Donnelly v Capricornia Prospecting Pty Ltd

[2001] NSWLEC 203

Reported Decision: 116 LGERA 264

Land and Environment Court

of New South Wales

CITATION:	Donnelly and Anor v Capricornia Prospecting Pty Ltd and Ors. [2001] NSWLEC 203
PARTIES:	APPLICANTS: Donnelly and Anor. RESPONDENTS: Capricornia Prospecting Pty Ltd and Ors.
FILE NUMBER(S):	40243 of 1998
CORAM:	Bignold J
KEY ISSUES:	Practice and Procedure :- Application for reduction in the amount of security for costs-Exercise of statutory discretion
LEGISLATION CITED:	Land and Environment Court Act 1979, s 69(5)
CASES CITED:	Brundza v Robbie & Co (No 2) (1952) 88 CLR 171
DATES OF HEARING:	30 August 2001
DATE OF JUDGMENT:	08/31/2001
LEGAL REPRESENTATIVES:	APPLICANTS: Mr A Oshlack, Agent SOLICITORS: N/A RESPONDENTS: Ms J Hughes, Solicitor SOLICITORS Phillips Fox

JUDGMENT:

IN THE LAND AND

Matter No. 40243 of 1998

ENVIRONMENT COURT OF

Coram: Bignold J.

NEW SOUTH WALES

31 August 2001

DONNELLY & ANOR

Applicants

v

CAPRICORNIA PROSPECTING PTY LTD

First Respondent

ROSS MINING N.L.

Second Respondent

TIMBARRA GOLD MINES PTY LTD ACN 009 088 359

Third Respondent

TENTERFIELD SHIRE COUNCIL

Fourth Respondent

THE WATER ADMINISTRATION MINISTERIAL CORPORATION

Fifth Respondent

JUDGMENT ON APPLICANTS’ NOTICE OF MOTION

Bignold J:

1. By Notice of Motion filed in Court on 15 August 2001, the Applicants seek the following relief:

The amount of the security bond at the discretion of the Court be returned to the Applicants as soon as possible.

2. The filing of the Motion coincided with the completion of the re-opened hearing of the present class 4 proceedings (which had been heard concurrently with related class 3 proceedings).

3. In the class 4 proceedings, the Applicants had been required by the judgment of Lloyd J delivered on 5 March 1999 to provide security for the first second and third Respondents’ costs in the sum of $20,000.

4. That security was ultimately provided in cash to the Court by 30 June 2000 in circumstances discussed in my judgment delivered on 11 May 2000 (2000) NSWLEC 134) where I extended until 30 June 2000 the time for providing the required security.

5. On the application of the Applicants, I exercised on 25 August 2000 the power conferred upon the Court by the Land and Environment Court Act 1979, s 69(5) (LEC Act) by reducing the amount of security from $20,000 to $17,000.

6. By their present Motion, the Applicants seek a further order reducing the amount of security to $10,000 so that $7,000 can be released to the Applicants.

7. Mr Oshlack, the Applicants’ agent, has informed the Court that the Applicants urgently require money to re-pay a person in present personal financial need, who had contributed $3,500 towards the Applicants’ public appeal for funds which had solely sourced their ability to raise the required security. Additionally, they would like to pay some fees (long outstanding) for expert witnesses who had been retained by the Applicants in the proceedings.

8. Miss Hughes, Solicitor for the first to third Respondents, who oppose the Applicants’ Motion, did not object to the Court acting upon the facts as related by Mr Oshlack which I have just summarised.

9. In opposing the requested reduction in security for costs, Miss Hughes relies upon the content of her affidavit sworn 30 August 2001 which reveals the following relevant facts:
(i.) the first and second Respondents have the benefit of a judgment for $87,504 against the Applicants (being the assessed costs in other legal proceedings concluded in this Court) which judgment is wholly unsatisfied;
(ii.) the first, second and third Respondents have paid more than $30,000 to their present Solicitors for costs in these proceedings;
(iii.) in addition to the amount paid to their Solicitors, the first, second and third Respondents have paid some $8,000 for Counsel’s fees in the proceedings and are liable to pay some $15,000 to retained experts in the proceedings; and
(iv.) the first, second and third Respondents have paid some $45,000 to other Solicitors earlier retained by them in the proceedings.

10. Accordingly, the first to third Respondents have paid, or are liable to pay, in the order of $100,000 to their lawyers (past and present) and experts engaged in the present proceedings.

11. At the commencement of the hearing, I informed the parties that I expected to deliver final judgment in the proceedings on 12 September 2001 (being the date that the same parties are due to appear before me in another uncompleted proceeding).

12. Mr Oshlack informed me that the Applicants desired an immediate return of $7,000 of the security held by the Court. Accordingly, the relief claimed which requires my adjudication is whether the Court should exercise its statutory discretion to immediately reduce by $7,000 the amount of the security for costs currently held by the Court, thereby leaving a security of $10,000.

13. In support of the Motion, Mr Oshlack has taken me extensively to the judgment of Lloyd J requiring the payment of security, with a view to showing that many of the matters which had influenced his Honour’s decision to require security no longer apply.

14. In particular, Mr Oshlack placed considerable reliance upon the following statement at par 47 of his Honour’s judgment:

The order for security for costs will test the genuineness of the Applicants’ claims.

15. Mr Oshlack submitted that the raising of the required security in the sum of $20,000 had attested the genuineness of the Applicants’ claims, as had the fact that the claims were fully and responsibly litigated by the Applicants. Having passed that “test”, so the argument went, the Applicants had fulfilled the purpose of the required security.

16. The passage from par 47 of Lloyd J’s judgment appears in the context of his Honour’s consideration of a separate question to the question of security, that was also litigated before Lloyd J, namely whether the Applicants and Mr Oshlack should be declared vexatious litigants. (His Honour declined to make declarations.)

17. Whereas I can readily appreciate the basis for Mr Oshlack’s argument, I am afraid that I am unable to accept that it provides any justification for reducing the security from $17,000 to $10,000.

18. Although his Honour expressed the view that he did, concerning the genuineness of the applicants’ claim, that view did not form part of his Honour’s stated reasons for requiring security. Those reasons appear in the following passage at par 27 (following his Honour’s discussion of the relevant considerations identified by his Honour at par 15 to 26):

It follows from the discussion under each of the considerations which apply to an application for security for costs that, on balance, an order for security should be made. It is inappropriate that the applicants should commence fresh litigation against the respondents when they have an unsatisfied order for costs against them made in earlier proceedings between the parties. It would be unfair to the respondents to allow this litigation to proceed without some form of security for their costs in these proceedings. An order for security for costs would not operate unfairly upon the applicants. As I have noted in paragraph 22 above, there is no evidence to suggest that others who stand behind the applicants are unable to provide the security sought by the respondents in this case; and if in due course the applicants are successful following the final hearing then the security will, in all probability, be returned to them. I note that the applicants do not dispute the amount of security which is sought. Accordingly an appropriate order for security for costs will be made.

19. In relation to this passage from his Honour’s judgment, I recognise that the Applicants contest his Honour’s statement that there was no evidence that those standing behind the Applicants could not satisfy the requirements for security. However, I repeat what I said in an earlier interlocutory judgment when extending the time for the provision of security, that it is no part of my function to review his Honour’s decision that security be required. Nor can I review the amount of the security as required by his Honour save in the exercise of the Court’s power conferred by the LEC Act, s 69(5). In exercising that power, there is no entitlement to revisit the question determined by Lloyd J in requiring security to be provided.

20. In exercising the statutory discretion conferred by s 69(5), it is important to recall the purpose of requiring security for costs to be given by a plaintiff in proceedings, namely “to secure justice between the parties—principally by ensuring that unsuccessful proceedings do not occasion injustice to defendants”—see Ritchie’s Supreme Court Practice Part 53 Rule 2 at p 3172.

21. Whereas the amount of security required to be provided does not seek to provide “a complete indemnity to the defendant in respect of his or her costs”: Brundza v Robbie & Co (No 2) (1952) 88 CLR 171 at 175, it is necessarily directly referable to the quantum of costs likely to be incurred by a successful defendant: see Ritchie at p 3177.

22. Accordingly, in exercising the Court’s statutory discretion to reduce the amount of security, it is both appropriate and necessary to consider the extent of the security currently provided in the light of the estimated or actual costs incurred by the Respondents. That comparison yields the following figures (i) $17,000 security provided and (ii) $80,000—$100,000 costs incurred by the first, second and third Respondents.

23. Accepting that the first to third Respondents’ estimate of costs probably reflects the costs incurred not only in the present proceedings but also in the related class 3 proceedings (the security was required only in respect of the class 4 proceedings) nonetheless, it is apparent that the amount of security currently deposited with the Court is likely to be far less than the amount of costs incurred by the first to third Respondents in the class 4 proceedings.

24. It follows that a significant reduction in amount of security to $10,000 as now sought, would only widen the gulf between the amount of security and the amount of costs claimable by the first to third Respondents if they are successful.

25. It is this feature of the case that chiefly militates against the granting of the relief claimed in the Applicants’ Notice of Motion.

26. Additionally, the fact (as earlier noted) that I presently intend to deliver final judgment in the related class 3 and class 4 proceedings on 12 September 2001 means that the Applicants’ Notice of Motion is untimely and potentially pre-emptive. Accepting that the Applicants will suffer some hardship by the non-immediate release of $7,000 of the security held, compared with the release of the security hereafter if the Applicants are successful in the final judgment, that hardship or inconvenience or prejudice must be balanced against the hardship or inconvenience or prejudice that the first to third Respondents would suffer by now reducing the security, in the event that they are successful in the final judgment anticipated to be delivered on 12 September 2001. The latter prejudice is greater.

27. Accordingly, and for all the foregoing reasons, I decline the Applicants’ application for the immediate reduction by $7,000 in the amount of security held by the Court in the proceedings. However, I adjourn the Applicants’ Notice of Motion for mention on 12 September 2001 when my anticipated final judgment is to be delivered in the proceedings.