Ezekiel-Hart v Reis

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FEDERAL COURT OF AUSTRALIA

Ezekiel-Hart v Reis [2024] FCA 1203

Appeal from: Ezekiel-Hart v Reis [2024] FedCFamC2G 121 (15 February 2024)
File number(s): ACD 8 of 2024
Judgment of: PERRY J
Date of judgment: 18 October 2024
Catchwords: PRACTICE AND PROCEDURE – bankruptcy – security for costs application – stay application – whether respondent will be able to recover costs of the appeal if successful – whether reasonable prospects of success on appeal – whether the appeals will be stifled or stultified if order for security made – where appellant has already had his “day in court” – security for costs granted.
Legislation:

Bankruptcy Act 1966 (Cth) s 43

Federal Court of Australia Act 1976 (Cth) ss 37M, 56

Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) r 2.05

Federal Court Rules 2011 (Cth) r 36.09

Cases cited:

Chawk v Callan [2024] 92

Cooper v Universal Music Australia Pty Ltd [2006] FCA 642 at

Derek George Shephard v Chiquita Brands South Pacific Limited [2004] FCAFC 76

Du Bray v ACW [2021] FCAFC 103

Ezekiel-Hart v Reis [2024] FedCFamC2G 121

Lamb v Sherman [2023] FCAFC 85

Quach v MLC Limited [2022] FCA 586
Division: General Division
Registry: Australian Capital Territory
National Practice Area: Commercial and Corporations
Sub-area: General and Personal Insolvency
Number of paragraphs: 36
Date of hearing: 14 October 2024
Counsel for the Appellant: The appellant appeared in person.
Counsel for the Respondents: P Bindon
Solicitor for the Respondents: Thomson Geer

ORDERS

ACD 8 of 2024
BETWEEN:

EMMANUEL TAM EZEKIEL-HART

Appellant
AND:

ROBERT ANTHONY REIS

First Respondent

COUNCIL OF THE LAW SOCIETY OF THE AUSTRALIAN CAPITAL TERRITORY

Second Respondent

ORDER MADE BY:

PERRY J

DATE OF ORDER:

18 OCTOBER 2024

THE COURT ORDERS THAT:

1.Pursuant to s 56(1) of the Federal Court of Australia Act 1976 (Cth) (Act) and r 36.09(1)(a) of the Federal Court Rules 2011 (Cth) (Rules), the appellant is to give security in the amount of $20,000.00 for the payment of costs that may be awarded against him.  

2.The security the subject of order 1 is to be provided by the appellant paying $20,000.00 into Court by 4.30pm on Friday 15 November 2024.

3.Pursuant to r 36.09(1)(b) of the Rules, the appellant’s appeal is stayed until the appellant has provided security for costs in accordance with Orders 1 and 2.

4.Pursuant to s 56(4) of the Act and r 36.09(1)(c) of the Rules, any hearing date allocated for the appeal be vacated and the appeal be stayed if the security required by Orders 1 and 2 has not been provided by the time specified in Order 2.

5.Pursuant to s 56(4) of the Act and r 36.09(1)(c) of the Rules, the appellant’s appeal be dismissed if the security required by Orders 1 and 2 has not been provided by the appellant by 4.30pm on Friday 15 November 2024.

6.The appellant is to pay the respondents’ costs of the interlocutory application for security for costs as agreed…

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Details
Case
[2024] FCA 1203
Decision Date

CaseChat Overview and Summary

In the matter of Ezekiel-Hart v Reis, the appellant sought to appeal the dismissal of an application to set aside a bankruptcy notice. The respondents, seeking to protect their interests, applied for an order for security for the costs of the appeal. The court was tasked with determining whether the appellant would be able to recover the costs of the appeal if successful and whether there were reasonable prospects of success on the appeal. Additionally, the court had to consider whether the appeal would be stifled or stultified if an order for security was made, especially given that the appellant had already had his day in court.

The court found that the appeal did not present reasonable prospects of success, as the primary judge had dismissed the set aside application on multiple grounds. The primary judge had concluded that the Circuit Court lacked jurisdiction to consider the application due to the appellant's failure to apply within the fixed time for compliance. Even if the application had been timely, the primary judge would have dismissed it, finding all grounds argued by the appellant to be without merit. The court also noted that the appeal would not be stifled or stultified by the imposition of security for costs, as the appellant had already had his opportunity to present his case at the initial hearing. The respondents would be able to recover their costs if the appeal were unsuccessful, and the imposition of security for costs was a reasonable measure to protect their interests.

Accordingly, the court granted the respondents' application for security for costs. The appellant was ordered to provide security in the amount of $20,000.00 for the payment of costs that may be awarded against him. The appeal was stayed until the appellant provided the required security by a specified date. If the security was not provided by that date, the appeal would be dismissed, and any allocated hearing date would be vacated. The appellant was also ordered to pay the respondents' costs of the interlocutory application for security for costs.

Orders

Orders of the court

1. Pursuant to s 56(1) of the Federal Court of Australia Act 1976 (Cth) (Act) and r 36.09(1)(a) of the Federal Court Rules 2011 (Cth) (Rules), the appellant is to give security in the amount of $20,000.00 for the payment of costs that may be awarded against him.

2. The security the subject of order 1 is to be provided by the appellant paying $20,000.00 into Court by 4.30pm on Friday 15 November 2024.

3. Pursuant to r 36.09(1)(b) of the Rules, the appellant’s appeal is stayed until the appellant has provided security for costs in accordance with Orders 1 and 2.

4. Pursuant to s 56(4) of the Act and r 36.09(1)(c) of the Rules, any hearing date allocated for the appeal be vacated and the appeal be stayed if the security required by Orders 1 and 2 has not been provided by the time specified in Order 2.

5. Pursuant to s 56(4) of the Act and r 36.09(1)(c) of the Rules, the appellant’s appeal be dismissed if the security required by Orders 1 and 2 has not been provided by the appellant by 4.30pm on Friday 15 November 2024.

6. The appellant is to pay the respondents’ costs of the interlocutory application for security for costs as agreed or assessed.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

For the reasons set out below, I am satisfied that this is an appropriate case in which to make orders in the terms sought by the respondents. 2. BACKGROUND This matter arises in the context of extensive litigation between the appellant and the Council. On 23 November 2023, the respondents filed a creditor’s petition seeking a sequestration order under s 43 of the Bankruptcy Act 1966 (Cth) against the appellant’s estate. By an application electronically lodged at 7.24pm on 26 May 2023 and accepted for filing on 30 May 2023 the appellant sought an order that the bankruptcy notice, upon which the creditor’s petition relied, be set aside (the set aside application). On 1 November 2023, the set aside application was heard. On 15 February 2024, a judge of the Federal Circuit and Family Court of Australia (Division 2) (the Circuit Court) dismissed the application: Ezekiel-Hart v Reis [2024] FedCFamC2G 121. The primary judge held that the Circuit Court lacked jurisdiction to consider the appellant’s application to set aside the bankruptcy notice because the appellant had failed to apply to set aside the notice after the fixed time for compliance had expired and the Court had no power to extend the time for compliance (applying Derek George Shephard v Chiquita Brands South Pacific Limited [2004] FCAFC 76 at [48] and Lamb v Sherman [2023] FCAFC 85). Further and in any event, the primary judge stated in obiter that he would have dismissed the application even if it had been filed within the requisite timeframe, finding that all six grounds argued by the appellant would have failed. 3. LEGAL FRAMEWORK Section 56 of the FCA Act relevantly provides that: (1)The Court or a Judge may order an applicant in a proceeding in the Court, or an appellant in an appeal under Division 2 of Part III, to give security for the payment of costs that may be awarded against him or her.(2)The security shall be of such amount, and given at such time and in such manner and form, as the Court or Judge directs. …(4)If security, or further security, is not given in accordance with an order under this section, the Court or a Judge may order that the proceeding or appeal be dismissed. Rule 36.09(1) of the FCA Rules provides that:(1)A party may apply to the Court for an order that:(a)the appellant give security for the costs of the appeal, and for the manner, time and terms for the security; and(b) the appeal be stayed until security is given; and(c)if the appellant fails to comply with the order to provide security within the time specified in the order – the appeal be stayed or dismissed. The question whether an order for security for costs either at trial or on appeal should be made turns upon an exercise of discretion having regard to the particular circumstances of the particular case: Cooper v Universal Music Australia Pty Ltd [2006] FCA 642 at [11] (Tamberlain J). In other words, as the appellant submits, that there is no automatic entitlement to an order for security for costs.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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