PSELLETES v BECA DEVELOPMENTS PTY LTD (IN LIQUIDATION) SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL HANDLEY and BEAZLEY JJA 2 March 1998 [1998] NSWCA 175 Handley JA In this matter, Mr Durston of counsel moves on a Notice of Motion of 18 February for an order that Mr Pselletes provide security of costs of the appeal that was granted by leave of this Court on 19 February. The appeal is from an order for the winding up of Centurion Constructions Pty Ltd on a summons presented by the liquidator of Beca Developments Pty Ltd. The summons relied on a judgment debt entered in favour of Beca Developments in proceedings heard and determined by Young J in September 1997. The cause of action relied upon was an inter-company loan, Mr Pselletes having controlled both companies prior to the liquidation of Beca Developments. The court which granted leave to appeal was persuaded that Mr Pselletes had a strong case that a set-off of $282.390 established prima facie by evidence before Young J in the form of an affidavit sworn by him on 11 April 1997 had been inadvertently overlooked by the Judge. If a set-off for this amount was allowed, no amount would be owing by Centurion Constructions to Beca Developments. Mr Pselletes, as a former director and a shareholder in Centurion Constructions, was permitted to present a summons for leave to appeal, in effect as a representative of this company in liquidation, control having passed to the court-appointed liquidator. This circumstance ordinarily justifies, if not requires, an order that the director appellant provide security for costs of the appeal. However having reviewed the evidence of Mr Pselletes in his affidavit of 10 April 1997, and the annexed documents and business records, and having been taken by Mr Durston to the affidavit of the liquidator, Mr Wily, of 14 July 1997, the Court has reached the firm conclusion that Mr Pselletes, and through him Centurion Constructions Pty Ltd, has a very strong prima facie case for succeeding in this appeal. In these circumstances the Court finds that the ordinary rule requiring security to be given by an appellant in the position of Mr Pselletes is displaced and the application for an order for security of costs should be refused. Since this view is based on a prima facie view of the merits of the appeal, the appropriate order is that the costs of this motion be costs in the appeal. The order of the Court is therefore motion dismissed, costs of the motion, costs in the appeal. Motion dismissed, costs of the motion, costs in the appeal.