DUCKWORTH -v- COMMONWEALTH BANK of AUSTRALIA - [2013] WASCA 249

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE COURT OF APPEAL (WA)

CITATION: DUCKWORTH -v- COMMONWEALTH BANK OF AUSTRALIA [2013] WASCA 249

CORAM: NEWNES JA

HEARD: 1 OCTOBER 2013

DELIVERED : 25 OCTOBER 2013

FILE NO/S: CACV 160 of 2012
CACV 161 of 2012

BETWEEN: FRANCES ANN DUCKWORTH
Appellant
AND
COMMONWEALTH BANK OF AUSTRALIA
Respondent

ON APPEAL FROM:
Jurisdiction              :  SUPREME COURT OF WESTERN AUSTRALIA
Coram  :MASTER SANDERSON
Citation  :COMMONWEALTH BANK OF AUSTRALIA -v- DUCKWORTH [2012] WASC 476
File No  :CIV 2361 of 2009, CIV 1811 of 2010

Catchwords:

Practice and procedure - Application for security for costs - Appellant without tangible assets - Inadequacy of grounds of appeal - Whether appeal has reasonable prospect of success

Legislation:

Nil

Result:

Order for security for costs of $30,000

Category: B

Representation:

Counsel:

Appellant: In person
Respondent: Ms C M Guy

Solicitors:

Appellant: In person
Respondent: Gadens Lawyers

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

Avsar v Binning [2009] WASCA 219
Brundza v Robbie & Co (No 2) [1952] HCA 49; (1952) 88 CLR 171
Commonwealth Bank of Australia v Eise (1991) 6 ACSR 1
Duckworth v Commonwealth Bank of Australia [2013] WASCA 24
Glew v Frank Jasper Pty Ltd [2010] WASCA 87
Mann v Dabelstein [2006] WASCA 176
Natcraft Pty Ltd v Det Norske Veritas [2002] QCA 241

NEWNES JA: These are applications by the respondent for security for the costs of the two appeals. The applications were opposed by the appellant. The appellant is appearing in person in the appeals and appeared in person in the proceedings below.

Background

The appeals arise out of two actions brought by the respondent against the appellant. In one action, CIV 2361 of 2009, the respondent claimed against the appellant possession of a residential property described as 9 Clarecastle Retreat, Mindarie (the Property), pursuant to mortgages granted by the appellant to secure the total sum of $3,100,000 advanced by the respondent to the appellant's husband, and repayment of the outstanding money pursuant to guarantees the appellant had provided.
The appellant's case at trial, in substance, was that she was not the beneficial owner of the Property but held it as trustee of the Duckworth Children's Family Trust (the Trust). The appellant also alleged that the respondent's conduct had been unconscionable in that, among other things, the effect of the mortgages and guarantees had not been explained to her and she was not advised to get legal advice before signing them.
In the other action, CIV 1811 of 2010, the respondent claimed the sum of $2,400,000 which had been advanced to the appellant and was secured by a mortgage over the Property. The appellant's defences were, in substance, the same as in the other action.
The actions were heard together over 11 days by Master Sanderson. In the event, the master rejected the appellant's defences in both actions. He found the appellant to be an untruthful witness and he was not prepared to accept anything she said in evidence unless it was independently verified. He found that she did not hold the Property as trustee for the Trust. He also concluded that the defence of unconscionability was without substance. He found, among other things, that before signing the mortgages and guarantees the appellant had in fact obtained legal advice from a solicitor specifically on the effect of those documents. The master accepted the evidence of the solicitor, Mr Clairs, that he had given such advice. The master was satisfied that the appellant had understood the nature and extent of her liability in the event of default.
On 14 December 2012, the master ordered the appellant to deliver up possession of the Property and to pay to the respondent an amount of some $4,200,000, plus interest and costs.
On 11 February 2013, the respondent took possession of the Property and subsequently entered into a contract for the sale of it to a third party. An application by the appellant for a stay of execution was refused: Duckworth v Commonwealth Bank of Australia [2013] WASCA 24.
The appellant filed notices of appeal on 20 December and 24 December 2012 respectively and filed her appellant's case in each appeal on 19 April 2013. An amended appellant's case was filed in each appeal on 5 June 2013.
The respondent filed applications for security for costs in the appeals on 8 and 13 August 2013 respectively, seeking an amount of $46,277 in each appeal. However, in light of an order I made that the appeals be heard either together or one after the other, counsel for the respondent conceded, quite properly in my view, that one amount of $46,277 should apply to both appeals.

Disposition of the applications

Under r 44(1) of the Supreme Court (Court of Appeal) Rules 2005 (WA) (Court of Appeal Rules), the court has a very wide discretion to make an order for security for the costs of an appeal: Mann v Dabelstein [2006] WASCA 176 [16]. The considerations which will be relevant to the exercise of the discretion cannot be exhaustively stated. Each case will turn on its own facts. However, some of the factors which may be relevant include:
(a)the appellant's capacity to pay any costs ordered against him or her, albeit that is not conclusive and the court will not order security against an individual appellant solely on the grounds of impecuniosity;
(b)the appellant's prospects of success on the appeal;
(c)whether an order for security would frustrate a possibly genuine appeal;
(d)whether some other person stands to benefit from the appeal if the appellant is successful, where that person has not offered to provide security or indemnify the appellant in respect of any costs for which the appellant may become liable to the respondent;
(e)whether there has been any delay by the respondent in bringing the application.
In addition, it is relevant on an application for security for costs of an appeal, as opposed to an application made in relation to proceedings in the General Division, that the respondent has the benefit of a judgment enforceable against the appellant. When doing justice between the parties, that is one of the factors to be taken into account.
Where an order for security for costs is made, the amount of the security to be provided must be related to the costs likely to be incurred by the respondent on the appeal, but the court does not endeavour to give a complete and certain indemnity to the respondent: Brundza v Robbie & Co (No 2) [1952] HCA 49; (1952) 88 CLR 171, 175. If the appellant is impecunious, the security ordered should not be greater than is absolutely necessary: Commonwealth Bank of Australia v Eise (1991) 6 ACSR 1, 3 ‑ 4; Natcraft Pty Ltd v Det Norske Veritas [2002] QCA 241 [9].
An affidavit in support of the application was sworn by a solicitor for the respondent, Ms Guy. In that affidavit Ms Guy said that, as at 7 August 2013, the total amount owing by the appellant to the respondent was $4,433,461.87. Ms Guy also deposed to a search having been conducted at Landgate which revealed that the only land registered in the appellant's name was the Property. A search at the Australian Securities and Investments Commission revealed no directorships or company shareholdings held by the appellant. I was told from the bar table by the respondent's counsel that following the very recent completion of the sale of the Property, an amount of $2,454,000 remains owing.
The appellant did not file an affidavit dealing with her financial circumstances but the appellant's inability to meet any order for costs made against her in the appeal was not in issue. At the trial, the appellant gave evidence that, apart from a period in 2008, she had been unemployed since about 1990 and financially was solely dependent upon her husband, Neil Duckworth. Mr Duckworth was declared bankrupt on 27 September 2011. On the hearing of the present applications the appellant said that she had no tangible assets and was not in a position to meet an order for security for costs. The appellant's opposition to the applications was put substantially on the basis of what she said was her impecuniosity, leading to the result that such an order would stifle a genuine appeal.
I should mention that it was not suggested that there was undue delay by the respondent in bringing the applications for security for costs and no such delay is apparent. The appeals have not proceeded beyond the filing of the amended appellant's case.
The respondent submitted that it was appropriate that an order for security be made, in circumstances where the appellant has not paid the costs of the trial, she does not have the capacity to meet an order for the costs of the appeal if she is unsuccessful, and the appeal is barely arguable, if arguable at all.
There are 20 grounds of appeal in each appeal, the grounds in each appeal being identical. It is unnecessary to set out the grounds in full. Suffice it to say that they fall well short of what is required by the Court of Appeal Rules. They do not identify with the necessary clarity any relevant error of fact or law. A number appear to relate simply to the appellant's own limitations in presenting her case in person, or to omissions in her case. Thus, for instance, grounds 5 and 6 are as follows:
5.Loan application - No application was made by the [appellant] and application was not signed by the [appellant] - Master Sanderson states in his summing up
'The [appellant] did not make the application for the first guarantee. That is correct, but again more is required to advance [the appellant's] case.'
Master Sanderson mentions in his summing up [sic, reasons for decision] as to the [appellant] having no means of paying back the sum secured and states
'As a proven fact, it does not, without more, advance the [appellant's] case'
This suggests with a legal professional more could have been proved to advance the [appellant's] case.
ERROR OF FACT
6.Profit & Loss and Balance sheets for Neil Duckworth list of entities used to secure loan with the [respondent] being listed as having no income - Master Sanderson mentioned this in his summing up when handing down his judgment but did not act upon it
This suggests with a legal professional more could have been proved to advance the [appellant's] case
ERROR OF FACT
Other grounds make general (and often confusing) complaints that the master did not provide the appellant with adequate assistance in relation to procedural matters during the trial. It is evident that a number of the complaints are either ill‑founded or appear at odds with what occurred at the trial (for example, compare ground 10 with ts 279 ‑ 280; ground 11 with ts 208, 336; ground 16 with ts 205, 212 ‑ 214), and in no case is there any indication how the alleged lack of assistance is said to have been material to the outcome. Thus, for instance, grounds 2, 3 and 4 are as follows:
2.Opening submission - Master Sanderson did not advise the [appellant] that further information could been added above and beyond what is in the [appellant's] opening submission prior to commencement of proceedings -
ERROR OF LAW
3.Master Sanderson did not advise the [appellant] of court room proceedings as to following the trial bundle exhibits when [respondent's] council [sic] giving opening submissions -
ERROR OF LAW
4.Final submission - No information provided by Master Sanderson -
ERROR OF LAW
Some grounds reflect a misunderstanding of the trial process or are simply incomprehensible. For instance, grounds 17 to 20 are as follows:
17.Gaining a benefit - Master Sanderson states '[the appellant] did not obtain a direct benefit in the sense no sum of money was paid into a bank account controlled by her which she could disperse at will.'
'But [the appellant] was maintained by her husband.' 'So in a real, if indirect, sense [the appellant] obtained a benefit from the loan advance.'
ERROR OF FACT
18.Master Sanderson comments on Plaintiff Barrister 'Appeal Proofing the Case'.
ERROR OF LAW
19.Master Sanderson took no notice of the [appellant's] List of Authorities save as to
Commonwealth Bank of Australia v Amadio (1983) 151 CLR 447
Garcia v National Bank of Australia Ltd (1998) 194 CLR 395
ERROR OF LAW
20.The Learned Master imposed a decision that was manifestly unjust and did not take into account much of the evidence tendered by the [appellant].
The written submissions in the appellant's case again do not comply with the Court of Appeal Rules, consisting simply of a long list of references to trial transcript pages and exhibits. They do not serve any purpose as submissions and obviously do nothing to overcome the obscurity of the grounds of appeal.
These are not mere matters of form. As this court has pointed out previously, on an appeal to this court an appellant must demonstrate that there has been error of a recognised genre that falls to be corrected and which entitles the appellant to the orders sought. The grounds of appeal are a critical part of the process because they are the vehicle which guides the review process. It is accepted that some allowance must be made for a litigant in person, but the extent to which the court can do so is limited both as a matter of fairness to the other party, who must be adequately informed of the case they have to meet, and because the provision of acceptable grounds of appeal is fundamental to the exercise of the appellate function by the court: Avsar v Binning [2009] WASCA 219 [37]; Glew v Frank Jasper Pty Ltd [2010] WASCA 87 [9] ‑ [10]. The appellant's grounds of appeal go well beyond allowable limits.
As the grounds of appeal stand it could not be concluded that the appeal has any reasonable prospect of success. They do not identify alleged errors of a recognised genre but, with respect, simply constitute a confused and confusing list of perceived grievances. It is also apparent that if the appeal is to proceed on the present grounds it will be much more time‑consuming and difficult, and therefore, for the respondent at least, much more costly than it should be.
In the circumstances, I consider it is appropriate to make an order for security for costs. The amount of security involves an exercise of discretion and is to be determined by what the court considers just in the circumstances. Whilst the amount of the respondent's likely taxed costs is ordinarily a primary consideration, it is not decisive. As the appellant appears to be impecunious, the amount should not be greater than is absolutely necessary. With that in mind, I would order that a single sum of $30,000 be paid by way of security for both appeals. It should be paid into an interest‑bearing account in the joint names of the appellant and the respondent within a time I will fix after hearing the parties. The appeal will be stayed until the amount of the security is paid.

Conclusion

I would order:
1.within a time to be fixed, the appellant give security for the respondent's costs of the appeals in the amount of $30,000 by payment of that amount into an interest‑bearing account in the joint names of the appellant and the respondent;
2.until payment of the sum of $30,000 in accordance with par 1, all further proceedings in the appeals are stayed;
3.the time within which the respondent is to file its answers in the appeals be extended to 14 days after the payment of the said sum of $30,000; and
4.there be liberty to apply.