Lawless v Mackendrick [No 2]
[2014] WASCA 157
•28 AUGUST 2014
LAWLESS -v- MACKENDRICK [No 2] [2014] WASCA 157
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2014] WASCA 157 | |
| THE COURT OF APPEAL (WA) | 28/08/2014 | ||
| Case No: | CACV:94/2013 | 13 AUGUST 2014 | |
| Coram: | NEWNES JA | 13/08/14 | |
| 8 | Judgment Part: | 1 of 1 | |
| Result: | Security for costs ordered in the sum of $15,000 | ||
| B | |||
| PDF Version |
| Parties: | KEVIN GERARD LAWLESS ALISTAIR MACKENDRICK PAMELA ALISON GABRIELS CHRISTOPHER DEREK BLAKE THE KING AND I PTY LTD |
Catchwords: | Practice and procedure Application for security for costs of appeal by second respondent Relevant principles Whether undue delay in making application Whether order for costs will stifle appeal |
Legislation: | Nil |
Case References: | Brundza v Robbie & Co [No 2] [1952] HCA 49; (1952) 88 CLR 171 Commonwealth Bank of Australia v Eise (1991) 6 ACSR 1 Lawless v Mackendrick [2014] WASCA 105 Mann v Dabelstein [2006] WASCA 176 Natcraft Pty Ltd v Det Norske Veritas [2002] QCA 241 Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE COURT OF APPEAL (WA) CITATION : LAWLESS -v- MACKENDRICK [No 2] [2014] WASCA 157 CORAM : NEWNES JA HEARD : 13 AUGUST 2014 DELIVERED : 13 AUGUST 2014 PUBLISHED : 28 AUGUST 2014 FILE NO/S : CACV 94 of 2013 BETWEEN : KEVIN GERARD LAWLESS
- Appellant
AND
ALISTAIR MACKENDRICK
PAMELA ALISON GABRIELS
First respondents
CHRISTOPHER DEREK BLAKE
Second respondent
THE KING AND I PTY LTD
Third respondent
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram : KENNETH MARTIN J
Citation : LAWLESS -v- MACKENDRICK [No 4] [2013] WASC 272
File No : CIV 1146 of 2006
Catchwords:
Practice and procedure - Application for security for costs of appeal by second respondent - Relevant principles - Whether undue delay in making application - Whether order for costs will stifle appeal
Legislation:
Nil
Result:
Security for costs ordered in the sum of $15,000
Category: B
Representation:
Counsel:
Appellant : Mr T Galic
First respondents : No appearance
Second respondent : Mr D J Pratt
Third respondent : No appearance
Solicitors:
Appellant : Galic & Co
First respondents : No appearance
Second respondent : Jackson McDonald
Third respondent : No appearance
Case(s) referred to in judgment(s):
Brundza v Robbie & Co [No 2] [1952] HCA 49; (1952) 88 CLR 171
Commonwealth Bank of Australia v Eise (1991) 6 ACSR 1
Lawless v Mackendrick [2014] WASCA 105
Mann v Dabelstein [2006] WASCA 176
Natcraft Pty Ltd v Det Norske Veritas [2002] QCA 241
Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72
1 NEWNES JA: On 13 August 2014, I ordered the appellant to provide security for the second respondent's costs of the appeal in the sum of $15,000. I said I would provide reasons for my decision. The following are the reasons.
2 The background to the appeal and the substantive issues arising on the appeal are summarised in my reasons for decision on the first respondents' application for security for costs: Lawless v Mackendrick [2014] WASCA 105. It is unnecessary to repeat what is said there.
The grounds of the appellant's opposition
3 It was not in issue that the appellant is unlikely to be able to satisfy an order for costs if the appeal is unsuccessful. The appellant relied, in substance, on two grounds in opposing the application:
(i) delay by the second respondent in making the application;
(ii) an order for security would stifle the appeal.
4 In an affidavit filed in opposition to the application, the appellant, who is 56 years of age, says he is unable to work due to serious knee injuries, which he has been told by his doctor will require a full knee reconstruction. The appellant says he has no assets and is living on a pension of $900.00 per fortnight, which is barely enough to cover his essential living expenses. According to the appellant, he has no means of finding any further funds to provide security for the second respondent's costs and he would not have provided security for the first respondents' costs if he had known that a similar application would be made by the second respondent.
The relevant principles
5 The principles to be applied on an application of this kind are set out in my earlier decision but for convenience I will repeat them.
6 Under r 44(1) of the Supreme Court (Court of Appeal) Rules 2005 (WA) (Court of Appeal Rules), the court has a very wide discretion to make an order for security for the costs of an appeal: Mann v Dabelstein [2006] WASCA 176 [16].
7 The purpose of an order for security for costs is protective, so as to ensure that the primary purpose of an award of costs (that is, indemnification of the successful party) is achieved: Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 [67]. There is an obvious injustice to a respondent who, having been successful on the merits at trial, is compelled to contest the matter for a second time without a probability of obtaining their costs if ultimately successful. In exercising the discretion to make an order for security for costs, however, the court seeks to achieve a balance between ensuring that adequate and fair protection is provided to the respondent, and avoiding injustice to an impecunious appellant by unnecessarily shutting them out of the appeal.
8 The factors which are relevant on an application by a respondent for security for the costs of an appeal cannot be stated exhaustively but will ordinarily include:
(a) whether the appellant is likely to be able to satisfy an order for costs if the appeal is unsuccessful;
(b) the appellant's prospects of success on the appeal;
(c) the fact the appellant has already lost at first instance on the merits, that being a circumstance which favours the exercise of the discretion in favour of an order for security for costs;
(d) whether the appellant would be shut out of the appeal if security for costs were ordered; and
(e) whether there has been any delay in the respondent filing the application for security for costs.
9 Where an order for security for costs is made, the amount of the security to be provided by an appellant must be related to the costs likely to be incurred by the respondent on the appeal, but the court does not endeavour to give a complete and certain indemnity to the respondent: Brundza v Robbie & Co [No 2] [1952] HCA 49; (1952) 88 CLR 171, 175. If the appellant is impecunious, the security ordered should not be greater than is absolutely necessary: Commonwealth Bank of Australia v Eise (1991) 6 ACSR 1, 3 - 4; Natcraft Pty Ltd v Det Norske Veritas [2002] QCA 241 [9].
The disposition of the application
10 I do not consider that delay weighs heavily in the balance in this case. To explain that, it is necessary to set out some of the history of the appeal.
11 The appeal was commenced on 20 August 2013. The appellant's case was therefore due to be filed and served on or before 24 September 2013. On 9 September 2013, the first respondents filed an application for security for costs. That application was not, however, pursued at that time, apparently pending service of the appellant's case. At about the same time, the second respondent's solicitors took up the issue on behalf of their client. By letters dated 19 September 2013 and 2, 14 and 16 October 2013, they informed the appellant's solicitor that the second respondent would be considering applying for security for costs once the appellant's case was served.
12 An appellant's case was not filed and served until 15 November 2013. It did not comply with the Court of Appeal Rules and, on 16 December 2013, the appellant was ordered to file an amended appellant's case on or before 24 January 2014. That order was not complied with and, on 20 February 2014, an order was made that unless an amended appellant's case was filed on or before 28 March 2014 the appeal be dismissed. An amended appellant's case was filed on 28 March 2014. By that time, the 35-day period for the filing and service of the appellant's case had run out to some six months.
13 In the meantime, the first respondents had reactivated their application for security for costs, which came on for hearing on 20 February 2014. On 15 May 2014, the appellant was ordered to provide security in the sum of $20,000 by 12 June 2014. Subsequently, the appellant applied for and obtained an order extending the time for compliance to 26 June 2014. Security was provided by that date.
14 The second respondent's application for security for costs was filed on 10 July 2014.
15 It was submitted on behalf of the appellant that there was no reason the second respondent's application could not have been made at a time which would have enabled it to be heard with the first respondents' application. The consequence of the delay was that the appellant had provided security for the first respondents' costs when he was likely to have declined to do so if aware that an application for security was to be made by the second respondent. In addition, it was submitted that the appellant's financial position was such that an order for security for the second respondent's costs would stifle the appeal.
16 There are several things to be said about those submissions. In the first place, I do not consider it unreasonable for the second respondent to have waited until the appellant's case was in a proper form before making the application. The grounds of appeal are an important element on such an application: they define the issues on the appeal, with the result that some assessment can then be made of the appellant's prospects of success and of the complexity of the appeal and the time it is likely to take. The prospects of success are, of course, a relevant consideration on an application of this nature, and the complexity of an appeal and time it will take bear upon the amount of any security that should be ordered. As mentioned above [12], an appellant's case which complied with the rules of court was not filed until 28 March 2014.
17 Secondly, the second respondent had alerted the appellant in September and October 2013 that an application for security for costs was likely to be made once the appellant's case was filed. Contrary to the tenor of the appellant's submissions, this application cannot have come as a surprise to the appellant. It might have been expected that the application would be made once the first respondents pursued their own application. The first respondents did so, however, at a time when the appellant's case was still to be put in a final form. The second respondent cannot, in my view, be criticised for declining to do so, particularly when the appellant had been put on notice of the second respondent's intention to apply.
18 Thirdly, in the period between 28 March 2014, when the amended appellant's case was filed, and 10 July 2014, when the second respondent's application was filed, the only significant step taken by the appellant was the filing, on 11 June 2014, of an application to adduce additional evidence on the appeal. That was supported by what the appellant's counsel described as a 'preliminary affidavit' (ts 42). He indicated there was much more affidavit material to come. Even taking that application into account, the appellant cannot have incurred substantial costs over that time.
19 Moreover, it is not the case that the issue of security for the second respondent's costs lay dormant throughout that period. On 15 May 2014, following delivery of my decision that day on the first respondents' application, the second respondent's solicitors wrote to the appellant's solicitor asking that the appellant provide security for the second respondent's costs in the sum of $20,000, failing which an application would be made for that security. That was repeated in letters of 22 May, 12 June and 19 June 2014, and emails of 27 May and 29 May 2014. That correspondence went unanswered until 30 June 2014 when the appellant's solicitor wrote to say that the second respondent had had enough time to seek security for costs and any application for it would be opposed.
20 Fourthly, the delay falls to be considered in the context of the very slow progress of the appeal, which is still at an early stage. That slow progress, in particular the six months it took to produce a proper appellant's case, was due entirely to the appellant's defaults. While undue delay is not to be condoned in any circumstances, the lack of any urgency on the appellant's part casts a somewhat different light on the appellant's complaint about delay on the second respondent's part.
21 Finally, it is not easy to understand why the appellant would have declined to provide security for the first respondents' costs if aware that a similar application would be made by the second respondent. If he had done so, his appeal against the first respondents would have been dismissed. As the appellant's counsel acknowledged on the hearing of this application, the appellant's primary claim is against the first respondents (ts 36).
22 Turning to the other relevant factors, there is no doubt that the appellant is unlikely to be able to satisfy an order for costs if the appeal is unsuccessful. That appears from his own evidence.
23 My view of the appellant's prospects of success remains the same as the view I expressed on the first respondents' application. There I said that 'while a firm view on the appellant's prospects of success on the appeal cannot be reached at this stage, on a preliminary view the appellant could not be regarded as having a strong case on appeal': Lawless v Mackendrick [19]. While the issues on the appeal in respect of the second respondent are not identical, the appellant's case again depends on challenges to detailed findings of fact, a number of which turned on issues of credibility.
24 I accept that an order for security for costs might frustrate the appeal and while that is a significant factor it is only one of the factors to be weighed in the balance. I also note the statement in the appellant's affidavit that he blames the second respondent for the financial predicament he finds himself in.
25 Having regard to all of the relevant factors, I consider it is in the interests of justice that an order for security should be made.
26 The second respondent sought an amount of $20,000 by way of security. That was the amount the appellant was ordered to pay by way of security for the first respondents' costs. I do not, however, consider that the second respondent's role in the appeal is likely to be as substantial as the first respondents' and accordingly I would not order costs in that amount. In my view, having regard to the relevant scale of costs, an appropriate amount by way of security would be $15,000.
Conclusion
27 It was for those reasons that I ordered the appellant to provide security for the second respondent's costs of the appeal in the sum of $15,000 on or before 24 September 2014, failing which the appeal against the second respondent will stand dismissed.
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