BOQ Equipment Finance Ltd & Williams v Scott

[2015] QCA 135

[2015] QCA 135

COURT OF APPEAL

GOTTERSON JA

Appeal No 3959 of 2015
SC No 4651 of 2011

BOQ EQUIPMENT FINANCE LIMITED
TRENT WILLIAMS  Applicants

v

PETER DOUGLASS SCOTT
CATHERINE ANNE SCOTT  Respondents

BRISBANE

THURSDAY, 23 JULY 2015

JUDGMENT

GOTTERSON JA:  On the 21st of April 2015, the appellants, Peter Douglas Scott and Catherine Anne Scott, who are respondents to this application, filed a notice of appeal in this court against a judgment given in proceedings commenced against them in the trial division by the appellant, BOQ Equipment Finance Limited.  In those proceedings, the Scotts counterclaimed against BOQ and its employee, Trent Williams.  The judgment, which was given on the 24th of March 2015, dismissed the counterclaim.  The Scotts were ordered to pay BOQ an amount of $1,894,291.19 and BOQ’s costs on the claim, as well as the costs of the defendant parties to the counterclaim.

The application before me today is for the provision of security for costs of the appeal by order made pursuant to r 772 of the Uniform Civil Procedure Rules.  In affidavit material filed on behalf of BOQ, there is evidence of an apprehension that BOQ has that if the appeal fails the Scotts may not be able to pay a costs order adverse to them.  Their concern was ventilated in correspondence sent to the Scotts, which sought proof from them that they were able to satisfy both the judgment and such a costs order.  The correspondence requested a reply by the 19th of May 2015.  None was provided.

The Deputy Commissioner of Taxation obtained a judgment against Mr Scott for $583,032.75 in the District Court of Queensland on the 11th of September 2014.  A recent affidavit filed on behalf of BOQ indicates that the National Australia Bank has appointed receivers and managers over the Scotts’ business premises.  The receivers have commenced proceedings against them.  In written submissions filed for this application, the Scotts concede that they are in a “poor financial position”.  That is, of course, a relevant consideration.

Another relevant consideration is the strength of the appeal.  The Scotts were sued for repayment of moneys lent to them on the security of a bill of sale given over two printing presses used in their business.  The Scotts pleaded case hinged on representations which they alleged were made by Mr Williams concerning further financing by BOQ of them or a related entity by way of debt factoring or – and otherwise, they claimed that it was on the footing of those representations that they entered into the bill of sale financing arrangement.

Specifically, the learned trial judge concluded that Mr Williams did not represent to them either that need not make a payment on the bill of sale financing until further credit was provided to them or that the debt financing facility would be provided only if they signed the bill of sale financing documents.  Those representations were at the heart of the Scotts’ case.

There are some 25 grounds of appeal.  Many of them relate to his Honour’s factual findings concerning the representations alleged.  Other grounds relate to additional findings made by his Honour that no loss had been suffered, even if the alleged representations had been proved.  BOQ points out, with some justification, that a number of grounds propose factual issues which were not alleged as part of the Scotts’ case.

Having regard to all these matters and to the absence of any ground of appeal which exposes a legal deficiency in BOQ’s debt case, my impression is that, at best, the Scotts’ prospects of success on appeal are quite modest.  This and their admitted financial position persuade me that there is a case in which – that this is a case in which an order should be made for security for costs.

I am very conscious that any security ordered to be given ought not stifle the appeal.  Whilst BOQ has provided an estimate of its costs of the appeal assessed on the standard basis of $22,862.40, the Scotts have stated that they could manage an amount of not more than $15,000, provided that they have at least one month to provide it.

In all the circumstances, I consider that they should provide security in the amount of $15,000 and that they should do so by the 31st of August 2015.  The costs of the application, so far as they relate to the applicant’s costs, should be costs in the appeal.  I am not prepared to make a guillotine order in the event that the security is not so provided.

The orders of the court are:

1.On or before 31st of August 2015, the appellants, Peter Douglas Scott and Catherine Anne Scott, provide security for the costs of the appeal of the respondents, BOQ Equipment Finance Limited and Trent Williams, in the sum of $15,000 in a form suitable to the registrar.

2.That until the security required by order 1 is provided, a party to the appeal shall not take a further step in the proceedings without the leave of the Court of Appeal.

3.The application is otherwise dismissed.

4.The applicant’s costs of the application be costs in the appeal.

Adjourn the court.