Fortrend Securities Pty Ltd v Wollermann (Stay Application)

The respondents opposed the applications. Their position was that the applicants had not proved a proper basis for a stay and had left the Court with speculation rather than reliable evidence. They also pointed out that they had already spent substantial money enforcing the orders through statutory demands, defending set-aside proceedings and commencing winding up proceedings.

That procedural setting matters. This was not a rehearing of the original claims. The Court was deciding whether enforcement should be paused, based on the evidence put forward for that limited purpose.

These details mattered because the applicants' argument depended on saying that payment would destroy the businesses. But one of the key liabilities, the costs order, was owed jointly and severally by two companies, and the Court had very little reliable material about one of them. That gap became central to the result.

The Court also focused on whether there was a real risk of prejudice that could not later be fixed by a successful appeal. One recognised way of showing that is to establish that the appeal would be rendered nugatory unless a stay is granted. Here, the applicants tried to do that by saying the companies would be wound up and cease to exist if forced to pay now.

But the Court made clear that this question turns on evidence, not assertion. It adopted the idea from Aqua Star that where an applicant leaves the matter in a state of speculation or mere argument, weight must be given to the fact that judgment has already been entered in favour of the other party.

That omission was serious. If FSI could pay, then the claimed collapse of FSA might not establish that the appeal would be rendered nugatory. The Court therefore found that the position regarding FSI was one of speculation or mere argument, and that this weighed heavily against granting a stay.

As for Mr Forster personally, the affidavit did not disclose his personal financial circumstances. The respondents argued that this still mattered because he owned FSI. The Court accepted that such information might be relevant, but did not place significant weight on the absence of personal financial information because the applicants were no longer pressing a stay of the personal penalty orders against him.

For FSA, some financial documents were produced, including its FY2024 tax return, a balance sheet as at 31 December 2025 and a profit and loss statement for the six months ending 31 December 2025. Mr Forster said FSA did not have the capacity to pay over $2 million into Court and that doing so would exhaust its working capital. But the Court identified several critical gaps.

First, FSA was said to be wholly owned by Winter Holdings Inc, an American company, yet no meaningful financial information about Winter Holdings was provided. The Court noted that O'Bryan J had already criticised the lack of disclosure about the ownership structure and true financial position in an earlier March 2026 decision, but the same problem remained.

Second, there was no financial information about FSI and no sufficient material identifying what obligations, if any, FSI had to FSA. Third, the evidence showed a significant reduction in FSA's commissions over time, while assets under management were said to be broadly similar. The respondents submitted that this might be because FSI retained more of the commissions earned by the group.

The affidavit said there was an agreement under which FSI remitted part of the net commission to FSA, but that agreement was not produced.

Because the agreement was missing, the Court said it could not tell whether FSI was obliged to pay FSA monthly or whether, given Mr Forster's control of both companies, the arrangement could be varied so that FSI withheld payments or reduced the commissions received by FSA. Those unanswered questions mattered directly to the claim that payment would destroy the business.

The applicants argued that the respondents had voluntarily pursued an aggressive enforcement strategy, so any prejudice should carry less weight. The Court rejected that submission. It said that if a stay had been sought and granted earlier, the respondents would not have been able to pursue the enforcement strategy they did. In those circumstances, the respondents had suffered real prejudice.

The Court also mentioned, but did not decide, a further argument based on the statutory presumption of insolvency and s 459S of the Corporations Act. The respondents said that even if a stay were granted, it might not stop winding up consequences because of the position created by the unsatisfied statutory demands. Since the stay applications failed on other grounds, the Court did not need to resolve that point.

The final result was that both interlocutory applications were dismissed, and the applicants were ordered to pay the respondents' costs of those applications. The Court was not satisfied that the applicants had shown the appeals would be rendered nugatory without a stay, and it was not prepared to deprive the successful parties of the benefit of their judgments on the incomplete evidence provided.

Just as importantly, the Court's reasoning was based on the evidence before it, not on any concluded view that the original appeals lacked merit. Businesses should read the case as a warning about proof, timing and enforcement risk. The applicants lost because they did not provide enough reliable material to establish the prejudice they alleged, and because the respondents had already incurred substantial enforcement costs while no stay was in place.

If your business is in a similar position, the practical focus should be on speed, complete financial disclosure, and documents that explain the real commercial position of every relevant entity.