1 This was an application for leave to orders of a judge in the Trial Division, setting aside the orders of an Associate Justice, requiring the respondents to provide security for the costs of the applicants in proceedings which had been commenced in the Commercial and Equity Division of the Supreme Court. The orders sought on appeal are that the order of Whelan J be set aside insofar as security for costs was refused to the applicants and that the first respondent be ordered to provide security to the applicants ANZ and the receivers in the amount of $86,361 and security in the amount of $31,808.20 to the applicants Apache and Yara. The receivers, who are the defendants in separate proceedings commenced by the second respondent, also seek to set aside the orders of Whelan J and seek an order that the second respondent provide them with security in the sum of $22,810.80.

2 On the hearing of the interlocutory appeal five senior counsel, six juniors and five firms of solicitors represented the parties. In addition to the notices of appeal and written cases of the parties a large number of lever arch folders of material were also relied on by some of the parties.

3 Whelan J refused to order security for costs as he considered the amount held in the escrow accounts (the hold-back amount) provided sufficient security to the applicants. I have had the benefit of reading in draft the reasons of Priest JA who has set out the circumstances which gave rise to the existence of the escrow accounts. To the extent that the evidence presently permits, he has identified the broad nature of the claims, many of which are contingent, which may be made on the hold-back amount.

4 For the reasons given by Priest JA, I agree that where an appeal is by way of hearing de novo, the applicant need show no more than that it is reasonably arguable that a different order from that made at first instance may be made on appeal. I agree with Priest JA that leave to appeal should be refused.

5 I wish to make some additional observations concerning two of the primary reasons advanced by the applicants as to why security for costs should be ordered. First was the contention that the hold-back amount did not provide the applicant with an immediate right to those funds. Second was the contention that there is no certainty that the hold-back amount will be sufficient to ensure that the applicants, if successful, will be able to recover their costs from the hold-back amount.

6 The applicants contended that as they do not have 'a presently exercisable right over an asset in the jurisdiction' there is no certainty that there will be a fund available or sufficient to meet an order for costs at the end of the escrow period. In support of this proposition they relied upon the cases of Tan Kah Hock v AWAPSGT 26 Investment Ltd[1] and Jessie James v Nolmont Pty Ltd.[2]

7 In Tan Kah Hock the applicants were ordinarily resident outside the jurisdiction and had no assets within the jurisdiction. Gilmore J said:

If the applicants do not pay a costs order against them (estimated by the respondents to be of the order of $130,000), the relevant respondents can cause Awap to declare and pay a dividend to its shareholders such that the first and second applicants' share of that dividend would be sufficient to cover any costs order. On the respondents' case regarding the first and second applicants' shareholding, a dividend of $390,000 would cover the estimated costs. On the applicants case, a dividend of around $260,000 would be sufficient.

Once the dividend has been declared, it is a debt owed to the first and second applicants by Awap and is therefore an 'available debt' as that term is defined in s 46 of the Civil Judgment Enforcement Act 2004 (WA) ('CJE Act'), which can be appropriated for the purposes of enforcement under s 49 of the CJE Act. Pursuant to s 49(2) of the CJE Act, the Court may make an order that the dividend issued to the first and second applicants be paid to the respondents to satisfy the costs order.

However, the respondents submit and I accept, that the first and second applicants, as shareholders in Awap, have no entitlement to be paid dividends from Awap's profits. Pursuant to Articles 123 and 126 of AWAP's Articles of Association, its directors have a discretion as to whether dividends are declared. It cannot be presumed that dividends in a sufficient amount, or at all, will be declared. Awap, by its directors, may determine to employ its profits in its present and or other business activities. I do not regard the mere possibility that the first and second applicants will be the beneficiaries of dividends as amounting to them presently having assets within the jurisdiction. [3]

8 In Jessie James v Nolmont Pty Ltd the applicants were resident out of the jurisdiction and had no assets within the jurisdiction. As Ryan J said:

There was a suggestion earlier in the tortuous history of interlocutory proceedings in this action that the third respondent, Vanilla Gorilla LP, which on 29 August 2007 was added as an applicant, might be entitled, as a licensor of the subject trademarks, to royalties payable by a licensee or licensees in Australia. However, that suggestion has not been developed to a point where the Court can identify any funds in this country to which any applicant has or is likely when judgment is given in this action to have, an immediate and indefeasible right.

In my view, Nolmont should not be required to realise its presumptive entitlement to payment of its costs in the event of its successfully defending the action by recourse only to assets as speculative as an unquantified stream of royalties flowing on some completely unidentified terms to Vanilla Gorilla or either of the other applicants.[4]

9 The respondents rightly contend that neither of these cases was authority for the principle relied upon. In neither case was there any asset of the respondents in existence, let alone available within the jurisdiction upon which the applicants if successful parties could have an enforced any judgment for costs.[5] No other authority was cited in support of the proposition that the asset within the jurisdiction must be immediately available and realisable in order to provide security.

10 The form of a fund or asset will be immaterial so long as it is adequate to achieve its object as a security.[6] The court has an unfettered discretion under r 62.03(1) as to what form of security may be acceptable. The degree of likelihood of the respondent being unable to pay the costs, along with all the circumstances, actual and possible, may be taken into account in the exercise of discretion.

11 Costs are usually assessed and payable some considerable time after the Court hands down its decision, giving an unsuccessful party time to liquidate such of its non-current assets as may be required to satisfy an adverse costs order. There is no authority that the respondent to a motion for security for costs must have liquid funds available at the time of the hearing of the motion. Its ability to liquidate its assets by the time any costs may become payable should be taken into account.[7] Although a respondent may not be entitled to 'extended time' to realise assets in order to pay a costs order,[8] the discretion must be broad enough to permit a reasonable time in which to do so.

12 As a matter of principle the discretion to grant or refuse security should not be circumscribed by a requirement that an asset within the jurisdiction be necessarily immediately available and accessible when there is no imminent likelihood that the applicant will obtain a costs order which it will seek to enforce. What is required is that the applicant have ready and certain access to the amount secured if and when entitlement to claim it arises.[9]

13 The applicants are not shut out from making a fresh application for security whenever there is a change or anticipated change in the circumstances relating to the asset or a risk arises that the asset may be dissipated or there is a more imminent likelihood that the applicant will obtain an order for costs.

14 The applicants also challenge Whelan J's conclusion that the hold-back amount provides them with sufficient security for costs. It was for the applicants to discharge the evidentiary burden of showing a prima facie case.[10] I agree with Priest JA that the applicants have failed to satisfy their evidentiary onus that there is no sufficient asset available within the jurisdiction. Not only was there an absence of material to enable the evaluation to be undertaken in order to establish that the asset would be insufficient, but this was a case where the investigation was beyond the scope of the enquiry required of a judge considering an application for security for

costs[11] or an appeal court on an application for leave to appeal from such a judgment.

15 In my opinion, for the reasons that follow, these applications for leave to appeal from orders refusing security for costs in proceedings in the Commercial and Equity Division should be refused.

16 The respondents to the applications in this Court, Radhika Pankaj Oswal ('Mrs Oswal' or 'RO') and her husband, Pankaj Oswal ('Mr Oswal' or 'PO'), are individually plaintiffs in two proceedings in the Commercial and Equity Division.

17 In the proceedings where Mrs Oswal is plaintiff,[12] the defendants are the Australia and New Zealand Banking Group Limited[13] ('ANZ'); Ian Menzies Carson,[14] David McEvoy[15] and Simon Theobald[16] (collectively, 'the Receivers'); Apache Fertilisers Pty Ltd[17] ('Apache'); and Yara Australia Pty Ltd[18] ('Yara').[19]

18 Mr Oswal is plaintiff in separate proceedings against the Receivers.[20]

19 On 20 July 2012 Efthim AsJ made orders for security for costs in each proceeding against the respective plaintiffs, Mrs Oswal and Mr Oswal. Each plaintiff sought leave to appeal under Rule 77.06(2.1) of the Supreme Court (General Civil Procedure) Rules 2005 ('the Rules').

20 Whelan J (as his Honour then was) granted leave to appeal on 9 August 2012, and on 24 August 2012 he gave brief reasons for doing so.

21 Also on 24 August 2012, his Honour gave reasons for judgment allowing the appeal.[21] On 31 August his Honour made orders to give effect to his judgment.

22 Applications for leave to appeal the orders of Whelan J came before Warren CJ and me on 16 November 2012. The applications were referred to a bench of three. It was anticipated that if leave to appeal were granted, the appeals would be heard instanter.

23 There are four applications for leave to appeal against the orders of Whelan J. In three of those applications Mrs Oswal is the respondent, and in the fourth, Mr Oswal .

24 With respect to Mrs Oswal, there is, first, an application by ANZ and the Receivers;[22] secondly, an application by Yara;[23] and, thirdly, an application by Apache.[24] So far as Mr Oswal is concerned, the Receivers are applicants.[25]

25 In the applications for leave to appeal concerning Mrs Oswal, the orders sought by ANZ and the Receivers, and by Yara and Apache, are substantially the same. Thus all Applicants seek leave to appeal against paragraphs 1,[26] 2[27] and 6[28] of the orders made 31 August 2012. Additionally, each Applicant seeks leave to appeal against costs orders. Thus, ANZ and the Receivers seek leave to appeal against order 3; Yara, order 5; and Apache, order 4. They also ask that the applications for leave be heard concurrently with the appeal, and any other necessary orders. Orders sought by each Applicant on the appeals include:

• The appeals be allowed and that the orders of Whelan J be set aside insofar as security for costs was refused to each of them.
• ANZ and the Receivers seek $86,361.00 in security.
• Apache and Yara each seek $31,808.20 in security.
• That security be paid within 14 days of the order, and that there be a stay of proceedings if security is not provided for within that time.
• Mrs Oswal pay the costs of the appeal and the costs of the applications before Whelan J.
• ANZ and the Receivers also seek that the costs of the application before Efthim AsJ be reserved.

26 Against Mr Oswal the Receivers against seek leave to appeal the orders of Whelan J of 31 August 2012, and for the appeal to be heard instanter. On the appeal, the orders sought are:

• The appeal be allowed and the orders of Whelan J be set aside.
  • Mr Oswal provide security of $22,810.80 to the Court within 14 days of the order.
  • If security is not so provided, a stay of the proceeding brought by Mr Oswal.
  • Mr Oswal pay the costs of this appeal, application for leave to appeal the decision of Whelan J, and appeal before Whelan J.
  • Costs of the application before Efthim AsJ be reserved.

27 Each of Mrs Oswal and Mr Oswal are resident in the United Arab Emirates ('UAE'). Mrs Oswal is the subject of a large claim[29] by the Australian Taxation Office. Putting to one side the funds held in certain escrow accounts - 'the Holdback Amounts' - which are pivotal to the present applications, neither has any unencumbered assets in this country. It is uncontroversial that enforcement of any orders made by an Australian court would be difficult in the UAE.

28 Burrup Fertilisers Pty Ltd ('BFPL') is the owner of an ammonia plant in Western Australia. All of BFPL's shares are owned by Burrup Holdings Limited (BHL). Mrs Oswal owned 35 percent of BHL's share capital; Mr Oswal owned 30 per cent; and Yara 35 per cent.

29 ANZ advanced large sums of money to BFPL, Mr Oswal (as trustee for Burrup Trust), and to an associated company, Maruti Investments Limited.

30 Both Mrs Oswal and Mr Oswal signed a guarantee. Pursuant to each guarantee, Mrs Oswal and Mr Oswal agreed to reimburse ANZ for its expenses in relation to contemplated, actual, or attempted enforcement, or exercise, preservation or consideration of ANZ's rights, powers or remedies under the guarantee (which expenses are said to include both administrative costs and legal fees on a full indemnity basis).

31 The share mortgages signed by Mrs Oswal and Mr Oswal secure all monetary liability on any account and in any capacity and make provision for the application of money received by ANZ, or any receiver, in terms whereby they, as mortgagors, are entitled to payment of a surplus only after payment of all costs, charges and expenses incurred by either the ANZ or the Receivers. ANZ is entitled to retain the proceeds of realisation of the secured property for so long as any sum is owing contingently.

32 In September 2011 Mrs Oswal issued a Writ. She claimed that in December 2009, she and her husband, Mr Oswal, entered into negotiations with the ANZ which resulted in her executing a guarantee; a share mortgage in relation to 7.5 per cent of the share capital of BHL; an escrow agreement and an escrow process deed in relation to the balance of her shareholding in BHL (27.5 per cent of the share capital); and two powers of attorney. It is claimed that as a result of the conduct of ANZ officers at the time of signing, the various instruments are void and unenforceable as being contrary to public policy, as a result of duress or undue influence (or both), and as a result of unconscionable conduct by ANZ both at common law and under statute.

33 The Receivers had been appointed by ANZ as receivers under its securities. Mrs Oswal's shares were the subject of escrow arrangements which were in the hands of an escrow agent, Citibank, with ANZ holding her power of attorney. In her writ, Mrs Oswal claimed that it was the intention of ANZ and the Receivers to sell her shares. She sought to prevent that sale.

34 An interim injunction to prevent the sale of the shares was refused by Davies J on 16 December 2011. As prospective purchaser of the shares, Yara was heard on the application.

35 Mrs Oswal's and Mr Oswal's shares were then sold to Apache and Yara. Apache acquired 49 per cent of the share capital of BHL. Yara, who already held 35 per cent, acquired a further 16 percent of the shares, so that its total holding became 51 per cent of BHL's share capital.

36 The sale of both Mrs Oswal's and Mr Oswal's shares was effected by two deeds. Although the purchasers were Yara and Apache respectively, the deeds otherwise essentially were in identical terms (apart, of course, from containing some different figures). Mrs Oswal's shares were sold in part by the Receivers and in part by ANZ pursuant to a power of attorney. It seems that Mr Oswal's shares were sold entirely by the Receivers, and his claim is against the Receivers alone.

37 The proceeds of the sale of Mrs Oswal's shares, approximately US$10.2 million, was paid into two escrow accounts with Citibank, one in the joint names of ANZ and Yara, and the other in the joint names of ANZ and Apache. The US$10.2 million represented the remainder after the amount secured by the mortgage and certain other amounts were taken out.

38 Further, the proceeds of the sale of Mr Oswal's shares were essentially divided into three amounts. ANZ applied one amount in discharge of the debts secured by the share mortgage. Another amount was paid in respect of the costs of receivership and other minor amounts (although there is said to be $1.77 million outstanding in costs of the receivership). The remaining amount, approximately US$9.2 million, was paid into two escrow accounts with Citibank, one in the joint names of ANZ and Yara, and the other in the joint names of ANZ and Apache.

39 Thus a total of US$20 million, 'the Holdback Amount', is held in escrow, under the share sale deeds. Of this, US$5 million is held in the joint names of ANZ and Yara; and US$15 million is held in the joint names of ANZ and Apache. The Holdback Amount is to be held in escrow for 24 months from completion ('the escrow period'), subject to certain exceptions.

40 Mrs Oswal seeks to unravel the transactions, and she seeks damages. In April 2012 she sought various amendments to her pleadings so as to add Apache and Yara as defendants. Further, she expanded her allegations of misconduct against ANZ officers. With respect to the agreements to sell her shares, Mrs Oswal alleges that there was a lack of authority to enter into those deeds and that they are not binding. Conversion and misleading conduct are alleged against ANZ. Alternatively, Mrs Oswal claims that if the impugned documents are held to be binding, ANZ and the Receivers breached duties which they owed her, both in entering into the deeds on the terms they contained and in selling her shares at less than market value. Apache and Yara, she alleges, had notice of the various breaches by ANZ.

41 By comparison with his wife's claims, Mr Oswal's proceeding is only against the Receivers, and is thus more confined. He alleges a failure to obtain a proper price for his shares, and also claims wrongful disclosure of the terms of an agreement.

42 The position I have described arises in the following way. By the share sale deeds the Receivers sell, and the respective buyers purchase, shares mortgaged by Mrs Oswal and Mr Oswal (Clause 3.1(a)(1)). Further, under the share sale deed, ANZ, as Mrs Oswal's attorney, sells, and the respective buyers purchase, the escrow shares owned by Mrs Oswal (Clause 3.1(a)(2)). The price calculation under each share sale deed begins with an amount called the 'Base Sale Shares Purchase Price' (Clause 3.2(a)(1)). This Base Sales Shares Purchase Price is then adjusted by a working capital adjustment, a provision as to interest, a provision as to the Receivers' costs, provisions as to dividends and payments to 'Oswal Entities', and other adjustments under the deed, so as to reach what is then called the 'Sale Shares Purchase Price' (Clause 3.2(a)(1)-(6)).

43 There are several parts of the share sale deeds which are of importance. Thus clause 3.2(b) of each deed then provides:

The Sale Shares Purchase Price will be paid as follows:

(1) The aggregate amounts referred to in (a)(1) to (a)(6) less the Holdback Amount (the Completion Payment), is payable by the Buyer on Completion in accordance with clause 4.3(c)(1);

(2) The Holdback Amount is payable by the Buyer on Completion, in accordance with clause 4.3(c)2. ...

44 In effect, clause 4.3(c)(1) provides for payment to or at the direction of the Receivers and ANZ (acting as attorney for Mrs Oswal); and clause 4.3(c)(2) provides for payment of the 'Holdback Amount' to Citibank (which is called the 'Escrow Agent'), for deposit into an account called the 'Escrow Account'. The Holdback Amount under the Yara share sale deed is $US5,000,000; and under the Apache share sale deed $US15,000,000.

45 Both of the share sale deeds contain a large number of representations, warranties and indemnities for the benefit of Yara and Apache (Clause 5). There are warranties and indemnities in relation to the assets of BFPL (including warranties and indemnities in relation to material contracts, personal property, real property, plant, sufficiency of assets for the conduct of the relevant business, environmental matters, industrial matters, the accuracy of the financial statements, insurance, and other matters), and a taxation indemnity.

46 ANZ (both in its own capacity and as attorney for Mrs Oswal) and the Receivers indemnify the respective buyers, Yara and Apache, in relation to all losses suffered or incurred by them arising out of or as a result of any 'Sale Shares Claim' or 'any Oswal Claim'. Mrs Oswal's proceeding has the character of both a 'Sale Shares Claim' and an 'Oswal Claim'.

47 Hence the buyers, Apache and Yara, have the benefit of a number of warranties and indemnities on a variety of matters. Importantly, one of the indemnities is in relation to the costs they incur in Mrs Oswal's proceeding.

48 With respect to any claims that the respective buyers might make, clause 6.11 of each share sale deed provides:

(a) Any payment made by ANZ, RO or the Receivers to the Buyer in respect of any Claim or any DoI Claim:

(1) Will be in reduction of the Sale Shares Purchase Price; and

(2) For so long as sufficient funds are available in the Escrow Account to satisfy Claims and DoI Claims, will be paid out of the Escrow Account. For the avoidance of any doubt, to the extent that the funds available in the Escrow Account are insufficient to satisfy a Claim, the Buyer shall be entitled to seek payment of the Claim from ANZ or the Receivers.

49 As to the Holdback Amount, clause 8.1 provides that the escrow account is to be held in the joint names of ANZ and the respective buyer; and clause 8.2 deals with use of the Holdback Amount. It provides as follows:

The funds in the Escrow Account shall be held on the following terms:

(a) Any interest or profit generated on the Escrow Account (subject to any bank or other charges properly charged to or in connection with the establishment or maintenance of the Escrow Account) (the income) shall accrue for the account of the Sale Shares Purchase Price and shall not form part of the Holdback Amount and the Escrow Agent shall be instructed to remit the income out of the Escrow Account upon a request from ANZ without further deduction or withholding other than as required by law;

(b) Subject to the remainder of this deed, the Holdback Amount shall be retained in the Escrow Account for a period of 24 months from completion (the Escrow Period). At the end of the Escrow Period (subject to clause 8.4) Buyer and ANZ shall issue joint written instructions to the Escrow Agent to release to ANZ (or at their direction) any remaining funds in the Escrow Account (together with any income);

(c) The Holdback Amount shall be utilised only for the satisfaction of any Claims under this deed and DoI Claims.

50 As I understand the position, subject to there being sufficient funds remaining, each of the defendants to the proceedings can be reimbursed for their costs of these proceedings from the Holdback Amount. It seems that Yara and Apache have first claim on the funds in escrow; ANZ and the Receivers the second claim; and Mrs Oswal and Mr Oswal the third claim. Yara and Apache can be indemnified for their costs in Mrs Oswal's proceeding out of the Holdback Amount in the manner discussed below. Relevantly, it will be recalled that there is US$5 million in escrow in respect of Yara, and US$15 million in escrow in respect of Apache. If the escrow funds are insufficient, Yara and Apache can seek indemnity from ANZ or the receivers.

51 After Yara and Apache are so indemnified - and only at the end of the 24 month escrow period at the earliest, which is 31 January 2014 - ANZ can apply the remainder of the Holdback Amount (if any) to ANZ's own costs of this litigation; the debt of $1.77 million which is still outstanding for receivership costs and expenses; and the Receivers' costs of this litigation. If any funds remain after Yara and Apache have been indemnified and ANZ and the Receivers' previously mentioned costs and expenses have been paid, then the remainder of the Holdback Amount must be accounted for to Mrs Oswal and Mr Oswal.

52 Yara's and Apache's rights to such indemnification is as follows. Under the share sale deeds, Yara and Apache are indemnified for any 'Claims' or 'DoI Claims' (Deed of Indemnity Claims), amongst a number of other indemnities. Yara and Apache are indemnified for the costs of the proceeding brought by Mrs Oswal as a 'Claim' or 'DoI Claim'. Claims and DoI Claims will be satisfied out of the Holdback Amount, so long as there are sufficient funds. To the extent that there are not sufficient funds in the Holdback Amount, Yara and Apache are entitled to payment from ANZ or the Receivers. Further, there is a term which requires Yara and Apache to mitigate any losses incurred with respect to any Claim or DOI Claim, and to repay to ANZ and the Receivers any amounts paid under the indemnity if they fail to do so (Clause 6.7).

53 Funds may be released from the escrow account to the buyer 'when such amounts are agreed or determined' (clause 8.3). The escrow period is subject to extension to the extent that any claim made within the 24 months remains unresolved (clause 8.4). Payments made under Claims and DoI Claims '[w]ill be in reduction of the Sale Shares Purchase Price' (clause 6.11(a)(1)). The position of Apache and Yara differs from that of ANZ and the Receivers in that Claims and DoI Claims may be satisfied out of the Holdback Amount, so long as there are sufficient funds to meet them.

54 It appears that the total amount paid by Yara and Apache under the share sale deeds was $US582,527,535. ANZ's debt largely has been repaid. An amount of $A1.77 million is said to be still outstanding for receivership costs and expenses.

55 As I have said, the sum of $US20,000,000 has been paid into the escrow accounts. Of that sum, approximately $US10.8 million is referable to the sale of Mrs Oswal's mortgaged shares and her escrow shares; and approximately $US9.2 million is referable to the sale of Mr Oswal's mortgaged shares.

56 It seems that the only 'Claims' or 'DoI Claims' which have been identified to date are claims for legal costs in relation to Mrs Oswal's proceeding.

57 According to the Receivers, some claims under the share sale agreement are 'capped' under clause 6.4, either by reference to the Holdback Amount (that is, the amount of the escrow accounts) or the total purchase price. It is unclear whether Claims or DoI Claims are capped in such a way, however, since clause 6.11(a)(2) provides that 'to the extent that the funds available in the Escrow Account are insufficient to satisfy a Claim, the Buyer shall be entitled to seek payment of the Claim from ANZ or the Receivers'.

58 Whelan J anticipated that the escrow funds would be sufficient:[30]

Thus, it seems to me that, if matters remain as they are, Yara will be able to recover all its costs of Mrs Oswal's proceeding from the escrow account established under its share sale deed unless those costs exceed $US5,000,000, and Apache will likewise be able to recover all its costs unless they exceed $US15,000,000. If matters remain as they are, I would expect substantial balances to be paid to ANZ at the end of the escrow period. ANZ can then apply those balances and that interest to meet the $A1.77 million said to be outstanding on its debt, its own costs, and the costs of the receivers in both the Oswal proceedings.

59 Presumably if Yara's costs exceeded US$5 million, or Apache's exceeded US$15 million, there would be no funds remaining in escrow to pay ANZ and the Receivers' legal costs, or to pay $1.77 million as costs of the receivership. Moreover, ANZ and the Receivers would themselves be liable to pay the excess of Yara's and Apache's legal costs as Claims and DoI Claims.

60 By Mr Oswal's calculations, assuming that interest on the holdback account is earned at 5 per cent per annum, there will be approximately $450,000 interest per year. That would be $900,000 over the duration of the escrow period of 24 months. However, interest accruing on the US$20 million in the escrow accounts does not form part of the Holdback Amount. Accordingly, presumably Yara and Apache cannot draw on it under Claims or DoI Claims. Interest is to be remitted to ANZ upon ANZ's request (clause 8.2(a)). ANZ can apply the interest 'to meet the $A1.77 million said to be outstanding on its debt, and the costs it and the Receivers incur in Mr Oswal's proceeding and Mrs Oswal's proceeding'.[31] To the extent that the interest might be applied towards the costs that ANZ and the Receivers incur in the proceedings brought by the Oswals, it provides security (although its adequacy for that purpose is, on the present state of the evidence, somewhat speculative).

61 Efthim AsJ ordered security for costs in each proceeding.

62 He said that the Holdback Amount is subject to further claims and that the factors raised in support of an order for security 'weigh against allowing a contingent fund to be used to defeat an order for security for costs'. As to Yara's and Apache's ability to recover costs from the escrow accounts, he was of the view that their position was relevantly no more secured than an insured defendant.

63 Whelan J provided the following reasons for granting leave to appeal:[32]

On 9 August 2012 I granted leave to appeal from security for costs orders made in each of these proceedings. I did so because I had concluded that the decision of the associate judge was attended with sufficient doubt to warrant its reconsideration on appeal and because I had concluded that substantial injustice would be caused to the applicants if the orders were allowed to stand. As to my grounds for concluding that there was sufficient doubt to warrant reconsideration, I refer to my reasons for judgment in the appeal which I will publish shortly. As to my grounds for concluding that substantial injustice would be caused if the orders were allowed to stand, I had concluded that if the orders were allowed to stand the plaintiffs would, in effect, be required to provide security for the defendants who already had sufficient security over the applicants' own assets. Leave having been granted, the appeals are by way of hearing de novo. I have decided that each appeal should be allowed and I publish my reasons.

64 His Honour then published detailed written reasons for allowing the appeal.[33] He observed that although Efthim AsJ dealt with a number of matters, there was but a single issue before him 'which might be encapsulated in the following question: Do the defendants already have sufficient security for their costs?'[34]

65 His Honour did not accept the contention put on behalf of ANZ and the receivers that the Holdback Amount is irrelevant because the plaintiffs do not have an immediate indefeasible right to that asset.[35] He also rejected the submissions made on behalf of Yara and Apache that their position is relevantly analogous to that of an insured defendant, regarding the analogy as 'inapt'.[36]

66 Critically, Whelan J expressed the views that if matters remain as they are, Yara will be able to recover all its costs of Mrs Oswal's proceeding from the escrow account established under its share sale deed unless those costs exceed $US5,000,000. Similarly, Apache will be able to recover all its costs unless they exceed $US15,000,000. Further, it might be expected that substantial balances will be paid to ANZ at the end of the escrow period. ANZ may then apply those balances and interest to meet the $A1.77 million said to be outstanding on its debt, its own costs, and the costs of the receivers in both Mrs Oswal's and Mr Oswal's proceedings.

67 His Honour acknowledged that it was possible that things will not remain as they were, since new claims by Apache or Yara may emerge. It was also possible that the total of the defendants' costs will exceed $US20,000,000, but as his Honour observed, there was no evidence before him addressing those possibilities.

68 These considerations led Whelan J to differ from Efthim AsJ. His Honour concluded that 'the defendants have security for their costs already', the issue being whether that security is sufficient.[37] He did 'not consider that the defendants are subjected to any unwarranted risk in this respect', and observed that they 'can bring a further application if and when they consider that they can demonstrate that the security represented by the respective Holdback Amounts is or may be inadequate'.[38]

69 With respect to Mrs Oswal, Apache and Yara largely rely on the submissions of ANZ and the Receivers.

70 First, the Receivers contend that Whelan J applied the wrong principles in granting leave to appeal under r 77.06(2.1). The correct approach was contested before his Honour. At the hearing, the Receivers argued that Niemann v Electronic Industries Ltd[39] ('Niemann') provides the test for leave to appeal under r 77.06(2.1). Therefore, for leave to appeal to be granted, there must be sufficient doubt attending the decision; and a risk of substantial injustice if the decision were allowed to stand. (As I will later discuss, Mr Oswal submits that, in light of the fact that any appeal under Rule 77.06 is by way of rehearing de novo, a more 'flexible' test than the Niemann test is appropriate.)

71 The Receivers submit that leave to appeal under r 77.06(2.1) is governed by House[40] principles. It is contended that the reasons of Whelan J reveal consideration of House principles is 'absent'. Further, his Honour's conclusion that 'This analysis leads me to a conclusion which differs from Efthim AsJ' shows that his Honour 'substituted his own view' rather than limiting himself to House principles. (As I will later discuss, it seems to me that the Receivers' submissions do not, however, address the possibility that his Honour only entered into the process of 'substituting his own view' after granting leave, in the context of an appeal by way of rehearing de novo.)

72 On the hearing of these applications, Senior Counsel for the ANZ and the Receivers, submitted that Whelan J's reasons contain three errors, which he characterised as the 'accessability error' (this being confined only to the Receivers), the 'immediacy error' and the 'certainty error'. He contended that the judge erred in allowing a single factor - the sufficiency of the security - to be determinative rather than simply weighing that factor in the balance of all relevant considerations.[41]

73 Very much abbreviated, the 'accessability error' submissions revolved around the propositions that the Receivers can never have access to the Holdback Amount because the share sale deeds confer no right of access beyond the buyers and the ANZ (and at the end of the escrow period the monies in the Holdback Amount only become available to ANZ if there is anything left). It was said that Whelan J did not appreciate that this is so.

74 The 'immediacy error' is underpinned by the notion that the whole purpose of ordering security for costs is so that there is a fund presently available to meet costs. In this case there is no immediacy, since ANZ and the Receivers cannot access the Holdback Amount during the escrow period. Whelan J did not give this aspect proper consideration.

75 As to the 'certainty error', there is a live issue whether at the end of the day there will be any fund available to meet the defendants' costs. It was said that, although the receivers have an indemnity from ANZ, the respondents being out of the jurisdiction are not relieved from providing security because the receivers have indemnity from another party. The material, it was said, clearly shows the risk that there may not be a fund which would ensure that the defendants' costs will be met. Whelan J did not adequately deal with this possibility.

76 In greater detail, ANZ and the Receivers submit that Whelan J's conclusion that the applicants already had sufficient security was based primarily upon the erroneous finding that the Holdback Amount was capable of ensuring that they would have a fund available within the jurisdiction against which they could enforce a judgment for costs. They contend that it was not open on the evidence to find that they already had sufficient security for costs, and hence that the provision of security to them would involve the provision of further security to parties who already had sufficient security for costs. His Honour erred, so it is argued, since the Holdback Amount does not, and is not capable of, providing sufficient security for costs. That argument is based primarily upon the premise that the Holdback Amount does not constitute an asset in the jurisdiction that belongs to Mrs Oswal (or so the Receivers submit, Mr Oswal) or over which they have a presently exercisable right or entitlement. Although Yara and Apache contended that the funds were theirs, ANZ and the Receivers submitted that nobody had any 'clear entitlement' to it - 'escrow means escrow'.

77 The submission by ANZ and the Receivers that the Holdback Amount does not ensure that an order for costs will be met by Mrs Oswal and Mr Oswal was amplified by several arguments. First, its availability is contingent upon some portion of the fund remaining available at the end of the escrow period (being 24 months from completion of the share sales, or 31 January 2014, unless otherwise extended) to satisfy relevant costs orders. Secondly, there is a possibility of the fund being reduced or consumed entirely through 'Claims' or 'DoI Claims' that may be made on the fund by Apache or Yara prior to the expiry of the escrow period. Thirdly, there may be further claims that may be made as a result of orders in other proceedings. Fourthly, Mrs Oswal has an unpaid tax liability of $186,321,790.11, with respect to which the Deputy Commissioner of Taxation may also make a claim.

78 ANZ and the Receivers, argue that the Holdback Amount is not sufficient security, given that the purpose of ordering security for costs in respect of a plaintiff who resides outside the jurisdiction is to 'ensure' that cost orders 'will' be met. The Holdback Amount cannot ensure that. They rely on Whelan J's statement that, if not for the Holdback Amount, he would have found the case for security 'strong, indeed compelling'.[42] They argue that there is uncertainty as to whether the Holdback Amount will be available and useable between now and the end of the escrow period, and that they will incur substantial costs during the escrow period. It was submitted that although Whelan J referred to authority,[43] he did not correctly apply the principles to be drawn from the cases that there must be sufficient assets within the jurisdiction to ensure that a costs order will be met.

79 Moreover, ANZ and the Receivers contend that they will suffer substantial injustice if the orders of Whelan J are allowed to stand. They have already incurred, and will continue to incur substantial legal costs in these proceedings. If the Holdback Amount proves unavailable or insufficient to meet a judgment for costs, they face a material risk of being left to bear these costs on their own, given that Mrs Oswal and Mr Oswal reside in the UAE, and have no unencumbered assets of any significance in Australia. It was submitted that, contrary to the views expressed by Whelan J, the costs risk that would arise if security is not granted to ANZ and the Receivers now, would not be addressed by an entitlement to re-agitate their claim for security if new claims on the fund emerge. It is also argued that the costs risk would also not be addressed by a stay of the proceedings. While a stay might protect ANZ and the Receivers against future costs, it would not do so for costs already incurred.

80 Apache adopted the submissions of ANZ and the Receivers.

81 Its additional and primary submission was that, on a proper construction of the share sale deed, the Holdback Amount is not an asset of Mrs Oswal and may never become one (since Mrs Oswal has no proprietary interest in the Holdback Amount and may never acquire any interest in it). It contends that the Holdback Amount is an asset that belongs to Apache, and that it is only after the escrow period expires that any part of the Holdback Amount that remains will become part of the purchase price of Mrs Oswal's shares. Accordingly, so it is submitted, recovery of costs from the Holdback Amount is recovery from Apache's own money. Thus Mrs Oswal is a non-resident with no assets in the jurisdiction, and Apache does not have security over any of her assets. Apache further argues that Whelan J incorrectly determined that the fact that the parties' interests in the Holdback Amount was contingent was irrelevant. Apache argues that it is precisely because Mrs Oswal's interest is contingent that the Holdback Amount was not an asset of Mrs Oswal's, thus necessitating the making of an order for security for costs.

82 Apache also contends that Whelan J erred in treating Apache's right to indemnity as different from that of an insured defendant. Apache argues that his Honour ought to have found that the fact that Apache was indemnified by ANZ was irrelevant to the question of security for costs.

83 Apache also submitted that Mrs Oswal would not suffer any substantial injustice if Efthim AsJ's orders were allowed to stand because an order for security would not stultify her claim and, if Apache were to have resort to the security provided, any future entitlement of Mrs Oswal to the Holdback Amount would not be reduced. It contends that it will suffer substantial injustice as a result of Whelan J's orders because it will be forced to defend a claim in circumstances where it has no ability to enforce any judgment for costs against Mrs Oswal if her claim fails.

84 Yara also adopted the submissions of ANZ and the Receivers' submissions. Its submissions also overlap in parts with those of Apache. Counsel for Yara relied on the observations of Staughton LJ in De Bry v Fitzgerald & Anor.[44] He conceded that, as the applicant, Yara generally bore an onus to demonstrate its entitlement to security; but he submitted that once it was established that Mrs Oswal is not resident in the jurisdiction, she was required to show that she had an asset in the jurisdiction, and that it is available as security. The Holdback Amount does not meet that description. It was submitted that Whelan J's conclusion that the Holdback Amount was security provided by Mrs Oswal to Yara incorrectly characterises the Holdback Amount. Whether the Holdback Amount is characterised as part of the sale price is a determinative issue. It submitted that the Holdback Amount is a sum of money 'held back' by Yara. That amount is reserved for two years and during that period is exclusively available to meet certain of Yara's future liabilities. The Holdback Amount, it was argued, does not become part of the purchase price unless the period expires without valid claims equalling or exceeding the Holdback Amount, a circumstance which Yara suggests may not arise at all. Yara submitted that there are several features that are inconsistent with the Holdback Amount being characterised as Mrs Oswal's asset, which include that Yara is the source of the money in the Holdback Amount; the Holdback Amount is held in an account at Citibank in the name of Yara and ANZ jointly; and the Holdback Amount is delivered separately from the purchase price and is completely unavailable to Mrs Oswal for two years.

85 Further, it was submitted by Yara that claims on the fund have already been made and are wider than those considered by Whelan J. If the Holdback Amount is treated as security it will not provide the full indemnity that was contracted for, since pursuant to the contract the claims were in most cases to be met by a full indemnity.

86 Yara submitted that the Holdback Amount cannot be regarded as security provided by Mrs Oswal to Yara because it is completely unavailable to Mrs Oswal for 24 months, or possibly, never. It was submitted that, in effect, the costs would be met from Yara's funds rather than from property owned by Mrs Oswal. Yara contends that there is no reason why the benefit of its prudence in obtaining an indemnity from ANZ should accrue to Mrs Oswal, and argues that an indemnity does not otherwise disentitle Yara from claiming security from Mrs Oswal.

87 It is convenient to deal with the submissions of the respondents together, since counsel for Mrs Oswal adopted those advanced by counsel for Mr Oswal.

88 Counsel contended that Whelan J was correct in finding that the answer to the question of whether the Holdback Amount could be sufficient security did not depend on whether Mrs Oswal's and her husband's interest in the Holdback Amount constituted an immediate enforceable right to that asset. Contrary to ANZ's and the Receivers' submissions, they argued that the cases do not establish any general rule that a foreign plaintiff need have a present and indefeasible right to an asset within the jurisdiction. Furthermore, it was submitted that the Holdback Amount is 'in the jurisdiction' and represents the net proceeds of the sale of shares in an Australian company. They submitted that the answer lies in the substantive effect of all of the relevant provisions bearing upon the Holdback Amount. An analysis of all these provisions led Whelan J to conclude that his Honour 'would expect substantial balances to be paid to ANZ at the end of the escrow period', and that such balances would be capable of covering the amount outstanding on the $1.77 million debt, as well as ANZ's and the Receivers' costs in the proceeding. Counsel relied on Whelan J's finding that only ANZ and the Receivers could adduce evidence to demonstrate that contrary to his Honour's assessment, the Holdback Amount was not sufficient, but that they failed to do so.

89 The respondents submitted that, as noted by Whelan J, interest on the Holdback Amount is payable to ANZ. The funds in the Holdback Amounts are derived from their property. They have an equitable or beneficial interest as mortgagors in the proceeds of sale in the Holdback Amount. In effect, the ANZ is secured by the Oswals' own money. [45]

90 It was submitted that Whelan J, in accordance with the principles in House, did identify a number of errors in the decision of Efthim AsJ that amounted to sufficient doubt warranting its reconsideration on appeal. They included a failure to analyse the 'contingent' nature of the Holdback Amount, which led Efthim AsJ to conclude that because these funds were a 'contingent fund', they could not constitute sufficient security; a failure to take into account the likely sufficiency of the Holdback Amount as security for ANZ's and the Receivers' costs, in the absence of any evidence to suggest that the funds were not sufficient; a failure to take into account the fact that Apache and Yara have a present entitlement to recover their costs of proceedings from the Holdback Amount; and an error of principle in finding that the ability of Apache and Yara to make 'claims' in respect of their costs was analogous to that of an insured defendant, and was thus irrelevant to the question of security for costs.

91 The respondents contend that there will be no substantial injustice if the orders of Whelan J are allowed to stand, because Apache and Yara will be able to recover their costs from the Holdback Amount as the proceeding progresses. As for ANZ and the Receivers, they will be able to make fresh applications for security for costs, including security for past costs, if there is any change in circumstances. They argued that reversal of Whelan J's decision - and the effective reinstatement of the orders of Efthim AsJ - would be the cause of substantial injustice.

92 Counsel argued further that there is a degree of 'flexibility' in the test to be applied when leave to appeal is sought from a decision of an Associate Judge. While the Court must identify a proper basis for granting leave, the exercise of the discretion to grant leave is not confined by particular criteria that must be satisfied. Bearing in mind that any appeal will be by way of rehearing, the court considering granting leave must ask itself whether there are reasonable prospects of success. Whelan J, in applying the Niemann test, adopted a more onerous test than was necessary. Moreover, Whelan J did apply the House considerations. When considering a grant of leave a court should look at the prospects of success of the appeal. When so doing, Whelan J should be taken as having concluded that the decision of Efthim AsJ was not reasonably open.

93 It was also submitted that the receivers have misinterpreted PS Chellaram & Co Ltd v China Ocean Shipping Co & Anor[46] and Energy Drilling Inc v Petroz NL & Ors.[47] The word 'ensure' in the latter case is used in the context of describing the purpose of ordering security - not the test for when security will be ordered. That decision does not state that security will be ordered unless existing funds 'ensure' that costs will be met. Indeed, counsel submitted, applications for security are often refused where there are significant assets within the jurisdiction, notwithstanding that those assets 'may always be removed or dissipated ... That is a matter to be considered should such a situation arise'.

94 As to the receivers submission concerning substantial injustice, the respondents submitted that there was no risk of substantial injustice. They contended that uncertainty as to the availability of the Holdback Amount cannot give rise to injustice. The Receivers raise speculative possibilities, which do not constitute the kind of adverse result with which substantial injustice is concerned.

95 Niemann provides the appropriate criteria for the grant of leave to appeal to this Court. Thus the Applicants must show that Whelan J's decision was wrong, or at least attended with sufficient doubt to justify granting leave; and that substantial injustice would be done by leaving the decision unreversed.[48]

96 There are three main aspects of his Honour's decision which the Applicants seek to impugn: first, that he acted on wrong principles in granting leave to appeal; secondly, he erred in finding that the 'Holdback Amount' provided sufficient security for costs; thirdly, he was wrong to hold that Apache's and Yara's right of indemnity was different from that of an insured defendant.

97 For reasons that I will explain, I do not think that error has been demonstrated in any of these three aspects. Leave to appeal should accordingly be refused.

Error was not shown in granting leave to appeal from the Associate Judge

98 It is necessary to examine the Rules so far as they govern appeals from an Associate Judge to Whelan J, since that will determine the extent of Whelan J's powers and their exercise.

99 The Applicants, it will be remembered, contend that Whelan J was required to undertake the task before him as dictated by Niemann, and that House principles circumscribed the proper approach. They complain that Whelan J merely 'substituted his own view'. In my opinion, however, these submissions conflate distinct considerations.

100 So far as is relevant, at the time that Whelan J allowed the appeals from the Associate Judge,[49] Rule 77.06 provided:[50]

77.06 Appeal to Judge of the Court

(1) Subject to paragraphs (2) and (2.1) and Rule 77.07, any person affected by any judgment given or order made by an Associate Judge under any Chapter of the Rules of the Supreme Court may appeal to a Judge of the Court.

...

(2.1) No order of an Associate Judge made in an interlocutory application in a proceeding in the Commercial Court shall be subject to an appeal under paragraph (1) except by leave of a List Judge of that Court.

...

(7) The appeal shall be by re-hearing de novo of the application to the Associate Judge but each party may, subject to any proper objections to admissibility -

(a) rely upon any affidavit used before the Associate Judge and upon any evidence given orally before the Associate Judge;

(b) by special leave of the Judge of the Court, rely upon an affidavit or oral evidence not used or given before the Associate Judge.

...

101 The following may be gleaned from Rule 77.06. First, a person affected by an order or judgment of an Associate Judge may appeal to a Judge. Secondly, where the order of the Associate Judge was made in an interlocutory application in the Commercial Court (as these were), leave to appeal is required. Thirdly, however, once leave is granted, the appeal shall be by rehearing de novo. This regime invites scrutiny of whether the principles in Niemann and House are apt for a grant of leave under Rule 77.06(2.1), since it is tolerably clear, in my view, that once leave is granted the Judge is entitled to substitute his own view, unfettered by any need to find error on the part of the Associate Judge.

102 The nature of an appeal by way of rehearing de novo was discussed by the High Court in Allesch v Maunz.[51] In that case the High Court considered the nature of an appeal pursuant to s 93A of the Family Law Act 1975 (Cth) and distinguished an appeal by way of rehearing from other forms of appeal. Gaudron, McHugh, Gummow and Hayne JJ stated:[52]

For present purposes, the critical difference between an appeal by way of rehearing and a hearing de novo is that, in the former case, the powers of the appellate court are exercisable only where the appellant can demonstrate that, having regard to all the evidence now before the appellate court, the order that is the subject of the appeal is the result of some legal, factual or discretionary error, whereas, in the latter case, those powers may be exercised regardless of error. At least that is so unless, in the case of an appeal by way of rehearing, there is some statutory provision which indicates that the powers may be exercised whether or not there was error at first instance. And the critical distinction, for present purposes, between an appeal by way of rehearing and an appeal in the strict sense is that, unless the matter is remitted for rehearing, a court hearing an appeal in the strict sense can only give the decision which should have been given at first instance whereas, on an appeal by way of rehearing, an appellate court can substitute its own decision based on the facts and the law as they then stand.

103 And in Coal and Allied Operations Pty Limited v AIRC,[53] Gleeson CJ, Gaudron and Hayne JJ put the relevant distinctions this way:

It is common and often convenient to describe an appeal to a court or tribunal whose function is simply to determine whether the decision in question was right or wrong on the evidence and the law as it stood when that decision was given as an appeal in the strict sense. An appeal to this Court under s 73 of the Constitution is an appeal of that kind. In the case of an appeal in the strict sense, an appellate court or tribunal cannot receive further evidence and its powers are limited to setting aside the decision under appeal and, if it be appropriate, to substituting the decision that should have been made at first instance.

If an appellate tribunal can receive further evidence and its powers are not restricted to making the decision that should have been made at first instance, the appeal is usually and conveniently described as an appeal by way of rehearing. Although further evidence may be admitted on an appeal of that kind, the appeal is usually conducted by reference to the evidence given at first instance and is to be contrasted with an appeal by way of hearing de novo. In the case of a hearing de novo, the matter is heard afresh and a decision is given on the evidence presented at that hearing.

Ordinarily, if there has been no further evidence admitted and if there has been no relevant change in the law, a court or tribunal entertaining an appeal by way of rehearing can exercise its appellate powers only if satisfied that there was error on the part of the primary decision-maker. That is because statutory provisions conferring appellate powers, even in the case of an appeal by way of rehearing, are construed on the basis that, unless there is something to indicate otherwise, the power is to be exercised for the correction of error_._ However, the conferral of a right of appeal by way of a hearing de novo is construed as a proceeding in which the appellate body is required to exercise its powers whether or not there was error at first instance.

104 There is some authority for the proposition that the Niemann test applied to an appeal under r 77.06 in the form that the rule appeared at the time that the matters were before Whelan J. Thus in Ubertini v Saeco International Group SPA[54] Davies J expressed the view that the Niemann test was apposite. Her Honour rejected a submission that the Niemann test was 'in tension' with the fact that if leave is granted, the appeal then permitted would be an appeal de novo, and said:[55]

... The requirement of leave carries with it the requirement for the court to be satisfied that there are reasons to grant leave and the court must exercise its discretion judicially, even though it is not a discretion confined by particular criteria that must be satisfied. Where a grant of leave is required to appeal a discretionary decision, the court has a duty to identify a proper basis for the grant of leave. It is not a sufficient reason to grant leave that an appellate court may have exercised the discretion differently if the matter had come before it at first instance. An appellate court will not normally interfere with a discretionary decision unless the court can identify some error in the exercise of discretion.[56] Where some error in the exercise of discretion can be identified the question of injustice flowing from the order sought to be appealed will generally be an important consideration on the issue of grant of leave, particularly where, as here, the appeal is sought on an interlocutory order. The courts will more readily grant leave where the error should be reviewed because substantial injustice would result if the error was not corrected.[57]

105 In my opinion, however, to posit a test for the grant of leave prefaced on the demonstration of error does not sit happily with the notion that the resulting appeal is by rehearing de novo 'in which the appellate body is required to exercise its powers whether or not there was error at first instance'. It may be acknowledged that, by the requirement for leave, the relevant Rule sought to limit the circumstances in which an appeal against the order of an Associate Judge made in an interlocutory application in a proceeding in the Commercial Court might be brought. But it does not follow, in my view, that the Niemann criteria - which are apt for the grant of leave with respect to an appeal where the demonstration of error is necessary - are appropriate for the grant of leave with respect to an appeal where the demonstration of error is unnecessary.

106 Under other appellate regimes, the grant of leave depends on whether the court is of the opinion that a ground of appeal is reasonably arguable.[58] In my view, the test to be adopted must be informed by the nature of the appeal. It must be assumed that r 77.06(2.1) existed for the purpose of limiting appeals in interlocutory matters from Associate Judges to Judges. It was designed as a filter, to ensure that appeals in interlocutory matters could not be brought as of right. Given that any appeal resulting from the grant of leave is to be conducted as a rehearing de novo, and that success on the appeal does not require demonstration of error on the part of the Associate Judge, however, the intention underlying the rule cannot have been the establishment of error at the leave stage. As Senior Counsel for Mr Oswal submitted, the first limb of the Niemann test - which requires an applicant to show that a decision is wrong, or is attended by sufficient doubt to warrant a grant of leave - is inapposite to the kind of appeal contemplated by r 77.06 (as it was).

107 In my opinion, for there to be a grant of leave, an applicant need show no more than that it is reasonably arguable that a Judge might make a different order to that from which it is sought to appeal. Since the Judge - if he or she grants leave - will not be confined to the evidence or submissions that were before the Associate Judge, necessarily the decision whether to grant leave may involve consideration of the merits from the Judge's own perspective, uninfluenced by the reasons of the Associate Judge.[59]

108 Whelan J approached the question of leave adopting the Niemann criteria. He said '[he] did so because [he] had concluded that the decision of the associate judge was attended with sufficient doubt to warrant its reconsideration on appeal and because [he] had concluded that substantial injustice would be caused to the applicants if the orders were allowed to stand'. In so doing he set the bar higher than he needed to. Whelan J also said that as to his grounds for concluding that there was sufficient doubt to warrant reconsideration, he referred to his reasons for judgment in the appeal which he was to shortly publish. In my view, a fair reading of his Honour's reasons shows that he considered the decision of the Associate Judge to be wrong, and that substantial injustice would result from leaving the orders uncorrected. He did, it is true, 'substitute his own view', but he did so upon arriving at the conclusion that the decision of Efthim AsJ was wrong. In any event, once he had granted leave, he was entitled to consider the matter afresh and arrive at his own view irrespective of what had fallen from the Associate Judge. If Whelan J erred in his approach to the question of leave, since he posed a more stringent test than was necessary, it was an error that favoured the Applicants.

109 Much of what I have said on this subject will be rendered somewhat redundant by the fact that r 77.06 in the form that it was when considered by Whelan J was substituted with a different regime from 1 January 2013.[60] Since the Applicants put suggested errors in granting leave at the forefront of their submissions, however, it was necessary that the issues raised be determined.

110 Whether or not he employed the correct test, I cannot see that Whelan J was wrong to grant leave to appeal from the orders of the Associate Judge. Certainly no miscarriage of justice resulted. Thus I would not grant leave to appeal on those grounds that claim error in granting such leave.

It was not wrong to refuse security for costs

111 The power to grant security for costs flows from r 62.02 of the Rules. Rule 62.02 requires an application by the defendant; and the power is enlivened where the plaintiff is ordinarily resident out of Victoria. So far as is relevant, r 62.02 provides:

62.02 When security for costs may be ordered

(1) Where -

(a) the plaintiff is ordinarily resident out of Victoria; ...

the Court may, on the application of a defendant, order that the plaintiff give security for the costs of the defendant of the proceeding and that the proceeding as against that defendant be stayed until the security is given.

112 Plainly r 62.02 requires the defendant to show that the plaintiff is ordinarily resident out of Victoria. ( There is no doubt that both plaintiffs, Mrs Oswal and Mr Oswal, are ordinarily resident out of Victoria.) Once that is done, the court may order that the plaintiff give security for costs of the proceeding. Use of the word 'may' imports a discretion, but beyond that, r 62.02 provides no guidance as to the manner in which the discretion is to be exercised. For that one must look elsewhere.

113 Without recourse to authority, it might readily be concluded that r 62.02 exists in recognition of the fact that recovery of costs pursuant to an order might be rendered unenforceable (or, at least, difficult to enforce) where a plaintiff is resident out of the jurisdiction and has no assets within it. The authorities to which Whelan J had regard make clear, however, that this is so. His Honour paid due regard to judicial principles summarised in two influential decisions. In PS Chellaram & Co Ltd v China Ocean Shipping Co & Another McHugh J said:[61]

To make or refuse an order for security for costs involves the exercise of a discretionary judgment. That means that the court exercising the discretion must weigh all the circumstances of the case. The weight to be given to any circumstance depends not only upon its own intrinsic persuasiveness but upon the impact of the other circumstances which have to be weighed. A circumstance which may have very great weight when only two or three circumstances have to be weighed may be of minor significance when many circumstances have to be weighed. However, for over 200 years, the fact that a party, bringing proceedings, is resident out of the jurisdiction and has no assets within the jurisdiction has been seen as a circumstance of great weight in determining whether an order for security for costs should be made. Indeed, for many years the practice has been to order such a party to provide security for costs unless that party can point to other circumstances which overcome the weight of the circumstance that that person is resident out of and has no assets within the jurisdiction.

114 In Energy Drilling Inc v Petroz NL & Ors ('Energy Drilling') Gummow J said:[62]

The purpose of ordering security for costs against an applicant ordinarily resident outside the jurisdiction is to ensure that a successful respondent will have a fund available within the jurisdiction of this Court against which it can enforce the judgment for costs, so that the respondent does not bear the risk as to the certainty of enforcement in the foreign country and as to the time and complexity of the action there which might be necessary to effect enforcement: Kent Heating Ltd v Cook on Gas Products Pty Ltd & Anor (1984) 59 ALR 277 at p 279. On the other hand, the mere circumstance that an applicant is resident outside the jurisdiction does not necessarily invite an exercise of discretion in favour of ordering security, the question being how justice will be best served in the particular case: Barton v Minister for Foreign Affairs [1984] FCA 89; (1984) 2 FCR 463, CBS Records Australia Ltd & Ors v Telmak Teleproducts (Aust) Pty Ltd (1987) ATPR 40-783 at pp 48,554-48,555; (1978) 72 ALR 270 at pp 284-285.

115 The principles that may be derived from these cases seem to me to be:

• first, the purpose of ordering security against a plaintiff ordinarily resident out of Victoria - and with no assets within it - is so that a successful defendant will have a fund in Victoria against which it can readily enforce an order for costs;

• secondly, to make or refuse an order for security is a discretionary judgment;

• thirdly, since such a judgment is discretionary, the court must weigh all relevant circumstances;

• fourthly, the weight of any one circumstance must depend not only on its own persuasiveness, but must be considered against the impact other circumstances might have against it;

• fifthly, a circumstance of great weight, but not necessarily decisive, is that the plaintiff is resident out of Victoria and has no assets within it;

• sixthly, the weight of that circumstance may be outweighed by the plaintiff being able to point to other countervailing circumstances; and

• seventhly, the ultimate question must always be - how is justice best served in the particular circumstances of the case?

116 In the context of this case, therefore, it being accepted that the plaintiffs are resident out of Victoria, Whelan J was required to ask himself, in all of the particular circumstances of the case, how justice would best be served. Part of the consideration of that question necessarily required attention to whether the Holdback Amount was an asset of the plaintiffs' within the jurisdiction. If it were to be so regarded, that would be a circumstance militating against an order for security (depending, perhaps, on his assessment of its adequacy as security in all of the circumstances). But even were he to consider that the Holdback Amount was not an asset of the plaintiffs' within the jurisdiction, that was not necessarily determinative. His Honour was required to ask himself whether - despite the undoubted importance of the absence of assets in the jurisdiction - the plaintiffs were able to point to other countervailing circumstances. Since his decision involved the exercise of a discretion in an interlocutory application, Whelan J obviously was required to approach the matter in a broad and practical way.

117 I can detect no error in his Honour's approach. Whelan J did not accept the submission put by ANZ and the Receivers that the Holdback Amount is irrelevant to the question of security since Mrs Oswal and Mr Oswal do not have an immediate indefeasible right to that asset. His Honour correctly observed that each case will depend on its own facts, the likelihood of a particular asset being available to meet a costs order being one of importance.[63] It was argued by counsel for Mr Oswal that the proceeds of the sale of shares held in escrow are tangible security for the defendants' costs because Mr Oswal has an equitable or beneficial interest in those proceeds. There is force in this submission. I do not think it can be doubted that, although Mrs Oswal and Mr Oswal have no immediate right to the proceeds of sale of shares held in escrow in the Holdback Amount, they currently have a beneficial interest in those proceeds, subject to the prior claims of Yara, Apache, ANZ and the Receivers.[64] At the end of the escrow period they will, however, have an immediate right to the money in the Holdback Amount, to the extent that the funds have not been exhausted in satisfaction of the defendants' prior claims. Whelan J accepted that Mrs Oswal's and Mr Oswal's interests in the Holdback Amount are 'contingent', but so too are the rights of Yara, Apache and ANZ. To simply describe the various interests as contingent does not much advance the matter. It is necessary to analyse the contingencies.[65] His Honour thought it unimportant to analyse whether the Holdback Amount can properly be described as part of the 'price' of Mrs Oswal's and Mr Oswal's shares.

118 As a matter of practical reality, based on the evidence which had been placed before him, Whelan J concluded that there is a total amount of $US20,000,000 held by Citibank for ANZ, Apache and Yara; Yara and Apache presently can claim their costs of Mrs Oswal's proceeding from those funds (and can continue to do so thereafter for so long as they are being incurred); at the moment there are no other known claims on the funds; if no other claims are made, the balance of the funds will be paid to ANZ at the end of the escrow period (and in the intervening period ANZ will derive interest); ANZ can apply those balances (and that interest) to meet the $A1.77 million said to be outstanding to it, and the costs ANZ and the Receivers incur in the plaintiffs proceedings; and any amount remaining must be accounted for to Mrs Oswal and Mr Oswal.[66] Based on these conclusions, Whelan J inferred that - unless there be some substantial change in circumstances, and unless its costs exceed $US5,000,000 - Yara will be able to recover all its costs in Mrs Oswal's proceeding from the escrow account; and, similarly, unless its costs exceed $US15,000,000, Apache will be able to recover its costs. His Honour expected that, unless circumstances changed in the intervening period, substantial balances would be paid to ANZ at the end of the escrow period, and those balances (and interest) could be applied to meet the $A1.77 million claimed to be outstanding on its debt, its own costs, and the costs of the Receivers in both proceedings.[67]

119 Of critical importance, Whelan J recognised that the position might not remain unchanged, in that new claims by Apache or Yara may emerge, and that it is also possible that the total of their costs will exceed $US20,000,000. His Honour observed, however, that no evidence had been put before him to address such possibilities, the defendants being 'the only parties who could usefully bring forward such evidence'.[68] Thus he concluded that the defendants had security for their costs, the only live issue being whether it was sufficient. Since the Applicants were the only ones who might provide evidence that the existing security might not be sufficient, but had not done so, security should not be ordered.[69] Moreover, his Honour left open the possibility of bringing a further application for security if the defendants provide evidence that the security represented by the Holdback Amount might be inadequate.[70]

120 As a matter of ordinary principle, since the Applicants sought the exercise of the discretion to award security in their favour, they bore the burden of persuading the Court that the justice of the case was best served by the grant of security.[71] They needed to point to circumstances that dictated that the weight of those circumstances favoured the grant of security. Moreover, the Applicants needed to persuade the Court that countervailing circumstances advanced by the plaintiffs should not tip the scale against the grant of security. So much is to recognise that in a given case there will be matters to be weighed in the exercise of discretion over which the plaintiffs will have carriage.[72]

121 In this case, in resisting the grant of security for costs, Mrs Oswal and Mr Oswal pointed to the Holdback Amount as being a fund within the jurisdiction capable of providing security for the Applicants' costs. On the face of it, therefore, there was a fund of $US20,000,000 that might be expected in the ordinary course of litigation to be sufficient to meet the Applicants' cost (even paying due regard to the fact that the litigation was likely to be complex and costly). The Applicants claimed that the security offered by the Holdback Amount was not, or may not be, sufficient. With respect to the alleged 'certainty error' (so characterised), the issue of whether the security offered by the Holdback Amount might not be sufficient was capable of resolution only by evidence in the hands of the Applicants. They bore the burden of persuasion. They did not fulfil it. They thus have not persuaded me that Whelan J erred in failing to order security for costs. An ability to establish facts supporting that assertion, however, was peculiarly within the province of the Applicants. They, rather than the plaintiffs, had the capacity to show that as a result of Claims and DoI Claims, and as a result of money already expended on costs (and likely in future to be expended), the sum in the Holdback Amount might be insufficient to meet their costs. Since that knowledge was peculiarly theirs, in my opinion the burden fell to them to persuade Whelan J that the funds held in escrow were not, or might not be, adequate security. As I have already observed, his Honour recognised as much. In so doing he was, in my opinion, correct.

122 An argument advanced by the Applicants was that, consistently with what Gummow J said in Energy Drilling, the Holdback Amount did not 'ensure' that there was security within the jurisdiction. With respect, this submission mistakes what Gummow J held. He made it clear that the purpose of making an order for security for costs against a plaintiff ordinarily resident outside the jurisdiction is to ensure that a successful defendant will have a fund available within the jurisdiction. Thus an order for security will only be made in the exercise of discretion if a court is satisfied that it is necessary to ensure that a fund is available to meet costs. Energy Drilling does not require a respondent to an application for security to ensure that a fund will be sufficient in order to resist an application for security.

123 I do not think that there is anything in the 'accessability error' (so described) relied upon by the Receivers. Whelan J was fully aware that the receivers would be incapable of having access to the funds in the Holdback Amount. However, the escrow period, unless extended, will expire in the relatively near future (on 31 January 2014). So long as the funds in the Holdback Amounts have not been exhausted by Claims and DoI Claims (no evidence as to the likelihood of which was forthcoming from the Applicants), there will be assets of the Oswals within the jurisdiction from which it might be expected that the fruits of any court order as to costs could be satisfied. To that extent, the funds will be no different to any other asset against which a successful defendant might seek to satisfy a costs order. As I have said, Whelan J was fully aware that the Receivers did not have a right of access to the fund in the same way as the other defendants in the proceedings. But this was but one factor in a constellation of factors relevant to the general exercise of discretion. I am not persuaded that he failed to take this factor into account, or gave it too little weight, or otherwise made an error in his approach to it.

124 Underpinning the 'immediacy error' (so called) was the notion that the purpose of security is to give an assurance that a fund is immediately available to meet costs. There is nothing in this point. As I have already observed, the purpose of an order for security is to ensure that there is a fund available in the jurisdiction to meet costs. In deciding whether to make an order for security, a it would be legitimate for a court to weigh in the balance the nature of the security pointed to by a plaintiff, including any fetters on its availability. Whelan J was acutely aware of the nature of the Holdback Amount and the nature of the escrow arrangement. He considered these aspects in deciding to refuse security. I cannot see that he failed to take a relevant feature into account, took into account an irrelevant matter, or otherwise misapprehended the task before him.

125 Out of respect for the submissions made by counsel for Yara, I should say that nothing in the foregoing is inconsistent with what fell from Staughton LJ in De Bry, when he said:[73]

... The argument was on the part of the plaintiff that there was no need to order security because he owned an asset here of considerable value which would remain within the jurisdiction, that is to say at least a half share in the statue. If one is to consider the burden of proof on such a point, it seems to me, having considered Kevorkian v. Burney (No. 2) [1937] 4 All E.R. 468, that it is first for the defendants to show that the plaintiff is resident abroad within Ord. 23, r. 1; secondly, for the plaintiff to show that he has an asset here which will remain here; and, thirdly, for the defendant to show, if he can, that the asset is worthless or not worth sufficient to cover the costs.

126 Indeed, I regard Staughton LJ's three step analysis in De Bry as entirely supporting Mrs Oswal's and Mr Oswal's cases. According to that analysis, it is first for the Applicants to show that the plaintiffs are resident out of the jurisdiction. This is uncontested. Secondly, the plaintiffs must show that they have an asset within the jurisdiction that will remain within it. Mrs Oswal and Mr Oswal pointed to the Holdback Amount, which is within the jurisdiction and, so far as I can tell, will remain in the jurisdiction.[74] The third step is for the defendants to show that 'the asset is worthless or not worth sufficient to cover the costs'. It was this, as Whelan J held, that the defendants had failed to do.

127 Yara and Apache also attack Whelan J's conclusion that their position is not analogous to that of an insured defendant.[75] In my opinion, Whelan J was correct to distinguish the position of Yara and Apache from that of an insured defendant. His Honour rejected the analogy as 'inapt', because an insured defendant has paid premiums to an insurer to cover specified eventualities, one of which might be incurring the costs of litigation. Otherwise the insurer has no interest in the dispute. But that is not Yara's and Apache's situation. As his analysis demonstrates, the indemnity provided by the Holdback Amount is from the plaintiffs' own property, rather than from a third party with whom the Applicants have a contract of insurance (and who otherwise has no interest in the litigation). Hence there is no insurer meeting Yara's or Apache's costs. Any costs will be met out of property owned the plaintiffs over which they have granted security and other rights.

128 In any event, even were it legitimate to equate the situation of Yara and Apache with that of insured defendants, the fact remains that an order for security remains discretionary, the existence of insurance being but one aspect a the applicable variety of circumstances.

129 Quichorn[76] was a case where an insurer sought an order for security for costs under r 62.02 against an insured, in proceedings which concerned whether the insured should be denied indemnity under the policy of insurance due to fraud. Hayne J made it plain that that there is no general rule favouring the exercise of discretion in a particular manner when the court is confronted by an application for security involving an insured defendant. His Honour made clear that the discretion under r 62.02 is unfettered, and that each case must be considered having regard to all of the circumstances without any predisposition one way or the other in favour or against the granting of security. He observed:[77]

Now, it has been said that in proceedings against an insurer for indemnity on a policy of insurance, when the existence of the policy is not disputed, it is not ordinarily appropriate to grant security in favour of the insurer. (See Irwin Alsop Services v Mercantile Mutual Insurance [1986] VicRp 6; [1986] VR 61). However, that view was not followed in Prime Forme Cutting Pty Ltd v Baltica General Insurance Co (1990) 8 ACLC 29; Frankston Ambassador Pty Ltd v Sigma Insurance Australia Ltd (1991) 9 ACLC 790; or Tenth Anemot Pty Ltd v Colonial Mutual General Insurance Co Ltd [1993] VicRp 56; [1993] 2 VR 48.

I consider the better view to be that the fact that an applicant for security is an insurer and that it is resisting a claim by a party on a contract in which it voluntarily entered are matters that may be taken into account in the exercise of the discretion whether to order security, but that there is no general predisposition against the granting of security to insurers. The question will always be one for the exercise of an unfettered discretion. The nature of that unfettered discretion was explored in some detail in Interwest Ltd v Tricontinental Corp Ltd (1991) 5 ACSR 621, especially at 624.

There is, in my view, no general principle of the kind which the plaintiffs submission suggests might apply to defendant insurers who seek security for costs. Rather, in each case the position of the applicant must be considered having regard to all of the circumstances that affect that applicant in those proceedings without any predisposition one way or the other in favour or against the granting of security.

If then there is no general principle of the kind which the plaintiff's submission suggests may exist, no question arises of applying what its submission describes as 'the same, discretionary matters affecting an insurer', at least if by that is meant applying some general principle against the granting of security.

130 In Livingspring,[78] Maxwell P and Buchanan JA expressed the view that whether an insurer defendant could seek security turned on the nature of an insurer's business, and had no relevance to an application for security by an insured defendant. There is no reason in principle why an insured defendant should be in any different position from an uninsured defendant, since in a situation where the insurer has agreed to indemnify the defendant against the plaintiff's claims, the insurer should be regarded as having exactly the same entitlement as the insured defendant to protection by way of security for cost.[79] None of what was said by their Honours derogates, however, from the general proposition that every case 'will be one for the exercise of an unfettered discretion', having regard to 'all of the circumstances' and 'without any predisposition one way or the other in favour or against the granting of security'.

131 Be that as it may, when one puts to one side the fact that Yara and Apache are indemnified by ANZ, the fact remains that the reasoning essential to Whelan J's judgment was that the plaintiffs had pointed to an asset in the jurisdiction likely to provide security for costs, and that the Applicants had not demonstrated that the asset was not, or might not be, sufficient for that purpose. To that extent, the question of whether the indemnified (Yara and Apache) were in the same position of the indemnifier (ANZ) or whether their position was analogous to that of an insured defendant, was not essential to the reasoning supporting the decision.

132 For these reasons I think there is nothing in Yara's and Apache's complaints that Whelan J erred in treating their position differently to that of an insured applicant for security.

133 I would refuse Yara and Apache leave to appeal on those grounds that turn on the insurance analogy.

134 In my opinion, none of what fell was attended by doubt (or any sufficient doubt) so as to attract a grant of leave to appeal. Were I to be wrong about that, for the reasons I have discussed, I am far from persuaded that there can be any substantial injustice in leaving Whelan J's orders undisturbed, particularly where the Applicants have it open to them to make a further application for security for costs

so as to demonstrate that what is held in escrow may be insufficient for that purpose.

135 I would refuse leave to appeal to each Applicant on all grounds in the draft notices of appeal.

136 I agree with both the presiding judge and with Priest JA. I too would dismiss each applicant's application for leave to appeal.

[1] [2008] FCA 540, [9].

[2] [2007] FCA 1604, [1].

[3] [2008] FCA 540, [17]-[19].

[4] [2007] FCA 1604, [1]-[2].

[5] Energy Drilling Inc v Petroz NL (1989) ATPR P40-954.

[6] G E Dal Pont, Law of Costs (LexisNexis Butterworth, 2003), 930 [28.43].

[7] Putney Group Pty Ltd v Royal Rehabilitation Centre Sydney [2009] NSWSC 424, [94] (Forster J).

[8] Street v Luna Park Sydney [2006] NSWSC 1317, [16] (Brereton J).

[9] Ashington Capital Pty Ltd v Parissen Capital (Project X) Pty Ltd [2012] NSWSC 410, [41].

[10] In Re Insurance Australia Group Ltd v HIH Casualty and General Insurance Ltd (in liquidation) [2003] FCA 803.

[11] Livingspring Pty Ltd v Kliger Partners [2008] VSCA 93; (2008) 20 VR 377, 388 [45].

[19] The fifth defendant J P Morgan Chase Bank NA has taken no part in the present applications.

[21] Oswal v ANZ & Ors [2012] VSC 356 ('Reasons').

[26] This order required the plaintiffs to provide security for costs.

[27] By this order the plaintiffs' appeals from Efthim AsJ were allowed.

[28] This ordered required any monies paid into Court as security for costs pursuant to Efthim AsJ's orders be 'forthwith paid out of Court'.

[33] Footnote [21] above.

[39] Niemann v Electronic Industries Ltd [1978] VicRp 44; [1978] VR 431.

[40] House v The King [1936] HCA 40; (1936) 55 CLR 499, 505 (Dixon, Evatt and McTiernan JJ); see also Livingspring Pty Ltd v Kliger Partners [2008] VSCA 93; (2008) 20 VR 377.

[41] He relied in particular on McHugh J's reasons in PS Chellaram & Co Ltd v China Ocean Shipping Co [1991] HCA 36; (1991) 102 ALR 321, 323, and in particular, 'that the court exercising the discretion must weigh all the circumstances of the case'.

[43] PS Chellaram & Co Ltd v China Ocean Shipping Co [1991] HCA 36; (1991) 102 ALR 321; Energy Drilling Inc v Petroz NL (1989) ATPR 40-954.

[44] [1990] 1 WLR 552, 560.

[45] Bofinger v Kingsway Group Ltd [2009] HCA 44; (2009) 239 CLR 269, [35]; Adams v Bank of New South Wales [1984] 1 NSWLR 285, 299, 302.

[46] [1991] HCA 36; (1991) 102 ALR 321.

[48] [1978] VicRp 44; [1978] VR 431, 441-2.

[49] Rule 77.06 in its current form was inserted by the Supreme Court (Associate Judges Appeals Amendment) Rules 2012, S.R. No. 121/2012, rule 4, which commenced on 1 January 2013.

[51] (2000) 203 CLR 172.

[52] Ibid 180-1 [23] (emphasis added; citations omitted).

[53] [2000] HCA 47; (2000) 203 CLR 194, 203-4 [12]-[14] (citations omitted; emphasis added).

[54] [2010] VSC 161.

[56] Mace v Murray [1955] HCA 2; (1955) 92 CLR 370; House v R [1936] HCA 40; (1936) 55 CLR 499.

1. [57] See also Groenvald Australia Pty Ltd v Nolten & Ors [2010] VSC 249, [6] (Ferguson J); JBS Southern Aust Pty Ltd & Anor v Westcity Group Holdings Pty Ltd & Ors [2011] VSC 476, [31]-[32] (Croft J).

[58] R v Blick [1999] VSCA 211; (1999) 108 A Crim R 525; R v Raad [2006] VSCA 67; (2006) 15 VR 338; Bradto Pty Ltd v State of Victoria [2006] VSCA 89; (2006) 15 VR 65, 67 [6].

[59] Compare Re Will of Gilbert [1946] NSWStRp 24; (1946) 46 SR (NSW) 318, 323; Livingspring Pty Ltd v Kliger Partners [2008] VSCA 93; (2008) 20 VR 377, 379 [7].

[60] See Practice Note No 4 of 2012 (Appeals from Associate Judges to a Judge of the Trial Division).

[61] [1991] HCA 36; (1991) 102 ALR 321, 323 (emphasis added).

[62] (1989) ATPR 40-954, 50,422 (emphasis added).

[64] Charles v Jones (1837) 35 Ch D 544, 549; Lloyds Bank NZA Ltd v National Safety Council of Australia (Vic) (In liq) [1993] VicRp 88; [1993] 2 VR 506, 511, 514; Sheahan v Carrier Air Conditioning Pty Ltd (1997) 189 CLR 407, 429-30; Bofinger v Kingsway Group Ltd [2009] HCA 44; (2009) 239 CLR 269, 287 [35].

[71] Livingspring Pty Ltd v Kliger Partners [2008] VSCA 93; (2008) 20 VR 377, 383 [20].

[73] De Bry v Fitzgerald & Anor [1990] 1 WLR 552, 560.

[74] As observed at [118], although Mrs Oswal and Mr Oswal have no immediate right to the proceeds of sale of shares held in escrow in the Holdback Amount, they currently have a beneficial interest in those proceeds, subject to the prior claims of Yara, Apache, ANZ and the Receivers.

[76] Quichorn Pty Ltd (trading as Heidelberg Hotel) v Broad & Anor (Unreported, 24 January 1994, VSC, Hayne J).

[78] Livingspring Pty Ltd v Kliger Partners [2008] VSCA 93; (2008) 20 VR 377.

[79] Ibid 393 [66]-[67]. See also Prime Forme Cutting Pty Ltd v Baltica General Insurance Co (1990) 8 ACLC 29 (Brooking J); Tenth Anemot Pty Ltd v Colonial Mutual General Insurance Co Ltd [[1993] VicRp 56; 1993] 2 VR 48 (McDonald J);