KABALAN v ELIAS BROS PTY LTD SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL MAHONEY JA 7 February 1994 [1994] NSWCA 160 Mahoney JA This is an application for security for costs in respect of an appeal to this Court from an order of Giles J. Summarising the matter briefly and therefore perhaps to an extent inadequately, the position is as follows. A claim was made which went before an arbitrator. The arbitration went against the appellant, Mr Kabalan. An appeal was brought to Giles J and his Honour, in a judgment given on 12 November 1993, adopted the arbitrator's report and, in effect, found against the appellant, Mr Kabalan. Mr Kabalan has brought an appeal to this Court against his Honour's judgment. There are two basic grounds upon which the appeal has been brought. (I disregard count one for this purpose; it is a ground that does not appear to be relevant in relation to the present matter). The two grounds are: (1) that the referee ought not, in reaching his finding, have drawn inferences adverse to the appellant's case from the correspondence between the solicitors; and (2) the court ought not to have found that a particular conversation took place. The effect of that conversation was relied upon in relation to a defence under the Statute of Limitations. This is a case to be brought to the Court of Appeal. It appears from the thrust of the judgment of Giles J that the likelihood of the appellant succeeding in the Court of Appeal is not very great. On one view it is relatively small, but it is a matter which is arguable and the appeal may be brought. The evidence establishes, so far as it appears from the material before this Court - and I emphasise that qualification - that if he fails, Mr Kabalan, the appellant, will not be able to pay the costs of the respondent to the appeal. He has stated in terms in his affidavit that he is not able to provide security for costs. The effect, therefore, of an order for security will be, in practical terms, that the appeal will be aborted. The issue of principle with which I am confronted is the issue posed by Pt51 r11. That rule provides that when a notice of appeal has been filed the Court of Appeal may, in special circumstances, order that such security as the Court of Appeal thinks fit, be provided for the costs of the appeal, but that subject to subr(1) no security for the costs of an appeal to the Court of Appeal shall be required. The thrust of that rule is, of course, to be taken from the precise terms of it, and I do not go beyond the terms of it; but the general policy behind the rule is that subject to an order made in special circumstances, no security for the costs of an appeal to this Court "shall be required". In the present case the real purpose of bringing the application is to prevent the appeal going on The argument of the applicant is that the application is brought to secure that the payment of costs will be secured if the appeal fails. That, of course, is so. But in practical terms the application is brought knowing that the effect of its success will be, in the circumstances, to prevent the appeal going on. 2 UNREPORTED JUDGMENTS I am conscious of the possibility that, notwithstanding that he has said he cannot provide security if an order is made, Mr Kabalan may, in fact, be able to provide security. Suggestions have been made from the Bar table that his affidavit is not to be taken at face value. I put that matter compendiously and it is not necessary for me to analyse the detail of what has been put or what is said in the affidavit. But there is a statement in the affidavit that if security is ordered, "I would be unable to provide any security for the costs of this appeal". That statement has not been subjected to cross examination or sought to be contradicted by evidence. On the basis of that statement as it has been put to the court and the state of the evidence, I do not feel that I should prevent the appeal going on. I appreciate the background of the proceedings. I have taken into account, inter alia, the extent of the possibility that the appeal will succeed and I have taken into account what Giles J has said in that regard. However, in all the circumstances I do not think that I should, in the light of the provisions of the rules, make an order which, in the present circumstances, has the effect of preventing the appeal going on. If there were more detail in relation to the matter which would show that the appeal was quite hopeless, then a different attitude might be adopted; but in fairness I do not think that that has been shown, and by what I say I do not suggest that it could have been shown. There is a possibility of the appeal succeeding, albeit a small possibility. In these circumstances I do not think that an order for security for costs should be made. I propose to dismiss the application. I think it must be dismissed with costs.