FEDERAL COURT OF AUSTRALIA Imperial China Tours Pty Ltd v Petrovski [2017] FCA 1005 File number: NSD 660 of 2017 Judge: GLEESON J Date of judgment: 10 August 2017 Date of publication of reasons: 25 August 2017 Catchwords: PRACTICE AND PROCEDURE – security for costs – security sought pursuant to s 56 of the Federal Court of Australia Act 1976 (Cth) and s 1335(1) of the Corporations Act 2001 (Cth) – security ordered Legislation: Federal Court of Australia Act 1976 (Cth) s 56 Corporations Act 2001 (Cth) s 1335 Federal Court Rules 2011 r 19.01 Cases cited: Cornelius v Global Medical Solutions Australia Pty Ltd; [2014] NSWCA 65; (2014) 98 ACSR 301 FFE Minerals Australia Pty Ltd v Mining Australia Pty Ltd [2000] WASCA 69; (2000) 22 WAR 241 Health Information Pharmacy Franchising Pty Ltd v Khoo [2010] FCA 438 KP Cable Investments Pty Ltd v Meltglow Pty Ltd [1995] FCA 76; (1995) 56 FCR 189 Livingspring Pty Ltd v Kliger Partners [2008] VSCA 93; (2008) 20 VR 377 Power Infrastructure Pty Ltd v Downer EDI Engineering Power Pty Ltd [2010] FCA 1222 Topcide Pty Ltd v Charter Financial Planning Ltd [2010] FCA 1151 Treloar Constructions Pty Ltd v McMillan [2016] NSWCA 302 Wollongong City Council v Legal Business Centre Pty Ltd [2012] NSWCA 245 at [30] Date of hearing: 10 August 2017 Registry: New South Wales Division: General Division National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Category: Catchwords Number of paragraphs: 42 Counsel for the Plaintiff: Ms G Jardine Solicitor for the Plaintiff: Holding Redlich Counsel for the Defendant: Mr J O'Connor Solicitor for the Defendant: Sward Law ORDERS NSD 660 of 2017 BETWEEN: IMPERIAL CHINA TOURS PTY LTD ACN 070 223 166 Plaintiff AND: TONY PETROVSKI Defendant JUDGE: GLEESON J DATE OF ORDER: 10 August 2017 THE COURT ORDERS THAT: 1. Pursuant to s 56 of the Federal Court of Australia Act 1976 (Cth) and s 1335(1) of the Corporations Act 2001 (Cth), the plaintiff provide security for the defendant's costs of the proceedings in the sum of $55,000 by way of unconditional bank guarantee in that sum, or otherwise to the satisfaction of the District Registrar of the Sydney District Registry of the Court. 2. The proceedings by the plaintiff be stayed as against the defendant until provision of that security is provided in accordance with order 1 above. 3. The plaintiff pay the defendant's costs of the application. 4. The proceeding be listed for case management on 7 September 2017 at 9.30 am. 5. There be liberty to apply on 24 hours' notice. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT GLEESON J: 1 On 10 August 2017, I made an order pursuant to s 56 of the Federal Court of Australia Act 1976 (Cth) ("Federal Court Act") and s 1335(1) of the Corporations Act 2001 (Cth) that the plaintiff ("Imperial China Tours" or the "corporation") provide security in the sum of $55,000 for the defendant's costs of the proceeding, and ancillary orders. 2 These are my reasons for making those orders. Substantive proceeding 3 The defendant, Mr Petrovski, is a former employee of Imperial China Tours. 4 By originating application dated 4 May 2017, Imperial China Tours seeks relief pursuant to ss 1317E and s 1317H of the Corporations Act, on grounds stated in an affidavit of Ju Yang made 3 May 2017. Ms Yang is the director and sole shareholder of Imperial China Tours. 5 In simple terms, Imperial China Tours alleges that Mr Petrovksi stole in excess of $452,000 from it over the period from 18 March 2011 to 20 December 2016. It alleges that, on about 90 occasions, Mr Petrovski transferred sums of money into his own bank accounts in the course of making payments to other companies on behalf of Imperial China Tours. Ms Yang's affidavit also referred to additional losses sustained as a result of Mr Petrovski's conduct which, Ms Yang said, she was in the process of quantifying but which would most likely exceed $1 million. 6 Imperial China Tours alleges that Mr Petrovski's thefts contravened ss 182(1) and 183(1) of the Corporations Act. By s 182(1), an employee of a corporation must not improperly use their position to gain an advantage for themselves or someone else or cause detriment to the corporation. By s 183(1), a person who obtains information because they are, or have been, an employee of a corporation must not improperly use the information to gain an advantage for themselves or someone else or cause detriment to the corporation. 7 Mr Petrovski admits that he transferred the disputed payments to himself but claims that they were authorised by Ms Yang. In support of that contention, Mr Petrovski has produced a notebook which appears to record Ms Yang's authorisation of the payments by handwritten initials. 8 Imperial China Tours contends that the notebook has been fabricated. In support of its case, Imperial China Tours has served an expert report of a forensic document examiner, Christopher Anderson, dated 20 July 2017. 9 As part of its case, Imperial China Tours also intends to rely upon evidence, presently contained in an affidavit of Naomi Riggs sworn 28 July 2017, that Mr Petrovski previously stole approximately $450,000 from another former employer. 10 Ms Yang and Mr Petrovski have each made detailed affidavits supporting their respective versions of events. Clearly, they cannot both be telling the truth. If the matter proceeds to a final hearing, a principal issue will be the determination of who should be believed. That determination will involve a conclusion that at least one of Ms Yang or Mr Petrovski has told serious lies on oath. Evidence 11 In support of his application for security for costs, Mr Petrovksi relied on an affidavit of Tania Sward, his solicitor, sworn 30 June 2017 and his own affidavit sworn 8 June 2017. 12 Ms Sward's evidence includes the following: (1) an ASIC search which shows that Imperial China Tours has a paid up share capital of $64,001, that the corporation has not filed any financial records since 2002 and that its principal place of business is in Sydney, New South Wales; (2) a NSW Land and Property Information search which is said to show that the corporation is not the registered proprietor of any real property in Australia; (3) a letter dated 13 June 2017 from Sward Law to the solicitors for Imperial China Tours, Adviceline Injury Lawyers. Concerning the financial position of the corporation, the letter asserts: (a) Imperial China Tours owns no real property that could be used to satisfy an adverse costs order; (b) there is reason to believe therefore that the corporation will be unable to pay the costs of Mr Petrovski if his is successful in his defence; and (c) as sole shareholder of the corporation, Ms Yang stands to benefit if Imperial China Tours succeeds in the litigation. The letter then requests the following documents: (i) financial records of the corporation including profit and loss statements for the period 30 June 2014 to date; and (ii) income tax returns submitted by the corporation for the 2014, 2015 and 2016 financial years. (4) A letter dated 15 June 2017 from Adviceline Injury Lawyers to Sward Law denying the request for financial information. The letter states that Sward Law does not have any concern that their client may be impecunious and that the request for financial material is made without a proper basis. (5) A letter dated 21 June 2017 from Sward Law to Adviceline Injury Lawyers which: (d) notes that there is no issue that Imperial China Tours does not own any real property; (e) states that the ASIC search annexed to Ms Yang's 3 May 2017 affidavit confirms that no financial reports have been lodged by the corporation with ASIC since 2002; and (f) asserts that Mr Petrovski is entitled to inspect the financial records of the corporation to determine whether it is able to pay his costs in the event that it is ordered to do so. 13 In opposing the application, Imperial China Tours relied on Ms Yang's 3 May 2017 affidavit, a further affidavit of Ms Yang sworn 2 August 2017, the affidavit of Ms Riggs referred to above and Mr Anderson's 20 July 2017 report. 14 The written submissions filed on behalf of Imperial China Tours noted that Ms Yang attests to financial hardship suffered by the corporation during the course of Mr Petrovski's employment. Ms Yang says that, during that time, she attributed the corporation's financial difficulties to lower margins, the state of the economy and changing patterns of travel. Ms Yang says that it was only after Mr Petrovski resigned his employment that she became aware of the alleged thefts. Specifically, Ms Yang said: (6) "[I]t was only after Petrovski left the business in early 2017, that I realised that Petrovski had abused [his position of] trust by stealing nearly half a million dollars over 8 years and causing millions of dollars of other damage to the business by his theft". In her 2 August 2017 affidavit, Ms Yang says that she expects the corporation to make a claim for damages of $2 million in addition to the current claim of $452,000. (7) Mr Petrovski's thefts required Ms Yang to sell her apartment in Beijing, China, and her apartment in Sydney to raise cash. Ms Yang used those funds to keep the corporation afloat. (8) In 2016, the financial situation of the corporation was very poor, as a result of Petrovski's thefts. (9) Since Mr Petrovski has left, the corporation "is now going well financially and gradually beginning to become profitable again." (10) If the corporation is ordered to provide security for costs, the order would be likely to stifle the claim against Mr Petrovski. (11) Ms Yang believes that the corporation would have sufficient funds to meet any costs order. However, where it is alleged that Mr Petrovski is the reason for the corporation's financial difficulties, Ms Yang does not see how the interests of justice could be served by the Court making an order for security for costs against the corporation. Legal framework 15 Section 56 of the Federal Court Act provides: (1) The Court or a Judge may order an applicant in a proceeding in the Court, or an appellant in an appeal under Division 2 of Part III, to give security for the payment of costs that may be awarded against him or her. (2) The security shall be of such amount, and given at such time and in such manner and form, as the Court or Judge directs. (3) The Court or a Judge may reduce or increase the amount of security ordered to be given and may vary the time at which, or manner or form in which, the security is to be given. (4) If security, or further security, is not given in accordance with an order under this section, the Court or a Judge may order that the proceeding or appeal be dismissed. (5) This section does not affect the operation of any provision made by or under any other Act or by the Rules of Court for or in relation to the furnishing of security. 16 Section 1335(1) of the Corporations Act provides: Where a corporation is plaintiff in any action or other legal proceeding, the court having jurisdiction in the matter may, if 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 in his, her or its defence, require sufficient security to be given for those costs and stay all proceedings until the security is given. 17 Rule 19.01 of the Federal Court Rules 2011 provides (notes omitted): (1) A respondent may apply to the Court for an order: (a) that an applicant give security for costs and for the manner, time and terms for the giving of the security; and (b) that the applicant's proceeding be stayed until security is given; and (c) that if the applicant fails to comply with the order to provide security within the time specified in the order, the proceeding be stayed or dismissed. (2) An application under subrule (1) must be accompanied by an affidavit stating the facts on which the order for security for costs is sought. (3) The respondent's affidavit should state the following: (a) whether there is reason to believe that the applicant will be unable to pay the respondent's costs if so ordered; (b) whether the applicant is ordinarily resident outside Australia; (c) whether the applicant is suing for someone else's benefit; (d) whether the applicant is impecunious; (e) any other relevant matter. 18 In Health Information Pharmacy Franchising Pty Ltd v Khoo [2010] FCA 438 at [5] ("Khoo"), Yates J said: Unlike s 1335(1) of the Corporations Act, s 56 of the Federal Court Act does not require "credible testimony that there is reason to believe that the corporation will be unable to pay the costs of [the respondents]". The differences between the two provisions have been considered by decisions of this Court: see, for example, Instyle Contract Textiles Pty Ltd v Good Environmental Choice Services Pty Ltd [2009] FCA 1422; (2009) 181 FCR 360 at [6]-[8]; MHG Plastic Industries Pty Ltd v Quality Assurance Services Pty Limited [2002] FCA 821 at [8]-[9]. However, given that the applicant's impecuniosity was the cornerstone of their motion, the respondents submitted that the Court's jurisdiction under both provisions was, in this case, relevantly identical. They proceeded on the basis that they were required to satisfy the threshold requirement of s 1335(1) in order to succeed on the motion. This approach is understandable. Where the only asserted basis for an order for security relates to the alleged inability of the applicant to meet a future costs order, it is difficult to see in practice a difference between the operation of the two provisions: see the observations of Perram J in Soul Pattinson Telecommunications Pty Ltd v Subex Americas Inc [2009] FCA 651 at [6]. 19 As Mr Petrovski's application is founded upon a claim of reason to believe that Imperial China Tours will be unable to pay his costs, there is no practical difference in the approach to deciding whether to make an order under either s 56 or s 1335(1). Reason to believe corporation will be unable to pay costs 20 In Treloar Constructions Pty Ltd v McMillan [2016] NSWCA 302 ("Treloar"), Beazley ACJ considered whether an applicant for security for costs had satisfied the threshold requirement for making an order under s 1335(1). At [12], her Honour cited the following observation of Maxwell P and Buchanan JA in Livingspring Pty Ltd v Kliger Partners [2008] VSCA 93; (2008) 20 VR 377 ("Livingspring") at [15]: "The section calls for a practical, commonsense approach to the examination of the corporation's financial affairs." 21 At [13], her Honour noted that the requirement of "reason to believe" is a "low threshold" reflecting the policy of the section, which is to protect a party against the risk of a corporation's impecuniosity, again citing Livingspring. 22 In Treloar, the applicant for security for costs had determined that the respondent corporation had a total paid up capital of $100 and no real property registered on the Land and Property Information NSW database. The applicant's lawyers had sought from the corporation satisfactory proof of the corporation's ability to meet a costs order of the magnitude of approximately $100,000 but received no response. The applicant's lawyers had also sought from the corporation a balance sheet or other materials sufficient to demonstrate that it would be able to meet a costs order but received no response. 23 At [25] and following, Beazley ACJ considered the decision of the Western Australian Court of Appeal in FFE Minerals Australia Pty Ltd v Mining Australia Pty Ltd [2000] WASCA 69; (2000) 22 WAR 241. In that case, the Court was satisfied of the necessary belief where the applicant for security for costs had adduced evidence that the relevant corporation had limited share capital and no land on the relevant land register, and where there was no evidence from the respondent corporation. 24 At [29], Beazley ACJ concluded: In my opinion, Mr McMillan has satisfied the threshold requirements of s 1335. As the evidence established, Treloar Constructions is a company with no real estate and a limited share capital. It is a project management and building services company and as such would not be expected to have any stock. Prior to the bringing of the application, it was asked to provide proof that it could meet an order for costs but chose not to do so. Although Mr McMillan would have been in a stronger forensic position had a notice to produce been issued, I am, as I have said, nonetheless satisfied that Mr McMillan has established by credible evidence that there is reason to believe that Treloar Constructions would be unable to pay an order for costs if unsuccessful on the appeal. Onus of proof 25 Once it appears by credible testimony that there is reason to believe that a corporation will be unable to pay the costs of the defendant if successful in its defence, there is an evidentiary burden on the party resisting the order for security for costs to establish a reason why security should not be granted: Wollongong City Council v Legal Business Centre Pty Ltd [2012] NSWCA 245 at [30] ("Wollongong City Council"); Topcide Pty Ltd v Charter Financial Planning Ltd [2010] FCA 1151 at [12]; Power Infrastructure Pty Ltd v Downer EDI Engineering Power Pty Ltd [2010] FCA 1222 at [9]. 26 Even so, the burden rests on the defendants, from first to last, to persuade the Court that the order for security should be made: Livingspring at [21]. 27 In Cornelius v Global Medical Solutions Australia Pty Ltd [2014] NSWCA 65; (2014) 98 ACSR 301 at [20], considering the reasons in Wollongong City Council, Macfarlan JA said: The expression "evidential burden" can be used in at least three senses: (Strong v Woolworths Ltd [2012] HCA 5; 246 CLR 182 at [46] - [64]). For present purposes, it is sufficient to say that it includes reference to the principle that in certain circumstances a party who does not bear the ultimate burden of proof may have to raise for consideration matters that favour it if it wishes them to be taken into account in the determination of the case. The evidential burden of raising a matter is thus distinct from the legal onus of proving entitlement to an order for security for costs which it is correct to describe as resting throughout on an applicant for such an order. Factors relevant to discretion 28 In KP Cable Investments Pty Ltd v Meltglow Pty Ltd [1995] FCA 76; (1995) 56 FCR 189 at 196, Beazley J said: The law is now settled that the discretion to order security for costs is unfettered and should be exercised having regard to all the circumstances of the case without any predisposition in favour of the award of security: ...In Gentry Bros Pty Ltd v Wilson Brown & Associates Pty Ltd (1992) 8 ACSR 405 at 415, Cooper J stated that: [i]t is not possible or appropriate to list all of the matters relevant to the exercise of the discretion. The factors will vary from case to case. The weight to be given to any circumstance depends upon its own intrinsic persuasiveness and its impact on other circumstances which have to be weighed: PS Chellaram & Co Ltd v China Ocean Shipping Co (1991) 65 ALJR 642 at 643. Notwithstanding the broad unfettered discretion with which the Court approaches an application for security for costs, there are a number of well established guidelines which the court typically takes into account in determining any such application. They are: 1. That such applications should be brought promptly. ... 2. That regard is to be had to the strength and bona fides of the applicant's case are relevant considerations: ... As a general rule, where a claim is prima facie regular on its face and discloses a cause of action, in the absence of evidence to the contrary, the court should proceed on the basis that the claim is bona fide with a reasonable prospect of success... 3. Whether the applicant's impecuniosity was caused by the respondent's conduct subject of the claim... 4. Whether the respondent's application for security is oppressive, in the sense that it is being used merely to deny an impecunious applicant a right to litigate ... This factor is related to the next, namely: 5. Whether there are any persons standing behind the company who are likely to benefit from the litigation and who are willing to provide the necessary security: see Memetu Pty Ltd v Lissenden (1983) 8 ACLR 364; Sent v Jet Corporation of Australia Pty Ltd (1984) 2 FCR 201; Bell Wholesale Co Pty Ltd v Gates Export Corporation (1984) 2 FCR 1; Hession v Century 21 South Pacific Ltd (n liq) (1992) 28 NSWLR 120 at 123; [Bryan E Fencott & Assocs Pty Ltd v Eretta Pty Ltd [1987] FCA 102; (1987) 16 FCR 497] at 513; [Yandil Holdings Pty Ltd v Insurance Co of North America (1986) 7 NSWLR 571] at 545. The combined effect of these two principles was summarised by Meagher JA in Hession at 123 as follows: ...a company in liquidation against whom an order for security for costs is sought cannot successfully resist such an order merely by proving that it cannot fund the litigation from its own resources if an order for security is made; it must prove that it cannot do so even if it relies on the other resources available to it (the company's shareholders or creditors) ...Finally, whilst it is both true and important that poverty must be no bar to litigation, what that means is that the courts must be astute to see that no person pursuing a claim which is not frivolous is precluded from doing so by the erection of obstacles which poverty is unable to surmount; it does not mean that proof of insolvency automatically confers an immunity from statutory provisions which deal with insolvent plaintiffs. 6. An issue related to the last guideline is whether persons standing behind the company have offered any personal undertaking to be liable for the costs and if so, the form of any such undertaking: see Cameron's Unit Services Pty Ltd v Kevin R Whelpton & Associates (Australia) Pty Ltd (1986) 13 FCR 46 at 53; Mantaray Pty Ltd v Brookfield Breeding Co Pty Ltd (1990) 8 ACLC 304; Clyde Industries Ltd v Ryad Engineering Pty Ltd (1993) 11 ACLC 325. 7. Security will only ordinarily be ordered against a party who is in substance a plaintiff, and an order ought not to be made against parties who are defending themselves and thus forced to litigate... Consideration Reason to believe corporation will be unable to pay costs 29 Ms Sward's affidavit did not state whether there was reason to believe that the applicant will be unable to pay the respondent's costs if so ordered, in accordance with r 19.01(3). 30 Even so, I was satisfied that it appears by credible testimony, being Ms Sward's unchallenged affidavit evidence, that there is reason to believe that Imperial China Tours will be unable to pay Mr Petrovski's costs if he is successful in his defence. That conclusion is based on the evidence that: (g) the corporation has no real property and that, although it appears to have share capital of $64,001, ASIC searches reveal no other information about the corporation's financial position; (h) when asked to provide financial information to establish the corporation's capacity to pay an adverse costs order, the corporation declined to do so; (i) the company operates as a travel agent and there is nothing about the nature of its business activities to indicate a likelihood that it would own substantial assets. 31 Ms Sward's evidence must be evaluated in the light of the evidence of Ms Yang, which raises further matters of concern about Imperial China Tours' ability to pay Mr Petrovski's costs if successful in his defence. As noted above, Ms Yang stated that in 2016, the financial situation of the corporation was very poor. Her current assessment of the corporation's position is that it "is now going well financially and gradually beginning to become profitable again". However, Ms Yang said that an order for security for costs would be likely to stifle the claim against Mr Petrovski. This assessment does not, without more, support an inference that Imperial China Tours would be able to pay Mr Petrovski's costs of his defence. To the contrary, the prospect that the litigation would be stifled raises a real doubt about the corporation's financial position. 32 Although Ms Yang expressed her belief that the corporation would have sufficient funds to meet any costs order, she also acknowledged that the corporation has experienced financial difficulties (which she said were caused by Mr Petrovski). In the absence of an explanation for the basis for her belief, this evidence does not affect the testimony of Ms Sward. 33 On behalf of Imperial China Tours, Ms Jardine argued that Mr Petrovski had failed to pass the jurisdictional hurdle because he himself had identified no basis for doubt about the corporation's financial position. I did not accept that argument because the evidence does not establish that Mr Petrovski is or ever was in a position to know the financial position of the corporation. 34 Ms Jardine also submitted that the burden of proof was effectively reversed if Mr Petrovski was entitled to rely upon the corporation's refusal to provide financial information. To the extent that Ms Jardine intended to suggest that the application for security for costs could not be made without access to financial information of the kind that the corporation refused to provide, I do not accept that suggestion. In any event, it is significant that Ms Yang gave evidence which raised questions about the corporation's financial position, but did not provide objective financial information to support her positive belief that the corporation could pay Mr Petrovski's costs. That evidence gave weight to the submission that the corporation's refusal to provide financial information provided a foundation for the requisite reason to believe. Factors relevant to discretion 35 On behalf of Mr Petrovski, Mr O'Connor argued that security for costs should be ordered because: (1) the notebook supports Mr Petrovski's defence that Ms Yang approved the disputed payments, whereas Mr Anderson's report is untested; (2) Imperial China Tours' claim lacks credibility where Ms Yang has not reported Mr Petrovski to the NSW Police; (3) there is no evidence that Mr Petrovski has caused the corporation's impecuniosity given that Ms Yang says that the business is able to pay her $66,000 per year and the business has grown in the past few years; (4) Ms Yang, who stands to benefit from Imperial China Tours' claim, has provided no evidence of her own assets and liabilities; and (5) there is no evidence that, were security ordered, Imperial China Tours' claim would be stifled given that the corporation has not produced any financial records, Ms Yang says she is able to be paid $66,000 per year and Ms Yang has provided no evidence of her own assets and liabilities. 36 On behalf of Imperial China Tours, Ms Jardine submitted that: (1) Mr Petrovski's defence is very weak in light of Mr Anderson's report; (2) Mr Petrovski is the cause of any financial difficulty which the corporation may have; (3) the information provided in Ms Riggs' affidavit adds strength to the corporation's case against Mr Petrovski; and (4) an order for security for costs could well have a stifling effect on the corporation's claim, which is a very strong claim. 37 The parties' respective cases in the substantive proceedings are diametrically opposed: on Imperial China Tours' case, Mr Petrovski is a thief; Mr Petrovski's defence involves the proposition that Ms Yang is dishonestly pursuing a case to recover payments that she authorised in writing. The bona fide nature of Imperial China Tours' case is corroborated by the evidence of an independent expert but, at this stage, the evidence is untested and the claim that Mr Petrovski has fabricated records to support his defence is hotly denied. In those circumstances, I was unable to form a view about the strength of the respective cases. In particular, I could not conclude that Imperial China Tour's claim is not bona fide, or does not have reasonable prospects of success. Conversely, I could not conclude that Mr Petrovski's defence is weak where he has not had sufficient time to respond to Mr Anderson's report, and that report has not been tested. 38 I did not place weight on the affidavit of Ms Riggs in the absence of detailed submissions about the admissibility and weight of tendency evidence in the circumstances of the case, and where the former employer has not yet sworn an affidavit concerning the alleged prior thefts. Nor do I place weight on the fact that Mr Petrovski has not been reported to the police. 39 In the absence of any evidence of the corporation's financial position, I am unable to reach a conclusion as to whether the payments made to Mr Petrovski are the cause of any financial difficulties experienced by the corporation. 40 The evidence did not support a conclusion that the litigation is likely to be stifled in the event that an order for security was made. I accepted Mr O'Connor's submission that Ms Yang is a person who stands behind the company who is likely to benefit from the litigation. There was no evidence of her financial position apart from her evidence that she has sold her apartments in Beijing and Sydney. That evidence does not enable me to conclude that Ms Yang would be unable to provide the necessary security, and no submission was made to the effect that she is unable to do so. 41 Accordingly, I was satisfied that security for costs should be provided by the corporation. On the basis of Ms Sward's uncontested evidence, I accepted that $55,000 is an appropriate amount of security being approximately 77% of the bottom of the range of Ms Sward's estimated defence costs and 62.5% of the top of the range of Ms Sward's estimated defence costs. 42 I can well understand that such an order may seem to add insult to injury to Imperial China Tours, if its claim is genuine. However, where the parties' respective cases are so diametrically opposed and the expert report of Mr Anderson has not been tested, it is not appropriate to proceed on an assumption that the Mr Petrovski's defence does not have reasonable prospects of success. I certify that the preceding forty-two (42) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gleeson. Associate: Dated: 25 August 2017