Sun World International Inc (Formerly Sun World Inc) v Registrar, Plant Breeder's Rights (Formerly Registrar, Plant Variety Rights

[1997] FCA 1373

FEDERAL COURT OF AUSTRALIA

PRACTICE AND PROCEDURE - appeal -  security for costs application - discretionary nature - relevant considerations - one party ordinarily resident outside Australia - relevance of delay in making application for security for costs.

Federal Court of Australia Act 1976 (Cth), s 56
Foreign Judgments Act 1991 (Cth)

Federal Court Rules O 28 r 3, O 52 r 20, O 53 r 8

SUN WORLD INTERNATIONAL, INC. (Formerly SUN WORLD, INC.) v REGISTRAR, PLANT BREEDER’S RIGHTS (Formerly REGISTRAR, PLANT VARIETY RIGHTS) and MURRAY VALLEY TABLE GRAPE GROWERS COUNCIL

VG 379 of 1997

MARSHALL J
MELBOURNE
8 DECEMBER 1997

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VG 379 of 1997

BETWEEN:

SUN WORLD INTERNATIONAL, INC. (Formerly SUN WORLD INC.)
APPELLANT

AND:

AND:

REGISTRAR, PLANT BREEDER'S RIGHTS (Formerly REGISTRAR, PLANT VARIETY RIGHTS)
RESPONDENT

MURRAY VALLEY TABLE GRAPE GROWERS COUNCIL
PARTY JOINED

JUDGE:	MARSHALL J
DATE:	8 DECEMBER 1997
PLACE:	MELBOURNE

REASONS FOR INTERLOCUTORY JUDGMENT

The matter before the Court is an application by the respondent for security for its costs of an appeal by the appellant from a judgment of French J and for its costs of the proceedings before French J in the matter the subject of the appeal.  The application was made by way of notice of motion dated 12 November 1997.

The notice of motion was heard by the Court on 4 December 1997.  The appellant was represented by Mr Mark Goldblatt of counsel.  Mr Geoff McCarthy of the Australian Government Solicitor’s office appeared for the respondent.  At the commencement of submissions, counsel advised the Court that they were content to make submissions only on the question whether security for costs should be ordered.  In the event that the Court determined that security for costs would be ordered, counsel considered that they should attempt to reach agreement on the terms of the order that the Court should make.

At the conclusion of counsel’s submissions I stated that I was satisfied that a limited order for security for costs should be made.  Rather than make any substantive order I adjourned the notice of motion until 2.15 pm on Monday, 8 December 1997 at which time I would hear any dispute about the quantum of such costs and on any ancillary issue regarding the wording of the order the Court should make.  What follows are my reasons for deciding that a limited order for security for costs should be made.

BACKGROUND

On 25 June 1997, French J delivered his reasons for judgment in the matter the subject of the appeal.  The matter before French J was an appeal to the Court by the present appellant from a decision of the Administrative Appeals Tribunal (“AAT”).  The AAT had affirmed a decision of the respondent to refuse an application by the appellant for the grant of plant variety rights under the now repealed Plant Variety Rights Act 1987.

The appellant is a United States company.  There is no evidence that it possesses any assets in Australia.  It is a solvent company of not insubstantial means.  It filed its notice of appeal from the judgment of French J on 15 July 1997.  The respondent did not raise the prospect of it seeking an order for security for costs in respect of the appeal until 16 September 1997.  There was no explanation in the evidence before the Court for the two month delay from July to September or the further delay from 16 September 1997 to 14 November 1997 when the notice of motion was filed.  There was also no explanation for the respondent’s failure until recently to seek an order for security for costs in respect of the proceedings before French J.

THE FEDERAL COURT ACT AND RULES

The Court’s power to order security for costs in this appeal is found in s 56 of the Federal Court of Australia Act 1976 (Cth) (“the Act”). Section 56 of the Act provides as follows:

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

(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 proceeding or 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 r 20 of the Federal Court Rules (“the Rules”) provides that:

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

Order 28 of the Rules deals general with security for costs.  It requires an application to be made by motion upon notice with a supporting affidavit.

Order 28 r 3(1)(a) provides that:

“(1)     Where, in any proceeding, it appears to the Court on the application of a respondent -

(a)that an applicant is ordinarily resident outside Australia;

...

the Court may order that applicant to give such security as the Court thinks fit for the costs of the respondent of and incidental to the proceeding.”

A special provision is made for security for costs applications in appeals from decisions of the AAT to a single judge.  Order 53 r 8 of the Rules provides that:

“(1)     The Court may, in special circumstances, order that such security for costs of appeal to the Court be given as it thinks fit.

(2)      Subject to sub-rule (1), no security for costs of an appeal to the Court shall be required.”

FACTORS IN THE BALANCE

The discretion to make a security for costs order is wide and unfettered but must be exercised judicially.  The duty of the Court when considering an application for security for costs is to weigh in balance the various factors which favour or count against the making of an order.  In this matter there are several factors which favour the granting of an order for security for costs.  They are as follows:

• The appellant is ordinarily resident in the United States of America (“USA”).

• It has no assets in Australia.

• USA is not listed in the regulations made pursuant to the Foreign Judgments Act 1991 (Cth) as a country with reciprocal arrangements with Australia for the enforcement of judgments.

• An order for security for costs would not stifle the proceedings given that the appeal would proceed even if the order was made.

The factors which count against the making of an order are as follows:

• The respondent was extremely dilatory in making its application, especially insofar as it related to the appeal from the AAT.

• The appellant is solvent.

• The respondent bears the onus of demonstrating that an order should be made.

CONSIDERATION

In my view it would be oppressive to require the appellant to provide security for costs in respect of the proceeding before French J. I reach this conclusion, having regard to the considerable delay in the respondent making application for security for costs, the possibility it foreshadowed as long ago as 13 June 1996 but did not effect until the filing of the notice of motion on 14 November 1997.  In the interim  the appellant involved itself in litigation and incurred expense without being aware of any real prospect (as distinct from a faintly foreshadowed one) that it would be at risk of having to provide security for costs in respect of the appeal from the AAT.  In any event such security for costs is only ordered “in special circumstances”.  No such circumstances exist which favour the respondent in respect of those costs.

Different considerations arise in respect of security for costs of the instant appeal since the filing on 14 November 1997 of the notice of motion dated 12 November 1997.  The only costs the parties would have incurred since that date would have been in preparing for this notice of motion and attending at a Full Court Callover conducted by the Chief Justice on 17 November 1997.  Some further costs will be incurred in the preparation of the appeal in respect to counsel’s fees and solicitors’ attendance at the appeal.

None of those costs are such that the appellant will be dissuaded from prosecuting its appeal if an order for security for costs is made.  The appellant will not be prejudiced by the passage of time from the filing of the notice of motion until the order of the Court disposing of it.

Having regard to any lack of prejudice to the appellant by the Court making an order with reference to costs to be incurred by the respondent on and from 14 November 1997 and having regard to the factors outlined above which favour the grant of an order for security for costs, the Court determined on 4 December 1997 that a limited order would be made with reference to costs incurred from 14 November 1997.

I certify that this and the preceding four (4) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Marshall

Associate:

Dated:            8 December 1997

Counsel for the Appellant:	Mr Mark Goldblatt
Solicitor for the Appellant:	Davies Collison Cave
Counsel for the Respondent:	Mr Geoff McCarthy
Solicitor for the Respondent:	Australian Government Solicitor
Date of Hearing:	4 December 1997
Date of Reasons for Interlocutory Judgment :	8 December 1997