MGICA LtD v Mid-West Finance 9ACT)P/L & ors Permanent Trustee Australia Ltd v MGICA Ltd & anor
[1992] FCA 632
•01 SEPTEMBER 1992
Re: MGICA LTD
And: MID-WEST FINANCE (ACT) PTY. LIMITED; GROWTH INDUSTRIES PTY LIMITED (IN
PROVISIONAL LIQUIDATION); PERMANENT TRUSTEE AUSTRALIA LIMITED HAMBROS
AUSTRALIA LIMITED and MGICA LTD
No. WA G134 of 1990
FED No. 632
Judgement -Costs - Practice and Procedure
COURT
IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
French J.(1)
CATCHWORDS
Judgment - pre-judgment interest - relevant criteria - applicability of statutory rates for post-judgment interest - credit for amounts paid under protest - appropriate date from which interest calculated. COSTS - apportionment of costs - general principle - success and failure on substantial issues by both parties - balance of success favouring one party - apportionment of costs.
Practice and Procedure - stay of execution - pending appeal - requirement for security.
Federal Court of Australia Act 1976 s.51A
Federal Court Rules O.35 r.8
Harper v. Phillips (1985) WAR 100
Inn Leisure Industries Pty Ltd (Provisional liquidator appointed) v. D.F. McCloy Pty Ltd (1991) 28 FCR 172
Hughes v. Western Australian Cricket Association (Inc.) (1986) ATPR 48,134
Cretazzo v. Lombardi (1975) 13 SASR 4
Trade Practices Commission v. Nicholas Enterprises Pty Ltd (1979) 42 FLR 213
Commissioner of Taxation v. The Myer Emporium Ltd (1986) 160 CLR 220
HEARING
SYDNEY
#DATE 1:9:1992
Counsel for the Applicant: Mr C. Einstein QC and Mr J.T. Gleeson
Solicitors for the Applicant: Corrs Chambers Westgarth
Counsel for the Third Respondent: Mr J.D. Heydon QC
Solicitors for the Third Respondent: Mallesons Stephen Jaques
ORDER
THE COURT ORDERS THAT:
1. That the applicant pay to the third respondent the amount of $100,000 by way of interest pursuant to s.51A of the Federal Court of Australia Act.
2. That the amount of interest payable on the judgment sums pursuant to O.35 r.8 be fixed at 8%.
3. The applicant pay one third of the third respondent's costs of the proceedings.
4. That there be a stay of execution on the money judgments until the hearing and determination of appeal number WAG 69 of 1992 or further order subject to the applicant providing on or before 13 September 1992 security for the total amount of the judgment sums namely $1,060,629.77 and interest thereon by way of bank guarantee or in some other form agreed by the parties.
5. There be liberty to apply as to the appropriate form of security in the event that the parties are unable to reach agreement.
Note: Settlement and entry of Orders is dealt with in Order 36 of the Federal Court Rules.
JUDGE1
Introduction
On 22 May 1992 for reasons then published, I gave judgment in these proceedings by way of declaratory orders and liberty to apply as to their wording and further or other relief, including the payment of judgment interest and costs. The wording of the declaratory orders and the questions of interest, costs and a stay of execution were the subject of argument on 13 August. On that day the declarations were varied and a money judgment awarded in favour of Permanent Trustee Australia Limited ("Permanent") in the amount of $960,629.77. The interest payable on the money sum, the apportionment of the costs of the proceedings and the question whether there should be a stay of execution pending appeal were reserved until today.
Outline of the Proceedings
The proceedings in this case arose out of finance and security arrangements relating to a project known as "The Australian Viticultural Project No. 2" under which members of the public were invited to invest in the cultivation of high quality wine grapes. Persons wishing to invest in the project were provided with finance for that purpose by a company called Mid-West Finance (ACT) Pty Limited, one of a group of companies operating under a holding company called Growth Industries Pty Ltd. The money for the finance originated from institutional investors secured by promissory notes. Their interests were protected by Permanent Trustee Australia Limited which was designated as a trustee in the scheme. MGICA Ltd, a finance company, provided Mid-West Finance (ACT) with guarantees of interest payments due on individual investor borrowings. The guarantees were provided pursuant to a Guarantee Agreement dated 30 June 1989 to which MGICA, Mid-West Finance (ACT), Permanent, Mid-West (ACT) Pty Ltd and another financier called Hambros Pty Ltd, were parties. Additional investors were brought under the guarantee by a further agreement dated 28 July 1989, known as the Relevant Loans Agreement and by subsequent exchanges of correspondence.
In 1990 elements of the Growth Industries group encountered serious financial difficulties. Interest payments due from certain investors, including some involved in the Growth Industries group itself were not met. Permanent appointed a partner in Moores, a firm of chartered accountants, to take recovery action against the defaulting investors and to make claims against MGICA under the Guarantee Agreement read with the Relevant Loans Agreement and later correspondence. On 22 November 1990, the present proceedings were commenced by MGICA in which it alleged misleading or deceptive conduct and breach of fiduciary on the part of Growth Industries Pty Ltd and Mid-West Finance (ACT) Pty Ltd which, it said, induced it to enter into the Relevant Loans Agreement. It claimed that on that basis it would have been entitled to set aside, avoid or rescind the Relevant Loans Agreement and was entitled against Permanent to have such an order in respect of that Agreement and/or its liability to pay money under it. MGICA also maintained that in respect of particular borrowers it was under no obligation to make payment of interest under the Guarantee Agreement because their primary obligation had been extinguished pursuant to separate agreements they had with the Growth Industries Group. On 15 February 1991, MGICA obtained a default judgment against Growth Industries Pty Ltd and Mid-West Finance (ACT) Pty Ltd. The proceedings carried on between MGICA and Permanent. Permanent cross-claimed for a declaration that MGICA was liable to pay to it a sum of money equivalent to all outstanding interest owed to West Finance (ACT) by borrowers from that company under The Australian Mid-Viticultural Project No. 2. In this respect it claimed an amount of $1,975,485 as at 11 January 1991 and orders for payment of further amounts as may have accrued since that time together with interest under s.51A of the Federal Court of Australia Act 1976 and costs. Hambros Australia Limited remained a party but played no active role and there was no relief sought against it.
In the judgment given on 22 May 1992 I made the following orders:
"1. It is hereby declared that MGICA Ltd is not obliged under the Guarantee Agreement between itself and Growth Industries Pty Limited, Permanent Trustee Australia Limited and Hambros Australia Limited dated 30 June 1989 to pay to Permanent Trustee Australia Limited any amount in relation to loan agreements entered into between Mid-West Finance (ACT) Pty Ltd and certain borrowers, full particulars of which loan agreements are contained in the schedule to the amended statement of claim.
2. It is hereby declared that MGICA Ltd is liable to pay to Permanent Trustee Australia Limited such sum of money as is equivalent to all outstanding interest owed to Mid-West Finance (ACT) Pty Ltd by borrowers from Mid-West Finance
(ACT) Pty Ltd in a scheme known as The Australian Viticultural Project No. 2.
3. There be liberty to all parties to apply within 28 days by written submission if desired on the question of such further or other relief as should be ordered including interest, if any, payable on any money judgment and costs. There will also be liberty to apply in relation to the wording of the declaratory orders in paragraphs 1 and 2 of this order.
4. The costs of the application and cross-claim be reserved."
The orders so made reflected findings on the issues at trial which may be summarised as follows:
1. MGICA did not enter into the Relevant Loans Agreement nor agreed to guarantee additional investors as the result of any misleading or deceptive conduct or breach of any fiduciary duty by Growth Industries Pty Limited or Mid-West Finance
(ACT) Pty Ltd.
2. Contrary to MGICA's contention, Permanent did have standing to enforce the Guarantee Agreement as against MGICA.
3. The primary obligations of certain of the investors covered by the Relevant Loans Agreement were extinguished and therefore MGICA had no liability to Permanent in respect of them.
4. Permanent was entitled to recover against MGICA under the provisions of the Guarantee Agreement in respect of all outstanding interest payments owed to Mid-West Finance (ACT) Pty Limited by investors in The Australian Viticultural Project No. 2.
A claim in Permanent's defence that the Guarantee Agreement and the Relevant Loans Agreement were insurance contracts for the purpose of the Insurance Contracts Act 1984 was abandoned in closing. There had been some argument and contested tender of documentary evidence on that issue.
Following argument on 13 August 1992, pursuant to the liberty granted in the judgment of 22 May 1992, the following orders were made in substitution for those made on 22 May:
"Pursuant to the liberty granted on 22 May 1992 the following orders are substituted for the orders made on 22 May 1992.
1. It is hereby declared that MGICA Ltd is not obliged under the Guarantee Agreement between itself and Mid-West Finance (ACT) Pty Limited, Permanent Trustee Australia Limited and Hambros Australia Limited dated 30 June 1989 to pay to Permanent Trustee Australia Limited any amount in relation to loans agreements entered into between Mid-West Finance (ACT) Pty Ltd and certain borrowers, namely the following: Borrower Date Loan Approved Pardo Pty Limited 27 July 1989 Bruce Stanley Benney 27 July 1989 Peter Campbell Bowden Kelly 27 July 1989 Frank Douglas Magnus 27 July 1989 Goldfield Developments
Pty Ltd 27 July 1989 Burleigh Nominees Pty Ltd 27 July 1989 Joseph Charles Learmonth
Duffy (NSW) Pty Limited 27 July 1989
2. Order 2 made on 22 May 1989 at Perth be substituted by the following:
It is hereby declared that MGICA Ltd is liable to pay to Permanent Trustee Australia Limited such sum of money as is equivalent to all outstanding interest owed to Mid-West Finance (ACT) Pty Limited by borrowers from Mid-West Finance
(ACT) Pty Limited in a scheme known as the Australian Viticultural Project No. 2 as may accrue from time to time except in respect of the borrowers referred to in Order 1 above and subject to any rights of MGICA Ltd arising in respect of any loan by reason of matters not part of the matter before the court in these proceedings.
3. It is hereby declared that MGICA Ltd is liable to pay to Permanent Trustee Australia Limited the amount of $960,629.77.
4. There be judgment for Permanent Trustee Australia Limited against MGICA Limited in the amount of $960,629.77.
5. The questions of costs and interest are reserved to 1 September 1992 at 9.15 am.
6. Execution of the money judgment be stayed until 1 September 1992."
The sum of $960,629.77 was not disputed as representing interest overdue at 13 August 1992 on loans outstanding to that date. The remaining issues concern the interest payable prior to and after judgment, the apportionment of costs in the case and the continuance of the stay order.
InterestPermanent contends that interest payable under s.51A of the Federal Court of Australia Act should be calculated by reference to the date on which each relevant amount was due to be paid by MGICA pursuant to the Guarantee Agreement, being the second business day following the dates of each claim. The first claim is said to have been submitted on 13 June 1990 by Marilyn Steer on behalf of Mid-West Finance (ACT). MGICA, on the other hand, submits that it would have been unreasonable to expect it to have paid any money prior to 16 September after the first demand in proper form and that the interest awarded should be tailored accordingly.
Clause 3.1(a) of the Guarantee Agreement provided for demand and payment in respect of interest on defaulting loans as follows:
"3.1 Subject to the succeeding provisions of this Clause 3, MGICA hereby undertakes that during such time as a Loan Agreement is Sixty Days in Arrears MGICA shall pay to the Lender:
(a) subject to paragraph (b) hereof, not later than the second Business Day following demand in writing from time to time by the Lender, all Interest which is due under that Loan Agreement as at the date on which MGICA shall make payment pursuant to that demand; or..."
Clause 4.1(c) set out a covenant on the part of Mid-West Finance (ACT) as follows:
"4.1 The Lender hereby covenants with MGICA as follows: .
.
.
(c) The Lender shall notify MGICA in writing if any amounts of principal or interest payable by any Borrower under any Loan Agreement are not paid within thirty (30) days of the due date for payment thereof, such notice to be given within fourteen (14) days after the date on which any such amount became thirty
(30) days in arrears and shall state what action the Lender has taken and proposes to take to cause the default to be rectified and shall thereafter give to MGICA written monthly reports within fourteen (14) days of the expiry of each period of thirty (30) days thereafter detailing all defaults including any further defaults by the relevant Borrower which are known to the Lender and which might reasonably be expected by the Lender to give rise to a claim by the Lender against MGICA hereunder;..."
The process of notification there specified is distinct from that of demand. In claiming interest from 13 June 1990, Permanent relies upon the letter from Marilyn Steer, to which reference has been made above. The point is made against the characterisation of that letter as a demand that some of the loans referred to in it were not then 60 days in arrears. A table included with the letter referred to loans to Data Gear Pty Ltd, Mr G. Godfrey and Mr J. Mak which were less than two months overdue. On the other hand, there were some 21 borrowers shown as 3 or 4 months in arrears. I accept, however, the submission made for MGICA that the letter was not in terms a demand and while a final demand would have been anticipated at that time, the terms of the agreement did not require MGICA to pay upon its precursor.
There followed a letter dated 26 June 1990 from Marilyn Steer to MGICA which said:
"Further to our notification to you of interest arrears as at 31 May, 1990 dated 13 June, 1990 within Mid-West Finance (ACT) Pty Limited, you are hereby advised that Mid-West Finance Pty Limited claim on behalf of Mid-West Finance (ACT.) Pty Limited, (as Manager of that company), the amount of $936,302 in interest arrears as detailed in the portfolio performance summary issued to you on 13 June, 1990.
Such claim is made by Mid-West Finance Pty Limited as manager of Mid-West Finance (ACT.) Pty Limited under Clause 4.1 (c) of the Guarantee Agreement between MGICA Limited, Mid-West Finance
(ACT.) Pty Limited, Permanent Trustee Australia Limited and Hambros Australia Limited."
This letter, it is said, was not tailored to loans 60 days in arrears. In my opinion, despite the mistaken reference to cl 4.1(c) of the agreement, it did constitute a sufficient demand under cl 3.1(a) in respect of such of the loans then outstanding as were 60 days or more in arrears. On that basis the demand should have been met on 28 June 1990.
Relevant to the question of interest, the submission was also made that on 2 October 1990, MGICA remitted the sum of $410,000 to Permanent, albeit that the payment was under protest. When the payment was made MGICA went into what might be described as a notional credit balance of $53,353.44 which represented the excess of $410,000 over the amount due under a consolidated claim of $354,646.56 made under the Guarantee Agreement on 12 September 1990. It remained in credit when the next claim was made on 15 October 1990. It moved to a debit position at the time of the third claim made in November 1990 which was for a consolidated total of $455,421.07. That debit increased to $105,054.16 after the fourth claim in December 1990, $166,675.04 after the fifth claim on 11 January 1991, $225,571 after the sixth claim on 16 February 1991 and $290,153.93 after the seventh claim on 15 March 1991. A second similar payment was made in an amount of $390,000 on 2 April 1991. That brought the balance to a credit of $37,789.40 after claim eight on 12 April 1991. Following successive claims the balance became and remained notionally in debit thereafter. I accept that although there is no strict entitlement to a set-off of the interest payable by reference to interest able to be earned on the credit balances from time to time, they are excess moneys in the hands of Permanent and it is appropriate to take them into account in the exercise of the discretion under s.51A of the Act which contemplates the award of pre-judgment interest as a compensatory measure.
The next issue debated in relation to interest was the rate at which it should be charged on the amounts which, consistently with the judgment, MGICA was liable to pay. It was suggested that as a general proposition I should have regard to the rates of interest allowable on judgments as prescribed by the Rules of Court. In Harper v. Phillips (1985) WAR 100, the Full Court of the Supreme Court of Western Australia applied to pre-judgment interest awarded under s.32 of the Supreme Court Act 1935 (WA), the same rate as that applicable under s.142 relating to interest on judgments. Burt C.J. at 104 expressly chose the rate of 14% for that reason. Wallace and Smith JJ. evidently regarded 14% as appropriate but did not refer to s.142 as their reason for doing so. I accept that the rate of interest payable on judgment sums from time to time under the Rules of Court may be a suitable measure. Nevertheless that applicable in a particular case under s.51A is discretionary and is to be fixed by reference to its broad compensatory function.
Section 51A of the Federal Court of Australia Act provides:
"51A(1) In any proceedings for the recovery of any money (including any debt or damages or the value of any goods) in respect of a cause of action that arises after the commencement of this section, the Court or a Judge shall, upon application, unless good cause is shown to the contrary, either-
(a) order that there be included in the sum for which judgment is given interest at such rate as the Court or the Judge, as the case may be, thinks fit on the whole or any part of the money for the whole or any part of the period between the date when the cause of action arose and the date as of which judgment is entered; or
(b) without proceeding to calculate interest in accordance with paragraph (a), order that there be included in the sum for which judgment is given a lump sum in lieu of any such interest.
(2) Sub-section (1) does not-
(a) authorize the giving of interest upon interest or of a sum in lieu of such interest;
(b) apply in relation to any debt upon which interest is payable as of right whether by virtue of an agreement or otherwise;
(c) affect the damages recoverable for the dishonour of a bill of exchange;
(d) limit the operation of any enactment or rule of law which, apart from this section, provides for the award of interest; or
(e) authorize the giving of interest, or a sum in lieu of interest, otherwise than by consent, upon any sum for which judgment is given by consent.
(3) Where the sum for which judgment is given (in this sub-section referred to as "the relevant sum") includes, or where the Court in its absolute discretion, or a Judge in that Judge's absolute discretion, determines that the relevant sum includes, any amount for -
(a) compensation in respect of liabilities incurred which do not carry interest as against the person claiming interest or claiming a sum in lieu of interest;
(b) compensation for loss or damage to be incurred or suffered after the date on which judgment is given; or
(c) exemplary or punitive damages,
interest, or a sum in lieu of interest, shall not be given under sub-section (1) in respect of any such amount or in respect of so much of the relevant sum as in the opinion of the Court or the Judge represents any such amount.
(4) Sub-section (3) shall not be taken to preclude interest or a sum in lieu of interest being given, pursuant to this section, upon compensation in respect of a liability of the kind referred to in paragraph (3)(a) where that liability has been met by the applicant, as from the date upon which that liability was so met."
Order 35 r.8 of the Federal Court Rules presently provides:
"A judgment debt carries interest at the rate of 15% per annum unless, in a particular case, the Court determines that justice requires that a lower rate should be applicable."
From 11 March 1990 to 11 August 1991 the prescribed rate under the Federal Court Rules was 17% per annum. Reference was made in argument to statutory rates prescribed by the Rules of the Supreme Courts of Western Australia and New South Wales. The latter Rules set out relatively frequently adjusted rates higher than those prescribed for Western Australia, but yielding a lower amount over the relevant period than the post-judgment rates of the Federal Court Rules. Relevantly the New South Wales rates are:
1 September 1989 to 31 August 1990 - 21%
1 September 1990 to 28 February 1991 - 19%
1 March 1991 to 31 August 1991 - 13%
1 September 1991 to 28 February 1992 - 15%
After 28 February 1992 - 13%
Those for Western Australia are as follows:
Effective from 14 April 1989 - 14%
Effective from 28 June 1991 - 12%
Effective from 19 May 1992 - 8.5%
Effective from 31 July 1992 - 8%
It is, in my opinion, convenient and realistic to apply the New South Wales rates to pre-judgment interest in the present case giving interest credits for the payments made by MGICA in October 1990 and April 1991. Permanent's figure calculated on this basis using the New South Wales Supreme Court rates, assuming interest is payable from 15 June 1990 was $101,819.74. On the basis that payment should have been made in answer to the demand of 26 June 1990 and should have been made on 28 June 1990, I will round that figure down to $100,000. So far as the post-judgment figure goes, there was evidence before the Court of current interest rates for bank bills and treasury bonds ranging between 5.64% and 6.61%. The Western Australian Supreme Court rate has been more recently adjusted than the New South Wales rates and stands at 8% since 31 July 1992. On the other hand, the current figure in the Supreme Court of New South Wales is 13%. In my opinion I should fix interest on the judgment sum under O.35 r.8 at 8%.
Costs
There was considerable debate about the costs order that should be made and a substantial difference between the position taken by MGICA and Permanent respectively. MGICA contended that Permanent should pay three quarters of its costs, while Permanent argued that MGICA should pay three quarters of its costs.
In Inn Leisure Industries Pty Ltd (Provisional liquidator appointed) v. D.F. McCloy Pty Ltd (1991) 28 FCR 172, I had occasion to consider the principles on this topic enunciated by Toohey J. in Hughes v. Western Australian Cricket Association (Inc.) (1986) ATPR 48,134 at 48,136 and the observations of Jacobs J. in Cretazzo v. Lombardi (1975) 13 SASR 4 at 12, as well as those of Fisher J. in Trade Practices Commission v. Nicholas Enterprises Pty Ltd (1979) 42 FLR 213 at 220. I will not repeat those here beyond saying that, as a general proposition, costs follow the event and according to the circumstances of the case and where there are special circumstances an apportionment may be made of the amount of costs to be paid. In the present case, it might well be thought there is some difficulty in defining "the event" for the purposes of the general rule. MGICA failed on its broad challenge to the Relevant Loans Agreement which was based upon the proposition that it was induced to enter into that agreement by misleading or deceptive conduct or breach of fiduciary duty on the part of Growth Industries Pty Limited and Mid-West Finance (ACT). It failed also in its challenge to Permanent's standing to sue it under the Guarantee Agreement. These were both substantial issues going to the question whether MGICA had any liability to Permanent at all. And its failure on those issues is directly related to the money judgment awarded to Permanent on 13 August 1992. On the other hand, MGICA succeeded in establishing that it was not liable in respect of interest due on specific loans for which it was able to show that the primary liability of the borrower was extinguished. That was also a substantial issue involving, as it did, loans exceeding $5 million in value. MGICA also succeeded by default on the insurance contract question which was abandoned by Permanent at the end of the hearing. This was a substantial matter which plainly required considerable preparation of legal argument, both as to the issue and as to the admissibility of documents relating to it.
I do not think it fruitful to attempt to enter upon a detailed dissection of the time spent in trial on the various issues. Success and failure on substantial issues were distributed across both parties and that I think is a special circumstance which warrants a departure from the usual approach that costs follow the event. In the event, I think the balance favours Permanent which emerged with a money judgment of $960,629.77 plus pre-judgment interest of $100,000. In my opinion, the balance of success and failure in the case is fairly reflected in an order that MGICA pay one third of Permanent's costs of the action.
The StayMGICA applies for a stay of execution of the judgment pending the hearing and determination of an appeal which it instituted on 11 June 1992. The application is supported by an affidavit sworn by Mr Herron of Corrs Chambers Westgarth, the solicitors for MGICA. From that affidavit it appears that MGICA and Permanent have not been able to reach agreement on an arrangement under which the judgment sum might be paid into a joint trust account or personal undertakings given by Permanent to repay the judgment sum together with interest in the event that the appeal is successful. Mr Herron refers to para.17 of the defence to the Further Re-Amended Statement of Claim which related to the payment of $410,000 to Permanent on 2 October 1990 and the contention on the part of Permanent that the Trust Deed obliged it to disburse that money to the noteholders under the Deed. MGICA fears that if the judgment sum is paid to Permanent it will, in the same way as it previously asserted it was bound to do, disburse such moneys to the noteholders under the Trust Deed. On this question, counsel for Permanent said that if the money were paid over by MGICA then Permanent would be in the position of any other trustee who has won a money judgment. It would be under a duty to disburse the money to the underlying beneficiaries and there might be practical and other difficulties in getting it back from them if the appeal were to succeed. Nevertheless, he said, that was no ground for a stay because while Permanent itself is solvent it simply has a duty to give back the money that has passed through its hands.
Order 52 r.17 provides that:
"17(1) An appeal to the Court shall not-
(a) operate as a stay of execution or of proceedings under the judgment appealed from; or
(b) invalidate any intermediate act or proceeding except so far as the Court or a Judge or the court below may direct."
Sub-rules (2) and (3) are not material for present purposes. The discretion to order a stay should only be exercised where special circumstances exist that justify a departure from the ordinary rule that a successful litigant is entitled to the fruits of its litigation. Special circumstances exist where a stay is necessary to prevent an appeal, if successful, from being nugatory - Commissioner of Taxation v. The Myer Emporium Ltd (1986) 160 CLR 220 at 222-223 (per Dawson J.). An appeal will be nugatory when, because of the financial state of the respondent, there is no reasonable prospect of recovering money paid pursuant to the judgment. This is not that case. Here the difficulty in recovering the judgment sum would arise from Permanent's receipt of it as trustee and on-payment to beneficiaries from whom the money could not necessarily be readily recoverable, if at all.
In my opinion there does appear to be a risk that the judgment sum if paid now might not be readily recoverable, if recoverable at all, in the event that the appeal succeeds. In the circumstances, I am prepared to extend the stay until the hearing and determination of the appeal but conditional upon MGICA providing an appropriate security by way of bank guarantee or otherwise as agreed between the parties to cover the amount of the judgment sums including pre-judgment and post-judgment interest. There will be liberty to apply on the question of the appropriate form of security in the event that agreement cannot be reached between the parties.
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