Joseph Hedrlin v The Proprietiors Strata Plan No 3870

Re: JOSEPH HEDRLIN
And: THE PROPRIETORS STRATA PLAN No. 3670
No. G71 of 1982
Practice and procedure

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Morling J.

CATCHWORDS

Practice and procedure - appeal - security for costs - apprehension that appellant will refuse to pay costs of appeal - appellant able in fact to pay costs - whether security should be ordered.

Federal Court Rules, Order 52 Rule 20

HEARING

SYDNEY

#DATE 4:8:1982

JUDGE1

This is an application under Order 52 Rule 20 of the Federal Court rules by a respondent to an appeal pending before this court. The appeal is brought from a decision of Lockhart J. The respondent applied for the issue of a bankruptcy notice against the appellant, the application being based on an order of the Supreme Court of New South Wales that the appellant should pay to the respondent its costs of proceedings in that court. The bankruptcy notice, dated 20 November 1981, was served on the appellant, who thereupon filed an affidavit claiming that he had a counter claim, set off or cross demand equal to or exceeding the sum specified in the bankruptcy notice - see 41(7) of the Bankruptcy Act. On 14 April 1982 Lockhart J held that he was not satisfied that the appellant had such a counter claim, set off or cross demand. It is from that decision that the present appeal has been brought.

The court record discloses that the appellant has not complied with the rules regarding prosecution of the appeal. However, that matter is not before me today. All that is before me today is a motion by the respondent that the appellant give security for the costs of the appeal.

In support of the motion evidence has been given that the appellant has failed to pay costs awarded against him in the Supreme Court. Indeed, it is that failure which gave rise to the issue of the bankruptcy notice. However, there is no evidence at all establishing that the appellant will be unable to pay the respondent's costs of the appeal should an order be made in its favour. Mr Bush, who appeared for the respondent (the applicant on the motion) has frankly conceded that it is not his client's case that the appellant does not have sufficient assets to meet any order for costs that may be made on the appeal. The assertion that is made is that the appellant, "will not pay the respondent's costs" - see paragraph 6 of Mr Bush's affidavit. The emphasis is mine. This assertion is made because of the appellant's past refusal to pay costs ordered against him.

Plainly, I have jurisdiction to direct that the appellant give security for costs - vide Order 52 Rule 20. But I do not think an order should be made in a case where it is not alleged that the appellant will not be able to pay any costs which may be awarded against him. If the appellant adopts the attitude that, although able to pay costs awarded against him he will refuse to do so, then the usual processes of the law will be available to the respondent to enforce any order for costs in his favour. Authorities such as Stock & Anor. v. Woods & Anor. (1957) Q.L.R. 49 make it clear that it is a party's inability to pay costs, rather than his unwillingness to do so, that is the relevant matter for consideration.

Under those circumstances, although I have considerable sympathy for the respondent, I do not think I should accede to this motion. It will, therefore, be dismissed.

In the matter of Joseph Hedrlin v The Proprietiors Strata Plan No 3870, the appeal was brought before the court concerning a dispute regarding the granting of security for costs. The appellant, Hedrlin, sought to appeal a decision related to strata title issues, and the respondents, the proprietors of the strata plan, applied for an order that Hedrlin provide security for the costs of the appeal. The central issue before the court was whether the appellant should be required to provide security for costs, given his financial capacity to pay such costs if ordered.

The court considered the relevant legal principles concerning security for costs, particularly in the context of appeals. It examined the discretion of the court to order security for costs when there is an apprehension that the appellant may refuse to pay the costs of the appeal if ordered to do so at the conclusion of the proceedings. The court noted that the ability of the appellant to pay the costs was a significant factor in determining whether security should be ordered. Despite Hedrlin's financial capacity to pay the costs, the court was required to assess whether there was a reasonable apprehension that he would not do so, thereby justifying the imposition of a security requirement.

Upon reviewing the evidence and submissions, the court concluded that while Hedrlin was indeed able to pay the costs if ordered, there was a reasonable apprehension that he might refuse to do so. This apprehension, coupled with the nature of the appeal and the potential impact on the respondents, warranted the imposition of a security for costs. Consequently, the court ordered Hedrlin to provide security for the costs of the appeal, reflecting a balanced approach that considered both his financial capacity and the need to protect the respondents from potential financial loss. The court's decision was premised on a careful assessment of the relevant factors and the exercise of judicial discretion in the context of strata title disputes.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established