Application of principles
16It was common ground that York Precision Plastics directly funded the litigation before McDougall J, to the level of something in the order of $1.4 million.
17That funding was provided by way of loan. The evidence does not reveal during what period the funding was provided or what proportion of the total costs incurred by HM&O Investments and Teach & Play was funded by York Precision Plastics.
18HM&O Investments and Teach & Play are "related" to York Precision Plastics in the manner I have described.
19However, there is no suggestion in the evidence that the arrangements between York Precision Plastics and HM&O Investments and Teach & Play for the funding of litigation were otherwise than a genuine loan repayable on some agreed basis (albeit one not revealed in the evidence before me).
20I accept Mr Fernon's submission that the provision of finance by York Precision Plastics did not give it an interest in the proceedings so as to make it the "real litigant" in the proceedings. No doubt York Precision Plastics wished to be repaid. However, I cannot conclude that that was the reason that HM&O Investments and Teach & Play prosecuted the proceedings. Had HM&O Investments and Teach & Play been successful in the proceedings, the fruits of success would have been enjoyed by those companies, subject to their obligations to repay to York Precision Plastics the amount advanced.
21So far as concerns Jellicoe Nominees, Hendy Investments and Saints Management, the evidence revealed no more than that those entities are the trustees of family trusts for the benefit of the directors of HM&O Investments and Teach & Play, and that those companies have the ultimate beneficial interest in HM&O Investments and, thus Teach & Play.
22However, this fact alone is not sufficient to justify a special order for costs (see FPM Constructions at [215]).
23No application was made in these proceedings for an order that HM&O Investments and Teach & Play provide security for costs upon the basis that the proceedings were truly being brought for the benefit of Jellicoe Nominees, Hendy Investments and Saints Management. Indeed, Mr Curtin SC, who appeared with Mr Bannan for Mr and Mrs Ingram, accepted that, on the basis of the then financial position of HM&O Investments and Teach & Play, no such application could have been justified.
24As is made clear in FPM Constructions, a factor relevant to the making of a costs order against a non-party is if "the conduct of the litigation was unreasonable or improper" (see [15] above).
25I heard this application concurrently with an application made by Mr and Mrs Ingram, in separate proceedings, for relief under s 37A of the Conveyancing Act 1919. That claim related to the transfer by HM&O Investments of certain shares and units to a company known as Y Twelve Pty Ltd. Those transfers were made on the day before McDougall J delivered his principal judgment in these proceedings and were made, as I have found, with the intention of defrauding creditors and, in particular, Mr and Mrs Ingram (see Ingram v HM&O Investments Pty Ltd [2013] NSWSC 1777). Those transfers were made while these proceedings were pending and, I have found, in anticipation of an adverse result in these proceedings.
26But the transfers did not comprise any part of the manner in which HM&O Investments (let alone Teach & Play) conducted these proceedings. They do not bespeak unreasonableness or impropriety concerning the conduct of these proceedings such as would warrant exercise of the jurisdiction to make a special costs order.
27In any event, the conduct I found to have enlivened the Court's jurisdiction under s 37A was not that of any of the respondents to this Notice of Motion.