Boensch v Pascoe

1. The applicant be granted an extension of time to file a notice of appeal including grounds 3 to 6, 10 and 14 to 17 of the notice of appeal being annexure "DWL 15" to the affidavit of David Winston Low sworn 15 August 2016, ground 17 to be amended in accordance with [90] of the reasons for judgment published today.
2. Otherwise, the application for an extension of time dated 25 August 2016 be refused.
3. The costs of the application for an extension of time dated 25 August 2016 be costs in the appeal.
4. The application for a stay of the costs order made against the applicant by the Supreme Court of New South Wales on 9 May 2016 be refused with costs.
5. Pursuant to s 56(1) of the Federal Court of Australia Act 1976 (Cth), the applicant is to give security for the payment of the respondent's costs of the appeal, by way of a bank guarantee from an Australian trading bank in favour of the respondent for an amount of $30,000.
6. The security ordered to be given by the applicant for the respondent's costs of the appeal be given within 21 days.
7. The appeal be stayed until security is given in accordance with orders 5 and 6 above.
8. If the security is not given in accordance with orders 5 and 6 above, the appeal be dismissed pursuant to s 56(4) of the Act.
9. The applicant pay the respondent's costs of and incidental to the application for security for costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

GLEESON J: 1 The applicant ("Mr Boensch") seeks an extension of time to appeal, primarily from the judgment of Darke J ("primary judge") in Franz Boensch as trustee of the Boensch Trust v Scott Darren Pascoe [2015] NSWSC 1882 and a subsequent costs order (Boensch as trustee of the Boensch Trust v Pascoe (No 2) [2016] NSWSC 343). In his Honour's main judgment, the primary judge dismissed proceedings brought by Mr Boensch in the Supreme Court of New South Wales ("Supreme Court proceedings") for compensation pursuant to s 74P(1) of the Real Property Act 1900 (NSW) from the respondent ("Mr Pascoe") in connection with Mr Pascoe's lodgement of a caveat over a property on Victoria Road, Rydalmere ("Rydalmere property") in the state of New South Wales. 2 Mr Boensch also appeals from an interlocutory judgment of Bergin CJ in Eq on 21 August 2015 (Franz Boensch as trustee of the Boensch Trust v Scott Pascoe (Unreported, Supreme Court of New South Wales, Bergin CJ in Eq, 21 August 2015) ("interlocutory judgment"). By the interlocutory judgment, Bergin CJ in Eq dismissed Mr Boensch's application for leave to amend his statement of claim in the proceedings. 3 In the event that an extension of time to appeal is granted: (1) Mr Boensch seeks an order staying the execution (including assessment) of the costs order pending determination of the appeal; and (2) Mr Pascoe seeks security for the costs of the appeal.

Background to the proposed appeal 4 Mr Boensch is the trustee of the Boensch Trust, established by a memorandum of trust dated 23 August 1999. The memorandum of trust provided for the Rydalmere property to be trust property. At all relevant times, Mr Boensch and his former wife were joint registered proprietors of the Rydalmere property. 5 Mr Boensch was made bankrupt on 23 August 2005, on the application of Michael Costin. The application was based on a judgment obtained by Mr Costin in the Ryde Local Court in July 2003, following a contested hearing. 6 Mr Pascoe was appointed as the trustee of Mr Boensch's bankrupt estate. On 25 August 2009, Mr Pascoe lodged a caveat over Mr Boensch's interest in the Rydalmere property. The nature of the estate or interest claimed by Mr Pascoe in the caveat was "legal interest pursuant to the Bankruptcy Act 1966". The estate or interest was said to arise by virtue of the sequestration order made against Mr Boensch and Mr Pascoe's appointment as trustee in bankruptcy. The caveat stated: Pursuant to sections 156A(3) and 58(1)(a) of the Bankruptcy Act 1966 property of the bankrupt vests in the Trustee. 7 As Darke J put it in his Honour's reasons, at [7]: The validity of the Boensch Trust became a matter of controversy between Mr Boensch and Mr Pascoe. So, too, did the question whether any transfer of property effected by the Memorandum of Trust was void against Mr Pascoe by reason of s 121 of the Bankruptcy Act 1966 (Cth). These matters were litigated in the Federal Magistrates Court and the Federal Court over a period of some years. Ultimately, Mr Boensch prevailed. 8 The relevant decision of a Full Court of this Court, dismissing Mr Pascoe's claims concerning the Boensch Trust is Pascoe v Boensch [2008] FCAFC 147. An application for special leave to appeal from that decision to the High Court of Australia was dismissed: Scott Darren Pascoe v Franz Boensch & Anor [2009] HCASL 61. 9 The caveat lapsed in September 2009. 10 In the Supreme Court proceedings, Mr Boensch claimed compensation from Mr Pascoe on the basis that, in the course of the bankruptcy, Mr Pascoe, without reasonable cause, lodged and later refused or failed to withdraw the caveat over the Rydalmere property.

Primary judge's reasons 11 At [4] of his Honour's reasons, the primary judge recorded an order, made by consent on 15 May 2015, for the determination of the following three separate questions: (1) Did [Mr Pascoe] lodge Caveat AB721857 over [the Rydalmere property] without reasonable cause within the meaning of section 74P(1) of the [Real Property Act]? (2) Did [Mr Pascoe], without reasonable cause within the meaning of s 74P(1) of the Act, refuse or fail to withdraw the Caveat after being requested to do so? (3) If the answer to Question (2) above is "Yes", on what date should [Mr Pascoe] have withdrawn the Caveat? 12 At [5] of his Honour's reasons, the primary judge records his rejection of Mr Pascoe's application, at the commencement of the final hearing, for determination of a different question being whether Mr Pascoe had a caveatable interest in the Rydalmere property during the relevant period. The primary judge recorded that he was not convinced that such a course would be productive of a quicker or more efficient disposition of the issues. 13 At [8] of his Honour's reasons, the primary judge recorded that Mr Boensch submitted, among other things, that Mr Pascoe did not have a caveatable interest in the Rydalmere property. 14 At [9] of his Honour's reasons, the primary judge recorded Mr Pascoe's counter-assertion that he did have such a caveatable interest. 15 The primary judge made factual findings under the heading "Summary of salient events" from [11] to [88] of his Honour's reasons. 16 At [89] to [96], his Honour recorded matters of relevant legal principle. After setting out some of the law concerning predecessors to the current version of s 74P, at [94] and [95], the primary judge recorded his understanding of the principles to be applied as follows: [94] Section 74P(1), in its current form, has been construed in a manner consistent with the approach taken by Clarke JA [in Beca Developments Pty Limited v Idameneo (No 92) Pty Limited (1990) 21 NSWLR 459, at 475A] to the former section 98. That is to say, it has been held that in order to establish that a caveat was lodged without reasonable cause, it is necessary to show (a) that the caveator did not have a caveatable interest, and (b) that the caveator did not have an honest belief based on reasonable grounds that he had a caveatable interest (see, for example, Collingridge v Sontor Pty Limited [1997] NSWSC 522 at [10] per Young J; Lee v Ross (No 2) [2003] NSWSC 507 at [23] per Palmer J; and Natuna Pty Limited v Cook [2007] NSWSC 121 at [195] per Biscoe AJ). [95] In Mahendran v Chase Enterprises Pty Limited [2013] NSWCA 280 at [52], Barrett JA (with whom Emmett and Gleeson JJA agreed) cited, with approval, the following statement by Biscoe AJ in Natuna Pty Limited v Cook (supra) at [195]: "Reasonable cause" for the lodgement of a caveat exists where the caveator has an honest belief, based upon reasonable grounds, that the caveator has a caveatable interest. In order to establish liability under s 74P, the onus is on Mr Cook to prove, first, that Natuna had no caveatable interest and, secondly, that Natuna did not have an honest belief based on reasonable grounds that a caveatable interest existed. As to the second issue, the test is partly subjective and partly objective. It is subjective in that it requires an examination of the caveator's actual belief and whether it was honestly held. It is objective in that it requires that the belief be held on reasonable grounds [citations omitted]. A caveator may have reasonable grounds upon which to believe that it has a caveatable interest even though it is mistaken and it is ultimately held that it did not [citation omitted]. 17 At [97] to [107], the primary judge addressed the question whether Mr Pascoe had a caveatable interest in the Rydalmere property, concluding that he had such an interest by virtue of s 58(1)(a) of the Bankruptcy Act 1966 (Cth). At [107], the primary judge said: In my opinion, Mr Pascoe had a caveatable interest in the Rydalmere property by virtue of s 58(1)(a) of the Bankruptcy Act. Moreover, he claimed such interest in the caveat he lodged. That caveatable interest subsisted throughout the life of the caveat. In those circumstances, it seems to me that it cannot be said that Mr Pascoe lodged the caveat, or refused or failed to withdraw the caveat, without reasonable cause within the meaning of s 74P(1) of the Act (see Beca Developments Pty Limited v Idameneo (No 92) Pty Limited (supra) at 475A per Clarke JA). 18 At [108], the primary judge found that this conclusion was sufficient to dispose of the separate questions in a manner favourable to Mr Pascoe. However, in case his Honour was wrong in finding that Mr Pascoe had a caveatable interest, the primary judge went on to consider whether Mr Pascoe had an honest belief based on reasonable grounds that he had a caveatable interest, on the assumption that there was no caveatable interest. The primary judge made the following key findings: (1) at all relevant times Mr Pascoe honestly believed that he had a caveatable interest in the Rydalmere property (at [109]); (2) at all relevant times, Mr Pascoe held the view that Mr Boensch might have had an interest in the property that was more than a bare legal title and that, upon the making of the sequestration order, such interest was vested in him as the trustee in bankruptcy (at [112]); (3) by the time the caveat was lodged in August 2005, Mr Pascoe had reasonable grounds to believe that the asserted trust might not be valid or enforceable against him (at [115]); (4) documents (including a letter from Mr Leong to Mr Boensch dated 17 March 2004), coupled with the absence of documentary evidence to suggest that the asserted trust had actually been carried on as such, provided a reasonable basis for Mr Pascoe to remain unconvinced about Mr Boensch's trust claim (at [116]); (5) Mr Pascoe had reasonable grounds to think that he had reasonable prospects of succeeding in the Federal Magistrates Court proceedings for relief, including relief challenging the validity of the asserted trust (at [120]); (6) by 10 December 2007 (after Mr Pascoe had failed in proceedings in the Federal Magistrates Court), Mr Pascoe understood from his lawyers that he had a proper basis to maintain his caveat at least until an appeal had been determined, and he did not lack reasonable grounds for that view (at [122]); (7) it was not shown that Mr Pascoe did not have reasonable grounds to believe, at least up to 13 August 2009, that the application to the Federal Magistrates Court under s 121 of the Bankruptcy Act had reasonable prospects of success (at [128]); (8) by May 2009 at the latest, Mr Pascoe had reasonable grounds for a belief (even if Mr Boensch's trust claims were valid) that Mr Boensch might have a right of indemnity out of trust assets (at [129]), although Mr Pascoe ultimately came to the view that such right was likely to have little value; (9) any right of indemnity (even if it was of limited value) would constitute property of Mr Boensch that would have vested in Mr Pascoe upon the making of a sequestration order (at [130]); and (10) Mr Boensch did not establish that, at any relevant time, Mr Pascoe's belief as to the existence of a caveatable interest was not based on reasonable grounds (at [131]). 19 At [135], his Honour concluded that the three separate questions set out above should be answered: (1) no; (2) no; and (3) does not arise. 20 At [136], his Honour noted the parties' agreement that, if the separate questions were answered in this way, the proceeding should be dismissed. Accordingly, the primary judge ordered that the proceeding be dismissed with costs.

Relevant principles 21 The decision to grant an extension of time to appeal is a discretionary one: DZAAD v Department of Immigration and Citizenship [2013] FCA 204 at [28] ("DZAAD"). The relevant considerations are: (1) the reasons for and length of the delay (the Court must be satisfied that it is proper to grant an extension of time, noting that the prescribed period is not to be ignored); (2) any prejudice to the respondent, noting that the mere absence of prejudice is not enough to justify the grant of an extension; and (3) the merits of the appeal: SZQCZ v Minister for Immigration and Citizenship [2012] FCA 91 at [19]; WAAD v Minister for Immigration and Multicultural Affairs [2002] FCAFC 399 at [9]; DZAAD at [28]. 22 The delay in seeking to appeal arose from the fact that the appeal was commenced in the New South Wales Court of Appeal. In that court, the appeal was commenced in accordance with the applicable time limits. However, on 4 August 2016, Leeming JA dismissed the appeal for lack of jurisdiction: Boensch v Pascoe [2016] NSWCA 191; (2016) 311 FLR 101, concluding that the appeal from the primary judge's decision lay to a Full Court of this Court. The question of the court's lack of jurisdiction was first raised by the court itself, shortly before Leeming JA dismissed the appeal. 23 Mr Pascoe accepts that he is not prejudiced by the delay in seeking to appeal to this Court. He opposes the extension of time sought on the ground that the appeal lacks merit. 24 In those circumstances, Mr Boensch should be granted an extension of time to appeal, but only if and only to the extent that he can demonstrate that the appeal has sufficient merit. 25 The discretion to extend time is given for the purpose of enabling the court to do justice between the parties: Hughes v National Trustees Executors & Agency Co of Australasia Ltd [1978] VR 257 at 262; [1978] VicRp 27; Gallo v Dawson; [1990] HCA 30; (1990) 93 ALR 479 at 480. The appeal must have sufficient prospects of success to make it just that the prospective appellant be permitted to proceed: cf WAAD at [9]. 26 Typically, an assessment of the merits of an appeal on an application for an extension of time can only be made in "a fairly rough and ready way": cf Jackamarra v Krakouer [1998] HCA 27; (1998) 195 CLR 516 ("Jackamarra") at [9] (Brennan CJ and McHugh J); Waters v Commonwealth of Australia (Australian Taxation Office) [2015] FCAFC 46 at [9] to [11] (Flick J, North and Katzmann JJ agreeing); (2015) 108 ACSR 445. The parties are not expected to argue the merits issue as elaborately as if they were arguing the appeal itself. 27 However, it may be apparent from the statement of the appeal argument that it must be rejected: cf Jackamarra at [10]. Thus, at [35], Gummow and Hayne JJ said: The parties submitted here that the Full Court should have decided whether the appeal was "arguable". It is important to understand what is meant in this context by "arguable". If it means no more than that counsel, acting responsibly, can formulate an argument which can properly be advanced in support of the appeal, the test is too loose; if it is clear that that argument will fail, the appeal should not proceed. To permit it to proceed is to subject the respondent to the many costs of litigation needlessly and is to occupy the courts when they could be occupied more productively. No doubt, as Barwick CJ said in General Steel Industries Inc : "... great care must be exercised to ensure that under the guise of achieving expeditious finality a plaintiff is not improperly deprived of his opportunity for the trial of his case by the appointed tribunal." But as he also said : "On the other hand, I do not think that the exercise of the jurisdiction should be reserved for those cases where argument is unnecessary to evoke the futility of the plaintiff's claim. Argument, perhaps even of an extensive kind, may be necessary to demonstrate that the case of the plaintiff is so clearly untenable that it cannot possibly succeed." Inevitably, then, courts will sometimes have to balance competing considerations. If the futility of an appeal can be demonstrated only by hearing the whole argument there may be no advantage in bringing that argument forward to the time at which some application is made to cure a minor procedural default. ... (footnotes omitted) 28 In this Court, it has been said that the standard to be applied to the assessment of the applicant's prospects of success in the proposed appeal is similar to that to be applied in an application for summary dismissal. The question is whether proposed appeal has no reasonable prospects in the sense that it is devoid of merit or will clearly fail, or is hopeless or unarguable: SZJDS v Minister for Immigration & Citizenship [2008] FCA 1093 at [30] (Reeves J); SZLXR v Minister for Immigration & Citizenship [2008] FCA 1897 at [20], (Flick J). 29 When applying such a standard, it must also be kept in mind that the party seeking the indulgence of an extension of time bears the burden of persuading the decision-maker to grant its request: Jackamarra at [66] (Kirby J). Mr Boensch has that burden. 30 The proposed notice of appeal contains 20 grounds, many of which are expressed in complex terms. A notice of appeal is required to state "briefly but specifically, the grounds relied on in support of the appeal": r 36.01(2)(c) of the Federal Court Rules 2011; cf. Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd; [2002] FCAFC 157; (2002) 234 FCR 549 at [4] and [5] (Branson J). Having regard to the reasons of Gummow and Hayne JJ in Jackamarra, I have approached the application on the basis that Mr Boensch is required, at least, to formulate an argument which can properly be advanced in support of each ground of appeal.

Grounds of notice of appeal not addressed by submissions 31 Counsel for Mr Boensch, Mr Bevan, did not make any separate submissions concerning grounds 8, 9, 11, 13, 18 and 19 of the notice of appeal. In the absence of any formulation of an argument which can properly be advanced in support of those grounds of appeal, I am not satisfied that an extension of time to appeal should be granted on those grounds.

Scope of Mr Pascoe's argument on the merits of the appeal 32 On Mr Boensch's behalf, it was contended that Mr Pascoe had made a "critical concession" at a case management hearing before Allsop CJ on 5 September 2016, to the effect that the only issue to be raised by Mr Pascoe on the extension of time application is "lack of merit founded upon a Fox v Percy submission assuming that the primary judge's ratio decision is in error". 33 Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 concerns the correct approach, on appeal, to interfering with a factual finding based on the credit of witnesses. 34 Mr Bevan referred to the transcript of a case management hearing before Allsop CJ on 5 September 2016. The relevant passage is a submission by Mr Newton, counsel for Mr Pascoe, addressing the Chief Justice's proposal that the extension of time and the security for costs applications be heard by the same judge, at the same time. Mr Newton had previously confirmed to the Chief Justice that Mr Pascoe would be arguing that the appeal was lacking in merit, both in answer to the application for extension of time and in support of the application for security for costs. Mr Newton briefly outlined the scope of his arguments on the merits of the appeal which included that the appeal from the interlocutory judgment was hopeless; that the legal points raised on the appeal dealt only with the "first road home", that is, the conclusion that Mr Boensch failed because there was a caveatable interest; and that the primary judge had found against Mr Boensch on the question of honest and reasonable belief. He concluded by submitting that there were "credit findings and the like relevant to that question, and it's a Fox v Percy type question". 35 In my view, Mr Newton's submission can only be understood as a reference to the appeal insofar as it concerns findings about Mr Pacsoe's belief. It is not expressed as a concession of the kind suggested by Mr Bevan. Mr Newton had previously stated clearly that Mr Pascoe wished to argue that the appeal lacks merit. Accordingly, I reject the submission that the scope of Mr Pascoe's opposition to the extension of time application was confined by the alleged "critical concession".

Evidence 36 The following affidavits were read on behalf of Mr Boensch, subject to rulings on admissibility: (1) affidavit of David Winston Low sworn 23 June 2016, and an accompanying exhibit marked "DWL1"; (2) affidavit of Mr Boensch sworn 22 July 2016; (3) affidavit of David Winston Low sworn 25 August 2016; (4) affidavit of Stephanie Boensch sworn 27 September 2016; (5) affidavit of Dominic Boensch sworn 27 September 2016; and (6) affidavit of Mr Boensch sworn 28 September 2016. 37 Mr Pascoe's evidence comprised: (1) affidavit of Paul Kozub sworn 30 June 2016, and an accompanying exhibit marked "PBK1"; (2) affidavit of Mr Kozub sworn 12 September 2016; (3) a volume of material exhibited to Mr Kozub at the time that he swore his 12 September 2016 affidavit; and (4) a notice to produce documents addressed to Mr Boensch and a bundle of documents produced in response to the notice to produce.

Merits of the appeal 38 I have addressed the various grounds of appeal in the order in which they were addressed by the parties' written submissions.

Ground 20: appeal from refusal of application for leave to amend statement of claim 39 Ground 20 is as follows: 20. The Chief Judge in Equity erred by refusing the appellant's application for leave to amend his statement of claim to plead issue estoppels and by finding, in doing so that: (a) the appellant did not need to rely upon any of those issue estoppels; and (b) it was sufficient that the appellant could rely on the tender of the judgments of the federal courts to prove that findings by those courts were made on the dates of the judgments within the meaning of s. 91 of the Evidence Act 1995. 40 Ground 20 concerns the interlocutory judgment. It specifies three alleged appellable errors by Bergin CJ in Eq, being: (1) the refusal of Mr Boensch's application for leave to amend his statement of claim to plead issue estoppels; (2) a finding that Mr Boensch did not need to rely upon any of the relevant issue estoppels; and (3) a finding that Mr Boensch could rely on the tender of the judgments of the federal courts to prove that findings by those courts were made on the dates of the judgments within the meaning of s. 91 of the Evidence Act 1995 (Cth). 41 Her Honour's ex tempore judgment records, relevantly: (1) Mr Bevan wished to rely on findings in earlier judgments, which he referred to as issue estoppels, in support of Mr Boensch's case. The findings were said to concern the credit of Mr Pascoe as well as "what the history of the matter is said to be in this proceeding compared with what it was said to be" in proceedings in this Court before Buchanan J; (2) her Honour asked Mr Bevan to identify the evidence served by Mr Pascoe in which Mr Pascoe sought to put forward matters inconsistent with the earlier judgments; (3) her Honour did not accept that the example provided by Mr Bevan was inconsistent with any previous finding. Her Honour described it as a "belief in 2005". On this basis, her Honour stated that "[t]here has been nothing identified that would cause a need for the pleading at this stage"; (4) her Honour then criticised aspects of the proposed pleading as "exquisitely a combination of submissions and allegations that are not appropriate for a pleading", a "very unhelpful" and "not … helpful in identifying the issues between the parties" and "fall[ing] foul of the usual requirements for pleadings to identify facts and allegations, rather than having submissions and contentions combined with alleged evidence and claimed issue estoppel all rolled up into one"; and (5) counsel for Mr Pascoe, Mr Newton, did not oppose the relevant judgments being placed before the primary judge. Her Honour recorded that Mr Newton "rightly points out that s 91 of the Evidence Act 1995 does not prevent that happening". Her Honour also recorded: During the course of debate, I invited Mr Newton to indicate whether there was any difficulty for the relevant judgments to be placed before the trial judge. Mr Newton rightly points out that section 91 of the Evidence Act 1995 does not prevent that happening. He does not have any difficultly with that happening and so it will be that if it is thought appropriate in the plaintiff's case that the judgments are to be relied upon as proof of the findings of the facts that occurred in those judgments then there will be no objection to the admissibility of those judgments for proof that those facts were found as at the dates of those judgments. 42 As to the alleged appellable error (1), Mr Bevan did not attempt to explain how her Honour had erred in concluding that deficiencies in the proposed pleading provided a basis for her Honour's decision to refuse leave to amend. Nor did he identify any basis upon which it might be argued that the exercise of her Honour's discretion to refuse leave to amend had miscarried except that it was affected by the two findings identified in ground 20. 43 As to the alleged appellable error (2), Mr Bevan did not identify the relevant finding in her Honour's reasons. Mr Bevan did not identify, in relation to any single individual "issue estoppel", a finding by her Honour that Mr Boensch did not need to rely upon that estoppel. 44 The most relevant statement by her Honour is: "There has been nothing identified that would cause a need for the pleading at this stage". 45 Mr Bevan did not seek to demonstrate that this statement involved error on the part of her Honour. In particular, Mr Bevan did not point to any particular fact or matter that was identified to her Honour as an issue estoppel upon which Mr Boensch needed to rely. 46 I am not satisfied that her Honour made a finding to the effect that Mr Boensch did not need to rely upon any of the relevant issue estoppels, as claimed in ground 20. 47 As to (3), Mr Bevan has identified no relevant error in her Honour's adoption of the submission that s 91 did not preclude Mr Bevan from putting the relevant judgments before the primary judge as evidence (to be clear, that observation must be understood as referred to s 91 read with s 93(3) but this does not affect Mr Bevan's argument). Mr Bevan did not submit that the observation was irrelevant to the exercise of her Honour's discretion to refuse leave to amend. 48 For these reasons, I conclude that there is no argument that can properly be advanced in support of ground 20.

Grounds 1 to 3 and 10 49 Grounds 1 to 3 are founded upon the proposition that, shortly prior to the hearing before Darke J, Mr Pascoe resiled from a previous agreement that he did not have a caveatable interest in the Rydalmere property. Mr Bevan's written submissions described grounds 1 to 3 as "the procedural estoppel grounds of appeal". In full, grounds 1 to 3 are: 1. The primary judge erred by permitting the respondent to depart from the agreement he made before the Chief Judge in Equity on 15 May 2015 (recorded in her consent orders for separate determination of questions that his liability to pay compensation under s. 74P of the Real Property Act 1900 would be determined by the answers to those questions), by determining liability in reliance upon a new question proposed by the respondent at trial about the existence of a caveatable interest in the property. 2. The primary judge erred, having rejected (at J[5]) the respondents' application to substitute a fourth question about whether he had a caveatable interest in the property during the relevant period under s. 58(1) of the Bankruptcy Act despite s. 116(2)(a) of the Act as the question to determine his liability to pay compensation under s. 74P of the Real Property Act, by determining liability by reference to that question (at J[107]). 3. The primary judge erred by treating his affirmative answer to the respondent's new question about whether he had any caveatable interest under the Bankruptcy Act and whether he claimed that interest in his Caveat as necessitating answers to the agreed separate questions favourably to the respondent or as rendering the agreed questions otiose to the issue of the respondents' liability under s. 74P of the Real Property Act. 50 Ground 10 is in the following terms: 10. The primary judge erred when he found that the respondent had a caveatable interest by virtue of s. 58(1)(a) of the Bankruptcy Act, that he had claimed such an interest for the purposes of s. 74F(1)(a) of the Real Property Act, that that caveatable interest subsisted throughout the life of the Caveat and that, in those circumstances, it cannot be said that he lodged his Caveat, or refused or failed to remove his Caveat, without reasonable cause within the meaning of s. 74P(1) of the Real Property Act. 51 It is plain from the primary judge's reasons that his Honour understood the existence of a caveatable interest to be a matter for determination by the Court. As early as [4] to [9] of his Honour's reasons, the primary judge identified the competing positions of the parties on that question. Mr Boensch said Mr Pascoe did not have a caveatable interest. Mr Pascoe said that he did have a caveatable interest. 52 Mr Bevan addressed grounds 1 to 3 together. As he put it orally, those grounds embodied a complaint that there was "a paradigm shift at the eleventh hour". 53 Mr Bevan contended that the terms of the separate questions embodied an "agreement" between the parties that Mr Pascoe did not have a caveatable interest. As he put it, when Mr Pascoe agreed to the separate questions on 15 May 2015, "he was conceding the absence of any caveatable interest and limiting his case on liability for compensation under s 74P(1) of the [Real Property Act]". This submission reflects the fact that there is no evidence of any explicit acknowledgement by or on behalf of Mr Pascoe that he did not have a caveatable interest. 54 In his written submissions, Mr Bevan contended, by reference to transcript, that Mr Pacoe first sought to make the existence of a caveatable interest an issue at the start of the trial on 21 September 2015. However, he ultimately accepted that the issue was raised by opening submissions served on behalf of Mr Pascoe and dated 14 September 2015 ("written opening submissions"). On the question of reasonable cause, those submissions state that there was an onus on Mr Boensch to show that Mr Pascoe did not have a caveatable interest. It was submitted that Mr Boensch could not discharge his onus because Mr Pascoe had a caveatable interest. 55 Mr Bevan's own preliminary outline of submissions dated 14 September 2015 contain the following proposition: … Mr Boensch bears the onus of establishing the absence of a caveatable interest (a fact which has already been established in earlier proceedings creating issue estoppels between the parties) … 56 The language of this proposition is inconsistent with the proposition that the absence of a caveatable interest was not in issue before the primary judge. It is also inexplicable if Mr Boensch's case was that Mr Pascoe had agreed that he never had a caveatable interest in the Rydalmere property. 57 Earlier in the preliminary outline of submissions, a different proposition is put, that the absence of a caveatable interest "is both an agreed fact and the subject of issue estoppels from earlier decisions". The submissions do not identify evidence of the "agreed fact". The earlier decisions are identified as Pascoe v Boensch & Anor (No 6) [2007] FMCA 2038; Pascoe v Boensch [2008] FCAFC 147; (2008) 250 ALR 24 and Pascoe v Boensch & Anor (No 9) [2009] FMCA 769. None of these cases contain any discussion about the existence or non-existence of a caveatable interest. 58 The primary judge's reasons do not record any submission on behalf of Mr Boensch to that effect or to the effect that the existence of a caveatable interest was not an issue for determination by the primary judge. 59 At the commencement of the hearing before the primary judge, Mr Williams SC, who appeared with Mr Newton for Mr Pascoe, submitted that there was a "clear issue" between the parties as to the existence or otherwise of a caveatable interest. This submission strongly suggests a prior debate as to whether the existence of a caveatable interest was in issue in the proceeding before the primary judge. In response, Mr Bevan said, relevantly: At all material times his caveat was to protect the interest by Mr Boensch as the owner in fee simple. That's why he claimed legal estate. He never at any stage sought to asset [sic] an interest as trustee of the trust and, indeed, if you embark on the motion I'll take you to correspondence where he was asked numerous times whether he asserted an interest as trustee of the trust. If so, would he resign? He said, "No, I'm not trustee of the trust. My claim is Mr Boensch's interest as owner of the estate." If there's a trust he wanted no part of it. That's why I said in my written submissions that it was an agreed fact that that there's no caveatable interest and by that I meant caveatable interest that had been asserted at all material times in the caveat coupled with conduct. This gentleman allowed the caveat to elapse after his challenge was dismissed in 2009. Never at any stage did he seek to assert an interest as trustee of the trust. The second point is even if he were able now after a decade of alleging and acting to the contrary to assert an interest as trustee of the trust, I submit, that's not a caveatable interest because the Act provides under s 90 that he just simply registers himself. He doesn't need to lodge a caveat. The caveat is completely otiose under the scheme of the legislation. He just simply lodges a memorandum of transfer under s 90 and the Registrar-General registers him upon product of the trust deed and the sequestration order. The caveats just don't arise in this context. 60 I find this submission difficult to understand. Although Mr Bevan was seeking to explain why he had said in his written submissions that it was an agreed fact that that there's no caveatable interest, he gave no explanation at all. 61 Mr Bevan's oral submissions to the primary judge in the passage above demonstrate that, when Mr Bevan submitted that it was an agreed fact that Mr Pascoe never had a caveatable interest in the Rydalmere property, he was not referring to any fact, matter or circumstance that would demonstrate a relevant agreement. To the contrary, the oral submissions suggest that the so-called agreed fact was a conclusion which, in Mr Bevan's submission, followed as a matter of necessity from other facts. 62 The matters identified by Mr Bevan, taken at their highest, do not provide evidence of an agreement of the kind asserted on behalf of Mr Boensch. I reject the contention that the agreement is recorded in the separate questions that were agreed between the parties. Mr Bevan's own preliminary outline of submissions recognised three components of "reasonable cause", the first one being that Mr Pascoe "never had a caveatable interest in the property". 63 For these reasons, I conclude that there is no argument that can properly be advanced in support of ground 1, or grounds 2 and 3 insofar as they are premised on the contention that the primary judge should have proceeded on the basis that Mr Pascoe conceded he did not have a caveatable interest.

Ground 2 reference to s 116(2)(a) of the Bankruptcy Act 64 Mr Bevan did not suggest that ground 2 should be allowed to proceed in the event that leave was refused in relation to ground 1. However, the reference to s 116(2)(a) in ground 2 reflects a separate argument put by Mr Bevan, namely, that s 58(1)(a) did not operate to vest any interest in the Rydalmere property in Mr Pascoe because the property was held by Mr Boensch in trust. The argument relies upon the proposition that, by s 116(2)(a), property held by a bankrupt in trust for another person is not divisible amongst the creditors of the bankrupt. 65 This issue is sufficiently raised by grounds 4 to 6 of the proposed notice of appeal. Accordingly, it is unnecessary to consider whether there is an alternate argument, not advanced by Mr Bevan in support of ground 2. 66 For these reasons, ground 2 should not be allowed to proceed.

Grounds 3 and 10 67 Mr Bevan put a separate argument, by reference to grounds 3 and 10, that the primary judge erred in concluding, as a matter of law, that the existence of a caveatable interest precluded a conclusion that the caveat was lodged without reasonable cause. 68 As I understood it, this argument relies on case law, including Bedford Properties Pty Ltd v Surgo Pty Ltd [1981] ANZ ConvR 89, [1981] 1 NSWLR 106 ("Bedford Properties") and Brogue Tableau Pty Ltd v Binningup Nominees Pty Ltd [2007] WASCA 179; (2007) 35 WAR 27 ("Brogue Tableau"), to contend that reasonable cause is not demonstrated merely by the possession of a caveatable interest. This line of cases is inconsistent with the decision of the New South Wales Court of Appeal in Mahendran v Chase Enterprises Pty Ltd [2013] NSWCA 280; (2013) 17 BPR, 32,733, which was applied by the primary judge. 69 Mr Bevan argued, in effect, that there are inconsistent decisions of intermediate appellate courts in relation to legislation that is relevantly uniform. Mr Bevan submitted that s 74P(1) is part of a standardised national scheme for regulating caveats. 70 The primary judge quoted from Bedford Properties at [92] of his Honour's reasons, and referred to Brogue Tableau at [96]. That case law appears to have informed his Honour's decision to consider the case upon the alternative basis that the existence of a caveatable interest was insufficient to dispose of the matter. 71 Having considered the matter on the alternative basis, there is only utility in allowing an appeal in relation to ground 3 if Mr Boensch appeals successfully on the alternative basis for the primary judge's decision. 72 However, in that event, Mr Boensch has an arguable point to the effect that the primary judge erred in concluding that the existence of a caveatable interest necessitated a conclusion that the caveat was not lodged without reasonable cause. 73 Accordingly, having regard to my conclusion below that Mr Boensch should be granted an extension of time to appeal on grounds 14 to 16 and, to a limited extent, on ground 17, I will grant an extension of time to appeal in relation to ground 3. 74 Ground 10 challenges several findings: the finding of a caveatable interest by virtue of s 58(1)(a); the finding that such an interest was claimed; and the findings that the caveatable interest subsisted until it was allowed to lapse. Mr Bevan's submissions dealt with grounds 3 and 10 together, and apparently in connection with the argument that I have described in the immediately preceding paragraphs. Mr Bevan's submissions did not explain how ground 10 raised that argument. 75 In my view, ground 10 is directed to something different, namely, the question of whether the primary judge erred in concluding that Mr Pascoe had a caveatable interest by virtue of s 58(1) of the Bankruptcy Act. As I understood Mr Bevan's argument, that question is also raised by grounds 4 to 6 of the notice of appeal. 76 I am not satisfied that ground 10 raises an argument which can properly be advanced in support of the appeal concerning the question of law about whether a caveatable interest precludes a conclusion that the caveat was lodged without reasonable cause within the meaning of s 74P(1). 77 Accordingly, I will not grant an extension of time to appeal on ground 10 on that basis. I will give further consideration to ground 10 when examining grounds 4 to 6.

Grounds 12 and 17 78 Grounds 12 and 17 are in the following terms: 12. The primary judge erred by making findings about what the Federal Magistrates Court and Full Federal Court found about the existence of a trust over the property which are inconsistent with the findings of those courts, which contradict various issue estoppels between the parties arising from those findings and which relegate the findings of those courts to a mere state of affairs at the date of making of each their judgments rather than a state of affairs at all material times since the Boensch Trust was created. 17. The primary judge erred by making findings about the reasonableness of the conduct of the respondent in maintaining his Caveat for the purposes of s. 74P(1) of the Real Property Act founded upon privileged communications passing between the appellant and his solicitor in 2004 despite unchallenged evidence that the privilege had never been waived and that the respondent had obtained those communications improperly. 79 In his oral submissions, Mr Bevan stated that he had addressed ground 17 in the context of his submissions on estoppels. I understood him to refer to his submissions on ground 12. 80 The written submissions on ground 12 were brief. They stated: The lack of bona fides in this aspect of the challenge to the appeal at this interlocutory stage is reinforced by the argument in RS-SC [58]-[59]. If the respondent finds the ground vague then he must await submissions to give it meaning. No respondent to an appeal can make a bona fide assertion that "this proposed ground obviously lacks merit" having conceded that he does not understand it. The appeal against Bergin CJ in Eq. has been fully addressed above in response to RS-SC [30-[37] about appeal ground 20. 81 This submission does not formulate an argument which can properly be advanced in support of the appeal. 82 Ground 12 lacks precision. It does not identify the "findings" of the primary judge mentioned in the first line, or the "findings" of the Federal Magistrates Court or the Full Federal Court mentioned in the third line, or the "issue estoppels" said to have arisen from the latter findings. 83 As explained by Mr Bevan in oral submissions , ground 12 is directed to an argument that the reasonableness of the trustee's belief should not have been assessed by reference to material protected by legal professional privilege. Mr Bevan identified the relevant material as a letter dated 17 March 2004. As I noted at [18] above, the primary judge relied upon that letter, together with other material to make a finding that Mr Pascoe has a reasonable basis to remain unconvinced about Mr Boensch's trust claim (apparently during 2005 and 2006). At [39] of his Honour's reasons, the primary judge referred to evidence given by Mr Pascoe about his scepticism concerning claims made by Mr Boensch being increased by, among other things, "a letter from Mr Leong to Mr Boensch dated 17 March 2004, which refers to Mr Boensch wanting to be nominated as a beneficiary of the trust". 84 Mr Bevan submitted that the 17 March 2004 letter was found to be protected by privilege in Boensch v Pascoe [2007] FCA 532. In that decision, Jacobson J found that an inadvertent tender to the Federal Magistrate's Court of six documents, forming part of a 73 page exhibit, did not constitute a waiver of the privilege in those documents. Jacobson J referred to the six documents as the "Extra Documents" to differentiate them from documents produced to Mr Pascoe and described as the "First Documents". The "First Documents" were produced to Mr Pascoe on about 30 September 2005 in answer to a notice issued under s 77A of the Bankruptcy Act. At [19] of his Honour's reasons, Jacobson J found that the "Extra Documents" did not form part of the "First Documents". 85 On behalf of Mr Pascoe, Mr Newton noted that Mr Bevan's argument is premised upon the basis that the 17 March 2004 letter was one of the "Extra Documents". However, from Mr Pascoe's opening submissions to the primary judge, it is apparent that the 17 March 2004 letter in evidence before the primary judge was a version of that document that was provided to Mr Pascoe by Mr Leong on about 30 September 2005 in one of a number of letters to Mr Pascoe from Mr Leong around that time. On that evidence, Mr Newton argued, Jacobson J's decision has no relevance to the 17 March 2004 letter in evidence before the primary judge: Jacobson J's decision was concerned with a document that was tendered inadvertently to the Federal Magistrate's Court. 86 Mr Newton also pointed to the transcript of the hearing before the primary judge. That transcript shows that Mr Pascoe was cross-examined about a previous dispute over whether there had been a waiver of privilege over Mr Leong's file. Mr Pascoe agreed that he knew that the contents of Mr Leong's file could not be used in any proceedings. Mr Pascoe then agreed that, despite this, at para 41 of an affidavit apparently sworn by him, he "put a good deal of emphasis on a number of documents from the file". This transcript reveals that documents from the file had been accepted into evidence. 87 The transcript shows that there was then some debate about the scope of Jacobson J's decision. The primary judge correctly noted that the issue decided by Jacobson J concerned whether an inadvertent tender of documents had effected a waiver. The debate concluded with the primary judge's observation that he could not see that there had been any determination about the file as a whole being produced in answer to the notice. 88 Mr Newton acknowledged that Mr Bevan had objected unsuccessfully to the tender of the relevant document. He said that the objection was made by reference to Jacobson J's decision. 89 I am satisfied that Mr Bevan has raised an arguable point that the primary judge erred in his reliance upon the 17 March 2004 letter to make his finding, at [116], as to the reasonable basis of Mr Pascoe's state of mind. In my view, that argument is more clearly raised by ground 17 than by ground 12. 90 I will grant an extension of time in relation to ground 17, limited so that the words "privileged communications" refer solely to the 17 March 2004 letter and omitting the words "and that the respondent had obtained those communications improperly". 91 Mr Bevan did not explain satisfactorily how ground 12 extended beyond the scope of ground 17, as limited. 92 Accordingly, I will not grant an extension of time in relation to ground 12.

Ground 14 93 Ground 14 is that the primary judge erred by finding that the caveatable interest claimed in the caveat was one which he believed in and that that belief was reasonable. This ground of appeal raises two issues: the primary judge's finding as to Mr Pascoe's subjective belief, and his Honour's finding that the belief was reasonably held. 94 In his written submissions, Mr Bevan stated that the appellant's principal case on the appeal is that Mr Pascoe's "honest belief" has no role to play in the application of the "reasonable cause" test in s 74P(1). In this respect, Mr Bevan's argument appears to depart from the reasoning in Bedford Properties and Brogue Tableau. 95 Thus, Mr Bevan appeared to seek to raise both a question of fact and a question of law by ground 14. The question of fact is whether Mr Pascoe's belief as to the existence of a caveatable interest was reasonable. The question of law is whether it was relevant to consider whether that belief was honestly held. 96 As to the question of fact, the question must depend upon an assessment of all of the relevant facts. Having regard to the multiplicity of relevant facts, I accept that there is an argument which can properly be advanced in support of the appeal on this point. 97 As to the question of law, I accept that Mr Bevan has identified an argument that can be put that the relevant test is entirely objective and has no subjective element, based on New South Wales v Taylor [2001] HCA 15 at [11]; (2001) 204 CLR 461. 98 Accordingly, I will grant an extension of time to appeal in relation to ground 14.

Grounds 15 and 16 99 The relevant grounds are as follows: 15. The primary judge erred when he found that, by May 2009 at the very latest, the respondent had reasonable grounds for believing that the appellant may well have had a right of indemnity in trust assets because of the payment of mortgage instalments, loan interest and council rates for the property by the appellant on behalf of the Trust. 16. The primary judge erred when he found, notwithstanding that the respondent allowed his Caveat to lapse on 25 August 2009 (amongst other reasons) because any right of indemnity of the appellant in the property was of only limited value, that the right of indemnity, despite its limited value, vested in the respondent on the making of the sequestration order and thereby established the reasonableness of the lodgement and maintenance of the Caveat within the meaning of s. 74P(1) of the Real Property Act. 100 Ground 7, which also concerns the primary judge's findings concerning a right of indemnity is: 7. The primary judge erred by finding that the appellant had, or may well have had, an equitable interest in the property represented by an unsatisfied right of indemnity, right of recoupment or right of reimbursement out of the property of the Boensch Trust as trustee of the Trust at the date of the making of the sequestration order against him. 101 In oral submissions, Mr Bevan conceded that the primary judge had not made a finding of the kind described in ground 16. Mr Bevan asked that ground 16 be read to refer to the primary judge's assumption as to the existence of a right of indemnity. 102 Although Mr Bevan did not identify the findings referred to in grounds 15 and 16, they appear to be at [129] and [130] of the primary judge's reasons. Ground 15 seeks to challenge the primary judge's finding of fact as to the existence of reasonable grounds for Mr Pascoe's belief concerning the possible existence of a right of indemnity. I accept that it is arguable that the primary judge erred in making this finding. Ground 16 raises a question of law. Mr Newton contended that Octavo Investments Pty Ltd v Knight [1979] HCA 61; (1979) 144 CLR 360 at 369-370 provides a complete answer to this ground of appeal. That contention is not so obvious that it must be accepted. 103 Mr Bevan did not make any substantive submissions in support of ground 7. At the hearing, the parties agreed that the primary judge did not make a finding that there was a right of indemnity. I was unable to locate any finding that corresponds with the description in ground 7. 104 In these circumstances, I will not allow ground 7 to proceed. I will allow grounds 15 and 16 to proceed.

Grounds 4 to 6 and 10 105 Grounds 4 to 6 are: 4. The primary judge erred by finding that, as a general principle of law, the trustee in bankruptcy of a registered proprietor of land under the Real Property Act has a caveatable interest in the property by reason of s. 58(1) of the Bankruptcy Act, even if the registered proprietor holds the title on trust for other persons, on the authority of Lewis v Condon (2013) 85 NSWLR 99 at 103 [1]; 119-121 [91], [92]; [100]; 124 [118]). 5. The primary judge erred by finding that it followed from Official Trustee v Ritchie (1988) 12 NSWLR 162 at 174 and Lewis v Condon (2013) 85 NSWLR 99 at 119-121 [91], [92] and [100], that the respondent had a caveatable interest in the property from the time he became the appellant's trustee in bankruptcy by virtue of s. 156A(3) of the Bankruptcy Act, because s. 58(1)(a) of that Act operated, in equity, to vest the appellant's interest in the property (as the registered proprietor of an estate in fee simple) in the respondent, which was an interest within the meaning of s. 74F(1) of the Real Property Act, and was thus capable of being the subject of a caveatable interest. 6. Alternatively, insofar as the primary judge correctly applied the principle enunciated in Lewis v Condon (2013) 85 NSWLR 99 at 119-121 [91], [92] and [100], the Court of Appeal was plainly wrong in its enunciation of the nature of the interest of a trustee in bankruptcy of a bankrupt trustee of an express trust in the trust property on the making of a sequestration order under the Bankruptcy Act, such that that part of the decision in Lewis v Condon should not be followed by the Full Court in determining this appeal. 106 Ground 10 is set out at [50] above. 107 Ground 4 raises a question of law about whether, where it has been established that Mr Boensch's interest in the Rydalmere property was held on trust, it follows that that interest could not have vested in Mr Pascoe upon the making of the sequestration order under s 58. The argument seems to be premised upon the proposition that property held by the bankrupt on trust does not vest in the trustee in bankruptcy: see, for example, Re Stansfield DIY Wealth Pty Limited (in liq) [2014] NSWSC 1484; (2014) 291 FCR 17 at [16]. 108 As I understand it, the argument is similar to the argument that was rejected by Powell J in Official Trustee in Bankruptcy v Ritchie (1998) 12 NSWLR 162, albeit that Powell J considered that "one cannot regard the matter as completely free from doubt". My preliminary researches have not located any case in which Powell J's decision has been considered by this Court. 109 In those circumstances, I accept that ground 4 raises an arguable ground of appeal. 110 Grounds 5 and 6 appear to raise related and perhaps overlapping arguments. Adopting a "rough and ready" approach, I consider that those grounds of appeal should proceed together with ground 4 in the absence of a reason to believe that either of them is hopeless. 111 Ground 10 also raises a slightly different point, that is, the nature of the caveatable interest claimed by Mr Pascoe. This is a question of construction of the caveat. At [106], the primary judge set out his construction of the caveat. I accept that there is an argument to be made that, if Mr Pascoe did have a caveatable interest in the property, he did not claim that interest by the language of the caveat. 112 Accordingly, I will grant an extension of time to appeal in relation to grounds 4 to 6 and 10.

Stay of primary judge's costs order 113 The relevant order is an order that Mr Boensch pay Mr Pascoe's costs of the proceeding below on the ordinary basis up to 16 May 2013 and thereafter on the indemnity basis. 114 On behalf of Mr Boensch, it was submitted that the appeal would be stultified if the appellant is required to pay Mr Pascoe's trial costs before the appeal is determined. It was said that Mr Boensch could not litigate the appeal if he is again declared bankrupt, this time at the suit of his former trustee in bankruptcy. 115 In response, Mr Newton submitted that there was no basis for a conclusion that enforcing the costs order would have the effect of rendering the appeal nugatory. In particular, Mr Newton argued that there was no identified basis for preventing assessment of the costs covered by the costs order, which step must be taken before execution of the order. Mr Pascoe wishes to have the costs assessed so that he can be in a position to recover them from the only available asset, said to be the Rydalmere property, in circumstances in which that property is being used to fund litigation. 116 The Court's power to grant a stay of execution is conferred by r 36.08 of the Federal Court Rules 2011. In Powerflex Services Pty Ltd v Data Access Corporation [1996] FCA 460; (1996) 67 FCR 65, the Full Court of this Court adopted the following statement of the relevant principle, applied in Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685: Where an application is made for a stay of proceedings, it is necessary that the applicant demonstrate an appropriate case. Prima facie, a successful party is entitled to the benefit of the judgment obtained by him and is entitled to commence with the presumption that the judgment is correct. These are not matters of rigid principle and a court asked to grant a stay will consider each case upon its merits, but where an applicant for a stay has not demonstrated an appropriate case but has left the situation in the state of speculation or of mere argument, weight must be given to the fact that the judgment below has been in favour of the other party. 117 A stay will be appropriate where, if it is not granted, the appeal would be rendered nugatory: Maher v Commonwealth Bank of Australia [2008] VSCA 122 at [24]-[26]. An example might be where the making of a sequestration order is foreshadowed: Narain v Euroasia (Pacific) Pty Ltd [2008] VSCA 195 at [21]. 118 In this case, it seems unlikely that the appeal would be rendered nugatory if no stay of execution is granted because it will be necessary first to conduct an assessment of the relevant costs. There is no particular reason to think that an assessment will be completed before the appeal or, at least, before the hearing of the appeal. Thus, there does not appear to be any real risk at present that Mr Boensch will be required to pay the costs order against him before the appeal is determined. 119 However, if the assessment is not stayed, Mr Boensch will be exposed to the costs of the assessment process, if he wishes to participate in that process. Of course, the costs of any assessment will be wasted (on both sides) if Mr Boensch's appeal is successful. Further, on Mr Boensch's case, the trust is impecunious. If so, the practical benefit to Mr Pascoe of obtaining a costs assessment is not obvious. 120 Taking all of these matters into account, I am not satisfied that Mr Boensch has made out an appropriate case for a stay of the costs order made by the primary judge.

Security for costs 121 Since I will grant an extension of time to appeal in relation to part of the notice of appeal, it is necessary to consider whether Mr Boensch should provide security for Mr Pascoe's costs of the appeal. 122 The relevant principles are set out in Mr Pascoe's written submissions as follows and are not in dispute: 11. Section 56 of the Federal Court of Australia Act 1976 (Cth) (Federal Court Act) provides, relevantly, that the Court or a judge may order an appellant in an appeal to give security for payment of costs that may be awarded against him or her. The security is to be of such amount and given at such time and in such manner and form as the Court or a judge directs. Under s 56(4), if security or further security is not given in accordance with an order under s 56, the Court or a judge may order that the appeal be dismissed. 12. Rule 36.09 of the Federal Court Rules 2011 deals with security for the costs of appeals, and provides that a party may apply to the court for an order that the appellant give security for the costs of the appeal and for the manner, time and terms for giving the security, that the appeal be stayed until security is given and that, if the appellant fails to comply with the order to provide security within the time specified in the order, the appeal be stayed or dismissed. 13. The power to make an order under s 56 of the Federal Court Act is broad and unconstrained by anything other than the requirement that it be exercised judicially. 14. On an application for security for the costs of an appeal, the relevant considerations include, at least, the following matters: (a) the prospects of success for the appeals; (b) the risk that an order for costs will not be satisfied; (c) whether the making of an order for security would be oppressive insofar as it would stifle a reasonably arguable claim; (d) whether impecuniosity of an appellant arises out of the conduct that is the subject of complaint in the relevant proceeding; (e) whether there are any aspects of public interest that weigh in the balance against granting security; and (f) whether there are any other particular discretionary matters peculiar to the circumstances of the case. 15. Further, in Dye v Commonwealth Securities Ltd at [27]-[28], Emmett J made the following observations about appeals and security for costs: "27 As a general rule, in relation to proceedings at first instance, impecuniosity, and even insolvency, does not mandate that an order for the provision of security for costs should be made. However, that principle does not necessarily apply in relation to an appeal, where the appellant has had the benefit of a decision of a court at first instance. An insolvent party will not be excluded from an appeal, but if he cannot find security, he may be prevented from taking his opponent from one court to another. The feature of an appeal that marks it out from a proceeding at first instance is that there has already been a decision given by the court that heard the matter at first instance. That is to say, the appellant has had his or her day in court and has had an opportunity to present his or her case, and has had a ruling that must be presumed to be correct. Security may not necessarily be ordered if an appeal is brought in good faith and raises substantial questions of law. However, the position will be different where the appeal tums largely on questions of fact and it does not give rise to any important question of law. 28 While impecuniosity ought not to be a bar to a person prosecuting a reasonable claim at first instance, the position on appeal is fundamentally different. At the appellate level, there has already been a determination adverse to the person against whom security for costs is sought. If there is a substantial risk that, if successful, the respondent will be deprived of costs, that outcome would clearly be unjust. In a sense, it is giving to a person who has been on the receiving end of an adverse determination by the courts, a free hit at great cost to the other party in the appeal proceeding. It is against those principles that I shall consider the matters addressed by the parties." (footnotes omitted) 123 Mr Boensch says that he, as trustee of the Boensch family trust, is impecunious. Mr Boensch also says that the trust itself is impecunious. Mr Pascoe accepts that the evidence probably demonstrates that Mr Boensch is impecunious. 124 Accepting Mr Boensch's impecuniosity, there is a high risk that an order for costs against Mr Boensch will not be satisfied. 125 Mr Bevan argued, however, that the Court should not order security for costs because it would stifle a reasonably arguable claim and because, in his submission, the appellant's impecuniosity has been caused by Mr Pascoe's conduct that is the subject of complaint in the proposed appeal. 126 Mr Boensch gave evidence to the following effect: (1) if ordered to do so, he is presently unable to pay, or provide, any security for Mr Pascoe's costs of the appeal; (2) if an order for security for costs were made, that order would stultify the appeal being determined on the merits; (3) he has previously had recourse to all available financial means of funding his defence of the actions brought against him by Mr Pascoe, and the prosecution of the proceeding below; and (4) he believes that his former wife would be unwilling to provide funds to satisfy such an order. 127 In addition, there was evidence from each of Mr Boensch's daughter and son, the beneficiaries of the Boensch Trust, to the effect that they each have no financial capacity to contribute to any legal costs or expenses which their father has incurred, or may incur, in litigation. 128 Mr Newton argued that Mr Boensch has not presented sufficient evidence to warrant a conclusion that an order for security for costs would stultify an appeal. 129 Mr Newton noted that, even if Mr Pascoe could be said to have caused Mr Boensch's impecuniosity, that is a matter of reduced significance on appeal because Mr Pascoe has the advantage of a judgment in his favour vindicating his actions: cf Aquatic Air Pty Ltd v Siewert [2016] NSWCA 130 at [22]. 130 Mr Boensch's evidence concerning the cause of his impecuniosity was confusing. He gave evidence that his, and the trust's, impecuniosity was caused by Mr Pascoe's conduct in lodging and maintaining the caveat and in pursuing litigation against Mr Boensch for several years. Mr Boensch gave evidence that apart from the direct legal costs to Mr Boensch, Mr Pascoe's conduct also caused Mr Boensch to lose the opportunity to redevelop the Rydalmere property and to incur costs in pursuing proceedings against the local council in the Land and Environment Court in order to reverse a development application decision, which Mr Boensch says were necessitated by Mr Pascoe's lodging and maintenance of the caveat. 131 Mr Boensch's occupation is that of a motor mechanic and it appears that he has no assets. I accept that his financial position has been adversely affected by incurring unrecoverable legal costs in proceedings brought by Mr Pascoe unsuccessfully against Mr Boensch. In particular, Mr Boensch incurred approximately $180,000 in defending various of those proceedings but, despite costs orders in his favour, was only able to recover approximately $90,000 of those costs from Mr Pascoe. 132 I also accept that Mr Boensch's financial position has been adversely affected by borrowing from the ANZ Bank to the extent that those borrowings were used to fund the proceeding below. 133 I am not satisfied that legal costs which Mr Boensch incurred in the Land and Environment Court seeking to reverse the development application decision are costs incurred by reason of Mr Pascoe's conduct. The circumstances in which the costs were incurred were not fully explained. I am also not satisfied that Mr Boensch's financial position has been adversely affected by any loss of opportunity to redevelop the Rydalmere property, given that he is not a beneficiary of the Boensch Trust. 134 Accordingly, I accept that Mr Boensch's impecuniosity has, to a significant degree, been adversely affected by the litigation between him and Mr Pascoe. I also accept that this is a matter of reduced significance on this appeal because Mr Pascoe's conduct in lodging and maintaining the caveat has been vindicated by the primary judge. 135 Based on Mr Boensch's evidence, I consider that it is likely (although not certain) that his proposed appeal will be stifled in the event that an order for security for costs is made. 136 Weighing up all of the relevant considerations, including that Mr Boensch has already had "his day in court", the fact that Mr Boensch has not identified a strong case on the principal question of whether the primary judge erred in concluding that Mr Pascoe had reasonable cause to lodge the caveat (and, subsequently, to maintain it) and the likelihood that any order for costs in favour of Mr Pascoe on the appeal will go unsatisfied, in my view, there should be an order for security for costs. 137 The evidence presented on Mr Pascoe's behalf, on quantum, was predicated upon an appeal of significantly greater magnitude than the appeal in respect of which an extension of time will be granted. However, I consider that a hearing of the appeal is likely to take one day, which is one of the assumptions made by Mr Kozub in his estimate of costs. Mr Kozub estimated that the total party party costs of the appeal would be approximately $62,000. I accept that this is a reasonable estimate. 138 Taking into account the risk that an order for security for costs will stultify the appeal, I will make an order that requires security for costs in an amount of $30,000.

Conclusion 139 I will grant an extension of time to appeal in relation to grounds 3 to 6, 10, and 14 to 17, with ground 17 being limited so that the words "privileged communications" refer solely to the 17 March 2004 letter and the words "and that the respondent had obtained those communications improperly" be omitted. 140 I will otherwise refuse the application for an extension of time to appeal. 141 Costs of the application for an extension of time will be costs in the appeal. 142 I will refuse the application for a stay of execution of the primary judge's costs order, with costs. 143 I will make an order for security for costs in an amount of $30,000. The appellant should pay the costs of that application. I certify that the preceding one hundred and forty-three (143) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gleeson.