Kent Heating Ltd v Cook-on Gas Products Pty Ltd

[1984] FCA 456

Re: KENT HEATING LIMITED
And: COOK-ON GAS PRODUCTS PTY LIMITED AND ANOR.
No. 13 of 1984
Security for costs

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Sheppard J.

CATCHWORDS

Security for Costs - applicant not resident or carrying on business in Australia - applicant a company carrying on business in New Zealand - consideration of enforcement procedures available for enforcement of judgment obtained in Australian Court - relevance of simplicity of such procedures to question of whether security should be ordered.

Federal Court Rules, Order 28, rule 3

Judicature Act 1908 (N.Z.), s. 56

Reciprocal Enforcement of Judgments Act 1934 (N.Z.)

HEARING

SYDNEY

#DATE 9:11:1984

JUDGE1

This is an application for additional security for costs made by the respondents in an application in which the applicant is a company incorporated and carrying on business in New Zealand. It does not carry on business in Australia and has no assets in this country. The evidence establishes that costs already incurred and to be incurred by the respondents before the matter will be ready for hearing will amount to approximately $20,000. The applicant has already provided security in the sum of $10,000. The respondents seek orders for the provision of an additional $10,000 in respect of costs to be incurred during the interlocutory stages of the proceedings and an order that there be liberty to make a further application in respect of an amount or amounts to be provided as security for costs incurred during the hearing.

1. The applicant does not claim to be financially embarrassed by the application. It is, apparently, a successful and well to do company in New Zealand with a turnover of some $20,000,000 yearly. But it opposes the application which has been made principally because it says that if it loses the litigation and is ordered to pay the costs of it, no matter that the order for costs may involve a very substantial sum, this Court's order will be able to be enforced reasonably simply in New Zealand by procedures provided for in s. 56 of the Judicature Act 1908 (N.Z.).

2. I should note in passing that judgments of the Supreme Courts of the States of Australia are enforceable by a simple procedure which is provided for in the Reciprocal Enforcement of Judgments Act 1934 (N.Z.) which, I gather, contains provisions not much more complex than those which are contained in the Service and Execution of Process Act 1901 which provide for the enforcement in one State of Australia of a judgment obtained in another State. The Reciprocal Enforcement of Judgments Act is not available in the present case because it has not been extended by Order in Council New Zealand to apply to judgments of this Court, nor I think, of the High Court.

3. It would seem to me, if I may say so in passing, that those who have the responsibility of providing for these things both in New Zealand and in Australia, may well consider it appropriate to ensure that enforcement of judgments in New Zealand of this Court or of the High Court should be no more complex than is the case in relation to the enforcement of judgments of the Supreme Courts of the States.

4. The provisions of the Reciprocal Enforcement of Judgments Act were the subject of consideration by Rath J. in Connop v. Varena Pty Limited (1984) 1 NSWLR 71. His Honour was there concerned with an application for security for costs in a matter in the Equity Division of the Supreme Court of New South Wales in which the plaintiff was in New Zealand, although there were some assets of the plaintiff within the jurisdiction. The case was one to which the Reciprocal Enforcement of Judgments Act applied. Principally because of its application to the case his Honour declined to order security. He said (p. 74):-
   
   

"An order for costs against the plaintiffs in this case would present no difficulties of any significance upon registration proceedings in New Zealand, and though there is provision for setting aside registered judgments none of the cases (as they are called in the Act) for so doing would be applicable. There is provision in the rules for security for costs, and it is possible that delay in enforcement could arise as the result of appeals in the New South Wales appellate system.

Thus there may be some delay, inconvenience and expense arising from registration and execution of a judgment in New Zealand; but apart from this I see no difference in regard to the costs of the first and second defendants between the circumstances of this case and those of a similar case where a plaintiff is not ordinarily resident outside the State. With only minor reservations, a judgment for costs will be as effective against the plaintiffs here as it would be in the case of a plaintiff who did not ordinarily reside outside the State . . ."

1. The provisions of s. 56 of the Judicature Act, so it seems to me, do enable a party such as the applicant here to oppose registration of a judgment in a greater variety of cases than is the case in relation to a judgment registered under the Reciprocal Enforcement of Judgments Act. Nevertheless, as Mr. Heydon has submitted, it would seem difficult to think that the opposition if made could be successful or could involve much delay or very great expense. Certainly the amount which has already been provided for security would seem to be enough to cover whatever costs would be involved. On the other hand, if I decline to order further security, the resondents, if they are successful in the proceedings and obtain an order for costs against the applicant, will be at some risk, even though the risk be not great, as to the certainty of enforcement and as to the time and complexity of the action that might be necessary to effect it.

2. Nevertheless, if there were no other factors, I think I may, notwithstanding the fact that the Reciprocal Enforcement of Judgments Act does not apply, have come down on the side of approaching the matter much in the same way as Rath J. I confess to having great sympathy for the approach which he adopted in the Connop case, but there is the distinction that in the Connop case the plaintiffs did have some assets in the jurisdiction. That may be said to be offset in the present case by the fact that already the applicant has provided $10,000 by way of security for costs, but other factors that I think should be taken into account are these.

3. There is, firstly, the need for a party wishing to pay money out of New Zealand to someone in another country to obtain Reserve Bank approval. Upon the evidence that I have at the moment it would seem that there is unlikely to be any difficulty about that matter. But this matter will not be resolved for some months or perhaps for even a year. One cannot foresee what the position may be at the end of that time. With the best will in the world there may be a problem. Again the probabilities may be that there will not be a problem, but the question is why should the respondents in the present case be put at risk.

4. Then, as Mr. Catterns on behalf of the respondents has mentioned, there may be a problem as to determining the date upon which the exchange rate for the payment of the money will be fixed. Will it be the date of the order for costs, the date of the certificate of taxation or the date of enforcement. Again, these matters may not present over much difficulty when they are looked at carefully, but why, I repeat, should the respondents in a case which, apparently, does not involve any financial hardship on the part of the applicant, be put at risk.

5. In all the circumstances I have reached the conclusion that I should accede to the application which is made on behalf of the respondents and I propose to do so.

6. The question then is the amount of the security. Having reflected on the matter and taken into account the judgment of Lane J., (as he was), in T. Slovan & Sons (Builders) Limited v. Brothers of Christian Instruction (1974) 3 All ER 715, I propose to order the provision of a further sum of $5,000 by way of security for costs, which is intended to provide security for the respondents' costs down to the commencement of the hearing, allowing for the sum of $10,000 already provided.

7. I propose also to reserve liberty to the respondents to make such further application for security for costs in relation to the hearing as they may be advised. I would suggest that the security be provided in such a manner and form as the parties may agree, or the Registrar may approve, within 48 days.
   
   (Discussion ensued).
   
   

8. The orders I make are as follows: I order that the applicant provide security in the sum of $5,000 for costs incurred and to be incurred by the respondents down to the commencement of the hearing of the application. Such sum is to be in addition to the sum of $10,000 already provided. Such security is to be provided within 28 days in such form as the parties may agree or, in default of agreement, the Registrar may determine. I give liberty to the respondents to make such further application for security for costs as they may be advised. Costs of the Notice of Motion of 28 September 1984 are to be costs in the application. I make orders in terms of the Short Minutes which I have amended and initialled and dated and placed with the papers. The matter is stood over to 8 February 1985 at 9.30 a.m. before me for further directions.