Mualim v Dzelme

[2020] NSWCA 333

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

Mualim v Dzelme [2020] NSWCA 333

Hearing dates:

On the papers

Decision date:

15 December 2020

Before:

Basten JA

Decision:

(1)   Order that the appellants provide security for the costs of the first and second respondents of the appeal by paying into court an amount of $40,000.

(2)   The amount referred to in order (1) is to be paid into court no later than Friday, 29 January 2021.

(3)   Failing compliance with orders (1) and (2), the proceedings in this Court are stayed pending further order.

(4)   Order that the costs of the motion for security of costs be the respondents’ costs in the appeal.

Catchwords:

APPEALS – security for costs – appellants resident outside Australia – appellants without assets in Australia – merits of appeal balanced – order would not stifle appeal – costs not disproportionate to amount in dispute – relationship of UCPR r 42.21 and r 51.50(1) – effect of r 51.50(3)

Legislation Cited:

Corporations Act 2001 (Cth), s 175

Uniform Civil Procedure Rules 2005 (NSW), rr 42.21, 51.50; Pt 51

Category:

Procedural and other rulings

Parties:

Gani Mualim (First Appellant)
Jordia Mualim (Second Appellant)
Ricards Dzelme (First Respondent)
Pacific Springs Pty Ltd (Second Respondent)

Representation:

Counsel:
D E Grieve QC (Appellants)
A J Macauley (Respondents)

Solicitors:
RBHM Commercial Lawyers (Appellants)
Swaab (Respondents)

File Number(s):

2020/285001

 Decision under appeal 

Court or tribunal:

Supreme Court

Jurisdiction:

Equity Division

Citation:

[2020] NSWSC 1240

Date of Decision:

11 September 2020

Before:

Rees J

File Number(s):

2019/55505

Judgment

1. BASTEN JA: The appellants each own 100 shares in the second respondent, Pacific Springs Pty Ltd. The company was managed by their son, Dean Mualim, now deceased. In 2004 Dean Mualim arranged for the issue of 1,800 shares in Pacific Springs to himself. The validity of the transaction depended upon the consent of his parents. On the death of Dean Mualim, his shareholding passed to the present respondent, Ricards Dzelme.

2. The appellants brought proceedings in the Equity Division seeking to have the allotment of shares to their late son set aside and correct the share register, under s 175 of the Corporations Act 2001 (Cth). The matter was heard over four days in July 2020 by Rees J in the Corporations List. On 11 September 2020 Rees J delivered judgment refusing the application to correct the share register. [1] She further declared that the appointment of Mr Dzelme as director and secretary was not invalid. The appellants have lodged an appeal from that judgment. The respondents seek an order that the appellants provide security for the costs of the appeal.

   1. Re Pacific Springs Pty Ltd [2020] NSWSC 1240.

3. Pursuant to Uniform Civil Procedure Rules 2005 (NSW) (UCPR), Pt 51, r 51.50(1), the court may, in special circumstances, order that such security as the court thinks fit be given for the costs of an appeal. That provision is said not to affect the general power of the court to grant…