Nostro Claimco Pty Ltd v Titus Tekform Pty Ltd

1. [1]

   HIS HONOUR: The plaintiff, Nostro Claimco Pty Ltd, seeks leave to appeal from a judgment of the Local Court of New South Wales ordering it, inter alia, to provide security for the costs of the defendant, Titus Tekform Pty Ltd, in the amount of $150,000, in three tranches, in relation to proceedings commenced by it in the Local Court seeking to recover a principal amount of $55,969.67 plus pre-judgment interest and certain other costs. The maximum judgment available in the Local Court, excluding pre-judgment interest, is $100,000: Local Court Act 2007 (NSW), ss 29(1)(a) and 30(4). The amounts of costs put forward by the defendant as estimates of what will be incurred by it in the event that, as it says, the trial will take three days are very large. As will be seen, the original estimate was $350,000. That was provided without any articulation of how it was comprised. When some discipline was imposed by the need to put on evidence to sustain the application for security, the estimate reduced to an amount in the order of $245,000.

2. [2]

   In order to explain some of the peculiarities of this litigation, and indeed why – contrary to what might otherwise be the case – this is a case where an order for the provision of any security at all is appropriate, it is necessary to say something, but only briefly, about the facts giving rise to the claim.

Background

1. [3]

   Titus Tekform, and four other persons or entities, were parties to contracts with Navigate Global Payments Pty Ltd. The latter company carried out a financial services business pursuant to which its clients engaged in, amongst other things, trading various forms of financial instruments. None of the details of those transactions matters for present purposes. A company called AMAL Security Services Pty Ltd is the trustee of what is now known as the “Privity Private Lending Trust”. That company was a secured creditor of Navigate.

2. [4]

   On 28 June 2023, Navigate purported to “close out” all of Titus Tekform’s positions, claiming to do so in accordance with its contractual entitlements. The same occurred for the other four clients of Navigate. The result, so Navigate contended, was that its clients became indebted to it for the outstanding balances.

3. [5]

   AMAL Security Services appointed, presumably pursuant to its rights of security over the assets of Navigate, receivers and managers (who were officers of KPMG) to Navigate. At some time thereafter, Navigate purported to assign all of its rights, title, interest in and the benefit of all rights and causes of action it had (or might have) in respect of the former clients. There is no dispute that notice was given to the clients of the assignment but its validity is in issue in the Local Court proceedings.

4. [6]

   The amount owing when its account was closed out by Titus Tekform was the $55,969 I have mentioned. It is by reason of the assignment that Nostro Claimco, which is a trustee of a separate trust known as the Claimco Unit Trust, has brought proceedings.

5. [7]

   Nostro Claimco brought two proceedings in the Local Court and three proceedings in the District Court. All of the defendants were represented by ClarkeKann Lawyers. At the time of the hearing before the Magistrate, it appears that all five of the proceedings were pending. More recently, all have settled, save for the claim against Titus Tekform. I mention that because it bears upon the correspondence concerning security for costs, and the quantum which is now sought.

6. [8]

   Nostro Claimco has no material assets and no independent, so far as the evidence discloses, interest in Navigate’s claims against its former clients. Indeed, it appears that Nostro Claimco and the trust of which it is a trustee were only brought into existence after those claims accrued. Rather than Navigate itself, by its receivers and managers, suing to recover the debts, they have been assigned to Nostro Claimco, in exchange for consideration supplied by way of a loan from AMAL. In short, Nostro Claimco on its face appears to be a company established (consistently with its name) for the purpose of recovering debts owed to Navigate. Of course, at least since the changes in the law concerning maintenance and champerty reflected in Campbells Cash and Carry Pty Ltd v Fostif Pty Ltd (2006) 229 CLR 386; [2006] HCA 41, there is nothing unlawful or contrary to public policy about this. However, it has become orthodox that those funding litigation may be ordered to provide security for the costs of defendants who are being sued.

7. [9]

   The proceedings against Titus Tekform, and quite probably the other four former clients, were commenced in late 2024. The defence in the Local Court was filed in late January 2025. The essential elements of the claim involved the written contractual provisions, the statement of account when the positions were closed out and the efficacy of the assignment of the debt. The essential issues in the defence and cross-claim included whether the exercise of the right by Navigate under the contract was completely unfettered, whether in the circumstances its exercise was unconscionable entitling Titus Tekform to damages under s 12GM of the Australian Securities and Investments Commission Act 2001 (Cth) which could give rise to a set-off, and whether the terms authorising the closing out of positions were “unfair” pursuant to s 12BF of the ASIC Act.

The application for security for costs

1. [10]

   After the pleadings closed there ensued correspondence concerning the defendant’s costs. Materially identical letters were supplied on 5 February 2025 asserting, substantially correctly, that Nostro Claimco had limited share capital, had recently been incorporated, was suing as an assignee of the alleged debts and was not the registered proprietor of any real property in New South Wales. Each email also asserted, “Our client’s estimated costs to defend this matter to a final hearing are $350,000”.

2. [11]

   On 11 February 2025, the solicitors for Nostro Claimco responded, including the following:

3. [12]

   A request to demonstrate how the $350,000 had been calculated and to provide it with the estimate that ClarkeKann Lawyers was obliged under s 174 of the Legal Profession Uniform Law (NSW) to provide to its clients was then made.

4. [13]

   On 11 February 2025, the solicitor from ClarkeKann Lawyers responded:

5. [14]

   The first sentence of that email is correct. The second is undoubtedly true but the terms of contract were identical and the issues arising in each were similar. The third sentence is problematic. The notion that legal costs to be incurred have no bearing on the quantum of the alleged debts flies in the face of s 60 of the Civil Procedure Act 2005 (NSW). True it is that a client may choose to spend extravagant amounts of money prosecuting or defending a claim. But when an issue arises as to security for costs, the question, at all times, is what costs would be recoverable, by agreement or after assessment, on a party-party basis. Section 60 is, so far as I can see, utterly inconsistent with the stance evidenced in the third sentence of ClarkeKann Lawyers’ email of 11 February 2025. The fourth sentence of that email is also problematic. It is true, as is implicit in that sentence, that a third party with no underlying interest and no assets who acquires a right of action is under an obligation to provide security for the defendant’s costs of the litigation it has commenced, or to explain why such an order should not be made. On the other hand, as far as quantum goes, the obligation is, in substance, upon the defendant to establish a proper basis for the conclusion that an order for security for costs in the amount that it seeks is appropriate in the circumstances of the case. The defendant is, after all, the moving part on the application for security for costs, and the likely costs it will incur are an element of its application. ClarkeKann Lawyers’ email made no attempt to explain how $350,000 in five separate matters, which is more than $1.7 million, was a reasonable estimate of the costs its clients would incur, let alone a reasonable estimate of the amounts that would be recoverable on assessment in the event that all five of the clients succeeded.

6. [15]

   The correspondence did not stop there. The following day there was an offer to provide some information about the asset situation of a related entity of the plaintiff. What happened between 12 February 2025 and the motion that was ultimately filed in the Local Court is not clear on the face of the evidence. What is clear is that the amount of security eventually sought by the defendants was much less than the $350,000 that had been threatened. It was reduced in the order of $245,000 in each of the proceedings in the Local Court, which is a reduction of slightly more than 40% of what had been asserted in February 2025.

The Local Court hearing

1. [16]

   The defendants’ application for the provision of security for costs was heard by the Local Court over parts of two days, 31 July 2025 and 14 August 2025. The plaintiff attached to its written submissions a proposed deed poll to be executed by AMAL Security Services in order to provide comfort to the defendants in the event that a favourable costs order was obtained. I shall, in due course, deal with the details of a different deed poll, which has in fact been executed, which is proffered in support of Nostro Claimco’s appeal in this Court in the event that error is established and it is necessary to re-exercise the discretion.

2. [17]

   The Local Court reserved and delivered reasons for judgment on 4 September 2025. The essential reasons are contained in paragraphs [20]-[32], which are reproduced below; I have added emphasis to [21] and [30]:

3. [18]

   Having determined that what had been offered by the plaintiff was “wholly inadequate”, her Honour moved to quantum. Her Honour accepted that the amount sought was high but added that it was “within range”. Noting that security was not intended to be a complete indemnity, her Honour reduced what was sought by approximately 60%, yielding the result that security in the amount of $150,000 was to be provided in three equal tranches to be paid by 19 September, 7 November and 13 December 2025. The appeal before me has proceeded on the basis that no amount has been paid and the consequence is that the proceeding in the Local Court has been stayed. It had been set down for final hearing, apparently, in late January 2026, with a three day estimate.

Should there be a grant of leave to appeal to this Court?

1. [19]

   The appeal to this Court is brought pursuant to s 40 of the Local Court Act 2007 (NSW). There is perhaps a question whether the appeal might fall within s 39, which depends upon the scope of the words “but only on a question of law”, for the main point argued was that the Magistrate had misunderstood the legal nature of a deed poll. That in turn could give rise to a question about whether there is a need to obtain leave pursuant to s 40(2)(a) or conceivably (c). However, I note that in Short v Burn [2012] NSWSC 695, a case where there was an interlocutory order seemingly confined to a question of law (see at [23] and [62]) the Court proceeded on the basis that leave was still required. I think that is, to say the least, the better view of ss 39 and 40, with the latter being specific and conferring a qualified right of appeal in contrast to the general right conferred by s 39; cf Anthony Hordern & Sons Ltd v Amalgamated Clothing and Allied Trades Union of Australia (1932) 47 CLR 1 at 7; [1932] HCA 9. Further, I would not depart from what has been said in Short v Burn. In any event, it has been common ground that leave is required.

2. [20]

   Against the grant of leave, Mr Macauley, who appeared here, but not in the Local Court, maintained that leave should not be granted because the decision was interlocutory, because it was necessary to exercise restraint in granting leave to appeal from interlocutory matters of practice and procedure, because the discretion exercised by the Local Court was a broad one, because her Honour formed the view that the amount was “in the range”, because it was not for a moment suggested that the ordering of security would stultify the proceedings, and because of the concern – not a concern reflected in his client’s February 2025 correspondence – that costs not swallow up the amount that is at stake. All of those points are sound.

3. [21]

   Telling against those matters, however, as Mr Santucci, who also had not appeared in the Local Court, submitted, this is a case where there was plain error on the face of the reasons. As will be seen from the above, at [21] and [30], her Honour put to one side the effects of the deed poll which was the centre piece of the response to the application for the provision of security on the basis that because Titus Tekform was not a party to it, they could not sue on it. It has at all times in this Court been common ground, and entirely correctly so, that her Honour was wrong to proceed on that basis. See, for example, Wollongong Coal Ltd v Gujarat NRE India Pty Ltd (2019) 100 NSWLR 432; [2019] NSWCA 135 at [55]-[57], where it was observed by reference to long-standing authorities that one of the critical differences between a deed inter partes and a deed poll is that a person to whom a covenant or grant contained in a deed poll is made can enforce it.

4. [22]

   Secondly, concerning whether the proposed appeal involves a matter of public importance, it is unusual, to say the least, for a Court with a jurisdictional limit of $100,000, presented with a claim in an amount less than that to proceed on the basis that some 60% of estimated costs of $245,000 (ie $150,000), was an appropriate order for security. It is true that the Magistrate concluded her reasons at [43] by stating:

5. [23]

   With that I agree, but it is difficult to reconcile that conclusion with the seeming acceptance that costs extravagantly exceeding the amount at stake would be incurred and should inform the discretion to order security. I consider that this gives rise to a question of public importance concerning the application of the discretion.

6. [24]

   The respondent’s answer on the grant of leave to the patent error on the face of the reasons was to contend that it was not material. I shall deal with that shortly. That contention carries with it, at least on the facts of this case, the need to read the reasons for judgment as a whole fairly to assess materiality, which tends against this being a case where leave should be refused.

7. [25]

   In any event, I heard full argument on both leave and the merits of the appeal. As indicated at the conclusion of the hearing, I formed the view that this was an appropriate case for the grant of leave.

Was the error material?

1. [26]

   The next question then is whether the error concededly made by the Local Court is one that was material. As is plain from the divided decision of the Court of Appeal in Magnate Projects Pty Ltd v Youma Constructions (No 2) Pty Ltd [2005] NSWCA 331, this can be a matter where different judicial eyes can reach different conclusions. Some things, however, are clear.

2. [27]

   First, where as here the response to conceded error is that the error was not material, then the onus lies upon the party asserting absence of materiality to make out that case.

3. [28]

   Secondly, the reasons of the Local Court are to be read as encapsulating the matters informing the discretion which was exercised.

4. [29]

   Thirdly, those reasons need to be read as a whole. The essence of the reasons of the Local Court, which relied upon what had been said in Blue Oil Energy Pty Ltd v Tan [2014] NSWCA 81 at [22], in identifying the “true issue”, namely, whether the form of security ordered was adequate to protect the party seeking it.

5. [30]

   Her Honour framed her reasons accordingly, and her conclusion at [31] was, as I have already said, that what was offered by the plaintiff was wholly inadequate to protect the defendants.

6. [31]

   A conclusion that the proffered security was adequate or inadequate is an evaluative one. A number of matters lead to the conclusion that her Honour’s mistake about the efficacy of the deed poll was material to the formation of that conclusion. One is that the statement that the deed poll cannot be of comfort to Titus Tekform immediately preceded the dispositive conclusion. Another is that her Honour’s incorrect observation about the deed poll was repeated in her Honour’s reasons. A third is that there was limited analysis of the strengths and weaknesses of the deed poll proffered by the trustee.

7. [32]

   The result is that I am comfortably satisfied, notwithstanding Mr Macauley’s submissions to the contrary, that the error made by the Magistrate was material to the exercise of her discretion.

Re-exercise of the discretion

1. [33]

   At that stage, it was common ground that under s 41 of the Local Court Act 2007, it was open to this Court to re-exercise the discretion to order security for costs. Entirely properly, it was not suggested that the matter should be remitted to the Local Court. The re-exercise of discretion accords with the approach taken, for example, in Samadi v WKA Legal Pty Ltd [2018] NSWSC 1159.

2. [34]

   I also had the benefit of evidence which was not provided to her Honour. That falls into three main categories.

   1. (1)

      The first is that I have not only more up to date, but also slightly better, information about the financial position of AMAL and the Privity Private Lending Trust (for example, in the form of more recent and audited financial statements).

   2. (2)

      Secondly, as mentioned above, a slightly different deed poll is put forward in answer to the application for security for costs, and this has been executed so that it applies today and will apply irrespective of the outcome of this appeal. I interpolate that the respondent’s response to that was to disavow such entitlements as it would receive under the executed deed poll; it much preferred the payment of amounts of security into Court or the provision of bank guarantees.

   3. (3)

      Thirdly, there is the fact that four of the five claims have settled. That affects some issues of quantum.

3. [35]

   A number of issues do not arise. First, it is not suggested that security should not be ordered because of the delay in bringing the application; cf Mohareb v Harbour Radio Pty Ltd [2020] NSWCA 231 at [16].

4. [36]

   Secondly, it remains the case that the plaintiff concedes that it is appropriate to give security, and indeed it has already, irrespective of the outcome of this appeal, done so by executing the deed poll. It follows that the considerations mentioned by me in Hung v Aquamore Credit Equity Pty Ltd [2022] NSWCA 123 at [26], are inapplicable:

5. [37]

   Were that not so, serious thought would have to be given to whether the inflated and untenable claims for security that were propounded in February 2025 of $350,000 in each of the five claims would lead to the result that no security at all would be ordered. The making of wildly exorbitant claims of security for costs is to be discouraged.

6. [38]

   There was also debate on the overlapping defence and cross-claim put forward by the defendants. Of course, this is not a case where the plaintiff seeks security from the defendant for its costs incurred defending the cross-claim. It was common ground that the cross-claim brought by Titus Tekform was “defensive” or “reflexive” within the meaning of those terms in this area of procedural jurisprudence. It was submitted that the entirety of the costs of the cross-claim overlapped with costs of the defence and therefore there was no need to separate those items. I shall proceed, favourably, to Titus Tekform, on that basis.

7. [39]

   As will shortly be seen, the amended deed poll does not involve any cap on Titus Tekform’s entitlement to sue on it in the event that it obtains a favourable costs order in this litigation. That, coupled with the concession that this is an appropriate case for the order of security, means that questions of quantum largely fade away. I think the parties correctly proceeded on the basis that the real issue before me was the adequacy of the promises contained in the deed poll, rather than the excessive claims for security.

8. [40]

   Accordingly I shall deal with quantum of the claim concisely. I am inclined to doubt that security could appropriately be ordered for the costs of preparing and running a security for costs application. That remains part of Titus Tekform’s case. On inquiry by me, it abandoned its claim to the costs of that application insofar as they had been incurred before it had been made (of some $12,000). Even so, Titus Tekform presses a claim for security for some $17,000 of costs incurred by it in running the very application which seeks an order for security. It is far from self-evident that it is appropriate in this case for a plaintiff to be ordered to provide security for the costs incurred by a defendant in bringing an application for security. The direct and immediate cause of those costs being incurred is the defendant’s choice to bring an application. I do not say that the power could never extend to such costs, and I think it is probable that much would depend on the strength of the case for security and the cost of running the security for costs application. But it is not necessary for me to reach a concluded view on this component of costs.

9. [41]

   Secondly, although the matter was set down for a three day hearing in the Local Court, the estimate of junior counsel’s costs for preparation for that hearing was some 45 hours. That is basically a week doing nothing but preparing for this three day case in the Local Court. Apart from that assertion, there was no evidence articulating why that amount of time would be appropriate to prepare a defence and cross-claim in a Local Court claim, even if it did take three days.

10. [42]

    Thirdly, Titus Tekform included as a component of $75,000 – the largest single component in the $245,000 it is said it would incur to defend the proceedings – an amount described only as:

11. [43]

    It may be difficult at an early stage of litigation to truly estimate all of a parties’ disbursements, but the answer to that is not to pluck a figure out of the air without any attempt to explain its calculation, but instead to do the best one can by way of testimonial evidence to estimate those costs or alternatively say that it is not possible at this early stage to do so and obtain tranches of security with top-up evidence as appropriate.

12. [44]

    Fourthly, an amount of $22,835 was estimated for discovery. It was described as:

13. [45]

    Separate amounts were set down for subpoenas. It is far from clear to me that any real attention was given to the appropriateness of spending $22,000 on discovery in a claim which, it is worth repeating, was for a principal amount of $55,969.

14. [46]

    Finally, there is another complicating factor. The evidence had been prepared on the basis that some of the costs to be incurred in defending the claim would be duplicative with costs incurred in defending the other proceeding in the Local Court. That proceeding has now settled. Nonetheless, on the re-exercise of discretion, Titus Tekform was content to rely merely on one half of the costs to the extent that they had previously been apportioned, despite it being the sole defendant. On the one hand, that concession involves a measure of generosity. On the other hand, it means that the appeal was propounded before me on the basis that Titus Tekform’s costs would exceed the $245,000, to the extent that that calculation was based on a 50% reduction in significant components.

15. [47]

    Were it necessary to impose a cap or fix an appropriate amount of security, it will be pellucidly clear from what I have already said, that the Local Court’s conclusion that there should be a substantial deduction upon the claimed $245,000 was correct. But the deduction should have been much greater. What needs to be borne in mind in the exercise of the discretion to order security for costs is the fact that the costs for which security is ordered are assessed costs and those costs will be assessed on the basis that s 60 will apply. The touchstone for assessment is whether the costs are fair and reasonable, and that mandates regard to s 60 as well as the nature of the claim and the jurisdictional limits of the Local Court. I struggle to see how in any ordinary case it could be appropriate to order security for a defendant’s costs which exceeds the jurisdictional limit of the Court, and I likewise struggle to see how there is anything especially extraordinary in the present litigation which could warrant such an order. Instead, all that has occurred is an inflated estimate of costs which disregards the strictures of the Civil Procedure Act.

16. [48]

    However, the real issues arising on the re-exercise of discretion turn upon the covenants contained in the executed deed poll which are unlimited by any maximum dollar amount. That uncapped obligation means that questions of quantum need not be resolved.

17. [49]

    The deed poll was made on 28 October 2025 and it was made in the context of this pending appeal. The recitals are as follows:

18. [50]

    The deed poll was expressed to be “in favour of Titus Tekform Pty Ltd”.

19. [51]

    The document defined “Adverse Costs Order” and “Quantified Adverse Costs Order” as follows:

20. [52]

    Clauses 3.1, 3.2, 3.3 and 3.5 provided as follows:

21. [53]

    The result was that not only has AMAL unconditionally and irrevocably undertaken to indemnify Nostro, which is the party liable to pay any costs order in favour of Titus Tekform, but it also has undertaken directly to pay that amount to Titus Tekform, within a specified time, and it is to be treated as a principal debtor.

22. [54]

    Clause 4.1 provides that if at any time total net asset value of the assets held on trust by AMAL pursuant to the Privity Private Lending Trust falls below $50 million, then it must give five days’ written notice to the applicants. Clause 4.2 provides that if it ceases to be the trustee of that trust, it must notify the applicants of that fact within five days.

23. [55]

    Clause 5.1(d) provides that AMAL consents to being sued by, relevantly, Titus Tekform under the deed poll and “will raise no defence about the standing of [Titus Tekform] to sue under this Deed Poll.”

24. [56]

    Clause 5.1(b) states that, inter alia, Titus Tekform is entitled if a Quantified Adverse Costs Order is not paid to immediately commence proceedings against AMAL and seek default judgment for that amount as well as to issue a statutory demand. It states that the statutory demand cannot be contested or sought to be set aside by AMAL.

25. [57]

    Finally, cl 7.11 states that:

26. [58]

    The financial statements and other financial documents before me show, not materially differently from what was before the Local Court, that the assets of the trust of which AMAL is trustee, and in which capacity it executed the deed poll, comfortably exceed $100 million and have done so for some period of time.

27. [59]

    It is true that on the face of the financial material only a very small proportion (less than 1%, but substantially more than the amount of security sought) of those assets is held in terms of cash at the bank, and the liquidity of the remaining trust assets is not known and I would proceed on the basis that they are relatively illiquid. That said, and this is why questions of quantum tend to fall away, if the deed poll permits an adequate form of Titus Tekform recovering such costs as it may become entitled to during the litigation, then whether those costs be $50,000 or $100,000 or even $200,000 is not really to the point, because the assets of the trust are many orders of magnitude greater than that.

28. [60]

    Hence attention was given to two main propositions. One was that there was no entitlement to any form of indemnification until costs had been quantified. That might mean Titus Tekform not only enduring a three day hearing in the Local Court but also a process of assessment with the possibility of reviews or appeals thereafter. That is so, but that places the position not materially different from the enforcement of any other costs order (save for a gross sum costs order).

29. [61]

    The second is that AMAL is a trustee and has expressly executed the deed poll in that capacity. There was concern that the assets could perhaps readily, within the five day period contemplated by the various notification provisions, be taken from that trust, bearing in mind that AMAL had no beneficial ownership of them. There was also concern that AMAL is expressed in cl 7.11 to enter into the deed poll “only in its capacity as trustee of the Lending Trust”.

30. [62]

    It is correct to submit, as Mr Macauley did, that the fact that the deed poll is proffered by a person who is a trustee introduces additional elements of risk should there be occasion to call upon it. Although Mr Santucci relied upon the decision in Re Tiaro Coal Ltd (in liq) [2018] NSWSC 746, that was a case of a registered insurer, subject to capital adequacy regulation, albeit in an overseas jurisdiction. No such constraints apply to AMAL, at least so far as the evidence discloses.

31. [63]

    However, and contrary to those submissions, the fact that Titus Tekform is entitled, if it obtains a costs order in its favour that is quantified, to sue on the deed poll, being a deed poll given by a trustee, also gives it certain advantages that are not shared by ordinary deed polls given by parties in their own capacity. I raised during submissions the entitlement of Titus Tekform, in the circumstances hypothesised, namely, a favourable quantified costs order, to be subrogated to AMAL’s entitlement to indemnity from trust assets, which indemnity is secured by a lien or a charge. It was not suggested, and I do not think in the circumstances of this case it could be suggested, that the deed poll was other than “properly entered into” within the meaning in this area of the law (there is doubt as to the precise extent – see Anderson v Canaccord Genuity Financial Ltd (2023) 113 NSWLR 151; [2023] NSWCA 294 at [299] but there is nothing to suggest that this is otherwise than clearly within the scope of the proper exercise of the trustee’s power to subject itself to liabilities) with the result that the trustee, to the extent it is exposed to obligations to Titus Tekform, is entitled to an indemnity out of trust assets and, further and highly significantly, Titus Tekform is entitled itself to execute against the assets which are the subject of that trustee’s lien or charge.

32. [64]

    The relatively recent decision of the High Court in Naaman v Jaken Properties Australia Pty Ltd (2025) 281 CLR 635; [2025] HCA 1 establishes that those rights survive something which Mr Macauley hypothesised as a potential pitfall, namely, the removal of AMAL as trustee. Further, if the assets of the trust are dissipated in some way, the fact that through subrogation Titus Tekform enjoys a proprietary claim against those assets may mean that it is in a better position than would be the case were it dealing with a person who was not a trustee.

33. [65]

    Against all this it was said, and not without force, that the existence of the trust gave rise to additional complications and there is no doubt that that is right. But telling against that is a circumstance which I have not given prominence to at all so far, namely, that Nostro Claimco in this Court but not in the Local Court propounds not only against the claim for security for costs, the deed poll executed by AMAL, but also an offer that within 14 days it pay $20,000 into Court as security for costs for Titus Tekform, including the costs of any enforcement against AMAL under the deed poll. It seems to me that that is a more than complete answer to the difficulties introduced by the fact that AMAL is a trustee.

Conclusion and orders

1. [66]

   The result of the above can be summarised as follows. This is an appropriate case for the grant of leave, principally because of the error which is patent on the face of the reasons of the Local Court. The nature of the evaluative decision making by the Local Court on the dispositive aspect of the application, namely, whether the security was adequate to protect Titus Tekform, is such that the error which led to the learned Magistrate disregarding entirely the deed poll because she was of the view that Titus Tekform could not enforce it, was material. The circumstances put forward on the re-exercise of discretion are somewhat different from those put forward before the Local Court. They include $20,000 being paid into court as well as the unlimited deed poll which has already been executed. The fact that AMAL’s obligations under the deed poll are not limited in amount means that there is little utility in addressing in any detail what quantum of security to be ordered would be. Such debates are best deferred to the circumstances when (a) those costs have in fact been incurred and (b) Titus Tekform has established an entitlement to call upon the promises in the deed poll.

2. [67]

   For those reasons I will make orders substantially in accordance with 1 and 2(a) and (b) of the amended summons seeking leave to appeal.

3. [68]

   The parties at the conclusion of the hearing agreed with what had fallen from me that, there being so many permutations, it would be desirable for there to be further submissions on the question of costs both in the Local Court and in this Court and I will either deal with that now or make some directions for it to happen efficiently. So, the orders I am going to make are 1 and 2(a) and (b) of the amended notice of appeal.

4. [69]

   [Discussion concerning the timing of submissions as to costs, and the making of final orders].

5. [70]

   I will make the following orders: