Downing v MNSBJ Pty Ltd

[2017] QCA 289

COURT OF APPEAL

SOFRONOFF P

Appeal No 3317 of 2017
DC No 3903 of 2016

ARTHUR CHARLES DOWNING Applicant/Appellant

MNSBJ PTY LTD First Respondent
ACN 144 779 448

FRESH WATER FROFFERS PTY LTD Second Respondent
ACN 169 204 933

JOHN SULLIVAN Third Respondent

NICOLAS JOEL GIBBIE Fourth Respondent

TAMMIE ANNE GIBBIE Fifth Respondent

GILES IVOR WAKEFIELD Sixth Respondent

BRISBANE

THURSDAY, 23 NOVEMBER 2017

JUDGMENT

SOFRONOFF P: This is an application to stay orders made by Morrison JA, pursuant to which his Honour ordered that the appellant give security for costs and that the appellant pay the respondents’ costs of that application for security for costs. The security has since been provided by the appellant. The matter arose out of proceedings in the District Court commenced by the respondents in respect of a debt that they alleged was owing to them pursuant to a deed. The respondents applied for summary judgment, and Reid DCJ granted them summary judgment on 9 March 2017.

On about 3 April 2017, the appellants filed their notice of appeal. On 26 April 2017, the respondents filed an application to strike out the notice of appeal, or in the alternative, for an order that the appellants give security for the respondents’ costs of the appeal. Those applications were heard by Justice Morrison on 12 May 2017. His Honour handed down his lengthy reasons in the matter on 21 June 2017. His Honour declined to strike out the notice of appeal. His Honour ordered that the appellants give security for the respondents’ costs of the appeal in the sum of $13,800. In due course, the appellant gave security in that sum. His Honour also ordered that the appellant pay the respondents’ costs of that application.

As a consequence of that latter order, the respondents furnished the appellant with a costs statement prepared by a costs assessor. The appellant has responded with objections to the costs statement. And upon receipt of that, on 10 November 2017 the respondents filed an application seeking the appointment of a costs assessor to determine the issues. There the matter stays for the moment.

The appellant now applies for an order seeking a stay of Justice Morrison’s order that the appellant give security for costs and his Honour’s order that the appellant pay the costs of the respondents of that application. The orders made by Justice Morrison in those respects were made based upon discretionary considerations that were before his Honour. While it is open for those orders to be set aside, they being interlocutory, at least in respect of the security for costs application, and while it is open for each of them to be stayed, it is necessary for an applicant for relief against an interlocutory order or an applicant for a stay of an interlocutory order to point to circumstances that were not before the Judge who decided the matter, which militate in favour of a different decision.

In this case, the appellant has put forward material which he has contended would satisfy that test. That material is the subject of detailed submissions in the appellant’s written outline. In substance, the new evidence that is sought to be led goes to the heart of the matter concerning the appellant’s liability or freedom from liability under the deed. It relates to the substantial defence that he would wish to raise about the way in which he was persuaded to enter into the deed and some associated transactions, which in the result have left him in the position of suffering a judgment of almost a quarter of a million dollars.

It may be that those matters have the effect for which he contends: that the summary judgment order against him should be set aside. It may be that the appeal succeeds upon other grounds. However, in my view, the matters that are now raised cannot bear upon the orders that were made by Justice Morrison in respect of the two interlocutory matters before him.

Those matters will not be affected by the outcome of the appeal. Security for costs was ordered upon the basis of considerations that do not depend upon who is ultimately vindicated in the proceeding. In addition, the cost decision, like all cost decisions, is based upon considerations that are peculiar to the bringing of the application and the justice of the case. It has not been shown before me that the litigation will be stifled if the costs process is allowed to proceed to its culmination. It is not clear when that culmination will be, in any event. For those reasons, I am not satisfied that there are any circumstances that have arisen since Justice Morrison made his order that would warrant interference with those orders at this stage, and I refuse the applications.

…

SOFRONOFF P: I order that the applicant pay the respondents’ costs of and incidental to these applications, fixed at $4,895.

In Downing v MNSBJ Pty Ltd, the applicant, Arthur Charles Downing, sought to appeal against the costs orders made by Justice Morrison in the District Court proceedings. The respondents, MNSBJ Pty Ltd and others, had sought summary judgment against Downing for a debt, which was granted. Downing appealed the decision and subsequently applied for a stay of the costs orders made by Justice Morrison, including the requirement to provide security for costs and the payment of the respondents' costs of the application. The Court of Appeal was tasked with determining whether Downing had presented new circumstances that warranted a stay of the costs orders.

The central legal issues before the Court of Appeal were whether the appellant had demonstrated new circumstances that were not before Justice Morrison when he made the costs orders, and whether these circumstances warranted a stay of those orders. The Court needed to consider whether the new evidence provided by Downing concerning his liability under the deed and the manner in which he was persuaded to enter into it could affect the costs orders made by Justice Morrison.

Justice Sofronoff, delivering the judgment, held that the new evidence Downing sought to introduce related to his liability or freedom from liability under the deed, which was central to the substantive appeal. However, the costs orders were based on discretionary considerations that were not dependent on the outcome of the appeal. The security for costs was ordered based on the balance of convenience and the justice of the case at the time, and the cost decision was based on the merits of the application and the justice of the case. Justice Sofronoff concluded that the new evidence did not impact the validity of the costs orders and, therefore, the costs orders should not be stayed. The appeal against the costs orders was dismissed, and Downing was ordered to pay the respondents' costs of the application.

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