Benjamin v GB Franchising Australia Pty Ltd
[2011] ACTCA 26
•December 8, 2011
JOHN ROBERT BENJAMIN v GB FRANCHISING AUSTRALIA PTY LTD
[2011] ACTCA 26 (8 December 2011)
PROCEDURE – costs – security for costs – payment out of court of security lodged.
Court Procedures Rules 2006 (ACT), rr 6, 21, 1000, 1013, 1906, 5001, 6013, 6450, Divs2.17.5, 2.17.8, Pt 6.2
Uniform Civil Procedure Rules 1999 (Qld), r 676
Douglas, the Hon Justice JS, (ed), Civil Procedure Queensland (LexisNexis Butterworths, Chatswood, NSW: 1999), looseleaf
Benjamin v GB Franchising Australia Pty Ltd (2008) 1 ACTLR 287
Hughes v Janrule Pty Ltd (2011) 252 FLR 397
Benjamin v GB Franchising Australia Pty Ltd [2010] ACTCA 4
Dwight v Commissioner for Taxation (1992) 37 FCR 178
Duncan (as Trustee for the Bankrupt Estate of Garrett) v National Australia Bank Ltd (2006) 95 SASR 208
Summer Hill Business Estate Pty Ltd v Equititrust Ltd [2011] NSWCA 211
Australian Gold Recovery Co Ltd v Gray (1900) 25 VLR 677
ON APPEAL FROM A SINGLE JUDGE OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
No. ACTCA 30 of 2007
No. SC 441 of 2006
Judge: Refshauge J
Court of Appeal of the Australian Capital Territory
Date: 8 December 2011
IN THE SUPREME COURT OF THE ) No. ACTCA 30 of 2007
) No. SC 441 of 2006
AUSTRALIAN CAPITAL TERRITORY )
)
COURT OF APPEAL )
ON APPEAL FROM A SINGLE JUDGE OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
BETWEEN:JOHN ROBERT BENJAMIN
Appellant
AND:GB FRANCHISING AUSTRALIA PTY LTD (IN LIQUIDATION) (ACN 105 196 389)
Respondent
ORDER
Judge: Refshauge J
Date: 8 December 2011
Place: Canberra
THE COURT ORDERS THAT:
Under r 6 of the Court Procedures Rules 2006 (ACT), so much of the rules are dispensed with as would prevent the making of this order.
The sum of $5,000 be, subject to this order, paid out to John Benjamin, PO Box 7316, St Kilda Road, Melbourne, Victoria, 8004.
Despite order 2, payment not be made until five days after a sealed copy of this order is served on the appellant and the respondent.
A sealed copy of this order be prepared in the Registry and service be effected by the Registry under r 6450 of the Court Procedures Rules 2006 (ACT), on the appellant and the respondent at their respective addresses for service, namely Fong & Co, Solicitors, 3/2-8 Burwood Highway, East Burwood, Victoria, 3151 for the appellant and Williams Love and Nicol, Level 8, 28 University Avenue, Canberra, ACT, 2601 for the respondent.
IN THE SUPREME COURT OF THE ) No. ACTCA 30 of 2007
) No. SC 441 of 2006
AUSTRALIAN CAPITAL TERRITORY )
)
COURT OF APPEAL )
ON APPEAL FROM A SINGLE JUDGE OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
BETWEEN:JOHN ROBERT BENJAMIN
Appellant
AND:GB FRANCHISING AUSTRALIA PTY LTD (IN LIQUIDATION) (ACN 105 196 389)
Respondent
Judge: Refshauge J
Date: 8 December 2011
Place: Canberra
REASONS FOR JUDGMENT
REFSHAUGE J:
On 1 July 2008, I ordered that the Appellant, John Benjamin, provide security for costs in the sum of $5,000 in respect of an appeal he had commenced against an order made by Crispin J on 1 August 2007: Benjamin v GB Franchising Australia Pty Ltd (2008) 1 ACTLR 287.
I note that there was controversy about whether a single judge could exercise the jurisdiction of the Court of Appeal for such an order. I found that a single judge had that power. That view was confirmed by Penfold J in Hughes v Janrule Pty Ltd (2011) 252 FLR 397, but for different reasons.
The sum of $5,000 was, in fact, paid into court on 1 September 2008. It was outside the time I specified, which was 13 August 2008, but no point seems to have been taken by any party as to that. I do not stay to consider what effect, if any, it had on the appeal proceedings. See, in this regard, r 1904(3) of the Court Procedures Rules 2006 (ACT).
The proceedings have had a somewhat chequered history. On 9 July 2009, Gray P dismissed the proceedings for want of prosecution. That order was set aside on 17 February 2010 by Higgins CJ: Benjamin v GB Franchising Australia Pty Ltd [2010] ACTCA 4.
The appeal came on for hearing on 6 August 2010 before Gray P and Penfold and Marshall JJ. There was no appearance for the Appellant and the appeal was dismissed, my orders staying the orders of Crispin J were set aside and the Appellant was ordered to pay the Respondent’s costs.
An Application in Proceedings dated 23 September 2010 was filed by the Appellant, seeking to set aside the order of dismissal and the consequential orders of 6 August 2010. That application was mentioned before the Court on a number of occasions and ultimately dismissed on 10 November 2010 by a court comprising Gray P and North J and myself.
No proceedings in court have occurred since then, though, as will appear, the parties have obviously been in discussion and, it appears, in negotiation.
In particular, no application has been made by any party in respect of the security sum paid into court. See [3] above.
The court has, however, received a letter dated 2 February 2011 from the solicitors for the Respondent in which, by reference to these proceedings, it is stated:
This matter and related proceedings have now settled as between the parties without reference or involvement of the funds held by the court as security for costs. In these circumstances, our client is not strictly entitled to these funds and steps should probably be taken by the court to notify the appellant, Mr Benjamin, of the fact that it continues to hold the security sum.
On 24 June 2011, contact was made by an officer of the Court Registry with a solicitor in the firm representing the Appellant and the solicitor indicated that he “will make application in due course”. No such application has been made. Ordinarily it would be made by Application in Proceedings under Pt 6.2 of the Court Procedures Rules.
On 21 November 2011, however, an e-mail was received in the Registry apparently from the Appellant which was in the following terms:
Further to our recent discussion it would be appreciated if you would be able to arrange for the $5,000 I deposited with the Court as security for costs to be returned.
As advised I did attend the Court in last [sic] month and was advised that I should receive the funds within ‘a few weeks’ by a lady who was finishing up at the Court that day.
The monies were deposited on 1 September 2008 as per the Order of Justice Refshauge on 1 August 2008.
As you confirmed the respondents have advised you that the matter has settled.
I would really be very grateful if you would arrange for the funds to be sent by cheque to the following address:
John Benjamin
PO Box 7316 St Kilda Road
MELBOURNE VIC 8004
Rule 1013 of the Court Procedures Rules provides that where money is paid into court under an order, it may only be paid out of court under an order. That rule, however, appears in the Part of the Rules dealing with the payment into court under r 1000, namely by a defendant in purported satisfaction of a claim made by a plaintiff. It is not at all clear that it applies in this situation, though that Part of the Rules is applied to appeals: see r 5001.
Division 2.17.8 of the Court Procedures Rules regulates Security for Costs and is also applied to appeals in the Court of Appeal: r 5001. That Division, however, makes no provision similar to that in r 1013. Sub-rule 1906(2) does provide that, if judgment is given requiring a party to pay all or part of the costs of proceedings or an application in proceedings, then the security paid may be applied in satisfaction of the costs. I note the use in the sub-rule of the discretionary “may”.
Sub-rule 1906(3) provides as follows:
(3) However, the security must be discharged –
(a)if a judgment is given and the judgment does not require the party to pay all or part of the costs of the proceeding or any application in the proceeding; or
(b)if the court orders the discharge of the security; or
(c)if the party entitled to the benefit of the security agrees to its discharge; or
(d)in relation to the balance after costs have been satisfied under subrule (2).
Thus, the court may, despite the proceedings being determined unfavourably to the party providing security, still discharge the security for good cause.
Rule 1906 is relevantly identical to r 676 of the Uniform Civil Procedure Rules 1999 (Qld). The authors of the practice book, Douglas, the Hon Justice JS, (ed), Civil Procedure Queensland (LexisNexis Butterworths, Chatswood, NSW: 1999), looseleaf, comment on this rule, though without reference to legislative or judicial authority:
An application to the court must be made for payment out of court of money paid into or deposited in court in a proceeding.
It seems to me, however, that this must be so. There are reasons of both policy and practice for this.
It is now clear that the security money, once paid into court, remains the property of the party providing the security and the other party only obtains any proprietary interest when an order for costs is made in his, her or its favour and then the party has a right of recourse to the funds to satisfy any costs order. This was so held in Dwight v Commissioner for Taxation (1992) 37 FCR 178. See also Duncan (as Trustee for the Bankrupt Estate of Garrett) v National Australia Bank Ltd (2006) 95 SASR 208 (at 219-20; [42] to [46]; Summer Hill Business Estate Pty Ltd v Equititrust Ltd [2011] NSWCA 211 (at [24] to [25]). That is a reason why it is desirable for a court order to be required before the security lodged with the court is paid out of court.
There is another reason why there is a need for a court order for payment out of court of moneys paid in as security, namely that the payment should not be made until the costs have been quantified, whether by assessment under Div 2.17.5 of the Court Procedures Rules or by agreement. Appropriate proof may be needed of, at least, such agreement. Further, it may also be that the full amount of the security may not be required to satisfy the costs order.
Whilst the correspondence referred to above (at [9] to [12]) is a quite informal way of applying to the court, I note that the sum involved is relatively small and the principle of proportionality and, indeed, r 21 of the Court Procedures Rules, requires the court to deal reasonably and appropriately with such matters, not increasing costs unnecessarily, though, of course, ensuring that fairness is preserved and the interests of the parties respected. In my view, there is sufficient material for me to make an order for payment out of the security sum, provided appropriate protections are given.
Ordinarily, the filing of an Application in Proceeding with a supporting affidavit is sufficient for the purpose, and an order for payment out of court of such funds would be easily made. Indeed, there may be a case for such an application to be made without the attendance of either party. At present this can only be done under r 6013 of the Court Procedures Rules where all that is sought is an adjournment. Perhaps such facility should be extended to other applications.
In this case, the correspondence to which I have referred above (at [9] and [11]) either would be annexed to such an affidavit or be made into the contents of the affidavit. The substance of what is said is sufficient for an order to be made directing payment out to the Appellant of the security lodged.
Clearly the court should facilitate the disposition of the funds in the way that they wish: Australian Gold Recovery Co Ltd v Gray (1900) 25 VLR 677 (at 679). In this case, it seems to me that, given the current form of order (Approved Form 2.41), these reasons take the place of the recitals to the court order suggested in that decision.
In any event, I will make orders that give effect to the conclusion I have reached.
I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court.
Associate:
Date: 8 December 2011
Solicitor for the Appellant: Fong & Co Solicitors
Solicitor for the Respondent: Williams Love Nicol
Date of judgment: 8 December 2011
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