Bradshaw v Winstanley
[2009] QCA 152
•3 June 2009
SUPREME COURT OF QUEENSLAND
CITATION:
Bradshaw v Henderson & Anor [2009] QCA 152
PARTIES:
GARY EDWARD BRADSHAW
(plaintiff/first respondent)
v
CYNTHIA HENDERSON
(first defendant/second respondent)
WALTER KIM WINSTANLEY
(second defendant/applicant/appellant)FILE NO/S:
Appeal No 3819 of 2009
Appeal No 3820 of 2009
DC No 2005 of 2008DIVISION:
Court of Appeal
PROCEEDING:
Application for Security for Costs
ORIGINATING COURT:
District Court at Brisbane
DELIVERED EX TEMPORE ON:
3 June 2009
DELIVERED AT:
Brisbane
HEARING DATE:
3 June 2009
JUDGES:
Muir JA
ORDER:
1. The orders on each of applications 3819 of 2009 and 3820 of 2009 be that the proceeding commenced by the application filed on 9 April 2009 be stayed until the applicant, Walter Kim Winstanley, gives security in the sum of $7,000 in such form as may be agreed by the parties or in default of the parties’ agreement, determined by the Registrar.
2. The costs of and incidental to this application will be the parties' costs in the cause.
CATCHWORDS:
PROCEDURE – COSTS – SECURITY FOR COSTS – RESIDENCE OUT OF JURISDICTION – GENERALLY – where first respondent entered into an agreement with the applicant, through the agency of the second respondent, for the purchase of a marina berth – where applicant sought to avoid completing the agreement – where first respondent sued for specific performance – where primary judge awarded damages against the applicant in the sum of $20,800 – where applicant sought to appeal the orders of the primary judge – where applicant was a New Zealand resident and his only asset in Australia was his interest in the marina berth – whether applicant had prospects of success – whether security for costs should be awarded
Property Law Act 1974 (Qld), s 11, s 15
ASA Constructions Pty Ltd v Iwanov & Ors [1975] 1 NSWLR 512, cited
COUNSEL:
S J Dickens (sol) for the applicant
D J Kelly for the first respondent
C K Copely for the second respondentSOLICITORS:
de Vere Lawyers for the applicant
Biggs Fitzgerald Pike for the first respondent
Caboolture Legal Centre for the second respondent
MUIR JA: The first respondent, Gary Edward Bradshaw, applies for an order that the applicant, Walter Kim Winstanley, provide security for the costs of the appeal in the sum of $15,000 and also for related relief. Another such application is made by the second respondent, Cynthia Henderson. She seeks security in the sum of $17,055. Her application extends to an application by the appellant for leave to appeal as well as to the appeal should leave be granted. The applicant contends, correctly in my view, that no leave is required.
On 5 February 2009, the District Court ordered after a trial, that the first respondent have judgment against the applicant in sums totalling $20,800. On 27 February 2009, the applicant was ordered to pay the costs of each of the respondents assessed on the standard basis on the highest Magistrates Court scale up to and including the date of transfer of the proceedings to the District Court and then on the applicable District Court scale.
In the proceedings the first respondent alleged that he entered into an agreement in January 2003 with the applicant and the second respondent, under which the applicant and the second respondent agreed to sell and he agreed to purchase a berth in Scarborough Marina for a purchase price of $30,000. The primary judge found that such an agreement had been entered into between the applicant and the first respondent through the agency of the second respondent. Other relevant findings were as follows. The first respondent paid a deposit of $1,000. The applicant sought to avoid completing the agreement. On his instructions, the second respondent sent a letter dated 21 April 2003 to the first respondent advising that the sale could not be completed and that she could not act as agent. A cheque for $1,000 was enclosed with the letter. The first respondent did not accept this repudiatory conduct and sued for specific performance. By the time the matter came on for trial in September 2008 there was evidence that the marina berth was worth about $110,500. The delay between the events in early 2003 and the trial of the proceedings was unexplained. The first respondent promptly purchased a berth in another marina for an undisclosed price. He could have mitigated his loss by purchasing another berth in the marina for around $44,000.
Specific performance was not ordered because of the first respondent's delay and "the prospect of hardship" to the applicant should he be forced to sell an asset which had more than trebled in value from the date of sale. The primary Judge found that if the applicant was obliged to complete the contract, his loss would be to the order of $80,500 and that there was no "balancing" hardship suffered by the first respondent.
He held, on the authority of ASA Constructions Pty Ltd v Iwanov & Ors [1975] 1 NSWLR 512, that it would be unjust to apply the normal measure of damages for breach of contract and the date for assessment of damages should be the date the second respondent on behalf of the applicant repudiated the contract by purporting to rescind it. That was the 21 April 2003.
On 9 April 2009 the applicant, not having filed a notice of appeal within time, filed an application for an extension of time within which to file a notice of appeal.
The grounds listed in the application under the heading "The reasons justifying the granting of leave", are, in substance, that the primary judge erred:
- in finding that the second respondent acted as agent for the first respondent;
- in finding that a binding contract of sale had been entered into;
- in not finding that there was no sufficient memorandum in writing for the purposes of sections 11 and 59 of the Property Law Act 1974 (Qld);
- in not finding that the contract was duly terminated by letter dated 21 April 2003;
- in ordering that the applicant pay the costs of each respondent.
The applications for security for costs after amendment were made under rules 671 and 672 of the Uniform Civil Procedure Rules 1999 (Qld). It is not disputed that under those rules this Court has power to order security.
The respondents rely particularly on the undisputed fact that the applicant is a resident of New Zealand and that his only asset in Australia is his interest in the marina berth. There is evidence that the net proceeds of sale of the berth may be to the order of $96,000, and it is contended by the respondents that the costs of both respondents of the trial are to the order of $85,000 and the likely costs of the appellate proceedings approximately $30,000.
The interest in the marina berth is presently the subject of an order made in the District Court on 11 March 2009, restraining the applicant from dealing with that property until the orders of the District Court made on 5 February 2009 and 27 February 2009 are satisfied or until further order.
The estimated costs of the second respondent of and incidental to the application for security for costs, of any leave to appeal and of any appeal are $6,000 for the solicitors, and $8,500 for counsel's fees, should there be an appeal. Counsel's fees attributable to an appeal are $3,000. The costs of the first respondent are expected to be of a similar order.
The applicant swears to having taken steps earlier this year to assign the berth to a specified person for $97,500. He swears also that he has equity in property in New Zealand to the value of a little under $NZ 100,000. He is prepared to undertake not to dispose of that property pending determination of the appeal.
As for the costs at first instance, the evidence reveals that no bill of costs has been presented to the applicant by the second respondent and that objections to the costs statement claiming costs of $52,671 delivered on behalf of the first respondent have been served. There is an unchallenged balance in respect of that costs statement of $27,720.
The applicant would appear to have very modest prospects of succeeding on grounds 1 and 4 above as the outcome of those grounds is largely dependent on the primary judge's findings on credibility. Nothing has been pointed to which suggests that there was no proper basis for the findings. There is no merit in the challenge to the costs orders unless the applicant succeeds on some other ground.
The other grounds of appeal rely on sections 11 and 59 of the Property Law Act 1974 (Qld). The primary judge considered that a sufficient memorandum existed in the form of the cheque for the deposit, the receipt provided by the second respondent and the second respondent's letter of 21 April 2003. After some debate in the course of argument, I have concluded that the applicant has an arguable case that the memoranda are insufficient for the purposes of section 11 and 59.
It seems to me to be likely that the respondents' costs at first instance will be reduced substantially below the figure of 85,000 put forward by the respondents. I consider it likely also that the figure of $30,000 for the costs of the application for extension of time and for the appeal will be reduced materially below $30,000. I would hope that the application for extension of time would be heard together with the appeal. It seems to me that very little additional work and argument would be required to argue the appeal as well as the application for the extension.
I am not in a position to determine the likely reduction in the amount of costs likely to be awarded in respect of the trial, but if I am correct in my appreciation that the reduction is likely to be substantial, the sale of the marina berth should come close to meeting any order for costs should the appeal not be successful, in that I include the costs at first instance. This does not take into account, however, the order for damages and interest, nor does it take into account costs in relation to the District Court injunction, the costs of registering any judgment in New Zealand and the costs and delay in enforcing any such judgment.
The property in New Zealand is encumbered and the unfortunate state of the applicant's health suggests that the liabilities with which that property is charged are likely to increase rather than decrease. Although there may not be particular difficulty in enforcing any judgment in New Zealand, the costs of so doing are not negligible and nor would the costs of levying execution be negligible should such action become necessary.
Having regard to all of these considerations, it seems to me that security for costs should be awarded, but that the amount ordered should be conservative so as not to stifle the litigation inappropriately and to take into account the fact that there is a substantial asset in the jurisdiction. I would limit each order for security to $7000.
Before I go on, I will invite you gentlemen to make note of the proposed order and to make submissions as to whether it is appropriate. The proposed order will be:
The orders on each application will be that the proceeding commenced by the application filed on 9 April 2009 be stayed until the applicant, Walter Kim Winstanley, gives security in the sum of $7,000 in such form as may be agreed by the parties or in default of agreement, determined by the Registrar. The costs of and incidental to this application will be the parties' costs in the cause.
Are there any submissions on those orders?
MR COPLEY: Your Honour, it may be simply a procedural query. That concerns the fact that there were two applications filed on the 9th April 2009.
MUIR JA: What I think I said was "the orders on each application." So that, to make it plain, I suppose, let me get the two applications.
The orders on each of applications 3819 of 2009 and 3820 of 2009 will be - and then it will go on as I have said. Are there any submissions then, on the substance of the orders?
MR DICKENS: Your Honour, just one for clarification. Is it that you require $7,000 to be paid as a global sum in relation to both, a total of $14,000?
MUIR JA: Yes. Well, I haven't ordered that anything be paid. Security must be given in such form as may be agreed by the parties, or in default of such agreement, determined by the Registrar, and I imagine the Registrar normally requires payment into Court unless some bank guarantee is offered. But one would think it would not make any financial sense to get a bank guarantee for those relatively small sums of money, but that's a matter for your client, I suppose.
MR DICKENS: Your Honour, there is one issue, and that is the undertaking that was offered up. That was offered up‑‑‑‑‑
MUIR JA: That undertaking hasn't been acted on.
MR DICKENS: Thank you, your Honour.
MUIR JA: So if you wish, I'll order that - well, perhaps we can deal with it this way, I give leave for you to withdraw your client's undertaking. That would seem to be appropriate in the circumstances.
MR DICKENS: I think it necessary in the circumstances, your Honour, if he's going to raise the money. Thank you, your Honour. I would formally ask that the undertaking‑‑‑‑‑
MUIR JA: Part of the order will be, then - I don't know that it's necessary to say anything. The record indicates your client is released from the undertaking. I don't think it's necessary to make a formal order about it, particularly as the undertaking wasn't acted or relied upon and was made for the purposes of the application.
MR DICKENS: Thank you, your Honour.
MUIR JA: I suggest before I go that having regard to the amount of money in this, it would be well worth the parties' while to make an effort to get rid of this without going any further. The game won't be worth the candle shortly at the rate we're going.
MR DICKENS: Thank you, your Honour.
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