Frigger v Murfett Legal Pty Ltd - [2016] WADC 71

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: FRIGGER -v- MURFETT LEGAL PTY LTD [2016] WADC 71

CORAM: GETHING DCJ

HEARD: 12 MAY 2016

DELIVERED : 20 MAY 2016

FILE NO/S: APP 4 of 2016

BETWEEN: ANGELA FRIGGER
First-named Appellant
HARTMUT FRIGGER
Second-named Appellant
AND
MURFETT LEGAL PTY LTD
Respondent

Catchwords:

District Court appeal - Source of the jurisdiction to order security for costs in an appeal - Whether security for costs should be ordered

Legislation:

Rules of the Supreme Court 1971 (WA) O 25, O 65
District Court Rules 2005 (WA) r 55, r 57, r 58, r 59, r 61A

Result:

Orders made

Representation:

Counsel:

First-named Appellant     :     In person
Second-named Appellant     :     In person
Respondent:     Mr R J Lilley

Solicitors:

First-named Appellant     :     Not applicable
Second-named Appellant     :     Not applicable
Respondent:     Douglas Cheverall Lawyers

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

Ailakis v Olivero [2013] WASCA 91
Allesch v Maunz [2000] HCA 40; (2000) 203 CLR 172
Attorney-General of Botswana v Aussie Diamond Products [2009] WASC 299
Brocklehurst v Wolinski [2015] WADC 36
Brundza v Robbie & Co (No 2) [1952] HCA 49; (1952) 88 CLR 171
Butler v Bennett [2007] WADC 107
Chandler v Water Corporation [2004] WASC 95
CSR Ltd v Cigna Insurance Australia Ltd [1997] HCA 33; (1997) 189 CLR 345
Fox v Percy [2003] HCA 22; (2003) 214 CLR 118
Gentry Brothers Pty Ltd v Wilson Brown & Associates Pty Ltd (1992) 8 ACSR 405
Grassby v The Queen [1989] HCA 45; (1989) 168 CLR 1
Jeffery and Katauskas Pty Ltd v Rickard Constructions Pty Ltd [2009] HCA 43
JH Billington Ltd v Billington [1907] 2 KB 106
Joseph v Joseph [2007] WASCA 27
Mabrouk Minerals Pty Ltd v Mabrouk Holdings Pty Ltd [2008] WASC 132
Mann v Dabelstein [2006] WASCA 176
Merribee Pastoral Industries Pty Ltd v Australia and New Zealand Banking Group Ltd [1998] HCA 41, [13]; (1998) 193 CLR 502
Murcia & Associates (a firm) v Grey [2001] WASCA 240; (2001) 25 WAR 209
Murfett Legal Pty Ltd v Frigger [2015] WASC 406
Nelson v Harvey [2015] WADC 106
O'Callaghan v Duhst [1931] SASR 369
Pelechowski v Registrar, Court of Appeal (NSW) [1999] HCA 19; (1999) 198 CLR 435
Pollard v Endale Pty Ltd [2009] WADC 97
Rajski v Computer Manufacture & Design [1982] 2 NSWLR 443
RCR Tomlinson Ltd v Russell [2015] WASCA 154
Rowe v Stoltze [2013] WASCA 92
Shannon v ANZ Banking Group Ltd (No 2) [1994] 2 Qd R 563
Sims v Suda Ltd [No 2] [2015] WASCA 180
Technomin Australia Pty Ltd v Xstrata Nickel Australasia Operations Pty Ltd [2010] WASC 218
The Hancock Family Memorial Foundation Ltd v Fieldhouse [2005] WASCA 93; (2005) 30 WAR 398
Williams v Grainger [1999] WADC 133

GETHING DCJ: Between 29 September 2010 and 18 October 2010 Murfett Legal, the respondent, provided legal services to Mr and Mrs Frigger, the appellants. The Friggers did not pay all of the fees charged by Murfett Legal for this work. On 15 January 2013 Murfett Legal commenced a general procedure claim in the Magistrates Court seeking payment of these fees. On 12 November 2013 the Friggers filed a counterclaim seeking damages for misleading and unconscionable conduct. The conduct is alleged to have arisen from representations made by Murfett Legal as to its ability to undertake work for the Friggers and its behaviour in the provision of the legal services and enforcing a debt said to be owed for those services.
The claim and the counterclaim went to trial before Magistrate Mignacca-Randazzo on 29 and 30 June 2015, 8 September 2015 and 22 January 2016. On 22 January 2016 the magistrate awarded judgment to Murfett Legal in the amount of $12,772.96, plus interest of $3,939.29. The magistrate also dismissed the counterclaim, and ordered the Friggers to pay Murfett Legal its costs. In the course of the interlocutory proceedings, an order had been made on an application for summary judgment against the Friggers that they pay an amount of $15,500 into court as a condition of being granted leave to defend the claim. This amount was paid in, and the magistrate ordered that this amount be paid to Murfett Legal in part payment of the judgment.
By appeal notice dated 1 February 2016, the Friggers commenced an appeal in this court from the decision of the magistrate. At a directions hearing in the appeal on 12 April 2016, the Friggers were granted leave to amend the appeal notice in terms of the proposed amended appeal notice dated 12 April 2016.
Murfett Legal, as respondent, filed a notice of respondent's intention in the appeal.
On 22 March 2016 Murfett Legal filed an application seeking an order that the Friggers pay the sum of $15,000 into court by way of security for its costs in the appeal. The application came before a judge on 15 April 2016 at which time programming orders were made. The application was listed before me for hearing on 12 May 2016.
The reasons which follow address this application.
Murfett Legal filed four affidavits in support of the application. The first was by Andrew John Cameron, a legal practitioner employed by Murfett Legal's lawyers, affirmed 22 March 2016 (First Cameron Affidavit). The second was by Kelly Parker, a legal practitioner employed by Murfett Legal, affirmed 21 April 2016 (Parker Affidavit). The third was another affidavit of Mr Cameron, affirmed 22 April 2016 (Second Cameron Affidavit). The fourth was by Robert John Lilley, another legal practitioner employed by Murfett Legal's lawyers, sworn 22 April 2016 (Lilley Affidavit).
Mrs Frigger filed an affidavit in opposition sworn 6 May 2016 (Frigger Affidavit), along with submissions of the same date. Both Mr and Mrs Frigger attended the hearing on 12 May 2016 and made submissions.

What issues arise for determination?

On the evidence and submissions before me, six issues arise for determination:
•What is the source of the District Court's power to order security for costs in an appeal?
•What is the scope of the court's power to order security for costs?
•What are the Friggers' prospects of success on the appeal?
•What are Murfett Legal's likely costs?
•Are the Friggers likely to be able to satisfy an order for costs if the appeal is unsuccessful?
•What is the appropriate exercise of the discretion?

What is the source of the District Court's power to order security for costs in an appeal?

There is some uncertainty as to the source of the power of the District Court to order security for the costs of an appeal.
There is no express power in the District Court Rules 2005 (WA) (DCR) to order security for costs, either in a first instance action or in an appeal.
District Court Rules r 58A provides that at 'any time before an appeal is concluded, a party to an appeal may apply for an order in the appeal or an order amending or cancelling an order in the appeal'. The rule goes on to provide the form in which this application must be made, as well as requirements as to service and affidavits in support. The rule does not provide the scope of the interim orders which may be made. That is done in DCR r 57(2). Specifically, DCR r 57(2) provides that '[b]efore or during the hearing of an appeal, the Court, on application or, after notifying the parties, on its own initiative, and on any terms needed' may make a specified list of interim orders. That list of interim orders does not include the power to order security for costs. There is no general power to make interim orders.
By contrast, a legally qualified registrar has a general power to make interim orders at a directions hearing in the appeal. Specifically, DCR r 55(3) provides that a 'legally qualified registrar may make any order or direction that in his or her opinion will or may facilitate the appeal being conducted efficiently, economically and expeditiously'. The rule then goes on to provide a list of orders, including any order under r 57, other than an order allowing a party to adduce further evidence (r 57(2)(h)) and an order as to the admission or otherwise of evidence in an affidavit (r 57(2)(j)).
District Court Rules r 59, dealing with costs in appeals, does refer to security for costs. Specifically, r 59 (3) provides that '[o]n determining an appeal, the Court may make any order as to any money paid to the Court as security for costs that is just having regard to any order made as to costs'. DCR r 58(3) expressly provides for the court to make orders in relation to moneys provided by way of security for costs in the event that an appeal is discontinued. DCR r 61A also deals with security for costs:
61A. Return of security for costs deposit
If -
(a)the Court has made an order for the payment of money by a party to the Court as security for the costs of an appeal (the security for costs deposit); and
(b)under that order, the party has paid the security for costs deposit; and
(c)no action has been taken on the appeal for 12 months; and
(d)no claim has been made on the security for costs deposit,
the Court may return the security for costs deposit to the party.
Rule 61A was inserted by rules commencing 31 December 2013 in order to allow the court to address a large number of amounts of $100 deposited by appellants into the court's trust account by way of security for costs for appeals which had either been resolved without orders being made as to these amounts, or in which no action had been taken for 12 or more months. The DCR used to provide in r 51(5) that '[w]hen filing a notice of appeal the appellant must pay the Court $100 as security for the costs of being unsuccessful'. This requirement was removed by amendments taking effect 1 January 2011 (see Gazette 10 December 2010 p 6266).
In this context, in my view DCR r 59(3) does not create a source of power to order security for the costs of an appeal.
The position under the DCR may be contrasted to the position under the Supreme Court (Court of Appeal) Rules 2005 (WA) (COAR). Rule 44 provides that '[a]t any time after an appeal is commenced and before it is concluded a party may apply for an interim order or an order amending or cancelling an interim order'. By r 43(2)(h), a single judge has jurisdiction to make an interim order in an appeal. 'Interim order' is defined in r 3 to include 'an order that an appellant provide security for a respondent's costs'.
There is a similar rule in relation to appeals to the general division of the Supreme Court, set out in Rules of the Supreme Court 1971 (WA) (RSC) O 65 r 13: '[A]t any time after an appeal is commenced and before it is concluded a party may apply for an interim order or an order amending or cancelling an interim order'. As with the COAR, 'interim order' is defined in RSC O 65 r 1 to include 'an order that an appellant provide security for a respondent's costs'.
Mrs Frigger submitted that RSC O 65 r 13 applies to a District Court appeal. I disagree. RSC O 65 r 2(1) makes it clear that the rule only applies to 'any appeal … that may be made to the General Division of the Court…'.
There is an express power to order security for costs in O 25. The RSC apply in respect of any 'case' in the District Court (DCR r 6(1)). 'Case' is defined in DCR r 3 so as to include an appeal. The DCR do not exclude RSC O 25 from application in the District Court. However, RSC O 25 only empowers the court to order that security for costs be given 'by a plaintiff'. The term 'plaintiff' is not defined in the RSC. It is, however, defined in Supreme Court Act 1935 (WA) (SCA) s 4 to include 'every person asking any relief (otherwise than by way of counter‑claim as a defendant) against any other person by any form of proceeding, whether the proceeding is by action, suit, petition, motion, summons or otherwise'. The definition in SCA s 4 applies 'unless the context otherwise requires'. The definition would apply to subsidiary legislation made under the SCA: see generally D Pierce & S Argument, Delegated Legislation in Australia (4th ed, 2012) p 462 ‑ 465.
As set out above ([17] and [18]), the context in which the term 'plaintiff' is used in RSC O 25 is that the power to order security for the costs of an appeal is separately provided for; in RSC O 65 for a general division appeal and in the COAR for an appeal to the Court of Appeal. In this context, the word 'plaintiff' is, in my view, limited to a first instance application, and thus limits the scope of RSC O 25. It is RSC O 25 so limited that applies to the District Court. Accordingly, I am of the view that RSC O 25 does not provide the District Court with the power to make an order that an appellant provide security for the costs of an appeal. This means that I respectfully disagree with the view of the principal registrar to the contrary in Nelson v Harvey [2015] WADC 106 [14] (though it seems to me that the final outcome would have been the same as in the incidental jurisdiction of the court).
The District Court has no inherent jurisdiction: Murcia & Associates (a firm) v Grey [2001] WASCA 240; (2001) 25 WAR 209 [16] (Steytler J, with whom Wallwork J agreed); Rowe v Stoltze [2013] WASCA 92 [28] (Newnes JA, with whom Pullin and Murphy JJA agreed). The jurisdiction given to the District Court does, however, include 'all powers and authorities incidental to the exercise of jurisdiction': District Court of Western Australia Act 1969 (WA) s 6; Murcia [9], [16]; Rowe [28]. More specifically, in the exercise of its statutory powers the District Court is able to call upon and exercise such powers as are reasonably required for the proper carrying out of its functions: Pelechowski v Registrar, Court of Appeal (NSW) [1999] HCA 19; (1999) 198 CLR 435 [50] - [51] (Gaudron, Gummow & Callinan JJ); Grassby v The Queen [1989] HCA 45; (1989) 168 CLR 1, 16 – 17 (Dawson J); Williams v Grainger [1999] WADC 133 [15] (Viol DCJ ). The full limits of the incidental jurisdiction of the District Court has not been explored: Murcia [16].
It is clear that the District Court cannot exercise its incidental jurisdiction in a manner which would conflict with a provision of a statute or the rules of court: Rowe [32]. However, there is no statute or rule which would conflict with the District Court having the power to order security for costs in its incidental jurisdiction.
The incidental jurisdiction of the District Court at least includes the power to correct irregularities in, and frauds upon, its own procedures and rules and prevent abuses of its process: Murcia [16]. For example, it extends to allowing the court to make orders to correct deficiencies in discovery: Technomin Australia Pty Ltd v Xstrata Nickel Australasia Operations Pty Ltd [2010] WASC 218 [3] - [5] (Murphy JA); Chandler v Water Corporation [2004] WASC 95 [16] (Hasluck J); Pollard v Endale Pty Ltd [2009] WADC 97 [10] (Sleight DCJ). On the other hand, the incidental jurisdiction of the District Court does not extend to an order to refuse to permit a solicitor to continue to represent a party in an action on the ground that there was a conflict of interest: Murcia [16].
A superior court has an inherent power to prevent its processes from being abused and the corresponding power to protect their integrity once they are set in motion: CSR Ltd v Cigna Insurance Australia Ltd [1997] HCA 33; (1997) 189 CLR 345, 391 (Dawson, Toohey, Gaudron, McHugh, Gummow & Kirby JJ); The Hancock Family Memorial Foundation Ltd v Fieldhouse [2005] WASCA 93; (2005) 30 WAR 398 [93] (Steytler P and Owen JA). This is a function of the 'broader consideration that the Court must ensure that justice is done in any case brought before it': Hancock [90]. Justice in this context includes a consideration of the private interests of the parties themselves and the public interest in the way in which disputes as to private interests are resolved: Hancock [91]. Both at common law and in equity, this inherent power includes the power to stay an action until such time as a plaintiff provides security for costs: Jeffery and Katauskas Pty Ltd v Rickard Constructions Pty Ltd [2009] HCA 43 [38] (French CJ, Gummow, Hayne and Crennan JJ); Merribee Pastoral Industries Pty Ltd v Australia and New Zealand Banking Group Ltd [1998] HCA 41; (1998) 193 CLR 502 [13] (Kirby J); Shannon v ANZ Banking Group Ltd (No 2) [1994] 2 Qd R 563, 563-4 (William J); Rajski v Computer Manufacture & Design [1982] 2 NSWLR 443, 447 (Holland J); JH Billington Ltd v Billington [1907] 2 KB 106, 109 ‑ 110 (Lord Alverstone CJ with whom Darlin J and Phillimore J agreed). This power was also able to be exercised in appeals: O'Callaghan v Duhst [1931] SASR 369, 373 (judgment of the court).
The incidental jurisdiction of the District Court has the same conceptual basis as the inherent jurisdiction of the Supreme Court, being to prevent the processes of the court from being abused and to protect their integrity once they are set in motion. Accordingly, I am of the view that the District Court has, in its incidental jurisdiction, the power to order that an appeal be stayed until such time as the appellant provides security for costs.
In summary terms, I am of the view that:
(a)there is no express power in the DCR to order an appellant to provide security for the costs of an appeal;
(b)the power in RSC O 25 to order a 'plaintiff' to provide security for costs does not apply to a District Court appeal as, in the context of the RSC, the term 'plaintiff' is limited to first instance cases, security for costs in appeals being dealt with in O 65 (general division appeals) and the COAR; and
(c)the District Court in its incidental jurisdiction may make an order that an appeal be stayed until such time as the appellant provides security for costs.

What is the scope of the court's power to order security for costs?

The exercise of the power to order security for costs is an order made to serve the interests of justice: Ailakis v Olivero [2013] WASCA 91 [5] (Pullin JA). The power is to be exercised where 'it would be unjust that the [appeal] should be allowed to proceed unless payment of the costs were secured': Billington (109). The discretion to order security for costs is wide and unfettered, but one which must be exercised judicially (and, where the source of power is in the rules of court, subject to those rules): Sims v Suda Ltd [No 2] [2015] WASCA 180 [18] (judgment of the court); Ailakis [1]; Joseph v Joseph [2007] WASCA 27 [6] (Buss JA); Mann v Dabelstein [2006] WASCA 176 [16] (McLure JA); Mabrouk Minerals Pty Ltd v Mabrouk Holdings Pty Ltd [2008] WASC 132 [57] (Newnes J).
In the context of COAR r 43(2)(h), in Ailakis, Pullin JA observed that 'a decision regarding an application for security for costs will be made after assembling all of the relevant factors and giving such weight as is appropriate to those factors before coming to a decision' [12]. In Mabrouk, Newnes J made a similar observation in the context of RSC O 25 [57]. In my view, that reasoning is apposite to the exercise of the equivalent power in the District Court's incidental jurisdiction. The factors which are often considered in the context of an application for security for the costs of an appeal include, without being exhaustive:
•Whether the appellant is likely to be able to satisfy an order for costs if the appeal is unsuccessful.
•The appellant's prospects of success on the appeal.
•The fact the appellant has already lost at first instance on the merits, that being a circumstance which supports the exercise of the discretion in favour of an order for security for costs.
•Whether the appellant would be shut out of the appeal if security for costs were ordered.
(See generally: Sims [18]; Ailakis [12].)
Consistent with her submission that RSC O 65 was the source of power to order security for costs, Mrs Frigger submitted that the power to order security for costs in O 65 r 13(1) is qualified by O 65 r 4(1): 'For the purposes of dealing with an appeal, a judge has jurisdiction to make any order that the judge considers will or may facilitate the appeal being conducted and concluded efficiently, economically and expeditiously'. As I am of the view that the source of power to order security for costs in RSC O 65 is not the relevant source for the present application, I do not need to consider this argument further. However, in the context of the incidental jurisdiction of the court, the same outcome is achieved for present purposes by the requirements of RSC O 1 r 4A and r 4B. These considerations are generally applicable in determining whether an order for security for costs serves the interests of justice: Ailakis [5].

What are the Friggers' prospects of success on the appeal?

In determining whether to order security for costs, courts have expressed reluctance to consider the merits of the case in detail. For example, in Gentry Brothers Pty Ltd v Wilson Brown & Associates Pty Ltd (1992) 8 ACSR 405, Cooper J identified the limited relevance of the merits of a claim in the exercise of the discretion to order security for costs (416):
Ordinarily in my view the likelihood or otherwise of success in the proceedings ought not to be investigated on an application for security for costs ... There may be circumstances where the merits are clear or where the claim cannot succeed in point of law or is not brought bona fide. Should that occur, regard will be had to those circumstances. However, those cases in my view are the exception to the ordinary rule.
As I have observed above [29], it may be that in an appeal the court will be slightly more willing to investigate the merits of the appeal as the court has the benefit of the reasons for decision of the first instance judicial officer.
The reasons for decision of the magistrate dated 22 January 2016 (Reasons for Decision) comprise 132 pages and 518 numbered paragraphs of closely reasoned text.
Magistrates Court (Civil Proceedings) Act 2004 (WA) (MCCPA) s 40(1) gives a party to a case a right of appeal to the District Court against the judgment of the Magistrates Court in the case. The appeal is by way of a 'reconsideration of the evidence' that was before the Magistrates Court: DCR r 50(1). An appeal from a decision of a magistrate to the District Court is by way of rehearing: Brocklehurst v Wolinski [2015] WADC 36 [14] (Derrick DCJ); Butler v Bennett [2007] WADC 107 [6] – [10] (Bowden DCJ). Thus the appellate powers of the District Court are only exercisable if the appellant demonstrates that the decision made by the magistrate the subject of the appeal was the result of some legal, factual or discretionary error: Allesch v Maunz [2000] HCA 40; (2000) 203 CLR 172 [23] (Gaurdon, McHugh, Gummow and Hayne JJ). The appeal is to be a 'real review' of the trial and of the reasons for decision at first instance, respecting the advantages which the magistrate has that 'derive from the obligation at trial to receive and consider the entirety of the evidence and the opportunity, normally over a longer interval, to reflect upon that evidence and to draw conclusions from it, viewed as a whole': Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 [23] - [25] (Gleeson CJ, Gummow and Kirby JJ).
The principles governing an appeal by way of rehearing are conveniently set out in the decision of the Court of Appeal in Jones v Darkan Hotel [2014] WASCA 133 [29] – [31]:
The relevant principles are well-established and were not in issue. They can be shortly stated. This appeal is by way of a rehearing solely on the evidence which was before the primary judge. In Fox v Percy [2003] HCA 22; (2003) 214 CLR 118, 125 - 126, Gleeson CJ, Gummow and Kirby JJ pointed out that that shapes the requirements and limitations of an appeal:
On the one hand, the appellate court is obliged to 'give the judgment which in its opinion ought to have been given in the first instance' Dearman v Dearman (1908) 7 CLR 549 at 561 … On the other, it must, of necessity, observe the 'natural limitations' that exist in the case of any appellate court proceeding wholly or substantially on the record … These limitations include the disadvantage that the appellate court has when compared with the trial judge in respect of the evaluation of witnesses' credibility and of the 'feeling' of a case which an appellate court, reading the transcript, cannot always fully share …
…
[But] if, making proper allowance for the advantages of the trial judge, [appellate courts] conclude that an error has been shown, they are authorised, and obliged, to discharge their appellate duties ... [23], [27].
Their Honours reiterated, however, the rule referred to in Warren v Coombes [1979] HCA 9; (1979) 142 CLR 531, 551, that:
[I]n general an appellate court is in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge. In deciding what is the proper inference to be drawn, the appellate court will give respect and weight to the conclusion of the trial judge but, once having reached its own conclusion, will not shrink from giving effect to it [25].
Nevertheless, the onus which lies on an appellant who appeals against findings of fact goes beyond merely showing that an alternative finding was available on the facts. An appeal is not a new trial on the evidence, constrained only by the unassailable factual findings: error must be demonstrated: Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd [2001] FCA 1833; (2001) 117 FCR 424 [30]. As the Full Court of the Federal Court said in Minister for Immigration, Local Government and Ethnic Affairs v Hamsher (1992) 35 FCR 359:
The court must be satisfied that the judgment of the trial judge is erroneous and it may be so satisfied if it reaches the conclusion that the trial judge failed to draw inferences that should have been drawn from the facts established by the evidence. The court is unlikely to be satisfied if all that is shown is that the trial judge made a choice between competing inferences, being a choice the court may not have been inclined to make but not a choice the trial judge should not have made (369).
See also Williams v The Minister Aboriginal Land Rights Act 1983 [2000] NSWCA 255; (2000) Aust Torts Reports 81-578 [60]; Leeder v The State of Western Australia [2008] WASCA 192.
The appeal notice sets out four grounds of appeal. In essence, ground 1 is that the magistrate erred 'in mixed fact and law' in finding that Murfett Legal was entitled to the judgment on the basis that, as a result of failures to disclose as required by the Legal Profession Act 2008 (WA), Murfett Legal was not entitled to maintain the proceedings in the Magistrates Court. It is evident from the magistrate's reasons that the determination of this issue turns on the detail of the communications between Murfett Legal and Mrs Frigger in the context of the fast approaching costs hearing on 13 and 14 October 2010. The appeal ground sets out a number of conclusions reached by the magistrate which are said to constitute errors. On reading the Reasons for Decision, it is not immediately apparent to me that the relevant conclusions reached by the magistrate were tainted with an error of law, fact or discretion.
Ground 2 is that the magistrate 'erred in mixed fact and law' in failing to find that Murfett Legal made a misrepresentation contrary to Trade Practices Act 1974 (Cth) s 52 (TPA) in relation to its ability to provide legal representation for the Friggers in the costs argument in the Supreme Court without briefing an external barrister. This arose out of the Friggers' counterclaim. The magistrate's conclusion is based on a specific finding of credibility against the Friggers (Reasons for Decision [455] - [459]). As the Court of Appeal stated in RCR Tomlinson Ltd v Russell [2015] WASCA 154 [55], 'an appellant who seeks to overturn credibility-based findings of fact faces a high hurdle'. The Court of Appeal went on to say that, generally, 'a trial judge's credibility‑based conclusions will not be reversed on appeal unless it is demonstrated that such conclusions are flawed by reference to incontrovertible facts or uncontested testimony, or are glaringly improbable or contrary to compelling inferences, or the trial judge has failed to use, or has palpably misused, their advantage as trial judge': [58]. There is nothing on the face of the Reasons for Decision or in the Frigger Affidavit which suggests that there is a risk that the conclusion reached by the magistrate is flawed in this sense.
Ground 3 is that the magistrate 'erred in mixed fact and law' in failing to find that Murfett Legal engaged in unconscionable conduct contrary to TPA s 51AB(1). This again arose out of the Friggers' counterclaim. As with the previous ground, the magistrate's conclusion is, in part, based on a specific finding of credibility as to whether or not misleading and deceptive statements were made by Murfett Legal (Reasons for Decision [475], [477]). The same observation may be made; there is nothing on the face of the Reasons for Decision or in the Frigger Affidavit which suggests that there is a risk that the conclusion reached by the magistrate on this issue is flawed in the sense set out above ([37]). As to the remainder of the reasoning of the magistrate, on my reading of the Reasons for Decision, it is again not immediately apparent to me that the relevant conclusions reached by the magistrate were tainted with an error of law, fact or discretion.
Ground 4 is that the magistrate erred in law by awarding interest pursuant to Magistrates Court (Civil Proceedings) Act 2004 (WA) s 12 contrary to the exception in MCCPA s 12(c). That paragraph provides that the power to award pre-judgment interest in s 12(1) does not 'apply in relation to any debt upon which interest is payable as of right whether by virtue of any agreement or otherwise'. However, it is clear that the basis on which the magistrate awarded interest was that it is payable as of right under cl 6.4 of the costs agreement (Reasons for Decision [515]). There is a second sub-ground that the interest was excessive. The error in this conclusion is not immediately apparent to me.
For the purposes of the present application, it is sufficient for me to observe, as Buss JA did in Joseph [8], that on the face of it, and entirely as a preliminary view, that the Friggers do not appear to have an overwhelming case or, indeed, even a particularly strong case, in the appeal. On the other hand, I do not consider the appeal to have been commenced with an absence of bona fides.

What are Murfett Legal's likely costs?

In his affidavit, Mr Lilley estimates that the hearing of the appeal could 'conceivably' take one full day. He comes to this conclusion on the basis that the Friggers' appeal notice contains four grounds of appeal, and numerous sub‑grounds, many of which challenge credibility based findings of fact by the trial magistrate. He makes the point that in order to respond to these grounds, Murfett Legal's lawyers will need to undertake a detailed analysis of the trial exhibits, the transcript of the two full days of hearing and the trial magistrate's reasons for decision. Mr Lilley observes that the transcript in this matter is some 230 pages in length, and that the trial magistrate's reasons for decision comprise 130 pages (Lilley Affidavit, pars 3, 4).
Mr Lilley estimates that the costs which Murfett Legal would be able to recover based on the Legal Profession (District Court Appeals) (Contentious Business) Determination 2014 is $15,000. He sets out a table supporting this calculation, analysed by scale item. There are two single items in the table above $1,000. The first is scale item 3, preparation of appeal, for which Mr Lilley allows 10 hours work by a junior practitioner at the rate of $330 per hour. The maximum for item 3 is $4,730, comprising 10 hours work by a senior practitioner at a rate of $473 per hour. The second is scale item 4, being the counsel fee on hearing. The maximum allowed is two days preparation and one day hearing (the daily rate being 10 hours), which at the rate allowed for counsel gives a maximum of $11,550. Mr Lilley allows an estimate of 30 hours worked by a junior practitioner, giving a total of $9,900. In effect, Murfett Legal submits that three days of preparation time is required, in addition to a day of hearing.
Mrs Frigger in her affidavit puts forward the view that, as Mr Lilley was counsel at trial, there are no new matters which will require him to spend 40 hours in preparation. She is of the view that an allowance of four hours preparation and two hours hearing would be sufficient, and that an appropriate allowance for costs would be $2,750 (Frigger Affidavit, pars 11 to 14).
In ordering security for costs, the court does not endeavour to give a complete and certain indemnity to a respondent: Brundza v Robbie & Co (No 2) [1952] HCA 49; (1952) 88 CLR 171, 175 (Fullagar J); Sims [19].
In my view, an estimate of one day to hear the appeal is appropriate. The length of the reasons for decision by the magistrate and the detail of the grounds set out in the appeal notice mean that this appeal is one of the more complex District Court appeals. A costs estimate towards the upper limit of the scale is both realistic and entirely appropriate. However, I would have thought that two days in total of preparation time would be a more reasonable estimate (one under item 3 and one under item 4). I would deduct a day's preparation from the hearing time (10 hours at $330 per hour, $3,300).
I am of the view that the amount of $12,500 ($15,807 less $3,300, rounded) is a reasonable estimate of the likely amount of taxed costs which Murfett Legal would receive should it be successful in the appeal and be awarded its costs.
If it is appropriate to order the Friggers to provide security for costs, the appropriate amount is $12,500.

Are the Friggers likely to be able to satisfy an order for costs if the appeal is unsuccessful?

In considering this factor, by analogy to RSC O 25 r 3, it is relevant to consider:
•What property within the jurisdiction may be available to satisfy any order for costs against the appellant.
•Whether the normal processes of the court would be available within the jurisdiction for enforcement of any order for costs made against the appellant.
The evidence before me discloses that there are three properties in Western Australia against which a judgment for costs could be enforced.
The first property is 29 Gairloch Street, Applecross (certificate of title volume 1206, folio 211). Both Mr and Mrs Frigger are registered proprietors of the Gairloch Street Property. The certificate of title indicates that there are five relevant interests registered against the title to the Gairloch Street Property:
(a)caveat by Murfett Legal, lodged 4 November 2011;
(b)a mortgage to H & A Frigger Pty Ltd, registered 7 April 2014, in the amount of $2,500,000;
(c)a property (seizure and sale) order (PSSO) in relation to Supreme Court action CIV 2765 of 2010, as to the interest of Mrs Frigger only, registered 14 October 2014;
(d)a PSSO in relation to Supreme Court action CIV 1727 of 2009, registered 27 November 2014, in relation to a judgment debt of $64,461.88; and
(e)a PSSO in relation to Supreme Court action COR 2 of 2010, registered 26 November 2015, in relation to an amount of $61,000.42.
(First Cameron Affidavit, par 6; Second Cameron Affidavit, par 5, Attachment AJC16)
In relation to Supreme Court action CIV 2765 of 2010, Mr Cameron in his second affidavit refers to a conversation with Mr David Lenhoff of Holborn Lenhoff Massey. Mr Lenhoff represents Mervyn Kitay and Computer Accounting & Tax Pty Ltd (in liquidation) in this action. On 22 April 2016, Mr Lenhoff advised Mr Cameron that the Friggers owed his clients in excess of $32,000 in unpaid costs orders. These costs include costs for which PSSOs have been registered. Mr Lenhoff further advised Mr Cameron that his attempts to enforce the costs orders were frustrated by the mortgagee, H & A Frigger Pty Ltd, refusing the company's consent to sell the Friggers' properties pursuant to a PSSO (Second Cameron Affidavit, pars 6, 7). Although this information is hearsay, it is admissible pursuant to RSC O 37 r 6(2)(c), as it is made for the purposes of an interlocutory application and Mr Cameron sets out the source of information as required by RSC O 37 r 6(3A).
The second is a property at 2A Union Street, Bayswater (Union Street Property). Only Mrs Frigger is the registered proprietor of the Union Street Property. The certificate of title indicates that there are five relevant interests registered against the title to the Union Street Property:
(a)mortgage to H & A Frigger Pty Ltd, registered 7 April 2014, securing a principal sum of $800,000;
(b)a PSSO in relation to Supreme Court appeal CACV 120 of 2013, registered 4 July 2014, relating to a judgment debt of $8,399.97;
(c)a PSSO in relation to Supreme Court action CIV 2307 of 2013, registered 12 November 2014, relating to a judgment debt of $6,820.92;
(d)a PSSO in relation to Supreme Court action CIV 1727 of 2009, registered 27 November 2014, in relation to a judgment debt of $64,461.88; and
(e)a PSSO in relation to Supreme Court action COR 2 of 2010, registered 26 November 2015, in relation to a judgment debt of amount of $61,000.42.
(First Cameron Affidavit, Attachment AJC5, par 6.)
The third is a property at 61 Cale Street, Como (Cale Street Property). Only Mrs Frigger is the registered proprietor of the Cale Street Property. The certificate of title indicates that there are four relevant interests registered against the title to the Cale Street Property:
(a)mortgage to H & A Frigger Pty Ltd, registered 7 April 2014, securing a principal sum of $800,000;
(b)a PSSO in relation to Supreme Court action CIV 2307 of 2013, registered 12 November 2014, relating to a judgment debt of $6,820.92;
(c)a PSSO in relation to Supreme Court action CIV 1727 of 2009, registered 27 November 2014, in relation to a judgment debt of $64,461.88; and
(d)a PSSO order in relation to Supreme Court action COR 2 of 2010, registered 26 November 2015, relating to a judgment debt of $61,000.42.
(First Cameron Affidavit, Attachment AJC10, par 6). (I have inferred that the PSSOs for each action are in respect of the same judgment debt, and inserted the amounts into the lists in this paragraph and [52].)
As to H & A Frigger Pty Ltd, its directors are Mr and Mrs Frigger. They were formerly the two shareholders of the company. The two shareholders, each holding one share, are a Wolfgang Popitz and a Helga Popitz, whose addresses are in Germany. The share transfer was notified to ASIC by a document lodged on 4 April 2014. (First Cameron Affidavit, par 7, attachment AJC13.)
Mr Cameron in the First Cameron Affidavit refers to a conversation with Mr Cameron Eastwood of Eastwood Sweeney Lawyers. Mr Eastwood represents a number of parties in Supreme Court actions in which the Friggers are a party. With the exception of Supreme Court CIV 1727 of 2009, the action numbers identified by Mr Eastwood are in addition to the action numbers referred to in the various PSSOs set out above. On 22 March 2016, Mr Eastwood advised Mr Cameron that a number of costs orders have been made against the Friggers in favour of Mr Eastwood's clients, and that those costs orders remain unpaid despite having been taxed. Mr Eastwood was unable to confirm the exact amount outstanding prior to Mr Cameron swearing his affidavit (First Cameron Affidavit, pars 8 to 10). This conversation is admissible pursuant to RSC O 37 r 6.
Mr Cameron in his first affidavit also refers to a conversation with Mr Gilbert Flynn of Hotchkin Hanley, solicitors for Mr Kim Holbrook in CIV 2265 of 2006. This is also an action in addition to those mentioned in [50], [52] and [53] above. Mr Flynn advised Mr Cameron that the Friggers owed his client outstanding taxed costs of approximately $78,254.06. (First Cameron Affidavit, pars 11 and 12). This conversation is again admissible pursuant to RSC O 37 r 6.
On or about 7 December 2015, Murfett Legal served the Friggers with bankruptcy notices in respect of certain unpaid costs orders totalling $5,885.17 (Bankruptcy Notices). The Friggers unsuccessfully sought to challenge the Bankruptcy Notices. Immediately following the dismissal of their challenge, but just prior to the time for compliance with the Bankruptcy Notices, Mrs Frigger paid the amount in question. (See generally the Parker Affidavit.)

Mrs Frigger deals with the financial position of her and her husband in the Frigger Affidavit. Mrs Frigger disputes that there is an obligation to pay the costs owed to Mr Eastwood's clients, Mr Flynn's clients and Mr Lenhoff's clients for reasons which I do not need to canvass for the purposes of the present application (Frigger Affidavit, pars 5, 6 and 16). Rather, it is sufficient for me to consider the various PSSOs in evidence.
Mrs Frigger also refers to the judgment of Le Miere J on the application to remove caveats. This decision is reported as Murfett Legal Pty Ltd v Frigger [2015] WASC 406. Mrs Frigger deposes that based on the orders of Le Miere J, her and her husband have a claim for approximately $70,000 for losses incurred when they were unable to obtain a bank loan due to the caveats being lodged (Frigger Affidavit, par 15). The basis of the claim seems to be the undertaking as to damages which Murfett Legal gave in relation to the continuation of the caveat. However, until such time as any such liability is quantified by the court and reflected in a judgment, the existence of the potential claim is not a reason to decline to honour an enforceable order of the court (and I include in that phrase an order for which there is no operative suspension order pursuant to Civil Judgments Enforcement Act 2004 (WA) s 15).
Finally, Mrs Frigger attaches to her affidavit the certificate of title to property at 105 Campbell Street, Hobart (Hobart Property) which she says she and her husband purchased in October 2014 for $7,850,000. She says that there are no encumbrances on the property. The attached certificate of title extract confirms that there are no mortgage encumbrances as at the date of issue of the extract being 13 May 2015 (Frigger Affidavit, par 17, attachment AF5).
In my view, the existence of the unsatisfied PSSOs is the most important aspect of the financial information provided. The PSSOs on their face provide that no suspension order has been made in relation to the relevant judgment debts (First Cameron Affidavit, pages 139, 153, 157, 163, 172). The judgments debts the subject of the PSSOs appear to have been registered against more than one property. Allowing for that overlap, the judgment debts the subject of the PSSOs appear to total $140,683.19.
I find the following:
(a)the evidence does not establish that the Friggers are insolvent, in the sense of not being able to pay all their debts as and when they fall due;
(b)nor does the evidence establish that the Friggers are impecunious (which would have required me to consider the principles discussed by Pullin J in Ailakis [6] – [11], in particular the common law position);
(c)the fact that the debt referred to in [57] was paid just prior to the time for compliance with a bankruptcy notice is evidence that the Friggers can pay their debts if they choose to, and supports the conclusions in (a) and (b);
(d)the Friggers have PSSOs for judgment debts totalling $140,683.19 which have not been paid; and
(e)the registered mortgages to H & A Frigger Pty Ltd on the titles to the Gairloch Street Property, the Union Street Property and the Cale Street Property are obvious impediments to an order for costs being enforced using a PSSO against these properties – this is both evident from the face of the documents and in the experience of Mr Lenhoff.
I further infer from these facts that there is a real risk that, if a costs order is made in favour of Murfett Legal in this appeal, it will have difficulties in enforcing it against the properties owned by the Friggers in this jurisdiction, notwithstanding that the Friggers have access to funds which they can use to pay a costs order should they choose to. In particular, there is a real risk that if Murfett Legal is awarded costs, and those costs become the subject of a PSSO, it will suffer the same fate as the judgment creditors who have the benefit of the PSSOs already registered against the properties in the jurisdiction owned by the Friggers; the existence of the prior registered mortgage will stymie efforts to enforce the PSSO.
This conclusion is subject to the position of the Hobart Property, to which I will return later.

What is the appropriate exercise of the discretion?

There are a number of factors in favour of an order for security for costs.
First, the Friggers lost at first instance on the merits, that being a circumstance which favours the exercise of the discretion in favour of an order for security for costs: Sims [18].
Second, as set out above [40], on the face of it, and entirely as a preliminary view, the Friggers do not appear to have an overwhelming case or, indeed, even a particularly strong case, in the appeal.
Third, there was no delay in Murfett Legal bringing its application. Where there has been delay, this is a factor against an order for security for costs: Attorney-General of Botswana v Aussie Diamond Products [2009] WASC 299 [23] (Kenneth Martin J).
Fourth, on the evidence before me I am satisfied that the Friggers would not be shut out of the appeal if an order for security for costs is made.
Fifth, the attitude of the appellant towards the respondent as regards the payment of money is a relevant factor, as is whether the normal processes of the court would be available within the jurisdiction for enforcement of any order for costs made against the appellant. For example, in Joseph one factor which Buss JA took into account in making an order for security for costs was evidence that the appellant had told the respondent before the trial of the action in the District Court that regardless of the outcome of the trial, the appellant would not pay him 'any money or costs under any circumstances' [7].
In the present application, I have found that that there is a real risk that if a costs order is made in favour of Murfett Legal in this appeal, it will have difficulties in enforcing it against the properties owned by the Friggers in the jurisdiction, notwithstanding that the Friggers have access to funds which they can use to pay a costs order should they choose to.
The evidence filed on behalf of Murfett Legal calls into question the veracity of evidence given by Mrs Frigger in relation to her assets. Annexure KP2 to the Parker Affidavit is an affidavit which Mrs Frigger swore on 2 February 2016 in Federal Circuit Court of Australia proceedings WAG 748 of 2015. These are the proceedings in which the Friggers sought to challenge the Bankruptcy Notices issued by Murfett Legal. At par 17 of that affidavit (page 21 of the Parker Affidavit), Mrs Frigger lists the 'net assets' of her and her husband, totalling some $17,500,000. The list includes a property at 140 Edward Street Perth (valued at $2,900,000). Landgate records annexed to the Parker Affidavit reveal that the registered proprietor of the land which is known as 140 Edward Street, Perth, is Computer Accounting & Tax Pty Ltd (CAT) (Annexure KP3). However, when I raised this discrepancy with Mrs Frigger in the hearing, she stated (albeit from the bar table) that this was because CAT held this property as trustee for the Friggers' superannuation fund. Upon going into liquidation, CAT became disqualified from acting as trustee. It thereafter continued to hold the property as a bare trustee. This explanation is not implausible. I do not place any weight on this discrepancy.
There are also a number of factors which suggest that an order for security for costs is not appropriate.
First, the Friggers are resident in the jurisdiction.
Second, I do not consider that the appeal has been commenced with an absence of bona fides.
Third, if Mrs Frigger's evidence of the ownership and value of the Hobart Property is accepted, the Friggers have substantial, unencumbered, assets with which to satisfy any order for costs made against them.
In Mabrouk in the context of RSC O 25 and a party ordinarily resident outside the jurisdiction, Newnes J observed that 'it will generally not be appropriate to order security if the court is satisfied that the plaintiff has assets within the jurisdiction which will remain available to meet the defendant's costs if the plaintiff is unsuccessful at trial'. His Honour went on the say that in 'determining whether the plaintiff has such assets, it may be relevant to consider the value and the nature of the assets, including whether they are of a fixed and permanent nature … or whether the court can ensure that the assets will not be dissipated …' [60]. These comments are apposite for present purposes.
Although Tasmania is outside the jurisdiction, a judgment of the District Court of Western Australia may be enforced in the Supreme Court of Tasmania pursuant to the Service and Execution of Process Act 1992 (Cth) s 105 (SEPA). A certificate of taxation may be enforced as a judgment: RSC O 66 r 57.
Leaving aside the properties in Western Australia, there are two ways in which Murfett Legal could enforce any costs orders against the Friggers. The first is using the bankruptcy processes, which it has already done successfully. The second is taking enforcement proceedings against the Hobart Property utilising the processes under SEPA.
The discretionary factors are finely balanced. The fulcrum is Mrs Frigger's evidence about the existence and value of, and lack of encumbrances over, the Hobart Property. Of particular concern to me is the fact that the certificate of title extract is dated 13 May 2015, and there is no independent confirmation that the Hobart Property is presently unencumbered by any mortgage.
In my view, an order in the following terms balances the respective risks of injustice:
(1)Unless by 31 May 2016 either:
(a)the appellants pay the amount of $12,500 into court by way of security for costs; or
(b)one of the appellants files and serves an affidavit annexing a certificate of title extract for the property in Tasmania comprising Certificate of Title volume 130023 folio 3 dated after 20 May 2016 which shows no encumbrances additional to those stated in the extract attached to the first named appellant's affidavit sworn 6 May 2016,
the appeal be stayed until further order.
(2)In the event that the appeal is stayed pursuant to the order in par 1 for a period in excess of three months, then, unless otherwise ordered prior to that date, the appeal be and is hereby dismissed, with the appellants to pay the respondents costs of the appeal, including all reserved costs, to be taxed if not agreed.
(3)The costs of the application be reserved.
I will hear from counsel for Murfett Legal and the Friggers as to the precise terms of the order.