Supreme Court New South Wales Medium Neutral Citation: Kirova Holdings Pty Limited v Commonwealth Bank of Australia [2025] NSWSC 98 Hearing dates: 21 February 2025 Date of orders: 21 February 2025 Decision date: 21 February 2025 Jurisdiction: Equity - Commercial List Before: Stevenson J Decision: First plaintiff to provide security for costs; proceedings be stayed if security not provided Catchwords: COSTS – security for costs – legal nature of the plaintiff – where co-plaintiff is an individual, but company is the true plaintiff – where plaintiff did not in substance address the defendant's application – where stay of proceeding if security is not provided Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW) Corporations Act 2001 (Cth) Category: Procedural rulings Parties: Kirova Holdings Pty Limited (First Plaintiff) Nashaat Sedhom (Second Plaintiff) Commonwealth Bank of Australia (Defendant) Representation: Counsel: J Foley (Defendant) Solicitors: Plaintiffs (self-represented) Clayton Utz (Defendant) File Number(s): 2024/116573 EX TEMPORE JUDGMENT (REVISED) 1. The plaintiffs, Kirova Holdings Pty Limited and Mr Sanahaat Sedhom commenced these proceedings on 14 March 2024. Although both Kirova and Mr Sedhom are named as plaintiffs, in substance, the claim that is made is by Kirova itself. 2. The claim is made following the settlement and discontinuance of the class action against the defendant, the Commonwealth Bank of Australia, which was approved by the Court on 15 December 2023. 3. The settlement provided that class members had a right to opt out of the settlement. Kirova exercised that right. 4. The claim that Kirova makes in the proceedings relates to loan contracts made between the Bank and Kirova. Mr Sedhom executed a guarantee in relation to Kirova's obligations, although that does not appear to play any role in the proceedings or in any allegations made by Kirova in these proceedings. 5. Kirova brings these proceedings against the Bank for breach of contract on the basis that the Code of Banking Practice formed part of the loan agreements between the Bank and Kirova, on the basis that the Bank allegedly breached the Code of Banking Practice in various ways. 6. The position of the proceedings is that the parties have not yet served evidence. The parties attended a mediation, which was not successful. 7. Mr Sedhom appeared today for himself and the company. 8. By Notice of Motion filed on 8 November 2024, the Bank seeks security for costs in the sum of $188,587.50. 9. I have received careful submissions from Mr Foley, who appears for the Bank. 10. With great dignity, Mr Sedhom outlined what I understood to be his complaints against the Bank's conduct in relation to him over the years. Mr Sedhom did not, in substance, address the Bank's application for security for costs, save that Mr Sedhom told me that, "All my assets are gone", and that, "I don't have any money". 11. Earlier this week, Mr Sedhom sent my Associate some documents which appear to be submissions directed to the complaints that Mr Sedhom wishes to make about how he sees the Bank as having treated him, rather than being directed to the application by the Bank for security for costs. 12. The question for me on this application is whether there is reason to believe that the plaintiffs would be unable to meet an adverse costs order were one to be made. As I have said, Mr Sedhom told me today he has no assets. Kirova has paid up capital of $5. It does not appear to own any real property. In correspondence, the Bank's solicitors sought from the plaintiffs' then solicitors information, including financial statements, balance sheets, and profit and loss accounts, that might cast light on Kirova's financial position. That material was not forthcoming. 13. As to the quantum of costs, the Bank's claim is based upon an estimate made by its solicitor of the likely future costs the Bank will incur in the proceedings. A necessarily broad brush approach must be taken in cases such as this, but I am satisfied that a figure in the order of that sought is an appropriate figure. 14. It is true that Mr Sedhom, himself, is one of the plaintiffs in the proceedings. The presence of an actual person, as the co-plaintiff, is a factor that is relevant to the Court's discretion in making an order for security for costs. I am persuaded that, in substance, the true plaintiff is Kirova and that there is no separate claim made in the proceedings attributable to any right or interest of Mr Sedhom himself. 15. I propose to order the payment of security. The Bank invites me to make an order that the proceedings stand dismissed if security is not provided. I do not propose to do that. I will order that if the security is not provided, the proceedings will be stayed. 16. I make the following orders: 1. Grant Mr Sedhom leave to appear for the plaintiff company today. 2. Pursuant to rule 42.21(1) of the Uniform Civil Procedure Rules 2005 (NSW) and section 1335 of the Corporations Act 2001 (Cth), the first plaintiff provide security for costs of the defendant of this proceeding in the sum of $188,587.50. 3. The security for costs ordered pursuant to paragraph 1 of this Order is to be provided within 28 days of the date of this Order, and in the form of: 1. the sum of $188,587.50 paid into court; or 2. an unconditional bank guarantee in the sum of $188,587.50 from an Australian owned bank (as recognised by the Australian Prudential Regulation Authority) in favour of the Principal Registrar of the Supreme Court of New South Wales, to be held by the Principal Registrar and in a form agreed, or failing agreement, in a form satisfactory to the Principal Registrar. 1. Subject to further order of the Court, in the event that the security is not provided in accordance with any order for security made by the Court, this proceeding be stayed. 2. The costs of this notice of motion be costs in the cause. 3. Stand the matter over for directions before the Commercial List Judge on 4 April 2025. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 25 February 2025