Nadjarian, G. v Myer Melbourne Ltd

[1981] FCA 272

2 ? 2 g/

JUDGMENT No. ........ ........ . J .... ... .....

- IN IHE FEDEXAL COUXT OF ~USTRATJIA - )

)

VICTORIA

-	DISTIiICT HEG12Tx	)	V.G. No. 193 o f 1981
)

DIVISION GENERAL )

ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA

, .

BETWEEN:

'L GEORGE NADJARIAN Appellant

and

MYER MELBOURNE LIMITED Respondent

NORTHROP J. EX TEMPORE JUDGMEKT - 9 DECEMBER 1981 _-.

On 13 August 1981 2 sequestration order was made against the estate of George Nad:jsr ian, the appellant. That

order W B S made under the Bankruptcy - Act 1966 oii the petition of Myfr Melbourne Limited, the respondent. On 1 September

1901 the appellant filed notice of appeal agalnst that

sequestration order, the appeal being matter V.G. 154 of

1981. On 9 November 1981 on the motion of the respondent the Federal Court constituted	by Mr. Justice Smithers made the
fol1or:r.g orders:

,

- 2 -

1. The appellant give security to the satisfaction of the Registrar in the sum of SlOCIO for tile payment of costs that may be awarded against him in respect of the

appeal of which notice dated 1 September 1981 was

given.

2.	The hearing of the appeal shall be stayed pending the
,I	giving of such security.
3 .	Unless such security is giver? withln three months the

appeal shall stand dismissed.

4 . The appellant shall pay the respondent's costs of

motion.

On 30 November 1981 the appeallant filed notice of

appeal against the orders mad? by Mr. Justice Smithers, that

appeal being matter V.G. 193 of 1981. The respondent now

moves the court in that appeal for the following orders, and this is in the form of the orders 'as sought, and not in the nore general form of the orders set out in the notice of motion:

- 3 -

1. The appellant give security to the satisfaction of the Registrar in the sum of $1000 for the payment of costs

that may be awarded against him in respect of the

appeal of which notice dated 30 November 1981 was

given.

r 8 .

2 . The hearing of the appeal be stayed pending the giving of such security.

7.

3 . Unless such security is given within three months the

appeal stand dismissed.

4 . The appellant pay for the respondent’s costs of the

motion.

One gets the impression from the evidence that this

may be the beginning of a never-ending treadmill, but there exist powers by which the court is hb3e to prevenC abuses of its powers.

The power to make an order f o r security of costs is

contained in s.56 of the Federal Court of Australia Act 1976

and I read the relevant sub-sections of that section:

“56.(1) The Court or a Judge may order a

plaintiff in a proceeding in the Court or an appellant In an appeal to the Court to give security for the payment of costs that may be awarded against hlm.

- 4 -

( 2 ) The security shall be of such amount,

and given at such tints and in such manner and

form, as the Court or Judge directs.

...

( 5 ) This section does not affect the

operation of any provision made by or under any other Act or by the Rules of Court for or in relation to the furnishing of security."

. .

Reference should be made also to s .59 of the

- Federal Court of Australia Act, being the section which

ehpowers the Federal Court, or rather the judges of the Court, to make rules not: icconsistent with the Act, meking provision for or in relation to the practice and procedure to

be followed in the Court and, in particular, reference is

made to s . 5 9 ( 2 ) ( n ) , whlch is a specific reference to the

power to make provision for or in reiation to the furnishing

of security.

The judges of the Court have made the Federal Court

Rules which include a rule in relation to the giving of

security, and in this regard reference is made to 0.52 , r.20,

being the Order dealing with appeals. That rule reads:

"20. Unless the Court otherwise directs no

security for costs of an appeal	to the Court
shall be required."

Reference should be made also to 0.28 of the Federal Court Rules, wh~.ch is headed "Securlty For Costs". That is the Order which epplies to ordinar) applications where a

,

- 5 -

respondent is seeking a security for costs order against the applicznt to those prcceedlngs. It is not in the form of applying directly to the general power to order security for costs on an appeal.

In 0.52, r.20, the word "Court" prima facie means

"

the Full Court - see 0.52, r.1 which provides:

" 1 . In this Order unless the contrary

intention appears -

...

'Court' means the Court exercising its

appellate or relate6 jurisdiction under Part

111 Divislon 2 of the Act;"

In ---- Prestige ---- BakingIndustries Tty. Limited v .

Beard, a decision of the Federal Court of Australia constituted by Northrop J., unreported, 15 December 1980:

the Court held that r.20 does not preclude the court

constituted by a single judge from considering and.

determinlng a motion as in the present case, for security for

costs. Likewise, Mr. Justice Smithers, in the present

matter, made an order while sitting as a single judge	of the
court.

In the Prestlqe Bakinq - IndustLies --- Case I expressed

views in relation to 0.52, z . 2 0 , and I adopt the same

- 6 -

principles for the present case. In particular I refer to

what I said in rclatic,n to the exercise of the discretion

conferred by 0.52, r.20:

"Counsel f o r the respondent has submitted that

the general principle to Se applied In

relation to appeals is simple and is stated

in Williams, Supreme Court Practice under

order 58 rule 20 on page 2396 as follows and I

quote :

'The ordinary rule is that, when

the respondent can show that the

appellant, if unscccessful, would be unable through povcrky to pay

the costs of the appeal, an order

for security of costs will be

made. '

Authorities cited to me in the course o€

submissions support that propositlon. Insofar

as the authorities depend upon the rules of

the Supreme Court of Victoria, they turn

largely upon the words 'under special

circumstances' appearing in order 58, rule 20.

There is much to be said for the qeneral

principle enunciated in the cases but that is

not the only factor for consideratlon.

In the present case, the basic principle

appears to be that. there shouid be no order

f o r security of costs in relatlon to an

appeal. The fact that an appellant would be

unable to pay the costs awarded against him,

if the appeal fails, is a strong factor to be

taken into account in considering whether to

award security for costs or not, but it 1s not

the only factor."

In that case the Court refused to make an order for security

f o r costs and an appeal from that decision was dismissed.

- 7 -

I n t h e p r e s e n t c a s e I adopt the same p r i n c i p l e s i n

applyiny 0 . 5 2 , r .20 , b u t I n ? d d i t i o n I make r e f e r e n c e t c

another extract f rom Wil l iams, Supreme Court P r a c t i c e , en

annotat ion under 0 .58, r .20 of t h e Supreme Court Rules a t

p.2395. Under t h e heading of "Security for Cos ts . - Grounds

on	which	crdered." ,	there	appears	the	fol lowing	paragraph,
I ' .

and I quote:

"Abuse of p rocess . - S e c u r i t y w i l l be ordered

where t h e a p p e a l a p p e a r s t o be an abuse of the

p r o c e s s o f t h e c o c r t (We!don v. -- MaDles ( ! 8 8 7 ) ,

20 Q.B.D. 331) , CL where c h e proceedings e re

vexa t ious (Usil - v. Brea r l ey ( 1 8 7 8 1 , 3 C.P.D.

206; R e I v o r y ( 1 8 7 3 ) , 10 Ch. D. 372) . I n

Main v. Duerdln ( 1 8 8 7 1 , 13 V.L.R. 7 0 6 , t h e

p l a i n t i f f was r e q u i r e d t o g i v e s e c u r i t y on an

a p p e a l a g a i n s t a n o r d e r d i r e c t e d a g a i n s t

a t t e n p t s made by h i m c a r r y t o on t h e

l i t i g a t i o n i n an unfair manner."

T h a t p r i n c i p l e h a s a p p l i c a t i o n a l s o t o t h e f a c t s of t h e

p r e s e n t c a s e .

As f a r a s t h e p r e s e n t c a s e is concerned , the

appe l l an t has no a s s e t s . He is unemployed and because of h i s

poverty has no p rospec t o f pay ing t he r e sponden t ' s cos t s i f

t h e appecl i s unsuccessfu l . I n a d d i t i o n , I a c c e p t t h e

evidence conkainc-d i n t h e a f f i d a v i t s of Mr. Ba t t e r sby and Mr.

McGuigan i n r e l a t i o n t o c o n v e r s a t i o n s t h e y hed w i t h t h e

a p p e l l a n t i n r e l a t i o n t o t h e appea l . From tha t ev idence , and

a l s o from vhat has Seen sa id by t h e a p p e l l a n t h i m s e l f , I have

formed the op in ion tha t the appea l i n t h e p resent case forms

- 8 -

part of a compaign of harassment by the appellant of the respondent in an attempt to gain release from the effect of

the sequestration order made against him and that tnat

conduct constitutes an abuse of the process of the court and is one which justifies the order being made in the present case.

Likewise, I have formed the opinion that the

i’mpecunious nature of the appellant, together with the nature of the order appealed from in the first place - the sequestration order - is such that on the grounds of poverty an order for security of costs should be made.

Further, the judgment of the order of Kr. Justice Smithers is an order arising from an exercise of discretion in a matter of practice and procedure of the court. Recenrly the High Court has expressed the view that in cases of that kind an appeal court should not interfere with the discretlon of the trial judge except in exceptional circumstances, and in this regard I refer to the decision of Adam P. Brown Male

Fashions Pty. Limited v . Phillip Morris Incorporated (1981)

35 A.L.R. 625, and I quote from the joint judgment of the

Chief	Justice,	Aickin,	Wilson	and Brennan JJ. at p.629,
.

where, after referring to a number of other authorjties

dealing with the question of appezls from the exercise of

discretions, they say:

,

- 9 -

"We would merely repeat, with approval, the

oft-cited statement of Sir Prederlck Jordan in

He W111 of F. R. Gilbert (deceased) (1946) 46

SR (NSW) 318 at 323" ' . . . I am of oplnion

that ... there is a material difference

between an exercise of dlscretion on a point

of practice or procedure and an exercise of

discretlon which determines substantlve

rights. In the former class of case, if a

tlght rein were not kept upon interference

with the orders of judges of first instance,

the result would be disastrous to the proper

administration of justice. The disposal of

cases could be delayed interminably, and costs heaped up indefinltely, if a litlgant w?.th a long purse or a litigious disposition could,

c	at will, In effsct transfer all exercises of discretion in interlocutory appl~cations from a Judge In Chambers to a Court of Appeal': ~~
see a150 Brambles Holdings Lcd. --__ v. Trade
----- Practices Commission (1979) 23 A.L.P. 191 at
193; Eougherty v. Chandler (1946) 4 6 SR (NSW)
370 at-374. It 1 s safe to say that the
question of injustice flowing from the order appealed from wlll generally be a relevant and necessary consideratlon."
In the present case the appeal for the judgment of

Mr. Justice Snithers comes within that statement of

pr inclplc. Likewise, on the view I have formed of the

appellant, he is a person of litigious disposition who 1 s attempting, by means of using some of hls own time while he 1s unemployed, to continue a series of applications and

appeals In this court at cost to the respondent in an attempt

to com$el the respondent to agree to a setting aslde or

dlscharge of the sequestration order already made. In those circumstmces this is an added factor why, In the exercise of the dlscretion conferred upon me, I propose to make the orders sought by tne respondent.

2

- 10 -

Accordingly, on the motion of the respondent, the court makes the following orders:

1. The appellant give security to the satisfaction of the Registrar in the sum of $1000 for the paplent 3f costs that may be awarded against him in respect of the

appeal of which notice date6 30 September 1981 is

given.

i

2. The hearing of thP appeal be stayed pending the giving of such security.

3 . Unless security is given within three months the appeal

stand dismissed.

4 . The appellant pay the respondent's costs of the motion.

_ -

b.