Moore v Macks

Case [2007] FCA 509

FEDERAL COURT OF AUSTRALIA

Moore v Macks [2007] FCA 509

SECURITY FOR COSTS OF APPEAL – no point of principle

Bankruptcy Act 1966 (Cth)
Federal Court of Australia Act 1975 (Cth)

Bell Wholesale Co Ltd v Gates Export Corporation (1984) 2 FCR 1 cited
Croker v Deputy Registrar of the High Court of Australia [2003] FCA 681 cited
Upton v Tasmanian Perpetual Trustees Pty Ltd [2006] FCA 1336 cited
Cowell v Taylor (1885) 31 Ch D 34 cited
Skyring v Sweeney [1999] FCA 61 cited
Re Alafaci; Registrar in Bankruptcy v Hardwick (1976) 9 ALR 262 discussed

DAVID GERALD MOORE v PETER IVAN MACKS

SAD 84 OF 2006

DAVID GERALD MOORE v PETER IVAN MACKS

SAD 7 OF 2007

MANSFIELD J
10 APRIL 2007
ADELAIDE


IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY

SAD 84 OF 2006
ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA

BETWEEN:

DAVID GERALD MOORE
Appellant

AND:

PETER IVAN MACKS
Respondent

SAD 7 OF 2007

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:

DAVID GERALD MOORE
Appellant

AND:

PETER IVAN MACKS
Respondent

JUDGE:

MANSFIELD J

DATE OF ORDER:

10 APRIL 2007

WHERE MADE:

ADELAIDE

IN SAD 84 OF 2006 THE COURT ORDERS THAT:

1.The appellant is to provide security of $4000 for the costs incurred and to be incurred by the respondent in the appeal, such security to be provided by paying the sum of $4000 into Court on or before 24 April 2007.

2.The hearing of the appeal is stayed until such security is provided or until further order.

3.The costs of the respondent’s notice of motion are the respondent’s costs on the appeal.

4.The respondent’s notice of motion is stood over to a date to be fixed with liberty to apply.

IN SAD 7 OF 2007 THE COURT ORDERS THAT:

1.The appellant is to provide security of $4200 for the costs to be incurred by the respondent in the appeal, such security to be provided by paying the sum of $4200 into Court on or before 24 April 2007.

2.The hearing of the appeal is stayed until such security is provided or until further order.

3.The costs of the respondent’s notice of motion are the respondent’s costs on the appeal.

4.The respondent’s notice of motion is stood over to a date to be fixed with liberty to apply.

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


IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY

SAD 84 OF 2006
ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA

BETWEEN:

DAVID GERALD MOORE
Appellant

AND:

PETER IVAN MACKS
Respondent

SAD 7 OF 2007

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:

DAVID GERALD MOORE
Appellant

AND:

PETER IVAN MACKS
Respondent

JUDGE:

MANSFIELD J

DATE:

10 APRIL 2007

PLACE:

ADELAIDE

REASONS FOR DECISION

  1. Mr Macks seeks an order for security for costs of these two appeals. 

    BACKGROUND

  2. There is a long background to…

Continue reading Moore v Macks

Sign in free to access the full text

Details
AGLC
Moore v Macks [2007] FCA 509
Case
[2007] FCA 509
Decision Date

CaseChat Overview and Summary

The case of Moore v Macks involves two appeals brought by Mr Moore, the appellant, against Mr Macks, the respondent, who is the trustee in bankruptcy of Mr Moore's estate. Mr Moore's appeals stem from previous orders made in a primary action and subsequent appeals from those orders. The central issue in this case is whether Mr Moore should be required to provide security for the costs of these appeals, given his financial situation and potential inability to pay should the appeals be unsuccessful. The court had to determine the appropriate exercise of its discretion to order security for costs, considering the relevant factors presented by the parties.

The court considered various factors in exercising its discretion to order security for costs. The primary focus was on the impecuniosity of Mr Moore and the risk that he would be unable to pay any costs if the appeals were unsuccessful. Mr Moore, being bankrupt, has limited assets and income, with a significant disparity between his estimated assets and liabilities. The court also considered Mr Macks's extensive involvement in the litigation and the costs incurred thus far, which amount to approximately $93,000. The court acknowledged that while impecuniosity generally should not bar a litigant from appealing, in this case, the risk of Mr Moore being unable to meet the costs of the appeals if they were unsuccessful was significant. The court found that the risk of Mr Moore being unable to pay was real and that he had acknowledged his inability to provide security or to pay any costs if the appeals were unsuccessful.

Based on the considerations above, the court decided to exercise its discretion to order security for costs. The appellant, Mr Moore, was required to provide security of $4200 for the costs to be incurred by the respondent, Mr Macks, in the appeal. This security was to be paid into court by a specified date. The hearing of the appeal was stayed until such security was provided. The court also ordered that the costs of the respondent's notice of motion were to be the respondent's costs on the appeal and that the respondent's notice of motion was to be stood over to a date to be fixed, with liberty to apply. This decision reflects the court's consideration of the balance between the right to appeal and the need to protect the respondent from potential financial loss.

Orders

Orders of the court

1. The appellant is to provide security of $4200 for the costs to be incurred by the respondent in the appeal, such security to be provided by paying the sum of $4200 into Court on or before 24 April 2007.

2. The hearing of the appeal is stayed until such security is provided or until further order.

3. The costs of the respondent’s notice of motion are the respondent’s costs on the appeal.

4. The respondent’s notice of motion is stood over to a date to be fixed with liberty to apply.

Background

Background to the litigation

Mr Macks seeks an order for security for costs of these two appeals. BACKGROUND There is a long background to the present appeals. On 14 July 2007, Lander J gave judgment in Wilson v Manna Hill Mining Co Pty Ltd [2004] FCA 912 (the primary action). Mr Moore was the second respondent. Subsequently, on 30 July 2004, after entering orders in the primary action, Lander J made orders as to the costs of that proceeding including that Mr Moore pay to the applicants in the primary action their costs on an indemnity basis: see Wilson v Manna Hill Mining Co Pty Ltd [2004] FCA 1035. Mr Moore appealed from the orders made in the primary action, including the costs orders by two separate appeals on 6 August 2004 (Matters SAD 175/04 and SAD 176/04) (the appeals from the primary judgment). I have so described those appeals although strictly speaking it may be that the costs order is really the subject of an application for leave to appeal. Before those appeals were heard, Mr Moore was declared bankrupt by order made on 21 January 2005. Mr Macks was appointed the trustee in bankruptcy of his estate. On 1 February 2005, Mr Moore applied in the Federal Magistrates Court to review the making of the sequestration order. That application was dismissed on 1 July 2005: Moore v Wilson [2005] FMCA 870. Mr Moore appealed to this Court from that order. On 10 February 2006 that appeal was dismissed: Moore v Wilson [2006] FCA 79. Mr Moore sought special leave to appeal to the High Court from that decision, but his application was deemed to be abandoned under the High Court Rules. In addition to challenging the making of the sequestration order, in separate proceedings in the Federal Magistrates Court, Mr Moore applied for the removal of Mr Macks as his trustee pursuant to s 179 of the Bankruptcy Act 1966 (Cth), based upon an alleged conflict of interests on the part of Mr Macks and upon other conduct. He also sought an order that Mr Macks continue to conduct the appeals from the primary judgment. Mr Macks applied by motion to summarily dismiss those proceedings. On 27 April 2006 Lindsay FM, on that notice of motion, dismissed the application by Mr Moore to have Mr Macks removed as his trustee: see Moore v Macks [2006] FMC 594. Federal Magistrate Lindsay referred to the Federal Court that part of the application which concerned the proposed decision of Mr Macks to abandon the appeals from the primary judgment. Mr Moore has appealed from the decision of Lindsay FM of 27 April 2006. The hearing of that appeal has been deferred from time to time pending determination of the issue as to whether his trustee, Mr Macks, should in the meantime discontinue the two appeals from the primary judgment. That question is the one referred to the Federal Court. The appeal from the decision of Lindsay FM has now been listed for hearing on 15 May 2007 in the Full Court. On 15 January 2007, Besanko J determined that the application by Mr Moore for an order directing Mr Macks not to implement his decision to abandon the appeals from the primary judgment should be dismissed: see Moore v Macks [2007] FCA 10. Mr Moore has also appealed from that decision. That appeal is also listed for hearing on 15 May 2007 in the Full Court. It is to be heard with the other appeal. It is in respect of those two appeals that Mr Macks has now sought orders for security for costs. I will call them the current appeals. REFUSAL TO ADJOURN THE MOTIONS

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

MANSFIELD J

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Established by: MANSFIELD J

The discretion to order security must be exercised judicially, but it is a broad and unfettered discretion. A number of factors have been held to be relevant when exercising the discretion, but in the present circumstances it is necessary to refer only to those which the parties by their respective submissions and evidence have identified or those which otherwise appear to the Court to be of significance. CONSIDERATION It is common ground that the impecuniosity of Mr Moore, and so the risk that he would be unable to meet any costs orders should the appeal be unsuccessful, should be addressed. In my judgment, there is a demonstrable risk that, if the current appeals are unsuccessful, Mr Moore will be unable to meet the costs of Mr Macks of the current appeals. Mr Moore is bankrupt. There is little evidence as to his assets, other than that disclosed in his statement of affairs of 11 February 2005. He has a modest income. He has no significant assets, except (he claims) shares in Manna Hill Mining Co Pty Ltd, Manna Hill Resources Pty Ltd and Hodgemore Pty Ltd. There is no independent valuation of those shares, although he estimates in his statement of affairs that those shares are worth in total a little under $700,000. That includes debts owing to him by Manna Hill Mining Co Pty Ltd and the other two entities. He estimates his liabilities at a figure in excess of $515,000. There is no reason to think that that is not a realistic, if not a conservative, assessment. The evidence also suggests that there is no significant change in Mr Moore’s assets or liabilities since the Statement of Affairs. Mr Macks’ fees and costs to date, bearing in mind his extensive involvement in litigation involving Mr Moore, are presently in the order of some $93,000. In my view, it is plain that there is a very real risk that, if the current appeals are unsuccessful, Mr Moore will be unable to meet the costs of Mr Macks incurred with respect to them. Indeed, in his written submissions, Mr Moore acknowledged that he did not have the funds to pay any security for costs or to pay any costs of the appeals if awarded against him. The cases suggest that, in the case of an appeal, where an impecunious litigant has had the benefit of a full hearing at first instance, the significance of the fact that a security for costs order may frustrate the exercise of the right of appeal should carry less weight than in the circumstances where a litigant at first instance may be put out of litigating a matter at all. As long ago as Cowell v Taylor (1885) 31 Ch D 34 at 38, Bowen LJ said:The general rule is that poverty is no bar to a litigant, that, from time immemorial, has been the rule at common law, and also, I believe, in equity. There is an exception in the case of appeals, but there the appellant has had the benefit of a decision by one of Her Majesty’s courts, and so an insolvent party is not excluded from the courts, but only prevented, if he cannot find security, from dragging his opponent from one court to another. Spender J in Skyring v Sweeney [1999] FCA 61 at [6] said:Impecuniosity is a factor which can be taken into account as justifying the grant of security. Impecuniosity ought not to be a bar to a person prosecuting at first instance a claim, but the position on appeal seems to me to be fundamentally different. In effect, in the absence of an order for security for costs in the circumstances of this case, Mr Skyring, in effect, is given a free hit, and that seems to me to be intrinsically unfair.