GULABRAI v HAMER-MATHEW [No2] SUPREME COURT OF NEW SOUTH WALES — COURT OF APPEAL KIRBY P, PRIESTLEY JA and SHELLER JA 8 May 1995 [1995] NSWCA 188 PRACTICE AND PROCEDURE-Court of Appeal-stay of execution of judgment-provision of security for costs-establishment of "special circumstances"'-total sum orders and unpaid on judgment $200,613.00-prospects of success affected by withdrawal of primary defence at trial-held (1) "special circumstances" for security for costs established under Pt51r11(1) SCR; (2) Security ordered and stay provided on terms that the claimant pay $120,000 into court. Supreme Court Rules Pt51r11(1). Kirby P. The proceedings before the Court started as an application for extension of time within which to move the Court and a summons for leave to appeal. However, it subsequently appeared that the claimant, Lux Gulabrai, filed a notice of appeal as of right challenging judgments of Brownie J of 22 August and 6 September 1994 and Master McLaughlin of 7 April 1995. That notice of appeal will, in due course, come before the Court for hearing. It is therefore sensible that the Court should transfer the proceedings which are before it today so that the motions and the summons will come before the Court which is constituted to hear the appeal which is brought as of right. This is a sensible deployment of the resources of the Court, not least because I am commencing these reasons at 4.30pm at the end of a heavy motions list. That then leaves two questions which are incidental. The Court should deal with them immediately. The first is whether to provide any stay of the execution of the judgment of Master McLaughlin given on 7 April 1995. The opponent asked the Court to require that some part of that judgment be paid into Court or other arrangements appropriately be made. The second question is whether any order should be made providing for the security for the costs of the appeal to this Court. In the special circumstances of the case it is appropriate that security for costs should be ordered. The Rules of Court require that 'special circumstances' should be shown before making such a provision as to security for costs in this Court. See. S1r 11(1) SCR The long chronicle of the litigation between the parties has produced the following position of indebtedness by the claimant to the opponent: Order of Master McLaughlin $ 101,613 Order of Justice Brownie as to indemnity costs $ 62,000 Order of Master McLaughlin as to indemnity costs $ 35,000 Sub-Total: $ 198,613 Already paid by the claimant to the opponent $ 30,000 Adjusted sub-total: $ 168,613 Alleged supplementary orders $7000 2 UNREPORTED JUDGMENTS Federal Court orders for costs alleged $ 5000 Total: $ 180,613 Costs of the appeal estimated $ 20,000 Final total: $ 200,613 The claimant contests the substantive orders. That will be, in due course, the point of the appeal. He also doubtless contests some of the costs orders. Even apart from liability he quite possibly contests the quantification of the orders. However, enough has been said to show that, at least if the matters remain in theposition they are in at the moment, the litigation has resulted in a very substantial indebtedness by the claimant to the opponent. That indebtedness is now expressed in the judgment. It is appropriate that the litigation should not go forward without some proper provision for the stay of execution of the judgments and a provision for security for costs. In so concluding I take into account the evidence, which has been placed before the Court in the affidavit of Mr Trevor Carter, solicitor, sworn 4 May 1994. That evidence, which has not been the subject of cross-examination or effective contest at this stage in the proceedings, indicates that it is not known, or not revealed, whether the claimant owns or leases the property in which he lives in Spring Street, Bondi Junction. He is, it seems, a citizen of the United States of America and not of this country. It appears that he has two children attending schools in this city, one at Cranbrook School and the other at Kambala School. However, the Court does not have information as to the claimant's financial status. Possibly because of the nature of the proceedings which the claimant came to advance before the Court today, such material has not been placed before the Court in full detail. The Court is now invited to provide a stay of execution of the judgment. Effectively, the judgment comprises the orders of the Master but also the orders for indemnity costs which the Master made and which earlier Brownie J made. I take into account the circumstances in which those orders were made. In the case of Brownie J they were made after the claimant sought, and was granted, leave to withdraw his substantial defence at the trial. That development obviously has relevance to the assessment of the prospects in the appeal. It does seem to me that the claimant should have a stay of execution of the judgment of Master McLaughlin and of the costs order of Brownie J. It also seems appropriate that the opponent should have some security for the costs of the appeal estimated at $20,000. It is not convenient to apportion part of the order to the stay and to security. In the result, however, I believe that the claimant, to gain the benefit of the stay, and to provide, in the special circumstances, for the security for costs which I would order, must deposit with the Registrar a sum of $120,000. Otherwise there should be no stay. That sum may be deposited in cash with the Registrar or by an appropriate bank draft. Alternatively, if the solicitors for the claimant and the opponent can agree upon the establishment of a jointly administered fund in which will be deposited the sum of $120,000 to abide the outcome of the appeal, then that would be a sensible course which is often taken in matters of this kind. A joint account is frequently established because it is sometimes found that solicitors can secure a better rate of interest than the Court can obtain. JOBNAME: No Job Name PAGE: 3 SESS: 1 OUTPUT: Mon Feb 25 18:12:36 2008 /reports/caseml]/case/urj/9508068 URJ GULABRAI v HAMER-MATHEW [No2] (Kirby P) 3 In providing for a deposit of a sum of $120,000 I have kept in mind the fact that the claimant has already paid $30,000, apparently in order to avoid an earlier contest as to a stay. However that payment is not sufficient having regard to the history of the matter and my own assessment, at this stage, necessarily in a 5 preliminary way as to the prospects of success in the appeal. Accordingly, the orders which I propose are: 1. Direct that the motions and summons before the Court this day be heard by the Court which is constituted to hear the appeal by Mr Lux Gulabrai in Court of Appeal matter 40056/95. . Order that the orders of Brownie J of 22 August 1994, 6 September 1994 and the orders of Master McLaughlin of 7 April 1995 be stayedupon the following conditions: (a) That the claimant deposit with the Registrar in a form reasonably acceptable to the Registrar an amount of $120,000 to abide the outcome of the appeal and the further order of the Court or of a Judge of the Court; or (b) That the claimant deposit in a bank account jointly administered by the solicitors for the claimant and the opponent the sum of $120,000 to abide the outcome of the appeal or the further order of the Court or of a Judge of the Court; and . Order that the costs of the proceedings before the Court today be costs in the appeal. Priestley JA. I agree. 25 Sheller JA. I also agree. Kirby P. Such are the orders of the Court. 1. Direct that the motions and summons before the Court this day be heard by the Court which is constituted to hear the appeal by Mr Lux Gulabrai in Court of Appeal matter 40056/95; . Order that the orders of Brownie J of 22 August 1994, 6 September 1994 and the orders of Master McLaughlin of 7 April 1995 be stayed upon the following conditions: (a) That the claimant deposit with the Registrar in a form reasonably acceptable to the Registrar an amount of $120,000 to abide the outcome of the appeal and the further order of the Court or of a Judge of the Court; or (b) That the claimant deposit in a bank account jointly administered by the solicitors for the claimant and the opponent the sum of $120,000 to abide the outcome of the appeal or the further order of the Court or of a Judge of the Court; and . Order that the costs of the proceedings before the Court today be costs in the appeal. Counsel for the appellant: K Andrews Solicitors for the appellant: N G Cassim and Co Counsel for the respondent: C Evatt/J Young 50 Solicitors for the respondent: Carter Solicitors