Archer v Woodhead Australia Pty Ltd - [1995] SASC 5020

ARCHER PTY LTD V WOODHEAD AUSTRALIA PTY LTD

Lander J

Application by a respondent for security for costs, on an appeal from a judgment of the District Court to the Full Court of the Supreme Court. The appellant, who was a defendant in the District Court, appeals to the Full Court of the Supreme Court from the judgment of Judge Kitchen which was delivered on 21 February 1995.

In that matter, Judge Kitchen entered judgment for the plaintiff in the sum of $40,000, allowed a claim for interest on judgment of $16,150, making a total of $56,150, and ordered the defendant to pay the plaintiff's costs.

I am told that the claim against the defendant was a claim in contract for architectural services delivered by the plaintiff to the defendant. The claim, I am told by Mr Floreani, who appeared for the appellant in this court, was upon the basis that there was an oral agreement entered into in March of 1990, which was later reduced into writing on 23 March 1990.

I am told from the bar table that the course of the trial had some unusual features. Firstly, notwithstanding there was an allegation of an oral agreement, the director of the defendant, who was present in court, was not called to give evidence. Having regard to the fact that the respondent's case was not answered on oath in the court below, Mr Strawbridge, who appeared for the respondent in this court, asked me to infer from that, that the appellant's prospects of success in this appeal are very slight.

Mr Floreani contended, however, that the appellant argued the case upon the pleadings. The pleadings claim that the oral agreement had been reduced into writing, and the appellant proved, through its defence of the action, that such could not have happened. In due course, Mr Floreani told me, the learned judge found for the plaintiff on a matter not pleaded. In those circumstances, he said there is nothing unusual about the director of the appellant not being called.

The appeal to this court was lodged on 28 February 1995, and immediately after the appeal was filed the respondent to the appeal made application for security for costs.

An application was then taken by the appellant seeking a stay of execution of the judgment of Judge Kitchen. The application for the stay of execution was made specially returnable before me on 14 March 1995.

The appellant's application for a stay of execution was argued on that day, and it was the appellant's then contention that a stay ought not to be ordered because the respondent's financial position was so precarious, that if the judgment moneys were paid to the respondent and the appeal was successful, there was a real risk the respondent would not be able to repay the moneys paid.

After that argument was presented, Mr Strawbridge told me from the bar table that his client had offered to provide a bank guarantee to the Registrar of the court,…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [1995] SASC 5020
Decision Date: 29 March 1995

CaseChat Overview and Summary

Archer Pty Ltd has appealed a judgment of the District Court to the Full Court of the Supreme Court. The original judgment, entered on 21 February 1995, awarded the plaintiff $40,000 plus interest and ordered the defendant to pay the plaintiff's costs. The appeal arose from a claim in contract for architectural services, based on an alleged oral agreement from March 1990, later formalised in writing. The appeal was lodged on 28 February 1995, and the respondent immediately applied for security for costs. The appellant later sought a stay of execution of the judgment, arguing that the respondent's financial situation was precarious, and if the appeal was successful, they might not be able to repay the judgment money. However, the appellant conceded the stay application, and the appeal proceeded to the application for security for costs.

The legal issues before the court were whether special circumstances existed that justified an order for security for costs and whether mere impecuniosity of the appellant was sufficient to warrant such an order. The court considered the principles governing applications for security for costs on appeal, noting that while impecuniosity alone is generally insufficient, it may constitute special circumstances depending on the case's circumstances. The court referenced relevant authorities, including Fletcher and Ors. v The Federal Commissioner for Taxation and Kennedy v McGeechan, and determined that in this case, the appellant's known financial difficulties and the risk of non-payment if the appeal was unsuccessful constituted special circumstances warranting an order for security for costs.

The court ordered that the appellant provide security in the amount of $5,000 for the respondent's costs of the appeal. The court found that the appellant's financial situation, as evidenced by their inability to provide a bank guarantee and the knowledge of their financial status by their advisers, demonstrated a significant risk that they would be unable to pay costs if the appeal was unsuccessful. This risk, coupled with the respondent's previous order for costs against the appellant, supported the conclusion that special circumstances existed justifying the security for costs order.

Orders