Fortrend Securities Pty Ltd v Wollermann (Stay Application)

This judgment was about two stay applications, not the final outcome of the underlying disputes. The appeals had already been heard by the Full Court and were reserved, so the immediate question for Dowling J was whether existing orders should be put on hold until the appeal decisions were delivered.

In one proceeding, Fortrend Securities Pty Ltd and Fortrend Securities Inc wanted a stay of costs orders made against them in the primary proceeding. In the other, Fortrend Securities Pty Ltd and Mr Joseph Forster wanted a stay of compensation and penalty orders made in a Fair Work proceeding. The applicants said that if they had to pay before the appeals were decided, the relevant companies would be wound up and cease to exist, making any later appeal success effectively useless.

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.

The judgment identifies two categories of orders. First were the costs orders in the primary proceeding. FSA and FSI were ordered to pay the respondents' costs, and on 27 August 2025 those costs were fixed at $2,023,140.76. The Court recorded that FSA and FSI were jointly and severally liable, meaning the respondents could pursue either or both for the full amount.

Second were the compensation and penalty orders in the Fair Work proceeding. On 6 May 2025, FSA and Mr Forster were ordered to pay compensation and penalties totalling $621,369.38. The Court noted that only two small penalty orders totalling $5,328 were directed personally to Mr Forster, and at the hearing the applicants no longer pressed a stay in relation to those personal orders.

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 set out the established principles relevant to a stay. It referred to authorities including National Retail Association v Fair Work Commission (No 2), Quach v MLC Ltd, Viagogo AG v ACCC, Aqua Star Pty Ltd v CP Aquaculture (India) Pvt Ltd, Wooldridge v ASIC and Urban Alley Brewery Pty Ltd v La Sirène Pty Ltd (No 2). The Court also referred to rr 36.08 and 41.11 of the Federal Court Rules 2011.

The principles included that a stay is discretionary and not granted lightly, that the discretion must be exercised judicially, that the balance of convenience is important, and that the Court may consider whether there are serious questions on appeal. Most importantly for this case, the Court emphasised that a successful party is ordinarily entitled to the fruits of its judgment and that a stay applicant bears the onus of showing a proper basis for intervention.

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.

The applicants relied mainly on affidavits from Mr Forster. The Court examined separately what financial material had been provided for FSI, Mr Forster and FSA.

For FSI, the evidence described its business role. Mr Forster said he was its president and owner, that it was a US regulated stockbroker, and that it acted as the conduit through which FSA accessed US markets. He also said that if FSA went into liquidation, FSI would stop generating revenue and its business would cease. But the Court said that none of this answered the critical question. There was no information about FSI's actual financial position or its capacity to meet the costs order for which it was jointly and severally liable.

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.

Even apart from the evidentiary gaps, the Court found that delay counted against the applicants. They had not sought a stay when the relevant orders were first made. They had also been on notice for about six months that, without a stay, the judgment debts were due and payable. The reasons record several points at which the respondents and the Court process had made that position clear.

During that period, the respondents issued statutory demands, successfully resisted proceedings to set them aside, and commenced winding up proceedings. Their evidence was that these enforcement steps had cost about $139,257.75 excluding GST. The Court accepted that these were costs likely to have been avoided if a stay application had been made earlier.

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.

The main lesson is procedural and commercial. If your business loses a case and intends to appeal, you need to think immediately about enforcement. A notice of appeal is not a shield against statutory demands, winding up steps or other recovery action. If you need breathing space, you must ask for it and justify it.

This case also shows how corporate structures can become a weakness if they are not properly explained. Where one company is liable, another company receives revenue, and a parent company owns the operating entity, the Court will expect a clear account of how the money actually moves and who can fund what. If the evidence leaves room for the possibility that a related entity could pay, or that intercompany arrangements could be changed, the Court may refuse to accept that immediate payment will destroy the business.

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.

The judgment was delivered on 22 May 2026 and the reasons were published on 27 May 2026. At that point, the Full Court appeals had already been heard and were reserved. The decision discussed here is therefore a procedural ruling on interim relief pending appeal, not the final appellate outcome.

The orders made by Dowling J dismissed both stay applications and required the applicants to pay the respondents' costs of those applications.