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[2026] NSWCA 2
procedural. The Court ordered Litigation Fund WCX Pty Ltd to provide $4,000 security for the respondents’ costs up to and including the leave application, payable into court. The proceeding was stayed until...
The judgment concerns only security for costs, not whether Litigation Fund WCX should receive leave to appeal or succeed in an appeal. The Court held that a company seeking leave could be ordered to provide security under s 1335 without proving special circumstances. The company director’s offer to personally cover adverse costs mattered but did not automatically defeat the application. Prior security orders and procedural complications supported requiring some security, but the costs claimed were too high for the narrower leave application. Once the Aversas agreed that leave could be determined on the papers, the Court reduced the security to $4,000. The proceeding was stayed until the security was paid, and each side was left to bear its own costs of the security motion.
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2,315 words · generated 08/10/2026
4 cited instruments linked from this judgment.
Litigation Fund WCX Pty Ltd had brought proceedings against Rosario and Antonia Aversa. McGrath J dismissed its claim summarily, concluding that the proceedings were an abuse of process. The decision under challenge was delivered on 5 November 2025: Litigation Fund WCX Pty Ltd v Aversa [2025] NSWSC 1301 [1]. Litigation Fund WCX first filed a notice of appeal on 12 November. It then filed a summons seeking leave to appeal on 8 December, after it was identified that an appeal as of right did not lie from the interlocutory decision [2].
The Aversas sought security for their costs of the leave proceeding. Litigation Fund WCX’s sole director and shareholder, Mr Coshott, offered a personal undertaking to meet any adverse costs orders against the company. The Aversas did not accept the undertaking [3]-[4]. The judgment says the evidence did not establish the assets of either the company or Mr Coshott personally. It records that the company was not the legal owner of real property in Australia, but that financial information had not been provided in response to a solicitor’s request [12].
The parties’ positions about the format of the leave application changed during the motion. Litigation Fund WCX initially had not specified whether the leave application should be heard with an appeal or separately, or whether it wanted an oral hearing [5]-[6]. Mr Coshott later said the company preferred a leave-only determination on the papers. The Aversas initially insisted on an oral hearing [8]-[10]. Leeming JA indicated that the security amount would be smaller for a leave-only hearing because it was a more limited proceeding [10].
The Aversas’ initial costs estimate totalled $63,277.50, including GST [7], and the application sought a substantially higher amount than the final order. The Court examined the components of the estimate and the mismatch between the estimate and the anticipated work. After the Court had indicated $12,000 based on an oral hearing, the Aversas changed their position and agreed to determination on the papers. Leeming JA then reduced the amount to $4,000 [42]-[48]. The operative orders stayed the proceeding until the security was provided, set timetables for written submissions, and made no order as to the costs of the motion [39], [49].
The judgment does not determine whether leave to appeal should be granted, nor does it decide the merits of the underlying dispute. It is a procedural ruling about security and preparation of the leave application.
The Court treated the director’s undertaking as relevant but not conclusive. It relied on Suchand Pty Ltd v Colbran and Stone (2024) 115 NSWLR 587; [2024] NSWCA 250, which it described as establishing that an undertaking is not “generally or presumptively” determinative. It is instead “a consideration, albeit a very powerful consideration,” to be assessed with other discretionary factors [13]. Because there was no evidence of the assets available to meet any costs liability, the undertaking did not resolve the practical security question [12]-[13].
The Court also rejected the argument that the Aversas needed to establish special circumstances. Mr Coshott’s argument relied on UCPR r 51.50, but Leeming JA explained that the rule’s special-circumstances requirement concerned an appeal brought by a natural person. In a company appeal, the respondents could rely on s 1335 of the Corporations Act 2001 (Cth) [23]. He cited Hung v Aquamore Credit Equity Pty Ltd [2022] NSWCA 123 at [10] for that distinction. The relevant point was not that every company must provide security, but that the natural-person threshold did not apply to this application.
Several considerations supported ordering some security. Security had previously been ordered between the same parties at first instance in what was, in substance, the same dispute. Leeming JA clarified that the existence of those earlier orders, rather than proof that the security had actually been provided, was the relevant factor [14]. The evidence also referred to costs orders against Litigation Fund WCX in two earlier proceedings, although the judgment noted that the evidence did not establish whether those amounts remained unpaid [15]. The procedural history, including the incorrect initial filing of a notice of appeal and the inadequate summary of argument, indicated that the leave application could require additional preparation [17]-[18].
The Court did not determine the prospects of the leave application. Mr Coshott challenged statements in the primary judgment, but the material needed to evaluate those challenges was not before Leeming JA. One example concerned whether the primary judge had correctly relied on the absence of a review of the Registrar’s decision not to permit an amendment [20]-[21]. Since the factual basis could not be resolved on the security motion, the Court proceeded on the ordinary basis that the leave application was reasonably arguable [22]. This was an approach to the security application, not a finding that leave should be granted.
The amount was governed by the limited work reasonably anticipated and by the difference between solicitor-client costs and costs recoverable on assessment. The Court found that parts of the $63,277.50 estimate were not appropriate for security. It considered the estimate for preparing the Aversas’ security application was not pressed [25]. The estimate for responding to the company’s submissions required a significant reduction because the summary was short and was to be replaced [26]-[27]. Most of the estimated directions-hearing and conference costs were not appropriate once the matter was to proceed as a leave-only application [28]. Two days’ preparation for a leave application, rather than an appeal, was also excessive [29].
Leeming JA referred to counsel-rate guidelines and observed that the rates claimed exceeded the figures stated in those guidelines. He reasoned that costs recoverable following a favourable costs order would generally be lower than the solicitor-client figures in the affidavit, subject to any exceptional case where the guidelines did not apply [30]. He then described security as a partial indemnity and said that successive discounts were required, while precise arithmetic was illusory in the circumstances [34]. The result was some security, but substantially less than sought.
The judgment does not set out a comprehensive account of the law before this decision. Its explanation is narrower. It applies the distinction between an appeal brought by a natural person and one brought by a company: for a natural-person appellant, UCPR r 51.50 requires special circumstances; for a company, an order may be made under s 1335 without that requirement [23]. That proposition is taken from Hung, not presented as a new rule created in this decision.
The judgment also follows the Court of Appeal’s approach in Suchand to personal undertakings. The undertaking is neither automatically decisive nor irrelevant. It is a powerful factor to be considered alongside the other circumstances [13]. Leeming JA stated that the position in Suchand was settled and binding on him.
The decision’s practical contribution is its application of those principles to a leave application whose mode of hearing changed during the security motion. It shows the amount of security being adjusted to the work that remained reasonably anticipated. A proposed oral hearing supported a higher preliminary figure; once the parties agreed that the application could be decided on the papers, the Court reduced the amount to $4,000 [42]-[48]. The decision does not announce a fixed scale or formula for security. It expressly cautions against arithmetical precision in such a case [34].
The judgment also distinguishes security for leave from potential security for a substantive appeal after leave might be granted. It says a later application would involve a different situation, including an exchange of submissions and consideration of the record. The Court did not decide whether a later application could or should succeed [32]-[33]. Accordingly, the judgment’s “after” position is not a change in the governing test, but an illustration of how the existing discretion was applied to the costs of the particular stage.
At [13], Leeming JA said a director’s undertaking was “neither ‘generally or presumptively’ determinative” and was instead a “very powerful consideration” to be weighed with other matters. In plain English, a promise by a director to pay costs can matter substantially, but does not automatically end the application. The evidence about resources and the other relevant circumstances remain material.
At [23], the Court explained that special circumstances are required for an appeal brought by a natural person under UCPR r 51.50, but not for a company where an order may be made under s 1335. In plain English, the company could not defeat the security motion merely by saying the Aversas had failed to show special circumstances.
At [22], the Court said the application for security proceeded on the ordinary basis that the leave application was reasonably arguable. This did not amount to a view about the merits. The Court lacked the material needed to resolve factual criticisms of the primary judgment, and did not decide whether leave should be granted [19]-[22].
At [34], the Court called arithmetical precision “utterly illusory” in the circumstances. In plain English, the amount was not derived from a precise formula. It required judgment about likely recoverable costs and appropriate discounts.
At [48], after the Aversas agreed to a paper determination, Leeming JA said he would replace $12,000 with $4,000. This passage records why the amount changed: the earlier figure had included costs associated with an oral hearing that was no longer required.
The most direct setting is an application for security in a proceeding where a company is seeking leave to appeal and the opposing party relies on s 1335 of the Corporations Act. The judgment says the special-circumstances requirement described in UCPR r 51.50 for a natural-person appellant does not apply to that company [23]. It does not say that security must be ordered whenever the applicant is a company; the Court still exercised a discretion by considering the circumstances.
The case is also relevant where a director offers a personal undertaking to meet adverse costs. Its treatment of Suchand indicates that the undertaking is a factor, even a powerful one, rather than an automatic answer [13]. The judgment’s analysis is particularly tied to a situation where the evidence did not disclose the assets of the company or director [12].
Another relevant factual feature is a history of security orders between the same parties in what is substantially the same dispute. The Court treated the existence of the earlier orders as supporting security, while carefully distinguishing that from proof that security had been paid [14]. It also considered previous costs orders, but noted the evidential gap about whether those amounts remained unpaid [15].
Finally, the decision is pertinent where the scope of the proposed hearing changes. The Court recalibrated security after the Aversas moved from insisting on an oral hearing to agreeing to determination on the papers [42]-[48]. The result was particular to the costs of the leave application and the evidence and positions before the Court.
The judgment supplied here does not contain decisions by later courts treating Aversa as precedent. It is dated 2 February 2026, and the source material gives no subsequent case history. It would therefore be unsupported to claim that later courts have followed, distinguished, or applied it.
The authorities that Leeming JA did discuss are earlier authorities, not later treatment of Aversa. Suchand is applied for the approach to personal undertakings [13]. Hung is cited for the distinction between company and natural-person appellants under the security provisions [23]. The first-instance judgment in Litigation Fund WCX Pty Ltd v Aversa is identified as the decision from which leave was sought [1]. The judgment also refers to a costs-guidelines decision at [30]. None of those references establishes how later courts have treated this decision.
For later-case research, the source-grounded propositions to check against any subsequent judgment would be the company/natural-person distinction at [23], the treatment of a director’s undertaking at [13], and the assessment of security against the actual scope of the hearing at [27]-[35] and [42]-[48]. This judgment alone cannot establish whether any of those propositions were later adopted or limited.
The judgment leaves the merits of the leave application open. Leeming JA expressly did not assess the prospects of leave, because the factual disputes could not be resolved on the material before him [19]-[22]. The later leave determination could therefore address the alleged errors in the primary judgment on a fuller record.
It also leaves open whether any further security application would be appropriate if leave were granted. The Court said that security for an appeal after leave would be a different application from security for the leave stage, and expressly reserved its view on whether such an application could or should be made [32]-[33]. Its observation about the Aversas’ insistence on an oral leave hearing was a caution about the discretionary context, not a final ruling on any future application [33].
The evidence about the company’s and director’s means was incomplete. The Court had no evidence of their assets apart from the company not owning real property in Australia, and noted that financial information had not been supplied in response to correspondence [12]. The judgment does not decide what weight a more complete financial record would carry in a future application.
The costs estimates also depended on the manner in which the leave application would proceed. The Court noted that the summary of argument needed replacement, that the matter would be determined on the papers, and that the costs estimate had included oral-hearing work [27]-[30], [42]-[48]. The judgment does not establish a general amount of security for leave applications, a universal costs cap, or a formula for calculating security.
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Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Aversa v Litigation Fund WCX Pty Ltd [2026] NSWCA 2
Hearing dates: 2 February 2026
Date of orders: 2 February 2026
Decision date: 02 February 2026
Before: Leeming JA
Decision: 1. Pursuant to s 1335 of the Corporations Act 2001 (Cth), Litigation Fund WCX Pty Ltd provide by payment into court security for the respondents’ costs of this proceeding up to and including the application for leave to appeal in the amount of $4,000.
2. The proceedings be stayed until such security is provided.
3. In the event that security is not provided within 21 days, the respondents have liberty to apply to my Chambers on three business days’ notice with a view to making an order dismissing the proceedings for want of prosecution.
4. The applicant has leave within 21 days of today to supply an amended summary of argument, to be filed and served.
5. The respondents are to file and serve their summary of argument within 28 days thereafter.
6. The applicant has leave to file and serve any submissions in reply within 14 days thereafter.
7. Note that, in the event that security is paid into Court, the parties have agreed that the application for leave is to be determined on the papers.
8. No order as to costs, with the intention that each party bear his, her or its own costs on the motion.
Catchwords: PROCEDURE – security for costs – application for leave to appeal – security ordered against company in earlier proceedings at first instance – no need for special circumstances – no ability to assess prospects of appeal – estimated amounts of costs excessive – security ordered, in much smaller amount than sought
Legislation Cited: Corporations Act 2001 (Cth) s 1335
Supreme Court Act 1970 (NSW) s 101
Uniform Civil Procedure Rules 2005 (NSW) r 51.50
Cases Cited: Elias v Smidt (No 3) [2025] NSWSC 1062
Hung v Aquamore Credit Equity Pty Ltd [2022] NSWCA 123
Litigation Fund WCX Pty Ltd v Aversa [2025] NSWSC 1301
Suchand Pty Ltd v Colbran and Stone (2024) 115 NSWLR 587; [2024] NSWCA 250
Category: Procedural rulings
Parties: Litigation Fund WCX Pty Ltd (Applicant / Respondent on Motion)
Rosario Aversa (First Respondent / First Applicant on Motion)
Antonia Aversa (Second Respondent / Second Applicant on Motion)
Representation: Counsel:
D Eardley (Applicants on Motion)
R Coshott (Respondent on Motion)
Solicitors:
Stacks Collins Thompson (Respondents)
File Number(s): 2025/437341
Publication restriction: N/A
LEEMING JA: Pending in the Court is a proceeding commenced by Litigation Fund WCX Pty Ltd against Mr Rosario and Ms Antonia Aversa. Litigation Fund is dissatisfied with the summary dismissal of its claim against the Aversas by judgment delivered by McGrath J on 5 November 2025: Litigation Fund WCX Pty Ltd v Aversa [2025] NSWSC 1301. Both sides had brought applications for summary disposal of the litigation and his Honour concluded in a judgment of 103 paragraphs that the proceedings should be dismissed as an abuse of process.
Litigation Fund WCX filed a notice of appeal on 12 November 2025. I am told that the Registrar picked up that no appeal as of right lay from the interlocutory decision (for the purposes of s 101(2)(e) of the Supreme Court Act 1970 (NSW)) and thereafter Litigation Fund WCX filed a separate originating process, by way of a summons seeking leave to appeal on 8 December 2025. Promptly thereafter, the Aversas filed a notice of motion seeking security for their costs.
Before me today, Mr Coshott, who is the sole director and shareholder of Litigation Fund WCX, has, with leave, appeared. Mr Eardley, who appeared for the Aversas in the proceedings below, has appeared for the applicants on the motion.
Mr Coshott, by written submissions supplied over the weekend, advised that he was willing to give a personal undertaking to be liable for any adverse costs orders against his company. That was not acceptable to the Aversas.
Litigation Fund WCX has also supplied a white folder in a form which (subject to any necessary supplementation) will be sufficient for the hearing of a leave alone application. The white folder includes the company’s summary of argument. That is a very short document of three and a half pages, more than half of which reproduces the grounds of appeal and extracts from High Court judgments, and less than one page of which develops any submissions in support of those grounds. In particular, some of the submissions merely say that the facts stated by the primary judge are incorrect or not supported by admissible evidence. This, for example, is the totality of what is said in support of ground 2: “At paragraphs 3, 55, 96-98, and 100 facts stated are either incorrect or not supported by admissible evidence”.
The document was also conspicuous by its failure to identify whether Litigation Fund WCX sought a concurrent hearing or a separate hearing of its application for leave, and if the latter, whether it wished to have an oral hearing.
The affidavit of the Aversas’ solicitor, made by Mr Christopher John Morris, an employed solicitor, proceeded on the basis that there would be a concurrent hearing lasting one day. He estimated that the costs incurred would be (including GST) some $63,277.50, a figure to which I will return, noting that there are aspects of it that Mr Eardley did not before me press.
The discretion to make orders for security for the costs of an appeal, in the case of an appeal brought by a natural person, requires the finding of special circumstances: UCPR r 51.50. However, in the case of an appeal brought by a company, there is no such requirement, because an order may be made under s 1335 of the Corporations Act 2001 (Cth).
Drawing those matters together, I have concluded that this an appropriate case to exercise the discretion to order security for costs. I am informed by the fact that security was ordered between the same parties at first instance, and the fact that the procedural history of the litigation in this court, conducted by Mr Coshott on behalf of his company, suggests that some additional costs will be incurred, and have been incurred, that would not ordinarily be the case. However, I am with Mr Coshott in that the amount of security that is sought is excessive. As I have noted, Mr Eardley has accepted as much.
I have so far skipped over the details of the security that was sought. The $63,277.50 of estimated costs comprised four components. The first (some $11,687.50) was the costs of preparing the application for security for costs. Mr Eardley did not press any aspect of that.
The second component is an amount of $16,940 for considering the appellant’s submissions, white book and other appeal books, and preparing the respondents’ submissions.
I have mentioned above the limitations of the summary of argument to date, and Mr Coshott has advised that he will supply a replacement document in due course. In my view, a significant reduction in the amount of costs in responding to the summary of argument will be required.
The third component of the costs is an amount of $11,660, which is as to about half for the attendance at and preparation for no fewer than four directions hearing, and as to the remainder, for a variety of attendances upon and conferences with counsel. It is no criticism of the solicitor to note that that estimate was made before Mr Coshott advised that he would seek a leave alone hearing. It is plain that the very large majority of that component is not to be included within an order for security for costs.
The fourth component was the hearing. That is an amount of $22,990, reflecting one hour’s time of the solicitor, and two days preparation and a one day hearing by counsel. That is to say, all save $715 is counsel’s time. Mr Eardley readily conceded that two days preparation for the hearing of a leave application (as opposed to the hearing of an appeal) was beyond what should properly be the subject of an application for security for costs, and he was right to do so.
Mr Coshott also submitted that the rates were too high. I mentioned during the hearing that in Schmidt v Elias (No 3) [2025] NSWSC 1062 I had referred to the Costs Assessment Rules Committee Guidelines dated 24 October 2023, which state that the daily rate allowable for junior counsel is between $2,400 and $5,600 exclusive of GST based on a ten hour day. The rates for counsel on which the application for security for costs has been based exceeds the amount stated in those guidelines. That is a matter of significance because the partial security reflected by an order for security for costs ultimately reflects the partial security of a successful litigant’s entitlement to recover costs as agreed or assessed from the unsuccessful litigant, pursuant to a costs order. Save in some exceptional case where the guidelines do not apply, it follows that the costs recoverable on assessment for counsel pursuant to a favourable costs order will be less than those stated in the affidavit.
COSHOTT: Yes.
HIS HONOUR: Four weeks for Mr Eardley to respond. Two weeks thereafter for anything in reply, and the Registrar - obviously I will let the Registrar know, and he will possibly without a directions hearing allocate a date for a leave alone application, which will be over in a morning, before two judges. Normally we say 20 minutes for each side, sometimes it is a little bit longer, but it’s a short and sharp hearing.
COSHOTT: Yes.
HIS HONOUR: You’re both familiar with those things. Do you want to say anything about the substance of those orders?
EARDLEY: No.
1. Pursuant to s 1335 of the Corporations Act 2001 (Cth), Litigation Fund WCX Pty Limited provide by payment into a court, security for the respondents’ costs of this proceeding up to and including the application for leave to appeal, in the amount of $12,000;
2. The proceedings be stayed until such security is provided;
3. In the event that security is not provided within 21 days, the respondents have liberty to apply to my chambers on three days’ notice with a view to making an order dismissing the proceedings for want of prosecution;
4. The applicant has leave within 21 days of today to supply an amended summary of argument, to be filed and served;
5. The respondents are to file and serve their summary of argument within 28 days thereafter;
6. The applicant has leave to file and serve any submissions in reply within 14 days thereafter;
7. Note that in the event that security is paid into court, it is expected that the Registrar will allocate a date for the hearing of an application for leave to appeal.
[Mr Eardley asked for a further adjournment to take instructions, following which he advised that he no longer sought an oral hearing. There followed submissions concerning the effect that had on orders].
HIS HONOUR: After timetabling orders consistent with the reasons I have just given were made, and the only outstanding issue was, so I thought, the question of costs of the application for security for costs, Mr Eardley sought an indulgence which was to seek further instructions as to whether his clients insisted upon an oral hearing. Mr Coshott did not object to that course and I granted a further short adjournment.
After that adjournment, Mr Eardley advised that his clients were willing to have the application for leave to appeal determined alone and on the papers. Mr Eardley acknowledged that the consequence was that the $12,000 I had ordered needed to be revisited because a component of that was the cost of his appearing at and preparing for the oral hearing which at that stage his clients had insisted upon.
Mr Coshott suggested that the costs to be incurred now, which were the subject of the application for security for costs, were so much smaller that they were, in effect, de minimis and ought not be the subject of a security for costs order at all. I indicated to him that there was, perhaps, an interrelationship between the two outstanding questions, namely, the amount of security for costs and the costs discretion in relation to the notice of motion that has now occupied two hours of the Court’s time. I suggested to him that perhaps there might be a small order for security for costs and no order as to the costs of the security for costs application. He had no objection to that.
Mr Eardley emphasised that in part the difference between his clients’ application for security for costs in the amount of $50,000 and the excessive amounts in the affidavit in support, and the much smaller amounts to which he would be entitled under the most recent instructions from his clients, was brought about in part by recent developments of Mr Coshott. That is so.
On the other hand, it remains the fact that the Aversas have brought this application without investigating before its hearing today any of the matters which I drew to the parties’ attention, which are obvious on the face of the documents, namely, that the summary of argument does not specify whether there is to be an oral hearing and whether there is to be an application for leave alone. It would have been very easy for such an inquiry to have been made at some stage prior to today, even bearing in mind that today is the first day of term, noting that the application was made on 7 January pursuant to a solicitor’s affidavit affirmed on 19 December, and the solicitor’s affidavit attached correspondence bearing upon the discretionary factors in the security for costs application which he had caused to be sent to Mr Coshott.
**********
Aversa
Litigation Fund WCX Pty Ltd [2026] NSWCA 2
(2024) 115 NSWLR 587
The Court ordered Litigation Fund WCX Pty Ltd to provide $4,000 security for the respondents’ costs up to and including the leave application, payable into court. The proceeding was stayed until payment. If security was not provided within 21 days, the respondents had liberty to apply on three business days’ notice for an order dismissing the proceeding for want of prosecution. The Court gave directions for further submissions, noted that the leave application was to be determined on the papers, and made no order as to the costs of the motion. The final amount was reduced from the $12,000 initially indicated after the Aversas changed their position on an oral hearing: [39]-[49].
When I drew to Mr Coshott’s attention the failure of the summary of argument to identify how the proceeding in this Court was to proceed, he advised on behalf of his company that he would prefer a leave alone determination on the papers, understanding that the consequence of that would be the two Judges of Appeal would review the papers and either grant or refuse leave. If leave were refused, that would be the end of the proceedings in this Court.
I gave Mr Eardley an opportunity to obtain instructions as to his clients’ attitude to what had belatedly been proposed in relation to the hearing of the appeal. They agreed that there should be a leave alone hearing, but they insisted, as is their entitlement, upon that being an oral hearing.
Ordinarily when both parties are agreed that there should be a leave alone hearing, the Court will accommodate their joint wish, and nothing has been said to me and I have seen nothing in the materials to suggest that any other course is appropriate in this case. That carries with it the consequence, as Mr Eardley acknowledged, that the security that was sought, in the event that it is ordered, will necessarily be in a smaller amount because of the limited nature of the leave alone hearing.
I now turn to the various matters raised by the parties in support or against the ordering of security. Mr Coshott’s threshold point is that his personal undertaking ought be a complete answer to the application.
Nothing is known, on the evidence before me, as to the assets of either Litigation Fund WCX or Mr Coshott personally, save that the former is not the legal owner of an real property in Australia. No notice to produce was issued to Litigation Fund WCX. Instead the solicitor requested standard financial information and there was no response to that request in ordinary correspondence. No criticism can be made in relation to the failure to make inquiry about Mr Coshott’s assets because the proffering of a personal undertaking was something that emerged only over the weekend.
The parties did not engage in submissions on this point, which was addressed in some detail in this Court’s decision in Suchand Pty Ltd v Colbran and Stone (2024) 115 NSWLR 587; [2024] NSWCA 250. In short, while there is some interstate authority suggesting that such an undertaking is a complete answer (as Mr Coshott contends), the settled position in this Court, and certainly binding upon me, is that such an undertaking is neither “generally or presumptively” determinative on an application, rather it is “a consideration, albeit a very powerful consideration, to be considered alongside other relevant discretionary considerations”: at [74].
Secondly, there is the fact that security for costs was ordered and (so I am told, although strictly the evidence falls short of establishing it) some $30,000 in security which had been ordered was provided for in earlier proceedings between the same parties at first instance. Strictly speaking, it is the existence of such orders for the provision of security for costs between the same parties in what, in substance, is the same dispute, as opposed to whether security was provided, which is a factor favouring the order of security in this court.
Next, there is evidence that costs orders have been made against Litigation Fund WCX in two earlier proceedings in the Supreme Court. Once again the evidence read strictly falls short of saying that those amounts have not been paid.
Thirdly, the evidence that was read without objection included “the respondents have incurred recoverable costs of no less than $243,116.41, including professional costs and council fees” in what have been called the First and Second Supreme Court proceedings (the present appeal is from a judgment in “the third Supreme Court proceedings”). After raising this with both parties, I have proceeded on the basis that what was intended, and is to be understood by that paragraph, is nothing to do with the recoverable costs but instead the solicitor/client costs that have been incurred in those two proceedings. The party/party costs recoverable on assessment will be less than that amount and in some cases they may be substantially less than that amount. What that amount is is not known.
Fourthly, some aspects of this litigation suggest that even hearing the application for leave to appeal alone may be a little more complicated than is sometimes the case. In part that is a consequence, I mean no disrespect to him, of the fact that Mr Coshott, the director, appears for his company with leave. I have referred above to the deficiencies in the summary of argument and to the incorrect filing of a notice of appeal rather than a summons seeking leave to appeal.
Mr Coshott correctly and candidly acknowledges that he wishes to supply a further summary of argument, this time one that complies with the rules. He is right to do so. That is but an indication that there may be some additional complexity and therefore time and cost incurred in dealing with the application for leave to appeal. Perhaps that is implicit in Mr Morris’ affidavit who predicts that no fewer than four directions hearings will be necessary for the preparation of the appeal, which is three more than most appeals in this Court require.
The fifth matter is the strength of the appeal. Mr Coshott contends that the appeal has strong prospects of success. Mr Eardley contends that the most likely result is that it will fail. I am in no position to express any view on the prospects of the appeal, or the application for leave to appeal. An example, which was raised in argument and is illustrative of the general problem is as follows.
Mr Coshott contends (in submissions supplied only over the weekend) that two paragraphs of the judgment of the primary judge are incorrect. These paragraphs concern his Honour’s reliance upon the absence of any review of the Registrar’s decision not to permit an amendment. He says that those paragraphs are simply wrong. Mr Eardley, I hope I am doing no injustice to him, expressed a recollection that that might not be so but was unable to be definitive about it and acknowledged, in my view entirely correctly, that it was not a point I could rule upon here and now.
The proposition in Mr Coshott’s written submissions is either true or correct and it is unlikely when the appeal – or the application for leave to appeal – is heard and determined there will be any dispute about it because it will be made clear from the transcript or documents that were filed or other parts of the record. But at the moment it is not possible for me to determine a view one way or the other as to the correctness of that.
The consequence of that, which is merely by way of example (I have referred above to other factual matters which Mr Coshott challenges but not only is the basis of the challenge not before me nor is the evidence upon which that challenge is put forward before me) is that this application for security for costs proceeds on the ordinary basis that the application is reasonably arguable, contrary to the submissions of both sides.
Sixthly, Mr Coshott also contends that it is necessary for the Aversas to establish special circumstances in order to obtain security for costs. That submission is based on Uniform Civil Procedure Rules 2005 (NSW) r 51.50. However, the very cases that Mr Coshott has relied upon in support of that proposition, which was not developed orally, confirm that it is confined to cases where a natural person is the appellant not a case such as the present where the Aversas rely upon s 1335 of the Corporations Act 2001 (Cth). For example, Mr Coshott relied upon Hung v Aquamore Credit Equity Pty Ltd [2022] NSWCA 123, as the first case in support of his proposition, but that states at [10]:
Finally, I note that there is no evidence one way or the other before me to suggest that any order for security will stultify the proceedings.
The consequence is that a substantially smaller amount of security for costs should be ordered at this stage. Such an order cannot, in the event that it is complied with and there is a grant of leave, stand in the way of a further application for security for costs, although the inefficiency of that course, not to mention the costs involved in it, are something that the respondents would be well to bear in mind. They would also be wise to bear in mind that it is one thing to seek security for costs of an application for leave to appeal, and another thing entirely to seek security for costs of an application which has been the subject of a grant of leave, and which by that time will have been the subject of an exchange of submissions, and the consideration by both sides of each other’s submissions and the record.
There is one further matter I should note in relation to the possibility of a future application for security for costs. The premise of any such application will be that there has been a grant of leave. To be absolutely clear about it, I am not expressing a view one way or the other as to whether there can or should be a grant of leave. It will follow, however, that it will mean that the oral hearing will have involved costs incurred by the Aversas who will have failed in their submission that leave should be refused. That is an oral hearing that will have been brought about by the decision of the Aversas and the Aversas alone, where Litigation Fund WCX was content to have application for leave to appeal heard and determined on the papers. There is a deal to be said for the proposition that even in the event that there is a grant of leave, further security should not be ordered for the costs of a second day’s hearing in this Court, when the need for the second day will have been brought about by the unsuccessful stance by the Aversas insisting, as is their entitlement, on an oral hearing for the opposition of leave.
It is well settled that, as I have mentioned, security for costs provides, at best, a partial indemnity. I bear in mind that a significant discount has to be applied to the solicitor/client costs that are pressed, and continue to be relevant, and that a further discount needs to be applied to convert those amounts to party/party recoverable costs, and that a further discount needs to be applied in order to determine an appropriate amount of security. Ultimately, arithmetical precision is utterly illusory in a case such as this. The significant aspects of the response to the application for leave to appeal, which is to be heard by itself, are the preparation of a summary of argument, and the preparation and appearance of counsel to respond to oral submissions.
I am going to order that the applicant seeking leave to appeal, Litigation Fund WCX, provide security in the amount of $12,000, that being security for the respondents’ costs of the application for leave to appeal, noting that the application for leave to appeal is to be heard separately from the appeal, but at an oral hearing at a date to be fixed.
Perhaps I should just raise some matters with you before I make the formal orders.
[Discussion concerning timing and form of orders]
HIS HONOUR: Where that leaves us is 21 days from today for provision of - I am just going to talk you through the gist of it. I will make some formal orders in a moment. 21 days for security plus supplementary submissions, or replacement submissions I think is what they are.
It is candidly and properly conceded by Mr Eardley that he is not entitled to the $12,000 security which I had been minded to order on the basis that there was to be an oral hearing. I think ultimately he accepted, and if he did not it does not matter because it is the fact, that the largest component of that $12,000 should be attributable to costs arising out of the need for an oral hearing. As much is palpably obvious from Mr Morris’ affidavit, for of the sum $51,000 which was pressed, almost half – slightly more than $22,000 – reflected Mr Eardley’s costs for preparing for and appearing at the hearing.
This application for security for costs is now, following the change of instructions from the Aversas, to be heard and determined on the basis that there will be no hearing. Accordingly, to the extent that there should be an order for security for costs it should be substantially less than the $12,000 I had previously indicated.
I continue to be minded to order an amount of security for costs, although I suspect the position might be different had the parties reached the position as to the way each wished the leave application to be heard and determined had been made clear prior to the hearing today. I will alter the orders made beforehand, replacing the $12,000 where it appears by $4,000.
Finally, I turn to the costs of the motion. On any view of the matter, there has been at best a very limited success by the Aversas in their application for security for costs. It is not necessary for me to go further, given that Mr Coshott is not entitled to any costs for his professional time, than to say that an appropriate outcome as to the discretion as to costs of the notice of motion filed 7 January 2026 is that there be no order as to costs with the intent that each party bear his, her or its own costs of that motion.