RADLEY INVESTMENT COMPANY PTY LTD v AMQUE CLOTHING PTY LTD SUPREME COURT OF NEW SOUTH WALES — COURT OF APPEAL HANDLEY JA 27 August 1993 [1993] NSWCA 222 Handley JA. Mr Segal, pursuant to liberty to apply reserved by the President on 5 July, has sought the prolongation of a stay of proceedings on the judgment entered by Judge Garling in favour of the first respondent for some $28,000 and costs. The President ordered that moneys be paid into court, or equivalent security be provided, within six weeks of that day and gave liberty to apply and ordered that if the sum was not paid, or appropriate security provided, within that time, that the proceedings be returned to the court for further order. Pursuant to that direction the matter came before me on Monday 23 August. At that stage the position adopted by the claimant/appellant was that no security of any kind was being offered as the price of, or as a condition of, a further stay. As a result of a question from me, Mr Segal indicated that further security in the form of a guarantee by Kabale Holdings Pty Ltd could be offered. There was at that stage no evidence as to the assets or liabilities of Kabale Holdings Pty Ltd and Mr Segal was not then formally instructed bythat company. In those circumstances I thought the appropriate course was to adjourn the matter until today and I directed that a further affidavit be filed and served on behalf of the claimants by 12 noon Tuesday 24 August 1993. When the matter was before me this morning, the deponent of that affidavit, Mr Dalley, was cross-examined by Mr Brereton and some additional documentary evidence was tendered by him. It seems evident that the appellants are in no position, on the material before me, to provide any further or other security for the protection of the opponents in respect of the judgment debt apart from the guarantee by Kabale Holdings Pty Ltd Nevertheless to some extent the position of the opponents/respondents will be improved by the giving of that guarantee. I propose to order that it be given. This afternoon, when the proceedings came back before me part heard from this morning, Mr Brereton made an oral application for an order that the appellants provide security for the respondents" costs of the appeal pursuant to RSC Pt 51 r 11. This provides that the Court of Appeal in special circumstances may order such security as the court thinks fit to be given for the costs of an appeal. It is customary to order that there should be a stay of proceedings in the appeal until the order for security has been complied with. One of the difficulties associated with this very late application for an order for security for costs is that, pursuant to the order of the President made on 5 July, the appeal in this case has been expedited and is currently fixed for 23 September next. In the light of the evidence of Mr Dalley it is apparent that it will not be easy for the appellants to pay or provide the additional security now sought for the respondents" costs of the appeal. There can be no certainty that they will be able to do so within sufficient time before23 September to enable the appeal to 2 UNREPORTED JUDGMENTS proceed conveniently on that date. However, I have consulted with the President and it appears that the court has a heavy list in September and although it would normally be reluctant to take a course which would result in an appeal which had been fixed for hearing being unfixed, and the hearing deferred to a later date, that course is not so unpalatable in the present case because of the heavy list for September. This is a difficult case and at the present moment I have no idea what the merits, or otherwise, are of the appeal. It is apparent that both groups of parties are in a position of some financial difficulty but the ultimate factor which persuades me that an order for security for costs should be made is that these appellants, whatever their other difficulties, have found, or are proposing to find, the funds to pay for the costs of the preparation of the appeal books and to arrange for their own costs of this appeal. In a situation where they are unable to provide any tangible security for the judgment debt and the costs of the trial, I do not consider that it is appropriate that they should put the respondents to further expense in defending the appeal in circumstances where there is no commercial or legal certainty that those further costs can be promptly recovered if the appeal fails. It is this factor which persuades me that special circumstances exist which warrant the making of an order for security. In the circumstances which I have outlined in these reasons, and have discussed with counsel, it seems to me that there have been elements of procedural default and delay on both sides which should be reflected to some modest extent in the order I make for costs. I think the appropriate order is that the costs of this application since 5 July should be the respondents" costs in the appeal. Needless to say I do not disturb the order for costs made by the President on 5 July, that the costs up to that date should be costs in the appeal. I therefore make the following orders. I order that the appellants provide a guarantee by Kabale Holdings Pty Ltd for the judgment debt in this matter and the respondents" costs of the trial in a form to be agreed with the solicitors for the respondents or, in default of such agreement, to be settled by the Registrar, such deed is to be provided and executed under the common seal of Kabale Holdings Pty Ltd on or before Wednesday 8 September 1993. I further order that the appellants provide security for the respondents" costs of the appeal in the sum of $5,000, such security to be in the form of cash or its commercial equivalent and to be provided in a form satisfactory to the respondents or approved by the Registrar on or before 4 pm Monday 13 September 1993. In default of such security being provided the hearing date presently fixed for the hearing of the appeal on Thursday 23 September will be vacated and the appeal will be stood over to a date to be fixed by the Registrar. If the hearing date is vacated I order that the security for costs be provided on or before Wednesday 13 October 1993, and that in the meantime the appeal be stayed. I grant liberty for the respondents to move to dismiss the appeal for want of prosecution if such security is not provided on or before Wednesday 13 October. I continue the present stay of execution on the District Court judgment up to and including Wednesday 8 September at 5 pm, but such stay will lapse at that time if the deed of guarantee executed under the common seal of Kabale Holdings Pty Ltd has not previously been lodged with the Registrar. I order that the costs of this motion incurred since 5 July this year be the respondents" costs in the appeal. UAADLEY INVESTMENT COMPANY PTY LTD v AMQUE CLOTHING PTY LTD (Handle$ JA) If the deed of guarantee executed by Kabale Holdings Pty Ltd is lodged with the Registrar on or before Wednesday 8 September 1993, the stayof execution on the judgment of the District Court will continue until the final disposal of the appeal or the further order of this court. Exhibits, apart from exhibit D, will be returned. Orders accordingly.