Ng v Van Der Velde

Solicitor for the Applicant: MLDG Lawyers

Counsel for the First and Second Respondents: Mr MK Stunden

Solicitor for the First and Second Respondents: Mills Oakley Lawyers

RIBY PTY LTD (ACN 081 153 219) IN LIQUIDATION AS TRUSTEE FOR THE JADE TRUST

INTRODUCTION 1 Ms Ng has lived at 15 Brookvale Drive, Underwood in the State of Queensland since 1999, when her now estranged husband, Mr Hastings, and her purchased that property with the use of a family trust, The Jade Family Trust. 2 On 22 December 2009, Greenwood J ordered, among other things, that Ms Ng deliver up vacant possession of that property to Mr Van Der Velde and Mr Stimpson (who I will refer to jointly in these reasons as Mr Van Der Velde) by Friday, 22 January 2010. This order was made shortly after the trial of these proceedings, which was held before Greenwood J on 14 December 2009. For reasons that I do not need to delineate at this point, Ms Ng did not attend that trial. 3 On 8 January 2010, Ms Ng filed a notice of appeal against the decision of Greenwood J, together with a notice of motion seeking a stay of execution of his Honour's orders until her appeal is determined. 4 In response, Mr Van Der Velde has filed a notice of motion seeking security for costs of the appeal. These are the two applications I am required to determine.

Factual background 5 Before turning to consider the issues that arise in these two applications, it is necessary to describe a little of the relevant factual background to these proceedings to provide some context for these applications. 6 Mr Van Der Velde and Mr Stimpson are the joint liquidators of Riby Pty Ltd. They were appointed to that position by the Supreme Court of Queensland on 26 April 2006. As at that date, Riby had unsecured creditors totalling $262,702.55. 7 Riby was the Trustee of The Jade Family Trust. As noted above, Ms Ng and her husband, Mr Hastings, used The Jade Family Trust to purchase the property at 15 Brookvale Drive, Underwood in 1999. Ms Ng and Mr Hastings were married on 21 November 1999. 8 According to the Trust Deed, the primary beneficiaries of The Jade Family Trust were Ms Ng and Mr Hastings. Mr Hastings was also the Principal of the Trust and the sole director of Riby. 9 The relationship between Ms Ng and Mr Hastings broke down. On 23 November 2005, they signed a document entitled "Terms of Settlement", which was subsequently filed in the Family Court of Australia on 14 December 2005. That document formed the basis of a set of consent orders that were made by that Court on 20 December 2005. Under those consent orders, Mr Hastings was (among other things) to cause the transfer of the 15 Brookvale Drive property and another property at 58 Brookvale Drive, together with a Citroen car, from Riby to Ms Ng. 10 On 3 April 2006, Ms Ng and Mr Hastings signed a new document entitled "Terms of Settlement" in much the same form as the earlier document of the same title. One of the main effects of this new document was to amend the earlier consent orders to exclude the property located at 58 Brookvale Drive from the properties to be transferred from Riby to Ms Ng. This new document formed the basis of a new set of consent orders that were made by the Family Court on 10 April 2006. 11 The transfer of the 15 Brookvale Drive property was not registered until 17 May 2006. Most of this delay appears to have occurred because Ms Ng refinanced the loan on the property from Perpetual Trustees Limited to RAMS Mortgage Corporation Ltd ("RAMS"). 12 Mr Van Der Velde commenced these proceedings by application filed on 12 December 2007. The main object of the proceedings was to set aside the 17 May 2006 transfer of the 15 Brookvale Drive property so it could be sold and the proceeds used to pay Riby's creditors. To do that, Mr Van Der Velde relied upon various provisions of the Corporations Act 2001 (Cth) ("the Act") relating to void or voidable transactions undertaken by a company before and after an application is made to wind it up. 13 In addition to the transfer itself, the conduct of Ms Ng and Mr Hastings that was relied upon included: · their applying for the consent orders in the Family Court of Australia made on 20 December 2005 and 10 April 2006; and · their executing the "Terms of Settlement" documents dated 23 November 2005 and 3 April 2006. 14 Mr Van Der Velde's statement of claim was amended a number of times during the course of the proceedings. For most of the proceedings, Ms Ng was represented by the firm of Lillas & Loel Lawyers. That firm filed defences on behalf of Ms Ng to the various amended forms of the statement of claim, up to and including the penultimate one. Ms Ng does not appear to have filed a defence to the final amended statement of claim. By the time that defence was due, Lillas & Loel had been given leave to cease acting for Ms Ng. In her defence to the penultimate statement of claim which Lillas & Loel filed on 24 July 2009, Ms Ng makes a number of admissions and denials and then, in answer to the whole of the statement of claim, she states as follows (in para 7): (i) At all material times up to 23 November 2005 the First Respondent and Hastings were married. (ii) The Second Respondent ("Riby") was the sole registered proprietor of the whole of the fee simple of the property known as 15 Brookvale Drive, Underwood in the State of Queensland ("the property") for the period 12 May 1999 until 17 May 2006. (iii) At all material times when Riby was the registered proprietor of the property it was registered in the capacity as trustee of the jade Trust under registered instrument number 703330790. (iv) Riby was trustee of the Jade Trust from 12 May 1999 until 1 November 2005. (v) From 1 January 2005 until the present, Meownco Pty Ltd ACN 116 930 557 ("Meownco") has been the trustee of the Jade Trust. (vi) When Riby was registered its share capital comprised two ordinary shares one of which was initially held by the First Respondent with the other being held by Hastings. On or about 27 January 2004 Hastings acquired the First Respondents share in Riby and became its sole shareholder. (vii) On 24 December 1997 Hastings was appointed the sole director of Riby, Hasting [sic] remained the sole director of Riby until he ceased to be a director of Riby on 21 February 2007. (viii) On 24 December 1997 Hastings was appointed company secretary of Riby. Hastings remained the company secretary until 21 February 2007. (ix) Hastings was an officer of Riby within the meaning of section 9 of the Corporations Act from 24 December 1997 until 21 February 2007. (x) On 23 November 2005 the First Respondent and Hastings separated within the meaning of the Family Law Act 1975 (Cth). (xi) The First Respondent says that she was a primary beneficiary (as defined in item 5 of the schedule of the Jade Trust Deed) of the Jade Trust from the execution of the said Deed; and (xii) Clause 19 of the said Deed provides that "any person being a beneficiary hereunder may by oral declaration recorded in the minutes of the records of the trustee or by written notice to the trustee at any time excludes himself from the class of beneficiaries hereunder"; and (xiii) On 20 December 2005 Hastings and the First Respondent entered into a document headed Terms of Settlement. (xiv) … (xv) The First Respondent will at the trial of this matter rely on the full terms of the Terms of Settlement for their true meaning and effect. (xvi) On 3 April 2006 consent orders on behalf of the First Respondent and Hastings were filed in the Brisbane Family Court seeking to give effect to Terms of Settlement reached as between the First Respondent and Hastings ("the BRF Application for Consent Orders"). The First Respondent will rely on the BRF Application for Consent Orders at the final hearing as if the same were pleaded herein in full. (xvii) The BRF Application for Consent Orders was expressly stated to be an Application to vary the existing Orders (Terms of Settlement) that had been made by consent on 20 December 2005. (xviii) Settlement of the transfer of the property from Riby Pty Ltd to the First Respondent took place on or about 21 April 2006. 15 On 18 November 2009, Collier J gave Lillas & Loel leave to cease acting for Ms Ng on certain conditions that I do not need to detail. Collier J also made a number of pre-trial directions, including one that the evidence-in-chief at the trial was to be given by affidavit. Accordingly, on 10 December 2009, Ms Ng filed an affidavit which contained her evidence for the trial. By this time, she was obviously acting as a litigant in person. 16 The proceedings were originally due to proceed to trial on 25 November 2009. However, on 24 November 2009 that trial date was vacated and a new trial date of 14 December 2009 was fixed. 17 On 11 and 14 December 2009, some emails passed between Ms Ng and the solicitors for the respondents, including one inquiring whether Ms Ng intended to appear at the trial on 14 December. Ms Ng did not respond to this inquiry. When the trial of the matter commenced on 14 December, Ms Ng failed to appear. The applicants proceeded in her absence relying upon the affidavits that they had earlier filed in accordance with the directions of Collier J. The applicants opposed Greenwood J relying upon the affidavit Ms Ng had filed on 10 December 2009 on the grounds that she had not appeared and relied upon that affidavit at the trial and she was not available to be cross-examined on it. Greenwood J subsequently decided to receive Ms Ng's affidavit as an exhibit and to take the contents of it into consideration in reaching his decision. 18 In his reasons for decision ([2009] FCA 1563]), Greenwood J made a number of findings: see [26] to [42]. They included the following: · as at 26 April 2006, Riby was insolvent: at [29]; · Riby was unable to pay its debts from 26 February 2005: at [30]; · the "Terms of Settlement" between Mr Hastings and Ms Ng (signed on 3 April 2006) and the consent orders of 10 April 2006 were in terms that were advantageous to both Mr Hastings and Ms Ng and conferred clear benefits upon them while conferring no benefit upon Riby: at [33]; · the transfer of the 15 Brookvale Drive property took place at an undervalue of approximately $76,000 and the creditors of Riby were prejudiced because there would have been some funds available to pay the creditors of Riby: at [33]; · the transfer of the 15 Brookvale Drive property on 17 May 2006 took place after the commencement of the winding up and a non-exempt disposition of property thereby occurred upon its registration: at [35]; and · the "Terms of Settlement" of 22 November 2005, the consent orders of 20 December 2005, the "Terms of Settlement" of 3 April 2006, the consent orders of 10 April 2006 and the transfer of 17 May 2006 all took place after 26 September 2005, when Riby was unable to pay its debts as and when they fell due: at [36]. 19 Based on these findings, Greenwood J made declarations that the 17 May 2006 transfer constituted a void disposition of property under s 468 of the Act and that the "Terms of Settlement" executed on 3 April 2006 constituted an agreement for the transfer of the 15 Brookvale Drive property which was rendered voidable under s 588FE of the Act. His Honour then proceeded to make the orders, the execution of which Ms Ng now seeks to stay. Included were orders that RAMS be paid the amount owing under its mortgage from the net proceeds of sale of the property and that Ms Ng pay the first and second applicants' costs of the proceedings.

The stay application 20 Order 52 r 17 of the Federal Court Rules provides that an appeal does not operate as a stay of the judgment appealed from except so far as the Court otherwise orders. To succeed in her stay application, it will be sufficient if Ms Ng is able to demonstrate "a reason or an appropriate case to warrant the exercise of the discretion in her favour". It is not necessary for her to demonstrate some "special" or "exceptional" circumstance: see Alexander v Cambridge Credit Corporation Ltd (Receivers Appointed) (1985) 2 NSWLR 685 ("Alexander") at 694 and Powerflex Services Pty Ltd v Data Access Corporation (1996) 137 ALR 498 at 499. 21 The "reason" or "appropriate case" relied upon by Ms Fajardo, Ms Ng's counsel, is that her appeal will be rendered nugatory and she will, in the process, lose her home if the orders of Greenwood J are executed. This is usually regarded as a substantial factor in favour of a stay: see Alexander at 695. 22 In response, Mr Stunden, Mr Van Der Velde's counsel, made two submissions. First, he submitted that Ms Ng only has an equity in the 15 Brookvale Drive property of about $70,000 and, even if the orders are effected and the property is sold, this equity will still be available to be paid to her, should she be successful on her appeal. 23 I should say at once that I reject this submission. While it might be true to say that $70,000 is the equity Ms Ng has in the property, that ignores the fact that the property is her home and once she delivers up possession and it is sold, even if she succeeds on her appeal, it is most unlikely she will be able to recover it. 24 Secondly, Mr Stunden submitted that Ms Ng's appeal had no prospects of success and that it would not be rendered nugatory by the orders of Greenwood J being executed, but rather it was rendered nugatory by virtue of its inherent lack of merits. 25 This submission obviously calls for an assessment of the prospects of success of the appeal. However, before I proceed to make that assessment, it is convenient to identify the principles relating to Mr Van Der Velde's application for security for costs because, as will appear below, it also requires a consideration of the prospects of success of Ms Ng's appeal.

SECURITY FOR COSTS 26 The Court has a wide power under s 56 of the Federal Court of Australia Act 1976 (Cth) to order security for costs. That power is not limited by O 28 r 3 of the Federal Court Rules, which deals with the making of orders for security for costs: see Bell Wholesale Co Ltd v Gates Export Corporation (1984) 2 FCR 1 at 3 per Sheppard, Morling and Neaves JJ. In Equity Access Limited v Westpac Banking Corporation (1989) ATPR 40-972, Hill J set out a list of matters that his Honour described as being "appropriate for consideration" in considering an application for security for costs (at 50,635). Insofar as those matters were relevant to this case, dealing with a personal litigant, they are: (i) the chances of success of the applicant; whether the applicant's claim is bona fide or a sham; (ii) the quantum of risk that the applicant cannot satisfy a cost order; (iii) whether the impecuniosity arises out of the act in respect to which relief is sought; (iv) whether there are aspects of public interest which weigh in the balance against the making of an order; and (v) whether there are any particular discretionary matters peculiar to the circumstances of the case. 27 As noted above, the first matter in this list requires a consideration of the prospects of success of Ms Ng's appeal. I will return to this matter later in these reasons. 28 As to the second and third matters on this list, while impecuniosity is generally regarded as a significant factor in ordering security for costs at first instance, the situation is fundamentally different on appeal because, by then, the unsuccessful party will have already had the opportunity to exercise the jurisdiction of the Court and the question changes to: should the unsuccessful party be allowed to force the successful party into another Court whilst being unable to meet the costs that may be awarded if he or she is again unsuccessful: see Cowell v Taylor (1885) 31 Ch D 34 at 38 per Bowen LJ; Skyring v Sweeney [1999] FCA 61 at [6] per Spender J; Thompson v Robinson [2005] QCA 253 at [6] per Keane JA and Moore v Macks [2007] FCA 509 at [20] to [21] per Mansfield J. 29 Ms Ng claims she is impecunious and, if an order for security for costs is made, that will effectively stultify her appeal because she will be unable to meet that order. 30 In support of this claim, Ms Ng has filed an affidavit in which she sets out the reasons why she says she is impecunious. In that affidavit she states, among other things: · that she has incurred legal bills amounting to $27,411.59 in retaining the services of Lillas & Loel; · that because of the stress associated with these proceedings her earning capacity as a computer analyst has been reduced and she is now only able to earn enough to cover her living expenses; and · that she has to pay off the mortgage on the 15 Brookvale Drive property. 31 Ms Ng has annexed to her affidavit a statement of financial position she submitted to the Registry of the Court in support of her application for deferral or waiver of the filing fee associated with her notice of appeal. In that statement, she discloses a fortnightly income of approximately $1,600 after tax, and fortnightly expenses of $1,839, including mortgage repayments of $841. Further, she discloses a total net asset position of approximately $140,000, including an equity in her home at 15 Brookvale Drive which she estimates at $130,000 and a motor vehicle the gross value of which she estimates at $8,000. 32 On this issue, Mr Stunden submitted that significant costs have already been incurred in pursuing the proceedings against Ms Ng and securing the judgment from Greenwood J. He submitted it would be unfair to the creditors of Riby to submit them to the further costs of defending the appeal brought by Ms Ng, particularly where she claims that she is impecunious and will not be able to meet any order for costs if she is unsuccessful. 33 Ms Ng's affidavit clearly shows that there is a significant risk that Ms Ng will not be able to meet an order for costs if she is unsuccessful in her appeal. However, I am not satisfied that it shows that Ms Ng is impecunious, in the ordinary sense of that word, viz, having no money, or penniless. The fact that she has a net annual income of approximately $42,000 shows she is neither penniless, nor possessed of no money. 34 And lest it be thought that Ms Ng may be able to meet any such order for costs from the net equity in the 15 Brookvale Drive property, it should be noted that whether that equity is approximately $70,000, as Mr Van Der Velde suggests, or $130,000, as Ms Ng suggests, it is much less than the sum of approximately $260,000, being the total sum owed to the creditors of Riby as at the date Mr Van Der Velde was appointed. 35 As to the fourth matter in this list, no issue of public interest has been raised by either of the parties and I do not consider this is a case where the interests of the administration of justice dictate that the appeal should not be stultified by an order for security for costs: cf Bates v Omareef Pty Ltd [1998] FCA 536 per Hill J. I also do not consider there are any particular discretionary matters I need to take into account under the fifth matter in the list (above). 36 I now turn to consider the issue of the prospects of success of the appeal. My assessment of those prospects at this very early stage of the proceedings can only be a "preliminary assessment about whether [she] has an arguable case", or whether her appeal "has been lodged without any real prospect of success and simply in the hope of gaining a respite against immediate execution upon the judgment": see Alexander at 695. The assessment has also been described as "a preliminary, non-speculative assessment of whether the appellant by the grounds of appeal has raised an arguable case" and involving a "low threshold of arguability": see Citrus Queensland Pty Ltd v Sunstate Orchards Pty Ltd [2008] FCA 1867 at [40] per Greenwood J. 37 On the question whether Ms Ng's appeal was lodged simply in the hope of gaining a respite against the impending execution of the judgment of Greenwood J, it is necessary to record some of the procedural history surrounding Ms Ng's stay application. 38 When the hearing of Ms Ng's notice of motion first came before me on 21 January 2010, it soon became apparent that the notice of appeal that had been filed on 8 January 2010 was fundamentally defective because it did not contain the grounds of appeal that were articulated during that hearing by Ms Ng's counsel, Ms Fajardo. This may well have led to the application being defeated there and then. 39 However, because Mr Van Der Velde's application for security for costs had only been filed and served that morning, and because the prospects of success of the appeal was a consideration that was common to both applications, I decided to adjourn both applications for a short period to, among other things, allow Ms Ng to put her notice of appeal in order. 40 In addition, I also directed Ms Ng to file a notice of motion and supporting affidavit seeking the leave of the Full Court to adduce any evidence on the appeal and to raise any issue that was not raised before Greenwood J. I did this because it also became apparent during the hearing on 21 January 2010 that Ms Ng wished to raise new factual and legal issues in her appeal that had not been ventilated before Greenwood J. I considered this material may be relevant to my assessment of the prospects of success of Ms Ng's appeal and, at least in relation to the application for leave to adduce new evidence, unless I made such an order, O 52 r 36 of the Federal Court Rules would apply and Ms Ng would not have to file this material until not later than 21 days before the hearing of the appeal. 41 I emphasised to Ms Fajardo, Ms Ng's counsel, that the affidavit in support of this application should set out all the material Ms Ng wished to rely on in making any application for leave to the Full Court. 42 On 29 January 2010, Ms Ng filed a supplementary notice of appeal. She was entitled to do this under O 52 r 21 of the Federal Court Rules rather than make a formal application for leave to amend the notice of appeal because no date had yet been set for the appointment to settle the appeal papers. Ms Ng also filed on 29 January 2010 a notice of motion and supporting affidavits seeking the leave of the Full Court to adduce evidence on the appeal and to raise new issues on the appeal. 43 The following is a summary of the issues raised in Ms Ng's supplementary, or amended, notice of appeal: Greenwood J erred in law in finding the transfer of the 15 Brookvale Drive property from Riby to Ms Ng on 17 May 2006 was a void disposition of property under s 468 of the Corporations Act because: (i) The Corporations Act, including s 468, did not apply because the subject matter of the litigation was not a corporate property but a trust property. (ii) The transfer of the property by Riby to Ms Ng constituted a valid distribution of the trust property to a beneficiary by the Trustee in its absolute discretion in accordance with the Trust Deed. Section 468 of the Corporations Act did not apply to such a distribution of trust property. (iii) Further, this distribution of trust property was effected to resolve the matrimonial property settlement issues between Ms Ng and Mr Hastings under Family Law Act provisions. Greenwood J erred in law in finding that the document "Terms of Settlement" signed by [Mr] Hastings and [Ms Ng] on 3 April 2006 and attached to orders of the Family Court of Australia made on 10 April 2006 constituted an agreement for transfer of the Underwood property rendered voidable by operation of s 588FE of the Corporations Act 2001 (Cth) because: (i) The Terms of Settlement represented an agreement in satisfaction of the property settlement issues between Ms Ng and Mr Hastings pursuant to s 79 of the Family Law Act. (ii) The consent orders made by the Family Court on 10 April 2006, based on the Terms of Settlement, altered the property interests of Ms Ng and Mr Hastings to give full force and effect to the provisions of s 81 of the Family Law Act. Greenwood J erred in law in ordering the transfer of the 15 Brookvale Drive property to Mr Van Der Velde because: (i) The 15 Brookvale Drive property was trust property. (ii) The liquidators of Riby do not have a right of charge or lien on the Underwood property as the Trust Deed provided specifically that the Trustee does not have any right of indemnity or recoupment from the Trust Fund for liabilities incurred by the Trustee. A liquidator's right over a trust property only exists if the Trustee has a right of recoupment or indemnity from the trust property to pass on to the liquidators. (iii) The Jade Trust was not a trading trust. The debts incurred by Riby were incurred in its own rights while trading as Hastings Distribution. The Trustee or the director of the Trust company also incurred debts purportedly on behalf of the Trust but he actually expended the money to support his personal business ventures. (iv) The Trustee was in breach of the Trust thereby losing any right a trustee might have against the Trust property. (v) The appellant was never involved directly or indirectly with the Trustee company. The appellant never gave any direction or instruction directly or indirectly to the Trustee. Ms Ng was deprived natural justice and procedural fairness by the orders being made at the trial in her absence when she was not able to afford legal representation and did not attend because she believed she was not required to attend the trial. 44 From this summary, it is obvious that Ms Ng wishes to raise a number of new legal issues in her appeal, including (but by no means limited to) the distinction between the corporate property of Riby and trust property of The Jade Trust, the application of the Corporations Act to trust property and whether the assets of The Jade Trust were available to pay the creditors of the corporate trustee, Riby. It is also obvious that she wishes to raise new factual issues, including whether Riby was trading in its own right as Hastings Distribution, or as the Trustee for The Jade Trust. During the adjourned hearing of her stay application on 2 and 3 February 2010, Ms Fajardo conceded that none of these issues had been squarely raised by Ms Ng in the original and amended defences filed by her legal advisers in the proceedings at first instance. 45 To be able to raise these new legal and factual issues, Ms Ng will need to obtain the leave of the Full Court, not only to raise these issues as new issues, but also to adduce the necessary evidence to found the new issues of fact she wishes to raise. To obtain that leave, Ms Ng will need to persuade the Full Court that there is an adequate explanation for her failure to raise these issues at first instance and also that these issues have clear merit. The Full Court will also consider the prejudice that will be suffered by Mr Van Der Velde and whether that can be remedied: see VUAX v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 158 at [46] to [48] and NAJT v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 147 FCR 51 at [154] to [166] per Madgwick J; [2005] FCAFC 134. 46 In the affidavit Ms Ng filed in support of her application for leave to adduce evidence and to rely upon new issues, she gave an explanation for her failure to raise these issues at first instance. It was to the following effect: · she could no longer afford to have legal representation at the trial; · she, herself, did not attend the trial because she thought the directions of Collier J of 18 November 2009 that: "Evidence-in-chief at the trial is to be given by affidavit …" meant that, once she had filed her affidavit on 10 December 2009, that would become her evidence and she did not need to attend the trial; and · because she did not have any legal or other representation at the trial she lost. 47 The difficulty with this explanation is that, while it may explain why Ms Ng did not attend the trial on 14 December 2009, it does not explain why the issues she now wishes to raise in her appeal were not raised in the proceedings at first instance. In particular, it does not explain why these issues were not raised before 18 November 2009, when she did have legal representation, viz the firm of Lillas & Loel Lawyers. Moreover, it does not explain why the amended defence filed by Lillas & Loel on behalf of Ms Ng on 24 July 2009 does not plead these matters: see at [14] above. And, this lack of explanation must be viewed against the background of my warnings to Ms Fajardo that Ms Ng's affidavit should include all the material she wished to rely upon in support of her application for leave to adduce evidence and raise new issues: see [41] above. 48 On one view, this lack of explanation should lead to the conclusion that Ms Ng's appeal has no prospects of success because she will not be able to overcome the threshold requirement of obtaining leave to raise the new matters she now wishes to raise in the appeal. After much reflection, I have decided I should not draw that conclusion and instead I should look to the substance of the matters Ms Ng wishes to raise on the assumption she will be able to meet the threshold requirements I have mentioned. 49 I do so for a number of reasons. To begin with, I do not think my role as a single judge entertaining a stay application extends to second-guessing the Full Court's reaction to Ms Ng's application for leave to raise these new matters. While I did warn Ms Fajardo to ensure Ms Ng included all the materials she wished to rely upon in support of her application for leave, it is possible, perhaps likely, that Ms Ng does have an explanation for her failure to raise these matters at first instance. If she does it is likely that the Full Court will allow her to give that explanation, even though it has not been given to me. Further, while these procedural requirements are very important and raise important policy issues such as finality in litigation, I consider, at this stage in these proceedings, I should not allow a possible failure to comply with them to defeat the substance of the matters Ms Ng wishes to raise in her appeal. Finally, there are some issues raised in Ms Ng's appeal that are not new issues and are therefore not affected by these procedural requirements in any event: see [52] to [53] below. 50 Turning then to the substance of the matters Ms Ng wishes to raise, I need to assess whether they raise an arguable case, keeping in mind that, at this stage, Ms Ng only needs to meet a low threshold of arguability. 51 Many of the new issues Ms Ng wishes to raise in her appeal involve the question of the use of trust assets in payment of the debts of an insolvent trustee. That question was recently described by the Full Court of the Federal Court as being "a matter of some dispute": see Federal Commissioner of Taxation v Bruton Holdings Pty Ltd (in liq) (2008) 173 FCR 472; [2008] FCAFC 184 ("Bruton") at [47]. The Full Court's decision in Bruton canvasses the nature and extent of that dispute. I do not consider it is my role to make a close examination of those issues. On this aspect, I should record that Mr Stunden took me to a provision of the Trust Deed that gives the trustee, Riby, the power to trade. While that may be so, I do not consider that it provides a complete answer to the question surrounding the use that may be made of trust assets in payment of the debts of an insolvent trustee. Undoubtedly all these issues will be fully ventilated at the hearing of the appeal. For my part, I think it is suffice to say that, having considered Bruton and some of the cases and articles referred to therein (see at [55] to [56]), I consider the new matters Ms Ng wishes to raise in her appeal going to this question are at least arguable. 52 Apart from the new issues Ms Ng wishes to raise, she has also sought to challenge the decision of Greenwood J on a similar basis to that pleaded in her various amended defences, particularly the last one on 24 July 2009: see at [14] above. That is, whether the transfer of the 15 Brookvale Drive property and the Terms of Settlement that preceded it, were part of a genuine settlement of the matrimonial property issues between Ms Ng and Mr Hastings under the relevant provisions of the Family Law Act 1975 (Cth), supported by the consent orders made by the Family Court and, therefore, not a voidable disposition of property under s 588FG of the Act. While Ms Ng's amended notice of appeal does not seek to challenge any of the findings of fact made by Greenwood J on this issue, bearing in mind the low threshold of arguability, I consider her challenge to this aspect of the decision is arguable. 53 Finally, as to Ms Ng's complaints about being deprived of procedural fairness, while the situation that Ms Ng found herself in appears to be one of her own making, I consider this aspect of Ms Ng's appeal may still be arguable. In reaching this conclusion, I have taken into account the procedure provided in O 32 r 2(2) of the Federal Court Rules, which allows a party to apply to set aside an order made at a trial in his or her absence. I consider this procedure is, at least in part, directed to ensuring the absent party is afforded procedural fairness. 54 For these reasons, I consider that at least these three groups of issues that are raised in Ms Ng's amended notice of appeal are arguable. Conversely, I cannot conclude that they have no prospects of success. I should add that I have not sought to deal with every issue that is raised in Ms Ng's amended notice of appeal because I do not consider that is called for when I have concluded that at least these three groups of issues are arguable.

conclusion 55 To sum up, I consider that Ms Ng's appeal will be rendered nugatory if there is no stay on the execution of the orders of Greenwood J - she will lose her home and it is highly unlikely that she will be able to recover it should she be successful on the appeal. Further, while I consider Ms Ng will confront some significant procedural difficulties in pursuing her appeal, I cannot conclude it has no prospects of success. I therefore consider she should be granted a stay of the execution of the orders of Greenwood J. 56 However, I consider any stay must be on terms that will protect Mr Van Der Velde against the significant risk that Ms Ng's will be unable to meet a costs order should her appeal be unsuccessful. I consider this can best be achieved by allowing Mr Van Der Velde's application and ordering Ms Ng to provide security for costs of her appeal. I do not consider Ms Ng has shown she is impecunious and, therefore, I do not consider Ms Ng has established that her appeal will be stultified if such an order is made. In any event, even if Ms Ng had established these matters, I do not consider it would be fair to Mr Van Der Velde to allow Ms Ng to rely upon a claim to impecuniosity to absolve her from the necessity to provide security for costs of her appeal, particularly where Mr Van Der Velde has been entirely successful at first instance, including obtaining an order for costs against her and where Ms Ng now wishes to appeal that judgment based, in large part, upon advancing a raft of new legal and factual issues. 57 At the same time, I consider it is necessary to address the possibility of a perverse outcome for Mr Van Der Velde if this order for security for costs is not met by Ms Ng. By this I mean Ms Ng choosing not to provide the security for costs and yet still being able to pursue her appeal protected by the stay. I, therefore, consider the stay order must be made conditional upon Ms Ng complying with the order for security for costs. 58 Based on these conclusions, I consider that the orders that I should make should be along the following lines: · Ms Ng should be ordered to pay security for costs of the appeal in the sum of $21,000 in a form to be determined. I will hear the parties on the form of the security to be ordered. I should also note that the quantum of the security for costs sought by Mr Van Der Velde was not challenged by Ms Ng. · I will continue the interim stay of the execution of the orders of Greenwood J to the close of business on a date to be fixed in approximately four weeks time. I will hear the parties as to the appropriate date. · If, by that time, Ms Ng provides the security for costs as ordered, there will be a further stay of the execution of the orders of Greenwood J to take effect from the expiry of the interim stay and to continue until such time as the appeal is finally determined, or until further order. Of course, if by that time Ms Ng does not provide the security for costs as ordered, the interim stay will cease and Mr Van Der Velde will be able to proceed to execute the orders of Greenwood J. To achieve this outcome, it will probably also be necessary to amend some of the orders of Greenwood J, for example, to replace the date "Friday, 22 January 2010" with a new date to reflect the new timetable effected by these orders. I will also hear the parties on this aspect. 59 I will also hear the parties on the question of the costs of these two applications. I certify that the preceding fifty-nine (59) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Reeves.