Paton v Campbell Capital Limited

[1993] FCA 449

STEVE PATON v. CAMPBELL CAPITAL LIMITED
No. NG332 of 1993
FED No. 449
Number of pages - 3
Practice and Procedure

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Burchett J(1)

CATCHWORDS

Practice and Procedure - security for costs - principles in relation to exercise of discretion to require security for costs against an appellant - impecuniosity of appellant - prospect of success of appeal.

Federal Court Rules, Order 52, r. 20

Barton v. Minister for Foreign Affairs (1984) 2 FCR 463

Lall v. 53-55 Hall Street Pty Ltd (1978) 1 NSWLR 310

Kennedy v. McGeechan (1978) 1 NSWLR 314

HEARING

SYDNEY, 1 July 1993

#DATE 1:7:1993

The appellant appeared in person.

Solicitors for the Appellant: Messrs Andrew Thorpe

Counsel for the Respondent: Mr M.R. Aldridge

Solicitors for the Respondent: Messrs Baskin and Lewis

ORDER

Application dismissed.

JUDGE1

BURCHETT J There is a general principle, which Morling J laid down in Barton v. Minister for Foreign Affairs (1984) 2 FCR 463, and which has been since applied in a number of judgments. That principle is that impecuniosity is no bar to a litigant. Accordingly, it is not generally appropriate to require an individual litigant, who simply does not have funds, to pay a security which he cannot pay, as the price of admission to the courts of justice, which are open to all persons in Australia. A somewhat special position pertains in relation to appeals. I have been referred to the rules of the Supreme Court of New South Wales, which talk about special circumstances as a basis for ordering security for costs in an appeal.

1. Our own rules in this court explicitly provide that unless the court or a judge otherwise directs, no security for costs of an appeal to the court shall be required. That is Order 52, r. 20. It is plain from the manner in which that rule is expressed that there is a discretion, but that there is something of an onus resting upon one who says that an appellant must be required to provide security. A feature of an appeal, which marks it out from litigation at first instance from this point of view, is that there has already been a decision given by the judge who heard the matter at first instance, and that the appellant has, in other words, had a day in court, has had an opportunity to present his case, and has had a ruling which may be presumed to be correct.

2. But when one says that a ruling may be presumed to be correct, it would be quite unreal to ignore the fact that, I think, statistics show that on average something like one third of all appeals, in most civilised countries in the world, do succeed. Academics have written papers on the subject. So one has to do more than simply say one assumes a decision given by a court is correct. In this case, I have been taken carefully by counsel, who has presented the application for security with his usual competence and thoroughness, through the judgment at first instance. It seems to me that the proper conclusion is that it cannot be said the appeal is unreasonable in the sense that there is no arguable case. At the same time, it cannot be said that there is any reason to think some matter of great significance has been overlooked. In other words, the appeal must be regarded as one which has some prospect of success, and it is on that basis that I consider the matter.

3. I have been referred to two decisions of the Court of Appeal of New South Wales, in Lall v. 53-55 Hall Street Pty Ltd (1978) 1 NSWLR 310 and Kennedy v. McGeechan, in the same volume, appended as a note to the former case, commencing at page 314. Each of these cases seems to me to illustrate the proposition that there is a discretion to require the giving of security where the court is of the view either that the appeal is without real merit or substance, or that the issue sought to be litigated in the appeal is not one of great importance to the appellant, while the prospect of the respondent being left without remedy in respect of a costs order is significant.

4. I do not think that this case is in either of those categories. Here the appellant seeks to challenge a sequestration order made against him. Bankruptcy, involving, as it does, status in a quite significant way, is a matter of real importance to the person involved. Indeed, it may possibly have extremely serious consequences extending to some criminal liability under which the person concerned would not otherwise lie. It is not suggested in this case that that last matter is in fact a consideration, but the possibility of it cannot ever in a matter of this kind be ignored.

5. On the evidence, the appellant, who has gone into the witness box and whose evidence I have no reason to reject, is in a situation of fairly extreme impecuniosity, with two young children and a wife to support and an income which, although supplemented by governmental rental assistance and the usual provision in respect of the children, is barely sufficient to cover day to day expenses. I have come to the conclusion that it would be wrong to exercise my discretion to require the appellant, in these circumstances, to provide security. Accordingly, the application for security is dismissed.