Maher v Official Trustee in Bankruptcy - [2013] FCA 1143

FEDERAL COURT OF AUSTRALIA
Maher v Official Trustee in Bankruptcy [2013] FCA 1143

Citation: Maher v Official Trustee in Bankruptcy [2013] FCA 1143

Parties: DENNIS MAHER v THE OFFICIAL TRUSTEE IN BANKRUPTCY and COMMONWEALTH BANK OF AUSTRALIA

File number: VID 733 of 2011

Judge: JESSUP J

Date of judgment: 8 November 2013

Catchwords: PRACTICE AND PROCEDURE – application by second respondent for security for costs in proceeding for annulment of bankruptcy – applicant impecunious and unable to pay second respondent’s costs – whether order for security should be made having regard to requirements of justice and nature of applicant’s claim for annulment

Legislation: Bankruptcy Act 1966 (Cth), ss 30 and 153B
Federal Court Rules 2011 (Cth), r 19.01

Cases cited:
Australian Workers’ Union v Bowen (1946) 72 CLR 575
Barton v Minister for Foreign Affairs (1984) 2 FLR 463
Blair v Curran (1939) 62 CLR 464
Commonwealth Bank of Australia & Ors v Maher
[2008] FMCA 552
Commonwealth Bank of Australia v Maher
[2008] FMCA 1280
Cowell v Taylor (1885) 31 Ch D
Delta Electricity v Blue Mountains Conservation Society Inc [2010] NSWCA 264
Ly v Jenkins (2001) 114 FCR 237
Maher v CBA & Ors [2005] FMCA 1097
Maher v CBA & Ors [2008] FMCA 1004
Maher v CBA [2007] FMCA 400
Maher v Commonwealth Bank of Australia & Ors
[2007] FCA 113
Maher v Commonwealth Bank of Australia & Ors
[2007] FCA 560
Maher v Commonwealth Bank of Australia
[2004] FCA 248

Maher v Commonwealth Bank of Australia
[2006] FCA 892
Maher v Commonwealth Bank of Australia
[2008] FCA 205
Maher v Commonwealth Bank of Australia
[2008] VSCA 122
Maher v Commonwealth Bank of Australia
[2009] FCA 1589
Maher v Commonwealth Bank of Australia
[2010] FCA 1178
Maher v Commonwealth Bank of Australia
ACN 123 123 124 [2008] FCA 773
Maher v Commonwealth Banking Corporation
[2002] FCAFC 104
Melville v Craig Nowlan and Associates Pty Ltd (2002)
54 NSWLR 82
Ng v Van Der Velde [2010] FCA 89
Ninan v St George Bank Ltd (2012) 294 ALR 190
Re Eastwood [1975] Ch 112
Re Oates (1987) 17 FCR 402

Date of hearing: 21 October 2013

Place: Melbourne

Division: GENERAL DIVISION

Category: Catchwords

Number of paragraphs: 29

Counsel for the Applicant: Mr P Little

Solicitor for the Applicant: Katherine Moorhouse Perks

Counsel for the First Respondent: The first respondent did not appear

Counsel for the Second Respondent: Mr J Peters SC with Mr R Shepherd

Solicitor for the Second Respondent: Turks Legal

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

GENERAL DIVISION

VID 733 of 2011

BETWEEN:
DENNIS MAHER
Applicant

AND:
THE OFFICIAL TRUSTEE IN BANKRUPTCY
First Respondent

COMMONWEALTH BANK OF AUSTRALIA
Second Respondent

JUDGE:

JESSUP J

DATE OF ORDER:

8 NOVEMBER 2013

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:
1. Within 21 days, the applicant provide security for the costs of the second respondent –
(a)in the sum of $50,000; and
(b)in such form as is acceptable to the District Registrar.

2.Save with respect to the second…

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: [2013] FCA 1143
Decision Date

CaseChat Overview and Summary

The case before the Federal Court of Australia concerns an application for security for costs by the Commonwealth Bank of Australia ("the Bank") in a proceeding brought by Dennis Maher ("the Applicant") seeking the annulment of his bankruptcy. The Bank's application was made pursuant to r 19.01 of the Federal Court Rules 2011 (Cth), and it is common ground that the Applicant will be unable to pay the Bank's costs if ordered, and that the Applicant is impecunious. The primary legal issue the court needed to decide was whether the requirements of justice would be satisfied by ordering the Applicant to provide security for the Bank's costs.

The court considered the principle that the purpose of ordering security for costs is to provide protection to a party brought into litigation by a party who is unable to meet the costs of that other party, should the litigation be unsuccessful. Given the Applicant's extensive history of litigation, and the fact that his bankruptcy was based on his failure to pay costs, the court was reluctant to stultify the Applicant's access to justice by ordering him to provide security. However, the court also considered that the policy consideration informing that practice was muted in this case, as the Applicant's need to have access to justice would have been satisfied by the hearing at first instance.

The court found that the making of an order for security in favour of the Bank would satisfy the requirements of justice in providing some protection for the Bank in the eventuality that it succeeds in the proceeding; and is unlikely to be the source of any apparent injustice to the Applicant, even if it should be the case that his inability to raise the amount required would stand in the way of him further prosecuting the proceeding.

The court ordered that the Applicant provide security for the Bank's costs in the sum of $50,000 within 21 days, and that the proceeding be stayed pending the provision of security. The court also ordered that the Applicant pay the Bank's costs of its Interlocutory Application filed on 2 November 2012.

Orders