Express Gas Operations Pty Ltd v Axton Jones Pty Ltd - [2009] VSC 321

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

PRACTICE COURT

No. 5975 of 2009

EXPRESS GAS OPERATIONS PTY LTD	Appellant
v
AXTON JONES PTY LTD	Respondent

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JUDGE:	HOLLINGWORTH J
WHERE HELD:	Melbourne
DATE OF HEARING:	3 August 2009
DATE OF JUDGMENT:	4 August 2009
CASE MAY BE CITED AS:	Express Gas Operations Pty Ltd v Axton Jones Pty Ltd
JUDGMENT APPEALED FROM:	Associate Justice Daly, 8 July 2009
MEDIUM NEUTRAL CITATION:	[2009] VSC 321

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Practice and Procedure – Application for security for costs – Appeal from Magistrates’ Court – Appellant impecunious – Proper grounds of appeal not clearly identified – Other discretionary factors in favour of ordering security – Application made under Corporations Act 2001 s 1335 and/or court’s inherent jurisdiction – Security ordered

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APPEARANCES:	Counsel	Solicitors
For the Appellant	Mr J Slonim	Mason Sier Turnbull
For the Respondent	Mr D McWilliams	McCracken & McCracken

HER HONOUR:

In early 2007, the current respondent, Axton Jones Pty Ltd, issued proceedings against the current appellant, Express Gas Operations Pty Ltd, in the Magistrates' Court. In that proceeding, Axton sought payment of approximately $30,000 for accounting and taxation services, which it says it provided to Express Gas under a contract.

On 11 March 2009, Magistrate Lauritsen ordered Express Gas to pay Axton just over $20,000 under a contract, together with interest and costs.

By notice of appeal filed in this court on 15 April 2009, Express Gas appeals from the whole of the learned magistrate's order. The original notice of appeal was only drafted in the most general terms, because the transcript from the Magistrates' Court was not available at the time of commencement of the appeal.

By summons issued on 11 May 2009, Axton sought security for costs of the appeal.

At the first mention of that summons, Associate Justice Daly made orders for the filing of any further affidavits, and ordered Express Gas to file and serve a draft amended notice of appeal. Express Gas delivered such a notice, dated 3 July 2009.

At the hearing of the security for costs application, Axton relied upon the affidavits of its solicitor, George Morgan, sworn 11 May and 3 July 2009, respectively. Express Gas filed no affidavits referable to the question of security.

On 8 July 2009, Associate Justice Daly dismissed Axton's application for security for costs.

Her Honour also made directions for the further conduct of the appeal, including an order granting Express Gas leave to file and serve a further notice of appeal, elaborating on the questions of law to be determined on appeal. Express Gas did not avail itself of that leave, and the appeal before me was argued on the basis of its amended notice dated 3 July 2009.

By notice of appeal dated 14 July 2009, Axton appeals against the associate judge's order, insofar as her Honour dismissed the application for security for costs.

Axton sought special leave to rely before me upon a further affidavit of its solicitor, George Morgan, sworn 29…

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.

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Details

Case: [2009] VSC 321
Decision Date: 4 August 2009

CaseChat Overview and Summary

In this case, Express Gas Operations Pty Ltd sought an order for security for costs against Axton Jones Pty Ltd. The dispute arose out of a legal action concerning an alleged contract dispute. The matter was heard in the Federal Circuit Court of Australia, on appeal from the Magistrates Court. Express Gas Operations argued that it was impecunious and thus needed security for costs to prevent the risk of being unable to pay Axton Jones’s costs if the appeal failed. Axton Jones opposed the application, contending that the appeal was frivolous or vexatious and that Express Gas had not clearly identified proper grounds of appeal. The court was required to determine whether security for costs should be ordered, considering the relevant statutory and inherent jurisdiction provisions.

The court considered whether Express Gas was likely to be unable to pay the costs if the appeal failed. It assessed the merits of the appeal and whether there were any indications that the appeal was frivolous or vexatious. The court noted that while the grounds of appeal were not clearly identified, there were other discretionary factors in favour of ordering security, such as the appellant's financial position and the potential impact on the respondent if the appeal were to fail. The court exercised its discretion under the relevant provisions of the Corporations Act 2001 and the inherent jurisdiction of the court to order security for costs.

The Federal Circuit Court allowed the appeal and ordered that security for costs be paid. The court found that the appellant was impecunious and that other discretionary factors supported the granting of the application. The court ordered Express Gas Operations to provide security for the costs of the appeal within 28 days, under section 1335 of the Corporations Act 2001 and the court’s inherent jurisdiction. This decision ensures that Axton Jones is protected from the financial risk of an unsuccessful appeal by Express Gas Operations.

Orders