S J Hooper Pty Ltd v Cockburn and 3 Ors

[1999] NSWSC 1151

CITATION:	S J Hooper Pty Ltd v Cockburn & 3 Ors [1999] NSWSC 1151
CURRENT JURISDICTION:	Common Law
FILE NUMBER(S):	10948/90
HEARING DATE(S):	2 August 1999
JUDGMENT DATE:	30 November 1999
PARTIES :	S J Hooper Pty Ltd - Plaintiff in person Grant Manners Cockburn & 3 Ors - Defendants
JUDGMENT OF:	Simpson J at 1

COUNSEL :
SOLICITORS:	Defendants: Phillips Fox
CATCHWORDS:
ACTS CITED:	Limitation Act 1969
DECISION:	Plaintiff's notice of motion dismissed. Order the plaintiff to pay the defendants' costs of and incidental to the notice of motion.

THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

SIMPSON J

Tuesday, 30 November 1999

10948/90

SJ HOOPER PTY LTD v Grant Manners COCKBURN & 3 ORS

Judgment

HER HONOUR :

1    Two notices of motion filed on behalf of the plaintiff company are before the court. In order to make clear what is sought to be achieved, it is necessary to recount some of the rather long and complex history of this matter.

2    The statement of claim that initiated the proceedings was filed on 2 March 1990. The plaintiff company sought damages for negligence and breach of contract alleged against the defendants, who are the partners of a firm of solicitors. The negligence and breach of contract alleged was failure to act on behalf of the plaintiff company to exercise an option to purchase certain real estate. The statement of claim was filed in the last days of the period allowed under the Limitation Act 1969. It was not served until December 1991,

3    Judging by the size of the court file and matters referred to in an affidavit filed on behalf of the plaintiff company, the proceedings appear to have been before the court on many occasions since the statement of claim was served. Details of the various interlocutory appeals were not in evidence, and, except for those matters to which I am about to refer, do not appear to be relevant.

4    Sometime in 1996 the defendant solicitors sought to protect their position by applying for an order for security for costs.

5    On 19 August 1996 the Prothonotary made the following orders:

“1. The Plaintiff provide security for costs in favour of the Defendants in the sum of $100,000.
2. Security for costs be given by deed, in accordance with Part 53, Rule 3(2) of the Supreme Court Rules.
3. These proceedings be stayed until such security has been provided.
4. Costs be in the cause.
5. There be liberty to apply on seven days’.”

6    On 14 July 1998 the plaintiff company provided to the court a deed executed by S J Hooper, who is by other evidence disclosed to be the governing director of the plaintiff company. Pursuant to the deed, Mr Hooper promised, in default by the plaintiff company of payment of any costs order, to make such payment himself.

7    On 20 April 1998 the plaintiff company filed two notices of motion, in one of which it sought an order that Mr Hooper be joined as a plaintiff in the proceedings. In the other, he sought transfer of the matter to the District Court.

8 On 17 July 1998 the Deputy Registrar of the court informed Mr Hooper that the deed referred to in paragraph 6 had been accepted as complying with SCR Pt 53 r3(2). On the same date he forwarded a copy of the deed to the solicitors acting for the defendants, and advised that the stay granted by order 3 of the Prothonotary’s orders of 19 August 1996 had been lifted.

9    On 8 October 1998 the solicitors acting for the defendants filed a notice of motion seeking the following:

“1. A direction that the deed executed by Stephen James Hooper on 14 July 1998 was not a provision of security within the terms of the orders made by the Prothonotary Whalan on 19 August 1996.
2. Further and/or alternatively in the event that Court should determine that the deed…satisfies the terms of orders… in regard to the giving of security then the said orders be varied to require that the said security be given by payment into court of the sum of $100,000 or by the giving of a deed as provided for in Part 53 Rule 3(2) but by a person with proven nett assets sufficient to fully satisfy any order for costs up to the amount of the security ordered.”

10    All these notices of motion were heard together by Master Harrison commencing on 15 October 1998. On 19 November 1998 the Master permitted the plaintiff company to re-open its case for the purpose of adducing evidence relating to Mr Hooper’s financial circumstances, and gave the plaintiff company leave to file in court a further notice of motion seeking an order that it be discharged from the obligation to give security on condition that it provide a deed of guarantee executed by Mr Hooper and his wife Barbara Elizabeth Frances Hooper, which bound them personally to pay any costs ordered against the plaintiff company.

11    After hearing evidence and argument the Master dismissed Mr Hooper’s notice of motion of 19 November. She vacated the order of the Prothonotary so far as it permitted the security for costs to be given by deed, but did not vacate the order requiring the plaintiff company to provide security for costs or the order that the proceedings be stayed pending provision of security. The effect of the Master’s orders is that the proceedings will be stayed unless and until the plaintiff provides a cash security of $100,000. Master Harrison further ordered that Mr Hooper

“be granted leave to be joined as a plaintiff in these proceedings once the stay of proceedings is lifted.”

12    The plaintiff company appealed. The appeal was heard and determined by Abadee J on 5 July 1999. In short, his Honour held that no error had been demonstrated in the Master’s discretionary judgment. He dismissed the appeal. One of the bases for the appeal, in which Mr Hooper represented the company, was that Mr and Mrs Hooper had, since the proceedings before the Master, in fact signed a deed of guarantee along the lines proposed in the 19 November notice of motion. Although the document was admitted on the hearing of the appeal without objection, Abadee J held that it did not advance the matter before him.

13    On the hearing of the present notices of motion I was informed that an appeal against the decision of Abadee J had been filed in the Court of Appeal but that this was in the nature of a holding appeal to protect the plaintiff’s interests in the event that it is unsuccessful in the present proceedings.

14    The nature of these applications can now be explained. The first notice of motion was filed on 14 July 1999 and is in essentially identical terms to that filed in court before Master Harrison on 19 November 1998. That is, the plaintiff company seeks discharge from the obligation to give security for costs on condition that it provide a deed of guarantee by which Mr and Mrs Hooper bind themselves personally to meet any costs ordered against the company.

15    In the second notice of motion, filed in court on the day of hearing (2 August 1999) the plaintiff company seeks a stay of execution of the Prothonotary’s order, and

“Any other orders the court deems fit.”

16    One preliminary matter raised by the defendants can be disposed of shortly. They argued that, having regard to the appeal before Abadee J, and the appeal from his decision filed in the Court of Appeal, the procedure now adopted is no more than a duplication of what has already been done, and amounts to an abuse of process, and that the plaintiff should not be permitted further to occupy the time of the court and impose additional burdens on the resources of the defendants. While this is an argument that demands a certain degree of sympathy, the fact of the appeals to Abadee J and to the Court of Appeal cannot resolve the present application. The issue raised before Abadee J was limited to whether the Master had been shown to have been in error in the exercise of her discretion on the evidence before her. Even taking into account the additional evidence admitted without objection, that remained the issue, given that Abadee J did not consider that evidence materially altered the position.

17    That brings me back to the plaintiff’s applications. They are brought under SCR Pt 42 r12, which is in the following terms:

“Matters occurring after judgment

12. (1) A person bound by a judgment may move the Court for a stay of execution of the judgment, or for some other order, on the ground of matters occurring after the date on which the judgment takes effect and the Court may, on terms, make such order as the nature of the case requires.
(2) Subrule (1) does not affect the powers of the Court under Part 44 rule 5 (which relates to stay of execution).”

18    For the purpose of this Part, “judgment” includes an order. The plaintiff relies upon what it asserts is a material change in circumstances sufficient to warrant variation of the orders made by Master Harrison. Mr Hooper again appeared for the purpose of representing the company. He asserted that the circumstances relevant to the decision had changed in two material respects.

19    The first of these concerns the availability of the deed, now executed by himself and his wife, in which they undertake to make themselves personally liable for any costs ordered against the company. This deed is different from that earlier provided only in that it is signed by Mrs Hooper as well as Mr Hooper.

20    The second asserted material change is that, as a consequence of the orders of Master Harrison, Mr Hooper is now a party to the proceedings, meaning that the defendants have available to them an individual against whom they have recourse in the event of a costs order being made in their favour.

21    In order to consider whether there has been any material change in circumstances, it is necessary to consider the issue that arose before the Master, and her reasons for the decision she made. It seems reasonably plain that, although the plaintiff was not in possession of a deed executed by Mrs Hooper at the time of hearing, it did quite clearly propose provision of such a document as an alternative to the payment of cash security as required by the Prothonotary. That was the basis of the application of 19 November, which was rejected by the Master. Master Harrison was sceptical about Mrs Hooper’s willingness to provide such a guarantee. The Master referred to the absence of direct evidence from Mrs Hooper that she was willing to do so; to her age, 63, and her relatively modest financial circumstances. Mrs Hooper’s income is derived from social security benefits. She has limited assets. She had then been separated from Mr Hooper for nearly 4 years. Mr Hooper had at some stage said that his wife wanted to retain such assets as she possessed. For these reasons Master Harrison doubted that Mrs Hooper would be willing to sign the guarantee. That was clearly a factor in the Master’s decision.

22    There is now evidence that Mrs Hooper is not only willing to take that course, but has in fact done so. There is, to that extent, a change in circumstances. However, that does not of itself establish a sufficiently significant change in circumstances to warrant a variation of the Master’s order.

23    The Master’s scepticism about Mrs Hooper’s willingness to sign was only one of the matters that led her to make the orders she did. Another was the value of the guarantee, given the assets position of both Mr and Mrs Hooper as disclosed by the evidence, relative to the amount of security ordered by the Prothonotary. The amount of security ordered was $100,000. The combined assets of Mr and Mrs Hooper would yield at most, a little over $42,000. Of this, Mrs Hooper’s assets were quantified at a little over $3000. In the light of this evidence the Master concluded that the deed proffered to the Deputy Registrar did not provide adequate security for the defendants. It is true that the deed accepted by the Registrar was signed by, and therefore bound, only Mr Hooper, and the deed now relied upon extends to Mrs Hooper. Having regard to the limited extent of her assets, it is quite clear that the Master’s decision would not have been any different even if the deed signed by Mrs Hooper had been available at the time of the master’s decision. That however, is not the question. This is not an appeal from the Master. The question is whether the deed now proffered does amount to a materially different circumstance sufficient to warrant variation of the order made. I am satisfied it does not. The purpose of the Prothonotary’s original orders, and the Masters variation, was to provide protection to the defendants in the event if a costs order against the plaintiff. The deed in the circumstances does not provide that protection.

24    The second matter on which the plaintiff relied was the asserted fact that Mr Hooper is now, as a result of Master Harrison’s orders, a party to the proceedings, and his assets would be accessible to the defendant to satisfy an otherwise unpaid costs order. Mr Hooper is not yet a party - he was granted leave to be joined as a party once the stay of proceedings is lifted. The stay of proceedings will be lifted, on the Master’s orders, only when proper security is provided. It is true that that order 2 could be varied to enable him to become a party before the provision of security, or simultaneously with that, but the evidence of his financial position demonstrates that that event would not materially alter the position as it was when Master Harrison made her orders.

25    The plaintiff has failed to establish any relevant change in circumstances such as to justify variation of the orders.

26    The plaintiff’s notice of motion is dismissed. I order the plaintiff to pay the defendants’ costs of and incidental to the notice of motion.

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Last Modified: 12/02/1999