Michael Wilson & Partners, Limited v John Forster Emmott

[2025] NSWCA 37

Court of Appeal

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Michael Wilson & Partners, Limited v John Forster Emmott [2025] NSWCA 37

Hearing dates:

10 March 2025

Date of orders:

14 March 2025

Decision date:

14 March 2025

Before:

McHugh JA

Decision:

(1) Pursuant to r 42.21 of the Uniform Civil Procedure Rules 2005 (NSW), the Applicant provide security for the Respondent’s costs of the application for leave to appeal in the amount of $20,000.

(2)   The security referred to in Order 1 above be paid into Court within 14 days of the date of these orders.

(3)   The proceedings be stayed until such time as the security ordered pursuant to Orders 1 and 2 above is provided.

(4)   The Applicant pay the Respondent’s costs of the Notice of Motion filed 18 February 2025.

(5)   The proceedings be listed before the Registrar on 31 March 2025.

Catchwords:

CIVIL PROCEDURE — security for costs — non-resident applicant for leave to appeal — unpaid costs orders in other proceedings — no issue of principle

Legislation Cited:

Corporations Act2001, s 1335

Civil Procedure Act 2005 (NSW), ss 56, 58(1)(a)(iii), 60

Foreign Judgments Act 1991 (Cth)

Uniform Civil Procedure Rules 2005 (NSW), rr 42.21, 51.50

Cases Cited:

Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc [1981] HCA 39; (1981) 148 CLR 170

All Class Insurance Brokers Pty Ltd (in liq) v Chubb Insurance Australia Ltd [2020] FCA 840

Berry v Innovia Security Pty Ltd [2014] FCA 357

Charara v Integrex Pty Ltd [2010] NSWCA 342

Michael Wilson & Partners Limited v Emmott [2024] NSWSC 1258

Michael Wilson & Partners Limited v Emmott (No. 2) [2024] NSWSC 1435

Michael Wilson & Partners Ltd as the assignee of Robert Colin Nicholls & Temujin International Limited (as trustee of Temujin International (trading) Trust) & Temujin Services Limited v Emmott [2024] NSWSC 1489

Live Board Holdings Ltd v Cody Live Pty Ltd [2017] NSWCA 302

Mohareb v Local Court of New South Wales [2024] NSWCA 235

PPKWilloughby Pty Ltd v Baird [2019] NSWCA 48

SSABR Pty Ltd v AMA Group Ltd [2024] NSWCA 104

Category:

Procedural rulings

Parties:

Michael Wilson & Partners, Limited (Applicant)
John Forster Emmott (Respondent)

Representation:

Counsel:
M Wilson (Solicitor) (Applicant)
J Baird (Respondent)

Solicitors:
M Wilson (Applicant)
Duggan Legal (Respondent)

File Number(s):

2024/00416114

Publication restriction:

Nil.

JUDGMENT

1. The respondent (Mr Emmott) seeks security for costs in the sum of $25,000 with respect to the applicant’s (MWP) application for leave to appeal.

Background

2. The background to the application is long-running litigation between the parties around the world. The present chapter arises out of MWP’s application for orders in the Supreme Court of New South Wales for the registration of certain foreign judgments and orders, including under the Foreign Judgments Act 1991 (Cth).

3. On 2 February 2024 the Registrar made orders registering some but not all of the judgments and orders.

4. Mr Emmott applied to have the registrations set aside or the proceedings stayed. MWP applied for leave for a review of the Registrar’s orders out of time, and for leave to amend its pleadings to have other foreign judgments and orders registered.

The two judgments of the primary judge

5. The applications came before Schmidt AJ who gave two judgments. The first, Michael Wilson & Partners Limited v Emmott [2024] NSWSC 1258, was given on 10 October 2024. The order her Honour made on that day was: “The proceedings are stayed.” That order was plainly intended to be an interlocutory order made until further order. Central to her Honour’s reasons was that Mr Emmott had on foot an application in the English courts to set off various costs orders in his favour against at least some of the judgments that were registered, or sought to be registered in Australia. That application was due to be determined in February 2025. Her Honour’s reasoning includes the following.

“[22] At the hearing the parties were urged to find a common way forward, but none was found, other than in respect of a small number of judgments which it was agreed should not have been registered.

[23] That was despite there being no issue that the likely outcome of the February 2025 hearing of the set off application will be a ‘balancing costs order’ being made by the High Court of England and Wales, of the kind discussed by Markovic J in Porter, referring to Miller, at [151]. Even if that Court’s conclusions are later disturbed by an appeal, some type of balancing order will result.

…

[26] It follows that in England, once a balancing order is made in respect of the disputed judgments which are also there in issue, consequential orders will be made. Logically, such orders are likely to set aside earlier orders which arise to be considered in these proceedings. If he is successful, once made, Mr Emmott will be entitled to rely on such orders to set aside the registration of the disputed judgments in this Court and to resist their enforcement here. If he is not, the parties ought then to be capable of resolving much of what remains in issue in these proceedings.

…

[81] One possible outcome of the set off application appears to be an order which subsumes all of the disputed judgments and orders into one judgment which specifies the amount, if any, Mr Emmott is liable to pay the Company in respect of all of these costs judgments and orders. That is no doubt part of the reason for the adjournment of the English bankruptcy proceedings.

…

[97] In all of the circumstances I have discussed, I am satisfied that these proceedings should be stayed, at least until the English set off application has been heard and determined, despite the Company’s submissions that Mr Emmott has insufficient prospects of success to permit this conclusion. Given all that I have explained, I cannot accept this submission.

…

[102] There are thus significant issues lying between the parties about matters not easily resolved, many of them due to be resolved in the English proceedings in February 2025. That being the case I am satisfied that these issues would better await the resolution of those proceedings, that [are] likely to significantly reduce what is really in issue between the parties in these proceedings.

…

[105] In all those circumstances I am satisfied that the appropriate order now to make is to stay the proceedings, rather than to determine, at this stage, what other judgments and orders, if any, must have their registration set aside.”

6. The primary judge’s second judgment was given on 12 November 2024: Michael Wilson & Partners Limited v Emmott (No. 2) [2024] NSWSC 1435. Her Honour’s reasons given on that day were mostly concerned with costs. The orders, which were as follows, also addressed the judgments and orders which the parties agreed should not have been registered (which were the subject of order 3(k) of 2 February 2024), and the stay.

“(1)   Order 3(k) of the Registrar’s 2 February 2024 orders, relating to Items 21 to 24 inclusive referred to in MFI 1, be set aside.

(2)   These proceedings be stayed until the final determination of the defendant’s 22 July 2022 set off application by the High Court of Justice, Business and Property Court of England & Wales, Commercial Court.

(3)   The parties confer after the High Court’s judgment is delivered, with a view to identifying the real issues remaining between them.

(4)   The plaintiff pay the defendant’s costs of the parties’ February and April 2024 motions to date, as agreed or assessed.

(5)   The proceedings be listed before the Registrar for further directions at 9.30 am on 11 March 2025, with liberty to apply on 72 hours’ notice in writing, in the event that the High Court’s judgment has not been delivered before that date.”

7. It might be noted that order (1) was, in effect agreed among the parties. Order (2) was again clearly interlocutory in character.

The proceedings in the Court of Appeal

8. MWP filed a notice of intention to appeal on 5 November 2024. It did not file a summons seeking leave to appeal from either decision until 20 January 2025. That was more than three months after the first decision given on 10 October 2024. And it was more than two months after the second decision, which was given on 12 November 2024. Since the 5 November 2024 notice of intention to appeal preceded the second decision, it would not appear to be effective with respect to that decision. In the circumstances, as I raised with the parties in argument, it may be that an extension of time is required in respect of each of the primary judge’s decisions. That is a matter to which the parties should give their attention.

9. Mr Emmott filed a notice of motion seeking security for costs on 18 February 2025. The order is sought pursuant to s 1335 of the Corporations Act2001 (Cth) or alternatively r 42.21 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR). Since the application is brought in respect of an application for leave to appeal, the requirements of r 51.50 dealing with security for costs sought in appeals do not apply: see, e.g., Charara v Integrex Pty Ltd [2010] NSWCA 342 at [13]. Instead, by operation of r 51.1(3) and (4), r 42.21 applies, reading any reference to a plaintiff as a reference to the applicant, and any reference to a defendant as a reference to the respondent.

The power in UCPR, r 42.21 is engaged

10. The criterion of engagement of the power in s 1335 is that “it appears by credible testimony that there is reason to believe that the corporation will be unable to pay the costs of the defendant if successful”. There was a good deal of argument about the financial position of MWP, and in particular its assets, to which I will return below in the context of discussing the matters relevant to the exercise of discretion. However, I have not found it necessary to determine whether the criterion of engagement in s 1335(1) is satisfied in this case.

11. That is because the criterion of engagement of the power in UCPR r 42.21(1)(a) is clearly satisfied: “If, in any proceedings, it appears to the court on the application of a [respondent]— … (a) that [the applicant] is ordinarily resident outside Australia”. It is not in dispute that MWP is ordinarily resident outside Australia. Accordingly the power is engaged and the question becomes one of discretion.

Discretion: Mr Emmott’s submissions

12. The principles applicable to the exercise of the discretion were not in dispute. As Allsop CJ said in All Class Insurance Brokers Pty Ltd (in liq) v Chubb Insurance Australia Ltd [2020] FCA 840 at [42], the factors informing the exercise of the discretion cannot be stated exhaustively. The only limitation is that the discretion must be exercised judicially; what lies at the heart of the discretion is fairness, both in terms of whether the security should be granted, and, if so, in what amount.

13. Neither party particularly emphasised any approach taken in the authorities, although Mr Emmott did refer in writing to the following statement of the position in the Federal Court of Australia in Berry v Innovia Security Pty Ltd [2014] FCA 357 at [34]:

“The position adopted, in this court at least, therefore seems to be as follows. A foreign applicant with no assets in Australia should normally expect to provide some security for costs if requested to do so. … A foreign applicant bears a practical onus of showing that the party seeking security will not be unreasonably disadvantaged if a costs order is made against the foreign applicant. … It may be relevant that the foreign applicant has given an undertaking not to seek security for costs in its own jurisdiction if enforcement of an Australian costs order is sought.”

14. Rule 42.21(1A) of the UCPR identifies various matters to which the court may have regard in determining whether it is appropriate to make an order for security. The court may also have regard to such other matters as it considers relevant.

MWP’s prospects of success: par (a)

15. Paragraph (a) is “the prospects of success or merits of the proceedings”.

16. The prospects of the present application for leave to appeal do not appear strong.

17. As to order (1) made by the primary judge on 12 November 2024, the order was effectively made with the consent of the parties. Although MWP submits that it gave that consent on a mistaken understanding of the applicable law as to limitation periods, that was its own mistake. That does not suggest that this is a promising candidate for leave to appeal. It is not obvious that the order involved a reasonably clear injustice.

18. As to order (2), the stay, the order was interlocutory and concerned a matter of practice and procedure. The Court’s caution about granting leave to appeal with respect to such matters is well established: see Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc [1981] HCA 39; (1981) 148 CLR 170 at 177; PPKWilloughby Pty Ltd v Baird [2019] NSWCA 48 at [3].

19. Moreover, as with any exercise of a discretionary power by a court, the utility of what is sought may be significant: Mohareb v Local Court of New South Wales [2024] NSWCA 235 at [28]. There is a significant question in this case whether the proposed appeal has any utility. On MWP’s case the stay ordered by the primary judge expired on 15 January 2025, when His Honour Judge Pelling KC, sitting as a Judge of the High Court of Justice of England and Wales, made orders disposing of Mr Emmott’s “Set-Off Application” of 22 July 2022, as amended on 19 February 2024. There was a substantial debate before me about the effect of the 15 January 2025 orders and in particular whether they met the description of “the final determination of the defendant’s 22 July 2022 set off application by the High Court of Justice”. Although it is unnecessary for me to decide that question finally on this application, it seems to me strongly arguable that the stay ordered by the primary judge expired upon the making of the 15 January 2025 orders in England.

20. That being so, it is to be doubted that any practical utility remains in the application. Mr Wilson, appearing for MWP remotely from Kazakhstan by Webex, identified three matters that he said gave rise to utility.

1. First, he submitted that the judgment contained findings in error, including a finding that Mr Emmott was owed a judgment debt of around 5 million pounds. This appears to be a reference to what her Honour said at [9] (which was expressed in terms of a figure “now claimed to exceed 5 million pounds”) and [90] of the first judgment. It is not clear precisely what MWP’s concern was arising out of the “finding”, if there in fact was one. But, as any such “finding” was stated as part of the reasons for an interlocutory order, it is doubtful that it would have any consequences beyond that order.

2. Secondly, Mr Wilson referred to the primary judge’s conclusion that there had been a breach of duty of disclosure on the part of MWP. MWP contests that there was any such duty of disclosure and says that that gives rise to a question of principle. Whether or not that is so, it would not automatically follow that this is an appropriate vehicle through which to resolve that question (or other questions of construction of the Foreign Judgments Act).

3. Thirdly, MWP complains that there was a costs order which it wishes to challenge. That is not a strong reason for granting leave.

21. In the result, MWP does not appear to have a strong case for leave to appeal, particularly given the effect of its own construction of the orders made in the English proceedings on 15 January 2025. Although it is not the Court’s function on an application of this kind to come to a concluded view on this issue, the apparent weakness of MWP’s prospects is a circumstance that favours a grant of security for costs: see Live Board Holdings Ltd v Cody Live Pty Ltd [2017] NSWCA 302 at [97]-[101] (Bathurst CJ, Leeming JA and Barrett AJA).

Whether an order for security would stifle the proceedings: par (f)

22. Mr Emmott relied on the absence of any suggestion that an order for security in the amount sought would stifle the proceedings. The absence of any such concern favours the grant of security.

MWP’s financial position and assets available to meet a costs order: pars (m) and (n)

23. There was substantial debate, but only limited evidence, about MWP’s financial position. The most recent accounts in evidence (Ex R2 on the application), which appear to be management accounts in United States dollars for the financial year ended 31 December 2023, disclose current assets of $786,204 and current liabilities of $74,281,827. The current liabilities include “Trade payables” of $13,222,426. That alone might have given rise to reason to believe that MWP would be unable to pay any costs order awarded in favour of Mr Emmott for purposes of the power in s 1335. But, as noted above, it is not necessary to decide that question.

24. The greater significance of MWP’s financial position for present purposes is that there is doubt whether it has assets within the jurisdiction, or otherwise, easily and conveniently available to satisfy a costs order.

25. The current assets shown in MWP’s accounts as at 31 December 2023 include USD 612,498 described as “Short-term bank deposits”. MWP submitted that this included an account with the St George private bank in Australia. MWP’s Consolidated Financial Statements for the year ended 31 December 2022 showed the balance of the St George account as USD 583,331 as at 31 December 2022, declining from USD 1,244,900 as at 31 December 2021. There was no evidence of the balance of any Australian bank account as at March 2025. Nor was any undertaking proffered to maintain any particular balance in any such account.

26. The other assets that MWP submitted it had within Australia were said to include the judgments and orders the subject of the Registrar’s orders made on 2 February 2024. Those orders are sought to be set aside in the proceeding that Schmidt AJ stayed. Although MWP’s position is that the primary judge’s order did not directly stay the Registrar’s orders of 2 February 2024, at a practical level the parties appear to have been proceeding on the basis that steps would not be taken to enforce the judgments or orders that were the subject of the Registrar’s 2 February 2024 registration orders while the stay ordered by Schmidt AJ was on foot. MWP’s submission on the present application appears to proceed on the assumptions that (a) the primary judge’s stay of the proceedings has been lifted by reason of the English court’s orders of 15 January 2025; and (b) there is no other impediment to enforcement of the judgments or orders registered on 2 February 2024.

27. The basic difficulty with this submission is that Mr Emmott’s application to have the registration of the foreign judgments and orders ordered on 2 February 2024 set aside is yet to be determined (save in respect of the small number of judgments that MWP had agreed should not have been registered). It is clear from the primary judge’s reasoning set out above (see, e.g., at [81]) that what her Honour was contemplating as the outcome of the English set off application would be, ideally, an order which determined the net amount, if any, that Mr Emmott is liable to pay MWP in respect of the judgments and orders that were the subject of the proceeding before her Honour. But on any view her Honour was contemplating that the English proceedings would resolve many of the issues between the parties: see, e.g., at [102]. That was the rationale for the stay which her Honour granted.

28. The English orders of 15 January 2025 appear to have resolved much less than the primary judge had contemplated that they might. The 15 January orders contemplated that the issues that remain would be determined in the three sets of proceedings in England referred to in order 3: MWP’s bankruptcy petitions against Mr Emmott; Mr Emmott’s application to set aside MWP’s statutory demands; and what was described as “the trial of MWP’s Part 7 Claim as to the Sinclair debts owed by Mr Emmott to MWP”. That being so, there must be at least some substantial prospect that if the stay granted by Schmidt AJ expired on 15 January 2025 (as MWP submits), a further stay of the proceeding seeking to set aside the Registrar’s 2 February 2024 orders will be granted pending the resolution of those English proceedings.

23. Equally, there must be at least some substantial prospect that if any attempt were made to enforce the remaining judgments the subject of the Registrar’s 2 February 2024 orders, those orders would be stayed, pending resolution of Mr Emmott’s application to have the 2 February 2024 registration of the judgments set aside.

24. All that being so, the question whether any of the judgments or orders registered on 2 February 2024, or, for that matter, the further judgments or orders that MWP seeks to have registered, should be treated as assets of MWP in Australia is far from clear.

25. MWP submitted that it also has assets within Australia consisting of judgment debts against third parties (and also, by assignment, against Mr Emmott himself), said to be “secured” by a world-wide freezing order that catches real property in Australia. Assuming all that in MWP’s favour (a matter which I did not understand Mr Emmott to concede), given the tortured history of this litigation, I reject MWP’s submission that it would be straightforward for Mr Emmott to enforce any costs order made in the present proceeding against MWP through court processes aimed at realising any such assets.

26. The final category of asset said to be available within the jurisdiction is MWP’s assertion that it is entitled to 67% of the Temujin Partnership, which is itself said to have substantial assets within Australia. As Mr Emmott submitted, the recent decision of Hammerschlag CJ in Eq in Michael Wilson & Partners Ltd as the assignee of Robert Colin Nicholls & Temujin International Limited (as trustee of Temujin International (trading) Trust) & Temujin Services Limited v Emmott [2024] NSWSC 1489 at [79]-[89] is inconsistent with MWP’s assertion.

27. As to UCPR, r 42.21(1A)(n), MWP’s position is that there would be “no problem” in enforcing foreign judgments in Kazakhstan, which is MWP’s place of business. I do not accept that it would be straightforward to do so. Given the relatively small size of Mr Emmott’s costs contemplated with respect to the leave application, the enforcement overseas of a costs order in his favour does not appear to me to be a reasonably practicable option. It would be substantially disproportionate to what is at issue. It would not be either easy or convenient, not least because of the need to deal with foreign lawyers operating in a different legal system. The same problem of disproportionality would be true of recovery in the British Virgin Islands where MWP is incorporated, even assuming that there were assets there. It is also relevant that, as Mr Emmott submits, MWP has not undertaken not to seek security for costs in answer to any enforcement proceedings in a foreign jurisdiction.

28. In the result, I consider that there is at the very least a substantial risk that in the absence of security, any costs order in favour of Mr Emmott would not be practically recoverable from MWP by means that were proportionate to the amount of the costs order contemplated.

29. That is a matter of some significance given that s 56(1) of the Civil Procedure Act 2005 (NSW) provides that the overriding purpose of the Act is “to facilitate the just, quick and cheap resolution of the real issues in the proceedings.” Similarly, s 60 provides that “the practice and procedure of the court should be implemented with the object of resolving the issues between the parties in such a way that the cost to the parties is proportionate to the importance and complexity of the subject-matter in dispute.” Section 58(1)(a)(iii) provides that in deciding whether to make any order of a procedural nature for the management of the proceedings, the court must seek to act in accordance with the dictates of justice. By subs 2(a), for the purpose of determining what are the dictates of justice in a particular case, the court must have regard to the provisions of s 56. In this case the overriding purpose, and the dictates of justice, tend in favour of making an order for security.

Other matters: the unsatisfied costs orders

36. Mr Emmott relies particularly on the fact that there are two recent unsatisfied gross sum costs orders in his favour against MWP. One was made by the New South Wales Court of Appeal on 20 December 2024 in the sum of $9,957.21. The second was made by the Australian Capital Territory Court of Appeal on 23 January 2025 in the sum of $113,933. Mr Emmott also relies upon a gross sum costs order made in his favour by Hammerschlag CJ in Eq on 22 November 2024, which had not yet been quantified as at the hearing of the present application for security.

37. It is not disputed that neither of the quantified gross sum costs orders has been paid. MWP’s position is not directly explained. It may be that it takes the stance that it is entitled to set those orders off against judgments or orders it claims in its favour. As Mr Emmott points out in his submissions, MWP does not proffer any undertaking that it will not seek to set off any order for costs made in the present proceedings.

38. This is a strong reason in favour of granting security for costs.

MWP’s submissions

39. Much of what was submitted on behalf of MWP, to the extent that it was relevant, has been addressed above.

40. The written submissions made on behalf of MWP were extensive, dense and largely irrelevant. They were in large measure directed to demonstrating the underlying merits of MWP’s claims against Mr Emmott. They invited the Court to survey a large part of the history of the litigation between the parties, including by the following submission: “As can be seen from the list of now >531 judgments, orders, rulings, default and final costs certificates in favour of MWP, it is now plain and clear for all to see that MWP is the clear overall winner.” Among other irrelevant matters, the submissions referred to various proceedings involving allegations of contempt. Much of Mr Wilson’s affidavit of 7 March 2024 which was read on the application was also in the nature of submission.

41. MWP’s written submissions did answer Mr Emmott’s submission that MWP had misstated its address for service. Mr Emmott put that issue forward as a separate basis for engaging the power to order security: see UCPR, r 42.21(1)(b). On the material before the Court, I am not satisfied that MWP has misstated its address for service. But that is not a matter of great moment, given that the power to order security is engaged on another basis.

42. The oral submissions made on behalf of MWP were largely focused on the effect of the orders made in England on 15 January 2025 and on MWP’s assets. Those issues have been addressed above.

43. MWP also submitted, both in writing and orally, that Mr Emmott was not capable of contracting with any lawyer so as to give rise to a liability in costs. This somewhat curious submission was said to be based on aspects of the way in which Mr Emmott has defended various proceedings from time to time. The material to which MWP pointed does not establish the proposition, which I reject.

44. In the result, none of the matters on which MWP relied weighed significantly in the balance against granting security.

Decision on discretion

45. I am satisfied that this is an appropriate case in which to order security in a modest amount. MWP is a non-resident corporation. Its prospects on the application for leave to appeal do not appear strong. It has not paid two costs orders recently made against it. Given the history of the litigation, it does not appear likely that it will be practical or proportionate to attempt to enforce any costs order made in this proceeding against MWP unless security is granted.

46. There are no strong countervailing considerations, particularly where the sum sought is small and it is not suggested that the ordering of security would stifle the litigation.

47. As to the form of the security to be ordered, it was submitted for MWP that the preferred form of security would be a guarantee rather than payment into Court. However, MWP’s own submissions complain about the difficulties that arose in connection with a guarantee on a previous occasion. I consider that the more appropriate course would be payment into Court.

Quantum

48. Payne JA recently said in SSABR Pty Ltd v AMA Group Ltd [2024] NSWCA 104 at [14]:

“In exercising the undoubted discretion to award security for costs, I am guided by the following principles:

(1) Any order for security for costs must be crafted to avoid stultifying the appeal proceedings: Preston v Harbour Pacific Underwriting Management Pty Ltd [2007] NSWCA 247 at [18] per Basten JA (Ipp JA and Hoeben J agreeing); McMillan v Coolah Home Base Pty Ltd [2023] NSWCA 172 at [75] per Mitchelmore JA.

(2) If the Court is satisfied an award of security should be made, then it is inappropriate to fix the quantum by assessing the strength of the appellant’s prospects of success: LSKF Holdings at [14] per Leeming JA; Swift v McLeary [2013] NSWCA 173 at [55]; Reddy v C&P Syndicate Pty Ltd [2013] NSWCA 425 at [34]. The discretion does not involve a preliminary hearing of the appeal: Mualim v Dzelme [2020] NSWCA 333 at [8] per Basten JA.

(3) The appropriate amount of security should be assessed on a ‘broad brush’ basis: Palermo Seafoods Pty Ltd v Lunapas Pty Ltd [2015] NSWCA 149 at [9] per Leeming JA; Broadway Plaza Investments Pty Ltd v Broadway Plaza Pty Ltd [2019] NSWSC 1082 at [206] per Ward CJ in Eq.

(4) The Court’s power is to require ‘sufficient security’. The Court does not set out to provide a complete indemnity to a respondent in respect of their costs: Rickard Constructions Pty Ltd v Rickard Hails Moretti Pty Ltd [2008] NSWCA 283 at [90] per Gyles AJA; Tyneside Property Management Pty Ltd v Hammersmith Management Pty Ltd [2014] NSWCA 417 at [163] per Emmett JA. Even where a relatively detailed and realistic estimate of actual and apprehended costs of an appeal is provided in the evidentiary material, it is the ordinary course for only a fraction of those costs to be ordered by way of security: Palermo Seafoods Pty Ltd at [8] per Leeming JA.

(5) The Court is not, in any event, bound to accept a respondent’s assessment of the costs likely to be incurred or recovered.”

49. I will apply a broad brush approach to the fixing of quantum.

50. Mr Emmott seeks security in the sum of $25,000, calculated by his solicitor, Mr Duggan, in an affidavit as follows:

1. $12,500 on account of counsel’s fees, being one day for the hearing and 1.5 days for preparation, at a rate of $5,000 per day.

2. $12,500 on account of solicitor’s fees, calculated at an hourly rate of $545. Mr Duggan estimates that there would be 30 hours of work in total, which would produce a figure of $16,350. He then proposes to discount that figure by 24% to take into account the likelihood of a reduction on a costs assessment, the result of which is the figure of $12,500.

51. Mr Wilson made submissions critical of, in particular, the amount of time estimated on account of the solicitor’s costs. I agree that the figure of 30 hours seems towards the upper end of the range on an application for leave to appeal. On the other hand, in hard-fought litigation like the present there is often much to do. The present application for security is an example. On the whole, Mr Duggan’s figures and the basis upon which they have been calculated are not unreasonable.

52. However, the purpose of security for costs is not to provide a complete indemnity for costs as assessed. In the usual case, even a reasonably detailed and realistic estimate of costs will be further discounted.

53. Mr Wilson submitted that if security were to be awarded, the sum of $10,000 would be appropriate. A discount of that magnitude is excessive, given the modesty of the overall figure. I consider a discount of a further 20% appropriate.

54. Accordingly, I will order security in the sum of $20,000.

55. The application was opposed. Costs should follow the event.

Orders

56. For these reasons, the following orders will be made:

1. Pursuant to r 42.21 of the Uniform Civil Procedure Rules 2005 (NSW), the Applicant provide security for the Respondent’s costs of the application for leave to appeal in the amount of $20,000.

2. The security referred to in Order 1 above be paid into Court within 14 days of the date of these orders.

3. The proceedings be stayed until such time as the security ordered pursuant to Orders 1 and 2 above is provided.

4. The Applicant pay the Respondent’s costs of the Notice of Motion filed 18 February 2025.

5. The proceedings be listed before the Registrar on 31 March 2025.

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Amendments

14 March 2025 - "Parties"/"Representation" - correction

Decision last updated: 14 March 2025