Aversa v Litigation Fund WCX Pty Ltd

LEEMING JA: Pending in the Court is a proceeding commenced by Litigation Fund WCX Pty Ltd against Mr Rosario and Ms Antonia Aversa. Litigation Fund is dissatisfied with the summary dismissal of its claim against the Aversas by judgment delivered by McGrath J on 5 November 2025: Litigation Fund WCX Pty Ltd v Aversa [2025] NSWSC 1301. Both sides had brought applications for summary disposal of the litigation and his Honour concluded in a judgment of 103 paragraphs that the proceedings should be dismissed as an abuse of process.

Litigation Fund WCX filed a notice of appeal on 12 November 2025. I am told that the Registrar picked up that no appeal as of right lay from the interlocutory decision (for the purposes of s 101(2)(e) of the Supreme Court Act 1970 (NSW)) and thereafter Litigation Fund WCX filed a separate originating process, by way of a summons seeking leave to appeal on 8 December 2025. Promptly thereafter, the Aversas filed a notice of motion seeking security for their costs.

Before me today, Mr Coshott, who is the sole director and shareholder of Litigation Fund WCX, has, with leave, appeared. Mr Eardley, who appeared for the Aversas in the proceedings below, has appeared for the applicants on the motion.

Mr Coshott, by written submissions supplied over the weekend, advised that he was willing to give a personal undertaking to be liable for any adverse costs orders against his company. That was not acceptable to the Aversas.

Litigation Fund WCX has also supplied a white folder in a form which (subject to any necessary supplementation) will be sufficient for the hearing of a leave alone application. The white folder includes the company’s summary of argument. That is a very short document of three and a half pages, more than half of which reproduces the grounds of appeal and extracts from High Court judgments, and less than one page of which develops any submissions in support of those grounds. In particular, some of the submissions merely say that the facts stated by the primary judge are incorrect or not supported by admissible evidence. This, for example, is the totality of what is said in support of ground 2: “At paragraphs 3, 55, 96-98, and 100 facts stated are either incorrect or not supported by admissible evidence”.

The document was also conspicuous by its failure to identify whether Litigation Fund WCX sought a concurrent hearing or a separate hearing of its application for leave, and if the latter, whether it wished to have an oral hearing.

The affidavit of the Aversas’ solicitor, made by Mr Christopher John Morris, an employed solicitor, proceeded on the basis that there would be a concurrent hearing lasting one day. He estimated that the costs incurred would be (including GST) some $63,277.50, a figure to which I will return, noting that there are aspects of it that Mr Eardley did not before me press.

When I drew to Mr Coshott’s attention the failure of the summary of argument to identify how the proceeding in this Court was to proceed, he advised on behalf of his company that he would prefer a leave alone determination on the papers, understanding that the consequence of that would be the two Judges of Appeal would review the papers and either grant or refuse leave. If leave were refused, that would be the end of the proceedings in this Court.

I gave Mr Eardley an opportunity to obtain instructions as to his clients’ attitude to what had belatedly been proposed in relation to the hearing of the appeal. They agreed that there should be a leave alone hearing, but they insisted, as is their entitlement, upon that being an oral hearing.

Ordinarily when both parties are agreed that there should be a leave alone hearing, the Court will accommodate their joint wish, and nothing has been said to me and I have seen nothing in the materials to suggest that any other course is appropriate in this case. That carries with it the consequence, as Mr Eardley acknowledged, that the security that was sought, in the event that it is ordered, will necessarily be in a smaller amount because of the limited nature of the leave alone hearing.

I now turn to the various matters raised by the parties in support or against the ordering of security. Mr Coshott’s threshold point is that his personal undertaking ought be a complete answer to the application.

Nothing is known, on the evidence before me, as to the assets of either Litigation Fund WCX or Mr Coshott personally, save that the former is not the legal owner of an real property in Australia. No notice to produce was issued to Litigation Fund WCX. Instead the solicitor requested standard financial information and there was no response to that request in ordinary correspondence. No criticism can be made in relation to the failure to make inquiry about Mr Coshott’s assets because the proffering of a personal undertaking was something that emerged only over the weekend.

The parties did not engage in submissions on this point, which was addressed in some detail in this Court’s decision in Suchand Pty Ltd v Colbran and Stone (2024) 115 NSWLR 587; [2024] NSWCA 250. In short, while there is some interstate authority suggesting that such an undertaking is a complete answer (as Mr Coshott contends), the settled position in this Court, and certainly binding upon me, is that such an undertaking is neither “generally or presumptively” determinative on an application, rather it is “a consideration, albeit a very powerful consideration, to be considered alongside other relevant discretionary considerations”: at [74].

Secondly, there is the fact that security for costs was ordered and (so I am told, although strictly the evidence falls short of establishing it) some $30,000 in security which had been ordered was provided for in earlier proceedings between the same parties at first instance. Strictly speaking, it is the existence of such orders for the provision of security for costs between the same parties in what, in substance, is the same dispute, as opposed to whether security was provided, which is a factor favouring the order of security in this court.

Next, there is evidence that costs orders have been made against Litigation Fund WCX in two earlier proceedings in the Supreme Court. Once again the evidence read strictly falls short of saying that those amounts have not been paid.

Thirdly, the evidence that was read without objection included “the respondents have incurred recoverable costs of no less than $243,116.41, including professional costs and council fees” in what have been called the First and Second Supreme Court proceedings (the present appeal is from a judgment in “the third Supreme Court proceedings”). After raising this with both parties, I have proceeded on the basis that what was intended, and is to be understood by that paragraph, is nothing to do with the recoverable costs but instead the solicitor/client costs that have been incurred in those two proceedings. The party/party costs recoverable on assessment will be less than that amount and in some cases they may be substantially less than that amount. What that amount is is not known.

Fourthly, some aspects of this litigation suggest that even hearing the application for leave to appeal alone may be a little more complicated than is sometimes the case. In part that is a consequence, I mean no disrespect to him, of the fact that Mr Coshott, the director, appears for his company with leave. I have referred above to the deficiencies in the summary of argument and to the incorrect filing of a notice of appeal rather than a summons seeking leave to appeal.

Mr Coshott correctly and candidly acknowledges that he wishes to supply a further summary of argument, this time one that complies with the rules. He is right to do so. That is but an indication that there may be some additional complexity and therefore time and cost incurred in dealing with the application for leave to appeal. Perhaps that is implicit in Mr Morris’ affidavit who predicts that no fewer than four directions hearings will be necessary for the preparation of the appeal, which is three more than most appeals in this Court require.

The fifth matter is the strength of the appeal. Mr Coshott contends that the appeal has strong prospects of success. Mr Eardley contends that the most likely result is that it will fail. I am in no position to express any view on the prospects of the appeal, or the application for leave to appeal. An example, which was raised in argument and is illustrative of the general problem is as follows.

Mr Coshott contends (in submissions supplied only over the weekend) that two paragraphs of the judgment of the primary judge are incorrect. These paragraphs concern his Honour’s reliance upon the absence of any review of the Registrar’s decision not to permit an amendment. He says that those paragraphs are simply wrong. Mr Eardley, I hope I am doing no injustice to him, expressed a recollection that that might not be so but was unable to be definitive about it and acknowledged, in my view entirely correctly, that it was not a point I could rule upon here and now.

The proposition in Mr Coshott’s written submissions is either true or correct and it is unlikely when the appeal – or the application for leave to appeal – is heard and determined there will be any dispute about it because it will be made clear from the transcript or documents that were filed or other parts of the record. But at the moment it is not possible for me to determine a view one way or the other as to the correctness of that.

The consequence of that, which is merely by way of example (I have referred above to other factual matters which Mr Coshott challenges but not only is the basis of the challenge not before me nor is the evidence upon which that challenge is put forward before me) is that this application for security for costs proceeds on the ordinary basis that the application is reasonably arguable, contrary to the submissions of both sides.

Sixthly, Mr Coshott also contends that it is necessary for the Aversas to establish special circumstances in order to obtain security for costs. That submission is based on Uniform Civil Procedure Rules 2005 (NSW) r 51.50. However, the very cases that Mr Coshott has relied upon in support of that proposition, which was not developed orally, confirm that it is confined to cases where a natural person is the appellant not a case such as the present where the Aversas rely upon s 1335 of the Corporations Act 2001 (Cth). For example, Mr Coshott relied upon Hung v Aquamore Credit Equity Pty Ltd [2022] NSWCA 123, as the first case in support of his proposition, but that states at [10]:

Drawing those matters together, I have concluded that this an appropriate case to exercise the discretion to order security for costs. I am informed by the fact that security was ordered between the same parties at first instance, and the fact that the procedural history of the litigation in this court, conducted by Mr Coshott on behalf of his company, suggests that some additional costs will be incurred, and have been incurred, that would not ordinarily be the case. However, I am with Mr Coshott in that the amount of security that is sought is excessive. As I have noted, Mr Eardley has accepted as much.

I have so far skipped over the details of the security that was sought. The $63,277.50 of estimated costs comprised four components. The first (some $11,687.50) was the costs of preparing the application for security for costs. Mr Eardley did not press any aspect of that.

The second component is an amount of $16,940 for considering the appellant’s submissions, white book and other appeal books, and preparing the respondents’ submissions.

I have mentioned above the limitations of the summary of argument to date, and Mr Coshott has advised that he will supply a replacement document in due course. In my view, a significant reduction in the amount of costs in responding to the summary of argument will be required.

The third component of the costs is an amount of $11,660, which is as to about half for the attendance at and preparation for no fewer than four directions hearing, and as to the remainder, for a variety of attendances upon and conferences with counsel. It is no criticism of the solicitor to note that that estimate was made before Mr Coshott advised that he would seek a leave alone hearing. It is plain that the very large majority of that component is not to be included within an order for security for costs.

The fourth component was the hearing. That is an amount of $22,990, reflecting one hour’s time of the solicitor, and two days preparation and a one day hearing by counsel. That is to say, all save $715 is counsel’s time. Mr Eardley readily conceded that two days preparation for the hearing of a leave application (as opposed to the hearing of an appeal) was beyond what should properly be the subject of an application for security for costs, and he was right to do so.

Mr Coshott also submitted that the rates were too high. I mentioned during the hearing that in Schmidt v Elias (No 3) [2025] NSWSC 1062 I had referred to the Costs Assessment Rules Committee Guidelines dated 24 October 2023, which state that the daily rate allowable for junior counsel is between $2,400 and $5,600 exclusive of GST based on a ten hour day. The rates for counsel on which the application for security for costs has been based exceeds the amount stated in those guidelines. That is a matter of significance because the partial security reflected by an order for security for costs ultimately reflects the partial security of a successful litigant’s entitlement to recover costs as agreed or assessed from the unsuccessful litigant, pursuant to a costs order. Save in some exceptional case where the guidelines do not apply, it follows that the costs recoverable on assessment for counsel pursuant to a favourable costs order will be less than those stated in the affidavit.

Finally, I note that there is no evidence one way or the other before me to suggest that any order for security will stultify the proceedings.

The consequence is that a substantially smaller amount of security for costs should be ordered at this stage. Such an order cannot, in the event that it is complied with and there is a grant of leave, stand in the way of a further application for security for costs, although the inefficiency of that course, not to mention the costs involved in it, are something that the respondents would be well to bear in mind. They would also be wise to bear in mind that it is one thing to seek security for costs of an application for leave to appeal, and another thing entirely to seek security for costs of an application which has been the subject of a grant of leave, and which by that time will have been the subject of an exchange of submissions, and the consideration by both sides of each other’s submissions and the record.

There is one further matter I should note in relation to the possibility of a future application for security for costs. The premise of any such application will be that there has been a grant of leave. To be absolutely clear about it, I am not expressing a view one way or the other as to whether there can or should be a grant of leave. It will follow, however, that it will mean that the oral hearing will have involved costs incurred by the Aversas who will have failed in their submission that leave should be refused. That is an oral hearing that will have been brought about by the decision of the Aversas and the Aversas alone, where Litigation Fund WCX was content to have application for leave to appeal heard and determined on the papers. There is a deal to be said for the proposition that even in the event that there is a grant of leave, further security should not be ordered for the costs of a second day’s hearing in this Court, when the need for the second day will have been brought about by the unsuccessful stance by the Aversas insisting, as is their entitlement, on an oral hearing for the opposition of leave.

It is well settled that, as I have mentioned, security for costs provides, at best, a partial indemnity. I bear in mind that a significant discount has to be applied to the solicitor/client costs that are pressed, and continue to be relevant, and that a further discount needs to be applied to convert those amounts to party/party recoverable costs, and that a further discount needs to be applied in order to determine an appropriate amount of security. Ultimately, arithmetical precision is utterly illusory in a case such as this. The significant aspects of the response to the application for leave to appeal, which is to be heard by itself, are the preparation of a summary of argument, and the preparation and appearance of counsel to respond to oral submissions.

I am going to order that the applicant seeking leave to appeal, Litigation Fund WCX, provide security in the amount of $12,000, that being security for the respondents’ costs of the application for leave to appeal, noting that the application for leave to appeal is to be heard separately from the appeal, but at an oral hearing at a date to be fixed.

Perhaps I should just raise some matters with you before I make the formal orders.

[Discussion concerning timing and form of orders]

HIS HONOUR: Where that leaves us is 21 days from today for provision of - I am just going to talk you through the gist of it. I will make some formal orders in a moment. 21 days for security plus supplementary submissions, or replacement submissions I think is what they are.

HIS HONOUR: I make the following orders:

[Mr Eardley asked for a further adjournment to take instructions, following which he advised that he no longer sought an oral hearing. There followed submissions concerning the effect that had on orders].

HIS HONOUR: After timetabling orders consistent with the reasons I have just given were made, and the only outstanding issue was, so I thought, the question of costs of the application for security for costs, Mr Eardley sought an indulgence which was to seek further instructions as to whether his clients insisted upon an oral hearing. Mr Coshott did not object to that course and I granted a further short adjournment.

After that adjournment, Mr Eardley advised that his clients were willing to have the application for leave to appeal determined alone and on the papers. Mr Eardley acknowledged that the consequence was that the $12,000 I had ordered needed to be revisited because a component of that was the cost of his appearing at and preparing for the oral hearing which at that stage his clients had insisted upon.

Mr Coshott suggested that the costs to be incurred now, which were the subject of the application for security for costs, were so much smaller that they were, in effect, de minimis and ought not be the subject of a security for costs order at all. I indicated to him that there was, perhaps, an interrelationship between the two outstanding questions, namely, the amount of security for costs and the costs discretion in relation to the notice of motion that has now occupied two hours of the Court’s time. I suggested to him that perhaps there might be a small order for security for costs and no order as to the costs of the security for costs application. He had no objection to that.

Mr Eardley emphasised that in part the difference between his clients’ application for security for costs in the amount of $50,000 and the excessive amounts in the affidavit in support, and the much smaller amounts to which he would be entitled under the most recent instructions from his clients, was brought about in part by recent developments of Mr Coshott. That is so.

On the other hand, it remains the fact that the Aversas have brought this application without investigating before its hearing today any of the matters which I drew to the parties’ attention, which are obvious on the face of the documents, namely, that the summary of argument does not specify whether there is to be an oral hearing and whether there is to be an application for leave alone. It would have been very easy for such an inquiry to have been made at some stage prior to today, even bearing in mind that today is the first day of term, noting that the application was made on 7 January pursuant to a solicitor’s affidavit affirmed on 19 December, and the solicitor’s affidavit attached correspondence bearing upon the discretionary factors in the security for costs application which he had caused to be sent to Mr Coshott.

It is candidly and properly conceded by Mr Eardley that he is not entitled to the $12,000 security which I had been minded to order on the basis that there was to be an oral hearing. I think ultimately he accepted, and if he did not it does not matter because it is the fact, that the largest component of that $12,000 should be attributable to costs arising out of the need for an oral hearing. As much is palpably obvious from Mr Morris’ affidavit, for of the sum $51,000 which was pressed, almost half – slightly more than $22,000 – reflected Mr Eardley’s costs for preparing for and appearing at the hearing.

This application for security for costs is now, following the change of instructions from the Aversas, to be heard and determined on the basis that there will be no hearing. Accordingly, to the extent that there should be an order for security for costs it should be substantially less than the $12,000 I had previously indicated.

I continue to be minded to order an amount of security for costs, although I suspect the position might be different had the parties reached the position as to the way each wished the leave application to be heard and determined had been made clear prior to the hearing today. I will alter the orders made beforehand, replacing the $12,000 where it appears by $4,000.

Finally, I turn to the costs of the motion. On any view of the matter, there has been at best a very limited success by the Aversas in their application for security for costs. It is not necessary for me to go further, given that Mr Coshott is not entitled to any costs for his professional time, than to say that an appropriate outcome as to the discretion as to costs of the notice of motion filed 7 January 2026 is that there be no order as to costs with the intent that each party bear his, her or its own costs of that motion.