LK Law Pty Ltd v Karas

On 20 February 2026, the Court delivered reasons and final orders in which judgment was entered in favour of the first applicant (LKPL) against the first respondent (Mr Karas) and the fourth respondent (MdR). At that stage, the Court listed the hearing of the stay application for 18 March 2026.

In the meantime, LKPL undertook not to take any steps to enforce judgment until 5.00pm (ACDT) on 18 March 2026 (LKPL undertaking).

On or about 12 March 2026, LKPL’s solicitors, Illes Selley, advised Mr Karas’ solicitors, Piper Alderman, by email that Mr Karas was required for cross-examination at the hearing of the stay application.

That same day Piper Alderman replied by letter acknowledging the requirement that Mr Karas attend for cross-examination and expressed its conclusion that LKPL was intending to challenge Mr Karas’ credit. Piper Alderman contended in that letter that as a consequence of the adverse findings I had made against Mr Karas in the reasons, I should recuse myself (recusal application): Annexure GTG-2 to the affidavit of Gordon Thomas Grieve sworn 16 March 2026 (Grieve Affidavit).

The contents of Piper Alderman’s letter dated 12 March 2026: GTG-2 to the Grieve Affidavit, are important. At paragraph 4 of that letter, Mr Grieve wrote:

In response, by letter dated 13 March 2026, Illes Selley opposed Mr Karas’ foreshadowed recusal application: Annexure GTG-4 to the Grieve Affidavit. Further, Iles Selley advised Piper Alderman that for the purposes of the stay application it was prepared to accept that Mr Karas has raised an arguable case on appeal.

On 15 March 2026, Mr Karas served an outline of written submissions in support of his recusal application. The applicants served their submissions in response on 16 March 2026.

Apart from the acceptance that Mr Karas has an arguable case on appeal, albeit for the limited purposes of the stay application, the applicants’ submissions on recusal also advised that LKPL no longer required Mr Karas to attend for cross-examination at the hearing on 18 March 2026.

The recusal application was called on for argument on 16 March 2026. In answer to a question from the bench, Mr Roberts KC, who appeared for LKPL, confirmed that there would be no submission made at the hearing of the stay application attacking Mr Karas’ credit.

I reserved my decision on the recusal application. On 17 March 2026, I advised the parties that the recusal application was refused and that I would provide reasons at the same time as delivering my reasons on the stay application.

The reasons which follow address:

Mr Karas seeks an order that I recuse myself on the basis of apprehended bias.

MdR supports Mr Karas’ application but ultimately will abide the event.

The principles are not in dispute and were set out in Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337 at [6] where the relevant test was described as being whether “a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge is required to decide”.

Application of that test was described in QYFM v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2023] HCA 15; (2023) 279 CLR 148 at [38] (Kiefel CJ and Gageler J) in the following terms:

Kiefel CJ and Gageler J continued by describing the characteristics of the fair-minded lay observer: at [47]-[48]:

Mr Karas advanced the recusal application on three bases.

The first basis reflects the first of the criteria identified in Ebner which is the factor that might lead me to resolve the issue of whether there should be a stay of enforcement of the judgment against Mr Karas other than on its legal and factual merits.

Mr Karas submits that in view of my adverse credit findings against him in the reasons, a fair-minded lay observer might reasonably apprehend that I might not be able to decide the question of whether a stay of enforcement of the judgment against Mr Karas should be granted on its merits and without regard to the adverse credit findings.

In support of that submission, Mr Karas refers to a number of cases which make it clear that where a judge has made adverse credit findings against a witness and has to address that witness’ credibility on a subsequent occasion, the judge should recuse themselves: Australian National Industries Ltd v Spedley Securities Ltd (in liq) (1992) 26 NSWLR 411, 419A-421A, 438C-442D, 448G-449; Global Capital Property Fund Ltd (in liq) v Point Bay Developments Pty Ltd [2025] FCA 1597 at [27] citing Livesy v NSW Bar Association [1983] HCA 17; (1983) 151 CLR 288 at 300; BHP Billiton Ltd v District Court of South Australia [2012] 112 SASR 494 at [44]-[46] (Gray J); Australian Securities and Investments Commission v SunshineLoans Pty Ltd [2025] FCAFC 32; (2025) 308 FCR 514.

In SunshineLoans, the primary judge was considering a matter in which there were split hearings, the first dealing with liability and the second with penalty. The primary judge made adverse credibility findings against a witness in the liability judgment. The same witness was to give evidence in the penalty hearing. The primary judge recused himself and the Full Court, by majority, held that his Honour had erred in so doing.

Special leave was granted against that decision and on 18 March 2026, the High Court dismissed an appeal against that decision: SunshineLoans Pty Ltd v Australian Securities and Investments Commission [2026] HCA 8.

After considering a number of the authorities dealing with recusal, Gageler CJ and Gleeson J observed: at [42]:

As is apparent from SunshineLoans and QYFM, there must be a logical connection between the identified source of apprehended bias and the feared deviation from deciding the case on its merits.

The second basis raised by Mr Karas in Piper Alderman’s letter dated 12 March 2026: exhibit GTG-2 to the Grieve Affidavit, is that I would need to hear cross-examination of Mr Karas and consider submissions as to his credit and reliability.

That is linked to the first basis which concerns an assessment as to the credit and reliability of Mr Karas on the stay application. In view of LKPL’s intimation that it no longer needed Mr Karas for cross-examination and that it would not be challenging Mr Karas’ credit, this basis falls away.

The third basis relied upon by Mr Karas, and as enunciated in Piper Alderman’s letter dated 12 March 2026, was that I would need to make a determination as to whether the respondents had raised an arguable case on appeal.

In view of LKPL’s quite proper concession that for the purposes of the stay application there are arguable grounds of appeal, this basis also falls away.

Having identified the factors said to comprise the first criteria, Mr Karas submits that there is a logical connection between the adverse credit findings that I made in the reasons and an apprehended deviation from deciding the question of whether there should be a stay of enforcement of the judgment on its merits. Mr Karas submits that provides an objectively credible reason why I might lack the required impartiality to decide the stay application.

I do not accept that submission for a number of reasons:

In view of Mr Karas’ failure to establish the logical connection required between the first and second criteria, the third criteria falls away. Nonetheless, in any event and in view of the matters I have set out above, I do not consider that objectively assessed, a fair-minded lay observer with the characteristics identified in QYFM: at [48], would consider an apprehension that I would decide the question of whether a stay of enforcement should be ordered other than on its legal and factual merits, to be reasonable.

It is for these reasons that I refused the application that I recuse myself from hearing the stay application.

A preliminary matter that arose on the stay application is that the parties in this matter seek confidentiality orders over various documents filed in relation to the stay application.

In each case, the parties seek a confidentiality order pursuant to ss 37AF(1)(b) and 37AG(1)(a) of the Federal Court of Australia Act 1976 (Cth).

On filing the documents in question, the parties had sought interim confidentiality orders. The documents remained confidential until such time as the Court had an opportunity to consider submissions from the parties in order to determine whether continuing confidentiality orders should be made.

At the commencement of the stay application hearing, I intimated my preliminary view to the parties that I did not consider that any of the documents filed on the stay application should remain confidential. No party advanced any opposition to that intimation.

I am not satisfied that any of the documents filed in relation to the stay application by any party should remain confidential and to the extent any documents filed in relation to the stay application have been marked as confidential on the Court file, that confidentiality is revoked.

The principles are not in dispute.

Rule 36.08(1) and (2) of the Federal Court Rules 2011 (Cth) provide that an appeal does not operate as a stay of proceedings and that an appellant may apply to the Court for a stay of execution of the proceedings until an appeal is heard.

In Powerflex Services Pty Ltd v Data Access Corporation (1996) 67 FCR 65, 66 (Burchett, Heerey, Whitlam JJ) the Full Court followed Alexander v Cambridge Credit Corporation Limited (Receivers Appointed) (1985) 2 NSWLR 685 in holding that it is not necessary for an applicant for a stay of enforcement to show “special reasons” and that it was “sufficient that the applicant for a stay demonstrate a reason or an appropriate case to warrant the exercise of the discretion in his favour”.

In Redbubble Ltd v Hells Angels Motorcycle Corporation (Australia) Pty Ltd [2022] FCA 1039, [35]-[37] Derrington J referred to the summary of principles in Stefanovski v Digital Central Australia (Assets) Pty Ltd [2017] FCA 1121 at [4]. Those principles included that identified in Powerflex as well as a number of other principles:

In Redbubble, Derrington J also referred to Viagogo AG v Australian Competition and Consumer Commission [2021] FCA 175 at [10]–[12] (Abraham J):

MdR’s liability was assessed at AUD$21,399,540.24 (inclusive of interest): LK Law Pty Ltd v Karas (No 5) [2026] FCA 129.

By an interlocutory application filed 2 February 2026, pursuant to FCR 36.08, MdR seek a stay of enforcement of the judgment against it pending the determination of an appeal, to be instituted by on or before 20 March 2026.

In support of that application, MdR has proffered a bank guarantee in the sum of AUD$21,399,540.24.

In general terms, that bank guarantee is acceptable to LKPL provided it is in Australian dollars and is provided by a recognised bank.

MdR has confirmed the former and the bank in question is National Westminster Bank PLC, a bank which is authorised by the Prudential Regulation Authority of England and regulated by the Financial Conduct Authority and the Prudential Regulation Authority of England. Clearly, National Westminster Bank PLC is a recognised bank.

In the circumstances, I am satisfied that the provision of a bank guarantee in that amount and on those terms is such that LKPL’s existing judgment against MdR is secured. I will hear the parties as to the time required to put such a bank guarantee in place.

As to the question of post-judgment interest. Initially I was disposed to order that the bank guarantee also include a sum for post-judgment interest for a period of 12 months. However, upon further consideration of Ms Well’s submissions, who appeared as counsel for MdR, I accept her submission that there is no basis at this stage to require an amount to be secured for post-judgment interest from MdR. To order post-judgment interest be paid or secured at this time, and thereby ahead of time, is punitive and I do not consider it appropriate.

However, there is a question as to when the judgment in any appeal will be delivered. On the assumption that it will be in the order of 12 months from the date of these orders, I will grant liberty to apply to the parties in relation to varying the quantum of the bank guarantee at a date not before six calendar months from the date of the stay order, to take into account the accrual of post-judgment interest.

One further matter arises which is the application to stay the execution of any costs order. On its terms, MdR’s interlocutory application also seeks a stay of enforcement of any costs order, the quantum of which is yet to be assessed.

Until such time as the costs are assessed, there is nothing to enforce. Whether the enforcement of such an order should be stayed is a matter I will consider after assessment of those costs and upon application by MdR pursuant to liberty to apply generally.

The position with respect to Mr Karas is more complicated.

In an affidavit sworn 9 March 2026 (Karas Affidavit) and read on the stay application, Mr Karas deposed: at [12] that in summary, his assets comprised:

On its face, that leaves net assets available to Mr Karas to satisfy the judgment against him of AUD$15 million.

In the following paragraphs of the Karas Affidavit, Mr Karas provides further information with respect to each of his assets.

Mr Karas deposes that he has interest in real property as sole owner, part owner with others, or as sole beneficiary of a discretionary trust: Karas Affidavit at [14].

Mr Karas annexes, at annexure JDK-1 to the Karas Affidavit, a list of 11 properties. He deposes that he is the sole or joint owner of the properties at line items 1, 2, 4, 5 and 6.

Mr Karas has not included the property at line item 3 of annexure JDK-1 in his list of real estate assets on the basis that he holds the property as trustee for, amongst others, himself, his wife (Ms Baillie-Karas) and their two children. The property is located on Fullarton Road, Rose Park in South Australia.

The Valuer-General’s valuation for the property is AUD$770,000.

Mr Karas’ reason for not including the property in his list of assets is that he contends it is not possible to determine the trust or obtain a distribution from it, as the children are still minors.

Mr Karas annexes the relevant trust deed as exhibit JDK-3 to the Karas Affidavit. Two things may be observed about Mr Karas’ contention as to a distribution. First, pursuant to cl 2(g) of the trust deed, where Mr Karas (as the sole trustee) holds funds on trust for the identified beneficiaries (which includes himself), he may, in his absolute discretion, pay those funds into a bank account in his own name as beneficiary, at which time the funds vest in him absolutely.

Second, Mr Karas, in his capacity as trustee, is not able to mortgage the property without the prior consent of his late father, nor can he lease it.

Mr Karas does not depose to the status of his father’s estate but in any event, given Mr Karas’ father is now deceased, in my view, it is open to Mr Karas to utilise the property as security against borrowings for the purposes of contributing to LKPL’s judgment, in the alternative to realise it and apply the cash for his own benefit or, in the further alternative, use it to support a bank guarantee.

Even if I am wrong in my conclusions as to Mr Karas’ powers under the trust as trustee, as will become apparent, it makes no difference to the conditions upon which I am prepared to order a stay.

Properties 7 (Bristow-Smith Avenue, Goolwa South in South Australia), 8 (Fairway Court, Goolwa South in South Australia) and 9 (Prescott Terrace, Rose Park in South Australia) in annexure JDK-1 to the Karas Affidavit are owned by Karas Properties Pty Ltd, a company of which Mr Karas is the sole director and shareholder.

As to properties 7 and 8, the properties are held by Karas Properties Pty Ltd as trustee for the Karas Investment Trust, the trust deed for which is annexure JDK-4 to the Karas Affidavit. Mr Karas, Ms Baillie-Karas and Mr Karas’ late father are named as beneficiaries.

Mr Karas does not include properties 7 and 8 in the estimated real property value of AUD$10.4 million. The Valuer-General’s valuation is AUD$930,000 for property 7 and AUD$650,000 for property 8.

Amongst other things, cl 4.1(12) of the trust deed permits the trustee to distribute capital, incur liabilities, guarantee, indemnify and undertake in any way any existing or future debts, liabilities or obligations incurred or which may be incurred at any time from, or from time to time, be incurred by any beneficiary.

Further, there are various provisions within that trust deed empowering the trustee to distribute the capital of the trust to such of the beneficiaries as the trustee may in its absolute discretion deem fit; permitting the trustee to sell the properties; empowering the trustees to advance and lend money to any person as the trustee thinks fit; and empowering the trustee to execute a mortgage for the purposes of securing payment of money to the trustee: see cls 3.4, 4, 4.1(10), 4.1(11).

In my view, both those properties are available as potential sources of security for borrowing, in the alternative for sale, or in the further alternative as security for the provision of a bank guarantee in order to contribute to and/or secure LKPL’s judgment.

Property 9 is included in the sum of AUD$10.4 million and is owned by Karath Properties Pty Ltd, a company of which Mr Karas is sole director and shareholder. It holds property 9 in trust for the Karas Property Trust with the trust deed annexed as annexure JDK-5 to the Karas Affidavit. Mr Karas is the sole beneficiary.

In broad terms, the same provisions exist in that trust deed as in the Karas Investment trust deed to which I have referred above.

The Valuer-General’s valuation is AUD$3.575 million with a mortgage of AUD$1.2 million, giving a net equity of AUD$2.375 million.

The remaining two properties are the properties listed at lines 10 and 11 in annexure JDK-1 to the Karas Affidavit. Mr Karas deposes that he does not have an interest in these properties, however within the context of the financial support he provides to Ms Baillie-Karas and his family, he is responsible for meeting the mortgage payments in relation to both those properties.

Property 10 is the family home in Adelaide. It is valued by the Valuer-General at AUD$6.275 million.

Property 11 is a flat in London, WC1 N2BF, which had a purchase price of AUD$2.4 million and was purchased in the name of Ms Baillie-Karas on 24 January 2026.

Mortgages exist over both properties.

Whereas Mr Karas deposes that he does not have an interest in the properties, the fact that he provides both financial support and is responsible for meeting the mortgage payments in relation to both properties, satisfies me that, at least in principle, he is able to use the properties as security for any borrowings, alternatively for sale, or in the further alternative as security for the provision of a bank guarantee in order to contribute to and/or secure LKPL’s judgment.

However, as property 10 is the family home, I am not prepared to include that property as being available for sale or a potential source of security for borrowings or the provision of a bank guarantee.

Property 11 is an asset that I consider to be available as a potential source of security for any borrowings, alternatively for sale, or in the further alternative as security for the provision of a bank guarantee. It has a mortgage over it in the sum of approximately AUD$1.9 million giving an equity of approximately AUD$500,000.

Mr Karas has deposed that he and Ms Baillie-Karas have acquired and collected Art for more than 20 years and although he does not have a valuation, he has estimated the total value at around AUD$3 million, with the figure of AUD$1.5 million being his 50% share.

By its nature, artwork is particular to the owner but also, once disposed of, is unlikely to be readily reacquired.

I am not prepared to include Mr Karas’ Artwork as available for sale or a potential source of security for borrowings, or the provision of a bank guarantee.

Mr Karas deposes that he holds liquid assets in the form of cash and listed company shares of about AUD$3.5 million. Mr Karas deposes further: at [21]-[22] of the Karas Affidavit, that these assets are critical to allow him to meet legal and other costs associated with the appeal. There is no estimate given other than the bare statement that he anticipates those costs will be in the millions of dollars.

Mr Karas currently receives USD$125,000 per month by way of income. He has not provided any information as to what his monthly commitments are.

A party seeking the exercise of the Court’s discretion to stay the enforcement of a judgment should provide sufficient detail as to their financial position, including their regular outgoings, so as to allow the Court to make an accurate assessment of what is available, realistically, for the purposes of meeting and/or securing a judgment sum in whole or in part.

Nonetheless, I accept that Mr Karas will require some of the assets in the form of cash and listed company shares for the purposes of prosecuting his appeal. I am prepared to allow AUD$2 million for those purposes, leaving a balance of AUD$1.5 million available as security for borrowings or a bank guarantee or as cash in order to contribute and/or secure LKPL’s judgment sum.

Mr Karas deposes: at [23]-[24] of the Karas Affidavit that he is owed approximately AUD$4 million by Karas So LLP comprising unpaid profits to 31 March 2025. He deposes that he does not presently know the likely timing of repayment of that amount nor does he believe that his interest in Karas So LLP currently has any realisable value in the context of the judgment and pending determination of the appeal. Mr Karas does not explain why that is so.

In the absence of any explanation or any details, doing the best I can on the scant information provided, I consider that approximately AUD$1 million is able to be leveraged by Mr Karas from Karas So LLP whether as an asset available as security for borrowings or a bank guarantee or able to be realised as cash.

Mr Karas deposes: at [25] of the Karas Affidavit, that he owns 50% of the shares in LKUK, which is the company established by he and Mr Lipman for the purposes of holding their share of Lipman Karas LLP, the firm established in London.

The companies are subject to a winding up petition in the UK. I do not consider the shareholding either a readily realisable asset in LKUK or an asset available as security for borrowings or a bank guarantee in order to contribute and/or secure LKPL’s judgment sum.

Mr Karas deposes: at [26]-29] of the Karas Affidavit that he has other assets comprising:

Mr Karas attributes no realisable value to household effects. As to his late father’s assets, beyond the real property to which he has referred, Mr Karas deposes that they are unlikely to exceed AUD$200,000.

I do not consider that the household effects or the personal effects of Mr Karas’ late father have any realisable value or provide assets that might be proffered as security for any borrowings or a bank guarantee or realised in order to contribute and/or secure LKPL’s judgment sum.

I have no information to allow me to form a view about the motor vehicles. I repeat my observations about the obligation of a party to provide adequate information to the Court in support of an application such as this.

As to the shares in CyberKnife, those shares either have a realisable value or comprise an asset that might be proffered as security for any borrowings or a bank guarantee, however I have no further information. I proceed on the basis that the value of that asset is AUD$1 million which is available as either security for borrowings or for a bank guarantee or is able to be realised.

The result of the above consideration is that Mr Karas has assets which are realisable, or alternatively available as security for borrowings or a bank guarantee, in the sum of AUD$16,470,000, such sum made up as follows:

To be balanced against Mr Karas’ asset position, is the asset position of LKPL. In the affidavit of Matthew Selley of Iles Selley, sworn 2 March 2026 (Selley Affidavit), Mr Selley annexes the annual financial statements for LKPL for the years ended 30 June 2025, as well as financial statements for the five months ended 30 November 2025.

Consideration of those documents reveals the following:

The five months to 30 November 2025 demonstrates an improving profit position, however it should be observed that the profitability of law firms can vary wildly depending on the vagaries of legal practice. Against that is the fact that LKPL is a well-established firm which is recognised internationally.

Utilising the balance sheet as at 30 June 2025, I am prepared to accept that in the event Mr Karas succeeds in his appeal, the assets to which he could have recourse when seeking the repayment of any money paid in partial satisfaction of the judgment is, on one view, limited to the excess of current assets over current liabilities in the sum of AUD$6,196,615.

Mr Karas deposes: at [31] of the Karas Affidavit that he does not believe he has any prospect of borrowing or obtaining a bank guarantee for a sum required to satisfy the judgment sum of AUD$36,458,048.44, inclusive of interest.

However, given that MdR is going to provide a bank guarantee for the sum of AUD$21,399,540.24, the balance of the judgment due to LKPL is AUD$15,058,508.20 and it is that figure against which I consider the extent, if any, to which enforcement of the balance of the LKPL judgment should be stayed.

Mr Karas deposes: at [32] that if the entire judgment is enforced against him, he will become bankrupt, will be unable to pursue the appeal, would lose his ability to practise as a solicitor in Hong Kong, and will likely lose the ability to remain a registered foreign lawyer in England.

Enforcement of the entire judgment sum against Mr Karas will have very serious consequences which the Court is not prepared to allow at this stage.

The position therefore is that Mr Karas has assets available to him of AUD$16.47 million which he is able to either realise or against which he is able to use as security for borrowing, or in the alternative, to support a bank guarantee in satisfaction or partial satisfaction of the sum of AUD$15,058,508.20. On the other hand, LKPL has assets in the sum of AUD$6,196.615 available to repay any monies paid by Mr Karas towards the judgment sum.

Mr Karas deposes: at [36] of the Karas Affidavit that in the event he sells any real property, he will incur a capital gains tax liability of about AUD$1.8 million. That will, of course, only apply if Mr Karas elects to sell any of the properties, however in any event it is not a reason to stay enforcement per se. It does, however, inform the value of the assets available to Mr Karas to put towards the balance of the judgment sum. I take that potential liability into account.

I am not satisfied that Mr Karas should utilise the AUD$16.47 million available to him, whether as cash or as security for borrowings, or for a bank guarantee. That is because such a figure assumes each of the assets realise the various sums attributed to them or, alternatively that a lender will either advance funds against 100% of the value of the available assets or provide a bank guarantee for the same. That is so, notwithstanding that the real property assets are valued using Valuer-General’s valuations, which typically are conservative. It also does not take into account Mr Karas’ ongoing ability to service any loan.

That said, as I have noted, Mr Karas provided no evidence as to his weekly/monthly commitments against his monthly income of USD$125,000. Conservatively, I proceed on the basis that Mr Karas is able to raise approximately 60% of his asset value of AUD$16.47 million, whether by way of cash, including by borrowing, or alternatively, by providing a bank guarantee of AUD$9.88 million which I round up to AUD$10 million.

However, I have noted that LKPL’s excess of current assets over current liabilities is AUD$6.196m as at 30 June 2025.

In arriving at a decision as to whether Mr Karas should either pay or secure part or all of the balance of the judgment sum after allowing for MdR’s bank guarantee, I am conscious that Mr Karas will need to fund any appeal as well as his genuine general living expenses both in Hong Kong where he resides, and Australia, where his family resides.

Under those circumstances, a combination of a bank guarantee in the sum of AUD$5 million on terms acceptable to LKPL and a cash payment of AUD$5 million to LKPL allows for both security for part of the judgment sum, as well as some recovery by LKPL of the fruits of its judgment.

As to the balance of LKPL’s judgment sum against Mr Karas after allowing for MdR’s bank guarantee, Mr Karas proffers an undertaking not to dispose of or charge, mortgage or otherwise encumber any of the assets identified in his affidavit other than for the purpose of meeting the ordinary living and business expenses of himself and his family and the costs of and associated with this litigation: at [39] of the Karas Affidavit. The specific terms of that undertaking are as follows:

As I understand it, the terms of that undertaking are acceptable to LKPL. However, in view of my findings as to Mr Karas’ available assets, the reference in the second paragraph of the undertaking to [12] of the Karas Affidavit is too limited, such that the undertaking needs to extend also to [13]-[19] inclusive of the Karas Affidavit.

That leaves five matters.

The first is that with a loan owing from LKPL to the third applicant, Lipman Family Pty Ltd, in the sum of AUD$10,295,268, Lipman Family, is by far, the largest creditor. In order to preserve the assets of LKPL pending the outcome of the appeals process, I will require an undertaking from the proper officer of Lipman Family that the debt will not be called until the determination of any final appeal. In the event that undertaking is not provided, then I reserve my right to reconsider the question of a cash payment to LKPL.

The second concerns post-judgment interest. I am satisfied that Mr Karas should make allowance for post-judgment interest in the same way as MdR, and the parties will have liberty to apply after not less than six months from the date of the orders to have the amount secured by the bank guarantees increased by the post-judgment interest to that point in time. Any amount will need to make allowance for the post-judgment interest secured by the other party.

The third is the question of the enforcement of any order for costs against Mr Karas.

It is for the same reasons as I have set out in relation to MdR on the question of costs that there will also be liberty to apply on that issue.

The fourth is LKPL’s undertaking. At the conclusion of the hearing on the stay application, LKPL advised the Court that its undertaking not to enforce the judgment would continue until I delivered my decision on the stay application. Since there are some administrative details to attend to that undertaking should continue.

As to those administrative details, I do not have any information as to:

Accordingly, I will hear the parties on those questions. If LKPL’s undertaking is not extended further, I reserve my right to reconsider the question of a cash payment to LKPL.

If the parties cannot agree as to the form of the bank guarantees, I will determine that question on any party exercising liberty to apply.

It is for these reasons, that subject to MdR, Mr Karas and LKPL satisfying the conditions set out in these reasons which will be reflected in the final orders, there will be a stay on the enforcement of the judgment sums against both Mr Karas and MdR pursuant to FCR 36.08.

The parties are to provide draft orders reflecting these reasons within 7 days of the date these reasons are published.

As to the question of costs of the stay application, the parties requested that I reserve that question to a further date. If necessary, I will fix a date in consultation with the parties for that matter to be argued.