Brooks-Johnson v Shine Lawyers Pty Ltd
[2015] WADC 42
•22 APRIL 2015
BROOKS-JOHNSON -v- SHINE LAWYERS PTY LTD [2015] WADC 42
| DISTRICT COURT OF WESTERN AUSTRALIA | Citation No: | [2015] WADC 42 | |
| Case No: | CIV:3482/2014 | 8 APRIL 2015 | |
| Coram: | PRINCIPAL REGISTRAR MELVILLE | 22/04/15 | |
| PERTH | |||
| 9 | Judgment Part: | 1 of 1 | |
| Result: | The plaintiff pay the sum of $20,000 into court by way of security for costs | ||
| PDF Version |
| Parties: | CAROL BROOKS-JOHNSON SHINE LAWYERS PTY LTD STEPHEN FRANCIS ROCHE SIMON MICHAEL MORRISON STUART MACLEOD JODIE WILEY DUSTIN CHERRY |
Catchwords: | Security for costs Judicial notice of Acts of the United Kingdom |
Legislation: | Evidence Act 1906 Foreign Judgments (Reciprocal Enforcement) Act 1933 (UK) Interpretation Act 1984 The Reciprocal Enforcement of Foreign Judgments (Australia) Order 1994 |
Case References: | James v McEvoy [2011] FMCA 604 Maxim's Caterers Ltd v Magnona Pty Ltd (No 1) [2010] FCA 450 Pollock v Wellington (1996) 15 WAR 1 PS Chellaram & Co Ltd v China Ocean Shipping Co (1991) 102 ALR 321 Re Thomas Barton v The Minister for Foreign Affairs 2 FCR 463; [1984] FCA 89 Romeo v Wesley College [2015] WASCA 52 Soh v Commonwealth of Australia [2006] FCA 575 |
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
- IN CIVIL
- Plaintiff
AND
SHINE LAWYERS PTY LTD
First Defendant
STEPHEN FRANCIS ROCHE
Second Defendant
SIMON MICHAEL MORRISON
Third Defendant
STUART MACLEOD
Fourth Defendant
JODIE WILEY
Fifth Defendant
DUSTIN CHERRY
Sixth Defendant
Catchwords:
Security for costs - Judicial notice of Acts of the United Kingdom
Legislation:
Evidence Act 1906
Foreign Judgments (Reciprocal Enforcement) Act 1933 (UK)
Interpretation Act 1984
The Reciprocal Enforcement of Foreign Judgments (Australia) Order 1994
Result:
The plaintiff pay the sum of $20,000 into court by way of security for costs
Representation:
Counsel:
Plaintiff : Mr I F Tait
First Defendant : Mr A K Sharpe
Second Defendant : Mr A K Sharpe
Third Defendant : Mr A K Sharpe
Fourth Defendant : Mr A K Sharpe
Fifth Defendant : Mr A K Sharpe
Sixth Defendant : Mr A K Sharpe
Solicitors:
Plaintiff : Tait & Co
First Defendant : Jarman McKenna
Second Defendant : Jarman McKenna
Third Defendant : Jarman McKenna
Fourth Defendant : Jarman McKenna
Fifth Defendant : Jarman McKenna
Sixth Defendant : Jarman McKenna
Case(s) referred to in judgment(s):
James v McEvoy [2011] FMCA 604
Maxim's Caterers Ltd v Magnona Pty Ltd (No 1) [2010] FCA 450
Pollock v Wellington (1996) 15 WAR 1
PS Chellaram & Co Ltd v China Ocean Shipping Co (1991) 102 ALR 321
Re Thomas Barton v The Minister for Foreign Affairs 2 FCR 463; [1984] FCA 89
Romeo v Wesley College [2015] WASCA 52
Soh v Commonwealth of Australia [2006] FCA 575
1 PRINCIPAL REGISTRAR MELVILLE: The plaintiff was employed by the first defendant. She seeks damages from all defendants for negligent representations and misleading and deceptive conduct in the course of negotiations leading to her contract of employment (the first defendant). It is common ground that that contract of employment has since ended and that the plaintiff has returned to her original place of residence in the United Kingdom.
2 The defendants now seek an order for security for the costs they will incur in defending the action in the amount of $118,962.
General principles
3 The question of security for costs is governed by O 25 to the Rules of the Supreme Court. By O 25 r 1, it is provided no order shall be made merely on the account of the poverty of the plaintiff or the likely inability of the plaintiff to pay any costs which may be awarded. This rule deals with the impecuniosity, if any, of the plaintiff.
4 By O 25 r 2 the court is given discretion to order security for costs in a number of circumstances including circumstances in which a plaintiff is ordinarily resident out of the jurisdiction, notwithstanding that he or she may be temporarily within the jurisdiction.
5 By O 25 r 3, the court is required to take into account a number of considerations being:
(a) the prima facie merits of the claim;
(b) what property is available within the jurisdiction to satisfy any costs order against the plaintiff;
(c) whether the normal processes of the court would be available within the jurisdiction for enforcement of any order for costs against the plaintiff.
6 In PS Chellaram & Co Ltd v China Ocean Shipping Co (1991) 102 ALR 321 (McHugh J), whilst observing, to make or to refuse to make an order for security for costs involved in the exercise of the discretionary judgment, and observing the weight to be given to the circumstances of a case depended not only on its own intrinsic persuasiveness but the other circumstances which had to be weighed, went on to observe that one circumstance which may have very great weight was the fact that a party bringing the proceedings was resident out of the jurisdiction and had no assets within the jurisdiction. He said (323):
Indeed, for many years the practice has been to order such a party to provide security of the costs unless that party can point to other circumstances which overcome the weight of the circumstance that that person is resident out of and has no assets within the jurisdiction.
7 In Romeo v Wesley College [2015] WASCA 52 [7] (Newnes JA) said:
The purpose of an order for security for costs is protective, so as to ensure that the primary purpose of an award of costs (that is, indemnification of the successful party) is achieved.
8 These are matters which inform the manner in which the discretion is to be exercised. However, there are other matters as referred to by McHugh J in PS Chellaram & Co Ltd. It is difficult to see why a defendant should be in any better position in respect to these costs because the litigant is out of the jurisdiction than the defendant would be because the plaintiff is within the jurisdiction. This line of thinking has been considered and applied in the Federal Court in cases such as Re Thomas Barton v The Minister for Foreign Affairs 2 FCR 463; [1984] FCA 89 and Soh v Commonwealth of Australia [2006] FCA 575.
9 In the case of Re Thomas Barton [25] it was said that:
The historical basis for requiring a foreign plaintiff to give security for costs was that to enforce a judgment, a defendant had to sue on the judgment in the foreign country where the plaintiff resided, and having got his judgment, then to enforce it.
10 In that case the court found that the defendant, if successful, would be able to enforce the judgment for costs in the United Kingdom by virtue of the provisions of the Foreign Judgments (Reciprocal Enforcement) Act 1933 (U.K.) S.2. and that the provisions of that Act apply to Australia. The court went on to agree with the submission that it would
… be an odd result if an impecunious plaintiff was ordered to give security merely because he was ordinarily a resident outside Australia, although his absence from Australia had little, if any, prejudicial effect on the prospects of recovering his costs.
11 In that case the court ordered the plaintiff pay into court costs in the amount of $2,000 which the court considered would be sufficient to cover the costs of registering and enforcing the judgment of the Federal Court in the United Kingdom.
12 A similar approach was taken in Maxim's Caterers Ltd v Magnona Pty Ltd (No 1) [2010] FCA 450. In that case the court found that the plaintiff not only asserted reciprocal enforceability of the judgment between Hong Kong and Australia, but that it had substantial assets in Hong Kong. (Jagot J) said [13]:
Using the words of McHugh J this is a case where, on the evidence, Maxim's 'can point to other circumstances which overcome the weight of the circumstance that the person is resident out of and has no assets within the jurisdiction' (PS Chellaram & Co Ltd, 323).
13 I was referred to a Federal Magistrates' Court decision of James v McEvoy [2011] FMCA 604 in which the magistrate concluded that in the circumstances of the case before him there was no basis to find that any costs order of his court would be recognised in the United Kingdom by virtue of the reciprocal arrangement and enforced there. It appears the reasoning that underpinned that conclusion was that the court could not take judicial notice of the extent of the British recognition of his particular court's judgment, that the court could not take judicial notice of foreign laws even if they provided for the recognition of its judgments and that the terms of a foreign law must be proved. Reference was made to s 174 of the Evidence Act 1995 (Cth).
14 However, in Western Australia, by s 53 of the Evidence Act 1906, it is provided that all courts and all persons acting judicially shall take judicial notice of all Acts of the Parliament of the United Kingdom. By the Interpretation Act 1984, s 56(2), 'shall' is to be regarded as mandatory.
15 Tendered into evidence before me was a document entitled 'Foreign Judgments (Reciprocal Enforcement) Act 1933' and 'The Reciprocal Enforcement of Foreign Judgments (Australia) Order 1994'. These two documents are legislative provisions of the United Kingdom and by O 3 of The Reciprocal Enforcement of Foreign Judgments (Australia) Order 1994 the District Court of Western Australia is recognised for the purpose of Pt 1 of the Foreign Judgments (Reciprocal Enforcement) Act 1933. It is to be observed there is no similar reference to the Federal Magistrates' Court of Australia, which may have been a matter that concerned the court in James v McEvoy.
The evidence
16 The application was supported by an affidavit of Mr Trent Andrew McCartney O'Neill. Annexed to that affidavit was a report of Maria-Luisa Coulson in which she expressed the opinion that a reasonable allowance for the defendants costs in defending the action would be $105,832 in professional fees and $13,130 in disbursements, including $12,500 for an expert opinion regarding the availability of jobs in Perth for lawyers with the qualifications and experience of the plaintiff.
17 There is no challenge to the qualifications of Ms Coulson to give this evidence. However the weight of the evidence is problematic, particularly where the opinion in respect of costs likely to be occurred on a solicitor/client basis is given to a court that frequently taxes costs on a party/party basis which necessarily involves consideration of the reasonable costs incurred as between solicitor and client.
18 Given the speculative nature of the process and the assumptions made, I am not satisfied that the costs that are likely to be incurred by the defendants will be in the amount proposed. That is not to say they will not be. But the question is attended with so much uncertainty that the allegation cannot be proven for my satisfaction. However, I am satisfied that the defendants' will incur considerable legal fees in defending the matter and that those fees could be in the region of $105,000.
19 It is noted that given that a number of allegations relating to misrepresentations has been made involving the second to the sixth defendants, there is likely to be at least seven witnesses, if not more, and the allowance of four days for the trial is not unreasonable.
20 I am unable to accept the assessment of $12,500 for the disbursement for the expert opinion. In Pollock v Wellington (1996) 15 WAR 1 [3], it was said that before a medical expert opinion could be of any value, the facts upon which it was based needed to be proved by admissible evidence and
As with any other evidence, expert opinion must be comprehensible and the conclusions reached must be rationally based. A court ought not to act on an opinion, the basis for which is not explained by the witness expressing it.
21 In my view there was no rational basis for the conclusion that the expert opinion is $12,500 and to the extent it might be said there is, it is not explained by the witness expressing it. I disregard that aspect of the opinion.
Plaintiff's evidence
22 The plaintiff gave evidence that the only assets she had within the jurisdiction was a pension fund worth $30,817 that she could access but upon which 38% tax would be levied, with a balance of $19,106.94 being payable into a National Australia Bank account, together with a savings account of $1,000.
23 The plaintiff did have assets in the United Kingdom constituted by a vehicle worth approximately $19,800, $4,000 in a savings account and ownership of a property together with her husband in the amount of approximately $965,000. It is not known how accessible her interest in that property would be for the defendants if they were successful in the defence.
24 The plaintiff went on to say that if she was ordered to pay security for costs, it was very likely she would be unable to proceed with the action. She did not condescend to particulars of this proposition. Given her asset situation in the United Kingdom, it seems clear to me she does have the resources to fund the litigation and that a proper inference to be drawn from what she has said in this regard is that she may not be prepared to spend those resources in funding the litigation but may prefer to spend those resources in maintaining her current lifestyle in the United Kingdom, namely to live in an unencumbered house and to possess a motor vehicle.
Conclusion
25 It is not possible to determine precisely the amount of legal costs the defendants' are likely to incur in defending the action. I am not satisfied as to $105,000 but I am satisfied it is a significant amount and likely to be in excess of $80,000 with the possibility of it being in the amount opined by the defendants' cost expert.
26 I find that the plaintiff does have some assets within this jurisdiction although it is doubtful how accessible they would be to the defendants. Although no evidence was given to me, it is not inconceivable that monies held for the plaintiff by way of superannuation could not be accessed by a judgment creditor.
27 On the other hand, there is no guarantee that the defendant will be successful in the defence. Having regard to the criteria that I must consider in O 25 r 3, it appears to me that the case on the face of it has merit. In so saying, it is not to say that the defence does not have merit. However, it is not a case which on the face of it looks weak.
28 I further find that in the event the defendants are successful, they will be able to enforce the judgment in the United Kingdom. Whilst I have been given no evidence as to the nature and extent those enforcement proceedings of the cost thereof, adopting the approach taken by Morling J in Barton, I am of the view it is not likely to exceed $20,000.
29 In my view, in exercising my discretion, and having regard to those matters, I think an order that the plaintiff pay the sum of $20,000 into court by way of security for the defendants' costs of the action adequately protects the defendants' interest insofar as they need to be able to recover their costs. In so doing I am mindful that this will not bar the plaintiff from pursuing her action, or put her to an undue financial stress associated with having to sell her residence in circumstances where she has a claim which, on the face of it, has merit.
0
7
4