Oze-Igiehon v Rasier Operations BV - [2017] WASCA 107

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE COURT OF APPEAL (WA)

CITATION: OZE-IGIEHON -v- RASIER OPERATIONS BV [2017] WASCA 107

CORAM: MITCHELL JA

HEARD: 8 JUNE 2017

DELIVERED : 8 JUNE 2017

PUBLISHED : 9 JUNE 2017

FILE NO/S: CACV 5 of 2017

BETWEEN: MIKE OZE-IGIEHON
Appellant
AND
RASIER OPERATIONS BV
Respondent

ON APPEAL FROM:
Jurisdiction              :  DISTRICT COURT OF WESTERN AUSTRALIA
Coram  :WAGER DCJ
Citation  :OZE-IGIEHON -v- RASIER OPERATIONS BV [2016] WADC 174
File No  :CIV 775 of 2016

Catchwords:

Security for costs - Principles relating to applications for security for costs in an appeal - Turns on own facts

Legislation:

Supreme Court (Court of Appeal) Rules 2005 (WA)

Result:

Application allowed

Category: B

Representation:

Counsel:

Appellant: In person
Respondent: Mr A P Hershowitz

Solicitors:

Appellant: In person
Respondent: Brand Partners Commercial Lawyers

Case(s) referred to in judgment(s):

George 218 Pty Ltd v Bank of Queensland Ltd [2016] WASCA 56
MITCHELL JA:
(This judgment was delivered extemporaneously on 8 June 2017 and has been edited from the court's record.)

The respondent has applied for security for costs in this appeal, by the appellant against the dismissal of his action in the District Court. The respondent operates the Uber 'Driver App'. The appellant used the Uber Driver App to provide transportation services to various clients. The appellant and respondent entered into an agreement relating to the appellant's use of the Uber Driver App.
The trial judge found that cl 2.4 of the agreement gave the respondent the 'right to, at any time at [the respondent's] sole discretion, deactivate or otherwise restrict [the appellant] from accessing or using the Driver App or the Uber Services in the event of violation of' the agreement. That clause also gave the respondent the right to take that action 'for any other reason' at its 'sole and reasonable discretion'. Clause 12.2 allowed either party to terminate the agreement without cause with seven days' prior notice, or immediately without notice for the other party's material breach of the agreement.
Between July and November 2015, the respondent received complaints from a number of clients relating to the appellant. In general terms, the complaints were to the effect that the appellant was fatigued and driving in a manner which was unsafe. The respondent suspended the appellant's Uber account temporarily on 14 November 2015, and permanently deactivated the account on 24 November 2015.
The appellant sued for damages in contract and negligence in relation to the termination of the agreement. The trial judge dismissed his action on 9 December 2016. In essence, the trial judge found that, by driving whilst tired, the appellant had materially breached the agreement [90]. She also found that the respondent acted reasonably in deactivating the appellant's account after receiving and considering the client complaints [91], [93]. The trial judge was also not satisfied that the appellant had proven any substantial loss or damage as a result of any wrongful termination of the agreement [95] ‑ [103].
The appellant appeals to this court against the primary judge's orders. The appellant is self‑represented, and his grounds of appeal are not clearly drafted. Construed generously, they are not entirely without merit. For example, the appellant in effect asserts that the trial judge erred in receiving evidence of the complaints made to the respondent as evidence of the truth of their contents. It is at least arguable that the hearsay rule precluded the use of evidence of the complaints to find that the appellant drove whilst fatigued, and that there was no other evidence to establish the conclusion that the appellant breached the terms of the agreement.
However, there are two issues which present as an impediment to the appellant's ultimate success in this appeal.
First, the terms of the agreement found by the trial judge gave the respondent a broad contractual right, acting reasonably, to deactivate the appellant's Uber account. The trial judge found that the respondent acted reasonably in taking that action in response to the complaints, in the exercise of that contractual right. That factual finding is not expressly challenged, and it is not obvious to me at this preliminary stage how it might be impugned. The existence of that contractual right does not depend on whether or not the agreement creates a relationship of employer and employee between the parties (a topic to which much of the appellant's written submissions are devoted). On that factual finding, the respondent had a contractual right to deactivate the appellant's Uber account.
Secondly, it is difficult to see how more than nominal damages could be established in the face of the agreement's provision for either party to terminate without cause on seven days' notice.
Therefore, assessing the matter as best I can at this stage, my (necessarily provisional) view is that the appellant's prospects of overturning the orders made by the trial judge are very weak.
The respondent relies on the affidavit of Terence O'Brien sworn on 21 April 2017. The affidavit deposes as to the legal costs incurred by the respondent in the District Court proceedings, which have not yet been assessed or paid. The affidavit also deposes as to a number of statements made by the appellant in the District Court proceedings which suggest that he will be unable to satisfy both the costs order in the District Court and any adverse costs orders in this court in the event that the appeal fails. Mr O'Brien estimates the respondent's costs of defending the appeal at approximately $36,000.
The appellant relies on affidavits he swore on 13 May 2017 and 7 June 2017. Those affidavits assert various matters concerning the merits of the appeal, but do not contain any evidence as to the appellant's current financial position.
Rule 44(1) of the Supreme Court (Court of Appeal) Rules 2005 (WA) provides that a party may apply for an 'interim order'. An 'interim order' is defined in r 3(1) to include an order that an appellant provide security for a respondent's costs. Under r 43(2)(h), a single judge has jurisdiction to make an interim order in an appeal.
Murphy JA considered the principles relating to applications for security for costs in an appeal in George 218 Pty Ltd v Bank of Queensland Ltd [2016] WASCA 56 [41] ‑ [48]. In summary, as his Honour recognised:
1.The power to order security is exercised to serve the interests of justice.
2.The discretion to order security is unfettered but must be exercised judicially.H:\Mitchrob\Matters\Oze-Igiehon v Rasier Operations BV\Oze-Igiehon v Rasier Operations Rev 5 CR.doc - bookmark8 'Special circumstances' do not have to be shown before an order for security for costs is made against an appellant.
3.An appellant's inability to satisfy a costs order should the appeal fail is generally a significant factor in favour of an order for security for costs. However, if the respondent has caused the appellant's impecuniosity, that may be a relevant countervailing factor.
4.Impecuniosity is not in itself generally the sole ground for the making of an order for security. Even where the appellant is impecunious, in all the circumstances, the interests of justice may properly be served by not making such an order.
5.Other factors generally include the appellant's prospects of success, whether the appellant would be shut out of the appeal if security for costs were ordered, and whether there has been any delay in the respondent filing the application for security for costs.
6.Ultimately, each case will turn on its own circumstances, and it is not possible to set out an exhaustive list of the relevant considerations.
7.Where security is ordered against an impecunious appellant, the amount ordered should not be greater than is absolutely necessary.
Having regard to the evidence adduced in the present case, I am satisfied that there is a real risk that the appellant will not be able to satisfy a costs order in this court, in addition to costs awarded in the District Court, if he is unsuccessful in the appeal. That inference can be drawn from the statements in the primary proceedings to which Mr O'Brien's affidavit refers. I am more comfortable in drawing that inference in circumstances where the appellant has not given contradictory evidence or given evidence of any details of his financial position.
I am not satisfied that the action of the respondent in terminating the agreement, even if wrongful, has been established as a cause of the appellant's likely inability to satisfy a costs order. The appellant's contention that the respondent caused his impecuniosity is made in circumstances where the respondent had the contractual right to terminate the agreement without cause on seven days' notice.
The appellant's affidavit does not state the detail of his current financial position or that he would be unable to raise a modest amount of security if it were ordered, so as to shut him out of the appeal if such an order was made. I recognise that, on the current state of the evidence, it may be inferred that there is at least some prospect that the appellant will be unable to raise security. However, that factor must be balanced against the other matters to which I have referred.
The respondent did not unreasonably delay in making the application after the appellant's case was filed. As I have indicated, and this is a significant factor, I consider the appellant's prospects for ultimate success in the appeal to be very weak.
In all of these circumstances, in my view it is in the interests of justice to order security for costs in this matter. The respondent seeks payment of $14,000 as security. Having regard to all of the circumstances, and bearing in mind that costs are not an indemnity, the amount of $10,000 appears to me to be reasonable and to reflect the minimum amount absolutely necessary in this case. I would therefore allow the respondent's application for security for costs to that extent.
I order that:
1.The appellant is to provide security for costs in the sum of $10,000 on or before 4.00 pm on 7 July 2017 by payment of that sum into court unless the parties can agree on arrangements for it to be paid into an interest bearing account.
2.If the sum of $10,000 is not paid by the appellant either into the court or into an agreed account by 4.00 pm on 7 July 2017 the appeal will stand dismissed and the appellant is to pay the respondent's costs of the appeal to be taxed.
3.Pending payment of security the appeal is stayed.
4.Costs of the application in the appeal dated 21 April 2017 be in the cause of the appeal.