FEDERAL COURT OF AUSTRALIA

Nathan v Burness (Trustee), in the matter of Nathan [2026] FCA 672

ORDERS

THE COURT ORDERS THAT:

1.    On or before 26 June 2026, pursuant to section 56 of the Federal Court of Australia Act 1976 (Cth), the Applicant is to provide security for the Respondents’ costs of and incidental to this proceeding in the amount of $32,000.

2.    The security is to be provided by way of irrevocable bank guarantee in a form acceptable to a Registrar of this Court or alternatively by payment into Court as a lump sum.

3.    The proceedings are to be stayed until such time as the security is provided in accordance with Orders 1 and 2 above.

4.    If the security is not provided in accordance with Orders 1 and 2 above, the proceeding be dismissed.

5.    The Applicant pay the Respondents’ costs of and incidental to this application.

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

REASONS FOR JUDGMENT

OWENS J:

1    Mr Kailai Nathan was made bankrupt more than seventeen and a half years ago: Capital Finance Aust Pty Ltd v Nathan [2008] FMCA 1363. Although the administration of his bankrupt estate has been finalised, he has not been discharged from bankruptcy. That is because he has never filed a statement of affairs in accordance with section 54 of the Bankruptcy Act 1966 (Cth), with the result that the time period specified in section 149 of that Act has not started to run.

2    By these proceedings, Mr Nathan seeks an order pursuant to section 153B of the Bankruptcy Act annulling his bankruptcy. It is not the first time he has sought such an order. He previously did so in 2010, albeit on what he contends were different grounds. That application was dismissed with costs in 2011: Nathan v Burness (No 2) [2011] FCA 289 (Tracey J).

3    The respondents to these proceedings are the trustees of Mr Nathan’s bankrupt estate. They have filed an interlocutory application seeking orders for security for costs, pursuant to section 56 of the Federal Court of Australia Act 1976 (Cth) and rule 19.01 of the Federal Court Rules 2011 (Cth). The parties were agreed that the application should be determined on the papers. For the reasons that follow, the respondents are entitled to security.

EVIDENCE

4    The respondents relied upon two affidavits:

(a)    an affidavit of Paul Burness, the first respondent, sworn on 20 March 2026; and

(b)    an affidavit of Jonathan Leung, the solicitor for the respondents, sworn on 20 March 2026.

5    On 2 April 2026, Mr Nathan filed an affidavit in response to the security application, sworn by him on 1 April 2026. In that affidavit, however, and in his submissions on the security application, Mr Nathan referred to matters raised in, and documents annexed to, an affidavit sworn by him on 17 December 2025, and filed in support of his originating application on 18 December 2025. I have had regard to all of the material to which Mr Nathan has referred.

APPLICABLE PRINCIPLES

6    The respondents invoked the jurisdiction conferred by section 56 of the Federal Court Act, along with rule 19.01(1) of the Rules. The Court’s discretion is broad and unfettered, subject only to the limitation that it be exercised judicially: Magdwick v Kelly [2013] FCAFC 61; (2013) 212 FCR 1 at [6] (Allsop CJ and Middleton J). The outcome in each case must depend on the particular circumstances, with the discretion to be exercised having regard to whether the interests of justice would be best served by making or refusing the order: see, e.g., Frigger, in the matter of Computer Accounting & Tax Pty Ltd (in Liq) (No 2) [2018] FCA 612 at [5] (Colvin J). The onus of persuasion, of course, rests on the party seeking security: Hillier v Martin (No 24) [2026] FCA 273 at [14] (Colvin J). Many cases have identified lists of potentially relevant considerations: see, e.g., Madgwick at [7]; Equity Access Ltd v Westpac Banking Corporation [1989] FCA 520; (1989) ATPR 40-972 at 50,635 (Hill J); KP Cable Investments Pty Ltd v Meltglow Pty Ltd [1995] FCA 76; (1995) 56 FCR 189 at 196-198 (Beazley J). But they should not be treated as a checklist, and whether a consideration has significance and, if so, the weight that it should be afforded, will depend on the particular circumstances of each case: Frigger at [9]; Hillier at [8].

7    Of particular significance to the present application are the following matters:

(a)    On an application for security for costs, while the applicant’s prospects of success may be a relevant consideration, it is not appropriate to investigate in considerable detail the likelihood or otherwise of success in the action, particularly where not all the evidence has been put on or tested: Appleglen Pty Ltd v Mainzeal Corporation Pty Ltd (1988) 79 ALR 634 at 635 (Pincus J), quoting Porzelack KG v Porzelack (UK) Ltd [1987] 1 WLR 420 at 423 (Browne-Wilkinson VC); Equity Access at 50,636 (Hill J).

(b)    In cases where security for costs is sought against a natural person, impecuniosity alone will not provide a basis for ordering security for costs; there must be some additional factor: Frigger at [10]; Hillier at [9]. That approach reflects the concern that poverty should not prevent access to the courts. As Mortimer J observed in Kiefel v State of Victoria [2014] FCA 604 at [51]:

There is something of a contradiction in examining impecuniosity in the context of an application for security for costs. Asserted impecuniosity may be the catalyst for an application, because that status provides a rational foundation for the proposition that a respondent cannot reasonably expect to recover its costs if a proceeding (or appeal) is successfully defended. Yet, asserted impecuniosity also tells against capacity to provide security for costs. This seems to be what underlies the consistent line of authority to the effect that impecuniosity by itself is not a justification for security for costs.

(c)    Some examples of the kind of additional factors that may justify an order for security for costs were collected by Lindgren J in Knight v Beyond Properties Pty Ltd [2005] FCA 764 at [33]:

(i)    the party opposing security resides outside Australia;

(ii)    the party opposing security is bringing a claim substantially for the benefit of others;

(iii)    the claim of the party opposing security lacks prospects of success;

(iv)    large costs would be involved to the party seeking security (in addition to the opposing party’s lack of prospects of success); and

(v)    an order for security would not stultify the proceeding, and the quantum of security is not oppressive.

(d)    Those considerations are, of course, not exhaustive. The respondents here, for example, placed reliance on Mulhern v Pearce (No 2) [2014] FCA 805 at [129] (Collier J), in support of a submission that the facts that a bankrupt had been deliberately uncooperative with his trustees in bankruptcy, and had repeatedly commenced proceedings which are substantially repetitive, were relevant to the exercise of the discretion. As I will explain, however, while I would not embrace the full apparent breadth of that submission, I do agree that the fact of repetitive litigation has potential relevance.

(e)    Overall, though, it is important to bear in mind that an application for security for costs should not be used as an alternative means by which to summarily dismiss a proceeding: Nyoni v Shire of Kellerberrin (No 9) [2016] FCA 472 at [25] (Mortimer J). The fundamental question is whether “it is fair in the particular circumstances of a case that a particular respondent not assume the risk usually assumed by respondents in litigation, and have available something in addition to the usual mechanisms for pursuing costs orders”: Kiefel at [88].

8    The amount of any security that is ultimately ordered is a matter for the Court’s discretion, considering what is just in the circumstances: Hillier at [47]. Generally, the amount ordered will reflect a reasonable estimate, based on evidence from the applicant for security, of the costs which the opposing party would be ordered to pay if unsuccessful at trial, and will not be a complete and certain indemnity: Hillier at [47].

THE RELEVANT FACTUAL BACKGROUND

9    On 28 May 2001, Mr Nathan entered into an agreement with Capital Finance Australia Ltd to finance the acquisition of a motor vehicle. The agreement required Mr Nathan to make periodic payments to Capital Finance. By early 2004, Mr Nathan had defaulted on making such payments, but had retained possession of the vehicle.

10    On 21 January 2004, Capital Finance commenced proceedings in the County Court of Victoria, seeking to recover the debt owed to it under that agreement. On 2 July 2004, when Mr Nathan had not appeared to defend the proceedings, it obtained default judgment in the sum of $70,181.44, including interest and costs. It entered that judgment in the registry on 11 August 2004. The copy of the document that was authenticated by the registry itemised the amounts constituting the total judgment sum of $70,181.44.

11    On 21 December 2004, Capital Finance issued a bankruptcy notice to Mr Nathan based on the judgment debt obtained in the County Court. On 9 February 2005, Mr Nathan applied to the Federal Magistrates Court of Australia to have that bankruptcy notice set aside. That application was dismissed on 21 March 2005.

12    In the meantime, on 2 March 2005, Mr Nathan had applied to the County Court of Victoria seeking to have the default judgment set aside. That application was dismissed on 4 May 2005. Capital Finance took out orders, entered in the registry on 7 November 2005, following this judgment, in the following terms:

1.    Judgment for the Plaintiff.

2.    The Defendant to pay the Plaintiff’s costs, such costs to be taxed on Scale D in default of agreement.

13    On 1 June 2005, Capital Finance issued a second bankruptcy notice to Mr Nathan. In July 2005, on the basis of a failure to comply with that notice, Capital Finance presented a creditor’s petition in the Federal Magistrates Court seeking a sequestration order against his estate. On 28 July 2006, Riethmuller FM dismissed that petition, on the ground that it did not comply with section 44 of the Bankruptcy Act: Capital Finance Australia Ltd v Nathan (No 2) [2006] FMCA 1051.

14    On 15 November 2007, Capital Finance issued a third bankruptcy notice based on the judgment debt of $70,181.44. Capital Finance did not annex to that notice the original copy of the default judgment it had obtained in 2004. For some reason, it had prepared a new document which it had authenticated by the registry of the County Court of Victoria. The registry applied the Court’s seal bearing the date 11 August 2004 (being the date the judgment was originally entered). While the substantive content of the new document was the same as the earlier document, there were a few differences, largely of a typographical nature.

15    On 21 April 2008, Capital Finance presented and filed another creditor’s petition in the Federal Magistrates Court. On 10 June 2008, Mr Nathan filed a notice of intention to oppose the creditor’s petition, and the matter was heard by Barnes FM on 21 August 2008. On 7 October 2008, Barnes FM delivered judgment in Capital Finance Aust Pty Ltd v Nathan [2008] FMCA 1363, making a sequestration order against Mr Nathan’s estate. His bankruptcy was taken to have commenced on 21 February 2008, and Barnes FM ordered that Capital Finance’s costs be taxed and paid from Mr Nathan’s bankrupt estate. The respondents were appointed as joint and several trustees of Mr Nathan’s bankrupt estate.

16    On 13 September 2010, Mr Nathan filed his first application to annul his bankruptcy. The application named Mr Burness, who is the first respondent in these proceedings, as a respondent, and Tracey J subsequently ordered that Mr Lane, who is the second respondent in these proceedings, be joined as well (alongside Capital Finance).

17    The grounds advanced by Mr Nathan in support of his application were as follows:

(a)    The default judgment on which [Mr Nathan’s] bankruptcy was founded[, being the fresh copy authenticated in 2007,] was not a judgment obtained in a proceeding.

(b)    Rule 4.02(1) of the Federal Court (Bankruptcy) Rules 2005 (Cth) (“the Rules”) which requires that a creditor’s petition be in accordance with Form 6 of the Rules had not been complied with.

(c)    A proof of debt, lodged on 18 December 2008 by Capital Finance, recorded that Capital Finance had a security interest in the car valued at $15,000 whereas, before the Federal Magistrate, Capital Finance had submitted that a nil valuation attached to the vehicle.

(d)    The failure of Capital Finance to comply with rule 4.08 following the making of the sequestration order.

(e)    Contradictory statements had been made by Capital Finance about whether the commercial agreement between that company and Mr Nathan was properly to be described as a hire purchase agreement or a lease agreement.

18    On 31 March 2011, Tracey J dismissed Mr Nathan’s application with costs. In respect of the argument that the default judgment was “not a judgment obtained in a proceeding” (because of its provenance that I have described above), his Honour found that Capital Finance’s reliance on that document was not a reason to annul Mr Nathan’s bankruptcy. His Honour said (at [18]):

The document which was authenticated, under the County Court Civil Procedure Rules, in 2007 provided a record of the making of the default judgment in 2004. It was a record on which Capital Finance was entitled to rely in seeking the issue of a bankruptcy notice and in establishing the existence of a judgment debt. The variations between the original authenticated order and the order obtained in 2007 were immaterial. Critically, both documents certified that Mr Nathan was indebted to Capital Finance to the extent of $70,181.44.

19    No appeal was brought from Tracey J’s decision. Mr Nathan has never paid the costs he was ordered to pay to the trustees.

THE BASIS UPON WHICH THE ORDERS WERE SOUGHT (AND RESISTED)

20    The respondents advanced five interrelated reasons in support of their application for security for their costs:

(a)    First, they submitted that they considered themselves “duty bound” to participate substantively in the proceedings and to act as a contradictor to Mr Nathan’s application. While they accepted that the role that a trustee ought to take in an annulment application depends on the circumstances of the case, they submitted that here the trustees have been named by Mr Nathan as respondents to his proceeding and that, if they do not appear, there will be no contradictor. They said that they are uniquely placed to put relevant submissions and evidence before the Court.

(b)    Secondly, as a result of their participation in the proceedings the respondents will incur significant costs. Mr Leung deposed to an itemised estimate of such costs in the sum of $45,820, which the respondents submitted is the appropriate quantum of security.

(c)    Thirdly, they submitted that there is a very significant risk that Mr Nathan would not satisfy an adverse costs order. There are no assets in Mr Nathan’s bankrupt estate to satisfy the outstanding remuneration and expenses of the respondents in the sum of approximately $128,400. Additionally, a costs order was made in favour of the respondents following the dismissal of Mr Nathan’s earlier attempt to have his bankruptcy annulled. He has not paid any amount pursuant to that order.

(d)    Fourthly, the respondents submitted that Mr Nathan’s application has no prospects of success. They said that the application is subject to an issue estoppel and constitutes an abuse of process. Further, they said, even if the discretionary power to annul Mr Nathan’s bankruptcy was enlivened, it would not be exercised because of Mr Nathan’s ongoing non-cooperation with the respondents and with the Court, and because a period of over 17 years has elapsed since the sequestration order was made.

(e)    Fifthly, they submitted that Mr Nathan’s inclination to institute “repetitive” proceedings which lack merit is a public interest consideration weighing in favour of an order for security.

21    Mr Nathan made a variety of arguments in response. The principal themes of his arguments were, I think, as follows:

(a)    First, Mr Nathan emphasised that he was not seeking to re-litigate the same issues that had been determined in 2011 in his first annulment application. He submitted that there was “a critical distinction” between his arguments in the two applications. I understood the difference to be that in 2011 he had argued that the document authenticated by the Victorian County Court registry in 2007 was not a judgment capable of supporting the issuance of a bankruptcy notice. In these proceedings, on the other hand, he also proposes to mount a more fundamental attack on the existence of a judgment in favour of Capital Finance. He says that the “central issue” in these proceedings is “whether there is a valid and enforceable judgment debt capable of supporting the bankruptcy notice” issued to him. The key integers of his new argument, as I understood it, were:

(i)    First, there had not crystallised an enforceable judgment debt in the amount of $70,181.44 as at 11 August 2004 (when the judgment of the Victorian County Court was entered). Why that is said to be so was not clear to me, although it may be connected to something that Mr Nathan contends was said in argument by Judge Davey, the Victorian County Court Judge who heard and determined his unsuccessful attempt to set aside the 2004 default judgment in 2005. In any event, Mr Nathan relies on the fact that the orders that were made by Judge Davey in 2005 did not specify the amount in which judgment was given against him.

(ii)    Secondly, after Mr Nathan had been made bankrupt, the respondents disclaimed (pursuant to section 133 of the Bankruptcy Act) the finance agreement upon which Capital Finance had sued him to judgment. Mr Nathan said that the disclaimer retrospectively extinguished the petitioning creditor’s rights, and that any judgment that sought to give effect to the disclaimed agreement was itself extinguished. It follows, he will submit, that there was no enforceable judgment debt capable of supporting the bankruptcy notice issued to him.

(b)    Secondly, Mr Nathan disputed that the proceedings involved any particular complexity, with the central issue simply being “the enforceability of an alleged judgment debt on the available evidence”. Mr Nathan was, in other words, submitting that the respondents’ submission that they would be likely to incur substantial costs in defending the proceedings should not be accepted.

(c)    Thirdly, Mr Nathan submitted that the respondents’ allegations that he had engaged in an “ongoing pattern of malfeasant conduct” were unsubstantiated, particularly given the absence of communication between him and the respondents from 2010, and that those allegations were, in any event, not relevant to the issue of security for costs.

(d)    Fourthly, Mr Nathan disputed the respondents’ claims that they had incurred remuneration and expenses of $128,400 to date. Mr Nathan argued that this sum was unverified and, in any event, the respondents’ interests were protected by section 154 of the Bankruptcy Act, which preserved their entitlement to those amounts even if the bankruptcy was annulled.

CONSIDERATION

22    There can be no doubt that, on the evidence before me, Mr Nathan is impecunious, and I am thus satisfied that there is a substantial risk that he would not be able to satisfy any adverse costs order.

23    In the whole time that he has been bankrupt, Mr Nathan has never filed a statement of affairs which might have shed some light on his present financial status. He also refused to participate in a mandatory examination regarding his estate (indeed, he was imprisoned for contempt of Court as a result of that refusal). Mr Nathan did not submit that there was any evidence before me that suggested he might have the capacity to meet any costs order that may be made against him.

24    The respondents, for their part, tendered a trial balance in respect of Mr Nathan’s bankrupt estate. That trial balance states that the “Total Available Funds” and “Net Available Funds” in respect of Mr Nathan’s estate are precisely “$0.00”. Otherwise, Mr Burness’ uncontradicted evidence is that the respondents are not aware of any assets owned, or which may be accessed, by Mr Nathan. Reinforcing the impression of all of this is the fact that there is, of course, an existing costs order made against Mr Nathan in favour of the respondents that has not been paid.

25    Mr Nathan argued that Mr Burness’ evidence that the respondents had incurred $128,400 in remuneration and expenses “has not been itemized or verified”. But even accepting for the sake of argument that some lesser number is the correct amount, I do not see how it could alter the conclusion of Mr Nathan’s impecuniosity. This is not a case where, on the evidence, there is a debate as to whether a person has sufficient assets to meet their liabilities. There is simply no evidence that Mr Nathan has any assets at all. (For that reason, the fact that section 154 of the Bankruptcy Act provides that the annulment of a bankruptcy does not affect a trustee’s right to recover amounts owing to them is not relevant to any issue that I have to determine on this application.)

26    While I am thus persuaded that the respondents have demonstrated that there is a real risk that Mr Nathan will not satisfy any costs order, it does not necessarily follow that any order for security for costs will necessarily stultify the proceedings. Mr Nathan’s failure, over many years and in these proceedings, to disclose any real information about his financial affairs means that the possibility that he would be able to satisfy any order that is made cannot be excluded. Nevertheless, I will determine this application on the basis that an order for security is likely to stultify the proceedings.

27    It follows that the critical issue on this application is whether there are factors in addition to Mr Nathan’s impecuniosity that make it appropriate to order him to pay security for costs.

28    As an initial matter, I have given careful consideration to whether it is in fact appropriate for the respondents to participate substantively in these proceedings. I am satisfied that it is. It is not just that Mr Nathan’s application names Mr Burness and Mr Lane as respondents. In circumstances where the events upon which Mr Nathan’s case is based took place many years ago (in some instances, more than twenty years ago), it is highly desirable, to ensure that a complete and accurate picture of those events is obtained, to have a contradictor, who has access to relevant documentary records and an understanding of the events in question, participate in the proceedings. That conclusion is a fortiori in respect of the issues that would necessarily fall to be considered upon the exercise of the discretion, if it were found to be enlivened. It is difficult to see how the Court could be confident that the discretion would be exercised on a fully informed basis without input from the respondents.

29    Insofar as the prospects of Mr Nathan’s case are concerned, consistently with the authorities I have already mentioned, I do not propose to consider in any detail the arguments raised by the respondents as to why they say his case will inevitably fail. It is sufficient to observe that his case is not an obviously strong or compelling one, in that:

(a)    It is difficult to see how Mr Nathan’s failed application to set aside a default judgment could be argued to have, nonetheless, somehow undone the effect of the judgment earlier given against him. I am aware that he wishes to contend that the 2004 default judgment was not an “enforceable judgment debt” but, on that point at least, the decision of Tracey J on Mr Nathan’s first annulment application is against him. And, of course, a default judgment is ordinarily, in accordance with well-known principles, a valid and enforceable judgment of a court.

(b)    The trustee’s disclaimer of the Capital Finance agreement cannot obviously assist Mr Nathan. The relevant rights of Capital Finance under that agreement merged in the judgment it obtained in the Victorian County Court in 2004. But, in any event, a disclaimer of onerous property under section 133 of the Bankruptcy Act operates prospectively, and is not capable of affecting any obligation or debt arising prior to Mr Nathan’s bankruptcy: see sub-section (2).

(c)    Assuming that Mr Nathan succeeded in demonstrating that the sequestration order ought not to have been made, it is well-settled that factors relevant to the exercise of the discretion include whether the applicant is presently solvent and, relatedly, whether he or she has made full disclosure of his or her financial affairs: Zaghloul v Jewellery & Gift Buying Service Pty Ltd t/as Nationwide Jewellers [2020] FCA 1045 at [12] (Banks-Smith J). Any unexplained delay in making the application is also a relevant factor. Again, it is not necessary for me to form any view about how the discretion would in fact be exercised. It is sufficient to note that in circumstances where Mr Nathan has never filed a statement of affairs, has given no evidence of his present financial status, and has not explained why he did not bring this application, at the latest, by 2013 when he discovered the 2005 County Court judgment upon which he relies, there would inevitably be a real issue about whether the discretion should be exercised in his favour.

30    So, while I do not propose to consider whether the respondents’ submission that Mr Nathan’s application has “no prospect of success” should be accepted, and while I will proceed on the basis that it has some prospect of succeeding, it plainly cannot be described as a case that is strong or compelling.

31    A factor of greater significance, it seems to me, especially in combination with my impressionistic assessment of the application’s prospects of success, is the fact that Mr Nathan has already made, and the Court has already determined, an application to annul his bankruptcy (cf. Mulhern at [129]). Although some of the precise arguments that he now wishes to make were not put to Tracey J on that application, he has already had the benefit of the Court considering the fundamental question that he seeks to have agitated on this application; namely, whether the default judgment given by the Victorian County Court in 2004 was a judgment capable of supporting the bankruptcy notice that was issued to him. That seems to me to put this case in a materially different category to those cases where an impecunious litigant would, if security were granted, be shut out completely from having their case considered by a court. Especially where the prospects of Mr Nathan’s new arguments, albeit considered on an impressionistic level, do not appear strong, the fact that he will not have been deprived of any opportunity to challenge his bankruptcy in court is significant. The courts are, as I have already mentioned, concerned to ensure that poverty not operate as a bar to access to the courts. But that concern has a significantly diminished operation in the context of an applicant who has previously had the opportunity to have the Court rule on the substantive issue in dispute.

32    I do not otherwise consider it to be relevant that Mr Nathan may have been (and I make no finding either way) uncooperative with the respondents throughout his bankruptcy, or to have engaged in an “ongoing pattern of malfeasant conduct” (again, cf. Mulhern at [129]). It is not apparent to me why those matters (even assuming that they are true) would be relevant to my exercise of the discretion to order security for costs. It is no part of the purpose of an award of security for costs to punish an applicant for past misconduct, or to incentivise good behaviour going forward. An applicant’s past conduct is only relevant to the extent that it sheds light on an issue relevant to the question of security (such as, for example, the risk that a costs order would not be satisfied).

33    It follows, therefore, that I do consider it to be relevant that Mr Nathan has not paid the costs he was ordered to pay in respect of his first annulment application. In Chang v Comcare Australia [1999] FCA 1677 at [31]-[32] (one of the cases to which Lindgren J referred in Knight at [33]), Moore J regarded it as relevant that the applicant had an existing, unsatisfied, obligation to pay the respondent’s costs from earlier litigation. At the very least, I am satisfied that the fact that an applicant has not paid costs ordered to be paid in relation to an earlier application of substantially the same nature is a reason why “it is fair in the particular circumstances … that a particular respondent not assume the risk usually assumed by respondents in litigation, and have available something in addition to the usual mechanisms for pursuing costs orders” (Kiefel at [88]) in relation to the second application.

34    It follows that I am satisfied that there are “additional factors” beyond Mr Nathan’s impecuniosity which warrant the making of an order for security for costs.

35    I have given careful consideration to whether it would be possible, and appropriate, to order security in a lower amount than that claimed by the respondents, perhaps on the basis that the question whether the discretion to annul Mr Nathan’s bankruptcy is enlivened could be determined separately, with the Court only proceeding to determine how the discretion should be exercised if that question were determined in Mr Nathan’s favour. Ultimately, though, I do not consider any such approach to be appropriate.

36    While there would be the potential to save some time in the preparation of evidence that would be relevant only to the exercise of the discretion, I do not consider that there would be any material difference in the costs incurred in relation to appearances in Court for a separate question on the first question only, and for the hearing of the application as a whole. On each of those scenarios, the same number of case management hearings would be involved, and a substantive hearing of no more than one day would be required for each. Furthermore, I doubt that any significant additional preparation time would be required for the respondents’ legal representatives to prepare for a full hearing. And if Mr Nathan did succeed in establishing that the discretion was enlivened, then proceeding in that way would inevitably involve a significant increase in total costs, not to mention delay and inefficiency. Overall, therefore, I am satisfied that security should be ordered in an amount referable to the respondents’ total costs of defending the application.

QUANTUM

37    Mr Leung’s affidavit, which provided an estimate of the respondents’ likely costs, was not the subject of any meaningful challenge by Mr Nathan. I am satisfied that the rates identified as being charged by the relevant practitioners in his calculations are reasonable. I am also satisfied that the estimates of the time involved to undertake the specified tasks are broadly reasonable, although I am not satisfied that the full amount would necessarily be recovered on a taxation. Taking a broad brush approach, and recognising that the respondents are not entitled to a “complete and certain indemnity”, I would apply a 30% discount to those costs for the purposes of ordering security. It follows that I would order security be provided in the (rounded) amount of $32,000.

CONCLUSION

38    It follows that I will make orders for security for costs in the amount of $32,000. I consider it appropriate to give Mr Nathan a period of 28 days to provide that security, which may be either by payment into Court, or provision of a bank guarantee. Pending provision of that security, it is appropriate that the proceedings be stayed. If the security is not provided, then I consider it to be appropriate to order that the proceedings be dismissed (rather than inviting some further application as to the fate of the proceedings, which seems to me would do nothing other than increase the costs involved for all concerned). The respondents should have their costs of this application.

Associate:

Dated:    29 May 2026