FEDERAL COURT OF AUSTRALIA
Ninan v St George Bank Ltd [2012] FCA 905
Citation: Ninan v St George Bank Ltd [2012] FCA 905 Parties: GEORGE NINAN and MOLLY GEORGE v ST GEORGE BANK LTD ABN 92 055 513 070 , VALUER GENERAL WESTERN AUSTRALIA, GODINILAND DEVELOPMENTS PTY LTD ACN 100 701 148 & RICHARD AH BOEY TAY, DEBORAH ANDREWS, COLIN DYMOND, WANNAUNUP DEVELOPMENT NOMINEES PTY LTD ACN 008 853 807 & PORT BOUVARD LTD, SIMON WROTH, GREG PENN, NATIONAL AUSTRALIA BANK ABN 12 004 044 937 and WESTPAC BANKING CORPORATION ABN 33 007 457 141 File number: NSD 700 of 2012 Judge: GRIFFITHS J Date of judgment: 23 August 2012 Catchwords: SECURITY FOR COSTS – impecunious natural persons – applicants resident outside the jurisdiction – deficiencies in applicants’ pleadings – whether applicants’ impecuniosity caused by the respondents’ conduct Legislation: Federal Court of Australia Act 1976 (Cth) s 56
Foreign Judgments Act 1991 (Cth)Cases cited: Aussie Protection Inc v Hy-Way Sunvisors (Sales) Pty Ltd, unreported decision of Gummow J, 23 December 1987 Austin, Nichols & Co Inc v Lodestar Anstalt [2009] FCA 1228
Australian Equity Investors, An Arizona Ltd Partnership v Colliers International (NSW) Pty Ltd (No. 5) [2011] FCA 1041
Appleglen Pty Ltd v Mainzeal Corporation Pty Limited (1988) 79 ALR 634
Barton v Minister for Foreign Affairs (1984) 2 FCR 463
Bell Wholesale Co Pty Ltd v Gates Export Corporation (1984) 2 FCR 1
Cameron’s Unit Services Pty Ltd v Kevin R Whelpton & Associates (Australia) Pty Ltd (1986) 13 FCR 46
Cashflow Finance Solutions Pty Limited v Compagnie
Francaise D’assurance Pour Le Commerce Exterieur [2012] FCA 203
Cowell v Taylor (1885) 31 ChD 34
Goodman v Thomson Maloney & Partners Pty Ltd trading as Charter Keck Cramer [2010] FCA 1264
High Tower Pty Limited v Island Motel Pty Limited, unreported decision of von Doussa J, 12 April 1989
Jazabas Pty Ltd v Haddad (2007) 65 ACSR 276
Jeffery & Katauskas Pty Ltd v SST Consulting Pty Ltd (2009) 239 CLR 75
Knight v Beyond Properties Pty Ltd [2005] FCA 764
K P Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189
Logue v Hansen Technologies Ltd (2003) 125 FCR 590
Mbuzi v Hall [2010] QSC 359
Pearson v Naydler [1977] 3 All ER 531
P S Chellaram & Co Ltd v China Ocean Shipping Co (1991) 102 ALR 321Date of hearing: 21 August 2012 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 54 Counsel for the Applicants: The First Applicant appeared in person Solicitor for the Second Respondent: Mr M Danger of State Solicitor’s Office Counsel for the Fourth and Fifth Respondents: Mr M S White Solicitor for the Fourth and Fifth Respondents: Lander & Rogers Lawyers Counsel for the Sixth Respondent: Mr P W Arblaster Solicitor for the Sixth Respondent: Lavan Legal Counsel for the Seventh and Eighth Respondents: Ms J M Sandford Solicitor for the Seventh and Eighth Respondents: Colin Biggers & Paisley Counsel for the Ninth Respondent:
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- Case
- [2012] FCA 905
- Decision Date
CaseChat Overview and Summary
The court had to determine whether it should exercise its discretion to order the applicants to provide security for costs. The court considered the arguments advanced by the respondents, including the applicants' impecuniosity and the deficiencies in their pleadings. The court also considered the applicants' arguments, including their claims that their impecuniosity was caused by the respondents' conduct, and that the proceedings would be stultified if they were required to provide security for costs. The court noted that the applicants had refused to replead despite being invited to do so and that the applicants carried the onus of establishing any stultifying effect.
After considering the arguments of both parties, the court ordered the applicants to provide security for the costs of and incidental to the proceedings in the form of a bank guarantee from an Australian trading bank. The court also stayed the proceedings as against any of the affected respondents until the relevant security for costs had been provided. The court further ordered that each of the respondents had liberty to apply, on seven days notice, to vary the amount of security for costs required to be provided. Finally, the court ordered that the applicants were to pay the costs of each of the respondents who had been successful in their interlocutory applications for security for costs, save that the second respondent was to pay the costs of providing the video conferencing facility for that part of the hearing held on 21 August 2012 in respect of its interlocutory application for security for costs.
Orders
Orders of the court
1. The applicants are to provide security for the costs of and incidental to the proceedings in respect of each of the following respondents and in the sum set out below in the form of a bank guarantee from an Australian trading bank (or in such other form as is acceptable to the District Registrar) to be lodged with the District Registrar and a copy of which is to be served on the solicitor for each of the relevant respondents:
(a) in the case of the second respondent, an amount of $16,600;
(b) in the case of the fourth and fifth respondents, an amount of $21,500;
(c) in the case of the sixth respondent, an amount of $23,500;
(d) in the case of the seventh and eighth respondents, an amount of $22,500;
(e) in the case of the ninth respondent, an amount of $29,000; and
(f) in the case of the tenth respondent, an amount of $35,730.
2. Each of the bank guarantees required by order 1 be lodged with the District Registrar by 31 December 2012.
3. The proceedings be stayed as against any of the affected respondents until the relevant security for costs has been provided in respect of that respondent in accordance with the order of the Court.
4. Each of the respondents referred to in order 1 above have liberty to apply, on seven days notice, to vary the amount of security for costs required to be provided in accordance with the order of the Court.
5. The applicants are to pay the costs of each of the respondents who have been successful in their interlocutory applications for security for costs (including the second respondent), save that, in the case of the second respondent, the second respondent is to pay the costs of providing the video conferencing facility for that part of the hearing held on 21 August 2012 in respect of its interlocutory application for security for costs.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
The arguments advanced by each of the respondents seeking security for costs were generally similar, although some gave more or less emphasis to particular matters. It is convenient to deal with them collectively. Their arguments may be summarised as follows:(a)the source of the Court’s power to order security for costs is to be found in both s 56 of the Federal Court of Australia 1976 (Cth) (“the FCA Act”) and Part 19 of the 2011 FCRs; and(b)the Court’s discretion to order security for costs should be exercised in favour of the relevant respondents because:· the applications were brought promptly;·the applicants are impecunious and will be unable to meet an adverse costs order;·both the applicants are ordinarily resident overseas and are not possessed of any material assets within Australia;·there is no arrangement between Australia and the United Arab Emirates for the reciprocal enforcement of foreign judgments;·the applicants’ originating application and statement of claim are embarrassing, frivolous and vexatious, and contain material that is offensive and scandalous (reference was made to the observations of Heydon J in Jeffery & Katauskas Pty Ltd v SST Consulting Pty Ltd (2009) 239 CLR 75 at [91]);·the applicants’ claims that their impecuniosity was caused by the respondents’ conduct which is the subject of the proceedings is unsubstantiated and deserves little or no weight having regard to the deficient pleadings and the absence of detailed evidence concerning the first applicant’s financial position prior to the matters which are said to have caused his impecuniosity;·the applicants’ argument that the proceedings will be stultified if they are asked to provide security for costs needs to be assessed in the context of the numerous alleged deficiencies in the applicants’ currently pleaded case and the applicants’ refusal to replead despite being invited to do so. It was also submitted that the applicants carry the onus of establishing any stultifying effect (reference was made to the observations of Jacobson J in Cashflow Finance Solutions Pty Limited v Compagnie Francaise D’assurance Pour Le Commerce Exterieur [2012] FCA 203 at [14]);·the applicants’ conduct in the SAT proceedings was described as being “argumentative” and indicative of how they were likely to conduct these proceedings. The applicants were also self-represented in the SAT proceedings and, it was claimed, they had not acted upon the SAT’s suggestion that they would benefit from expert advice on both law and land valuation. There was evidence before me indicating that the applicants’ written submissions in the SAT proceedings were almost 2000 pages in length; and·some of the respondents contended that the applicants had either no or poor prospects of success against them.25The basis upon which the applicants opposed having to give security for costs may be summarised as follows:(a)the respondents had no prospects of successfully defending the proceedings and it was their “duty” to indicate their chances of success;(b)the Court should infer from the fact that many of the respondents had not yet filed defences that those parties had no chance of success;(c)the applicants’ allegations of collusion between the Valuer General and developers and banks raised matters of public interest which should proceed to trial;(d)the fact that the applicants were now impecunious was “solely and totally caused by the actions of Respondents (sic)”, but that it “does not matter as (sic) this time who is responsible for it”;(e)if the proceedings cannot proceed because the applicants are unable to provide security for costs, the applicants would be denied justice;(f)the applicants are natural persons and it was submitted that courts do not order security for costs against natural persons, where impecunious or not, but the position is even stronger if the individual is impecunious;(g)the applicants claim that their pleadings are in compliance with the 2011 FCRs, even if they did not meet the “preconceived ideas” of lawyers. The applicants argued that their status as litigants in person needed to be taken into account and given significant weight;(h)a different approach should be taken where security for costs is sought by a corporation against a natural person (although no legal authority was cited in support of that proposition); and(i)in an endeavour to explain their case by reference to what was described as an “analogy”, the applicants made the following written submission:Let us say that I was a slave to a bad master in Egypt in BC 3000. The master beat me every day as his taxes on me was (sic) more than my earnings from him. So he reduced my pay and increased his taxes and beat me more. He used a foreman to accuse me and beat me. I was unable to work as my body was weak with all his beatings. I got courage and made a complaint to the Pharaoh. The master said to the Pharaoh “Please throw him into the jail as he is not capable to work & pay my taxes. Ask him to undress and see it for yourself, Pharaoh”.This is what Valuer General (Foreman) enabled the banks (master) to do to me; beat me daily and make me undress to show my disfigured body in front of the Pharaoh. Consideration