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EX TEMPORE Judgment 1WARD JA: Before me are two applications, each for security for costs. The first is an application by notice of motion filed 16 October 2014 by the first to third respondents in appeal proceedings brought by Echelon Property Management Pty Ltd (Echelon) and Mr Ian Lazar. The second is by notice of motion, also filed 16 October 2014, by the fourth respondent in the appeal proceedings, a company by the name of Alexandria 1 Pty Ltd. 2The appeal proceedings were commenced by the filing of a notice of appeal on 6 August 2014. The appeal is brought from a decision of Brereton J in the Equity Division of the Supreme Court ([2014] NSWSC 572) and relates to his Honour's judgment as to compensation payable to the respective respondents pursuant to s 74P of the Real Property Act 1900 (NSW). 3The judgment appealed from follows an earlier judgment by Brereton J ([2014] NSWSC 444) in which his Honour found that a deed of assignment, which was relied upon as giving rise to a caveatable interest in respect to certain land, was a forgery. Mr Tyson, counsel for the first to third respondents, the applicants on the first motion, draws attention to the fact that there has been no appeal from that judgment. The appeal instead is from the decision of his Honour as to the amount payable by way of compensation. 4The appeal grounds simply assert error in finding that the affidavit material put to the court established that the respective respondents had suffered pecuniary loss because of the lodgement of the caveat in question over the property the subject of the court proceedings. 5The application by the first to third respondents in the appeal proceedings for security for costs is brought solely against Echelon. The evidence shows that it is a limited liability company domiciled outside New South Wales, is relatively newly established and holds no real property assets in Australia. A statutory presumption of insolvency has arisen against it, there having been no compliance with a statutory demand issued by the fourth respondent in the appeal proceedings. 6The first to third respondents to the appeal proceedings contend that an order for security for costs should be made on the basis that Echelon is impecunious, has not responded to solicitor's letters seeking security for costs, and has taken no steps in order to provide evidence of its books and financial records to show that it has the means to pay if it is ordered to provide costs in the future. 7It is noted that there has been no evidence served by Echelon in accordance with orders made by the Registrar as to the service of evidence on this application. It is also noted that there has been no compliance with the court rules in relation to the appeal. In particular there has been no service of any red book, and no submissions have been provided indicating the basis on which it is contended that his Honour erred in entering judgment in relation to the amount of compensation. 8It is also noted that no application has been made for leave to commence proceedings against the first two respondents each of which is in liquidation. 9The requirement for leave pursuant to s 471B of the Corporations Act 2001 (Cth) is one that applies in appeal proceedings as was noted by Beazley JA (as her Honour then was) in Distinctive FX 9 Pty Ltd v Statewide Developments Pty Ltd [2012] NSWCA 393; (2012) 30 ACLC 12-063 at [13]. 10Pursuant to r 51.50 of the Uniform Civil Procedure Rules 2005 (NSW) special circumstances must be shown before an order for security for the costs of an appeal can be made. In Preston v Harbour Pacific Underwriting Management Pty Ltd [2007] NSWCA 247 at [18] Basten JA noted that the principles governing applications for security for costs that have been set out by Beazley J (as her Honour then was) in the Federal Court in KP Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189 at 197-198 (there in the context of an unfettered discretion as to security for costs), remain relevant in assessing whether there are special circumstances for the purposes of the rule applicable when considering security for the costs of an appeal. 11Basten JA there had regard to what was said in Transglobal Capital Pty Ltd v Yolarna Pty Ltd [2004] NSWCA 136; (2004) 60 NSWLR 143 and Porter v Gordian Runoff Ltd [2004] NSWCA 171 to the effect that impecuniosity without more would usually be insufficient to constitute special circumstances but that consideration of what may constitute special circumstances should not be fettered by some general rule of practice. Basten JA noted that an order may be appropriate if the appeal is shown to be hopeless, unreasonable or of an harassing nature. His Honour also noted that where a bona fide and reasonably arguable appeal would be stifled by an order for security such an order would usually not be made. 12In the present case it is submitted by Mr Tyson that special circumstances are established by various matters the subject of the respondents' submissions as to security for costs, including that: the first appellant has not put forward anything to suggest that there is any prospect of a successful appeal; the first appellant has flouted the proper court procedures by not serving its red book or submissions; and the first appellant has not sought leave as required to do so under s 471B of the Corporations Act for the proceedings as against the first and second respondents. It is submitted, having regard to the evidence as to correspondence by the solicitors for the first and third respondents in relation to the security for costs and the service of evidence in relation thereto, that the conduct of Echelon gives rise to the suspicion that the appeal proceedings have not been brought in good faith. 13The first to third respondents in the appeal proceedings have relied on an affidavit sworn 16 October 2014 by Andrew John Byrne, a solicitor and senior associate at the law firm Allens, who has the day to day conduct or carriage of the proceedings. Mr Byrne deposes to the background to the proceedings as well as to an application brought by Echelon to stay the enforcement of Brereton J's judgment and Echelon's non-compliance with the statutory demand served by the fourth respondent. Mr Byrne also deposes to, and exhibits to his affidavit, correspondence in relation to the costs of the appeal sought by his clients. Mr Byrne gives evidence, which is not challenged, as to the steps that would be required for the preparation of the appeal and the likely costs to be incurred in that regard. Mr Byrne also sets out the assumptions to which he has had regard when preparing those estimates of costs and has allowed for a discount in the event that the appeal were to be dismissed and costs were to be awarded in favour of his clients on a party/party basis (his assumption being that the recoverable party costs would be only 60% of the solicitor/client costs - an estimate that Mr Byrne submits is probably conservative). 14The amount sought by way of security for costs by the first to third respondents is divided into two tranches, being an amount of $22,944 at this stage with a further amount of $8,560 upon the hearing date being set. That is predicted on the assumption that the proceedings are ultimately properly constituted with leave being granted in relation to the proceedings against the respondents who are in liquidation. 15The fourth named respondent to the appeal proceeding, Alexandria 1 Pty Ltd, adopts and puts forward similar submissions to the other respondents in relation to the application for security for costs. Reliance is placed on an affidavit sworn 16 October 2014 by David Winston Low, a solicitor in the employ of Madison Marcus Law Firm, the firm that acted as the solicitors in the court below for the fourth respondent. 16The fourth respondent was the purchaser of the property affected by the caveat the subject of the proceedings. It obtained an order that the appellants pay its costs as agreed in the amount specified in the costs order. Insofar as the appeal relates to judgments for costs orders made against Echelon, leave would be required for such an appeal. The amount of those costs orders was agreed at $9,000 and $1,000 respectively. It is noted again that there is a statutory presumption of insolvency arising against the first appellant. 17As indicated above, the appellants have filed no evidence contesting the matters relied upon by the respondents in their respective applications for security for costs. No submissions have been made on this application. The solicitors acting for the appellants and on the record in the appeal proceedings have today sought leave to file in court a notice of ceasing to act. The circumstances in which that application arises are that a notice of intention to file a notice of ceasing to act dated 10 November 2014 was served on the appellants, but leave is necessary for them to cease acting. 18I have read affidavits of service of Catherine Chen affirmed 14 November 2014 and Alex Ronayne sworn 14 November 2014 deposing to the service of the solicitors' notice of intention to file a notice of ceasing to act at the last known address of the second appellant (Mr Lazar), who I am informed is currently on remand, and on Echelon at a registered business office. 19For completeness, I note that there is a dispute by the solicitors whose business office is at that address as to whether there was any consent for it to be nominated as the registered business office of Echelon. 20I am informed by Mr Ronayne, the solicitor who attended today in order to apply for leave to cease to act in the matter, of his concern not to waive legal professional privilege in relation to his correspondence with the appellants but he maintains that he is satisfied that the appellants are aware that the applications for security for costs were listed in court today. Mr Ronayne informs the Court that he has done everything he can to ensure that the appellants are aware of his intention to cease to act. The matter was called outside the Court but there has been no appearance by anyone else on behalf of either of the appellants. 21In my opinion, the applications for security for costs are well founded. There has been no application for leave to proceed against the first or second respondents as required pursuant to s 471B of the Corporations Act. There is nothing to show that there is any reasonable prospect of a successful appeal against any of the respondents. No leave has been sought to appeal against the costs judgment in favour of the fourth respondent. There has been no response to any of the communications from the first three respondents in relation to security for costs. There has been no compliance with the Court rules and procedures in relation to the conduct of the appeal. I have taken into account, where applicable, the factors set out in Meltglow in determining whether security for costs should be ordered against an impecunious defendant. I am satisfied that special circumstances have been established, by reference to the matters referred to above, for an order for security for costs to be made in favour of the respective respondents. 22The amount of costs sought by way of security for costs by the first and third respondents is not unreasonable. In relation to the fourth respondent, Mr Low allowed a discount for costs recoverable on a party/party basis for the estimated solicitors' professional costs but not for counsel's costs. I will take that into account in the award of the security for costs that I propose to make. 23I will, therefore, make the following orders, noting that at this stage the appeal proceedings against the first and second respondents, having been brought without leave pursuant to s 471B of the Corporations Act, appear to me incompetent and the appeal proceeding against the fourth respondent, insofar as this is an appeal only against orders for costs and has also been made without leave, would also appear to be incompetent. (1)The first appellant, Echelon Property Management Pty Ltd, provide security for the first, second and third respondents' costs of the appeal proceedings in two tranches as follows: (a)within 14 days the amount of $22,944 by payment into court or by bank guarantee in a form acceptable to the first, second and third respondents; (b)the amount of $8,560 by payment into court or by bank guarantee in a form acceptable to the first, second and third respondents within five business days of the date on which any order is made setting the appeal down for final hearing. (2)In default of the first appellant providing security in accordance with either order 1(a) or order 1(b), the proceedings against the first, second and third respondents be stayed forthwith. (3)Note that the above orders are without prejudice to the ability of the first, second and third respondents to make any further application for security for costs of the appeal proceedings in due course. (4)The first appellant, Echelon Property Management Pty Ltd, provide security for the costs of the appeal of the fourth named respondent in the sum of $18,000 by payment into court or by bank guarantee in a form acceptable to the fourth respondent within 14 days. (5)In default of the first appellant providing security in accordance with order 4, proceedings against the fourth respondent be stayed forthwith. (6)The first appellant, Echelon Property Management Pty Ltd, pay the costs of the first, second and third respondents and of the fourth respondent, respectively, of and incidental to this application, as agreed or assessed. 24I also direct the legal representative for the appellants to take all reasonable steps to notify the appellants of the outcome of the applications for security for costs and the consequences for the conduct of the appeal proceedings in the event that there is non-compliance with the orders for security for costs. 25I will grant leave for the filing in court of the two notices of ceasing to act dated 14 November 2014 by Alex Ronayne of Ronayne Owens Lawyers, and give leave for Mr Ronayne to cease to act for the appellants with effect from the conclusion of the hearing of this application. 26I note that, since giving my oral reasons, I realised that I had omitted to make an order of the kind in order 3 with respect to the fourth respondent and I have since made an order in chambers (order 5A) under the slip rule to that effect.