Battenberg v Chief Executive Officer & Secretary, Union Club

[2003] NSWADT 88

CITATION:	Battenberg -v- Chief Executive Officer & Secretary, Union Club [2003] NSWADT 88
DIVISION:	Equal Opportunity Division
PARTIES:	APPLICANT Andrew Battenberg RESPONDENT Chief Executive Officer & Secretary, Union Club
FILE NUMBER:	011069
HEARING DATES:	On the papers
SUBMISSIONS CLOSED:	04/09/2003
DATE OF DECISION:	04/23/2003
BEFORE:	Britton A - Judicial Member; Bolt M - Member; Nemeth de Bikal L - Member
APPLICATION:	Security for costs
MATTER FOR DECISION:	Preliminary matter
LEGISLATION CITED:	Administrative Decisions Tribunal Act 1997 Anti-Discrimination Act 1977
CASES CITED:	Vercoe v AMP Shopping Centres Pty Ltd & Hardy [1999] NSWADT 89) Battenberg v Chief Executive Officer & Secretary, Union Club [2002] NSWADT 219 Bell Wholesale Co Ltd v Gates Export Corporation (1984) 2 FCR 1 King v Commercial Bank of Australia Ltd (1920) 28 CLR 289 Lucas v Yorke (1983) 50 ALR 228 Melville v Craig Nowlan & Associates Pty Ltd (2002) 54 NSWLR 82 Equity Access Ltd v Westpac Banking Corporation (1989) ATPR 40-972 Idoport Pty Limited & Anor v National Australia Bank Limited & 8 Ors Idoport Pty Limited & Market Holdings Pty Limited v Donald Robert Argus Idoport Pty Limited "JMG" v National Australia Bank Limited [35] [2001] NSWSC 744 revised - 20/09/2001 [at 53] PS Chellarum & Co Ltd v China Ocean Shipping Co (1991) 7 102 ALR 321 7 Energy Drilling Inc v Petroz NL (1989) ATPR 40-954
REPRESENTATION:	APPLICANT J Dupree, Barrister RESPONDENT K Eastman, Barrister
ORDERS:	1. Application is dismissed.

1 The respondent has made application for an order for security for costs. It appears to be common ground that, under s114 of the Anti-Discrimination Act (“AD Act”) the Tribunal has a broad discretion to make such an order in appropriate circumstances. The issue to be resolved is whether such circumstances exist in this case.

2 The respondent concedes that, unlike ordinary civil proceedings, parties to proceedings under the AD Act will usually bear their own costs and that it is therefore rare for the Tribunal to grant the order sought (See Vercoe v AMP Shopping Centres Pty Ltd & Hardy [1999] NSWADT 89)

3 Ms Eastman, for the respondent, submits that this is one of the rare instances in which it is appropriate to grant the application because of a combination of circumstances. These are: First, the applicant revealed at a directions hearing on 30 January 2003 that from April this year he intended to spend his time largely in the United Kingdom and would not live permanently in Australia. Second, there is already an outstanding costs order against the applicant. Third, there is no evidence that the applicant has any substantial assets in the jurisdiction. Fourth, there has been substantial delay in relation to the applicant complying with the outstanding costs order. Fifth, there has been substantial delay in the proceedings themselves because the applicant spent a large part of the time previously allocated for the hearing in unsuccessfully arguing procedural matters, thus causing the respondent’s costs to escalate unnecessarily. Sixth, the applicant’s prospects of success in the application are poor. Seventh, the applicant will be involved in another hearing from 24 March 2003.

4 Counsel for the applicant, Mr Dupree, submits that the Tribunal’s discretion is a narrow one and ought not be exercised against the applicant. In relation to the specific matters raised by the respondent, he contends that an order for security for costs cannot be used in some way to discipline or sanction a party in relation to past or future conduct. He also submits that there is no basis upon which the Tribunal might conclude that the applicant resides outside NSW or Australia. He further submits that it is premature to conclude whether or not the applicant has good or poor prospects of success in the matter. He argues that the fact that the applicant is involved in other proceedings is irrelevant. He concludes by asserting that there is no proper basis upon which an order for security could be made.

Background

5 By letter dated 3 September 2001, the President of the Anti- Discrimination Board (the President) referred to the Tribunal under s 91(1) of AD Act two complaints lodged by the applicant on 18 July and 16 August 2001 respectively, having formed the view that these complaints could not be resolved by conciliation.

6 In the first complaint, the applicant alleged unlawful discrimination on the ground of disability and presumed homosexuality in the provision of goods and services by the respondent Club. In the second, he alleged that the respondent had victimised him.

7 On 23 October 2002, the Tribunal heard an application from the applicant to set aside a summons to produce documents. That summons was issued under s 84 of the Administrative Decisions Tribunal Act 1997 (“Tribunal Act”) at the request of the Chief Executive Officer of the Union Club. The summons was directed to the applicant.

8 The set aside application was dismissed. The applicant was ordered to pay the respondent’s costs in respect of that application: Battenberg v Chief Executive Officer & Secretary, Union Club [2002] NSWADT 219. The reasons for that order are set out at [33]-[49] of that decision.

Relevant legislative provisions

9 The Tribunal’s power to order security for costs is found in s 114 of the AD Act which provides:

(1) Except as provided by section 111 (2) and subsection (2) each party to an inquiry shall pay his
or her own costs.
(2) Where the Tribunal is of the opinion in a particular case that there are circumstances that
justify it doing so, it may make such order as to costs and security for costs, whether by way of
interim order or otherwise, as it thinks fit.

10 Section 111(2) is not relevant to these proceedings.

11 There is no express power in the Administrative Decisions Tribunal Act 1997 (Tribunal Act) to order security for costs.

Relevant principles

12 As with the powers of a Court considering an application for security costs, the Tribunal's discretion is broad and unfettered but must be exercised judicially. (See Bell Wholesale Co Ltd v Gates Export Corporation (1984) 2 FCR 1 at 3 - 4, King v Commercial Bank of Australia Ltd (1920) 28 CLR 289 at 292, Lucas v Yorke (1983) 50 ALR 228 at 229 and generally Melville v Craig Nowlan & Associates Pty Ltd (2002) 54 NSWLR 82)

13 In Equity Access Ltd v Westpac Banking Corporation (1989) ATPR 40-972 at 50, 635, the Federal Court referred to six specific matters that the authorities indicated should be considered when deciding whether security for costs ought be awarded in ordinary civil proceedings. They were:

• the prospects of success;
• the quantum of risk that a costs order will not be satisfied;
• whether the making of an order would be oppressive in that it would stifle a reasonable arguable claim;
• whether any impecuniosity of an applicant arises out of the conduct complained of,
• whether there are aspects of public interest which weigh in the balance against such an order;
• whether there are any particular discretionary matters peculiar to the circumstances of the case.

14 It is to be noted that, under the general law, where the plaintiff is a natural person, his or her impecuniosity does not give rise to a presumption that security for costs will be ordered. ( See for example Idoport Pty Limited & Anor v National Australia Bank Limited & 8 Ors; Idoport Pty Limited & Market Holdings Pty Limited v Donald Robert Argus; Idoport Pty Limited "JMG" v National Australia Bank Limited [35] [2001] NSWSC 744 revised - 20/09/2001 [at 53].)

15 In Vercoe v AMP Shopping Centres Pty Limited & Hardy [1999] NSWADT 89, this Tribunal set out the principles relevant to deciding whether to make a security costs order. The Tribunal noted that it has a broad discretion to make orders where it thinks fit. The Tribunal held that the following factors are relevant, but not necessarily decisive, in the exercise of this discretion:

• plaintiff’s prospects of success;
• defendant's prospects of success;
• whether the claim is bona fide;
• the application is being made oppressively;
• the nexus between the plaintiff’s impecuniosity and the defendant's conduct;
• whether the making of an order for security may stultify the litigation;
• and public policy considerations.

16 These factors largely, but not entirely, reflect the approach followed by the Federal Court in Equity Access.

17 In Vercoe, the Tribunal considered the relevance of a party’s failure to comply with a timetable in such applications, noting that, while it viewed “failure to comply with the timetable as a serious issue, the appropriate responses would generally be a reminder or a warning and ultimately a costs order.” It is noted that at the hearing in this matter on 30 January 2003, the issue of the applicant's adherence to the Tribunal's timetable was also raised with the Tribunal in the relation to the applicant's application for an adjournment. A chronology was handed up to the Tribunal at that hearing showing the applicant's history of chronically irregular adherence to the timetable.

18 In Vercoe, the Tribunal also made the following observations concerning the circumstances which might lead to the making of a security for costs order:

Although the Tribunal does have power to order security for costs, such an order would only be justified in rare circumstances. Because the normal costs rule is that each party pays their own costs, the Tribunal would firstly have to assess the prospect that a costs order would be made against the complainant at the conclusion of the hearing. Secondly, the Tribunal would have to be satisfied that any costs order it did make may not be met. This could be the case where there was evidence that the complainant was attempting to conceal his or her address or was ordinarily resident outside Australia.

19 Here, of course, the Tribunal has already made a costs order in relation to the applicant's non-compliance with orders and failure to comply with a summons.

20 Finally in Vercoe, the Tribunal also noted that:

The ordering of security of costs in relation to a person who ordinarily resides outside Australia is
designed to catch those cases where a costs order, if made, would not be enforceable in the
jurisdiction in which the person resides.

21 In general civil proceedings, an application for security for costs will ordinarily be granted when a party is resident outside the jurisdiction and has no substantial assets within the jurisdiction. This is so the applicant for the order will have a fund available within the jurisdiction from which to draw its costs if successful against the respondent. (See PS Chellarum & Co Ltd v China Ocean Shipping Co (1991) 7 102 ALR 321 7 and Energy Drilling Inc v Petroz NL (1989) ATPR 40-954.)

Conclusions

22 This is a case in which a costs order has already been made against the applicant. That costs order has not yet been satisfied. There is a history of delay on the part of the applicant in dealing with it and other procedural aspects of this case. Whether the applicant has reasonable prospects of ultimate success in the substantive hearing is difficult to determine at this stage.

23 In relation to the costs order made on 31 October 2002, the only question for consideration is whether that order will be met. On current indications, it may not be. There has been a lengthy delay in meeting the order. The applicant has indicated that he intends to reside mainly overseas. He has not put evidence before the Tribunal demonstrating that he has substantial assets in this jurisdiction as a respondent to such an application might be expected to do if it were the case. An inference may therefore be drawn that he has no such assets in NSW. Finally, there has been a lengthy delay in meeting the order, suggesting that the applicant is short of funds or may be seeking to throw the burden of costs in the matter onto the respondent even in relation to the costs order already made against him.

24 While it may be true that a security for costs order ought not be made to discipline or impose a sanction upon a party (a proposition for which no authority was cited by Mr Dupree but which seems correct having regard to first principles). However, the fact that the applicant cannot or will not pay the costs order already made is a relevant consideration in assessing whether or not the Tribunal should exercise its discretion. It is a clear indication that if the application ultimately fails and costs are awarded against him the applicant may be unable or unwilling to comply. This Tribunal would also, from what was said at the directions hearing, be entitled to infer that the applicant proposes to absent himself from the jurisdiction from April 2003. This would give rise to a reasonable apprehension that a costs order would, if made against him, be difficult to enforce.

25 The primary question, however, is whether a costs order would follow if the applicant is unsuccessful at the substantive hearing. The matter is currently part heard. The respondent asserts that the applicant has poor prospects of success and has foreshadowed that at the close of the applicant’s case it may make an application under s 111 of the AD Act. At this stage of the proceedings the Tribunal is unable to form a view as to whether the respondent’s belief is well founded. It is to be noted that the President did not decline to entertain the Applicant’s complaint under s 90 of the AD Act.

26 Even if the applicant were unsuccessful, it does not follow that a costs order would necessarily be made beyond that already in existence. Section 114(1) of the AD Act establishes a presumption in favour of each party bearing their own costs. A party seeking an order for costs needs to establish that circumstances warrant a departure from the usual rule enshrined in s 114(1). It is a high threshold for the respondent to cross and without more evidence it is by no means clear, on the balance of probabilities, that a costs order would follow the rejection of the applicant’s case (were that to happen). This distinguishes cases in this jurisdiction from the types of cases dealt with in ordinary civil proceedings where security for costs would generally be ordered in relation to overseas litigants without assets in the jurisdiction.

27 It is open to the respondent to have the costs order made on 31 October 2002 enforced. That to date that order has not been satisfied does not in our view warrant an order for costs in respect of the substantive proceedings. Nor do we consider it appropriate to make the order sought in effect to “secure” the costs order already made by the Tribunal. Were the applicant to obstruct the enforcement of the costs order already made the respondent then have cause to apply to have these proceedings stayed but that is a bridge at which we have not yet arrived.

28 While it is probable that the order sought would have been made had the ordinary principles in respect to costs been applicable, those principles do not apply in full in this jurisdiction. Taking into account all relevant factors we do not consider this to be an appropriate case to exercise our discretion to make the order sought and accordingly we dismiss the application.

Orders

1. Application dismissed.