Gold Coast Blaze Pty Ltd v Joyce - [2012] QCA 37

[2012] QCA 37

COURT OF APPEAL

FRASER JA

Appeal No 559 of 2012
SC No 9548 of 2009

GOLD COAST BLAZE PTY LTD
ACN 122 467 289 Appellant

and

BRENDAN STEVEN JOYCE Respondent

BRISBANE

DATE 05/03/2012

ORDER

FRASER JA: The respondent to this appeal has applied for security for costs of the appeal. The appellant opposes security on the ground that the respondent has not adduced sufficient evidence to justify a conclusion that there is reason to believe that the appellant will be unable to pay the respondent's costs if the respondent is successful in defending the appeal.

That proposition is argued on two different bases. First, the appellant argues that it is a threshold condition for the exercise of a power to order security for costs on appeal that there is reason to believe that the appellant company will be unable to pay the costs if the respondent is successful on the appeal.

In support of that proposition, the appellant cited three decisions. First, the appellant cited Karam v Mansukhani [2006] QCA 349. However, in that decision, Douglas J, with whom the President agreed, merely mentioned that the considerations applicable at first instance are relevant also in an application for security on appeal, the considerations applicable at first instance, in the case of a corporation, including that there is reason to believe that the plaintiff will not be able to pay the defendant's costs if ordered to pay them. That decision did not decide that there was any such jurisdictional condition. The appellant also cited Livingspring Pty Ltd v Kliger Partners (2008) 20 VR 377 and Hurworth Nominees Pty Ltd v ANZ Banking Group Ltd [2005] NSWSC 1360. Both decisions related to the considerations applicable in an application for security for costs at first instance, not on appeal. They do not establish the jurisdictional condition for which the appellant contended.

Relevantly, it was held by this Court in Murchie v Big Kart Track Pty Ltd (No 2) [2003] 1 Qd R 528 at 529, paragraph 6 that "The court has an unfettered discretion whether to order security and, if so, in what amount. The fact that the plaintiff has already 'had her day in court' and lost, her impecuniosity and her prospects of success on appeal are factors relevant to the exercise of that discretion". The Court's decision that impecuniosity is a factor relevant to the exercise of the discretion to order security for costs on appeal is inconsistent with the appellant's submission that there is a jurisdictional fact concerning the appellant's likely ability to pay the respondent's costs.

The decision in Murchie was based upon r 772(1) of the UCPR. That rule empowers the court to order security. It uses the expression "[t]he Court of Appeal, or the court that made the decision appealed from, may order an appellant to give security...". A discretion is conferred in general terms. It would be quite wrong to read down that discretion by interposing some jurisdictional condition which is…

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: [2012] QCA 37
Decision Date: 05/03/2012

CaseChat Overview and Summary

In the matter of Gold Coast Blaze Pty Ltd v Joyce, the Court of Appeal considered the respondent's application for security for costs of the appeal. The primary concern was whether the appellant, Gold Coast Blaze Pty Ltd, would be unable to pay the respondent's costs if the appeal was unsuccessful. The appellant contested the application, arguing that the respondent had not provided sufficient evidence to justify the order. The court was tasked with determining whether the respondent had demonstrated a reasonable belief that the appellant would be unable to pay the costs and if the court had the discretion to order security for costs on appeal.

The court first examined the proposition that the exercise of the power to order security for costs on appeal requires a threshold condition that there is reason to believe the appellant will be unable to pay the costs if the respondent succeeds. The appellant cited several cases to support this proposition but the court found that these cases did not establish such a jurisdictional condition. The court referred to Murchie v Big Kart Track Pty Ltd (No 2) which held that the court has an unfettered discretion whether to order security and, if so, in what amount. The court concluded that the appellant's argument for a jurisdictional condition was incorrect, as the relevant rule did not impose such a condition.

Next, the court considered whether the respondent had provided sufficient evidence to justify the order of security. The respondent's evidence included company searches and correspondence between the parties' solicitors, which suggested that the appellant may not have sufficient funds to cover the costs if the appeal failed. The court noted that the appellant's response to the application for security raised concerns about its financial capacity. While the court could not make a final determination on the prospects of success, it noted that the trial judge's reasons provided persuasive support for the respondent's case.

In conclusion, the court found that the respondent had made out an appropriate case for security for costs. It ordered the appellant to provide security in the amount of $50,000 within seven days, and further ordered that there be a stay of any further proceedings on the appeal until the security was provided. The costs of the application were reserved.

Orders