Victorian Xray Group (Dandenong) Pty Ltd v Malouf trading as Malouf Solicitors

[2025] NSWCA 116

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

Victorian Xray Group (Dandenong) Pty Ltd v Malouf trading as Malouf Solicitors [2025] NSWCA 116

Hearing dates:

26 May 2025

Date of orders:

27 May 2025

Decision date:

27 May 2025

Before:

Griffiths AJA

Decision:

(1) Pursuant to Uniform Civil Procedure Rules 2005 (NSW) r 51.50(1) and, in the case of the first and second appellants, also under s 1335 of the Corporations Act 2001 (Cth):

(a) by 4:00pm on 16 June 2025 the appellants are to provide security in the sum of $20,000 towards the respondent’s costs of the appeal;

(b) by 4:00pm on 7 July 2025 the appellants are to provide security in the further sum of $20,000 towards the respondent’s costs of the appeal; and

(c) by 4:00pm on 28 July 2025 the appellants are to provide security in the further sum of $20,000 towards the respondent’s costs of the appeal,

these sums to be paid into Court or in such other form as the respondent may agree in writing before the relevant time expires.

(2) The proceedings be stayed until the appellants have provided security in accordance with Order (1)(a).

(3) The application by the respondent for orders that the appeal should be dismissed pursuant to Uniform Civil Procedure Rules 2005 (NSW) r 51.50(2A) if security has not been provided in accordance with Order (1) is adjourned.

(4) The respondent has leave to approach the Registrar if the appellants fail to make any of the payments specified in Order (1) within the times specified, with a view to the Registrar giving directions for there to be an urgent hearing concerning the adjourned application for orders dismissing the appeal.

(5) The appellants are to pay the respondent’s costs of the motion for security for costs filed on 28 November 2024.

Catchwords:

COSTS — security for costs — pending appeal — where no dispute that security for costs should be ordered — where additional undertaking proffered by appellants — whether appellants should be afforded opportunity to file further evidence

Legislation Cited:

Corporations Act 2001 (Cth), s 1335

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

Cases Cited:

Flynn v PPK Mining Equipment Pty Ltd [2023] NSWCA 151

Preston v Harbour Pacific Underwriting Management Pty Ltd [2007] NSWCA 247

Salmon v Albarran (No 2) [2024] NSWCA 99

Victorian X-Ray Group Pty Ltd v Malouf t/a Malouf Solicitors (No 3) [2024] NSWSC 888

Victorian X-Ray Group Pty Ltd v Malouf t/a Malouf Solicitors (No 4) [2025] NSWSC 353

Texts Cited:

Nil

Category:

Procedural rulings

Parties:

Victorian Xray Group (Dandenong) Pty Ltd (First Appellant / First Respondent to the motion)
Victorian Xray Group (Boronia) Pty Ltd (Second Appellant / Second Respondent to the motion)
Bevyn Thomas White (Third Appellant / Third Respondent to the motion)
Anthony Mark Malouf trading as Malouf Solicitors (Respondent / Applicant on the motion)

Representation:

Counsel:
M Luitingh (Appellants / Respondents to the motion)
A Avery-Williams (Respondent / Applicant on the motion)

Solicitors:
Jane Button & Associates Pty Ltd (Appellants / Respondents to the motion)
Sparke Helmore (Respondent / Applicant on the motion)

File Number(s):

2024/302485

Publication restriction:

Nil

 Decision under appeal 

Court or tribunal:

Supreme Court

Jurisdiction:

Common Law

Citation:

[2024] NSWSC 888; [2025] NSWSC 353

Date of Decision:

23 July 2024; 14 April 2025

Before:

Cavanagh J

File Number(s):

2021/139605

JUDGMENT

1. By notice of motion filed on 28 November 2024, the respondent in the appeal seeks security for costs.

2. The appeal is listed to be heard on 15 August 2025. The contest between the parties relates not to the question whether there should be an order for security but rather relates to the form that it should take.

3. For the following reasons, the appellants should pay security for costs in three tranches in the total amount of $60,000.

Background

4. The appeal relates to a judgment by Cavanagh J in Victorian X-Ray Group Pty Ltd v Malouf t/a Malouf Solicitors (No 3) [2024] NSWSC 888. By orders dated 23 July 2024, judgment was given to the then defendant and the then plaintiffs were ordered to pay the defendant’s costs of the trial. According to an affidavit dated 28 November 2024 by the respondent's solicitor, Mr John Coorey, those costs are estimated to be $750,000 (excluding GST). The costs have not yet been assessed, nor paid.

5. On 16 August 2024, the respondents to the present motion filed a notice of intention to appeal, which was followed by a notice of appeal filed 22 October 2024. An amended notice of appeal was filed on 20 May 2025. It raises multiple grounds of appeal, not only in respect of the primary judge’s orders dated 23 July 2024, but also a subsequent order dated 14 April 2025, in which the primary judge dismissed the then plaintiffs’ application to vary the costs order relating to the trial (see Victorian X-Ray Group Pty Ltd v Malouf t/a Malouf Solicitors (No 4) [2025] NSWSC 353). The hearing of the notice of motion filed 28 November 2024 was deferred pending finalisation of the application below to vary the costs order. On 28 April 2025, the Registrar made orders setting down the appeal for hearing commencing 15 August 2025 and directing the parties to file and serve submissions and evidence in respect of the security for costs motion by 23 May 2025.

6. Presumably in response to those directions, the parties filed various affidavits. The applicant on the motion filed Mr Coorey’s affidavit referred to above, as well as an updated outline of written submissions filed 23 May 2025.

7. The respondents to the motion filed updated submissions on 23 May 2025, and also relied upon two affidavits, dated 13 December 2024 and 23 May 2025, by their instructing solicitor, Ms Jane Button.

Consideration and determination

8. The applicant on the motion acknowledged that, despite the fact that security for costs was sought under both r 51.50 of the Uniform Civil Procedure Rules 2005 (NSW) and r 42.21 as against each of the three appellants, and/or s 1335 of the Corporations Act 2001 (Cth) against the corporate appellants only (i.e. the first and second appellants), it needed to demonstrate “special circumstances” as regards all three of the appellants, citing Salmon v Albarran (No 2) [2024] NSWCA 99 at [14] per Stern JA.

9. The relevant principles concerning the requirement for special circumstances were described by Stern JA in Flynn v PPK Mining Equipment Pty Ltd [2023] NSWCA 151 at [38]-[48]. Reference was also made to Basten JA’s summary of the relevant principles (Ipp JA and Hoeben J agreeing) in Prestonv Harbour Pacific Underwriting Management Pty Ltd [2007] NSWCA 247 at [18].

10. Mr Luitingh, who appeared for the respondents to the motion, candidly accepted that the evidence provided to date by his clients was inadequate. His primary position was to seek further time to provide additional evidence which he contended could satisfy the applicant on the motion to accept the respondents’ offer to give an undertaking to maintain equity in a property at Surfers Paradise (Property) in the amount of $60,000 in addition to an existing undertaking to maintain an amount of equity of at least $500,000 in that same Property. The existing undertaking formed the basis for the consent order made in the proceedings below which settled an earlier dispute regarding security for costs.

11. Ms Avery-Williams, who appeared for the applicant on the motion, said that the proffered additional undertaking was inadequate. In particular, she submitted that the proffered undertaking was deficient in the following circumstances:

1. a personal statement of Mr White’s assets and liabilities dated 5 May 2025 was not prepared by an accountant, nor verified by an accountant;

2. the statement did not take account of the appellants’ liability to pay the costs below, which are estimated to be in the amount of $750,000;

3. the valuation (dated 28 January 2025) valued the Property in the amount of $2.5 million, which gave the respondent little comfort in circumstances where Mr White’s liabilities were more than $2.3 million;

4. no sufficient documentation had been provided by the appellants regarding three mortgages now affecting the Property, apart from the limited information set out in the personal statement of assets and liabilities, which simply specified the amounts owing; and

5. the appellants had failed to disclose to the respondent the fact that, after acceptance of the earlier undertaking, Ms Tracey Maree White has been added as a joint tenant of the Property and nothing is known regarding her financial circumstances.

12. There is considerable force in each of those matters. This was effectively conceded by Mr Luitingh, apart from pointing out the appeal also included a challenge to the primary judge’s refusal to vary the costs order below, which could affect the $750,000 estimate on costs.

13. I shall now explain why I am not willing to give the appellants further time to provide evidence which might address these shortcomings. As noted above, directions were made on 28 April 2025 which required the parties to file updated submissions and any evidence concerning security for costs by 23 May 2025. The appellants relied on two affidavits, the second being dated 23 May 2025.

14. I consider that the appellants were afforded ample opportunity to adduce evidence in support of their offer to proffer the additional undertaking and their financial circumstances, but they failed to do so. Having regard to the fact that the appeal is scheduled to commence in approximately nine weeks’ time, I consider that the respondent is justified in not accepting the additional undertaking.

15. Mr Luitingh pointed to the appellants’ burden in preparing and providing appeal books, which he said might be affected by a different order requiring security for costs. He did not go so far, however, as to say that the appeal would be stifled by any such order, nor was there any evidence which would support any such claim.

Conclusion

16. For all these reasons, I accept that there should be an order in favour of the respondent concerning security for costs. I will make the following orders:

1. Pursuant to Uniform Civil Procedure Rules 2005 (NSW) r 51.50(1) and, in the case of the first and second appellants, also under s 1335 of the Corporations Act 2001 (Cth):

1. by 4:00pm on 16 June 2025 the appellants are to provide security in the sum of $20,000 towards the respondent’s costs of the appeal;

2. by 4:00pm on 7 July 2025 the appellants are to provide security in the further sum of $20,000 towards the respondent’s costs of the appeal; and

3. by 4:00pm on 28 July 2025 the appellants are to provide security in the further sum of $20,000 towards the respondent’s costs of the appeal,

these sums to be paid into Court or in such other form as the respondent may agree in writing before the relevant time expires.

2. The proceedings be stayed until the appellants have provided security in accordance with Order (1)(a).

3. The application by the respondent for orders that the appeal should be dismissed pursuant to Uniform Civil Procedure Rules 2005 (NSW) r 51.50(2A) if security has not been provided in accordance with Order (1) is adjourned.

4. The respondent has leave to approach the Registrar if the appellants fail to make any of the payments specified in Order (1) within the times specified, with a view to the Registrar giving directions for there to be an urgent hearing concerning the adjourned application for orders dismissing the appeal.

5. The appellants are to pay the respondent’s costs of the motion for security for costs filed on 28 November 2024.

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Decision last updated: 27 May 2025