Hunt Contracting Co Pty Ltd v Roebuck Resources Nl - [1995] FCA 521

PROCEDURE - security for costs - appeal - whether security should be ordered - whether prospects of success - whether appellant impecunious - whether impecuniosity due to primary judgment - whether public interest in appeal

Federal Court of Australia Act, s56
Rules of the Federal Court of Australia, O28 r3(1)(b), O52 r20

Gentry Bros Pty Ltd v Wilson Brown and Associates Pty Ltd (1992) ATPR 41-184
Cowell v Taylor (1885) 31 Ch D 34
Wiest v Director of Public Prosecutions (Gummow J, 5 September 1988, unreported)
Bethune v Porteous (1892) 18 VLR 493
D J E Constructions Pty Ltd v Maddocks (1981) 38 ALR 185
Lucas v Yorke & Anor (1983) 50 ALR 228
Webster v Lampard (1993) 112 ALR 174
Dorin v Cottam (Carr J, 27 June 1995, unreported)

HUNT CONTRACTING CO PTY LTD v ROEBUCK RESOURCES NL and PETER DONALD ALLCHURCH and SAMUEL WARNE
NO WAG 43 of 1995

R D NICHOLSON J
PERTH
26 JULY 1995

IN THE FEDERAL COURT OF AUSTRALIA )
WESTERN AUSTRALIA DISTRICT REGISTRY )

GENERAL DIVISION ) NO WAG 43 of 1995

B E T W E E N: HUNT CONTRACTING CO PTY LTD

Appellant

and

ROEBUCK RESOURCES NL

First Respondent

and

PETER DONALD ALLCHURCH

Second Respondent

and

SAMUEL WARNE

Third Respondent

MINUTE OF ORDER

JUDGE MAKING ORDER:     R D NICHOLSON J
DATE OF ORDER:         26 JULY 1995
WHERE MADE:            PERTH

THE COURT ORDERS THAT:

Within 28 days the appellant provide security for the respondents' costs of this action in the sum of $20,000, failing which the proceeding be stayed.

The appellant pay the respondents' costs of this application.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA )
WESTERN AUSTRALIA DISTRICT REGISTRY )
GENERAL DIVISION ) NO WAG 43 of 1995

B E T W E E N: HUNT CONTRACTING CO PTY LTD

Appellant

and

ROEBUCK RESOURCES NL

First Respondent

and

PETER DONALD ALLCHURCH

Second Respondent

and

SAMUEL WARNE

Third Respondent

CORAM:R D NICHOLSON J
DATE:26 JULY 1995
PLACE:PERTH

REASONS FOR JUDGMENT

R D NICHOLSON J:

Application is made on behalf of the respondents for an order for security for costs of the appeal. The application is brought in reliance on O28 r3(1)(b) of the Federal Court Rules ("FCR") and contested by the appellant in reliance on FCR O52 r20. These rules are supported by s56 of the Federal Court of Australia Act 1976. From the latter rule it is apparent that the onus of establishing the appropriateness of the exercise of the discretion in favour of the making of an order for security of costs on an appeal rests upon the party bringing the application for such an order.

The law which is applicable to a resolution of this application is not materially in dispute between the parties. For the respondents, reliance is placed upon Cowell v Taylor (1885) 31 Ch D 34; Wiest v Director of Public Prosecutions (Gummow J, 5 September 1988, unreported)…

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: [1995] FCA 521
Decision Date: 26 JULY 1995

CaseChat Overview and Summary

The case of Hunt Contracting Co Pty Ltd v Roebuck Resources Nl involved an appeal by the appellant, Hunt Contracting, against the decision of the primary judge, French J, who dismissed the appellant's claim against the respondents, Roebuck Resources and others, for misleading and deceptive conduct and negligence. The respondents applied for an order for security for costs of the appeal, which was contested by Hunt Contracting. The court was required to determine whether the respondents' application for security for costs should be granted, considering factors such as the prospects of success of the appeal, the appellant's impecuniosity, and the public interest.

The court examined the evidence and the grounds of appeal, finding that there was no challenge to critical findings of fact without which the appeal could not succeed. The court held that the appeal had little chance of success, as the primary judge found that the mining operation was worth more than the appellant paid for it and the losses incurred by the appellant were due to its own mismanagement decisions. The court also found that the appellant was impecunious and unable to provide any form of security for costs. The offer by the appellant's directors to accept personal liability for the respondents' costs of the appeal was unsupported by assets in the hands of the proposed guarantors.

The court concluded that the factors favouring the making of an order for security for costs outweighed the factors against such an order. The court ordered that Hunt Contracting provide security for the respondents' costs of the appeal in the sum of $20,000 within 28 days, failing which the proceeding be stayed. The appellant was also ordered to pay the respondents' costs of the application.

This case highlights the importance of considering the factors relevant to the exercise of the discretion in respect of an application for security of costs in relation to an appeal, including the prospects of success of the appeal, the appellant's impecuniosity, and the public interest. The court must exercise its discretion judicially, with regard to how, on the whole, justice will best be served. In this case, the court found that the factors favouring the making of an order for security for costs outweighed the factors against such an order, and therefore granted the respondents' application for security for costs.

Orders