Pi v Zhou

[2017] NSWCA 16

Court of Appeal

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:	Pi v Zhou [2017] NSWCA 16
Hearing dates:	30 January 2017
Date of orders:	15 February 2017
Decision date:	15 February 2017
Before:	Basten JA at [1] Payne JA at [14] Sackville AJA at [80]
Decision:	(1) Set aside the orders made by Gleeson JA on 24 June 2016. (2) The applicant (Mr Pi) is to provide security for the respondents’ (Mr Zhou and Mrs Zhao) costs by paying into court the sum of $12,000 or by otherwise providing security for that amount in a manner satisfactory to the respondents. Until that security is provided, there will be a stay of the proceedings. The security is to be provided before 5 April 2017. (3) The matter is to be listed before a judge of the Court on 10 April 2017 for consequential orders, or, in the event that the security has not been provided, an order for the dismissal of the proceedings under UCPR r 42.21(3). (4) The applicant (Mr Pi) to pay 30% of the respondents’ (Mr Zhou and Mrs Zhao’s) costs of the notice of motion filed 20 April 2016 and of this application for review, as agreed or assessed.
Catchwords:	PROCEDURE – review of single judge of Court of Appeal; security for costs
Legislation Cited:	Civil Procedure Act 2005 (NSW) s 67 Corporations Act 2001 (Cth) s 1335 Supreme Court Act 1970 (NSW) ss 19, 46, 46B Uniform Civil Procedure Rules 2000 (NSW) rr 12.4, 13.4, 51.1(3), 51.2, 51.50, 51.58
Cases Cited:	Baira v RHG Mortgage Corporation Limited [2012] NSWCA 387 Di Iorio v Wagener [2016] QCA 346 Helton v Allen (1940) 63 CLR 691 House v The King (1936) 55 CLR 499 Patrick v Howorth [2002] NSWCA 285 Pi v Zhou [2016] NSWCA 148 Preston v Harbor Pacific Underwriting Management Pty Ltd [2007] NSWCA 247 Rinehart v Welker [2011] NSWCA 403 Saba v National Australia Bank Ltd [1999] NSWCA 93 Transglobal Capital Pty Ltd v Yolarno Pty Ltd (2004) 60 NSWLR 143; [2004] NSWCA 136 Tyneside Property Management Pty Ltd v Hammersmith Management Pty Ltd [2014] NSWCA 417; 103 ACSR 201 Wentworth v Wentworth (1994) 35 NSWLR 726
Category:	Principal judgment
Parties:	Guang Hua Pi (Applicant) Jian Cheng Zhou (First respondent) Christine Zhao (Second respondent)
Representation:	Solicitors: Applicant (self-represented) Respondent (self-represented)
File Number(s):	2015/355864
Decision under review	Court or tribunal: Court of Appeal Citation: [2016] NSWCA 148 Date of Decision: 24 June 2016 Before: Gleeson JA File Number(s): 2015/355864

headnote

[This headnote is not to be read as part of the judgment]

The applicant’s claim for damages for breach of contract, assault and conversion of a washing machine was rejected by Adamson J in the Supreme Court. The applicant twice commenced judicial review proceedings from that decision which were discontinued. The applicant then sought leave to appeal from Adamson J’s decision.

Sitting as a single judge in the Court of Appeal, Gleeson JA stayed the application for leave to appeal until the applicant had paid the costs of the two discontinued judicial review proceedings and provided security for costs of the application for leave to appeal.

The applicant applied for a review of the decision of Gleeson JA under s. 46(4) of the Supreme Court Act. The issues on that review were:

(i)    whether Gleeson JA erred in granting a stay until the applicant had paid the costs of the two discontinued judicial review proceedings; and

(ii) whether Gleeson JA erred in finding “special circumstances” warranted ordering security for costs of the appeal under r 51.50 of the Uniform Civil Procedure Rules 2005 (NSW) and granting a stay until that security was provided.

In relation to issue (i), (setting aside the stay) per Payne JA (Basten JA and Sackville AJA agreeing)

(1)    The evidence on this application for review established that by reason of costs assessments made in November 2016, the amount currently owing by the respondents to the applicant exceeded the sum owing by the applicant to the respondents for the two cases incorrectly commenced as judicial review proceedings in the Court of Appeal: at [57]

(2)    The costs of the trial before Adamson J should not have been taken into account in determining a stay as the order to pay those costs would be set aside if the applicant was successful in his appeal: at [1] per Basten JA; at [59] per Payne JA; at [83] per Sackville AJA

In relation to (ii), (making an order for security for costs and granting a stay) per Payne JA (Sackville AJA agreeing)

(1)    The applicant’s poor prospects of success may be taken into account in determining whether “special circumstances” existed warranting an order for the provision for security of the costs of an appeal. The application for leave to appeal did not enjoy reasonable prospects of success. This, together with evidence of the two earlier proceedings commenced without cause and and the absence of evidence of stultification of the proceedings if the order for security was made, established “special circumstances” warranting an order for security of the costs of the appeal: at [76] per Payne JA; at [87-91] per Sackville AJA.

Preston v Harbor Pacific Underwriting Management Pty Ltd [2007] NSWCA 247 at [18] applied

In relation to (ii), per Basten JA dissenting

(1)    There is doubt as to the appropriateness of the power to order a stay pending provision of security for costs being based purely on an assessment of the merit of an application for leave to appeal: at [9]

(2)    Once the separate bases for the stay are rejected, the judge should not have ordered a stay of the leave application on the sole ground that the application lacked merit: at [9]

Judgment

1. BASTEN JA: This is an application to discharge an interlocutory stay, conditional on payment of two costs orders and providing security for the costs of the application for leave to appeal, ordered by Gleeson JA. [1] Subject to one qualification, I agree with Payne JA that the stay of the leave application cannot be based on payment by the applicant of two outstanding costs orders in this Court (which may be set-off against costs due to the applicant) or the unpaid costs of the trial from which leave to appeal is sought. In that situation, I do not think the stay can be based solely on the lack of prospects of success in obtaining leave to appeal.

   1. Pi v Zhou [2016] NSWCA 148.

Nature of jurisdiction

2. The qualification relates to the nature of the jurisdiction of this Court in exercising its function to discharge or vary a judgment given by a judge of appeal, sitting alone, pursuant to s 46(4) of the Supreme Court Act 1970 (NSW).

3. Quite recently, in Di Iorio v Wagener, the Queensland Court of Appeal identified a “consistent approach” taken by this Court in relation to reviews under that provision. [2] As Gotterson JA noted, there are questions as to the nature of the review provided by s 46(4) and the equivalent provision in the Queensland legislation, but “[t]he words of the section themselves do not shed light on how they are to be answered.”[3] Gotterson JA also pointed out, correctly, that the formulations of principle adopted by members of this Court in Wentworth v Wentworth [4] and other cases vary.

   2. [2016] QCA 346 at [20] (Gotterson JA, Philippides JA and Henry J agreeing).

   3. Di Iorio at [19].

   4. (1994) 35 NSWLR 726.

4. In Tyneside Property Management Pty Ltd v Hammersmith Management Pty Ltd [5] I suggested that the language of “vary or discharge” in s 46(4) reflects the power of a court in relation to its own interlocutory orders. [6] Although it is well-established that a principle of restraint should apply in varying or discharging orders made by a single judge of the Court, it should be understood that such a principle is based in expediency[7] and constitutes a gloss on the language of the statutory power, which would not ordinarily be accepted in construing a statutory provision conferring jurisdiction on a superior court. [8]

   5. [2014] NSWCA 417; 103 ACSR 201.

   6.    Tyneside at [4]-[6].

   7. Wentworth v Wentworth at 729E, quoting Kirby P in Knaggs v Solicitors’ Statutory Committee [1990] NSWCA 108 at 4.

   8. Owners of the Ship ‘Shin Kobe Maru’ v Empire Shipping Co Inc (1994) 181 CLR 404 at 420-421.

5. The appropriate approach should be determined in each case and will depend upon the nature of the judgment sought to be varied or discharged and the circumstances in which the application is made. [9]

   9.    Tyneside at [33]-[34].

6. Consistently with that approach, Heydon JA in Patrick v Howorth [10] adopted language consistent with the practice in relation to review of discretionary decisions, but prefaced his own statement of principles with the proposition that an application to discharge or vary “will ordinarily not succeed” unless a ground of the kind identified in House v The King [11] has been made good. There is merit in not seeking a universally applicable principle to be imposed on the language of the section.

   10. [2002] NSWCA 285 at [10] (Hodgson JA and Young CJ in Eq agreeing).

   11. (1936) 55 CLR 499 at 505.

Security for costs – “special circumstances”

7. Secondly, and consistently with the foregoing reasoning, it should be accepted that consideration of “special circumstances” in considering an application for security for costs under the Uniform Civil Procedure Rules 2005 (NSW), r 51.50(1), and (3) (whatever the function, purpose and meaning of the latter provision may be) should not be fettered by rules as to general practice. On the other hand, there is at least a degree of awkwardness in imposing a stay on an application for leave to appeal, subject to the provision by the applicant of security for the costs of the respondent, in circumstances where the applicant is an individual and the provisions of the Corporations Act 2001 (Cth), s 1335, are not engaged.

8. An application for leave to appeal can be heard by two judges of appeal, but only on the direction of the Chief Justice. [12] It is tolerably clear from s 46B, read in combination with s 46(3), that a single judge does not have power to grant or refuse leave to appeal. However, where security for costs is ordered in circumstances which may stifle the application for leave, on the sole ground that the application lacks merit, the practical effect may be the same as the refusal of leave to appeal. If a power to order a stay in such circumstances is available to a single judge, as a matter of practice, a single judge should not exercise the power.

   12. Supreme Court Act, s 46B(1)(a) and (2).

9. There is, in any event, doubt as to the appropriateness of the power to order a stay pending provision of security for costs being based purely on an assessment of the merit of an application for leave to appeal. Accordingly, once the separate bases for the stay are rejected, the judge should not have ordered a stay of the leave application on the sole ground that the application lacked merit. Further, if this Court upheld the order on that basis, the result would be that three judges of the Court, although not determining the leave application, would have declared that it had no reasonable prospects of success. One issue on the leave application will be whether the proposed appeal is likely to succeed. If, contrary to expectations, security were provided, it would be necessary for two judges of appeal (with the Chief Justice’s approval) to determine the leave application. That would either give rise to significant embarrassment and at least the appearance of inconsistency (if leave were granted) or would be a waste of resources and give the appearance of prejudgment (if leave were refused).

10. A pragmatic approach would have been to invite this Court, when dealing with the application to discharge the judgment of the single judge, to determine the application for leave to appeal. That was not done and, accordingly, it is not appropriate for this Court to deal with the matter on that basis.

11. In my view the only principled outcome in this situation is to uphold the application to discharge the orders made by Gleeson JA.

12. There remains a question as to the appropriate order for costs. In the ordinary course, the application having been successful, the applicant should have his costs, both of the present application and of the proceeding before Gleeson JA. If the application for leave to appeal is ultimately dismissed, that result may well appear harsh in its operation on the respondents. There are two answers to that concern. The first is that, instead of simply meeting the application for leave to appeal on its merits, they sought a stay on the grounds adopted by the single judge. Further, they continued to actively defend the orders made in opposition to the application to discharge them.

13. In my view the Court should make the following orders:

1. Discharge the orders made by Gleeson JA on 24 June 2016.

2. Order that the respondents pay the costs of the applicant of the motion before Gleeson JA and the application to discharge the orders made on 24 June 2016.

14. PAYNE JA: This is an application for review of a judgment of Gleeson JA[13] under s 46(4) of the Supreme Court Act 1970 (NSW).

    13. Pi v Zhou [2016] NSWCA 148.

Background facts

15. In June 2010, Jian Cheng Zhou and Christine Zhao, the respondents, leased a one-bedroom flat to the applicant, Guang Hua Pi. The flat was located at the rear of a property in Lakemba. During the period of the lease Mr Zhou and Mrs Zhao resided in the house at the front of the property. Another tenant, Ms Gu, also resided in the house.

16. Following a complaint in late 2010 by Ms Gu to the respondents about alleged inappropriate behaviour by the applicant, Mr Zhou remonstrated with the applicant. Ms Gu subsequently complained that the inappropriate behaviour had again occurred and she gave notice and moved out of the house in late December 2010. The relationship between the applicant and the respondents deteriorated thereafter. In early January 2011, the applicant complained that the internet connection he alleged he had been promised was ineffective. The applicant demanded a reduction in his weekly rent. There was an angry exchange of electronic messages and the respondents say that a threat of violence was made towards them by the applicant. On or about 9 January 2011, Mr Zhou gave Mr Pi two weeks’ notice to vacate the property. The primary judge accepted evidence that on that day the applicant said to the respondents that “I will send these photos [of the respondents] to someone who will kill you”.

17. On 12 January 2011, a physical altercation occurred between Mr Zhou and Mr Pi in the yard of the property. The applicant was charged by the police with assault arising out of the incident. The magistrate who ultimately decided the assault charge (which, for reasons which presently do not matter, was decided on the papers), held that the prosecution had not proved to the requisite standard that the applicant had not acted in self-defence.

18. On 8 July 2015, the applicant commenced proceedings against the respondents in the Supreme Court, claiming damages for:

1. breach of the lease contract, arising from his forced eviction from the Lakemba property;

2. personal injuries arising out of the alleged assault that occurred on 12 January 2011; and

3. conversion of a washing machine.

The decision of Adamson J

19. Adamson J rejected each of the applicant’s claims. Costs were awarded in favour of the respondents. Given the history of the matter it is necessary to examine her Honour’s judgment in a little detail.

20. The only issue in the case on appeal was the alleged assault (the complaints about the termination of the tenancy and the washing machine were not the subject of the draft notice of appeal). It was common ground that a physical altercation had occurred between the applicant and Mr Zhou on 12 January 2011. The only issue was who had started the altercation and who (if anybody) was acting in self-defence.

21. The only witnesses who gave oral evidence before her Honour were the applicant, Mr Zhou and Mrs Zhao. It may be that statements made by certain police officers and bystanders about the altercation between the applicant and Mr Zhou were also tendered, although it was unclear on the evidence (with one important exception I will come to) who tendered those statements.

22. Photographs of the altercation were taken by Mrs Zhao as the fight was occurring. Adamson J made these findings about the photographs:

16 Mrs Zhao came out of the house when she heard the commotion. She called out to Mr Pi to stop. Mrs Zhao saw Mr Pi hit Mr Zhou on the back with both his hands. She screamed for help and asked passersby to call the police. I infer that Mrs Zhao, a native Mandarin speaker, may have preferred a bystander to ring the police rather than make the call herself. During the altercation she took photographs of the two men with her mobile phone. The photographs in evidence, although somewhat blurred, show Mr Pi as the aggressor and that Mr Zhou was trying to get away. I reject Mr Pi’s evidence that the photographs were “fake” [italics added].

23. Photographs allegedly taken the day after the altercation by the applicant’s daughter, which were relied upon heavily by the applicant in this Court, were described by Adamson J thus:

21 Mr Pi gave evidence that, when he returned home in the early hours of 13 January 2011 after he had been discharged from hospital, his daughter took photographs of his mouth and bruises to his back. His daughter was not called to give evidence. I do not accept Mr Pi’s evidence that the photographs were taken at that time.

24. These findings by Adamson J were challenged by the applicant as being “untruths”, but it was not otherwise explained why it was that her Honour erred in making those findings.

25. In relation to the altercation itself, her Honour accepted the evidence of Mr Zhou that at about 7.15pm on 12 January 2011, he was about to commence working and was walking to his taxi which was parked outside the house. The applicant approached Mr Zhou and said “You bastard I will kill you”.  At the time he was speaking the applicant had his right hand hidden behind his back. The applicant then made a sudden movement and attempted to hit Mr Zhou in the head with a power drill. The applicant initially missed but then hit Mr Zhou in the chest with the drill. The applicant grabbed Mr Zhou’s left forearm and pulled it towards him. He bit the webbing between Mr Zhou’s thumb and first finger, causing a deep wound and immediate pain.

26. Adamson J also accepted the evidence of Mrs Zhao that at about 7pm on 12 January 2011, shortly after her husband had left the house to go to work as a taxi driver, she heard yelling at the front of the house. She went to the front door and saw her husband and the applicant in the driveway of their house. The applicant had a drill in his hand and he was pointing it at her husband’s head. Mrs Zhao saw her husband standing with his hands out in front of his face waving them around trying to protect himself. When he was waving his hands he hit the applicant in the face a few times. Mrs Zhao saw the applicant hit her husband on the back with both hands.

27. An important piece of evidence was tendered by the applicant before Adamson J. That was a statement of Constable Stone, to which the respondents took no objection. Adamson J accepted what Constable Stone said in the statement, as follows:

4. I took the victim [Mr Zhou] to the front porch area of the house and spoke to him and his wife. The victim’s wife is Christine ZHAO. At this time several other police arrived at the location. ZHAO said “He want to kill my husband. He have drill and put it to my husband head. He want to kill him.” I went back outside to where the accused and Constable REY were standing. The accused was pointing towards the victim and yelling “I kill you.” The accused then sat down. A short time later an ambulance arrived at the location.

28. The primary judge found that the fact that the applicant had been acquitted of assault was no bar to a finding that he was the instigator and perpetrator of the assault or that he was not acting in self-defence: Helton v Allen (1940) 63 CLR 691.

29. Her Honour concluded that it was enough, in the circumstances of the present case, to find on the balance of probabilities that she was not satisfied that Mr Zhou was acting other than in self-defence when he came into physical contact with Mr Pi on 12 January 2011.

30. Her Honour also made a positive finding that the applicant was the aggressor and that Mr Zhou acted in self-defence. Adamson J described the altercation as being an “unprovoked attack” which the applicant initiated.

31. So far as damages were concerned, her Honour found that the applicant suffered some injuries as a result of the altercation with Mr Zhou on 12 January 2011, but that he probably damaged his mouth and teeth when Mr Zhou resisted his attempts to bite his hand, and when he actually bit his hand.

32. Aside from those injuries recorded in the ambulance notes, and the injuries to his mouth recorded by Dr Burleigh, Adamson J did not accept that the applicant suffered any injuries as a result of the physical contact with Mr Zhou on 12 January 2011.

33. Critically, her Honour made detailed credit findings adverse to the applicant. Her Honour made a finding based on credit that Mr Zhou was an impressive and articulate witness and was satisfied that his evidence was truthful. Adamson J also accepted Mrs Zhao’s evidence in preference to that of the applicant. She found the applicant to be “a very distracted and intense witness”. Adamson J formed the view that “his grasp on reality was not particularly strong”. Her Honour concluded that although the applicant may have genuinely believed in the truth of his own version, it conflicted not only with the respondents’ version but also with the circumstance that there were bystanders in the vicinity and that the police arrived relatively soon after the conflict began.

34. Her Honour found that the objective circumstances that Mr Zhou, who was dressed for work as a taxi driver and was about to commence his shift, made it less likely that he would then have initiated a physical conflict with one of his tenants who was, apparently, in the process of moving out. The objective probabilities also tended to suggest that the applicant was the one who had a grievance as he was required to leave what had been his home as he was no longer welcome at the property. Her Honour did not accept the applicant’s evidence except where admitted, corroborated or when it was given against interest.

Procedural history in the Court of Appeal

35. The applicant commenced proceedings in this Court three times. First, on 16 November 2015, the applicant filed a summons seeking judicial review of the decision of Adamson J. On 4 December 2015, the applicant filed a notice of discontinuance without leave. That discontinuance was given effect by orders of the Registrar made on 7 December 2015, who set aside the notice of discontinuance filed without leave, granted leave to the applicant to discontinue proceedings and ordered that the applicant pay the costs of the respondents assessed at $1,200.

36. Secondly, on 9 February 2016, the applicant commenced fresh proceedings by filing a summons seeking judicial review of the decision of Adamson J. By notice of motion, the respondents applied to dismiss those proceedings on the basis that they were frivolous or vexatious, or an abuse of the processes of the Court: Uniform Civil Procedure Rules 2005 (NSW) (UCPR) r 13.4. On 2 March 2016 that motion was successful and the applicant was ordered to pay the respondents’ costs of the summons as agreed or assessed: Pi v Zhao [2016] NSWCA 24. Mr Pi tendered evidence in this Court which showed that those costs had been assessed in November 2016 as $3,622.10 plus $100 for costs of the assessment.

37. Thirdly, on 8 March 2016, Mr Pi filed a summons seeking leave to appeal out of time from the decision of Adamson J.

The decision of Gleeson JA

38. Mr Zhou and Mrs Zhao, by notice of motion filed on 20 April 2016, sought orders that the applicant provide security for costs for the appeal (the proceedings referred to in paragraph 37). They also sought orders that the appeal proceedings be stayed until the costs of the proceedings referred to in paragraphs 35 and 36 had been paid.

39. On 24 June 2016, his Honour made the following orders on that notice of motion:

1. Stay these proceedings until the applicant (Mr Pi) has:

1. paid to the respondents (Mr Zhou and Mrs Zhao):

1. the costs of $1,200 ordered on 7 December 2015 in proceedings 2015/336639, and

2. the costs of the summons in proceedings 2016/41912 ordered on 2 March 2016, as assessed or agreed; and

2. provided security for the respondents’ costs of the application for leave to appeal in accordance with order 2 below.

2. The applicant provide within 21 days security in the sum of $12,000 for the respondents’ costs of the application for leave to appeal by payment of that amount into court.

3. The applicant (Mr Pi) to pay the respondents’ (Mr Zhou and Mrs Zhao’s) costs of the notice of motion filed 20 April 2016.

Stay relating to unpaid costs of judicial review applications

40. His Honour found that both judicial review proceedings commenced by the applicant were brought improperly. In relation to the first judicial review proceeding, $1,200 costs had been ordered to be paid. In relation to the second application, the respondents were put to the trouble and expense of filing a notice of motion for dismissal of the proceedings which was granted after a contested application. Evidence tendered on the review, which was not before his Honour, showed that in November 2016 the costs had been assessed at $3,622.10 plus $100 costs of the assessment.

41. On 22 April 2015, the applicant had obtained on an order for costs against the respondents in proceedings before by McCallum J in the Common Law Division. Gleeson JA rejected the applicant’s submission that the unpaid costs owed by him were substantially less than the amount of the separate costs owing to him based on the order made by McCallum J. Those latter costs were assessed in November 2016 (after the decision under review) as being $5,000 plus $500 for costs of the assessment. The respondents have applied for a review of that assessment which has not as yet been determined.

42. His Honour rejected the applicant’s submission on the basis that:

1. McCallum J’s order was made in the trial proceedings rather than in the Court of Appeal (as the two adverse costs orders had been); and

2. the respondents had incurred counsel’s fees at the trial before Adamson J of $35,651 (including GST).

43. His Honour concluded that the respondents should be protected against the unpaid costs of the discontinued and dismissed proceedings in this Court before having to incur further costs defending the applicant’s claims on substantially the same cause of action in a third proceeding in this Court. Accordingly, his Honour ordered a stay of the present proceedings pending payment of costs of the two earlier judicial review proceedings.

Stay relating to security for costs of the appeal

44. His Honour also determined the security for costs application and found the following “special circumstances” which enlivened the discretion to order security for costs under UCPR r 51.50:

1. the applicant had not paid three previous costs orders;

2. an unsuccessful attempt to levy execution against Mr Pi’s property in respect of the costs order for $1,200;

3. the applicant’s impecuniosity; and

4. the absence of prospects of success or any public interest raised by the proposed appeal and Mr Pi’s lack of success on the merits at first instance.

45. His Honour found that there was no issue of principle or question of general importance in the present application for leave to appeal. The proposed grounds in the draft notice of appeal essentially asserted that Adamson J’s decision involved an error of law or fact (without identifying any particular error); that the decision was based on “false and untruths material” (without identifying such material); that there was no evidence justifying the decision; and that the decision was unreasonable.

46. His Honour found that success on the proposed appeal on these grounds required the applicant to show that the findings of Adamson J were contrary to incontrovertibly established facts or uncontested testimony, or that her Honour failed to use or palpably misused her advantage, or that her findings were glaringly improbable or contrary to compelling inferences.

47. His Honour concluded that the applicant had not “identified an injustice which [was] reasonably clear, nor arguable grounds of appeal”, having regard to what the applicant needed to establish on any appeal where credit-based factual findings had been made by the primary judge adverse to the applicant.

48. His Honour determined that the applicant’s prospects of success on the leave application were “extremely weak” and that the proposed grounds of appeal were not fairly arguable. Accordingly, his Honour concluded that special circumstances had been shown and ordered security for costs in the amount of $12,000 and stayed the proceedings until that amount was paid.

Principles of review in the present case

49. An application for review under s 46(4) is not an appeal: Supreme Court Act s 19(2) and UCPR rr 51.2 and 51.58. The subsection does not confer an unrestricted right to a new hearing of the matters in contest. The applicant for review must show that there has been a material error of law or fact or a disregard of material considerations in the exercise of the power or that the decision was plainly unreasonable and therefore wrong: Transglobal Capital Pty Ltd v Yolarno Pty Ltd (2004) 60 NSWLR 143; Rinehart v Welker [2011] NSWCA 403; Wentworth v Wentworth (1994) 35 NSWLR 726 per Mahoney and Powell JJA.

50. “Special circumstances” must be demonstrated to justify the making of an order for security for costs of an appeal under UCPR r 51.50. There was no challenge by either party to the test for “special circumstances” described by Basten JA in Preston v Harbor Pacific Underwriting Management Pty Ltd [2007] NSWCA 247 at [18]:

The principles governing applications for security were helpfully set out by Beazley J in the Federal Court in KP Cable Investments Pty Ltd v Meltglow Pty Ltd(1995) 56 FCR 189 at 197-198. Although the factors are discussed in the context of an unfettered discretion, in contrast to the power conferred by Pt 51 r 16, the factors themselves remain relevant in assessing special circumstances. The considerations engaged by the concept of “special circumstances” in relation to security for costs were considered by this Court in Transglobal Capital Pty Ltd v Yolarno Pty Ltd (2004) 60 NSWLR 143 (Beazley, Santow and Ipp JJA), and in Porter v Gordian Runoff Ltd [2004] NSWCA 171 (Bryson JA, Sheller and Giles JJA agreeing). The following principles were identified:

(1) no order for security should be made in the absence of “special circumstances”; (2) consideration of what may constitute special circumstances should not be fettered by some general rule of practice; (3) impecuniosity, without more, will usually be insufficient; (4) an order may be appropriate if the appeal is shown to be hopeless, unreasonable or of an harassing nature; (5) where a bona fide and reasonably arguable appeal would be stifled by an order for security, such an order should usually not be made, and (6) the subject matter of the appeal, including an issue as to the liberty of the individual, or a public interest may provide a reason for not imposing a security order which would stifle the continuation of the appeal. 

The applicant’s submissions

51. The present applicant for review appeared unrepresented in this Court and did not address any submissions to the satisfaction of the legal test imposed by applications for review described above. The applicant submitted that the decision of Gleeson JA should be set aside on the following bases: [at p 463]

(1) Gleeson JA extremely biased to cover up Adamson J fault decisions;

(2) Gleeson JA unreasonable to this disregard 22 April 2015 Court of order misleading Justice reverse debt making judicial confusion;

(3) Gleeson JA biased and unreasonableness insight making costs confusion;

(4) extremely biased and disregard plaintiffs victim right to oppressive damage plaintiff;

(5) extremely biased and disregard any evidence that have proven the defendants assaulted me resulting in my disability;

(6) extremely biased misleading distortion and condoned defendants fabricates false facts.

52. In oral address the applicant’s complaints about the decision of Gleeson JA fell into two categories. The first category of complaints were each to the effect that Gleeson JA erred in the way he treated the costs orders made by McCallum J on 22 April 2015 and by Adamson J on 9 November 2015 in the decision about which he was seeking leave to appeal. The second category were complaints that Gleeson JA erred in finding that the applicant had very poor prospects of success in his application for leave to appeal based on the underlying facts.

The evidence on this application

53. The applicant tendered evidence in relation to the costs assessments referred to above without objection.

54. In addition, the applicant also handed up a number of documents which were said to contain better copies of photographs which were in evidence before Gleeson JA. To that extent the Court was content to receive them.

55. Many of the documents handed up by the applicant contained additional material which was not before Gleeson JA or Adamson J. For example, in a document handed up entitled “Annexed “F” – Assaults and batters Multiple Grievous Bodily Harm”, the applicant inserted what appear to be hand drawn diagrams of the altercation between him and Mr Zhou (pp 273, 275 and 277). This content did not appear in the evidence before Gleeson JA or Adamson J. Nor did an additional insertion of text accompanying a photograph of his arm “I did not see the victim’s injuries at this stage…On the accused I saw blood coming from his mouth and blood also dripped onto his clothing – statement of Police MEREDITH No. 4” (p 273).

56. I am content to treat this additional material as a further submission made by the applicant. It was not tendered as fresh evidence on this application. Had the applicant sought to tender the material, the Court would have rejected it as being material which was available to the applicant at the time of the hearing before Gleeson JA. Nor were there “special grounds” warranting its acceptance as “further evidence” under s 75A(8) of the Supreme Court Act, the purpose of the tender being to establish the merit of the challenge to the judgment of Adamson J.

Consideration of the applicant’s complaints: orders 1(a) and (b) – costs of the discontinued judicial review proceedings

57. The evidence on this application for review establishes that by reason of costs assessments made in November 2016, the amount currently owing by the respondents to the applicant (of $5,000) exceeds the sum owing by the applicant to the respondents for the two cases incorrectly commenced as judicial review proceedings in the Court of Appeal (of $1,200 and $3,622.10). The applicant correctly submitted that, as matters stand, he has a set off against the sum owing to the respondents by reason of the aborted judicial review proceedings.

58. The costs order made by McCallum J was able to be assessed as it related to a discrete application in the trial process (an application to set aside a default judgment obtained by the applicant) in relation to which there was no application for leave to appeal by the respondents. The correctness of that order forms no part of any proceedings before the Court of Appeal. It is thus of a different character to the ultimate costs order made in the trial by Adamson J. Despite the respondents’ success before Adamson J, and despite any ultimate outcome of the proceedings in this Court, the respondents remain liable to pay the costs as ordered by McCallum J.

59. Although there is a pending application to review the latter costs assessment, in my view, it was an error to stay the present proceedings pending payment of costs of the two earlier judicial review proceedings. That order should be set aside.

Consideration of the applicant’s complaints: order 2 – security for costs

60. It will be recalled that his Honour took into account four matters in granting security for costs and ordering a stay:

1. the applicant has not paid the three previous costs orders;

2. the unsuccessful attempt to levy execution against the applicant’s property in respect of the costs order for $1,200;

3. the applicant’s impecuniosity; and

4. the absence of prospects of success or any public interest raised by the proposed appeal and the applicant’s lack of success on the merits at first instance.

61. It is correct that the outstanding costs order made by Adamson J at trial has not been assessed and remains outstanding. It may be assumed that if not set aside, that order will be assessed to be a much larger amount than the amount owing by the respondents in relation to the order made by McCallum J.

62. As a general matter, however, an appeal would not ordinarily be stayed on the basis that the costs of the primary proceedings had not yet been paid. This is because the appeal, if successful, would see the award of costs set aside. This was a material consideration in the exercise of the power to stay the proceedings which was not taken into account by his Honour.

63. Given that the costs order made by Adamson J would be set aside if the applicant was successful in this Court, the failure to pay that amount is not a special circumstance warranting a stay pending the provision for security of the costs of the appeal.

64. The first three matters do not establish special circumstances, either individually or collectively. The unsuccessful attempt to levy execution can be put to one side once it is understood that the respondents are in debt to the applicant at present. The impecuniosity of the applicant does not of itself provide “special circumstances”.

65. The final matter, however, being his Honour’s finding that the application for leave to appeal did not enjoy any reasonable prospects of success, did provide “special circumstances” which warranted the making of the order for security for costs and the grant of a stay. To understand why this is so reference must be made to the decision of Adamson J and the applicant’s draft notice of appeal.

66. On 8 March 2016, the applicant filed a draft notice of appeal under s 110(2) of the Supreme Court Act 1970 (NSW). The twelve proposed grounds of appeal assert in essence that Adamson J should not have accepted the evidence of the respondents in preference to that of the applicant.

67. In my view, Gleeson JA correctly determined that the application for leave to appeal against the decision of Adamson J was extremely weak. The decision of Adamson J was based on her Honour’s clear preference for the evidence of the respondents over the applicant together with considerable contemporaneous evidence. That contemporaneous evidence included photographs taken at the time of the assault by Mrs Zhao which Adamson J found showed the applicant as the aggressor. In a case where the only issue was self-defence, contemporaneous photographic evidence that her Honour accepted that went directly to that issue was plainly important. The applicant’s response to the photographs was not to assert that they did not show him as the aggressor but rather that the photographs were “fake”. Her Honour rejected the applicant’s evidence that the photographs were “fake”.

68. Adamson J observed the applicant and the respondents giving evidence before her and strongly preferred the evidence of the respondents. Critically, her Honour made detailed credit findings adverse to the applicant. She described Mr Zhou as an impressive and articulate witness and was satisfied that his evidence was truthful. On the other hand she found the applicant to be “a very distracted and intense witness” whose “grasp on reality was not particularly strong”. These findings by Adamson J were challenged by the applicant as being “untruths” but it was not otherwise explained why her Honour allegedly erred in making those findings.

61. In Baira v RHG Mortgage Corporation Limited [2012] NSWCA 387, Bathurst CJ emphasised (at [173]) the restraints on an appellate court in reviewing findings of a trial judge based on credit and said:

Such findings can only be overturned if the appellate court is satisfied that the findings are glaringly improbable or contrary to compelling inferences: Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 at [28]-[29], or if it can be shown that the judge has palpably misused his advantage or acted on facts which were inconsistent with the evidence or glaringly improbable: Devries v Australian National Railways Commission [1993] HCA 78; (1993) 177 CLR 472 at 479; Abalos v Australian Postal Commission [1990] HCA 47; (1990) 171 CLR 167 at 178-179.

70. No arguable case was advanced by the applicant that Adamson J had palpably misused her advantage or acted on facts which were inconsistent with the evidence or made findings which were glaringly improbable. The applicant did not explain how it was that the objective circumstances taken into account by Adamson J were not properly considered by her Honour as supporting her credit based findings. Those objective circumstances, in my view, provide an additional hurdle to the applicant’s prospects of successfully seeking leave to appeal.

71. The applicant’s complaints about the failure by Adamson J to have regard to findings allegedly made in the Burwood Local Court or by the CTTT have not been shown to have any merit. Adamson J correctly concluded that the fact that the applicant had been acquitted of assault was no bar to a finding that he was the instigator and perpetrator of the assault or that he was not acting in self-defence: Helton v Allen (1940) 63 CLR 691. Further, evidence of the decision or a finding of fact in another Australian proceeding is not admissible to prove the existence of that fact: Evidence Act1995 (NSW) s 91.

72. The applicant’s complaints advanced orally that her Honour erred in taking into account statements made by police officers and bystanders about the assault also lack substance. With the exception of a statement tendered by the applicant, Adamson J does not appear to have taken into account in any material way any statements made by police officers or bystanders, assuming them to have been before her. Certainly the only conduct in the judgment attributed to a bystander is a glancing reference to a bystander coming between the applicant and Mr Zhou after the altercation had quieted. This reference provides no real support to the application for leave to appeal.

73. The applicant also made detailed submissions attacking the credibility of the police officers and bystanders, based on an analysis of their statements and identification of alleged inconsistencies about matters such as timing. In circumstances where Adamson J did not rely on those statements and made only brief reference in her reasons to one bystander in a way not material to her decision, this detailed analysis lends no support to the application for leave to appeal.

74. Finally, the statement of Constable Stone tendered by the applicant before Adamson J poses a significant hurdle to his prospects of successfully seeking leave to appeal. That statement demonstrates that in the immediate aftermath of the altercation Mrs Zhao made a complaint that the applicant was the aggressor and that the applicant was pointing towards Mr Zhou and yelling “I kill you”.

75. That evidence, which was tendered by the applicant himself, provided powerful support for the respondents’ version of events.

76. For these reasons I agree with Gleeson JA that the applicant’s case seeking leave to appeal is not reasonably arguable. In my view the absence of reasonable prospects of success and of any public interest raised by the proposed appeal is sufficient to establish “special circumstances” warranting an order for security for costs. Further, for the additional reasons Sackville AJA gives at paragraphs [88]-[90] below, “special circumstances” warranting an order for security for costs are demonstrated in this case.

77. The applicant did not challenge the amount of security order by Gleeson JA.

Conclusion and orders

78. For the reasons I have given, I propose that the orders made by Gleeson JA should be varied and what was order 1(a) made on 24 July 2016 be deleted. To ensure clarity in the operation of the stay and in identifying the obligations of Mr Pi to provide security for costs, I propose also to amend the orders for security for costs made by Gleeson JA.

79. As the applicant has enjoyed some success on the review that should be reflected in the costs order to be made in these proceedings and in relation to the original notice of motion. As the order relating to security for costs of the appeal for costs and consequent stay should be confirmed, I propose that Mr Pi be ordered to pay 30% of Mr Zhou’s and Mrs Zhao’s costs, as agreed or assessed, of the original notice of motion and this application for review. I propose the following orders:

1. Set aside the orders made by Gleeson JA on 24 June 2016.

2. The applicant (Mr Pi) is to provide security for the respondents’ (Mr Zhou and Mrs Zhao) costs by paying into court the sum of $12,000 or by otherwise providing security for that amount in a manner satisfactory to the respondents. Until that security is provided, there will be a stay of the proceedings. The security is to be provided before 5 April 2017.

3. The matter is to be listed before a judge of the Court on 10 April 2017 for consequential orders, or, in the event that the security has not been provided, an order for the dismissal of the proceedings under UCPR r 42.21(3).

4. The applicant (Mr Pi) to pay 30% of the respondents’ (Mr Zhou and Mrs Zhao’s) costs of the notice of motion filed 20 April 2016 and of this application for review, as agreed or assessed.

80. SACKVILLE AJA: I have had the advantage of reading the judgments in draft of Payne JA and Basten JA.

81. Gleeson JA dealt with two applications by the present respondent. [14] His Honour first addressed the respondent’s application, pursuant to Uniform Civil Procedure Rules 2005 (NSW) (UCPR) r 12.4 and the Civil Procedure Act 2005 (NSW) (CP Act) s 67, that the application for leave to appeal out of time from the decision of Adamson J be stayed until the applicant pays two outstanding costs orders in favour of the respondent. Both costs orders were made as a consequence of the applicant’s misconceived applications for judicial review of Adamson J’s decision.

    14. Pi v Zhou [2016] NSWCA 148.

82. Gleeson JA held that UCPR r 12.4 did not apply to the present case, but that the stay orders should be made pursuant to s 67 of the CP Act, which provides as follows:

“Subject to rules of court, the court may at any time and from time to time, by order, stay any proceedings before it, either permanently or until a specified day.”

83. Both Payne JA and Basten JA consider that Gleeson JA erred in staying the application for leave to appeal out of time until the applicant satisfied the two earlier costs orders. I agree with this conclusion for the reasons given by Payne JA.

84. Payne JA and Basten JA disagree, however, as to whether the order made by Gleeson JA, staying the leave application until the applicant provides security for costs in the sum of $12,000, should be set aside. Gleeson JA made the order on the basis that he was satisfied that “special circumstances” existed, as required by UCPR r 51.50. [15]

    15. UCPR r 51.50 provides that “[i]n special circumstances, the Court may order that such security as the Court thinks fit be given for costs of an appeal.”

85. I agree with Payne JA that Gleeson JA erred in taking into account for the purpose of determining whether “special circumstances” existed, the applicant’s failure to pay the previous costs orders (including the orders made by Adamson J) and the unsuccessful attempt by the respondent to levy execution on the applicant’s property. This error justifies this Court in exercising afresh the discretion conferred by UCPR r 51.50.

86. It is well established that one factor that can be taken into account in determining whether “special circumstances” exist is that the appeal (or application for leave to appeal) can be regarded as “hopeless, unreasonable or of an harassing nature”. [16] Whether the applicant’s prospects of success weigh heavily on the scales may depend on the other circumstances of the case.

    16. Preston v Harbour Pacific Underwriting Management Pty Ltd [2007] NSWCA 247 at [18] (Basten JA, Ipp JA and Hoeben J agreeing).

87. In my opinion, there are special circumstances in this case that justify making an order for security for costs. I reach this conclusion, however, not merely on the basis that the applicant has not shown that the leave application or the appeal has any real prospects of success.

88. This is the third occasion in which the applicant has sought to challenge the decision of Adamson J. The first two applications, as I have noted, were misconceived. The respondent was put to expense and inconvenience in answering the misconceived applications. Regardless of whether the costs orders against the applicant have been satisfied, the fact that the applicant has made a third application, without identifying any grounds having a reasonable prospect of success, suggests that the respondent has been subjected, if not to “endless litigation”,[17] then to repeated applications seeking, in substance, to raise the same issues.

    17. Saba v National Australia Bank Ltd [1999] NSWCA 93 at [12] (Sheller JA), cited in Transglobal Capital Pty Ltd v Yolarno Pty Ltd (2004) 60 NSWLR 143; [2004] NSWCA 136 at [32] per curiam.

89. It is also relevant to the re-exercise of discretion that Gleeson JA did not find that the order for security would stultify the application for an extension of time to appeal. In dealing with the application to stay the proceedings until the earlier costs orders were paid, his Honour said that:[18]

“It is common ground that Mr Pi is a disability pensioner and I have taken into account that the effect of the stay may be to prevent Mr Pi from pursuing the current proceedings. The likelihood of stultification of proceedings cannot be put any higher in view of the absence of evidence from Mr Pi as to his financial position, or the resources that may be available to him such as, from family or associates.” (Emphasis added.)

18. Pi v Zhou at [29].

90. Later in the judgment, when addressing the application for an order for security for costs, his Honour returned to the question of impecuniosity as follows: [19]

“Next, whilst Mr Pi asserted in oral argument that his impecuniosity is attributable to the conduct of the respondents, he did not point to any evidence which supported this assertion. I am not persuaded that he has demonstrated that this is the case.

Stultification of the proceedings if security is ordered is an important consideration to be weighed, particularly in light of Mr Pi’s impecuniosity: Fiduciary Ltd v Morningstar Research Pty Ltd [2004] NSWSC 664; 208 ALR 564 at [72]. Against this, Mr Pi did not give evidence relating to his financial position, including whether or not there are others, such as family or associates, who may step in to assist him. The authorities make clear that stultification does not necessarily follow from a finding of impecuniosity: Hastings v Hastings [2009] NSWCA 294 at [14]; Levy v Bablis [2011] NSWCA 411 at [10].”

At most, his Honour could say only that the orders “may stifle the proposed appeal”. [20]

19. Pi v Zhou at [51], [52].

20. Pi v Zhou at [55].

91. Taking into account the matters I have identified, I consider that there are “special circumstances” that justify an order for security for costs. The amount of $12,000 specified by his Honour seems to me reasonable.

92. I add the following observations. Given that:

• an order for security for the costs of an appeal is ordinarily heard by a single Judge;

• s 46(4) of the Supreme Court Act 1970 (NSW) allows an appellant (or an applicant for leave) who is subject to such an order to apply to the Court to discharge or vary an order for security made by a single Judge;

• an application pursuant to s 46(4) is ordinarily heard by a three member Court; and

• an application for an extension of time or for leave to appeal is ordinarily heard by two Judges,

it is inevitable that there will be some occasions on which a three member Court will be required to express views as to the merits of a pending application that will ultimately be determined by a two member Court.

93. While this might be thought to be undesirable, it is the product of what Mahoney JA in Wentworth v Wentworth[21] described as the “perhaps … incongruous” situation that a three member Court determines whether interlocutory orders made by a single Judge should be varied or discharged. It should also be borne in mind that it is not unusual for courts to express views as to the prospects of success in pending litigation, including pending appeals. Such views are necessarily based on the material before the Court at the time of the decision. While the Court’s assessment of the prospects of success might have very significant consequences, for example on an application for an interlocutory injunction, the assessment cannot be understood as the equivalent of a final determination on the merits.

    21. (1994) 35 NSWLR 726 at 729 (Handley JA agreeing).

94. I agree with Basten JA that a pragmatic (and sensible) approach in this case, as in others involving challenges to interlocutory decisions, would have been to invite this Court to determine the application for an extension of time without interposing an application for security for costs. But this was not done.

95. For the reasons I have given, and with the greatest respect, I do not agree that the “only principled outcome” of the application before this Court is to discharge the orders made by Gleeson JA.

96. I agree with the orders proposed by Payne JA.

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Endnotes

Amendments

15 February 2017 - Correction to coverpage: Decision under review.

Decision last updated: 15 February 2017