Chawk v Callan

Case [2024] FCA 92

FEDERAL COURT OF AUSTRALIA

Chawk v Callan [2024] FCA 92

Appeal from: Callan v Chawk [2023] FCA 898; Callan v Chawk (Costs) [2023] FCA 1198
File number: VID 682 of 2023
Judgment of: ROFE J
Date of judgment: 16 February 2024
Catchwords: PRACTICE AND PROCEDURE – defamation – security for costs application – stay application – where appellant admits he is impecunious but seeks to stay the costs orders below pending the outcome of his appeal – prospects of success of the appeal – whether respondent will be able to recover costs of the proceedings below or costs of the appeal if successful – security for costs will stultify appeal but appellant has had his “day in court” – security for costs granted.
Legislation:

Federal Court of Australia Act 1976 (Cth)

Federal Court Rules 2011 (Cth)

Defamation Act 2005 (NSW)
Cases cited:

Callan v Chawk [2023] FCA 898

Callan v Chawk (Costs) [2023] FCA 1198

Dye v Commonwealth Securities Ltd [2012] FCA 992

Flight Centre Ltd v Australian Competition and Consumer Commission [2014] FCA 658

Mathews v All Options Pty Ltd [2019] FCA 1972

Nationwide News Pty Ltd v Rush (2020) 380 ALR 432

Nugawela v Dudley (Trustee) [2023] FCA 1603

Redbubble Ltd v Hells Angels Motorcycle Corp (Australia) Pty Ltd (2022) 168 IPR 74
Division: General Division
Registry: Victoria
National Practice Area: Other Federal Jurisdiction
Number of paragraphs: 41
Date of hearing: 15 February 2024
Counsel for the Appellant: Ms L Collaris
Solicitor for the Appellant: Boadicea Legal Services Pty Ltd
Counsel for the Respondent: Mr N Olson
Solicitor for the Respondent: Company Giles Pty Ltd

ORDERS

VID 682 of 2023
BETWEEN:

ZACHARIAH CHAWK

Appellant
AND:

DR PETER CALLAN

Respondent

ORDER MADE BY:

ROFE J

DATE OF ORDER:

16 FEBRUARY 2024

THE COURT ORDERS THAT:

1.The appellant’s interlocutory application dated 9 January 2024 be dismissed.

2.Pursuant to s 56 of the Federal Court of Australia Act 1976 (Cth) and r 19.01 of the Federal Court Rules 2011 (Cth), the appellant is to provide security for the respondent’s costs in the amount of $50,000 within 42 days of these orders.

3.The security referred to in order 2 is to be provided by payment into Court or by way of irrevocable bank guarantee(s) issued by an Australian bank and realisable on an order of the Court.

4.Until security for costs is provided by the appellant in accordance with orders 2 and 3, this proceeding be stayed.

5.If the appellant fails to comply with order 2, the appeal be dismissed pursuant to s 56(4) of the Act and r 19.01(c) of the Rules.

6.Execution of the following orders are stayed for 42 days:

(a)Order 1 of the orders made in Callan v Chawk [2023] FCA 898 on 3 August 2023; and

(b)Orders 2 and 3 of the orders made in Callan v Chawk (Costs) [2023] FCA 1198 on 10 October 2023.

7.The appellant pay the respondent’s costs of, and incidental to, this application.

Note:   Entry of orders is dealt with in…

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Chawk v Callan [2024] FCA 92
Case
[2024] FCA 92
Decision Date

CaseChat Overview and Summary

In the matter of Chawk v Callan, the appellant, Mr Chawk, has appealed against the costs orders made in the Federal Court by his Honour, who awarded costs to Dr Callan, the respondent, for proceedings between the parties. The primary judgment was delivered on 3 August 2023, and the costs judgment was delivered on 10 October 2023. The appeal concerns the security for costs required for the appeal proceedings and the stay of the costs orders pending the appeal's outcome. Mr Chawk has admitted to being impecunious but seeks to stay the costs orders below pending the outcome of his appeal. Dr Callan has applied for security for the costs of the appeal under s 56 of the Federal Court of Australia Act 1976 (Cth) and r 36.09 of the Federal Court Rules 2011 (Cth), while Mr Chawk has filed an interlocutory application seeking to stay the orders in the primary judgment and the costs judgment. Both applications are heard together as they concern Mr Chawk's capacity to pay any costs order. The court granted Dr Callan's application for security for costs and dismissed Mr Chawk's application to stay the orders. The court found that Mr Chawk should give security for the costs of the appeal and the appeal be stayed until security is given. The court exercised its discretion under s 56 of the Act and r 36.09(1) of the Rules, considering the relevant principles, including the prospects of success of the appeal, the likelihood of the costs order being satisfied, and whether the making of the order would be oppressive. The court also considered the public interest aspects of the case. The orders made by the court include dismissing Mr Chawk's interlocutory application, requiring Mr Chawk to provide security for the respondent's costs in the amount of $50,000 within 42 days, and staying the execution of certain orders pending the provision of security. The court also ordered that if Mr Chawk fails to comply with the order to provide security, the appeal be dismissed.

Orders

Orders of the court

1. The appellant’s interlocutory application dated 9 January 2024 be dismissed.

2. Pursuant to s 56 of the Federal Court of Australia Act 1976 (Cth) and r 19.01 of the Federal Court Rules 2011 (Cth), the appellant is to provide security for the respondent’s costs in the amount of $50,000 within 42 days of these orders.

3. The security referred to in order 2 is to be provided by payment into Court or by way of irrevocable bank guarantee(s) issued by an Australian bank and realisable on an order of the Court.

4. Until security for costs is provided by the appellant in accordance with orders 2 and 3, this proceeding be stayed.

5. If the appellant fails to comply with order 2, the appeal be dismissed pursuant to s 56(4) of the Act and r 19.01(c) of the Rules.

6. Execution of the following orders are stayed for 42 days:

(a) Order 1 of the orders made in Callan v Chawk [2023] FCA 898 on 3 August 2023; and

(b) Orders 2 and 3 of the orders made in Callan v Chawk (Costs) [2023] FCA 1198 on 10 October 2023.

7. The appellant pay the respondent’s costs of, and incidental to, this application.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

On 10 October 2023, his Honour ordered that Mr Chawk pay Dr Callan’s costs of the proceedings on the ordinary basis up to 6 October 2022 and on an indemnity basis thereafter: Callan v Chawk (Costs) [2023] FCA 1198 (Costs Judgment). His Honour also rejected (at [34]-[35]) an application by Mr Chawk for a stay of the costs order. On 30 August 2023, Mr Chawk filed a notice of appeal, seeking to set aside both the Primary Judgment and the Costs Judgment. An amended notice of appeal was filed on 27 September 2023. On 30 October 2023, Dr Callan filed an interlocutory application seeking security for the costs of the appeal under s 56 of the Federal Court of Australia Act 1976 (Cth) and r 36.09 of the Federal Court Rules 2011 (Cth) (Dr Callan’s application). Dr Callan relies upon the affidavit of Ms Rebekah Giles, his solicitor, made on 30 October 2023. Ms Giles was cross-examined. Mr Chawk then filed an interlocutory application on 9 January 2024, again seeking to stay the orders in the Primary Judgment and the Costs Judgment (Mr Chawk’s application). Mr Chawk relies upon two affidavits made by him on 10 January and 12 February 2024. Dr Callan objected to exhibit ZC-2 to the second affidavit: a copy of the review with a partial response by Dr Callan’s practice. I will discuss this exhibit below. Those two interlocutory applications are now before me in my capacity as duty judge. Mr Chawk’s capacity to pay any costs order is the central issue in both applications and therefore both applications were heard together on 15 February 2024. Both parties filed written submissions before the hearing. For the reasons that follow, I will grant Dr Callan’s application and dismiss Mr Chawk’s application. I am satisfied pursuant to r 36.09(1) of the Rules that Mr Chawk should give security for the costs of the appeal and the appeal be stayed until security is given. SECURITY FOR COSTS PRINCIPLES Section 56 of the Act relevantly provides: (1) The Court or a Judge may order an applicant in a proceeding in the Court, or an appellant in an appeal under Division 2 of Part III, to give security for the payment of costs that may be awarded against him or her. (2) The security shall be of such amount, and given at such time and in such manner and form, as the Court or Judge directs. Rule 36.09(1) of the Rules provides:(1)A party may apply to the Court for an order that:(a)the appellant give security for the costs of the appeal, and for the manner, time and terms for giving the security; and(b) the appeal be stayed until security is given; and(c)if the appellant fails to comply with the order to provide security within the time specified in the order – the appeal be stayed or dismissed. The principles in relation to security for costs are well-known and were not in dispute. The provisions set out above create a broad and unfettered discretion: Lim v Comcare [2016] FCA 1346 at [18] (per Wigney J). The principles applicable to the exercise of this discretion were summarised by O’Bryan J in Mathews v All Options Pty Ltd [2019] FCA 1972 at [13], recently followed in Nugawela v Dudley (Trustee) [2023] FCA 1603 at [13]-[14] (per Jackson J). Relevant matters to be considered include:(a)the prospects of success of the appeal; (b)the likelihood that a costs order will not be satisfied; (c)whether the making of the order would be oppressive in that it would stifle a reasonably arguable appeal; (d)whether the appellant’s impecuniosity arises out of the respondent’s conduct; and (e)whether there are aspects of public interest which weigh against the making of the order.

Ratio Decidendi

Legal Principle Established

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