Dodds v Kennedy - [2010] WASCA 201

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE COURT OF APPEAL (WA)

CITATION: DODDS -v- KENNEDY [2010] WASCA 201

CORAM: NEWNES JA

HEARD: 1 OCTOBER 2010

DELIVERED : 21 OCTOBER 2010

FILE NO/S: CACV 89 of 2010

BETWEEN: SUZANNE DODDS
TIMOTHY DODDS
Appellants
AND
GILLIAN KENNEDY
DONNCHA KENNEDY
Respondents

ON APPEAL FROM:
Jurisdiction              :  DISTRICT COURT OF WESTERN AUSTRALIA
Coram  :BOWDEN DCJ
Citation  :KENNEDY & ANOR -v- DODDS & ORS [2010] WADC 122
File No  :CIV 249 of 2009

Catchwords:

Practice and procedure - Application for security for costs - Whether order for security for costs would stifle appeal - Appellants impecunious - Appellants' solicitors acting pro bono on appeal - Whether inference should be drawn they are doing so in endeavour to recover their unpaid costs of trial - Whether appellants' solicitors stand to benefit from appeal

Legislation:

Nil

Result:

Application for security for costs dismissed

Category: B

Representation:

Counsel:

Appellants: Mr D A Lenhoff
Respondents : Mr D H Solomon

Solicitors:

Appellants: Holborn Lenhoff Massey
Respondents : Solomon Brothers

Case(s) referred to in judgment(s):

Bell Wholesale Co Ltd v Gates Export Corporation (1984) 2 FCR 1
Commonwealth Bank of Australia v Eise (1991) 6 ACSR 1
Green v CGU Insurance Ltd [2008] NSWCA 148; (2008) 67 ACSR 105
Jeffery & Katauskas Pty Ltd v SST Consulting Pty Ltd [2009] HCA 43; (2009) 239 CLR 75
Joseph v Joseph [2007] WASCA 27
Mann v Dabelstein [2006] WASCA 176
Natcraft Pty Ltd v Det Norske Veritas [2002] QCA 241
Turner v Leda Commercial Properties Pty Ltd [2002] ACTSC 5

NEWNES JA: This is an application by the respondents for security for costs of the appeal. The amount of the security sought is $18,000. The application is opposed by the appellants who say that because they are impecunious such an order would stifle the appeal.

Background

On 4 April 2008 the appellants entered into a standard REIWA Contract for the Sale of Land (September 2006 revision) by which they agreed to purchase the respondents' property in Hillarys for the sum of $672,500. The contract was expressed to be subject to finance. The lender nominated in the contract was the ANZ Bank and the latest date for finance approval was 21 April 2008.
On 11 April 2008, the appellants attended a meeting with a licensed finance broker, Mr Blackburne. Mr Blackburne carried on business as a mortgage broker and acted as an intermediary, taking applications for finance on behalf of clients and submitting them to financial institutions. He was not an agent of the ANZ Bank able to approve finance applications but he was an accredited mortgage broker with the ANZ Bank and was entitled to submit loan applications to the ANZ Bank on behalf of his clients. He submitted to the ANZ Bank approximately 50% of the applications he received for finance.
At the meeting, the appellants showed Mr Blackburne the contract of sale and provided him with certain financial and…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Dodds v Kennedy

Details

AGLC: Dodds v Kennedy [2010] WASCA 201
Case: [2010] WASCA 201
Decision Date: 21 OCTOBER 2010

CaseChat Overview and Summary

The matter of Dodds v Kennedy involved an application by the respondents, Kennedy, for security for costs against the appellants, Dodds. The dispute centred on the appellants' financial inability to cover the costs of the appeal, given their status as an impecunious entity. The appellants' solicitors were acting pro bono, raising questions about whether this fact should influence the court's decision on the application for security for costs. The case was heard by the court, which had to determine whether the appellants' solicitors, who were acting pro bono, stood to benefit from the appeal in a way that should affect the decision on the security for costs application.

The court faced several key legal issues. Primarily, it had to consider the implications of the appellants' impecunious status and the pro bono nature of the representation on the application for security for costs. The court needed to decide if the fact that the appellants' solicitors were acting without compensation due to the pro bono arrangement should impact the decision on the security for costs, potentially stifling the appeal. This required the court to balance the principles of ensuring that those who benefit from litigation bear its costs against the need to support pro bono legal services.

The court's reasoning involved a careful analysis of the principles established in previous cases. It noted that generally, a court would not refuse to order security for costs against an appellant company if the shareholders or creditors who stand to benefit from the litigation are also impecunious. However, the court distinguished the situation where solicitors act pro bono for altruistic reasons, finding that such a scenario did not warrant the same considerations as those where parties stand to make a commercial profit from litigation. The court referenced Turner v Leda Commercial Properties Pty Ltd, where it was held that pro bono representation should not support the exercise of the discretion to order security for costs. In light of these considerations, the court concluded that ordering security for costs in this case would not be appropriate.

In conclusion, the court dismissed the application for security for costs. It held that the pro bono nature of the appellants' solicitors' representation did not warrant a different approach to the application for security for costs. The court's decision was grounded in the principle that supporting pro bono legal services should not be compromised, even if the solicitors would recover fees if the litigation were successful.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

It is accepted that generally a court will not refuse to order security for costs against an appellant company on the ground that such an order would stifle the litigation, unless it is established that the shareholders or creditors (or in the case of a trustee, the beneficiaries) who stand behind the company and stand to benefit from the litigation if it is successful are also without means: Bell Wholesale Co Ltd v Gates Export Corporation (1984) 2 FCR 1, 4. That is based on the notion that those who seek to take the benefit of litigation should also bear the risks and burdens that the litigation involves. Similarly, following the development of litigation funding, it has been said that a court should be readier to order security for costs where a party who stands to benefit from litigation is a party whose interest is solely to make a commercial profit from funding it; that the courts should be particularly concerned that persons whose involvement in litigation is purely for commercial profit should not avoid responsibility for costs if the litigation fails: Green v CGU Insurance Ltd [2008] NSWCA 148; (2008) 67 ACSR 105 [51]; Jeffery & Katauskas Pty Ltd v SST Consulting Pty Ltd [2009] HCA 43; (2009) 239 CLR 75 [61] ‑ [64]. However, solicitors who are acting pro bono for altruistic reasons are a long way removed from those situations and I do not accept that the same or analogous considerations apply simply because, if the litigation is successful, the solicitors will recover fees for that work and any preceding legal work for which they might otherwise remain unpaid. No authority was cited by the respondents in support of their contention and my own research has revealed only one case where the question of pro bono representation has arisen in the context of an application for security for costs. That case does not assist the respondents. In Turner v Leda Commercial Properties Pty Ltd [2002] ACTSC 5, Master Connolly concluded that the fact the appellant had pro bono representation did not support the exercise of the discretion to order security for costs. The master considered that to find otherwise would be contrary to public policy as it would tend to stifle the development of pro bono schemes. In the circumstances of this case, I do not consider that an order for security for costs is appropriate. I would dismiss the application.