FEDERAL COURT OF AUSTRALIA
Goo v Kim [2022] FCA 1562
Appeal from: Kim v Goo [2022] FedCFamC2G 602 File number(s): NSD 743 of 2022 Judgment of: HALLEY J Date of judgment: 22 December 2022 Catchwords: COSTS – interlocutory application for security for costs of an appeal – s 56 Federal Court of Australia Act 1976 (Cth) and r 36.09 Federal Court Rules 2011 (Cth) – whether order for security for costs would stifle appeal – whether appeal raises a substantive point of law – whether in public interest that issue be determined – application dismissed Legislation: Federal Court of Australia Act 1976 (Cth) s 56
Federal Court Rules 2011 (Cth) r 36.09
Cases cited: Allison v Murphy [2021] FCA 1551
Beames v Rigby [2002] FCA 1095
Bell Wholesale Co Ltd v Gates Export Corporation (1984) 2 FCR 1
Dye v Commonwealth Securities Ltd [2012] FCA 992
McCardle v Lyons [2019] FCA 1554
Nyoni v Pharmacy Board of Australia [2018] FCA 1313
Singh v Secretary, Department of Employment and Workplace Relations [2007] FCA 90
Division: General Division Registry: New South Wales National Practice Area: Commercial and Corporations Sub-area: General and Personal Insolvency Number of paragraphs: 29 Date of hearing: 12 December 2022 Counsel for the Appellant: G McDonald Solicitor for the Appellant: Rays Lawyers Counsel for the Respondent: D Eardley Solicitor for the Respondent: Praxis Lawyers ORDERS
NSD 743 of 2022 BETWEEN: MR SEOUNG JIN GOO
Appellant
AND: MR JAY KOO KIM
Respondent
ORDER MADE BY:
HALLEY J
DATE OF ORDER:
22 DECEMBER 2022
THE COURT ORDERS THAT:
1.The respondent’s interlocutory application for security for costs dated 24 October 2022 be dismissed (interlocutory application).
2.Subject to the filing and service by either party of an application for a special or alternative costs order by 4.30 pm on Friday, 27 January 2023, the respondent pay the costs of the appellant of and incidental to the hearing of the interlocutory application on Monday, 12 December 2022.
3.The matter be listed for a case management hearing at 9.30 am on Friday 3 February 2023.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
HALLEY J:
Introduction
By an interlocutory application dated 24 October 2022, the respondent, Mr Jay Koo Kim, seeks an order for security for costs against the appellant, Mr Seoung Jin Goo in the sum of $60,000.
The appellant is an undischarged bankrupt. He has filed a notice of appeal against a sequestration order made on 12 August 2022 by the primary judge in the Federal Circuit and Family Court of Australia (Division 2) against the estate of the appellant.
The application for security for costs is supported by an affidavit of Mr Stefan Psaltis, the solicitor for the respondent, sworn on 24 October 2022. Mr Psaltis annexes to his affidavit a copy of an estimate that he has made of the future costs that…
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- Goo v Kim [2022] FCA 1562
- Case
- [2022] FCA 1562
- Decision Date
CaseChat Overview and Summary
The court determined that the appellant's bankruptcy and current financial position made it likely that an order for security for costs would stultify the appeal. The court was not persuaded that the appellant would be able to provide an amount by way of security that would be sufficient to meet any adverse costs order. The court considered the appellant's submissions regarding the prospects of success of the appeal and the public interest factors that might weigh against a grant of security. The court was satisfied that the appeal had good prospects because it dealt with principles that had received support in relevant authorities, and that the issue raised in the appeal had not previously been squarely addressed. The court also noted that the primary judge did not directly address the issue in his reasons for judgment.
In light of the above, the court dismissed the respondent's interlocutory application for security for costs. The court ordered that the respondent pay the costs of the appellant of and incidental to the hearing of the interlocutory application and that the matter be listed for a case management hearing. The court did not consider it appropriate to draw any inference from the fact that the appellant was legally represented, that he would be able to provide an amount by way of security that would be sufficient to meet any adverse costs order. The court also noted that it was not suggested by the appellant that his impecuniosity was caused by the respondent.
Orders
Orders of the court
1. The respondent’s interlocutory application for security for costs dated 24 October 2022 be dismissed (interlocutory application).
2. Subject to the filing and service by either party of an application for a special or alternative costs order by 4.30 pm on Friday, 27 January 2023, the respondent pay the costs of the appellant of and incidental to the hearing of the interlocutory application on Monday, 12 December 2022.
3. The matter be listed for a case management hearing at 9.30 am on Friday 3 February 2023.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
The appellant submits that by reason of his bankruptcy, he has no ability to provide any substantive security for costs and therefore an order that he provide security for costs would stultify the appeal. The appellant submits that: (a)he faces the risk of bankruptcy again if he is unsuccessful on the appeal; (b)the ground of appeal is very narrow and the matter could be determined on the papers;(c)the appeal has good prospects because it deals with principles that have received support in relevant authorities; (d)the primary judge did not directly address the issue in his reasons for judgment; and(e)the issue raised in the appeal has not previously been squarely addressed and to the extent that there is a lacuna in the authorities, the public interest weighs against the provision of security if an order for security would otherwise stultify the appeal. Consideration I am satisfied given the appellant’s bankruptcy and his current financial position, as disclosed in his affidavit sworn on 22 November 2022, that: (a)there is a significant risk that an order for costs against the appellant would not be satisfied; and(b)an order for the appellant to provide security for costs would likely stultify the appeal. I am not prepared to draw any inference from the fact that the appellant is legally represented, that he would be able to provide an amount by way of security that would be sufficient to meet any adverse costs order. Further, it was not suggested by the appellant that his impecuniosity was caused by the respondent. The principal questions that remain to be addressed, before weighing the competing considerations, are the prospects of success of the appeal and whether there are any public interest factors that might weigh against a grant of security. The principal ground of appeal in the notice of appeal is expressed in the following terms:3.The Court erred in giving no consideration or, alternatively, insufficient consideration, including par [68] of the Reasons, to the submission of the Respondent, noted at par [57] (sub par 58) of the Reasons, summarised as:“There are circumstances in which there is a “stay of a judgment” when the execution creditor is, for some reason, not in a position to issue execution upon his judgment. As a result of the order for specific performance being under the control of the Court, there was an effective stay of the applicant’s rights to issue a Bankruptcy Notice (see s. 41(3)(b) of the Act). As a result, the Bankruptcy notice could not be issued and there was no act of Bankruptcy. If there is no act of Bankruptcy, the Petition should be dismissed.” The submission reproduced in ground 3 was directed at an “effective” stay by reason of an election by a creditor and a subsequent order of the Court. I am satisfied that this was not an issue that the primary judge specifically addressed in his reasons for judgment. The appellant, by his counsel Mr Macdonald, advances the following propositions in support of the appeal in a draft outline of submissions for the appeal annexed to the appellant’s affidavit: 9.It is a general principle concerning orders for specific performance that once such an order has been made, the contractual rights of the parties are not superseded but their future exercise is under the control of the court, so that the working out of the order for specific performance is under the court’s control. Where an order for specific performance is not complied with by a one party, the other party may either apply to the court for enforcement of the order, or apply to dissolve the order and ask the court to put an end to the contract. Where an order for specific performance has been made, the rights and obligations of the parties come under the control of the court, and the working out of the order of specific performance is under the control of the court; (see Georges & anor v Peter Wieland & ors [2010] NSWSC 1378 at [25]).10.In a number of circumstances, execution of a judgment may be deemed to be stayed even where there is no express order of a court staying execution. Execution is deemed to have been stayed where a judgment creditor is not “in a position to issue immediate execution upon it”; (see Jagatramka v Coeclerici Asia (PTE) Limited (No.2) [2015] FCCA 2743) at [23]).