Field Camp Services Pty Ltd v Green (No.4)
[2014] FCCA 523
•18 March 2014
FEDERAL CIRCUIT COURT OF AUSTRALIA
| FIELD CAMP SERVICES PTY LTD v GREEN (No.4) | [2014] FCCA 523 |
| Catchwords: COSTS – Security for costs – further application. |
| Legislation: Competition and Consumer Act 2010 (Cth) |
| Epping Plaza Fresh Fruit & Vegetables Pty Ltd v Bevendale Pty Ltd [1999] 2 VR 191; [1999] VSCA 43 Singh v Singh & Ors [2014] FCCA 50 |
| Applicant: | FIELD CAMP SERVICES PTY LTD |
| Respondent: | PETER JAMES GREEN |
| File Number: | PEG 145 of 2011 |
| Judgment of: | Judge Antoni Lucev |
| Hearing date: | 13 March 2014 |
| Date of Last Submission: | 13 March 2014 |
| Delivered at: | Perth |
| Delivered on: | 18 March 2014 |
REPRESENTATION
| Counsel for the Applicant: | Mr A Rumsley |
| Solicitors for the Applicant: | Alan Rumsley |
| Counsel for the Respondent: | Mr B Wheatley |
| Solicitors for the Respondent: | Mossensons |
ORDERS
The respondent’s application in a case filed 24 February 2014 be dismissed.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT PERTH |
PEG 145 of 2011
| FIELD CAMP SERVICES PTY LTD |
Applicant
And
| PETER JAMES GREEN |
Respondent
REASONS FOR JUDGMENT
Introduction
By order dated 10 February 2014 the respondent/cross-claimant, Peter James Green, was given liberty to apply with respect to security for costs within 14 days.
On 24 February 2014 an application in a case was made by Mr Green seeking:
a)that the application of the applicant, Field Camp Services Pty Ltd,[1] be stayed pending the provision of security for costs in the sum of $10,000; and
b)Field Camp Services pay the costs of the application in a case, to be fixed.
[1] “Field Camp Services”.
The application in a case was supported by an affidavit of Mr Green sworn 21 February 2014.[2]
[2] “Mr Green’s Affidavit”.
Mr Green’s Affidavit
Mr Green’s Affidavit sets out the following relevant facts and part of the litigation history of the proceedings:
a)on 27 April 2012 Field Camp Services was ordered to provide security for Mr Green’s costs of these proceedings in the sum of $5,378 to be paid into the trust account of Mr Green’s solicitors by 8 June 2012;[3]
b)on 14 June 2012 (six days late) an amount of $5,378 was paid into Mr Green’s solicitor’s trust account;
c)a creditors’ statutory demand dated 20 June 2012 was not met by Field Camp Services, and on 20 July 2012 a company called Site Accommodation Pty Ltd, of which Mr Green is a director, issued an application for winding-up on the ground of insolvency against Field Camp Services in the Supreme Court of Western Australia, which was listed for hearing on 28 August 2012;
d)Field Camp Services paid the amount of the creditors’ statutory demand, plus costs, prior to the hearing on 28 August 2012;
e)on 16 September 2013, Gregory Browne, a director of Field Camp Services, swore an affidavit in these proceedings,[4] which said that Field Camp Services “is not trading”;[5]
f)on 17 September 2013, Field Camp Services was ordered to pay further security for costs in the sum of $10,000 in these proceedings to be paid into the trust account of the solicitors for Mr Green by 31 October 2013;
g)an amount of $10,000 was paid into Mr Green’s solicitor’s trust account on 18 November 2013 (18 days late);
h)on 10 February 2014 it was ordered that the proceedings be listed for hearing for two days on 15 and 16 April 2014;
i)by email dated 19 February 2014 Mr Green’s solicitors requested Field Camp Services to provide a further sum of $10,000 as security for costs; and
j)Field Camp Services has not responded to Mr Green’s request for further security for costs.[6]
[3] Field Camp Services Pty Ltd v Green (No. 2) [2012] FMCA 299 at paras.31-33 and 34(b) per Lucev FM (“Field Camp Services (No. 2)”).
[4] “Mr Browne’s Affidavit”.
[5] Mr Browne’s Affidavit at para.13.
[6] Mr Green’s Affidavit at paras.3-12.
Mr Green’s Affidavit goes on to assert that by reason of:
a)Field Camp Services’ lack of assets;
b)the prior difficulties in obtaining payment for security for costs and payment of the creditors’ statutory demand from Field Camp Services; and
c)the prior history of the matter,
he believes that if Field Camp Services is unsuccessful in its application, it will be unable to, or will not, pay the costs of the application if it is ordered to do so, and therefore further security for costs in the sum of $10,000 is sought.[7]
The earlier security for costs orders
[7] Mr Green’s Affidavit at paras.13-14.
27 April 2012 order
The 27 April 2012 order for security for costs, in the sum of $5,378, followed from an earlier application in a case by Mr Green in which the then Federal Magistrates Court considered the matter and observed that:
a)it had power to order security for costs in an amount considered appropriate or sufficient;
b)the quantum of costs must, unless determined otherwise, be in accordance with the relevant costs schedule;
c)it was appropriate to assess the quantum of security for costs on the basis that there was an application made for security for costs at the outset of the proceedings;
d)based on the relevant costs schedule the total estimate of costs for the matter was $13,129 if it proceeded to hearing (of 1 day) and judgment (excluding any advocacy loading as both parties were represented by solicitor advocates from the firms who were instructing solicitors);
e)security for costs is not intended to operate as a complete indemnity for costs;
f)the real issue in this case was whether or not Field Camp Services would be able to meet an award for costs in the event that its application was unsuccessful;
g)impecuniosity alone was not a reason to order security for costs, but a factor of some, and sometimes determinative, weight;
h)it was cognisant of the need to consider whether an order might be oppressive, and might disadvantage the party against whom security for costs was sought to be ordered;
i)various orders made in other courts with respect to damages and costs, and security for costs in appeal proceedings, and an earlier order for payment of costs in an application in a case in these proceedings needed to be taken into account;
j)there was no direct evidence in these proceedings of the financial standing of Field Camp Services, or of any person standing behind it;
k)it was prepared to infer there might be some frailty in Field Camp Services’ financial position, but could not conclude that it was impecunious, but rather that it may have the capacity to raise a further moderate sum as security for costs in relation to its genuine, and probably arguable, claims in these proceedings; and
l)security for costs in an amount of $5,378, or roughly 40% of the total estimated costs if the matter were to proceed to be heard and to judgment would be ordered, and that amount could be revisted if the proceedings went beyond mediation.[8]
[8] Field Camp Services (No. 2) at paras.14-32 per Lucev FM.
The Court notes that the proceedings were the subject of mediation in November 2012 before a Registrar of this Court, but that the proceedings were not resolved by that mediation.
17 September 2013 order
Following the failure of mediation to resolve the matter, and in accordance with the intent of the 27 April 2012 order,[9] Mr Green sought further security for costs for the hearing of the matter on 17 September 2013. Security for costs was opposed, but consistent with the intent of the 27 April 2012 order the Court re-visited the quantum of security for costs. Having regard to the fact that the matter had moved past mediation, and subject to an application for summary relief by Mr Green, would proceed to hearing, the Court ordered a further sum of $10,000 by way of security for costs on 17 September 2013, for essentially the same reasons as the 27 April 2012 costs order had been made.
Consideration of the current application in a case for security for costs
[9] Field Camp Services (No. 2) at para.31 per Lucev FM.
The law
The law with respect to security for costs is set out in Field Camp Services (No. 2),[10] and is adopted, but not repeated, for present purposes.
[10] See Field Camp Services (No. 2) at paras.14-16 and 23-27 per Lucev FM.
Factors for consideration
Mr Green argued that there were five factors for consideration by the Court in determining whether or not to order further security for costs in the amount sought. Each of those factors is set out, and considered, below.
First factor – no assets and not trading
Mr Green asserts that there are no assets in Field Camp Services and Field Camp Services is not trading. It was argued that if judgment is obtained by Mr Green any judgment sum (including within that phrase, for present purposes, costs) of these proceedings, will not be able to be met by Field Camp Services.
There is still no particular evidence of Field Camp Services’ assets, or lack of them, and the mere fact that Field Camp Services’ “is not trading” is a fact which precedes the making of the 17 September 2013 order for the payment of further security for costs, but is of itself, not, in any event, necessarily an indicator of impecuniosity. The financial position of Field Camp Services does not appear to have changed since the making of the 17 September 2013 order.
Second factor – past history
Mr Green suggests that the past history is such that any judgment sum obtained by him against Field Camp Services will not be paid, and again points to the fact that Field Camp Services is said to be impecunious and no longer trading.
It is relevant to note that in relation to orders for security for costs Field Camp Services has not defaulted in the requirement to pay security for costs, save that on each occasion the applicant has been late in paying those costs, and likewise with respect to the amount of the creditors’ statutory demand. Since the 17 September 2013 order for the payment of further security for costs in the sum of $10,000, which was paid, albeit late, there has been no relevant change in factual circumstances, save for the unilateral demand by Mr Green for the payment of a further sum of $10,000 by way of security for costs, to which Field Camp Services has not responded.
Field Camp Services has paid $15,378 by way of security for costs in relation to these proceedings. Allowing for the fact that there is now to be a two day hearing, the recoverable costs under the Federal Circuit Court Rules 2001 (Cth), Schedule 1[11] that Mr Green is likely to be awarded, if successful, are estimated as follows:
[11] “FCC Costs Schedule”.
Stage Description Quantum
Stage 1 Lump sum $2,500
Daily hearing fee $255
Stage 5 Alternative dispute resolution
(mediation) $2,623
Stage 7 Preparation for final hearing for a
two day matter $8,998
Stage 9 Final hearing costs for solicitor:
Attendance at hearing (daily hearing fee) $3,988
Taking judgment and explaining orders $271
The total estimate of costs for the matter is therefore $18,635 if the matter proceeds to a two day hearing and judgment, as scheduled. There are also five short directions hearings, which for costs purposes can be treated as mentions, in respect of which costs have been reserved. The total of costs for those at $271 per mention is $1,355. That therefore makes the total estimate of costs for this matter $19,990.
The amount already paid by way of security for costs is 76.9% of the total costs which the Court might award under the FCC Costs Schedule to Mr Green if he is successful. Were the additional sum of $10,000 now sought to be ordered as security for costs paid, the amount of the security for costs paid would then be 127% of the amount of costs which this Court would ordinarily order under the FCC Costs Schedule to Mr Green if he is successful.
Whatever the current financial position of Field Camp Services the past history does not support a contention that any judgment sum ordered to be paid by this Court will not be paid. Field Camp Services’ financial position appears to have been much the same as it presently is since at least 27 April 2012 when the first security for costs order was made. That order for security for costs of $5,378, and the subsequent 17 September 2013 security for costs order for $10,000, were both paid. Thus, whatever Field Camp Services’ precise financial position is, the past history does not, as a matter of fact, indicate that any judgment sum ordered by this Court to be paid by Field Camp Services will not be paid. In any event, to the extent that there is a risk in that regard, there is already a substantial sum secured by reason of the 27 April 2012 order and the 17 September 2013 order.
Third factor – no loss
Mr Green asserted that no loss had been suffered by Field Camp Services, and pointed to decisions in the District Court of Western Australia[12] and the Supreme Court of Western Australia, Court of Appeal[13] which indicated that the contract alleged to be central to the matters in issue, had been found to be properly terminated at law, and to have therefore caused no loss to Field Camp Services. It is argued that this aspect of the matter was not addressed in Field Camp Services (No.1).
[12] “District Court”.
[13] “Court of Appeal”.
Mr Green relies upon the judgment of the Court of Appeal in Field Camp Services Pty Ltd v Site Accommodation Pty Ltd (No.2).[14] Essentially, it is argued that the Field Camp Services – Court of Appeal means that Field Camp Services is not able to establish a bona fide claim or any reasonable prospect of success in these proceedings. The merits of the action are not always irrelevant in an application for security for costs, but a detailed examination of the merits is “scarcely warranted”, unless there is a total lack of merit or bona fides in the application.[15]
[14] [2012] WASCA 27 (“Field Camp Services – Court of Appeal”).
[15] Epping Plaza Fresh Fruit & Vegetables Pty Ltd v Bevendale Pty Ltd [1999] 2 VR 191 at 199 per Winneke P and Phillips JA; [1999] VSCA 43 at para.28 per Winneke P and Phillips JA (“Epping Plaza”).
Mr Green submits that the Court of Appeal found that the contract between Site Accommodation and Field Camp Services was duly terminated. This, however, is not the case: that was a fact admitted by Field Camp Services, which also admitted that there was a debt due to Site Accommodation.[16] The appeal in Field Camp Services – Court of Appeal failed because a counterclaim amounting to a mere cross-action does not provide a defence to a plaintiff’s claim, and there was no contention by Field Camp Services in the appeal that the primary Judge (who gave summary judgment for Site Accommodation) should have found that Field Camp Services’ alleged claim for unliquidated damages constituted an equitable set-off by way of defence to Site Accommodation’s claim in debt.[17] Secondly, even if such a contention was made, there was no adequate evidence of the likely quantum of Field Camp Services’ claim. In resisting an application for summary judgment on an equitable set-off basis, it is necessary for a defendant to establish an arguable defence to be able to point a court to evidence on which the court can make an informed assessment of the likely sum of the set-off, and whether it is likely to reach or exceed the level of the alleged claim in debt.[18] The Court of Appeal went on to observe that the claim of alleged tortious interference with contractual relations made by Field Camp Services also lacked merit, but found it unnecessary to deal with that claim.[19]
[16] Field Camp Services – Court of Appeal at para.3 per Newnes and Murphy JJA.
[17] Field Camp Services – Court of Appeal at para.6 per Newnes and Murphy JJA.
[18] Field Camp Services – Court of Appeal at para.7 per Newnes and Murphy JJA.
[19] Field Camp Services – Court of Appeal at para.8 per Newnes and Murphy JJA.
The judgment of the Supreme Court of Western Australia, Court of Appeal does not take the matter any further than was the case when the then Federal Magistrates Court determined Field Camp Services Pty Ltd v Green.[20] At that time the District Court had determined that Field Camp Services was liable under a contract to a company called Site Accommodation Pty Ltd, and that judgment was confirmed, in that respect, by the Court of Appeal. The Federal Magistrates Court, however, made findings which held that the matters in issue in these proceedings, relating to claims under the Competition and Consumer Act 2010 (Cth)[21] and the Fair Trading Act 1987 (WA)[22] were “independent causes of action, based on different, and as yet untried, factual and legal elements, and the mere existence of the orders in the District Court and Court of Appeal [at that time in relation to the pending appeal], ought not preclude an otherwise arguable claim being pursued in this Court.”[23] That conclusion was reached against the background of a detailed consideration of the application of Anshun estoppel,[24] and abuse of process, to the proceedings then in the Federal Magistrates Court and the proceedings in the District Court and the Court of Appeal.[25]
[20] [2012] FMCA 85 (“Field Camp Services (No. 1)”).
[21] “CC Act”.
[22] “FT Act”.
[23] Field Camp Services(No. 1) at para.115 per Lucev FM.
[24] Port of Melbourne Authority v Anshun Pty Limited (1981) 147 CLR 589.
[25] See Field Camp Services(No. 1) at paras.46, 60, 85 and 86, 95 and 96, and 111 per Lucev FM.
Mr Green’s argument is no more than an attempt to re-argue what has already been determined at an earlier stage in these proceedings, and an argument made without reference to any material change in circumstances since the making of the 17 September 2013 order for security for costs. As has been previously observed the causes of action in these proceedings, which involve different parties to the proceedings in the District Court and Court of Appeal, are not the same as those in issue in the District Court and the Court of Appeal, and the possibility of a remedy arising under either the CC Act or the FT Act cannot be excluded.
The judgment of the Court of Appeal in Field Camp Services – Court of Appeal does not take the matter further, insofar as it does not alter the fact that the claim before this Court is based on different, and as yet untried, factual and legal elements, in relation to a different, but related, party.
The question of whether there is sufficient evidence of loss based on the evidence presently on affidavit before the Court does, however, need to be addressed.
There is evidence of loss given by Mr Browne, a director of Field Camp Services.[26] The loss in this case is said to arise from “the loss of the ability to derive the benefit of the Contract between 20 January 2010 and 15 May 2010”.[27] The loss is alleged to arise because of the alleged misleading and deceptive conduct of Mr Green in relation to telephone calls involving Mr Browne, and the third party contractor, which resulted in a lawful termination of the contract between the third party contractor and Field Camp Services, but, on Field Camp Services’ case, only did so because of the alleged misleading and deceptive conduct, thereby resulting in the alleged loss.
[26] Affidavit of Gregory Browne, sworn 18 November 2013, at paras.68-74.
[27] Statement of Claim, paras.21.1 and 23.1.
The issue raised is whether any loss was suffered. It is not argued that there is no reasonable prospect of proving the misleading and deceptive conduct. Assuming, therefore, that causation can be established, orders under s.82 of the CC Act (and the equivalent provision of the FT Act) are not to be limited by analogy to breach of contract, tort or equitable remedies.[28] Furthermore, on the evidence it is contended, or at the very least it is foreseeable, that it might be argued that Field Camp Services suffered loss because, but for the misleading and deceptive conduct it might have been able to act in some other way, which would have been of benefit to it, or less detrimental to it, than the course in fact ultimately adopted.[29]
[28] Marks & Ors v GIO Australia Holdings Limited & Ors (1998) 196 CLR 494; [1998] HCA 69 (“Marks”).
[29] Marks.
It may be a difficult case to establish that Field Camp Services has suffered loss, but the Court cannot preclude it, or say that it is not reasonably arguable, based on the evidence presently before the Court.
Fourth factor – penalising Mr Green
Mr Green submits that he would be penalised if security for costs were not ordered because there is no evidence of potential loss to Field Camp Services given the finding of the Court of Appeal that the contract was lawfully terminated.
This factor is in effect no different to the third factor, and the Court makes the same observations as it did in relation to the third factor.
Fifth factor – costs of the application not covered
Mr Green argued that the existing security did not cover the costs of the present application if the matter went to hearing.
Mr Green relied upon a recent judgment of this Court in Singh v Singh & Ors[30] in which security for costs was ordered in the total amount of the likely costs of the proceedings. There are a number of distinguishing features in relation to Singh which are not present in this case. First, the proceedings in Singh were contempt proceedings between blood relatives, in relation to separate and ongoing proceedings in the Supreme Court of Western Australia, the then Federal Magistrates Court, and courts in Malaysia.[31] Second, the various court proceedings had occupied those courts, on and off for almost seven years.[32] Third, the party against whom security for costs was sought was a former bankrupt and there was a considerable delay in bringing the proceedings, the alleged contempts having been committed over a period four to five years prior to the bringing of proceedings.[33] Finally, the Court described the circumstances of the case as “unusual”.[34] Singh is, therefore, not a case which sets a precedent or guide for the exercise of the Court’s discretion with respect to the grant of security for costs, or the assessment of any quantum of security for costs, in this case.
[30] [2014] FCCA 50 (“Singh”).
[31] Singh at paras.8-16 and 56 per Judge Riethmuller.
[32] Singh at para.56 per Judge Riethmuller.
[33] Singh at paras.29 and 46-47 per Judge Riethmuller.
[34] Singh at para.57 per Judge Riethmuller.
In this case, as noted above, there is already a significant partial indemnity for security for costs in this case by reason of the payment of $15,378 (in two tranches) by Field Camp Services. There is no reason why this case ought not be dealt with on the basis of the normal rule that security for costs is not a complete indemnity for costs.[35]
[35] Field Camp Services (No. 2) at para.23 per Lucev FM, and see also the High Court and Federal Court authorities cited at para.13(b) and (c) of Field Camp Services (No. 2).
Other factors
Another factor which was mentioned in the course of argument was that the proceedings were being run for a collateral purpose. Some of the evidence, particularly the telephone calls between Mr Browne and Mr Green, might be open to the interpretation that the proceedings are being conducted for no other purpose than to “get back at” (to adopt a phrase used by Counsel for Mr Green) Mr Green. The same evidence can also be read as indicating that Mr Browne, on behalf of Field Camp Services, was not going to be dealt with in the manner that he alleges Mr Green dealt with him, and that available legal remedies would be pursued, as they have been. In the circumstances, the Court is not satisfied that the proceedings are being run for a collateral purpose.
The Court must also have regard for proper principles of case management in determining this application for security for costs. These proceedings have now been on foot for two and three quarter years, and this is the second occasions on which a hearing has been listed, the hearing being vacated on the first occasion in November 2013. As will be evident from the fact that this is the fourth judgment of the Court, all on interlocutory matters, and the fact that there are five orders for costs reserved in respect of directions hearings, the proceedings can be characterised as having been fought with some tenacity. Even if this were a borderline case warranting payment of security for costs in a further sum, the Court would be justified in seriously considering whether to order security for costs, if it would have the effect of vacating the listed second hearing, which is now only four weeks away. This is not such a case, but were it so, the Court would not be minded to make an order for security for costs if it had the consequence that the hearing would be vacated.
Conclusions and order
In all of the above circumstances, and particularly where:
a)there is no sufficient evidence of Field Camp Services being impecunious;
b)Field Camp Services has paid, albeit late, security for costs in two tranches amounting to $15,378 in these proceedings, the security for costs already ordered amounting to 76.9% of the costs which this Court would ordinarily award if Mr Green were successful; and
c)there has been no relevant change in circumstances since Field Camp Services was ordered to pay further security for costs in the sum of $10,000 on 17 September 2013,
the Court is of the view that there is no necessity for a further order for payment of security for costs by Field Camp Services. Security for costs is not intended to operate as a complete indemnity for costs. It follows, therefore, that the application in a case filed 24 February 2014 by Mr Green for the payment of a further sum by way of security for costs must be dismissed. There will be an order accordingly.
The Court will hear the parties as to costs.
I certify that the preceding thirty-seven (37) paragraphs are a true copy of the reasons for judgment of Judge Antoni Lucev
Associate:
Date: 18 March 2014
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