Australian Beauty Trade Supplies Ltd v Conference and Exhibition Organisers Pty Ltd

[1990] FCA 766

NOT SUITABLE FOR GENERAL DISTRIBUTION

IN THE FEDERAL COURT OF AUSTRALIA	)
1

NEW SOU TH WALES DISTRICT REGISTRY ) NG 533 of 1990

1

GENERAL DIVISION )

BETWEEN :	m
LIMITED

Appellant

AND :

PTY LIMITED

Respondent

C O W : Burchett J.

PLACE: Sydney	RECEIVED
DATE : 12 December 1990	- 8 JAN 1991
FEDERAL COURT or

AUSTRWA	PRINCIPAL
-	R

This is an application for security for the costs of an appeal. Order 52 rule 20 provides: "Unless the Court or a Judge otherwise directs no security for costs of an appeal to the Court shall be required." The applicant respondent to the appeal makes this application in reliance upon S. 533 of the Com~anies Code and S. 56 of the Federal Court of Australia m. There is no dispute that S. 56 of the Federal Court of Australia Act confers a discretion in such broad terms as to comprehend any consideration which might be made applicable by a. 533 of the Com~anies Code if it stood alone. It has repeatedly been held that, under these provisions, the court has a broad discretion to make such order as may seem just in

the circumstances.

In this case, the material put before the court in support of the applicat~on was predicated upon the basis that the application would be pursued in reliance on the financial situation of the appellant. The argument is that the appellant's financial position is such as to create a significant doubt whether the costs of the appeal could be paid by it, assuming it to be unsuccessful in the appeal. Reliance was placed on several particular matters, but, first, I should point out that the material tendered in the applicant's case brought the financial position of the appellant up to the date of 30 June 1989 only, and at that date showed that the appellant had an excess in its balance sheet of assets over total liabilities of $41,422, which represented an increase in its asset position from $34,899 at the end of the previous year. The picture conveyed by the accounts was suggestive of a regular comfortable accrual of an excess of income over expenditure.

It is the appellant which has placed before the court, by because of the drain of this litigation, has deteriorated, so	affidavit, information showing that its position, presumably
that its present excess of assets over liabilities is almost $18,000. I see no reason at all, despite the submissions put for the applicant, to doubt that this statement of the appellant's position is honest and accurate. The applicant, in particular, suggested there was a doubt whether a sum of just under $11,000, shown as due, would in fact be received by the appellant. In submissions for the applicant, it was put that the appellant had itself contended, at the hearing at first instance of the principal action, that this sum was not due by contract but as a gratuity. I find this submission quite extraordinary, for the fact is that the chief basis of the respondent's success, in the proceeding at first instance, was its achievement in satisfying the trial judge that this sum was due by contract. In any case, the submission is technical to the point where all sense of reality is attenuated completely, because it was accepted at the hearing that, however the sum should be described, it was in fact regularly received.
The asset position of the appellant is one factor. The fact that it has regularly operated, and achieved surpluses, is another factor. Its ability to levy its members for contributions is yet another, and I see no reason to doubt that, should there be a shortfall, it will in fact do what its secretary and treasurer has indicated in his affidavit , namely, raise an appropriate levy. But all these
be taken into account. On the other side of the picture is considerations only reflect one side of the picture that must
the quantum of the liability sought to be protected by the application for security. I must say that the amount which it is suggested would be required seems to me to be considerably exaggerated. The respondent (the applicant before me) does not bear the burden of preparing the appeal books, and the length of the appeal was estimated to me by counsel for the applicant at half a day.
What it really comes down to is what is the just order to be made, in the exercise of a broad discretion which should take account of all of the circumstances of the litigation, as well as of the more specific matters I have been discussing. In my opinion, it has not been shown that the interests of justice require any order for security in this matter, and I refuse the motion. I think the applicant (respondent to the appeal) should pay the costs of this motion, but in accordance with the Rules they will not be taxed until the principal proceeding is determined.

I certify that this and the preceding three (3) pages are a true copy of the Reasons for Judgment herein of his Honour Mr

Dated: 12 December 1990

Counsel for the Appellant:	Mr I. Faulkner
Solicitors for the Appellant:	Messrs Hunt and Hunt
Counsel for the Respondent:	Mr R.W. Cameron
Solicitors for the Respondent:	Messrs Lee, Hourigan and Brooks
Date of hearing:	12 December 1990