Federal Court of Australia

Khan v Magar [2026] FCA 45

ORDERS

THE COURT ORDERS THAT:

1.    The orders of Judicial Registrar White dated 9 December 2025 be set aside.

2.    The Appellant pay the Respondent’s costs of the interlocutory application seeking security for costs filed on 9 October 2025 on an agreed or assessed basis.

3.    Pursuant to s 56(1) and (2) of the Federal Court of Australia Act 1976 (Cth) and r 36.09(1)(a) of the Federal Court Rules 2011 (Cth), the Appellant is to give security for the Respondent’s costs of the proceeding up to the hearing of the appeal (NSD1547/2025), on the following terms:

(a)    the Appellant pay security in the amount of $25,000 (Security Amount); and

(b)    the Security Amount be paid into the Court within 21 days of the Court making these orders.

4.    Pursuant to r 36.09(1)(b) and (c) of the Rules, the proceeding be:

(a)    stayed until the Appellant pays the Security Amount; and

(b)    dismissed if the Appellant does not pay the Security Amount within 21 days of the Court making these orders.

5.    The Appellant pay the Respondent’s costs of the interlocutory application filed on 24 December 2025 seeking a review of Judicial Registrar White’s decision on an agreed or assessed basis.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

RAPER J:

1    This decision concerns an application for security for costs brought by Ms Magar against Mr Khan. Ms Magar was employed by Mr Khan. Ms Magar brought successful proceedings against Mr Khan on the basis that he had sexually harassed her and victimised her for complaining about his unlawful conduct in breach of ss 28B and 47A of the Sex Discrimination Act 1984 (Cth). By judgment delivered on 1 August 2025 and orders made on 20 August 2025, Bromwich J upheld Ms Magar’s claim and awarded her $305,000 in compensation and damages as well as the costs of the proceeding: Magar v Khan [2025] FCA 874; 342 IR 403 (primary judgment). Ms Magar’s solicitors acted on a contingency basis and her counsel on a pro-bono basis in the proceedings below. Mr Khan has not paid Ms Magar the ordered amounts nor applied for a stay of those orders. On 1 September 2025, Mr Khan lodged an appeal. The notice of appeal raises seven grounds, which largely concern purported procedural issues at trial, and seeks that the judgment be set aside, the proceeding be remitted for re-hearing, and for Ms Magar to pay Mr Khan’s costs.

2    By interlocutory application filed on 9 October 2025 and heard on 5 November 2025, Ms Magar sought an order that Mr Khan give security for her costs of the appeal in the amount of $50,000, pursuant to s 56 of the Federal Court of Australia Act 1976 (Cth) and r 36.09(1)(a) of the Federal Court Rules 2011 (Cth). Ms Magar’s solicitors and counsel on appeal appear on a contingency basis. In default of payment of any order for security, Ms Magar sought an order that the appeal be stayed. On 9 December 2025, a Judicial Registrar dismissed the application and published reasons for the decision.

3    By further interlocutory application filed on 24 December 2025, Ms Magar seeks a review of and applies to set aside the Registrar’s decision and reagitates for Mr Khan to give security for her costs of the appeal in the amount of $50,000 and a stay of the appeal.

4    This Court may review a Registrar’s decision upon application, such as this one, pursuant to s 35A(6) of the FCA Act. Such a review requires this Court to conduct a re-hearing de novo. The review does not “hinge, or focus, upon error in the decision of the registrar”, it is a hearing de novo, in which the matter is considered afresh on the evidence and on the law at the time of the review: Bechara v Bates [2021] FCAFC 34; 286 FCR 166 at [17].

5    Accordingly, little attention needs to be given to the Registrar’s decision, save to note that the Registrar ultimately refused to grant security. The Registrar considered Mr Khan’s grounds of appeal and ultimately assessed the appeal as being barely arguable and amenable to swift disposition. The Registrar found that any order for the payment of security in any substantial amount would not be satisfied, having the effect that the appeal would be dismissed without a hearing on its merits. The Registrar considered that there is a public interest in permitting a person who has been found to have engaged in very serious sexual harassment, and victimisation, an opportunity to pursue the appeal process available to him, if he wishes to do so. The gravity of the conduct here was said to be not the same as that considered by Abraham J in Lehrmann v Network Ten Pty Limited [2024] FCA 1226 at [54], but nonetheless considered it extremely serious, substantially destructive of reputation, and conduct that justifiably attracts public opprobrium.

6    The Registrar considered the purpose of an order for security for costs being to ensure that a successful respondent to a claim will have a fund available within the jurisdiction of the Court against which the respondent, if successful in defence, can enforce a judgment for costs in the respondent’s favour, citing Commissioner of Taxation v Vasiliades [2016] FCAFC 170; 344 ALR 558 per Kenny and Edelman JJ at [72]. Notably, of course, the case here involves an appeal. The Registrar went on to consider it significant that Ms Magar’s evidence indicated that her representatives, the Redfern Legal Centre and counsel, will not seek to recover any costs from Ms Magar unless those costs can be recovered directly from Mr Khan if Ms Magar is successful in defending the appeal. Therefore, the Registrar found that any potential prejudice to Ms Magar from the result (if security was not granted) was rendered illusory. But for this last consideration, the Registrar would have had little hesitation in ordering security for Ms Magar’s costs of the appeal.

7    The issues for this Court to determine are whether it should exercise its discretion to make an order that Mr Khan give security for Ms Magar’s costs of the appeal in the amount of $50,000 (or in any other amount), pursuant to s 56 of the FCA Act and r 36.09(1)(a) of the Rules. The Court must also determine, if an order for security is made, whether the proceeding should be stayed until Mr Khan pays the security and dismissed if he does not pay within a particular time period of making the orders sought by Ms Magar.

8    For the reasons which follow, I will grant security in the amount of $25,000, payable within 21 days of the date of this order and otherwise grant a stay if the security is not paid into Court.

Principles governing applications for a security for costs

9    This Court may order an applicant in a proceeding in the Court, or an appellant in an appeal under Division 2 of Part III of the FCA Act, to give security for the payment of costs that may be awarded against him or her. The security shall be of such amount, and given at such time and in such manner and form, as the Court directs, pursuant to s 56(2) of the FCA Act.

10    Rule 36.09 of the Rules provides that:

(1) A party may apply to the Court for an order that:

(a) the appellant give security for the costs of the appeal, and for the manner, time and terms for giving the security; and

(b) the appeal be stayed until security is given; and

(c) if the appellant fails to comply with the order to provide security within the time specified in the order—the appeal be stayed or dismissed.

11    There was no disagreement as to the principles to be applied on the present application, determining de novo whether orders for security should be made. Each party referred to the recent Lehrmann decision in which Abraham J helpfully distilled the principles that have come to inform the discretionary exercise:

[19] The power to order security is discretionary and has been described as “broad”: James v Australian and New Zealand Banking Group Ltd (No 1) [1985] FCA 539; (1985) 9 FCR 442 at 444; Madgwick v Kelly [2013] FCAFC 61; (2013) 212 FCR 1 (Madgwick) at [6]; Stapleton v Fairfax Media Publications Pty Ltd [2019] FCA 1418 (Stapleton) at [6]-[7]. The discretion “is to be exercised in light of the facts and circumstances of the particular case”: Stapleton at [6], quoting Botsman v Bolitho [2018] VSCA 111 at [36]. The issue is essentially one of risk management: East Grace Corporation v Xing (No 1) [2005] FCA 219 at [6].

[20] Against that background, the authorities reflect the type of factors which have been considered as relevant on such applications, which have included the following.

[21] First, whether the application for security for costs has been brought promptly: KP Cable Investments Pty Ltd v Meltglow Pty Ltd [1995] FCA 76; (1995) 56 FCR 189 at 197.

[22] Second, whether the applicant (or appellant) is impecunious such that they would not be able to satisfy a costs order against it: Bell Wholesale Co. Ltd v Gates Export Corporation [1984] FCA 29; (1984) 2 FCR 1 at 4; Australian Equity Investors v Colliers International (NSW) Pty Ltd [2012] FCAFC 57 at [25]-[30].

[23] Third, whether the appellant is a natural person or a corporation. Although courts are disinclined to order security against natural persons, even if impecunious, as Lindgren J observed in Knight v Beyond Properties Pty Ltd [2005] FCA 764 at [32]-[33], it has been recognised that being a natural person is no bar to an order for security for costs.

[24] Fourth, the prospects of success of that person’s claim, or the merits of that claim: see, e.g., Staff Development & Training Centre Pty Ltd v Commonwealth of Australia [2005] FCA 1643 at [12]-[13]. Prospects of success may be especially relevant to an application for security for costs of an appeal given “the appellant has had his day in court”: Singh v Secretary, Department of Employment and Workplace Relations [2007] FCA 90 at [12].

[25] Fifth, interrelated with impecuniosity is whether an order for security would stifle the litigation. It is generally observed that poverty is no bar to a litigant: Cowell v Taylor (1885) 31 Ch D 34 (Cowell) at 38. This is particularly so where it is a primary proceeding, although the position on appeal may be different: see, e.g., Dye v Commonwealth Securities Limited [2012] FCA 992 (Dye) at [27]. Cf Nyoni v Shire of Kellerberrin (No 9) [2016] FCA 472 (Nyoni) at [8]. It is for the party resisting the order to show that impecuniosity would stultify the proceedings.

[26] The factors that may be relevant cannot be exhaustively stated, with the only limitation being that the discretion is exercised judicially: Madgwick at [6]. The Court’s discretion is to be exercised having regard to whether the interests of justice are best served by making or refusing an order: Gentry Brothers Pty Ltd v Wilson Brown & Associates Pty Ltd [1992] FCA 592; (1992) 8 ACSR 405 at 411; Karis at [38].

Competing Submissions

12    The parties made oral submissions as to their respective positions with respect to the application before me at the case management hearing and then both agreed that the appropriate course was for the Court to otherwise consider their written submissions and evidence as filed before the Registrar and determine the matter on the papers.

13    In support of the application, Ms Magar relied upon the affidavit of Ms Seri Feldman-Gubbay affirmed on 3 October 2025. Ms Magar made the following submissions below which are reaffirmed upon this review application, in the following terms:

(1)    the application for security has been brought promptly and prior to either party incurring any significant costs in the context of the appeal.

(2)    the evidence of Ms Seri Feldman-Gubbay establishes that Mr Khan is impecunious such that he would not be able to satisfy a costs order against him.

(3)    whilst Mr Khan is a natural person as Lindgren J observed in Knight v Beyond Properties Pty Ltd [2005] FCA 764 at [32]-[33], it has been recognised that being a natural person is no bar to an order for security for costs.

(4)    the prospects of Mr Khan’s appeal are clearly poor.

(5)    there is no evidence that making the orders sought by Ms Magar would stifle the litigation. Mr Khan has not adduced evidence to support such a contention and, as a consequence of his failure to adduce any evidence on this application, the Court should draw an inference that any evidence from Mr Khan would not have assisted his case.

(6)    there are no aspects of public interest which weigh in the balance against an order for security being made.

14    Ms Magar made the following short oral submissions before me at the case management hearing supplementing her written submissions. It was submitted that the fact of Ms Magar having entered into a contingent costs arrangement does not ward against the discretionary factors in favour of granting such an order. If Ms Magar is successful in her application, she will have the benefit of funds to pay her solicitors and counsel for the work they will be required to do in relation to the appeal. Ms Magar submitted that the potential benefit of these funds directly conflicts with the Registrar’s findings that prejudice to Ms Magar will be illusory if a security for costs order is not made.

15    If the Court comes to a view that $50,000 is not an appropriate figure to order, Ms Magar would be content with any sum of $50,000 or lower. If Ms Magar’s application is unsuccessful, this could have a chilling effect on solicitors and counsel who act for applicants on a contingency basis in that they would be penalised for doing so.

16    By contrast, before the Court below, and repeated as part of this review, Mr Khan made, in essence, the following submissions. Mr Khan acknowledged the breadth of the power but that it must be exercised judicially and gave emphasis to the following matters which he submitted warded against making the order:

(a)    there is a “disinclination” to order an applicant who is a natural person to provide security, at least in the absence of some factor in addition to impecuniosity, citing Vasiliades at [16] per Dowsett J; Knight at [32]–[33] and Sheather v Staples Waste Removals Pty Ltd [2012] FCA 998 at [18].

(b)    there was no dispute as to Mr Khan’s impecuniosity and his place of residence, being Australia. Mr Khan submitted that it is likely that he will become a bankrupt if/when Ms Magar commences enforcement action in relation to the judgement debt.

(c)    security for costs should not be ordered as it would completely stifle the proceedings. Mr Khan submitted that he cannot afford to pay the security sought by Ms Magar, his bank account balance is negligible, and his current liabilities exceed $490,000.

(d)    Mr Khan submitted that, while Ms Magar received the benefit of free legal representation in the original proceeding, he incurred significant debt in defending himself against her allegations in excess of $40,000. Mr Khan submitted that the firm acting for him acted on a "whatever he can pay, whenever he can pay in instalments” basis. Mr Khan submitted that, to date, he has only been able to pay $6,000 (and from the Bar table submitted that now a further $1,000 had been paid). Mr Khan submitted that given he is 62 years old, suffers from very serious health issues and earns approximately $2,000 a fortnight before tax from his part time employment, it is highly unlikely he will ever be able to pay the entire legal costs of the original proceeding, let alone of the appeal.

(e)    Mr Khan submitted that he has reasonable prospects of success or his grounds of appeal are “reasonably arguable” (per Lehrmann). Mr Khan submitted that his grounds of appeal largely relate to the Court’s failure to afford him procedural fairness. Mr Khan submitted that, while a detailed analysis of the prospects of success of the appeal is not possible based on the material currently before the Court, he nevertheless maintains that his grounds of appeal are, at the very least, arguable, and the Court should consider Ms Magar’s application on that basis, citing Lehrmann at [53]).

(f)    there is a genuine and compelling public interest in the appeal which weighs in favour of dismissing Ms Magar’s application for security. Mr Khan submitted that the reasons for this are two-fold. First, the grounds of appeal turn on notable questions of law, including the practical application of the rule in Browne v Dunn (1893) 6 R 67. Mr Khan submitted that the determination of such questions are likely to have a significant impact on the conduct of legal proceedings going forward. Secondly, Mr Khan submitted that the first instance decision drew widespread media coverage due to the seriousness of Ms Magar’s allegations and the historic award ordered by Justice Bromwich. Mr Khan submitted that the award of $305,000 was widely reported as a “record win”, and both Ms Magar and her legal representative gave interviews to various media outlets about the decision and Mr Khan’s alleged conduct during the original proceeding. Mr Khan submitted that News.com.au quoted Ms Magar’s legal representative as stating the following:

“[this] landmark decision should act as a warning to employers: if you tolerate sexist workplace cultures, target vulnerable workers for sexual harassment, or threaten defamation proceedings against employees who speak up about sexual harassment, you will face the most serious consequences… Despite legal intimidation at every step of this proceeding, our client persisted”

(g)    given the publicity surrounding the first instance decision, and the potential implications of the appeal for the future conduct of legal proceedings and cases in this developing area of the law, the appeal is likely to draw significant public interest.

(h)    ultimately, consideration of a security for costs application is an exercise in risk management, citing East Grace Corp v Xing (No 1) [2005] FCA 219 at [6]. Mr Khan submitted that the Court must determine whether there is a risk to Ms Magar of non-recovery of her costs in the event that she is successful in defending the appeal. Mr Khan submitted that there is no risk that Ms Magar will be out of pocket for her own legal costs in light of the following evidence given by her legal representative:

“In respect of the Appeal, Redfern Legal Centre continues to act for Ms Magar on a contingency basis. Counsel has also agreed to act for Ms Magar on a contingency basis for the appeal. Both Redfern Legal Centre and Counsel have agreed that they will not seek to recover any costs from Ms Magar unless those costs can be recovered directly from the Appellant if Ms Magar is successful in defending the Appeal” - Affidavit of Seri Brana Feldman-Gubbay at [19].

(i)    as a consequence Mr Khan submitted that, while there will be no actual detriment to Ms Magar, the injustice that will stem from an order granting security for costs is clear. Mr Khan submitted that he will not be able to meet the order for security, and he will be effectively prevented from exercising his right to appeal. Mr Khan submitted that this is an unacceptable outcome, given the seriousness of this matter and the allegations made against him, and the historic award ordered by the Court in the first instance decision. Mr Khan submitted that in the Lehrmann case, the Court acknowledged that a costs order made against the appellant would likely be unrecoverable by the respondent due to the appellant’s impecuniosity, but nevertheless, dismissed the respondents application for security, at [67].

17    In addition, at the case management hearing, Mr Gupta, on behalf of Mr Khan, made the following additional submissions:

(1)    Ms Magar’s legal advisors have confirmed, by way of Ms Feldman-Gubbay’s affidavit affirmed 3 October 2025 at [19], their written submissions dated 4 November 2025 and in the hearing in front of the Registrar on 5 November 2025, that they are acting on a contingency basis and will continue to work regardless of whether there is money available to pay them for their work, and that on this basis it is clear Ms Magar does not need this money to fight the appeal.

(2)    Ms Magar has provided insufficient evidence to justify the figure of $50,000 in security for costs to pay her legal advisors.

(3)    If Ms Magar succeeds in her application, Mr Khan will be unable to pay due to his impecuniosity.

Consideration

18    For the following reasons, it is my view that it is appropriate in all of the circumstances to make the order for security for costs.

19    First, the application was brought promptly.

20    Secondly, whilst impecuniosity is a factor that is necessarily given focus when considering whether to grant this kind of relief, the authorities make clear that where there are special circumstances involved, such as where the case is inarguable and in an appellate jurisdiction (as opposed to an applicant first bringing the proceeding), then a security for costs order may be warranted: Knight at [32]-[33]; Chang v Comcare Australia [1999] FCA 1677 (Moore J) at [32]; Sheather at [18].

21    Thirdly, being a natural person is no bar to an order being made. This is particularly so where the prospects of an appeal are poor, as is the case here.

22    A careful review of the appeal grounds, the decision below and the evidence and submissions of the parties suggests that Mr Khan’s appeal grounds have little, if any, merit. This is so given the majority of the grounds concern matters of procedure for which the Court has broad, discretionary powers and for which leave to appeal would be required. Further, the grounds appear, in certain instances, to be based upon assertions that are unlikely to be able to be made out in fact. In addition, in the main, it is not apparent from the grounds what the discernible appealable error is claimed to be.

23    Fourthly, the primary judgment concerned allegations of sex discrimination, sexual harassment and victimisation. I do not accept that merely the making of a claim of this kind or its defence is such that the proceedings have a “public interest” dimension.

24    Fifthly, an issue that was raised below, and had persuasive power before the Registrar’s decision, was the purported lack of utility of the order where it was said to be unnecessary in Ms Magar’s circumstances. This was said to be the case because Ms Magar has the benefit of a contingency arrangement on appeal with respect to both her solicitor and counsel where they will continue to act on her behalf even if security for costs orders are not made. I do not accept this.

25    The purpose of the granting of such an order is to protect a respondent beneficiary of a costs order from being wholly frustrated by the inability of an appellant (in this case) from satisfying that order. It is a power directed to risk management and securing, in this case, Ms Magar’s own legal costs. There is no question that Ms Magar, if she successfully defends the appeal, will be entitled to her costs. The fact that she has a contingency agreement in place will have no bearing on the question of her entitlement to costs at the end of the day.

26    It is my view that, in the circumstances of this case, the fact that Ms Magar has a contingency arrangement in place is not relevant to the determination of whether a grant of security should be made. Many persons, who are not the applicant for security, may ultimately be the beneficiary of such an order. It may be accepted that there may be utility in considering the fact of contingency arrangements in other cases. For example, where a respondent on appeal seeks security and relies on the fact that he or she will not have the benefit of legal representation unless a security for costs application is granted, this may be a relevant factor. It does not necessarily follow that the reverse applies where, despite the presence of a contingency arrangement, the respondent will continue to have the benefit of representation.

27    For all of the reasons already given, it is my view that it is appropriate in this case to grant security for costs.

28    Lastly, I am required to consider the quantum of the order sought. Ms Magar seeks an order in the amount of $50,000, payable within 28 days. The Court noted at the case management hearing that, given the current scheduling of the appeal, such an order would be payable after the hearing of the appeal. Mr Gupta, on behalf of Mr Khan, submitted that it did not matter whether the order for payment was 21 or 28 days given Mr Khan could not pay in either circumstance. It is my view therefore, that the order for payment should be payable within 21 days.

29    As to the quantum, I do not accept that Ms Magar has established that $50,000 is an appropriate sum to be ordered for a half-day appeal where the appeal grounds are of the number and nature described above. Ms Magar’s solicitor does not justify in her affidavit why that amount is appropriate by reference to the hourly and daily rates of junior counsel and the solicitors nor the extent of the work involved and the division of tasks. It is my view that a division of two and half days of junior counsel’s time would be sufficient to draft written submissions, prepare for the hearing and attend the appeal. Additional time, but less, would be required of the instructing solicitor. In the circumstances, an order in the sum of $25,000 would be appropriate.

Associate:

Dated:    4 February 2026