Supreme Court New South Wales

• Medium Neutral Citation: RSA v VDM CCE and VDM CCE v RSA [2012] NSWSC 861
• Hearing dates: 20/07/2012
• Decision date: 20 July 2012
• Jurisdiction: Equity Division - Technology and Construction List
• Before: McDougall J

Decision

Stay to be granted on conditions as to security and diligent prosecution of claim.

• Catchwords: [PROCEDURE] - civil - application for stay of judgment - where proceedings cross-vested from Supreme Court of Queensland -Building and Construction Industry Payments Act 2004 (QLD) - whether court should exercise its discretion to grant a stay - whether the plaintiff's rights will be rendered nugatory - whether refusal of stay will cause substantial prejudice.
• Legislation Cited: Building and Construction Industry Security of Payment Act 1999 (NSW); Building and Construction Industry Payments Act 2004 (Qld)
• Cases Cited: Chase Oyster Bar v Hamo Industries (2010) 78 NSWLR 393; Grosvenor Constructions (NSW) Pty Ltd v Musico [2004] NSWSC 344; Herscho v Expile Pty Ltd [2004] NSWCA 468; RJ Neller Building Pty Ltd v Ainsworth [2009] 1 Qd R 390; Taylor Projects Group Pty Ltd v Brick Dept Pty Ltd & Ors [2005] NSWSC 571; Veolia Water Solutions v Kruger Engineering (No 3) [2007] NSWSC 459
• Category: Procedural and other rulings
• Parties: RSA (Moorvale Station) Pty Ltd [ACN 127 377 851] (First Plaintiff); Transpac Capital Pty Ltd [ACN 076 836 470] (Second Plaintiff); VDM CCE Pty Ltd [ACN 106 121 635] (First Defendant); VDM Group Ltd [ACN 109 829 334] (Second Defendant)
• Representation: Counsel: E B Cowpe / P Morrison QC (Plaintiff 2011/57243) (Defendant 2012/215354); F P Hicks (Defendant 2011/57243) (Plaintiff 2012/215354); Solicitors: James Beatty & Associates (Plaintiffs); Wotton + Kearney (First and Second Defendants)
• File Number(s): 2011/57243 and 2012/215354

Judgment - ex tempore (revised 20 july 2012)

1 HIS HONOUR: This is an application for stay of a judgment recovered by the defendant (VDM CCE) against the plaintiff (RSA) by filing, in the Supreme Court of Queensland, an adjudication certificate recovered pursuant to the Building and Construction Industry Payments Act 2004 (Qld) (the Queensland Act). RSA originally, and obviously enough, moved for a stay in the Supreme Court of Queensland. Because there are other proceedings on foot in this Court in which RSA is plaintiff and VDM CCE is defendant, the Supreme Court of Queensland cross-vested its proceedings to this Court. Thus, the final determination on the application for a stay is to be made by this Court.

The judgment debt

2 The construction contract between the parties required VDM CCE to construct a mining village on Moorvale Station, to be leased to and used by Macarthur Coal Limited for the purposes of a coal mine that it conducted in the vicinity. The contract was made in March 2008. Work was completed in June 2009, subject to the question of defects and the like. Claims under the Queensland Act were made in August and October 2009, but not pursued. In the meantime, all surplus assets of VDM CCE were sold and the company, in effect, became an inoperative shell. There is uncontroverted evidence from Mr Knight of RSA to the effect that a former Chief Executive Officer of VDM Group Limited (the parent company of VDM CCE, and a listed public company) said that VDM CCE was a real mess; it had to be closed down because it was in a lot of trouble; and it had been involved in at least eight separate court actions over construction disputes.

3 The adjudication, pursuant to which the adjudication certificate was obtained that was filed in the Supreme Court of Queensland, was commenced by a payment claim served on February 2012. It might be thought to be more than a little remarkable that a claimant having an entitlement (as it believed) to some millions of dollars would wait approximately two and a half years before seeking to vindicate that claim through the process of adjudication. I do observe, as Mr Hicks of counsel for VDM CCE submitted, that there had been a mediation between the parties in February 2010, and what appears to have been some sort of "standstill" between the parties in May 2011, when they tried to negotiate a settlement of their differences. Nonetheless, it is, in my view, remarkable that there was so long a gap between the completion of work and the pursuit of the claim: particularly in circumstances where claims were made in August and October 2009, and not pursued.

4 The judgment debt is of the order of $3.3 million. The claim asserted by RSA in the proceedings commenced by it as plaintiff in this Court relates to defective performance of the works, delays, and other matters. The damages claimed exceed $8.6 million. I proceed on the basis that the claim has been put forward in good faith, and I note that Mr Knight has sworn an affidavit verifying, although in summary form, the facts that are "pleaded" at some length in the list statement.

Bases on which stay sought and opposed

5 In essence, RSA seeks the stay because it asserts that if it is successful in its action in this Court, there is a real risk that it will be unpaid. There is no doubt that VDM CCE is in no position to repay the amount of $3.3 million out of its own resources. However, VDM Group, and all the other companies in the group (including VDM CCE) have cross-guaranteed the obligations of each other. Initially, it was submitted that this was a sufficient answer to the fear of non-payment. However, it is clear that the terms on which the cross-guarantee operates (which require that the company owing the guaranteed obligation be liquidated or wound up or dissolved before the guarantee can be called upon) make the cross-guarantee at best an uncertain instrument of recompense.

6 No doubt recognising that problem, VDM Group has now offered an undertaking to the Court to stand behind VDM CCE, to the extent of (in round figures) $3.3 million, if the stay is not continued and if, ultimately, the claim against VDM CCE succeeds to an amount of at least $3.3 million. However, RSA submits that even this enhanced offering of assurance of payment is inadequate.

The principles

7 The parties pressed me with a number of cases in which the nature of the discretion to grant a stay had been discussed. Time does not permit a detailed analysis of those cases. It is sufficient to say that I remain of the view that I expressed in Veolia Water Solutions v Kruger Engineering (No 3) [2007] NSWSC 459 at [33]-[39] and again at [72]-[75]. In the interest of brevity, I will incorporate those paragraphs into the revised version of these reasons:

33The plaintiff (Grosvenor) had obtained an adjudication certificate, and recovered a judgment, in the sum of $486,324.77. It had been put into external administration. The evidence suggested a deficit in excess of $4.2 million and a likely return to unsecured creditors of 11 cents in the dollar. By reason of some matters of history which Einstein J discussed at paras [6] to [10], the defendant (Musico) had given an unconditional bank guarantee in the sum of $712,757 to secure, among other things, payment of the judgment that Grosvenor had recovered. Musico asserted that it had no liability whatsoever to Grosvenor, and that in addition Grosvenor was liable to it in an amount exceeding $550,000 representing liquidated damages, cost to complete and cost of rectification of defects. It sought a stay to prevent Grosvenor from calling on the guarantee until its claim against Grosvenor had been dealt with.

34 Einstein J referred in para [12] to a number of first instance decisions that emphasised the interim nature of adjudication determinations. That is a necessary result of the legislative policy, enshrined in the Act, that progress claims should be paid promptly, and should not be delayed and bedevilled by disputes; and the preservation of final rights to which s 32 of the Security of Payment Act gives effect.

35 Einstein J then referred at paras [18] to [25] to a number of English decisions relating to the Housing Grants, Construction and Regeneration Act 1996 (which Act includes provisions creating a statutory right to progress payments). The effect of the decisions cited by Einstein J was that a successful claimant should not be kept out of its money unless there was real doubt as to the claimant's ability to repay in the event that a final determination went against it.

36 At paras [29] to [31], Einstein J referred to decisions staying execution on judgments pending an appeal where there was a risk that the appellant might not recover its money if it succeeded on the appeal. In para [31], his Honour noted that "the analogy with appeals is not a perfect one", because it did not take into account the evident policy of the Act requiring prompt payment of progress claims. Thus, his Honour said, "there is a sound reason for making stays less readily available in relation to debts arising under the [Security of Payment] Act, in contrast to the position in relation to appeals arising from curial proceedings." His Honour said that one way in which this might be recognised was by requiring "more than a "real risk that [the respondent] will suffer prejudice or damage, if a stay is not granted."" (The internal quotation comes from the decision of the Court of Appeal in Kalifair Pty Ltd and Another v Digi-Tech (Australia) Ltd and Others (2002) 55 NSWLR 737 at 741-742 [18]; the emphasis comes from Einstein J.)

37 Thus, his Honour concluded at para [32], "in a case ... where there is a certainty that the defendants' rights will be otherwise rendered nugatory, and that it will suffer irreparable prejudice, the proper and principled exercise of the Court's discretion is to grant a stay." At para [33], his Honour drew comfort from the fact that the plaintiff's entitlement under the judgment recovered by it was fully secured.

38 At para [35], his Honour observed that "if no stay is granted, an interim arrangement would be in practice converted into a final order." He repeated that the effect of refusing the stay would be to render nugatory Musico's rights, and thereby cause "irreparable prejudice".

39 I adopt his Honour's statement of the principles as being those that, in general, should be considered when deciding an application such as that before his Honour, or that before me. However, in any particular case, the application of those principles, and the balancing of the various considerations, will require careful attention. For example, each case will require close analysis of the extent or certainty of the risk of prejudice or damage, if a stay is not granted (I refer to the question posed but not answered by his Honour in para [31]).

...

72The exercise of the discretion to grant a stay requires a balancing of the relevant factors. Two factors of particular significance in this case are:

(1)On the one hand, the policy of the Security of Payment Act, that successful applicants be paid promptly (recognised by Einstein J in Grosvenor at para [31]); and

(2) On the other, the likelihood of irreparable prejudice, where that prejudice would flow from the refusal of the stay because cross-claims would be rendered worthless (recognised by Einstein J in Grosvenor at para [32]).

73 In assessing whether the refusal of a stay will cause irreparable prejudice, it is open to the Court to have regard to the strength of the cross-claim, to ascertain whether there is at least a real risk that prejudice will follow if a stay is not granted (see the analysis of Einstein J in Grosvenor at paras [29] and [30], applying by analogy the principles relevant to stay pending appeal). I say "at least" because of the issue reserved, but not answered, by Einstein J in para [31] of his reasons.

74 As a general rule, I think, the balancing of the two significant factors to which I referred in para [72] above requires the Court to look closely at the strength of the cross-claim asserted by the applicant for a stay. There are at least two reasons why this is so. The first is that there has been an examination, admittedly of an abbreviated and sometimes rough and ready way, of the competing claims. I accept that adjudicators are as prone to error as other human beings; and I accept also that the stresses placed upon them by the extremely tight timetable for which ss 19 to 21 of the Security of Payment Act provide may magnify the possibility of error. Nonetheless, the legislature has said that disputes as to progress payments are to be determined in the first instance through the mechanism provided in the Security of Payment Act. That mechanism allows an examination not only of the payment claim but also of the payment schedule, in which (one might expect) the respondent ordinarily would set out all reasons why, it says, the claimant is not entitled to be paid.

75 The second reason flows from the plain legislative intention that progress claims should be dealt with, and paid, promptly. In my view, any court faced with, and required to give effect to, that clear legislative policy should be careful before exercising a discretion in a way that would intercept the effectuation of that policy in a particular case. Thus, I agree with Einstein J that the Court would ordinarily do so (in cases such as the present) only where the failure to do so would have the practical effect of making permanent that which, clearly enough, the legislature intended to be only interim.

8 It has been suggested that there are other cases which suggest that the risk of non-payment must approach virtual certainty before the Court would be justified in granting a stay, in relation to judgments recovered under the Queensland Act or its equivalent in this State, the Building and Construction Industry Security of Payment Act 1999 (NSW). For example, I was taken to the judgment of Hodgson JA in Herscho v Expile Pty Ltd [2004] NSWCA 468. At [3], his Honour referred to what Einstein J had said in Grosvenor Constructions (NSW) Pty Ltd v Musico [2004] NSWSC 344 at [31],[32]. I had referred to those in my judgment in Veolia and the relevant passages are set out in the paragraphs that I have extracted.

9 In Herscho at [9], Hodgson JA said that:

"...[t]here is evidence that does suggest some risk that if the money is paid it will not be recovered; but it does not go so far as to suggest that it will not be recovered, or that the risk is a very high risk".

10 Thus, as his Honour said at [10] "on the whole", and taking into account the policy of the NSW Act, his Honour dismissed the application for a stay.

11 In Taylor Projects Group Pty Ltd v Brick Dept Pty Ltd & Ors [2005] NSWSC 571, Einstein J referred at [54] to the decision in Herscho as justifying the proposition that the risk of prejudice must be "a very high risk", and in any event "more than merely a real risk" if a stay were to be granted. With great respect, I think that this is putting too high a burden on the words of Hodgson JA, which clearly were directed not at laying down some general principle but at the facts of the particular case.

12 Of more moment is what Einstein J said in Taylor Projects at [59]:

59The principle in Grosvenor is only applicable where the claimant is either actually, or very close to, insolvent. Were it otherwise then the stay itself may drive the claimant into the very insolvency which the interim payment regime of the Act is designed to prevent. Such a result would be unjust in circumstances where:

· prima facie there is a debt due from the respondent to the claimant;

· the final amounts due between the parties may not be ascertained for weeks, months or years;

· the Court is in no position to assess the relative merits of the parties on the final claims;

· the financial situation of the respondent may itself deteriorate so that the claimant loses for all time the benefit of the right which is now prima facie enforceable;

· there is nothing in the Act which suggests a claimant's entitlement to receive the interim payments depends upon it establishing a capacity to repay those sums if there is a final determination unfavourable to it;

· the claimant is deprived of the very funds the Act contemplated would be made available to it to pay its own employees and suppliers.

13 The features that emerge from that paragraph include:

(1)one of the matters that the Court is required to consider, and that it should be astute to prevent, is driving the claimant (as that term is used in the NSW Act) into insolvency (being the state of affairs that the NSW Act sought to prevent) by granting a stay;

(2)the Court should seek to protect the claimant against a deterioration in the respondent's financial position; and

(3) one of the fundamental purposes of the NSW Act is to ensure that claimants are put in funds to pay their own employees and suppliers.

14 It is apparent, when one looks at the matters listed by Einstein J in [59], that his Honour was not proceeding on the simplistic analysis of the need to demonstrate "very high risk" but, rather, that he was balancing the possibility of detriment to the respondent on the one hand, with the possibility of detriment to the claimant on the other, and taking into account, as a moderating factor, the policy of the Act.

15 As to the Queensland Act, Keane JA (who spoke with the concurrence of Fraser JA and Fryberg J) said in RJ Neller Building Pty Ltd v Ainsworth [2009] 1 Qd R 390 at [40] that one of the features of the Queensland Act was that, as a matter of legislative policy, it assigned, the risk of insolvency to respondents rather than claimants. In those circumstances, as his Honour said at [41], the mere existence of the risk of the claimant's insolvency would not of itself justify a stay. There must be something else which, together with that risk, justified keeping a claimant out of its statutory right.

16 Those comments apply equally to the NSW Act: see Chase Oyster Bar v Hamo Industries (2010) 78 NSWLR 393 at [207].

17 I remain of the view that in considering whether or not to grant a stay, it is necessary to see what risk there is to the applicant for a stay, other than the simple and unquantified risk that the respondent to the application for a stay will become insolvent, if a stay is granted; to take into account the prejudice to the respondent to the application for a stay if the stay is granted; and to take into account the policy of the Act.

Countervailing risks of prejudice

18 In the present case, the first two kinds of prejudice are clear. If RSA does not obtain a stay, and is required to pay the amount of the judgment debt, there is at least the usual commercial risk that any success it enjoys in the unresolved proceedings in this Court will not be requited with satisfaction of a monetary judgment, to the extent at least of the payment made. On the other hand, if a stay is granted, VDM CCE will be kept out of the money to which, prima facie (both by virtue of the adjudication determination and by virtue of the judgment founded on it) it is entitled. But the proffer of an unconditional bank guarantee means that if a stay is granted, VDM CCE will not suffer the additional risk, to which Keane JA referred in RJ Neller and to which Einstein J referred in Taylor Projects, that if VDM CCE's position is ultimately vindicated, it will nonetheless lose because of a deterioration in the financial situation of RSA.

19 Another matter to take into account is that the evidence in this case makes it clear that VDM CCE does not require the money to pay its sub-contractors or employees or suppliers. It has paid those persons. Of course, as Mr Hicks submitted, having paid them, it has at least a prima facie entitlement (subject to the terms of the contract) to be recouped.

20 Since there is no evidence that VDM CCE is operative, or about to become so (and the rather optimistic submission by Mr Hicks, that one could not exclude that probability, finds no support in the evidence), there is no reason for thinking that it needs the money to fund its future operations.

21 Equally, although a great volume of evidence has been put before the Court, there is nothing in that evidence - at least to the extent that I was taken to it - to suggest that VDM Group as a whole needs the money for the purposes of its on-going operations.

22 It thus becomes necessary to consider whether what one might call the ordinary or everyday risk that a plaintiff in litigation is exposed to, of not recovering its judgment, is amplified in the circumstances of this case, and in particular becomes more onerous if RSA is required now to pay the amount of a judgment debt.

23 In the circumstances to which I referred earlier in these reasons, the debate focused largely on the financial situation of VDM Group. Again, time does not permit a detailed analysis of that evidence; and in any event, bearing in mind the nature of the evidence, no detailed analysis could lead to anything other than interim or tentative conclusions.

24 There is no doubt that VDM Group has entered into some sort of financial facility with Swiss Re. There is no doubt that it has given a charge over its assets (which means, as I understand it, all the assets of every member of the group) in support of that charge. There is no doubt that the charge is fixed in relation to land, plant and equipment, marketable securities and the like. Thus, to the extent that the assets of VDM Group include assets that fall within the class of those over which the charge is fixed, they are, at least prima facie, not likely to be available to stand behind the undertaking to the Court that has been offered.

25 The charge was said to secure obligations up to $105 million. There is evidence, which came in very late in the piece, that VDM Group and Swiss Re have agreed to reduce some unspecified facility to a limit of $25 million. Whether that is the same facility as the facility in respect of which the charge was granted is not made clear by the evidence. Indeed, it is remarkable that although the offer to reduce the facility was made on 19 June and accepted on 22 June, not a word of it emerged in the affidavit evidence for VDM CCE. The only evidence of the offer is the letter conveying it and the terms sheet, which has been accepted. Whether the reduced facility is to be the only facility the subject of the guarantee is not explained. Nor is it explained how far (if at all) the parties have got along the path of negotiation and execution of the security documentation for which, clearly enough, the reduced facility limit agreement calls.

26 Thus, whilst I accept that there is some evidence that the charge may end up securing substantially less than $105 million, bearing in mind that the party who could have given evidence on these matters has chosen not to do so (except by tender of the bare minimum of documentation), I do not propose to draw any inferences beyond that from the document that has been tendered.

27 The debate as to the financial position of VDM Group paid attention, on the one hand, to its dismal operating performance in the past and, on the other, to what was said to be its bright prospects for success in the future. As to the past: VDM Group lost $115 million net in the 2009 financial year, $52 million net in the 2011 financial year and $46.9 million net for the six months ended 31 December 2011. There is a projected loss, announced to ASX, of about $5 million for the second half of the 2012 financial year.

28 As against that, VDM Group recorded a net profit of $21.5 million for the 2010 financial year.

29 That summary of the trading position of VDM Group does not inspire any great confidence in its ongoing profitability. Further, although it is apparent that VDM Group has been successful in securing fresh work, it appears to be the case that its current order book has declined substantially over the years. In other words, although VDM Group has secured ongoing work, the work on hand has declined from an adjusted figure of $362,471,000 for the 2009 financial year to an estimated figure of $170 million for the 2012 financial year.

30 The other point to make is that even if one were to accept what is said on behalf of VDM Group as to its reorganisation, recapitalisation and attempts to turn its business around, the impact of all that is yet to be proved. The question is whether RSA should be exposed to the risk that a company having recorded the significant losses that VDM Group has, and having (for the reasons I will turn to in a moment) a somewhat shaky balance sheet, should be left to its rights in the future, on the expectation of some turnaround; or whether it should be protected by the grant of a stay.

31 I accept that the balance sheet of VDM Group as at 31 December 2011 (the last date to which audited figures were available) showed net assets of $95.3 million. On the face of things, that is a satisfactory situation. However, of its total assets, some $15 million is ascribed to property, plant and equipment. To the extent that the property, plant and equipment may realise anything like that value, it is in any event unavailable because it is one of the assets over which the charge in favour of Swiss Re is fixed. Another significant asset is some $23.4 million of intangible assets and goodwill. There is no further or detailed description of what those assets are, but it must be doubted that they carry any significant realisable value. There are also said to be other non-current assets of $11.1 million, but again there is no way of assessing what recoverable value, if any, they may have.

32 The current assets include some $42.5 million of receivables. However, as against that, there is some $42 million of trade and other current liabilities. Thus, the current asset situation is to a large extent offset by the current liability situation.

33 When one gives the balance sheet anything more than the cursory scrutiny to which it was put in the submissions for VDM CCE, it is, in my view, apparent that it is not a source of any great comfort to someone in the position of RSA, who is faced with the prospect of paying over $3.3 million if no stay is granted, and having to recover that (and more) if its claim in its proceedings in this Court succeeds.

34 There is, as I have said, a very substantial volume of evidence and time does not permit an analysis of all of it. One salient feature of that evidence is that, as a result of a restructuring and asset sale, VDM Group has (or as at 30 June 2012 had) a significant cash balance at bank. But again, in the absence of any detailed evidence as to the overall financial situation of VDM Group as at 30 June 2012, the significance of that cash balance is difficult to estimate. (I am not being critical in referring to "the absence of evidence" on this point. I accept that it has not been possible for VDM Group to produce audited accounts, showing a true and fair position of its financial situation, in the short time since the end of the financial year.)

35 To my mind, there are very significant questions attending the ability of VDM Group to pay, if required to do so, pursuant to its undertaking to the Court that it proposes to give, the sum of $3.3 million. It may be in a position to do so. But that seems to me to be dependent entirely on a significant turnaround in its performance over the next two financial years. In other words, it requires the Court to assume, in its favour, that the recent restructure of its management and affairs is likely to produce a beneficial effect.

36 One particular criticism made by VDM CCE of the evidence for RSA was that although it referred to a likely drop in revenues, it did not recognise a corresponding drop in operating costs. However, material on which VDM CCE relies shows that this is unlikely to happen (and, indeed, is recognised as a significant business risk) because VDM Group apparently maintains a standing workforce to enable it to commence work as soon as possible, and without needing to recruit labour, on any projects that it wins. That is no doubt admirable, but it rather undermines the force of the criticism. Further, to my mind, it raises at least a suspicion that VDM Group may feel compelled to take work which is, at best, marginally profitable, in order to meet those operating costs, and thus that the projected profits may not eventuate in full.

37 Much of the evidence for VDM CCE focused on the probability that VDM Group would win future contracts. It did not focus at all on the likely profitability of those contracts. The matter that I have just referred to suggests that the contracts may be undertaken at least in some cases simply to defray operating expenses. Further, the past performance of VDM Group appears to suggest that it has not had a great deal of success in converting operating revenues into profit. Again, the only answer offered to this is that the new management team and restructuring of operations may effect a turnaround.

Balancing the risks with the underlying policy

38 I return to the analysis which, in my view, the application requires. I have referred already to the countervailing risks of prejudice. Turning to the policy of the Act, I accept that it is that those who carry out construction work, or provide related goods and services, under construction contracts are entitled to, and should receive, prompt payment. I accept, as the cases to which I have referred make clear, that at least one of the purposes of this is to ensure that those companies remain viable.

39 To my mind, the extraordinary feature of this case - one which takes it out of the ordinary class of cases to which I referred in Veolia - is that VDM CCE has shut down its operations. As I have said, it does not need the money to pay its debts (because they have been paid). Nor does it need the money to fund ongoing operations. Thus, whilst giving due recognition to the policy underlying the Queensland Act, it seems to me that the particular circumstances of this case suggest that the policy is of significantly less weight than it might be in the ordinary case.

40 I take into account, further, that the bank guarantee that is in place means that if and to the extent that VDM CCE succeeds in repulsing the claim made by RSA in the proceedings in this Court, it will be assured of payment, to the extent of the guarantee, in respect of the adjudication determination and subsequent judgment debt.

41 Finally, as part of the balancing exercise, and for the reasons that I have given in relation to the financial material, I conclude that there is more than the ordinary risk that if RSA is required to pay over the money and succeeds in its claim in this Court, it may not recover it. That seems to me to follow from the fact that the prospects of recovery are tied entirely to the hope expressed by Mr Coyne of VDM Group, that the changes to which I have referred will lead it away from the miry depths of loss and into the broad uplands of profit. At the present time, it is simply impossible to concur in that assessment.

Conclusion: there should be a stay on conditions

42 Accordingly, I conclude that the judgment in favour of VDM CCE should be stayed, on condition, among other things, that the bank guarantee remain in place and that RSA prosecute its action in this Court with appropriate diligence.

43 Bearing in mind the time, I will not attempt to draft formal orders but will stand the proceedings over to enable the parties to do this. That will also enable the accompanying but subsidiary application, by VDM CCE against RSA for security for costs, to be dealt with.

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Decision last updated: 03 August 2012