Swift v McLeary

[2013] NSWCA 173

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

Swift v McLeary [2013] NSWCA 173

Hearing dates:

27 May 2013

Decision date:

14 June 2013

Before:

Gleeson JA

Decision:

(1) The appellant provide within 14 days security in the sum of $40,000 for the respondent's costs of the appeal by payment into court.

(2) The appeal be stayed until such security is provided.

(3) The Court notes the consent given by the respondent to the appellant, pursuant to order 2(b) made by Young AJ on 11 March 2013 in proceedings numbered 2011/69385, to:

(a) the disposition of property by the appellant insofar as that disposition is by way of payment into court of the security, the subject of order 1 above; and

(b) the disposition by a bona fide arms-length sale of any of the items of property of the appellant identified in paragraphs [4] to [8] of the appellant's affidavit sworn 11 February 2013 in such proceedings, if required to meet the payment into court of the security, the subject of order 1 above.

(4) The appellant to pay the respondent's costs of the motion.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords:

PROCEDURE - costs - security for costs -- where appellant has unexplained dissipation of assets - impecuniosity - whether special circumstances shown

Legislation Cited:

Corporations Act 2001
Uniform Civil Procedure Rules

Cases Cited:

Bell Wholesale Co Ltd v Gates Export Corporation (1984) 2 FCR 1
Green v CGU Insurance Ltd [2008] NSWCA 148; 67 ACSR 105
Hastings v Hastings [2009] NSWCA 294
Jeffrey and Katauskas Pty Ltd v SST Consultation Pty Ltd [2009] HCA 43; 239 CLR 75
J M Properties Pty Ltd v Strata Corporation No 13975 Inc [2006] SASC 227
KP Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189
Levy v Bablis [2011] NSWCA 411
Marks-Isaacs v Fowler [2005] NSWCA 37
Preston v Harbour Pacific Underwriting Management Pty Ltd [2007] NSWCA 247
P S Chellaram & Co Ltd v China Ocean Shipping [1991] HCA 36; 102 ALR 321
Raptis v Wija Investments Development Pty Ltd [2007] NSWSC 870
Shannon v Australia and New Zealand Banking Group Ltd (No 2) [1994] 2 Qd R 563
Varley v Varley [2006] NSWSC 1025
Vista Capital Developments Pty Ltd v Duncombe [2010] FMCA 793; 245 FLR 389

Texts Cited:

Young, Croft, Smith, On Equity (Lawbook Co, 2009)

Category:

Interlocutory applications

Parties:

Martin Swift (Appellant)
Jeffrey John McLeary (Respondent)

Representation:

Counsel:
J Johnson (Appellant)
B Bradley (Respondent)
Solicitors:
Beazley Singleton Lawyers (Appellant)
Shotters Lawyers (Respondent)

File Number(s):

2012/384187

Publication restriction:

No

 Decision under appeal 

Jurisdiction:

9111

Citation:

McLeary v Swift [2012] NSWSC 1403

Date of Decision:

2012-11-21 00:00:00

Before:

Windeyer AJ

File Number(s):

2011/69385

Judgment

1. This is an application by the respondent, Mr McLeary, that the appellant, Mr Swift, provide security for costs of the appeal which was filed on 21 February 2013. The amount of security sought in the notice of motion was initially $60,000, but this was reduced during the course of oral submissions to $50,000.

1. The essential issue is whether the respondent has shown "special circumstances" which enliven the discretion to order security for costs under Uniform Civil Procedure Rules ("UCPR") r 51.50.

Background

1. The background facts are that the appellant and the respondent formerly carried on a business together as air-conditioning contractors. They carried on business under a number of corporate vehicles. Their relationship broke down and they entered into an agreement dated 27 February 2009 to deal with their ongoing relationships.

1. Clause 5.9 of the agreement provided that financial statements of various corporate entities would be submitted to the Australian Taxation Office ("ATO") and that the appellant and the respondent "acknowledge and agree that they will each be liable for one half of the taxation liability assessed as payable by the [ATO] ... up to an[d] including the financial year ended 30 June 2008". The clause further provided that upon receipt of the assessment issued by the ATO, the respondent must cause a copy of the assessment to be provided to the appellant promptly and upon receipt of the ATO assessment the appellant "will be liable to pay one half of the assessment as a debt due and payable by not later than the due date for payment allowed by the ATO".

1. One of the companies covered by this clause was Teffcog Pty Ltd ("Teffcog"). Under the agreement, the appellant agreed to transfer his interest in Teffcog to the respondent. That company was originally assessed for income tax for the 2006 financial year in the sum of $103,529. However after an audit, the ATO issued a notice of amended assessment for an additional sum of $970,200 and also a penalty notice for a further $458,100. The respondent arranged for payments to the ATO to be made through entities he controlled. The payments were made by Star Mend Pty Ltd ("Star Mend"), as trustee of the McLeary Family Trust, and treated in the books of Star Mend as distributions to Teffcog, a beneficiary of that Trust. The respondent complained that the appellant did not pay his half share of the tax debt owed by Teffcog.

Decision below

1. The respondent commenced specific performance proceedings and on 21 November 2012 Windeyer AJ held that the respondent should succeed (see McLeary v Swift [2012] NSWSC 1403). On 26 November 2012, his Honour ordered that by 24 December 2012 the appellant pay to the Deputy Commissioner of Taxation to the credit of Teffcog the sum of $822,995.47. An application for a stay of this order was refused.

1. The appellant did not make payment to the Deputy Commissioner of Taxation by 24 December 2013 as ordered. On 21 February 2013, the appellant filed a notice of appeal against that decision. The appellant has not sought a stay of the orders below in this court.

Freezing orders

1. On 11 March 2013, Young AJ heard and determined an application by the respondent for various freezing orders. These were with respect to the property of the appellant and corporations in which he had an interest because of a fear that the judgement in the proceedings below might be nullified by the appellant's activities (see McLeary v Swift [2013] NSWSC 216). His Honour was satisfied (at [23]) that between 10 December 2012 and 29 January 2013, the appellant divested himself of his beneficially owned shares in five corporate entities. The transferee in each case was Astbury Enterprises Pty Ltd (Astbury), a company that is the trustee of one of the appellant's discretionary trusts (known as the "Swift Family Trust") under which he is merely appointor and contingent beneficiary. The appellant thus divested himself of his beneficial interest in that property.

1. There was also evidence before Young AJ that the appellant had transferred his four ordinary shares in Astbury which he held beneficially to Astbury itself. His Honour described this (at [26]) as a rather strange transaction and noted that it was not the subject of argument before him, but that it might involve an unauthorised reduction of capital under section 256B of the Corporations Act 2001 or an unauthorised buyback. In any event, his Honour considered that it weighed against there being some commercial purpose in the transfer of the shares by the appellant in the period post the judgement of Windeyer AJ.

1. His Honour also noted (at [27]) that the appellant had not divested himself of his beneficial interest in two other companies being, one share out of 606 ordinary shares in Crown on Darby Pty Ltd and one out of two ordinary shares in Blue Sky Developments Pty Ltd. However, in relation to the first entity, the evidence on this application in the form of an Australian Securities and Investments Commission ("ASIC") historical company extract reveals that the appellant divested himself of one ordinary share in Crown on Darby Pty Ltd, it may be inferred in favour of Astbury, on or about 16 November 2012, as notified to ASIC on 13 December 2012.

1. His Honour was satisfied that it was appropriate to make freezing orders as against Mr Swift and Astbury, and made orders in the following terms:

(a)   as against Astbury Enterprises Pty Ltd, that it not permit any dealing with its shares nor any disposal of assets or rights other than in the ordinary course of its ordinary business pending the disposal of these proceedings in the Court of Appeal with liberty to apply on 5 days notice;

(b)   as against Mr Swift, that he not be permitted to make any disposition of property without the consent of the respondent or the Court, save and except as to his living expenses up to $900 per week and the cost of this litigation not exceeding $15,000, or such other amount as the respondent may consent to with liberty to apply on 5 days notice.

Appeal

1. As noted above, the appellant filed his notice of appeal on 21 February 2013. The appellant was to file and serve written submissions within six weeks of that date, being 4 April 2013. That did not occur.

1. At a directions hearing on 24 April 2013, the appellant sought and obtained an extension of time to serve his written submissions by 3 May 2013. Again, that did not occur.

1. The appeal was listed for a further directions hearing on 22 May 2013, when it was adjourned to 27 May 2013 to hear the respondent's application for security. The appellant has still not served his written submissions in support of the appeal.

1. No explanation was provided to the court by way of affidavit explaining the appellant's failure to comply with the rules and the directions of the court. Counsel appearing for the appellant on this application stated from the bar table that he had been overseas for two weeks and that he was probably at fault. In view of the time which has elapsed first, between 4 April and 3 May 2013 and secondly, since 3 May 2013, this statement did not satisfactorily explain why the appellant had failed to serve his written submissions in support of the appeal.

1. It is necessary to refer to two other matters which are said by the parties to have some significance for the present application.

Bankruptcy proceedings

1. The first relates to a bankruptcy notice and creditors petition filed against the appellant. This is relied upon by the respondent as further evidence of the appellant's impecuniosity.

1. The short facts are that a bankruptcy notice issued on 28 February 2013 at the request of the respondent, was purportedly served on the appellant by sending it by facsimile to the solicitor for the appellant (who apparently agreed to accept service) on 3 April 2013. Subsequently, a creditors petition was filed on 17 May 2013 and again purportedly served on the appellant by sending it by facsimile and by post to the appellant's solicitor on 17 May 2013.

1. The appellant disputes the validity of service of these documents on the ground that service on the appellant's solicitor does not constitute valid service. The appellant also contends that the documents are defective because they require payment of the amount of the judgment to the respondent, which is inconsistent with the form of orders below.

1. The respondent countered that service on the appellant's solicitor was authorised by Bankruptcy Regulation 16.01 and referred to Vista Capital Developments Pty Ltd v Duncombe [2010] FMCA 793; (2010) 245 FLR 389, but made no submissions on whether these documents were defective.

1. It is unnecessary to express any view on the validity of the purported service of the bankruptcy notice or creditor's petition. There is a more fundamental problem in relation to these documents. The judgment below required the appellant to pay $822,595.47 to the Deputy Commissioner of Taxation for the account of Teffcog. Prima facie, and without the benefit of argument on this point, the bankruptcy notice would appear to be invalid, as its claims that the appellant is liable to the respondent in the amount of $822,595.47. This is incorrect.

1. The creditor's petition contains the same error in that it asserts that the respondent is a creditor of the appellant in the amount which was ordered to be paid to the Deputy Commissioner of Taxation. In my view, this assertion is also incorrect.

1. The validity of the bankruptcy notice and creditor's petition are matters to be dealt with by the Federal Court, if the applicant chooses to contest the bankruptcy proceedings. I proceed on the basis that the appellant's failure to comply with the bankruptcy notice and the filing of the creditor's petition do not advance the respondent's submission concerning the appellant's impecuniosity.

Alleged "offset"

1. The second matter relates to a claim by the appellant that he would be entitled to an "offset" against the judgment against him in the proceedings below, having regard to a substantial payment subsequently received by Teffcog in about April 2013. This payment is said to have been received of Teffcog in compromise of separate proceedings brought by the respondent and Teffcog, amongst others, against their accountants for alleged negligent advice, breach of contract and misleading for deceptive conduct in relation to certain advice and accounting services provided to them.

1. The appellant tendered in evidence over objection, an undated (save for the printed year "2013") and unexecuted deed between the respondent and Teffcog, amongst others, and an accounting firm trading as Davidson Accountants. This document was said to be a copy of the terms of an executed deed to the same effect which obliged the accountants to pay a sum of money to various persons and entities. This included an amount to Teffcog, being for part penalties and shortfall interest imposed on Teffcog by the ATO following lodgement of the income tax returns for the 2006 year, and an amount for costs.

1. There was some debate between the parties as to whether or not the unexecuted and undated deed was subject to a confidentiality restriction. For the purposes of this application, counsel for the respondent indicated that it was not in dispute that a payment had been received by Teffcog, not in its entirety but in its great bulk, pursuant to a settlement with its accountants. The amount of the payment specified in the document related to only part of the amount which the appellant was ordered below to pay to the Deputy Commissioner of Taxation.

Legal principles

1. Special circumstances must be shown before order for security for costs of an appeal can be made under UCPR r 51.50.

1. In Preston v Harbour Pacific Underwriting Management Pty Ltd [2007] NSWCA 247 at [18], Basten JA noted that the principles governing applications for security in the context of an unfettered discretion as set out by Beazley J (as her Honour then was) in the Federal Court in KP Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189 at 197-198, remain relevant in assessing "special circumstances" for the purposes of the rules applicable when considering security for costs on an appeal.

1. In Preston at [18] Basten JA also said:

"... The considerations engaged by the concept of "special circumstances" in relation to security for costs were considered by this Court in Transglobal Capital Pty Ltd v Yolarno Pty Ltd (2004) 60 NSWLR 143 (Beazley, Santow and Ipp JJA), and in Porter v Gordian Runoff Ltd [2004] NSWCA 171 (Bryson JA, Sheller and Giles JJA agreeing). The following principles were identified:

(1) no order for security should be made in the absence of "special circumstances";

(2) consideration of what may constitute special circumstances should not be fettered by some general rule of practice;

(3) impecuniosity, without more, will usually be insufficient;

(4) an order may be appropriate if the appeal is shown to be hopeless, unreasonable or of an harassing nature;

(5) where a bona fide and reasonably arguable appeal would be stifled by an order for security, such an order should usually not be made, and

(6) the subject matter of the appeal, including an issue as to the liberty of the individual, or a public interest may provide a reason for not imposing a security order which would stifle the continuation of the appeal."

1. When weighing all the circumstances of the case in the exercise of the discretion to order security for costs, it is necessary to keep in mind that the weight to be given to any circumstance depends not only on its owns intrinsic persuasiveness, but upon the impact of the other circumstances which have to be weighed (see per McHugh J in P S Chellaram & Co Ltd v China Ocean Shipping [1991] HCA 36; (1991) 102 ALR 321 at 323).

Special circumstances

1. The respondent submitted that the following special circumstances exist justifying an order for security for costs of the appeal:

(a)   the court below has found that the appellant has divested a beneficial interest in property after the adverse judgement was delivered, and that judgement remains unsatisfied.

(b)   the appeal grounds have poor prospects of success.

(c)   the appellant has failed to demonstrate that he is able to meet an order for costs made against him should his appeal be unsuccessful.

(d)   the appellant is in significant default of the Court timetable and has failed to provide any explanation for that default to date.

1. In opposing security, the appellant did not make any submissions seeking to explain the circumstances in which the dissipation of assets post-judgment had occurred.

1. As to the merits of the appeal, the appellant submitted that it could not be said that the appeal is manifestly groundless, or that there was a risk that the appeal would involve unnecessary costs as it was likely to be a relatively short appeal of about half a day. Nor, the appellant submitted, could it be said that the appeal involved an abuse of process.

1. As to the risk of the respondent recovering any costs if successful on appeal, the appellant made no submissions concerning his financial circumstances other than that there were no outstanding assessed costs orders that had not been paid. So far as the evidence reveals, this is correct.

1. As to the non-compliance with the Court timetable, the appellant submitted that there had not been any delay in prosecuting the appeal, although it was acknowledged that the appellant's written submissions in support of the appeal had not been filed in accordance with the Court's rules and directions made in the appeal.

1. The appellant also submitted that the freezing order of Young AJ precluded the appellant from disposing of property except for certain permitted purposes and there would need to be a variation of the existing freezing orders to permit the provision of security. This is correct, but as explained below, the respondent has confirmed that it will consent to any disposition by the appellant made for the purpose of providing security, if so ordered.

Dissipation of assets

1. The respondent placed great emphasis on the appellant's conduct post-judgment in divesting himself of certain assets which ultimately lead to the freezing orders made by Young AJ. The respondent referred to the judgment of Young AJ as containing "findings" that the appellant had divested his beneficial interest in property after the adverse judgment was delivered.

1. Strictly, the interlocutory reasons of Young AJ do not constitute final findings of fact by which the parties are bound. Rather, what his Honour determined was whether or not the evidence put forward by the respondent demonstrated a serious risk that the judgment would be rendered nugatory unless freezing orders were made (see Varley v Varley [2006] NSWSC 1025 at [56] per Campbell J and Raptis v Wija Investments Development Pty Ltd [2007] NSWSC 870 at [10] per Palmer J).

1. Nevertheless, as noted by Campbell J in Varley at [56], in the course of an interlocutory hearing there may be some facts which are either common ground or some which, when proved by documents, do not admit of any real doubt. The transfer by the appellant of his shareholdings in various entities (including Astbury) to Astbury, falls into this category.

1. Counsel for the appellant acknowledged that the observations made by Young AJ in relation to the unexplained circumstances of the appellant's transfer of assets post-judgment were open to his Honour at the time, and could be taken into account on the current application for security for costs.

1. Independently of the reasons of Young AJ on the freezing order application below, I am satisfied that the material tendered by the respondent on this application establishes that the applicant divested himself of his beneficially owned shares in five corporate entities, and of his four ordinary shares in Astbury, as referred to in paras [23] and [26] of the Judgment of Young AJ. Two additional observations are appropriate.

1. First, the divestiture of assets appears, from the ASIC historical company extracts to have occurred on 16 November 2012 and was the subject of notifications to ASIC on 13 December 2012.

1. Secondly, as noted above, the appellant also divested himself of his one beneficially owned share out of 606 shares in Crown on Darby Pty Ltd on 16 November 2012.

1. The respondent submits that dissipation of assets constitutes special circumstances, referring to Green v CGU Insurance Ltd [2008] NSWCA 148; (2008) 67 ACSR 105 at [45(3)]. The observation of Hodgson JA in Green v CGU Insurance was made in the context of whether security for costs might be ordered against a natural person or a liquidator outside the circumstances provided for in UCPR 42.21. It was referred to with approval by Heydon J in Jeffrey and Katauskas Pty Ltd v SST Consultation Pty Ltd [2009] HCA 43; (2009) 239 CLR 75 at [91].

1. Although Green v CGU Insurance Ltd was not specifically concerned with "special circumstances" within UCPR 51.50, in my view, any dissipation of assets which affects the ability of a successful respondent to recover costs may amount to special circumstances for the purposes of UCPR 51.50 (see J M Properties Pty Ltd v Strata Corporation No 13975 Inc [2006] SASC 227; Shannon v Australia and New Zealand Banking Group Ltd (No 2) [1994] 2 Qd R 563).

1. The appellant has not sought on this application to provide any affidavit evidence seeking to explain the divestiture of assets post-judgment. Nor were any submissions made on behalf of the appellant in this regard. In my view the appellant's unexplained conduct in dissipating assets post-judgment is a relevant consideration in assessing whether special circumstances have been shown in this case.

Prospects of success

1. The respondent submitted that the grounds of appeal have poor prospects of success and noted that they were not supported by written submissions. However, the respondent did not go so far as to suggest that the appeal was not bona fide.

1. There was some debate between the parties as to whether the order of Windeyer AJ was properly described as a mandatory order rather than an order for specific performance. Strictly, orders in the nature of specific performance are described as mandatory orders where the contract is executed on one side and the plaintiff simply requires enforcement of a legal right. This is often referred to a "quasi-specific performance" or relief "in the nature of specific performance" or relief "approximate to specific performance": see Young, Croft, Smith, On Equity Lawbook Co 2009 at [16.870] and the authorities there cited.

1. In this case, the relevant agreement appears to have been executed on one side, at least in terms of the appellant having transferred his interest in Teffcog to the respondent. Thus, the language of Windeyer AJ referring to the order as a mandatory order was appropriate. Ultimately, however, nothing turns on this issue for present purposes.

1. The grounds of appeal raise issues concerning the proper construction of the agreement between the parties.

1. The appellant's essential complaint is that the respondent could not satisfy his obligation under cl 5.9 of the agreement by causing companies which he controlled to make payments to the ATO of his half-share of the tax liability. Rather the respondent was required to make that payment personally and this had not been established on the evidence before Windeyer AJ. It followed on the appellant's argument, that the respondent should have been denied equitable relief because he was unable to and had not performed his mutual promise under cl 5.9 of the agreement.

1. In my view, the appellant's argument on the proper construction of the agreement is weak. The argument fails to distinguish between the existence of a liability and the means of discharge of a liability. Nothing in the language of cl 5.9 of the agreement suggests that either party could not discharge their respective obligations to pay one half of the tax debts of any of the relevant entities (including Teffcog) to the ATO, by utilising whatever moneys were available to them, either personally or through entities over which they exercised control. My view is obviously provisional and without the benefit of argument. As there is no suggestion that the appeal is not bona fide, I must assume that the alternative construction which the appellant seeks to advance is at least arguable.

1. Neither party made any submissions concerning the "offset" argument which the appellant's solicitor foreshadowed in his affidavit opposing the application for security for costs. Two observations are however appropriate. First, the argument would appear to rely upon evidence of matters occurring post-judgment.

1. Secondly, the appellant's description of the payment received by Teffcog from a third party as giving rise to an "offset" against the judgment below is somewhat inapt. Rather, the appellant's contention seems to be that the effect of the payment received by Teffcog under the compromise with its accountants was to partly reduce or extinguish the appellant's liability (for the benefit of Teffcog) under cl 5.9 of the agreement. The legal basis on which this result might occur was left unexplained by the appellant.

1. It is not appropriate to embark on any consideration of the likely strength of this foreshadowed ground of appeal. It is sufficient to observe that it was not suggested by the respondent that the contention is manifestly hopeless.

1. Overall, I proceed on the basis that the appeal is bona fide and at least arguable.

Impecuniosity

1. The evidence tendered by the respondent on this application supports the conclusion that the appellant is impecunious or at least of very limited means. The appellant did not make any submissions to the contrary. There is, on the evidence, a substantial risk that if successful, the respondent would not recover his costs of the appeal.

1. Significantly, no submission was made to the effect that the appellant's impecuniosity has been caused by the respondent's conduct the subject of the dispute below.

1. There is no evidence from the appellant as to his ability to continue with the appeal if security be ordered, or indeed any evidence from the appellant as to his current financial circumstances. It appears however that the appellant can find the resources to conduct the appeal.

1. The fact that the appellant is relatively impecunious does not of itself show that the appeal would be stultified if security were ordered (see Hastings v Hastings [2009] NSWCA 294 at [14]; Levy v Bablis [2011] NSWCA 411 at [10]). The facts relating to the appellant's financial position are peculiarly within his knowledge and he bears an evidentiary onus of establishing that any order for security would stultify his appeal, although the ultimate onus of establishing special circumstances rests on the respondent (see Marks-Isaacs v Fowler [2005] NSWCA 37 at [24] per Handley JA; Bell Wholesale Co Ltd v Gates Export Corporation (1984) 2 FCR 1 at 4).

1. The appellant has not suggested, let alone demonstrated, that the appeal would be stultified if security were ordered.

Procedural non-compliance

1. The respondent points to non-compliance with directions of the Court for the filing of the appellant's submissions that remain unexplained. As noted above, the absence of the appellant's counsel who said he was overseas for two weeks, did not satisfactorily explain the appellant's non-compliance which has continued since 4 April 2013.

1. Of itself, such non-compliance would not ordinarily be sufficient to constitute special circumstances. However, when viewed in the context of the appellant's dissipation of assets post-judgment, the unexplained non-compliance with procedural directions takes on much greater significance.

Conclusion

1. In my view, special circumstances have been shown which enliven the discretion to order security for costs. Mere impecuniosity will not ordinarily justify an order for security for costs. However, there are the additional matters which, in combination, are capable of constituting special circumstances including the appellant's unexplained dissipation of assets post-judgment; the absence of evidence that the appeal would be stultified if security were ordered; the appellant's apparent ability to find the resources to conduct the appeal; the absence of any satisfactory explanation for the appellant's non-compliance with the rules of court and procedural directions in relation to the appeal; and the substantial risk that if successful, the respondent will not recover his costs of the appeal from the appellant.

1. Weighing all the matters which arise for consideration on this application, my conclusion is that the Court ought exercise its discretion in favour of ordering security for costs.

Appropriate orders

1. In terms of quantum, the respondent seeks an amount of $50,000 based on his solicitor's unchallenged estimate. In my view, a fair and appropriate amount having regard to the estimated length of the appeal (of not more than one day) would be $40,000. I propose to order that the appellant provide security for costs in the sum of $40,000 by payment into court. The proceedings will be stayed pending the provision of such security. The appellant is to pay the respondent's cost of the appeal.

1. The existing freezing orders made by Young AJ on 11 March 2013 have the effect of preventing the appellant from disposing of his assets except for limited purposes, unless the respondent consents to the relevant disposition as expressly contemplated by the orders made by Young AJ.

1. The Court raised this matter with counsel for the respondent who has confirmed in writing to the Court that if an order for security is made, the respondent consents to the appellant making the necessary disposition of property so as to provide any security so ordered. The Court's orders will be framed on the basis that such consent has been given by the respondent.

1. The orders of the Court will be that:

(1)   The appellant provide within 14 days security in the sum of $40,000 for the respondent's costs of the appeal by payment into court.

(2)   The appeal be stayed until such security is provided.

(3)   The Court notes the consent given by the respondent to the appellant, pursuant to order 2(b) made by Young AJ on 11 March 2013 in proceedings numbered 2011/69385, to:

(a)   the disposition of property by the appellant insofar as that disposition is by way of payment into court of the security, the subject of order 1 above; and

(b)   the disposition by a bona fide arms-length sale of any of the items of property of the appellant identified in paragraphs [4] to [8] of the appellant's affidavit sworn 11 February 2013 in such proceedings, if required to meet the payment into court of the security, the subject of order 1 above.

(4)   The appellant to pay the respondent's costs of the motion.

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Decision last updated: 14 June 2013