FEDERAL COURT OF AUSTRALIA Bailey v Beagle Management Pty Ltd [2001] FCA 60 PRACTICE AND PROCEDURE – application for leave to appeal against refusal to set aside notices to produce issued in connection with security for costs applications – documents sought accepted to be relevant – whether notices fishing – whether general rule that party issuing notice must first have evidence supporting substantive claim – nature of fishing objection – whether substantial injustice if order wrong and uncorrected WORDS AND PHRASES – "fishing" COSTS – unsuccessful application for leave to appeal against interlocutory order in a matter of practice and procedure – whether costs should be ordered to be paid forthwith pursuant to O 62 r 3(2) Federal Court of Australia Act 1976 (Cth) s 24(1A) Federal Court Rules O 33 r 12, O 62 r 3(2) Commissioner for Railways v Small (1938) 38 SR (NSW) 564 at 575 followed Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 followed Jarrett v Seymour (1993) 46 FCR 557 followed Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at 177 followed Home Office v Harman [1983]1AC 280 mentioned Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10 at 33 mentioned Associated Dominions Assurance Society Pty Ltd v John Fairfax & Son Pty Ltd (1952) 72 WN(NSW) 250 at 254 followed Caltex Refining Co Pty Ltd v AMWU (unreported, Full Court, 6 December 1990) followed Trade Practices Commission v CC (New South Wales) Pty Ltd (1995) 58 FCR 426 at 436 followed Treasurer v CanWest Global Communications Corp [1997] FCA 578 followed Microsoft Corporation v Adelong Electronics Pty Ltd [1997] FCA 224 followed Bertran v Vanstone [1999] FCA 1753 at pars 18-23 followed In the matter of Davison, Donnelly v Davison [2000] FCA 1396 followed Grant v Downs (1976) 135 CLR 674 at 685 followed WA Pines Pty Ltd v Bannerman (1980) 41 FLR 175 at 181 mentioned PETER G BAILEY & ORS V BEAGLE MANAGEMENT PTY LTD & ORS V 435 OF 2000 HEEREY, BRANSON AND MERKEL JJ 12 FEBRUARY 2001 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 435 OF 2000 BETWEEN: PETER G BAILEY AND OTHERS (ACCORDING TO THE SCHEDULE ATTACHED) FIRST APPLICANT TO EIGHTEENTH APPLICANTS AND: BEAGLE MANAGEMENT PTY LTD (ACN 009 280 791) FIRST RESPONDENT B M LIMITED (ACN 009 362 350) SECOND RESPONDENT BEAGLE HOLDINGS PTY LTD (ACN 009 280 782) THIRD RESPONDENT JOHN CARLTON YOUNG FOURTH RESPONDENT HELEN MARGARET SEWELL FIFTH RESPONDENT PERPETUAL TRUSTEES W A LTD (ACN 08 666 886) SIXTH RESPONDENT JUDGES: HEEREY, BRANSON AND MERKEL JJ DATE OF ORDER: 12 FEBRUARY 2001 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. Leave to appeal against the order of Goldberg J made 1 November 2000 be refused. 2. The applicants pay the respondents' costs of the application, such costs to be taxed and paid forthwith. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 435 OF 2000 BETWEEN: PETER G BAILEY AND OTHERS (ACCORDING TO THE SCHEDULE ATTACHED) FIRST APPLICANT TO EIGHTEENTH APPLICANTS AND: BEAGLE MANAGEMENT PTY LTD (ACN 009 280 791) FIRST RESPONDENT B M LIMITED (ACN 009 362 350) SECOND RESPONDENT BEAGLE HOLDINGS PTY LTD (ACN 009 280 782) THIRD RESPONDENT JOHN CARLTON YOUNG FOURTH RESPONDENT HELEN MARGARET SEWELL FIFTH RESPONDENT PERPETUAL TRUSTEES W A LTD (ACN 08 666 886) SIXTH RESPONDENT JUDGES: HEEREY, BRANSON AND MERKEL JJ DATE: 12 FEBRUARY 2001 PLACE: MELBOURNE REASONS FOR JUDGMENT THE COURT: 1 The applicants seek leave to appeal against an order of Goldberg J made on 1 November 2000 dismissing their motion seeking orders that certain notices to produce be struck out as an abuse of process. It is not in dispute that the order was an interlocutory judgment and that leave is required: Federal Court of Australia Act 1976 (Cth) s 24(1A). At the conclusion of the hearing on 6 February 2001 we announced that leave would be refused. We now publish our reasons. 2 The notices to produce were filed by the respondents pursuant to O 33 r 12 in connection with applications for orders that the applicants provide security for costs. These applications were brought under s 1335(1) of the Corporations Law or in the alternative under s 56 of the Federal Court of Australia Act or O 28 r 3 of the Federal Court Rules. 3 The substantive proceeding, commenced on 21 June 2000, arises out of the issue in 1988 of a prospectus seeking investments in a pine plantation scheme. The first to seventeenth applicants invested in the scheme using funds borrowed from the eighteenth applicant Equuscorp Pty Limited (Equus). Equus asserts a right to sue in their names pursuant to powers of attorney and as mortgagee in possession of their interests. That right is apparently in dispute. But in any event the practical reality is that Equus is the moving party in this litigation. 4 The applicants allege promises in the prospectus by various of the respondents, and also representations directly to Equus, that the respondents or some of them would cause to be maintained a "secondary market" in the interests issued pursuant to the prospectus. The complaint is that, had it not been for these representations, Equus would not have advanced monies to the other applicants for their investments. The causes of action alleged include breaches of the Trade Practices Act 1974 (Cth), the Fair Trading Act 1999 (Vic) and the Australian Securities and Investment Commission Act 1989 (Cth). 5 On 10 October 2000 the first to fifth respondents filed a notice of motion seeking an order that all applicants provide security for costs. On the same day those respondents served a notice requiring the applicants to produce in respect of Equus: "1. the latest balance sheet; 2. the latest forecast balance sheet; 3. the latest profit and loss forecast; 4. the latest consolidated profit forecast; 5. monthly accounts for the past 12 months; 6. the latest two sets of unaudited accounts; 7. the income tax returns for the financial years ended 30 June 1998, 30 June 1999 and 30 June 2000 (if available);" 6 On 17 October the sixth respondent filed a notice of motion seeking security and served a notice requiring production of; "1. All accounts, profit and loss statements, statements of assets and liabilities, annual reports and income tax returns of (Equus): · for, or in respect of, the year ended 30 June 1999; · for, or in respect of, the six months ended 30 June 1999; · for, or in respect of, the six months ended 31 December 1999; · for, or in respect of, the year ended 30 June 2000." Material before the primary judge 7 Mr Roland Burt, a consultant with Norton Gledhill, Melbourne agents for Williams & Hughes, the Perth solicitors for the first to fifth respondents, deposed that the proceeding was a "relatively substantial piece of litigation". The claim was for a sum in excess of $2 million. The matters alleged cover a period of more than a decade and covered a great deal of factual material and raised numerous legal issues. Thirteen of the investor applicants had either settled their debts or compromised those debts or Equus has surrendered the security it held. A number of the issues arising from the allegations in respect of a secondary market raised issues of taxation, primary production and legislative amendments. Large numbers of documents dating back to the 1980s would have to be reviewed and many witnesses interviewed. Mr Burt's detailed estimate of costs on a party and party basis up to and including a twenty day trial amounted to $467,800. Some of those costs would overlap costs incurred by the first to fifth respondents in connection with related Federal Court proceeding VG 299 of 1998. Taking account of this overlap Mr Burt reduced his estimate by one-third to $311,867. 8 Mr Burt produced correspondence between solicitors for the parties in July and August 2000. By letter dated 27 July Norton Gledhill asserted that the other applicants had brought the proceeding not for their own benefit but for the benefit of Equus. Agreement for the provision of security was sought. By letter dated 3 August the solicitor for Equus advised that Equus undertook to meet any order for costs that may be made against any of the applicants. The letter asserted that Equus was a financial institution established fourteen years ago which was "presently engaged in approximately 800 pieces of litigation". It had litigated "many matters in the courts of Victoria and other Australian States and has met all costs orders made against it". It had established a separate list in the Supreme Court of Victoria to pursue some of this litigation. It was "well aware of the consequences of the failure to meet a costs order and in particular the effect that it would have on its ability to pursue litigation in all courts". 9 Williams & Hughes replied by letter dated 8 August repeating a number of matters deposed to by Mr Burt in an affidavit sworn in the related Equus proceeding VG 299 of 1998. Equus had a paid up capital of $2.5 million. There were presently four charges registered in relation to Equus which had not been satisfied. The charges secured all present and future assets and undertakings of Equus. The charges secured respectively · all monies owed by Equus to Beneficial Finance Corporation Ltd · all monies up to $200 million · all monies up to $1.5 million · all monies up to $800,000 Equus had an obligation to pay costs to ten defendants in Victorian County Court proceedings which it was estimated would be taxed in a sum in excess of $200,000. Williams & Hughes' letter further asserted that a search of documents held by ASIC disclosed an unregistered first ranking charge over the assets and undertaking of Equus in favour of Australian Mortgagee Discounters Pty Ltd. Recent proceedings in the Supreme Court of Western Australia had resulted in a liability for costs of the order of $155,000 and damages of $47,652.90 plus accruing interest. The letter noted that Equus had not produced, or offered to produce, evidence of its present and future financial position. The consent of the other applicants to be included in the proceeding had not been obtained and at least three of those applicants were undischarged bankrupts. Certain documents were sought, being substantially the same as those subsequently identified in the notice to produce. 10 By letter dated 18 August the solicitors for Equus asserted amongst other things that Equus had "ownership of substantial assets (including choses in action) together with liquid funds in excess of $800,000", was "actively engaged in carrying on business" (the nature of which was not specified) and was "solvent according to the generally accepted accounting definition of solvency". It was said that Equus had "never failed to meet any costs order made against it and that Equus presently conducts recovery and other litigation throughout Australia worth in excess of $80 million and involving over 1000 debtors". It proposed a security in the form of an assignment of its management agreements issued to the other applicants. By letter of 25 August Norton Gledhill declined that offer. 11 Mr Mark Dobbie, the solicitor for the sixth respondent, swore an affidavit which corroborated Mr Burt's costs estimates. 12 At the hearing before Goldberg J the applicants did not rely on any affidavits. Before us the applicants tendered, without opposition from the respondents, an affidavit sworn by the solicitor for Equus on 1 February 2001 which deposed that the County Court costs had now been taxed at $169,374.48, and had been paid by Equus on 16 January 2001. The affidavit also referred to an Equus proceeding in the Supreme Court of Victoria. At a hearing on 24 January 2001 before Beach J the same point as arises in the present leave application had been taken. His Honour had reserved his decision and indicated he would probably await the Full Federal Court's decision on the present leave application. Decision of the primary judge 13 The applicants argued before the primary judge that the notices to produce were an abuse of process because they were fishing. Reliance was placed on the well known statement of Jordan CJ in Commissioner for Railways v Small (1938) 38 SR (NSW) 564 at 575: "In the absence of special circumstances eg Griebart v Morris [1921] KB 659, a party is no more entitled to use a subpoena duces tecum than he is a summons for interrogatories for the purpose of 'fishing', i.e. endeavouring not to obtain evidence to support his case but to discover whether he has a case at all." 14 The primary judge accepted that this principle applied equally to notices to produce. His Honour said: "7. There is a clear distinction to be drawn between a notice to produce which involves a fishing expedition and a notice to produce which does seek to obtain evidence to support a party's case. I read The Commissioner for Railways v Small (supra) as being authority for the proposition that where a subpoena or notice to produce is served to obtain evidence to support a party's case then the subpoena or the notice to produce will not be regarded as fishing or as an abuse of process or as vexatious and will not be set aside. That will only occur where a party is in fact seeking to discover whether the party has a case at all. 8. I consider that under whichever head of jurisdiction this matter is considered, the documents which are sought in the notices to produce are relevant to the issues raised on the respondents' motions. They go to the financial position of the applicant. The financial position of the corporate applicant, Equuscorp Pty Limited, speaking broadly, is a relevant issue on these applications for security for costs. As senior counsel for the applicants rightly pointed out, accounts and documents of the type sought may not necessarily provide a true and proper view of the financial position of the corporation to which they relate. Nevertheless the documents which are sought to be produced are relevant to a determination of the financial position of the corporate applicant. 9. I recognise that there is no onus on a security for costs application, such as those before me, for any party to establish issues such as solvency, ability to pay debts, or insolvency. If an order is made for the production of documents pursuant to a notice to produce I do not regard such an order as establishing, or being predicated upon there being, any onus upon the corporate applicant in any way. 10. At the present time there is only affidavit evidence before me from the respondents which will have to be addressed in due course. Some of that evidence is challenged as being inadmissible and some of it is challenged as being of little probative value but 1 have to decide those issues in due course. On the other side of the record there is no affidavit evidence from the applicants, in particular the corporate applicant, but there are written submissions which assist to define what are the relevant issues to be determined on the applications for security for costs. 11. I am satisfied, having regard to the material presently before me and the manner in which the issues are defined, not only by reference to that material but by reference to the submissions, that the documents which are sought are relevant to the issues which have to be determined on the applications for security for costs. 1 do not regard the notices to produce as undertaking a fishing expedition to discover whether the respondents have a case at all. I consider an appropriate characterisation of the notices to produce as being designed or calculated to obtain evidence to support their case." Leave to appeal in matters of practice and procedure 15 The leading authority in this Court on leave to appeal is the Full Court decision in Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397. The primary matters to be considered are (i) whether the decision at first instance was attended with sufficient doubt to warrant it being reconsidered and (ii) whether substantial injustice would result if leave were refused supposing the decision as first instance was wrong; see also Jarrett v Seymour (1993) 46 FCR 557. Those principles apply to an application for leave to appeal against any interlocutory judgment. Further appellate restraints apply when the order sought to be appealed from is a matter of practice and procedure, as is the order in the present case: Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at 177. The majority (Gibbs CJ, Aickin, Wilson and Brennan JJ) said (at 177, citations omitted): "Nor is there any serious dispute between the parties that appellate courts exercise particular caution in reviewing decisions pertaining to practice and procedure. Counsel for Brown urged that specific cumulative bars operate to guide appellate courts in the discharge of that task. Not only must there be error of principle, but the decision appealed from must work a substantial injustice to one of the parties. The opposing view is that such criteria are to be expressed disjunctively. Cases can be cited in support of both views: for example, on the one hand, Niemann v. Electronic Industries Ltd; on the other hand, De Mestre v. A. D. Hunter Pty. Ltd. For ourselves, we believe it to be unnecessary and indeed unwise to lay down rigid and exhaustive criteria. The circumstances of different cases are infinitely various. We would merely repeat, with approval, the oft-cited statement of Sir Frederick Jordan in In re the Will of F. B. Gilbert (dec.): '… I am of the opinion that, …there is a material difference between an exercise of discretion which determines substantive rights. In the former class of case, if a tight rein were not kept upon interference with the orders of Judges of first instance, the result would be disastrous to the proper administration of justice. The disposal of cases could be delayed interminably, and costs heaped up indefinitely, if a litigant with a long purse or a litigious disposition could, at will, in effect transfer all exercises of discretion in interlocutory applications from a Judge in Chambers to a Court of Appeal.' See also, Brambles Holdings Ltd. v. Trade Practices Commission; Dougherty v. Chandler. It is safe to say that the question of injustice flowing from the order appealed from will generally be a relevant and necessary condition." Substantial injustice 16 The applicants accept that the documents sought by the notices to produce are relevant for the determination of the security for costs applications. It was not contended that these documents are so numerous or difficult to locate that the notices to produce impose obligations that are burdensome and oppressive. There was a complaint (said not to have been made before Goldberg J) that Equus would be required to produce confidential documents evidencing its financial position. But the respondents would of course be bound by the implied undertaking not to disclose or use documents obtained by compulsory process otherwise than for the purpose of the litigation: Home Office v Harman [1983] 1 AC 280, Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10 at 33. In any case, the respondents are not trade rivals of Equus. 17 So if the order of Goldberg J is wrong but remains uncorrected the injustice suffered by the applicants can only be that on the hearing of the security applications unarguably relevant evidence will be before the judge. This does not strike us as injustice at all, let alone substantial injustice. Moreover, his Honour did no more than decide on the production of evidence which might be tendered in the course of a hearing which is itself interlocutory. The order is thus several removes from any question affecting the substantive rights of Equus. 18 We hold therefore that the order complained of, even if wrong, would not occasion substantial injustice. In the present case, on this ground alone we would refuse leave to appeal. The suggested "reasonable apprehension" rule 19 Senior Counsel for the applicants however argued that leave should be granted because the primary judge was not only incorrect, but erred by contravening what was said to be a general rule. The vindication of this rule was said to amount to a matter of general importance such as to warrant the grant of leave even if the Décor tests were not otherwise satisfied. 20 The suggested rule was in these terms: "For a notice to produce not to constitute 'fishing' and therefore an abuse of process: (a) the material relied upon by the respondent in support of its notice to produce should give rise to a reasonable apprehension that the corporation may be unable to pay the costs of the respondent if successful in his, her, or its defence; (b) the notice to produce must seek to discover relevant documents." 21 As the argument developed, it appeared that the material referred to in the first limb was material already before the Court in support of the security for costs application. If such material did not give rise to a "reasonable apprehension" of possible inability to pay costs, a notice to produce would be fishing. Moreover, this consequence would follow whether or not the documents sought were relevant; the two limbs of the rule imposed cumulative requirements. 22 As already noted, the relevance of the documents sought was not in dispute in the present case. But it was submitted that the first limb of the rule had not been satisfied. However, we do not accept there is any such rule. Even if there were, it would have no application in the circumstances of the present case. 23 In the first place, as the majority said in Adam P Brown in the passage already quoted (par 15 above), rigid and exhaustive criteria are undesirable in matters of practice and procedure, since the circumstances of different cases are infinitely various. Their Honours were of course discussing the approach to the grant of leave to appeal against an interlocutory order in a matter of practice and procedure, but the warning is we think equally applicable in the present context. The adoption of the rigid test proposed by the applicants would unnecessarily fetter the Court's broad discretionary powers in relation to the interlocutory processes that are appropriate for the just determination of a security for costs application. 24 Further, we do not accept that the proposed test would be sound even if it were stated as a general principle. If a security for costs application is properly brought we can see no reason for imposing any criterion upon the trial judge in respect of a notice to produce given to the other party by the applicant for security other than that, generally, the judge be satisfied that the documents the subject of the notice are specified with reasonable particularity and are properly being sought to advance the case to be put by the applicant. Of course, in determining whether a notice to produce should be set aside the Court will consider the relevance of the documents sought and the extent to which the notice might be fishing, vexatious, oppressive or inappropriate for any other reason. 25 Secondly, the notices to produce in the present case are simply not fishing at all, in the sense in which that term is used metaphorically in the law relating to discovery, interrogatories, subpoenas, notices to produce and other forms of compulsive interlocutory process, that is to say where "… a person who has no evidence that fish of a particular kind are in a pool desires to be at liberty to drag it for the purpose of finding whether there are any there or not." (Associated Dominions Assurance Society Pty Ltd v John Fairfax & Son Pty Ltd (1952) 72 WN(NSW) 250 at 254 per Owen J) 26 In the present case it can be safely assumed that the documents sought by the notices to produce in fact exist, they being standard financial documents which the law and proper accounting practice would require companies of any substance to generate. Likewise, as already mentioned, there can be no doubt that these documents contain information relevant to the issues which arise on a security for costs application. The only uncertainty is whether that information would help or hinder the security application. But unpredictability of response has never been a bar to the pursuit of relevant evidence, as many a hapless cross-examiner who received an unexpected answer will attest. 27 Thirdly, even if the notices to produce are properly to be regarded as fishing, that concept has undergone substantial rethinking in this Court in recent years. In a number of cases it has been pointed out that O 15A r 6 (discovery before action) expressly contemplates what once might have been castigated as fishing and that it would be incongruous if the power to order discovery were less extensive in favour of a party to a proceeding properly brought in the Court than in favour of someone unable for lack of evidence to mount a case: Caltex Refining Co Pty Ltd v AMWU (unreported, Full Court, 6 December 1990), Trade Practices Commission v CC (New South Wales) Pty Ltd (1995) 58 FCR 426 at 436 (Lindgren J), Treasurer v CanWest Global Communications Corp [1997] FCA 578 (Full Court), Microsoft Corporation v Adelong Electronics Pty Ltd [1977] FCA 224 (Burchett J), Bertran v Vanstone [1999] FCA 1753 at pars 18-23 (Kenny J), In the matter of Davison, Donnelly v Davison [2000] FCA 1396 (Branson J). Also one should not lose sight of what the majority of the High Court in Grant v Downs (1976) 135 CLR 674 at 685 noted as the public interest "…which requires that in the interests of a fair trial litigation should be conducted on the footing that all relevant documentary evidence is available." 28 The applicants' suggested rule imposes a requirement that, to avoid the stigma of fishing, a party must already be in possession of some evidence before issuing a notice to produce (or, presumably, any other compulsive interlocutory process). But historically the concept of fishing was not concerned with the prior possession of evidence but rather that there was a prior pleading which raised issues for which the evidence sought by the process would be relevant. In Edward Bray's "Principles and Practice of Discovery" (1885) – described by R P Meagher QC in the 1981 Foreward to a reprinted edition as "the standard Victorian [era] masterpiece on the subject" – the learned author, speaking of the stage at which discovery can be required said (at 16, emphasis added): "… the right to discovery is limited to supporting a definite case set up, and does not extend to fishing out a case from the opponent; and therefore a party cannot have discovery before he has stated his case, whether in the claim as plaintiff or the defence as defendant." 29 This principle underlies the common practice whereby a plaintiff who has no recollection of the accident issues a statement of claim alleging negligence by reason of excessive speed, failure to keep a proper lookout etc. The plaintiff then interrogates the defendant as to factual circumstances of the accident. The plaintiff may have no other evidence, and is plainly seeking to make out a case, but such interrogatories are not considered objectionable on the ground of fishing. 30 The substantive issue for present purposes is not the ultimate liability of the respondents but the question of security for costs. There are no pleadings as to that, but for practical purposes the issues on the security application have been raised in the correspondence between the parties. At the risk of tedious repetition, we note again that the documents sought are relevant to those issues. 31 Moreover, often a holding that interlocutory process is fishing on closer examination appears to be more a question of oppression. In Small, immediately after the passage already quoted (par 13) above), Jordan CJ goes on to say: "Even if the documents are specified, a subpoena will be set aside as abusive if great numbers of documents are called for and it appears they are not sufficiently relevant." 32 His Honour appears to accept that, when the documents sought from a party to the proceeding are described with reasonable particularity and are relevant, they could not be said to be sought for the purpose of fishing, although if a large number of documents of only marginal relevance were sought, the subpoena would be set aside as oppressive. 33 Fourthly, there is a further practical consideration in relation to applications for security for costs. Delay in making the application will operate as a discretionary factor against the ordering of security, it being obviously unfair to allow the other party to incur costs which might be rendered fruitless as a result of inability to comply with a belated order for security. So if the suggested rule applied, a party might delay a security for costs application while seeking to obtain sufficient material to raise a "reasonable apprehension" of inability to pay costs before serving a notice to produce. The party might then be met with the argument that the application should fail because of delay. 34 In the light of such considerations, modern techniques of case management suggest a more pragmatic and flexible approach than the structured, rule-laden regime proposed by the applicants. 35 Finally, in the circumstances of this case, there was, prior to the service of the notices to produce, at the very least a suspicion that grounds for ordering security existed, proof of which was likely to be aided by the notices to produce: WA Pines Pty Ltd v Bannerman (1980) 41 FLR 175 at 181 per Brennan J. · The assets of Equus were subject to a number of charges which secured amounts well in excess of its paid up capital and which would crystallise upon any process of execution being issued. · On its own account, it was engaged in a huge amount of litigation, some of which at least had already proved unsuccessful. The potential liability for costs orders was obvious. 36 Moreover, the respondents requested that all applicants provide security on the basis that, as to the first to seventeenth applicants, they were litigating for the benefit of Equus. In response, Equus proffered its own undertaking and asserted a previous history of meeting costs orders. It advanced selective and unsubstantiated generalised statements as to its financial position, e.g. "ownership of substantial assets", "liquid funds in excess of $800,000". Having put its financial standing in issue in this way, Equus can hardly complain about notices to produce which seek evidence as to the worth of its promises. Costs 37 The applicants must pay the respondents' costs. We also think this an appropriate case for an order under O 62 r 3(2) that these costs be paid forthwith. The policy behind O 62 r 3 is that, in the ordinary course of litigation, costs awarded in interlocutory proceedings need not be paid until the conclusion of the proceeding when set-offs can be made in the light of the ultimate orders for costs. There is an access to justice aspect in this. Impecunious litigants who have a meritorious claim or defence should not be forced out of court because of inability to meet interlocutory costs orders. However applications for leave to appeal in interlocutory matters of practice and procedure stand on a different footing. There is a strong public policy against the proliferation of such applications, for the reasons given by Jordan CJ and endorsed by the High Court in Adam P Brown (par 15 above). The applicants in the present case having failed in this application, the respondents should not have to wait for a year or more before being paid. Orders 38 1. The applicants pay the respondents' costs of the application, such costs to be taxed and paid forthwith. 2. The applicants pay the respondents' costs of the application, such costs to be taxed and paid forthwith. I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Heerey, Branson and Merkel. Associate: Dated: 12 February 2001 Counsel for the Applicants: J D Hammond QC and J C Simpson Solicitor for the Applicants: P Kotsanis Counsel for the first to fifth Respondents: S R Horgan Solicitors for the first to sixth Respondents: Norton Gledhill Counsel for the sixth Respondents: P G Cawthorn Solicitors for the sixth Respondent: Middleton, Moore & Bevins Date of Hearing: 6 February 2001 Date of Judgment: 12 February 2001