Daley v Brooks

[1992] TASSC 121

Serial No B44/1992
List “B”

CITATION:  Daley v Brooks [1992] TASSC 121; B44/1992

PARTIES:  DALEY, Elaine Frances

v

BROOKS, Phillip Archie

JOHNSTON, Reginald W

WEBSTER LIMITED 

TITLE OF COURT:  SUPREME COURT OF TASMANIA

JURISDICTION:  APPELLATE

FILE NOS:  FCA 101/1991

DELIVERED:  13 October 1992

HEARING DATES:  5 October 1992

JUDGMENT OF:  Crawford J

CATCHWORDS:

Appeal—Practice and procedure—Security for costs—Impecuniosity of appellant—Delay by respondent.

Rules of the Supreme Court, O76, r29.

REPRESENTATION:

Counsel:

Appellant/Second Respondent:            A Blow

Appellant/Third Respondent:               R Mackay

Respondent/Appellant:  M Hunniford

Solicitors:

Appellant/Second Respondent:            McLean Phillips and Bartlett

Appellant/Third Respondent:               Dobson Mitchell and Allport

Respondent/Appellant:  Hunniford

Judgment category classification:

Judgment ID Number:                 B44/1992

Number of paragraphs:               16

Serial No B44/1992

List "B"

File No FCA 101/1991

ELAINE FRANCES DALEY v PHILLIP ARCHIE BROOKS, REGINALD W JOHNSTON AND WEBSTER LIMITED

REASONS FOR JUDGMENT  CRAWFORD J

13 October 1992

1. The appellant is Elaine Frances Heatley. Her previous name was Daley but at some time she married Ronald Thomas Heatley, a professional punter. In the second half of 1985 Mr Heatley suggested to her that she acquire a pacer, in particular a three year old colt called "Hughies Return" owned and trained by the first respondent, Phillip Archie Brooks, of Devonport. She decided to do so. Mr Heatley acted as her agent for the purpose of acquiring the horse. He engaged Reginald W Johnston ("the second respondent") who was an employee of Webster Limited ("the third respondent"). The arrangement between Mr Heatley, acting on behalf of the appellant, and the second respondent was that the latter would deal with the first respondent in negotiations for the purchase of the pacer. As a result of those negotiations the appellant became the owner of it. The price paid was $14,000. In addition it was agreed that the appellant would pay $2,000 from each of the horse's first three wins. It never won. Its total prize money was only $531 after a number of races. In March 1988 the plaintiff sold the pacer for $1,000.

1. The appellant first sued the first respondent for damages for alleged breach of warranty as to the soundness and other qualities of the horse. In a second action she sued the second respondent in tort and contract claiming that he had agreed to act as her agent in the purchase of the horse, but that he had failed to obey the terms of his engagement and in breach thereof, and negligently, had failed to inspect the horse and detect its infirmities, failed to advise the appellant as to its true condition and failed to ensure that a veterinary certificate of soundness and an ECG heart certificate had been obtained prior to completion of the sale and delivery. The third respondent was also sued in the second action, it being claimed that it was vicariously liable for the wrongful conduct of the second respondent.

1. Many interlocutory steps occurred in both actions, including many interlocutory applications and hearings. Eventually both actions were tried together by Cox J without a jury. The trial took sixteen sitting days until judgment was reserved. On 23 August 1991 judgment was given for all the respondents against the appellant with costs.

1. On 11 September 1991 the appellant appealed against the three respondents. She applied for an order staying the execution of the orders for costs. On 19 November 1991 that application was dismissed with costs. On 14 November 1991 the third respondent's costs of the trial were taxed at $17,732.71. The appellant has not paid those costs.

1. The appellant failed to prepare the appeal books as required by the Rules. The third respondent applied to strike out the appeal for that failure. The application failed, the judge being prepared to give the appellant further time, but costs were ordered against her. On 6 March 1992 she obtained an order extending the time for filing the appeal books and costs were ordered against her in favour of the second and third respondents.

1. The appeal was listed for hearing on 28 May 1992. Counsel for the second respondent announced that his client did not wish to take part at the hearing and withdrew. The reason for that decision can be inferred from the grounds of the appeal as they then existed. They all concerned both the second and third respondents and the third respondent was represented by counsel and obviously intended to oppose the appeal. The appellant applied to amend the grounds of appeal however. That application and the hearing of the appeal were adjourned. The appellant was ordered to pay the third respondent's costs thrown away by the adjournment.

1. On 2 June 1992 the appellant filed a notice stating that she discontinued the appeal against the first respondent. On 3 June the application to amend the grounds of appeal came on for hearing once more. The appellant and the second and third respondents were represented by counsel. The Full Court made orders amending the notice of appeal. New grounds were inserted. The appellant was ordered to pay the costs of the second and third respondents both of the application and thrown away. The hearing of the appeal was adjourned to a date to be fixed. New grounds of the appeal directly attacked findings of the trial judge about the contractual relationship between the appellant and the second respondent and the duties owed by the second respondent to the appellant. As a result it appears that the second respondent thereafter chose to play a more active part in the conduct of the appeal than he had previously intended.

1. On 19 June 1992 the appellant filed an application to a judge for an order permitting her to call fresh evidence on the hearing of the appeal. The application did not state what the fresh evidence was. It was not supported by an affidavit. A single judge had no jurisdiction to deal with the application and when it came before the Chief Justice on 20 July 1992 it was adjourned sine die and the appellant was ordered to pay the costs thrown away of the second and third respondents.

1. It can be expected that in the meantime the second and third respondents were becoming increasingly concerned at the ever growing cost of the litigation. In the circumstances of the apparent impecuniosity of the appellant, to which I will later refer, the making from time to time of orders for costs in their favour against her must have been cold comfort. On 9 July 1992 the second respondent filed an application that the appellant give security for his costs of the appeal by paying $10,000 into court. On 10 July 1992 the third respondent made a similar application. My task is to determine the applications.

1. Affidavits of Michael Ernest O'Farrell, a legal representative for the third respondent, and of the appellant were read. Both deponents were cross–examined. The evidence established the impecuniosity of the appellant. She has no assets of any significant value. Her only income is from knitting and amounts to about $30 each week. Knitting has been her only source of income for several years. There is no reasonable prospect of her paying any of the costs which have been ordered against her. Specifically she was asked whether she would pay the third respondent's taxed costs of the trial in the sum of $17,732.71. She said that if she won "Tatts" or won money on a horse she would, but there was no other source from which the necessary funds would be forthcoming. Her own legal costs of the trial amounted, she said, to around $40,000 and she paid them with money borrowed from Mr Heatley. She had paid for the preparation of the appeal books something over $1,000, once again with money borrowed from Mr Heatley. She had applied unsuccessfully for legal aid to fund the appeal. I think it a reasonable inference that Mr Heatley is funding her costs at present.

1. It is patently unfair and unreasonable that the second and third respondents should have to face mounting and substantial legal expenses as the appeal staggers along the road towards hearing, in circumstances where a substantial portion of the expenses so far incurred have been occasioned by reason of the fault of the appellant or her legal representatives. It is equally unfair and unreasonable in those circumstances that the second and third respondents should also have to face the prospect of incurring the costs of adequate legal representation from now until the appeal is heard and resolved with virtually no prospect of being reimbursed by the appellant if the appeal fails and orders for costs are made against her.

1. The Rules of Court, O76, r29 provides that security for the costs of an appeal shall not ordinarily be required, but the court or a judge may, in a proper case, order an appellant to give such security. I have no hesitation in concluding that this is a proper case for making such an order, for the following reasons:

1The appellant is impecunious. The respondents have no real prospect of recovering their costs of the trial which were ordered to be paid by the appellant, nor of recovering the costs from time to time ordered to be paid by the appellant throughout the appeal process which has occurred so far. Adding to those costs the costs of the appeal which are likely to be awarded against her if it fails, the total bill of the respondents will be very large and there is clearly a risk of considerable injustice to them if the appellant is permitted to proceed further with her case against them without providing security.

2A not insignificant sum by way of costs has been incurred by the respondents already because of the failure of the appellant or her legal advisers to manage and conduct her appeal in an orderly and efficient manner.

3It has in no way been suggested that the impecuniosity of the appellant has been brought about by the respondents, the court proceedings against them or the subject matter of those proceedings.

4No questions of law of any substance appear to be raised on the face of the grounds of the appeal. No element of public importance arises. The issues appear to relate to findings of fact made by the learned trial judge, some of which depended on the credit of witnesses, particularly Mr Heatley and the second respondent.

5Nothing was put before me to suggest that any particular ground of the appeal is likely to succeed. That is not to say of course that all are likely to fail.

6It is likely that further costs will be incurred unreasonably from the point of view of the respondents if the appellant persists with her desire to place fresh evidence before the Full Court. The grounds of appeal will need to be amended again.

1. The main argument advanced by the appellant's counsel in opposition to the applications for security for costs was that the second and third respondents have delayed in making their applications. There are a number of authorities in support of the proposition that an application for security for costs should be made promptly. Many of those authorities were referred to in Smail v Burton [1975] VR 776. It is this argument which caused me to reserve my decision but on reflection it does not have much weight in the circumstances of this case. The appellant is unlikely to have been faced with the applications if her appeal had been prosecuted in an orderly and efficient manner. In my view the applications have reasonably been made out of a justified sense of frustration on the part of the second and third respondents and their advisers and concern about mounting legal expenses which, although most of them have so far been ordered to be paid by the appellant, are unlikely ever to be recovered.

1. In her affidavit the appellant asserted that she will be unable to pay any amount ordered as security and will therefore be unable to proceed with her appeal. If this was truthful, and I have no reason for finding that it was not, then it should be recognised that she has reasonably incurred some costs in the progress of the appeal towards hearing, which will be wasted by the making of the order for security. In the interests of doing justice to the appellant I propose to recognise this by reducing by $2,000 the amount of security I would otherwise have ordered she should pay to each of the second and third respondents.

1. Mr O'Farrell, in his affidavit, estimated that the hearing of the appeal could take as long as six days and that the costs of each respondent of and incidental to the hearing of the appeal could amount to $9,000 or more. He was not cross–examined about this and I accept what he said. In the orders for security I will deduct $2,000 from that sum because of the delay in making the applications.

1. There will be an order that the appellant give security for the second named respondent's costs of this appeal by paying into court the sum of $7,000 to abide the order of the court or a judge. A similar order will be made in favour of the third named respondent. It seems appropriate that it should also be ordered that until payment into court has been made and notice thereof given by the appellant to the respective respondents all proceedings in the appeal be stayed, but as the terms of the applications make no mention of this I will invite submissions from the parties.