FEDERAL COURT OF AUSTRALIA
Etnyre v Australian Broadcasting Corporation [2021] FCA 610
File number: NSD 902 of 2020 Judgment of: ABRAHAM J Date of judgment: 7 June 2021 Catchwords: PRACTICE AND PROCEDURE – security for costs – factors relevant to exercise of Court’s discretion – where applicants impecunious – where applicants are resident outside of Australia – where applicants have no assets within Australia – whether order for security for costs would stifle proceedings Legislation: Federal Court of Australia Act 1976 (Cth) s 56
Federal Court Rules 2011 (Cth) r 19.01
Cases cited: Australian Equity Investors v Colliers International (NSW) Pty Ltd [2012] FCAFC 57
Bell Wholesale Co. Ltd v Gates Export Corporation (1984) 2 FCR 1
Botsman v Bolitho & Ors [2018] VSCA 111
Cowell v Taylor (1885) 31 Ch D 34
East Grace Corporation v Xing (No 1) [2005] FCA 219
Frigger v Kitay [2019] FCA 624
James v Australian and New Zealand Banking Group Ltd (No 1) (1985) 9 FCR 442
KP Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189
Logue v Hansen Technologies Ltd[2003] FCA 81; (2003) 125 FCR 590
Madgwick v Kelly [2013] FCAFC 61; (2013) 212 FCR 1
Mecrus Pty Ltd v Industrial Energy Pty Ltd [2015] FCA 103
PS Chellaram & Co Ltd v China Ocean Shipping Co [1991] HCA 36; (1991) 102 ALR 321
Staff Development & Training Centre Pty Ltd v Commonwealth of Australia [2005] FCA 1643
Stapleton v Fairfax Media Publications Pty Ltd [2019] FCA 1418
Division: General Division Registry: New South Wales National Practice Area: Other Federal Jurisdiction Number of paragraphs: 34 Date of hearing: 1 April 2021 Counsel for the Applicants: Mr. T Molomby SC Solicitor for the Applicants: O’Brien Criminal & Civil Solicitors Counsel for the Respondent: Ms. L Barnett with Ms. S Jeliba Solicitor for the Respondent: ABC Legal ORDERS
NSD 902 of 2020 BETWEEN: MATTHEW ETNYRE
First Applicant
IRMGARD PAGAN
Second Applicant
AND: AUSTRALIAN BROADCASTING CORPORATION ABN 52 429 278 345
Respondent
ORDER MADE BY:
ABRAHAM J
DATE OF ORDER:
7 JUNE 2021
THE COURT ORDERS THAT:
1.Pursuant to s 56 of the Federal Court of Australia Act 1976 (Cth) (Federal Court Act) and r 19.01(1) of the Federal Court Rules 2011 (Cth) (the Rules), the first and second applicants are to give security for the respondent’s costs of the proceedings up to the hearing, on the following terms:
a)The first and second applicants to pay security in the amount of $100,000 (Security Amount).
b)The Security Amount to be paid within 28 days of the making of these Orders.
c)The Security Amount to be paid into Court.
2.Pursuant to r 19.01(1)(b) of the Rules, the proceedings be stayed until the applicants have paid the Security Amount in accordance with Order 1 above.
3.If the applicants fail to comply with Order 1 above by 12 July 2021, an application may be made, returnable on 23 July 2021, for…
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- Case
- [2021] FCA 610
- Decision Date
CaseChat Overview and Summary
The court was tasked with determining whether the applicants' circumstances warranted special consideration under the authority of PS Chellaram, which emphasized the importance of having funds in Australia to enforce a judgment for costs. The applicants argued that the proliferation of communication technology and the existence of treaties for the enforcement of judgments in other countries should allow the court to deviate from the established legal principles. The court had to assess the validity of the applicants' arguments and decide whether the existing legal principles should be applied or if the circumstances of the case warranted an exception.
The court found that the applicants' arguments to distinguish or limit the significance of PS Chellaram were misplaced. The court emphasised that the rationale behind the legal principle was to ensure there were funds in Australia against which a successful respondent could enforce a judgment for costs, thus avoiding the risks, uncertainties, and delays of enforcing a judgment in another jurisdiction. The court noted that the existence of treaties and international communication technology did not negate the need for funds in Australia. Furthermore, the court acknowledged that while the applicants were impecunious and had no assets in Australia, this did not automatically entitle them to special consideration. The court ultimately upheld the legal principles established in PS Chellaram and found that the applicants' circumstances did not warrant a deviation from these principles.
The court's decision was that the applicants were not entitled to special consideration and that the legal principles established in PS Chellaram applied. The court did not make any specific orders regarding the costs application but left it to the parties to proceed with their case. The applicants were reminded that their impecunious status and lack of assets in Australia were factors that needed to be considered in the context of enforcing any potential judgment for costs.
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Ratio Decidendi
Legal Principle Established
The applicants attempted to distinguish or limit the significance of the observations of McHugh J in PS Chellaram, recited above at [13]. This included on the basis that the progressive introduction of treaties allowing for the international enforcement of judgments has changed that situation in many instances. It was submitted that has been recognised by the courts to the extent that ease of recovery in the foreign jurisdiction is now a factor taken into account. It was submitted that they presently reside in Maryland which has such a treaty and a relatively straightforward and inexpensive process for enforcing international judgments. Further, the applicants said they are prepared to undertake that they would not resist the making of such an enforcement order were they to be ultimately unsuccessful in their case. They also sought to distinguish this case from others on the basis that they have nothing to do with Australia, they are citizens of the USA who have been involved in events in Ukraine and that “[r]emarkable and radical developments in communication technology have allowed the respondent to make a program about the applicants’ situation and make it available internationally and instantaneously”. The applicants contended that results in an unfair situation and that they should be entitled to attempt to remedy it. Consideration The applicants do not challenge the estimate of costs as deposed to by the respondent, nor that the amount sought on this application, which is at least $100,000, was reasonable in the circumstances. That amount being said to be approximately one third of the estimated costs which may be recovered. There was no issue between the parties that the applicants are impecunious, reside overseas and have no assets in Australia. Senior counsel for the applicant accepted that the optimism expressed by Ms Pagan that if a costs order was made she was confident that they could pay it relatively quickly was speculative, and that in reality they would not be in a position to do so. The observations of McHugh J in PS Chellaram reflect that circumstances may carry great weight, depending on the facts of the matter. The applicants’ bases for attempting to limit the consideration of that authority are misplaced. Once it appreciated that, as Weinberg J explained in Logue v Hansen Technologies Ltd recited above at [13], the rationale of the approach is that there be funds in this country against which a successful respondent may enforce a judgment for costs which avoids the risks, uncertainties and delays of enforcing a judgment in the applicant’s claimed country of residence. The bases for distinguishing it, such a proliferation of communication by use of the internet, misses the point. PS Chellaram was decided in 1991, and has been repeatedly and recently cited with approval. There is no novelty with the concept there may be treaties in place with various countries that may assist with the recovery of debts. However, that is fact specific and would not, in any event, avoid the need to invoke such processes in the relevant jurisdiction (which would be costly and potentially time consuming). I note the evidence before the Court is there is no bilateral agreements in place for enforcing Australian judgments in Puerto Rico, although it is possible to enforce a judgment in the local court in accordance with the local rules.