Stanbridge, D. v Ray, R.F.

[1995] FCA 575

CATCHWORDS

IN THE FEDERAL COURT OF AUSTRALIA     )
QUEENSLAND DISTRICT REGISTRY         )    No. QG 80 of 1995
GENERAL DIVISION  )

BETWEEN   :    Dennis STANBRIDGE
  Applicant

AND:    MINISTER FOR DEFENCE SENATOR THE HONOURABLE ROBERT FRANCIS RAY and THE BOARD OF DIRECTORS OF B.H.P. FOR 1995

Respondents

CORAM:    Spender J
PLACE:    Brisbane
DATE:     20 July 1995

MINUTES OF ORDER

In relation to the notice of motion of the Minister for Defence filed on 16 June 1995, -

THE COURT ORDERS THAT:

1. the appellant provide security for costs to the satisfaction of the Registrar, by payment into court or otherwise, in the sum of $3000.00, to await the outcome of the appeal.

1. the appeal be stayed until security is so provided.

In relation to the notice of motion of the Directors of BHP, filed on 18 July 1995, -

THE COURT ORDERS THAT:

1. the appellant provide security for costs to the satisfaction of the Registrar in the sum of $1500.00, by payment into court or otherwise, to await the outcome of the appeal;

1. the appeal be stayed until such security has been provided.

THE COURT GRANTS liberty to apply to any party on three working days' notice.

Note:     Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA     )
QUEENSLAND DISTRICT REGISTRY         )    No. QG 80 of 1995
GENERAL DIVISION  )

BETWEEN   :    Dennis STANBRIDGE

Applicant

AND:    MINISTER FOR DEFENCE SENATOR THE HONOURABLE ROBERT FRANCIS RAY and THE BOARD OF DIRECTORS OF B.H.P. FOR 1995

Respondents

CORAM:     Spender J
PLACE:     Brisbane
DATE:     20 July 1995

REASONS FOR JUDGMENT

There are before me two notices of motion, the first by the Minister for Defence, Senator the Honourable Robert Francis Ray, filed on 16 June 1995, wherein the Minister seeks an order that:

"...in pursuance of Order 52, Rule 20 the Applicant give security for costs of the Respondent Minister for Defence of the appeal instituted by the Applicant by the Notice of Appeal dated 2 June 1995, by payment into Court of the sum of $4,500.00 to await the outcome of the appeal, and that such appeal be stayed until such sum be paid into Court. "

The motion also seeks such other orders as the honourable Court deems meet.  The second motion is on behalf of the Board of Directors of BHP.  They, as well as the Minister, are respondents to the appeal referred to in the Minister's motion,  and they seek an order that security be provided  "by payment into court of the sum of $1,500.00 to await the outcome of the appeal, and that such appeal be stayed until such sum be paid into Court".  In support of the motion on behalf of the Minister, an affidavit by Richard Melville deposes to the fact that on 14 June 1995 a copy of the notice of appeal dated 2 June and Mr Stanbridge's affidavit sworn 8 June were served on the office of the Australian Government Solicitor.

The application, then, for security for costs is made within two days of service of the notice of appeal, so this is not a case where there has been any standing by in the bringing of an application for security.  Mr Melville's affidavit refers, in part, to some observations by the primary judge in the matter, to which I will refer in some detail, but there is deposed by Mr Melville a conversation between his Honour and the appellant in the following terms on 18 May 1995.  Drummond J asked:

"You do understand that you expose yourself to an order for costs if the proceedings are dismissed, Mr Stanbridge?  Do you understand that? "

to which Mr Stanbridge replied:

"Yes.  Well, again, that makes me ‑ ‑ ‑ "

Drummond J continued:

"And as anyone who joins in the proceedings by putting their name on the papers also exposes them to an order for costs, and anyone who simply stands in the background and urges you on in your own name does not expose themselves to any liability for costs.  Do you understand that? "

To which Mr Stanbridge said:

"I understand that very clearly, your Honour. "

And he later said:

"It also makes me a special person, too, because I am unemployed and have been for a number of years."

And later:

"I have no assets of any particular value. "

On 18 May 1995, Drummond J dismissed the application by Mr Stanbridge and ordered that he pay the respondents' costs of the proceedings to be taxed. The application by Mr Stanbridge was an application under s. 5(1) of the Administrative Decisions (Judicial Review) Act 1977 ('the ADJR Act') to review a decision of the Minister for Defence to have a large number of military weapons melted down. As the primary judge noted:

"Mr Stanbridge has put material, which includes newspaper reports, before me that indicates that BHP, whose directors he has also joined in these proceedings, has been engaged to carry out this task.  There is an obvious difficulty in justifying the joinder of the BHP directors in these proceedings under the Act upon which Mr Stanbridge relies. "

His Honour on that day gave his reasons in respect of a preliminary question for determination - namely, whether Mr Stanbridge was an aggrieved person for the purposes of the ADJR Act. After an extensive review of authorities, his Honour concluded that:

"...it is plain beyond doubt in my view that he is not a person aggrieved by this decision within the meaning which I am bound to give to this term in the ADJR Act by the case law. "

His Honour referred to the test by the Full Court of the Federal Court in Broadbridge v Starmers (1987) 76 ALR 339; to Australian Institute of Marine and Power Engineers v Secretary, Department of Transport (1986) 71 ALR 73; the recent decision of the High Court, Shop Distributive and Allied Employees Association v Minister for Industrial Affairs (1995) 69 ALJR 558, which in turn followed the rule established in Australian Conservation Foundation v The Commonwealth (1980) 146 CLR 493 and the observations by Gibbs CJ in Onus v ALCOA (1981) 149 CLR 27 where the former Chief Justice said:

"A plaintiff has no standing to bring an action to prevent the violation of a public right if he has no interest in the subject matter beyond that of any other member of the public; if no private right of his is interfered with, he has standing to sue only if he has a special interest in the subject matter of the action. "

What Mr Stanbridge indicated before me as his special interest permitting him to have the standing to proceed for a review of the Minister's decision was his claim that he was a born-again Christian, that the decision of the Minister would have the effect of rendering the country liable to invasion with the possibility of harmful consequences to him as a result of the likely religious tenets of the invading force and his beliefs as a Christian.  It is not appropriate for me to pass any final judgment on this claimed special interest, but it is clear that it has formidable difficulties in its way.
The question, however, is one of whether the court should require security for costs in the prosecution by Mr Stanbridge of his appeal rights. Section 56 of the Federal Court of Australia Act 1976 provides:

"(1) The court or a Judge may order...an appellant in an appeal to the Court to give security for the payment of costs that may be awarded against him. 

(2) The security shall be of such amount and given at such time and in such manner and form, as the Court or Judge directs.

(3) The Court or a Judge may reduce or increase the amount of security ordered to be given and may vary the time at which, or manner or form in which, the security is to be given.

(4) If security, or further security, is not given in accordance with an order under this section, the Court or a Judge may order that the ...appeal be dismissed.

(5) This section does not affect the operation of any provision made by or under any other Act or by the Rules of Court for or in relation to the furnishing of security. "

Order 52 rule 20 provides:

"Unless the Court or a Judge otherwise directs no security for costs of an appeal to the court shall be required. "

The general rule, expressed as long ago as 1885, but clearly having an older ancestry than that, by Bowen LJ in Cowell v Taylor(1886) 31 Ch.D. 34, was expressed in these terms:

"The general rule is that poverty is no bar to a litigant, that, from time immemorial, has been the rule at common law, and also, I believe, in equity.  There is an exception in the case of appeals, but there the appellant has had the benefit of a decision by one of Her Majesty's Courts, and so an insolvent party is not excluded from the courts, but only prevented, if he cannot find security, from dragging his opponent from one Court to another.  There is also an exception introduced in order to prevent abuse, that if an insolvent sues as nominal plaintiff for the benefit of somebody else, he must give security.  In that case, the nominal plaintiff is a mere shadow. "

There is reason to think that in this case Mr Stanbridge comes within both exceptions.  He has had a decision against him on the question of standing.  Gummow J, in Wiest v Director of Public Prosecutions (Gummow J, Federal Court, unreported, 5 September 1988), an application for security where the applicant had a judgment in its favour,  referred to the observations of Hood J in an old Victorian case, Bethune v Porteous (1892) 18 VLR 493 at 494. In that case, Hood J said that:

"...the reason underlying the numerous and varying cases in which appellants have been ordered to give security will be found in the injustice to a successful litigant that may be caused if he be compelled to contest the matter for a second time without a probability of obtaining his costs if ultimately successful. "

As to the exception in relation to a nominal plaintiff, Drummond J observed, at the conclusion of his reasons why Mr Stanbridge was not a person aggrieved for the purposes of the Administrative Decisions (Judicial Review) Act, as follows:

"I mention one matter that concerns me.  Mr Stanbridge appears to have the support in court today, as he had on the last occasion, of a number of persons.  While he stated that he represented a number of persons with similar views to his own, he frankly indicated that he, rather than they, had undertaken the burden of suing because he is in the position of being unemployed and without assets.  He is exempt, even, from having to pay the filing fees that ordinary litigants have to pay in order to commence proceedings in this court.

Where litigation is instigated by persons who do not, however, expose themselves to the risks of having to compensate in costs those whom they compel to come before a court to answer their claims, if they lose the case, but who instead support a person of like opinion to their own but who is without means to institute the action, it needs to be noted by all concerned that the courts have power to ensure that such an action does not proceed, unless those provoking it expose themselves, directly or indirectly, to having to answer for the costs of the defendants, if the defendants ultimately succeed. "

As O 52 r 20 indicates, it requires a positive decision for an appellant to be required to provide security.  The rule in the Federal Court Rules is similar to the rule contained in Part 51 r 11(i) of the New South Wales Supreme Court Rules 1970, which provides:

"The Court of Appeal may, in special circumstances, order that such security as the Court of Appeal thinks fit be given for the cost of an appeal to the Court of Appeal. "

In Kennedy v McGeechan (Moffitt P. and Hutley and Samuels JJ.A.; NSW Court of Appeal, 16 September 1974) which is reproduced in Lall v 53-55 Hall Street Pty Ltd [1978] 1 NSWLR 310 at 315, the Court said:

"While there are reported decisions which are helpful as a guide, each case must be judged on its own merits as to whether special circumstances exist, leading the Court in its discretion to order security for costs of the appeal.  The impecuniosity of an appellant may constitute a 'special circumstance' leading the Court to order security, in that it is a circumstance which may deprive or delay a respondent receiving his costs of the appeal, if the appeal fails, which costs a successful respondent can usually expect he will actually receive.  In an appellate situation, a respondent seeking security is in a stronger position than a defendant at first instance, to the extent that he has a decision in his favour, which is presumably right until displaced.

However, impecuniosity may not conclude the matter.  Consideration of possible frustration of an apparently genuine appeal or concerning the subject matter of the appeal, such as appeals involving matters of great moment or the liberty of the subject, may provide reasons to refuse an order.  The foregoing observations are made not to circumscribe the discretion, but in order to indicate its width. "

It was urged on me by Mr Stanbridge that in this particular case matters of great moment were involved, and that should provide sufficient reason not to order security.  However sincere and earnest Mr Stanbridge may be in his view, I have to say that the prospects of his succeeding on his appeal on the preliminary point strike me at the moment as remote.  The question of standing is quite a separate question from the other matters to which he refers before me, and there, notwithstanding the matters to which he referred in support of his appeal, the Australian authorities are very strongly against him.

This was not a case like Lucas v Yorke (1983) 50 ALR 228, or like Beard v Prestige Baking Industries Pty Ltd (1980) 51 FLR 454, where in each case the appellant's impecuniosity was at least arguably the consequence of conduct by the other parties to the application for security. In the first case, Lucas v Yorke, Brennan J, as he then was, said at 228-9:

"The inability of an appellant to meet the costs of an unsuccessful appeal is a relevant factor in exercising the discretion conferred by O 70 r 10, of the Rules of [the High] Court, but it is no more than a factor to be weighed in all the circumstances...The discretion is not fettered by a rule, such as the rule adopted by the Court of Appeal in Hall v Snowdon, Hubbard and Co [1899] 1 QB 593, that security for costs is ordinarily ordered when a respondent shows that the appellant, if unsuccessful, will be unable through poverty to pay the costs of the appeal.  The discretion under O 70, r 10, is absolute..."

Later, he said:

"A factor which ought not be left out of account is the course of the litigation, particularly if the appellant has failed at first instance and again on appeal to an intermediate appellate court.  A second appeal upon substantially the same grounds is indulging in a luxury, as Rich J said in King's case (at 294).  That factor tells against the appellants in this case. "

However, for the reason that the appellant's impecuniosity had arisen from losses sustained as a result of the buying and carrying on of a business which would be relieved by satisfaction of the judgment recovered by the appellants against those judgment debtors, his Honour declined to make an order for security for costs.  As he said:

"It is an important consideration that the making of an order for security for costs will effectively shut out an appeal designed to
recover losses which have caused the appellants' impecuniosity: See Farrer v Lacy, Hartland and Co (1885) 28 Ch D 482 at 485. "

Similarly, Northrop J, in giving his reasons for declining to order security in Beard v Prestige Baking Industries, supra, said at p. 457,:

"It is sufficient to say at the present time that the financial position of the appellant and his inability to pay debts arises largely from the series of transactions between himself and Prestige Baking Industries Pty Ltd and that the Prestige Baking Industries Pty Ltd claims against the appellant all arise out of the transaction already referred to involving the licensing arrangement for the Hades Hot Bread shops. "

Those considerations do not apply here.  In Ciappina v Ciappina (1983) 70 FLR 287, Neaves J ordered that:

"...the appellant give security to the satisfaction of the Registrar within 28 days in the sum of $2000.00 failing which the appeal herein is to stand dismissed."

He ordered that the costs of the application for security be the respondent's costs in the appeal, and gave liberty to apply on seven days' notice.  In the course of reaching that conclusion, his Honour said at p. 290-91:

"It is now well established that the impecuniosity of an appellant resulting in an inability to pay the costs of an appeal should that appeal not be successful amounts to a special circumstance justifying an order for security: Harlock v Ashberry (1881) 19 Ch.D. 84; Kardynal v Dodek [1978] VR 414.  The circumstance that the appellant is a legally aided person will not preclude the making of such an order..."

Neaves J cited certain authorities, and then he continued:

"The court is bound, however, to examine the whole of the circumstances for the purpose of discovering whether there are factors present in this particular case which may be of importance in determining whether security should be ordered.  Counsel for the appellant did not refer to any particular matters except the desire of the appellant to proceed based on her conviction that the learned trial judge had fallen into error.  I have taken into account the nature of the points to be raised on the appeal and, in relation thereto, submissions by counsel for the respondent to which I have already referred. 

Taking these matters into consideration I have concluded that the court should order the appellant to give security for the costs of the appeal. "

He noted, in reaching the figure that he did, that as Fullagar J had said in Brundza v Robbie and Co (No 2) (1952) 88 CLR 171 at 175:

"...in ordering security for costs, the court does not set out to give a complete and certain indemnity to a respondent: see Aberdare & Plymouth Co v Hankey (1888) 32 SJ 644.  It is not, of course, to be assumed that the appellant will fail. "

In this particular case, in all the circumstances, it seems to me to be just that some order concerning security should be made.   Not only is this an appeal and therefore is different from the circumstances of an applicant seeking security at first instance but, in this particular case, it is apparent that Mr Stanbridge in a sense is appealing as a nominee or as a representative of persons, and it seems to me to be wrong that those persons can have the luxury of having their views ventilated at no risk in terms of a costs order against them.

I will not make orders such that the appeal will be frustrated.  But it seems to me that I ought to prevent the appeal from going ahead unless there is some form of protection for the respondents to the appeal in the event that the appeal is unsuccessful.  As to the quantum of the security, the security is not meant to provide perfect indemnity for costs and I think in the case of the Minister, I should order that the appellant, Denis Stanbridge, give security to the satisfaction of the Registrar by payment into court or otherwise in the sum of $3000.00 to await the outcome of the appeal, and that the appeal be stayed until security is so provided.

In relation to the motion by the Directors of BHP, I order that the appellant provide security to the satisfaction of the Registrar in the sum of $1500.00, by payment into court or otherwise, to await the outcome of the appeal, and that the appeal be stayed until such security has been provided.  I will de-list the appeal which was to be heard on 1 August 1995, and I will give liberty to apply to any party on three working days' notice.

If security as I have indicated is not provided within a reasonable time, I would anticipate that an application would be made pursuant to s. 56 of the Federal Court of Australia Act 1976 for an order that if it is not provided within a specified time, the appeal would stand dismissed. Now I will not make such order at this stage and see what happens in relation to the prosecution of the appeal. As to the costs of the motions, it seems to me that I should make them the respondents' costs in the appeal.

Those are the orders that I make.

I certify that this and the  preceding twelve (12) pages are a true copy of the reasons for judgment herein of the Honourable Justice J.E.J. Spender.

Associate

Date: 20 July 1995

APPEARANCES

The applicant appeared in person.

Counsel for the first
        respondent         :  Mr D. J. McGill 

instructed by               : Mr R. Melville of Australian Government Solicitor   

Solicitors for the second

respondent: Mr B. D. Bartley of Corrs Chambers Westgarth

Date of Hearing             : 20 July 1995