Interslice Pty Ltd v CCA Investments - Bass Hill Pty Ltd

By notice of motion filed on 8 May 2026, the appellant, Interslice Pty Ltd (Interslice) sought the following orders:

The first respondent on the appeal, CCA Investments – Bass Hill Pty Ltd (CCA), opposed the order for payment out. Instead, it sought an order, also pursuant to Pt 41 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR), that the sum the subject of Interslice’s application be paid out to it, in partial satisfaction of its costs at first instance. CCA separately had the benefit of an order for security for its costs at first instance in the amount of $20,000: Interslice Pty Ltd v CCA Investments – Bass Hill Pty Ltd [2021] NSWSC 1578.

On 18 May 2026, I heard argument on the notice of motion and, at the conclusion of argument, I made the orders that Interslice sought. These are my reasons for making those orders.

Interslice brought an appeal from the decision of Richmond J in proceedings it commenced against CCA, seeking damages for the alleged repudiation and termination of a lease and equitable lease of premises in Bass Hill, which were used as a commercial gymnasium. CCA, in turn, cross-claimed against Interslice, seeking arrears of rent, outgoings and other monies and damages. The primary judge dismissed Interslice’s claims save for repayment of the bond, and upheld the cross-claim, awarding CCA nominal damages of $10: Interslice Pty Ltd v CCA Investments – Bass Hill Pty Ltd (No 2) [2024] NSWSC 481 at [143].

As McHugh JA (Ward P and Leeming JA agreeing) described on appeal, the primary judge awarded the costs of the proceedings below (on both the claim and the cross-claim) against Interslice on the basis that it had been unsuccessful on the real issue in dispute, namely, whether Interslice’s termination of the lease was valid: Interslice Pty Ltd v CCA Investments – Bass Hill Pty Ltd [2025] NSWCA 175 at [300].

Interslice appealed from the decision of the primary judge. By notice of motion filed 6 September 2024, CCA applied for security for costs: Interslice Pty Ltd v CCA Investments – Bass Hill Pty Ltd [2024] NSWCA 247 at [2]. Interslice did not dispute that the jurisdictional ground in s 1335 of the Corporations Act 2001 (Cth) was established, or that an order for security should be made. However, it disputed the quantum of security sought: at [10].

On 15 October 2024, Gleeson JA made the following orders:

On the present application, CCA accepted that Gleeson JA’s orders were based on an assessment of the likely costs of the appeal. Nonetheless, it sought to make something of the fact that the order for security did not refer, in terms, to the costs of the appeal. Focusing on the words in order 1, “provide security for costs of $50,000”, CCA submitted that the purpose for which the funds were paid into court “was to provide security for CCA’s costs”. I do not accept CCA’s submission at the level of generality at which it was put, which involved reading order 1 divorced from Gleeson JA’s reasons. In the context of a judgment in which his Honour determined CCA’s application for security for costs of the appeal, the purpose of order 1 of his Honour’s orders cannot sensibly be construed as being for costs generally, including costs incurred in the proceedings at first instance. Contrary to CCA’s submission, Interslice’s position, that the security ordered by Gleeson JA was for the purpose of the appeal, did not involve an unduly narrow construction of the purpose for the payment of that amount into court.

CCA’s reliance on the terms of s 1335 of the Corporations Act also did not assist its submissions in this regard. CCA sought to emphasise that s 1335 is drafted more broadly than r 51.50(1) of the UCPR, indicating that s 1335 is more flexible in so far as it is not limited to appellate litigation. True it is that s 1335 is a provision of more general application, applying to proceedings where a corporation is the plaintiff, and that the terms of r 51.50(1) are more confined, consistently with the limited application of the latter to appeals in this Court. However, the drafting difference does not relevantly assist in the proper characterisation of the purpose for which the funds the subject of the present application were paid into court.

The amount of security that Gleeson JA ordered was paid into court. On 16 December 2024, the appeal was heard, and on 4 August 2025 the Court of Appeal handed down its decision: Interslice Pty Ltd v CCA Investments – Bass Hill Pty Ltd [2025] NSWCA 175. The Court upheld ground 4 of Interslice’s amended notice of appeal, by which Interslice contended that it had validly terminated the lease. McHugh JA stated that it followed from Interslice’s success on this ground that CCA’s cross-claim must be dismissed: at [298]. The Court otherwise dismissed the grounds of the amended notice of appeal, and dismissed CCA’s notice of contention.

The Court made orders which included a declaration as to Interslice’s valid termination of the lease, as well as judgment for Interslice against CCA in the sum of $10. In relation to the costs of the proceedings below, McHugh JA noted that the premise of the primary judge’s costs order had been upset on appeal, requiring the discretion to be re-exercised: at [300]. His Honour stated (referring to Interslice as the “Tenant” and CCA as the “Landlord”):

Interslice sought special leave to appeal to the High Court. On 4 December 2025, the High Court refused special leave to appeal with costs: Interslice Pty Ltd ACN 601 103 226 v CCA Investments – Bass Hill Pty Ltd ACN 634 907 369 [2025] HCADisp 301.

The correspondence between the parties in relation to payment out of the $50,000 following the Court of Appeal’s decision was annexed to the affidavit of Danka Bakic, the sole director and shareholder of Interslice, affirmed 28 April 2026. On 5 August 2025, being the day after the Court of Appeal’s judgment, Interslice’s solicitors wrote to CCA’s solicitors seeking consent to the payment out of court of the $50,000 paid into court pursuant to the orders of Gleeson JA.

CCA’s solicitors responded by letter dated 8 August 2025, stating that the Court has a wide discretion as to the release of this amount, citing the decision of Sackar J in Thomson v Golden Destiny Investments Pty Ltd (No 2) [2015] NSWSC 1929 (“Golden Destiny Investments”) at [151]. It also relied on the decision of the Court of Appeal in Cellarit Pty Ltd v Cawarrah Holdings Pty Ltd (No 2) [2018] NSWCA 266 (“Cellarit”) at [81] for the proposition that when considering how to disburse the monies, the Court takes account of the purpose of the payment into court. Asserting that the $50,000 was paid into court “to provide our client ‘security for costs’”, CCA’s solicitors stated that CCA sought payment of the $50,000 to it, as well as the $20,000 ordered by way of security at first instance, “in order to achieve that purpose”. The letter continued:

By letter dated 14 August 2025, Interslice’s solicitors disputed the basis on which CCA was refusing to release the funds, stating:

By email dated 23 February 2026, Interslice’s solicitors repeated their request for consent and foreshadowed the present application.

It was common ground before me that payment out under r 41.3 of the UCPR is discretionary, and that the discretion is broad: Golden Destiny Investments at [151]; Cellarit at [80]-[81]. In Cellarit at [81], Macfarlan JA stated that in making decisions about the payment out of funds, “the court engages in an exercise of prudential management of the funds to ensure their due administration and to ensure that the processes of the court are not abused”. Both parties also accepted that the discretion is informed by the nature and purpose of the payment into court: Cellarit at [81]; JKB Holdings Pty Ltd v de la Vega [2013] NSWSC 501 at [14]. In the latter case, Lindsay J observed that inquiring into the nature and purpose of the antecedent payment in to court “is necessary to ensure that the Court acts within its mandate, judicially, and in a manner that gives due recognition to the rights and expectations of persons who may claim to be ‘entitled’ to property affected by an exercise of the Court’s jurisdiction”.

It may be accepted, as CCA’s solicitors wrote in their correspondence with Interslice’s solicitors, and as was submitted to me, that CCA incurred costs at first instance that substantially exceeded the amount of security in the court below ($20,000). Those costs have yet to be assessed. Emma Brianne Watt, CCA’s solicitor with day-to-day conduct of the proceedings, deposed in her affidavit affirmed 15 May 2026 that she estimated the costs at first instance, excluding the costs of the cross-claim, as being in the order of $356,626. CCA submitted that in circumstances where Interslice’s impecuniosity was the basis for CCA’s application for the security that Gleeson JA ordered, release of the $50,000 to CCA would still be for the purpose of costs, and would go some way to meeting its costs. By contrast, it submitted, if the security were to be released to Interslice, its director Ms Bakic, who, together with her husband, Mr Robinson, at least partially funded the security, would obtain a benefit whilst being shielded from the downside of CCA pursuing its costs against the company.

I have referred above to the purpose for which Interslice paid the $50,000 into court, namely, as security for CCA’s costs of the appeal. This purpose was narrower than the description of the purpose of providing security per se that CCA asserted, in both its letter of 8 August 2025 and on the present application. The source of the funds paid into court on behalf of Interslice, and what may happen to the funds after they are paid out to Interslice, does not relevantly affect the proper characterisation of that purpose.

I accept Interslice’s submission that in the absence of any order of the Court of Appeal that Interslice pay CCA’s costs of the appeal, the purpose for which those funds were paid into court was at an end. Insofar as CCA submitted that the orders that the Court of Appeal made in relation to the costs of the proceedings below operated to engage the security that Gleeson JA ordered, I reject that submission. It is apparent that the Court made those orders “in lieu” of the primary judge’s orders, so as to disentitle CCA from its costs of the cross-claim, in respect of which Interslice succeeded on appeal, while maintaining the overall costs position from the court below, which was in CCA’s favour. The Court’s orders as to costs distinguish between “costs … at first instance” and “costs of the proceedings in this Court”. Interslice was correct in its submission that the re-making or modification of first instance costs orders does not convert the subject costs into costs of the appeal.

Moreover, the order sought by CCA goes further than merely facilitating the receipt of costs to which it is entitled. It would serve to elevate CCA to the position of a secured creditor, without proper regard to the ordinary rules of prioritisation and administration. It is one thing to order such security prospectively, under rr 42.21 or 51.50 of the UCPR or s 1335 of the Corporations Act; it is another thing to do so retrospectively by applying security ordered for the costs of certain proceedings to satisfy costs incurred in different proceedings, in which a separate order for security for costs was made. The due administration of funds paid into court, which guides the exercise of the discretion in Pt 41, would not be served by releasing funds that were paid by way of security in order to meet costs that they were not paid in to secure.

As Interslice submitted in its written reply, CCA’s submissions amounted to an invitation to the Court to treat appeal security as providing a general pool of funds that were available to CCA to reduce its broader costs exposure. As Interslice further submitted, that invitation was inconsistent with the purpose-specific nature of the security for costs that were ordered at first instance and, separately, on appeal. It should be refused.

Accordingly, I made the orders that Interslice sought in its notice of motion.