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REDLICH, JA:

1 This is an application under r 64.24 of the Supreme Court Rules seeking an order for security of costs. Although the summons merely states that security for costs of the appeal is sought, Ms Bird who appears for the applicant has stated that the applicant also seeks security for the order for costs already made in relation to the trial.

2 The applicant and the respondent were in a domestic relationship from 1998 to 2003. During that time the couple cared for two children, the first of whom was born immediately before they commenced to cohabit, the second during the period of cohabitation.

3 The respondent during that period and to date has primary care of the children. During their relationship there was evidence that the couple borrowed money and received support from members of their respective families in order to maintain their business venture and their residential arrangements.

4 The applicant and the respondent purchased a property in mid 2000 and they used that property as their principal place of residence. They also used the land for stock and the agistment of cattle. Shortly after purchasing the property the applicant commenced his own business in logging and received bookkeeping support from the respondent. After separation the respondent claimed to have used the property as her principal place of residence until sometime between September and November 2003, although there was some dispute at the trial about when precisely she vacated the property.

5 The applicant visited the property from November 2003 to March 2004 for unascertainable periods of time, given that the nature of his work required his travel. In March 2004 the respondent returned to the property and continued in the agistment of cattle and the business of using the land for stock.

6 The applicant brought an action against the respondent claiming an adjustment in the parties' respective interests in the property pursuant to Part IX of the Property Law Act 1958. The applicant sought orders that the respondent vacate the property, pay taxes and utility rates incurred during their occupation of the land and that she transfer any interest that she retained in the title to the applicant.

7 After a five day hearing in the County Court orders were made in favour of the applicant, essentially in the form which he sought. The learned trial judge made an order granting the applicant costs. Those costs remain unpaid, but the trial judge granted a stay in relation to those costs pending the appeal. The summons presently before us seeks, as I have said, security for costs of the appeal, although the affidavit filed in support of the summons also sought orders for payment of the trial costs by way of some form of security and sought a stay until the security for both of those costs was given. The applicant seeks orders that the security be in an amount of $35,000, that such security should be given within one month of this date, and that otherwise the appeal should be dismissed. Ms Bird explained this morning that of that amount of $35,000, only $10,000 was said to be security sought in relation to the costs of the appeal. I take it that the balance is the costs of the trial.

8 In the material advanced on behalf of the applicant, reliance is placed on a letter from the applicant's solicitors asking for information as to the respondent's financial circumstances and stating that if such information were not provided or security given for the applicant's costs of the appeal by January 2007, application would be made to this Court. Reference was made in the letter to the fact that the respondent had been in such an impecunious state that she was unable to afford the cost of the transcript at the trial. I note in passing a memorandum of the Prothonotary in relation to an application made on 20 October 2006 that the respondent be relieved of having to pay for the filing fee in relation to the commencement of this appeal.

9 The affidavit filed in support of this application referred at length to the estimated costs of the trial and the costs to date of the appeal, estimating those costs at $65,000. The affidavit exhibited a letter which suggested that those costs were in the order of $70,000, of which $58,000 related to the trial. The position of the applicant in relation to the nature of the application that he is making, to what it relates, and the amount which he is seeking by way of security is quite unsatisfactory given the ambiguity of the summons and the materials supplied in support of the summons.

10 In Equity Access Ltd v Westpac Banking Corporation[1] it was suggested that the following matters may be relevant to an application for security for costs: the prospects of success of the appeal; the quantum of risk that a costs order would not be satisfied; whether the making of an order would be oppressive in that it would stifle a reasonably arguable claim; whether any impecuniosity of the appellant arises out of the conduct complained of; whether there are other aspects of public interest which weigh in the balance against such an order; and whether there are any particular discretionary matters peculiar to the circumstances of the case.

11 The applicant relies principally upon the respondent's impecuniosity and what is said to be the poor prospects of success of the respondent's appeal. Prior to this morning, there was nothing in the material which was filed in support of the application which threw any particular light upon the merits of the appeal in either direction. This morning a further submission was lodged on behalf of the respondent which provides a detailed argument as to why the appeal has some prospect of success.

12 Dealing first with the merits of the appeal, it seems to me that there is an argument, reasonably open, that her Honour may have erred in the approach that she took to the question of how the property of the parties should be distributed pursuant to Part IX of the Property Law Act 1958. That Part requires an evaluation of the contributions of each party during the relationship in order to determine any adjustment in the interests of the parties in property. Adjustments are made pursuant to a broad discretion as to what is just and equitable. The learned trial judge adverted to the various approaches to the exercise of this discretion, described by her Honour as the 'global approach' on the one hand, and the 'contextual approach' on the other. The latter seeks to make an identification in financial terms of each contribution made. The learned trial judge cited the rejection by Gillard J in Giller v Procopets[2] of one of those approaches but then appeared, in part, to employ that approach in combination with the other. The question of whether the judge below was entitled to adopt an approach that had been rejected by Gillard J would itself be sufficient to suggest that the reasons of her Honour are not free from doubt. I note in passing that there is presently an appeal before this court from Gillard J's decision in Giller v Procopets which may bear upon the proper approach to take in such proceedings.

13 Thus, in my view, it cannot be said that the appeal is hopeless or has such a high degree of probability of failure that a granting of security is warranted on that ground. Secondly, as I have said, the applicant contends that the respondent's impecuniosity constitutes a sufficient ground upon which security should be granted. The applicant refers to cases such as Scerri v Northam Holdings Ltd,[3] Smail v Burton[4] and other cases which establish that the inability of a respondent to pay the successful party's costs of the appeal may constitute a sufficient ground to grant security. The respondent's impecuniosity is not in itself a decisive consideration that security should be granted, but rather a significant consideration favouring an order for security that should be weighed in the light of all of the considerations.

14 In this case there are, in my view, countervailing considerations that lead to the conclusion that the application for security for costs should be refused, even if it be assumed for present purposes that the respondent is impecunious. I should say in passing that I am not satisfied on the material that the respondent in any event should be described as impecunious for the purposes of the application of the principle to which I have referred. But assuming that to be so, the question arises as to whether the nature of this litigation militates against granting a stay. This case concerns a dispute over property, in which the respondent has a close and material interest. Thus respondent has a real interest in and connection with the subject matter of the litigation. It was used at various times by the respondent and the applicant as their principal place of residence, as a source of income and in part as a basis for enabling one or both of the parties to finance this appeal. Furthermore it is not in issue that the only resources available to the respondent either constitutes the subject matter of the litigation or have been directed to funding the proceedings. The respondent therefore seeks to rely upon the principle stated in Arons v McInerney[5] that where a person has no means except the property in respect of which they have raised the litigation, and if they were to succeed in the appeal they would be entitled to that property, the Court should not embarrass them by ordering them to find security and thereby perchance throw out the appeal altogether and thus deprive them of that to which they may be entitled.

15 The dispute in the present case being over the residence and primary asset of two litigants who lived on the property in a de facto relationship and having regard to what means are available to the respondent, the consideration raised in Arons v McInerney becomes an important one for the purpose of determining whether an order for security should be made. On this ground and having regard to the fact that it cannot be said that the judgment of the court below is free from doubt, I would refuse the application for security.

MAXWELL, P:

16 I too would refuse the application, for the reasons which His Honour has given.

(Discussion ensued re mediation.)

17 The order of the Court is that the application for security for costs is refused. We will direct that the appeal be referred to a Master of this court for mediation, such mediation to be completed by 31 May 2007. That is, of course, subject to change by agreement between the parties, in consultation with the Registrar of the court.

18 I would record, by way of reasons for making that direction, that this court now treats appeal mediation as the rule rather than the exception. There appears to have been a view previously that, if you had had a mediation before trial, then there was no point in having another one after trial. We now take the view that the circumstances have very materially changed once a judgment has been given and parties have had an opportunity to observe the strength or weakness of their evidence as presented, whether through witnesses or in documents, and to assess the response of the judge at first instance to the case on the facts and on the law.

19 Experience since we have implemented this policy indicates that appeal mediation is very often successful. It is particularly appropriate in a case like this. Litigation is notoriously expensive. The costs incurred to date will no doubt already be very substantial, on both sides. Where there are limited resources - and there are now two households to be supported and children to be cared for - it is obviously in the interests of the parties that they explore every possibility of achieving a resolution which avoid the need to incur any further costs.

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