The affidavits
107 The application for security is principally supported by an affidavit of Ms Catherine Mills who is the solicitor for UBS.
108 Ms Mills says that she has conducted relevant searches which reveal that Mr Tyne is an undischarged bankrupt. In his affidavit sworn 4 March 2014, Mr Tyne says this about that matter. In May 2013, Mr Tyne's estate was sequestrated. Mr Tyne's bankruptcy resulted from his having entered into a guarantee of Telesto's financial obligations to the ANZ Bank. That guarantee was called upon when Telesto defaulted under its obligations to the Bank. Judgment was entered against Mr Tyne for AUD$11.7 million. The judgment was not satisfied. Mr Tyne became bankrupt. Mr Tyne also says this in his affidavit of 4 March 2014:
11. Telesto's default as principal debtor was precipitated by the default of a portfolio of Eurobonds that Telesto had purchased at the recommendation of [UBS]. I refer to paragraphs 19 to 21, 24 to 27, 32, 37, 41, 45(d) and (e), 49 to 51, 60, 64, 69, 74 and 82 of the SOC [Statement of Claim in these proceedings]. Had those bonds not defaulted, alternatively had Telesto never purchased them, Telesto would have been in a position to meet its obligations to ANZ Bank. Accordingly, the actions of [UBS] complained of in the SOC ultimately resulted in my impoverishment.
12. I have earned no income since being made bankrupt. Since my bankruptcy all legal expenses have been met by a loan advanced by my parents, or were not met at all.
13. My parents advise me, and I believe, that they have no more liquid assets to speak of and that their only source of income is the old age pension.
109 Ms Mills identifies a series of costs orders at para 52(a) to (e) of her affidavit and observes at para 53 that she is informed by Ms Sannie Sng of UBS that "to date, none of the above costs orders have been satisfied (in full or in part) by Telesto, Mr Tyne or, where applicable, the Argot Unit Trust".
110 The relevant orders are these.
111 On 21 February 2011, Assistant Registrar Ms Tan Wen Hsien, ordered Telesto, Mr Tyne personally and ACN 074 as trustee of the Argot Trust to pay the costs of UBS in relation to the anti-suit injunction application before the Singapore High Court on an indemnity basis.
112 On 21 February 2011, Assistant Registrar Ms Tan Wen Hsien, ordered Telesto and Mr Tyne to pay the costs of UBS in relation to applications made in the proceedings commenced by UBS in the Singapore High Court on an indemnity basis. These costs concerned the costs of UBS in defending the stay application brought by Telesto and Mr Tyne.
113 On 14 July 2011, Chong J of the Singapore High Court ordered Telesto, Mr Tyne and ACN 074 as trustee of the Argot Trust to pay the costs of UBS of the appeal by the anti-suit injunction defendants from the anti-suit injunction orders, on an indemnity basis.
114 On 14 July 2011, Chong J of the Singapore High Court ordered Telesto and Mr Tyne to pay UBS's costs of the appeal by those parties of the dismissal of the stay application on an indemnity basis.
115 On 21 February 2012, in the New South Wales proceeding, Ward J, by Order 4, ordered Telesto, Mr Tyne personally and ACN 074 as trustee of the Argot Trust to pay UBS's costs of a notice of motion filed on 24 October 2011 (the stay application).
116 All of these costs orders are joint and several costs orders. Mr Tyne is subject to all of the orders. The trustee of the Argot Trust is subject to the orders at [111], [113] and [115]. Ms Sng of UBS says that none of these costs orders have been satisfied in whole or in part. Ms Mills says the same thing in her letter to Mr Tyne and Ms Marks on 7 February 2014. Mr Tyne says that each of the costs orders provide for the payment of costs in an amount to be agreed or alternatively in an amount as determined upon taxation of the costs. Mr Tyne says that no bill of costs has ever been presented to him or ACN 074 and no agreement has ever been reached with UBS about the amount of the costs. Moreover, he says that so far as the present proceedings are concerned only some of the costs orders concern the estate of the Argot Trust.
117 Nevertheless, it is plain from the matters described at [108] and the passages quoted at [108] from Mr Tyne's affidavit that there is no prospect of his being able to pay the amount of the costs orders whether the quantification of each costs order is crystallised by agreement or by taxation of a bill of costs. It is, of course, correct to say that until agreement is reached or the costs are quantified by certification upon taxation, no particular amount is payable by Mr Tyne. Nevertheless, his bankruptcy and "impoverishment" as he puts it, means, on balance, that he has no capacity to pay the costs referable to these orders.
118 That circumstance becomes a relevant matter so far as the Argot Trust is concerned because Mr Tyne is both a bankrupt and impoverished and he brings the proceeding on behalf of the Trust in the interests of the beneficiaries (see r 19.01(3)(c) of the Federal Court Rules 2011).
119 That means that when UBS seeks to enforce any order for costs which it might obtain in these proceedings, Mr Tyne will be unable to satisfy that costs order. However, in the ordinary course, in the case of a trustee incurring financial obligations to UBS in properly performing his or her trust obligations, the trustee would be entitled to seek indemnity out of the trust assets in respect of that liability. The difficulty is that Mr Tyne, as trustee of the Argot Unit Trust, has not put into evidence the trust deed. Nor has Mr Tyne put on any evidence as to the assets of the Trust. It thus becomes difficult for UBS to determine whether Mr Tyne is properly performing powers conferred upon him by the Trust Deed or indeed whether he is properly performing his duties as trustee upon which the right of indemnity is dependent. UBS has no knowledge of the assets that might be available to meet any indemnity in discharge of the trustee's obligations to it under a costs order. In addition, UBS says, put simply, that it is unsatisfactory in terms of its risk of non-payment of any costs order it might obtain that it starts from the position of having to deal with a bankrupt trustee of the trust estate. Because of this circumstance, UBS says it must necessarily (and can only) look to the strength and financial integrity of the indemnity available to the bankrupt trustee in meeting any costs orders.
120 As to the Argot Trust, Mr Tyne says this in his affidavit sworn 4 March 2014:
7. The Argot Trust is a unit trust, with provision for ordinary and income units. There are presently 1,010 ordinary units on issue, ten of which [are] registered in my name. Five hundred ordinary units are registered in my name as trustee for my 12-year old son, and five hundred more registered in my name as trustee for my 9-year old daughter. There are no income units presently on issue.
[emphasis added]
121 It is difficult on the present evidence to form any clear view about either the assets or the liabilities of the Argot Unit Trust or the strength of any indemnity available to Mr Tyne as trustee of the Trust except have regard to the following observations of Croft J upon which UBS places emphasis in its submissions. In ACN 074 971 109 Pty Ltd (as trustee for the Argot Unit Trust) v The National Mutual Life Association of Australasia Ltd (No 2) [2012] VSC 177, Croft J determined the question of the quantum of damages in the plaintiff's proceedings by which it claimed relief for unconscionable conduct and also determined the nature of the costs order that ought to be made in the matter. In doing so, Croft J made this observation at [54] in the reasons for judgment published on 4 May 2012:
54 The defendant submitted that the evidence is clear that [ACN 074], which was the trustee of the Argot Unit Trust, was always a thing of straw. On the defendant's application for security for costs in December 2009, Mr Tyne deposed that:
(a) [ACN 074] was a bare trustee, with no assets other than a paid up capital of $2 and a right of indemnity out of the Argot Unit Trust [see affidavit of Scott Tyne, 13 October 2009 (C09), para 15].
(b) The only asset of the Argot Unit Trust that was identified was its damages claim in the 2002 Proceeding [see affidavit of Scott Tyne, 13 October 2009 (C09), para 18]. The asset is now shown to be chimerical. Any amount awarded to [ACN 074] will be dwarfed by the costs payable by it.
Further, in answer to the notice of discovery given by the defendant, neither [ACN 074] nor the Argot Unit Trust produce any Australian income tax returns, indicating that the Trust had no income.
[emphasis added]
122 It seems very likely therefore that the Argot Unit Trust has no assets. However, the profit and loss statements and balance sheet statements for the Trust for the financial years ending 30 June 2013 and 30 June 2014 ought to be produced together with the Trust Deed for the Trust. This material ought to be provided so as to test whether inferences UBS draws, and invites the Court to draw, about the current asset position of the Trust based on the observations of Croft J at [54] of his Honour's reasons for judgment remains the current position.
123 As to the financial position of Ms Marks, Mr Tyne says this:
15. The second applicant to this proceeding is my de facto wife, Clare Marks (Clare). Clare also guaranteed the facility referred to in paragraph 11 [quoted at [108] above]. I refer to paragraph 97 of the SOC.
16. Clare's guarantee was supported by the Mortgage referred to in paragraph 98 SOC. That Mortgage was enforced through exercise of the power of sale … In addition, the ANZ Bank has instigated proceedings against Clare seeking recovery of the shortfall in the sale price of the Land and Dwelling as against the guaranteed debt. Hence, the actions of [UBS] complained of in the SOC have also ultimately resulted in Clare's impoverishment.
17. As to which, Clare informs me, and I believe, that:
(a) in the last 12 months, she has earned approximately $55,000 before tax; and
(b) the value of her remaining assets would not exceed $100,000 (including the present value of her superannuation, which is not presently accessible by her, and her car).
124 Mr Tyne also says that when considering the financial circumstances of the applicants and in particular the first applicant, those circumstances must be balanced against a consideration of the financial circumstances of UBS. Mr Tyne says that UBS is one of the largest financial institutions in the world with total assets in the order of AUD$1.6 trillion and in the financial year ended 2013 UBS's operating profit was in the order of AUD$4.14 billion notwithstanding that provision has been made in the accounts for AUD$2 billion against litigation and legal liabilities.
125 Mr Tyne says four further things. First, he says he has reasonable prospects of success in the principal proceeding having regard to a range of matters he identifies at paras 21 to 24 of his affidavit of 4 March 2014. Second, he says that his bankruptcy and impoverishment is directly a function of the conduct of UBS about which he complains in the principal proceeding. He says that his present circumstances reflected in his apparent incapacity to satisfy potential costs orders is directly attributable to the contravening conduct he pleads in the action and thus UBS ought not be able to effectively foreclose an examination of the quality of that conduct by relying upon circumstances confronting Mr Tyne which it brought about. Third, the present proceedings are brought on behalf of the Argot Unit Trust and thus on behalf of the beneficiaries of the Trust who are Mr Tyne's children. Fourth, any order for security for costs will foreclose or stultify prosecution of the claims by the trustee of the Argot Unit Trust as there is simply no basis upon which either the trustee in his own capacity or for and on behalf of the Trust, can provide security for any costs order which might be made against the first applicant.
126 As to the contention that Mr Tyne's impecuniosity and the present circumstances of Ms Marks have been caused by the conduct of UBS which is the subject of the present proceeding, UBS says that Mr Tyne focuses upon assertions to the effect that his own circumstances of impecuniosity (and those of Ms Marks) have been brought about by the conduct of UBS, but fails to demonstrate that the contended conduct "depleted or diminished" the assets of the Argot Trust itself, or caused the impecuniosity of Mr Tyne in his capacity as trustee of the Argot Trust.
127 UBS says that in the absence of evidence of such a causal connection, the Court should regard Mr Tyne's claims of a causal connection between UBS's contended conduct and impecuniosity as rising no higher than a bare assertion.
128 UBS also says that the absence of any evidence, in the affidavits, of a relevant causal connection suggests an inference that the more likely cause of any impecuniosity in the Argot Trust is, firstly, the election made by the trustee of the Trust (ACN 074) to make substantial unsecured securities "loans" to Telesto under the securities lending arrangement and otherwise, to support the financial facility, and secondly, investment advice given by Mr Tyne to the trustee of the Trust "through Pole Star".
129 As to the notion that a security for costs order would stultify the proceeding, UBS says that there is no evidence of any steps taken by either of the applicants to secure third party funding to support the prosecution of the proceeding which the applicants regard as a substantial commercial claim. UBS also says that even if the grant of security would have the effect of stultifying the proceeding, such a result would be insufficient to justify a refusal of security because the risk of stultification is but one factor to be taken into account in the exercise of the discretion. UBS says that even if a real likelihood of stultification is established, that consideration is not determinative of the exercise of the discretion.
130 As to the merits, UBS says the applicants are likely to fail in the proceeding for these reasons.
131 First, UBS says that any representations made by it must have been made to Mr Tyne as an officer of Pole Star on behalf of Telesto, the UBS account holder. The representations were not made to ACN 074 as trustee of the Argot Unit Trust. The only person who could have been "directly misled" was Telesto. UBS says that the manner in which ACN 074 is said to have been misled is not clear on the face of the pleading. For example, it is said to be unclear whether Mr Tyne as an officer of Pole Star "passed on" to ACN 074 for the Trust UBS's contended representations and if so, when and how that occurred. Nor is it said whether ACN 074 relied on the representations and if so, when and how that occurred.
132 Second, UBS says that the claims rely heavily upon oral representations made and advice given by UBS representatives and a failure by UBS to disclose information much of which was publicly available at material times.
133 Third, the contentions of reliance are said to be weak as Mr Tyne is a sophisticated investor and extensive written disclosures described in the judgment of Sackar J were given to Mr Tyne by UBS concerning the risks of investing in emerging markets.
134 Fourth, UBS says that consistent with its view of Telesto's sole role in the engagement with UBS is the circumstance that Telesto's New South Wales proceeding was conducted on the footing that Telesto had suffered the relevant loss. Moreover, ACN 074 as trustee of the Argot Trust in a letter of undertaking given to UBS dated 28 January 2010 (see also UBS's letter to Telesto dated 14 December 2009, cl 4(c) requiring an undertaking in the form of the letter of 28 January 2010), agreed to apply the full amount of any litigation proceeds concerning two particular actions in which it was engaged (called in the letter of undertaking the "Actions") towards repayment of Telesto's liabilities to UBS, and in that context, ACN 074 as trustee of the Trust represented to UBS that its only asset was its right of indemnity from the Trust (cl 2(a)) and that the "only asset of the Argot Unit Trust [is] the Actions" (cl 2(c)). UBS says it is noticeable that no assertion is made in the 28 January 2010 letter of undertaking that the trustee of the Argot Unit Trust has or had a claim or claims of any kind against any entity arising out of relevant facts and circumstances relating to investments in BTA and/or Astana Kazakhstan bond issues, or the granting of collateral charges or pledges or the lending of trust securities in support of Telesto's investments.
135 As earlier mentioned, the pleading asserts that Mr Tyne was at all material times a Director of ACN 074 as trustee of the Argot Unit Trust and that by reason of a Deed between ACN 074 and Mr Tyne dated 13 April 2000, Mr Tyne was appointed by the trustee to manage the Trust's investment portfolio. The pleading also asserts that Mr Tyne was at all material times a Director of Pole Star and by reason of a Deed dated 9 October 2006, Pole Star was engaged by Telesto to manage Telesto's investment portfolio. The pleading then asserts events of engagement between Mr Tyne and representatives of UBS. The pleading goes on to assert that those events of engagement occurred in particular capacities in which Mr Tyne was acting, that is, in his own capacity, in his capacity as a Director of ACN 074 in its trustee capacity, as a Director of Pole Star and, through Pole Star, as Manager of Telesto's investment portfolio. In other words, the pleading comprehends a series of exchanges and engagements between Mr Tyne on the one hand and representatives of UBS on the other as the fundamental engagement. The capacity in which Mr Tyne was acting is attributed by the pleading to Tyne Related Entities as described.
136 As to the apparent anomaly that the letter of undertaking of 28 January 2010 given by the trustee of the Argot Unit Trust does not suggest a right of action in the trustee against any person or entity arising out of facts and circumstances relating to investments in BTA and/or Astana Kazakhstan bond issues, it may be not altogether surprising that in a letter of undertaking given to UBS in the context of a continuing financial relationship between UBS, Telesto and the trustee of the Argot Unit Trust, that no suggestion is made of a claim against UBS as an asset of the Argot Unit Trust and nor is any claim made against Telesto.
137 A central question in the proceeding may not be one of whether the pleaded representations made by UBS were "passed on" but whether they were made to Mr Tyne in particular capacities directly or indirectly.
138 It will be apparent from this discussion of the contentions of the parties on the application that each of the matters in r 19.01(3)(a) to (d) of the Federal Court Rules 2011 have been addressed including some other matters, for the purposes of r 19.01(3)(e).
139 Plainly, s 56 of the Federal Court Act confers a wide and flexible discretionary power which must be exercised judicially, that is to say, having regard to settled principle. The Federal Court Rules do not operate to constrain the scope of the discretion conferred by s 56: Bell Wholesale Co Pty Ltd v Gates Export Corp (1984) 2 FCR 1 at 3. These propositions have been accepted and applied extensively in many authorities and it is not necessary to set out the references in these reasons.
140 Some of the factors to be taken into account in the exercise of the discretion are whether the application has been brought promptly; the strength and bona fides of the applicant's case; whether the impecuniosity of the applicant was brought about by the respondent's conduct the subject of the proceeding; whether the respondent's application for security operates oppressively in the sense that a respondent brings the application merely to deny an impecunious applicant a right to litigate a controversy before the Court; whether there are outstanding costs orders against an applicant which have not been discharged; whether there are persons standing behind the applicant who are likely to benefit from the litigation and who are willing to provide security; whether persons standing behind the applicant have sought to raise funds to support the proceeding; and whether persons standing behind the applicant have offered any personal undertaking to be liable for the costs and if so the form of any such undertaking. The last three considerations are generally considerations that operate in the context of a proceeding brought by a company although similar considerations apply where a proceeding is brought by a trustee of a trust in the proper performance of a trustee's duty to protect the assets of the trust for and on behalf of the beneficiaries. Again, it is not necessary to recite a sequence of authorities which support these propositions. These considerations are well recognised in the authorities.
141 In the present application, it seems to me that the following matters are particularly important.
142 First, there is no doubt that UBS, should it obtain an order for costs in the proceeding, has no prospect of recovering the amount of those costs from Mr Tyne.
143 Second, I am satisfied, having regard to the matters described at [121] of these reasons and particularly the observations of Croft J to which UBS particularly refers in its submissions, consistent with the oral submissions of Mr Tyne on the hearing of this application, that the Argot Unit Trust has no assets (other than, arguably, the claim it seeks to bring against UBS).
144 Third, I am satisfied that those persons standing behind the Argot Unit Trust have no serious prospect (or any prospect at all) of providing security or offering any personal undertaking to be liable for the costs which would be remotely meaningful. There are no income units on issue and having regard to the matters mentioned at [121] of these reasons, there is no income of the Trust. The ordinary units are principally held by Mr Tyne's 12 year old son and his nine year old daughter. Ten of the ordinary units are held by Mr Tyne but he is not only impecunious but bankrupt. I accept therefore that there is no serious prospect of any person standing behind or under the Argot Unit Trust offering any form of meaningful security to UBS.
145 Fourth, in these reasons I have examined two particular matters. The first of those concerns the history of the earlier litigation and the second concerns the nature and content of the claims sought to be made in the proceeding and the criticism by UBS of the strength of those claims. As to the earlier litigation, I have made observations at [99] to [106] of these reasons and I am not satisfied that, weighing all of the matters at [56] to [106] in the balance, the result is that an order for security for costs ought to be made by reason of those factors. Of course, those factors must be weighed together with the other factors, in the balance. As to the strength of the claims sought to be agitated in the proceeding and the factual matrix giving rise to those claims, I am satisfied about two matters. The first is that caution must be adopted in seeking to make assessments about the apparent merits or otherwise of a claim in any detailed analytical way which might, at such an early point in the proceeding, tell against an applicant and in favour of an order for security for costs. The second is that many of the claims concerning who said what to whom in which circumstances and in which particular capacities is entirely in controversy and a matter for determination in the very exercise of judicial power. At this point in the proceeding, I do not accept that the pleading is so substantially deficient that it renders the proceeding either doomed to failure or very likely to result in a dismissal of the proceeding.
146 Fifth, clearly there are a number of costs orders which have been made against Mr Tyne and three of those costs orders are orders made against ACN 074 as trustee of the Argot Unit Trust in respect of which it would no doubt seek to assert a right of indemnity. There are no assets in the Argot Unit Trust to satisfy that indemnity other than the claim sought to be made in these proceedings against UBS. All of these matters go to the financial incapacity of the Argot Unit Trust to meet either existing orders or potentially further orders which might be made should the present proceeding be unsuccessful. Mr Tyne takes the point that the costs orders have not been quantified and thus it is simply not fair or accurate to say that either he or the trustee of the Trust has failed to pay any costs orders at all. Until the costs orders are quantified by agreement or taxation, there can be no operative "failure" to pay costs orders. I infer, since no mention is made of the matter by UBS, that no bill of costs in taxable form has been prepared or served upon ACN 074 or Mr Tyne and that no agreement has been reached about the costs nor any taxation of them. Although Mr Tyne's propositions about these matters are undoubtedly true, it nevertheless seems to me presently clear that neither Mr Tyne nor the Trust is capable of paying the quantification of those costs orders because the Trust has no income or assets but for its contended claim in this proceeding and Mr Tyne is both impecunious and a bankrupt.
147 Sixth, I am satisfied that having regard to all of these matters, making an order for security for costs will entirely foreclose the proceedings brought by the first applicant and render it impossible for the first applicant to prosecute the claim. I am entirely satisfied that making an order for security for costs will shut down that entire part of the proceeding and bring it to an immediate end.
148 The criticisms of the pleading made by UBS might well have been the subject of an application by UBS to strike out the statement of claim so as to compel the first applicant (and the applicants) to frame a pleading which reflects properly formulated claims addressing those criticisms, if they are shown to be well placed on a properly developed application directed expressly to that question. In the absence of a properly framed pleading, certain consequences might follow for the action. Alternatively, to the extent that it is said that commencing the present proceeding falls within the scope of the anti-suit injunction order, or to the extent that the proceeding ought to be permanently stayed by reason of any of the considerations described at [56] to [98] of these reasons, an application might have been brought by UBS to deal with that matter as a preliminary question. Success on that question would result in a permanent stay as a question of law.
149 However, those matters are entirely separate methods of seeking to deal with what is thought to be a proceeding which the first applicant, at least, is either not entitled to commence in the Court, or a proceeding which ought to be stayed, as a matter of law, according to UBS. Neither of those applications has been made. I have taken into account the contentions made by UBS concerning the criticisms of the pleading, the contended merits of the applicants and the contended effect of the orders in the earlier litigation. However, for the reasons I have already indicated I do not regard those considerations as determinative on the security for costs application. No doubt, questions relating to the pleading and/or the effect of orders made in the earlier litigation will be the subject of separate applications properly supported by the relevant material.
150 The application for security for costs is brought in an amount of $450,000.00 and I have no doubt at all that making an order for security of that order of magnitude or any amount which reflects even a staged quantification of likely recoverable party and party costs by reference to the completion of particular interlocutory steps, would have the effect of stultifying the action.
151 I can see no basis on the present evidence upon which the proceeding could continue should an order for security be made.
152 Seventh, whatever the ultimate merits might prove to be in the proceeding, I am satisfied that there is at least an arguable question raised by the proceeding that the cause of Mr Tyne's impecuniosity is the contended conduct of UBS. UBS contends that due to lack of clarity, the pleading does not demonstrate a causal link between the conduct of UBS and Mr Tyne's impecuniosity, and more particularly, the pleading does not demonstrate a causal link between the conduct of UBS and any impecuniosity in the Argot Unit Trust. However, it seems to me that the facts, circumstances and events reflected in the statement of claim which are said to give rise to claims against UBS in respect of engagements between UBS and Mr Tyne in his various capacities on behalf of the Trust and other entities, contend for losses suffered by him, Telesto and the Trust by reason of representations made by UBS (in contravention of the relevant law) concerning investments in bonds issued by the relevant Kazakhstan issuers, and as a result of breaches of fiduciary duty and negligence on the part of UBS. At least in the pleaded sense, there seems to be a clear contention that the losses giving rise to impecuniosity by reason of reliance, are caused by the conduct of UBS.
153 Those losses, in part at least, seem to concern steps taken by the Argot Unit Trust, as pleaded. They may or may not be made good but at least at this stage of the proceeding the contention on the face of a pleading (rather than a mere bare allegation), is that there is a causal link between the conduct of UBS (made the subject of the proceeding), and impecuniosity on the part of Mr Tyne and the Argot Unit Trust.
154 Eighth, no application for security is sought against Ms Marks.
155 That, no doubt, arises because Ms Marks is personally the litigant and she does not bring a claim on behalf of anyone but herself. Nevertheless, her contended losses are said to arise out of defaults by Telesto in servicing the ANZ Bank facility (of which she was a guarantor) which occurred because Telesto suffered losses by reason of its investments in the Kazakhstan bonds. An order for security for costs made against the first applicant, quite independently of any question of any criticisms of the pleading so far as it frames causes of action on her behalf against UBS, will leave Ms Marks's claim extant and it would need to be litigated in any event. Clearly her claims are not caught by any of the difficulties said to arise for Mr Tyne, Telesto or ACN 074 as trustee of the Argot Unit Trust (or Mr Tyne as the present trustee of the Trust) arising out of the earlier litigation or the orders made in that litigation. Moreover, to the extent that there is contended inter-dependency between the claims of Ms Marks and the contended contravening conduct of UBS, the applicants stand susceptible of a joint and several costs order in relation to the proceedings at large should they fail in their case.
156 Having regard to all of these considerations and weighing them all in the balance, it seems to me that the proper course is not to order security for costs. I am satisfied that some of the factors I have discussed suggest that UBS's position ought to be protected by a security for costs order but weighing all of the factors in the balance overall and taking very particular account of the features to which UBS has pressed emphatic attention, it seems to me that the overall balance is such that the interests of justice are best served, in the context of the controversy between these parties in this proceeding, by not ordering security for costs, as things presently stand.
157 Having regard to all of these considerations I am minded to dismiss the application with costs. However, I propose to adjourn the application and direct Mr Tyne as trustee of the Argot Unit Trust to file an affidavit within 30 days exhibiting a copy of the Argot Unit Trust Deed and a copy of the profit and loss statements and balance sheets for the Argot Unit Trust for the financial years ending 30 June 2013 and 30 June 2014. The contention put is that the Trust has no assets and that those standing behind the Trust are not capable of providing any security or undertaking in support of the proceedings. I propose to examine the profit and loss statements and balance sheets for those two financial years before making final orders in the matter. It may be necessary to take further short written submissions from the parties before making final orders. On the assumption that the financial statements demonstrate that the Trust has no assets (leaving aside any question of an asset in the form of a claim against UBS in these proceedings) my present inclination is to dismiss the application for security with costs. If it emerges on the basis of the financial statements that the Trust has assets, I will consider further whether any of those assets ought to be made the subject of an order for security for costs in support of the trustee's right of indemnity.
I certify that the preceding one hundred and fifty-seven (157) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood.