Thrower v SA Power Networks - [2023] SASC 117

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
THROWER v SA POWER NETWORKS & ORS
[2023] SASC 117
Decision of Judge Bochner a Master of the Supreme Court
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - SECURITY FOR COSTS
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - SECURITY FOR COSTS - POWER TO ORDER
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - SECURITY FOR COSTS - PLAINTIFF OR APPLICANT - NOMINAL OR REPRESENTATIVE PLAINTIFF OR APPLICANT
This is an application for security for costs brought by the second and third respondents in a representative proceeding in which damages are claimed for losses suffered as a result of a bushfire.
Held:
1. The second and third respondents' application for security for costs is dismissed.
Uniform Civil Rules 2020 (SA), referred to.
Kurray v Brinkworth & Ors [2023] SASC 16; Proude v Visic (No 3) (2012) 118 SASR 444; Its Eco Pty Ltd v BPS Financial Ltd [2022] FCA 842; Eades v Endeavour Energy [2018] NSWSC 801; De Jong v Carnival PLC [2016] NSWSC 347, considered.

THROWER v SA POWER NETWORKS & ORS
[2023] SASC 117
CIVIL

This is a representative action commenced by the applicant on 10 March 2021. The subject of the action is a bushfire which commenced on land owned by the second and third respondents, when a tree fell and struck a powerline belonging to the first respondent. The powerline made contact with a metal fence which resulted in arcing, and the consequent ignition of dry grass near the fence. Approximately 23,000 hectares of private land were burnt, including the destruction of 86 houses, 552 sheds and 325 vehicles.
The applicant has brought this claim in negligence against the respondents, in respect of loss and damage to personal property and personal injury. It is not in dispute that, at the time of the bushfire, the applicant was the occupier of a property which was destroyed by the fire. All of his personal belongings were destroyed and he alleges that he developed a post-traumatic stress disorder and major depression as a result. The property in which he was living was owned by his fiancé. She is a member of the representative group.
Liability in this matter is contested by all respondents. Expert reports have been exchanged between the parties.
The applicant brings this action on behalf of those persons who suffered loss or damage to property as a result of the bushfire, all those who suffered personal injury as a result of the bushfire, and all of those who suffered economic loss as a result of the bushfire. Class closure has now occurred; 1,119 parties have registered as group members, including members whose interests have been registered by their subrogated underwriters. The group includes individuals, unincorporated businesses and corporate entities.
It is not in dispute that the applicant does not have the ability to meet an adverse costs order. Nor is it in dispute that there is no third party…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Thrower v SA Power Networks

Details

AGLC: Thrower v SA Power Networks [2023] SASC 117
Case: [2023] SASC 117
Decision Date: 8 August 2023

CaseChat Overview and Summary

In the matter of Thrower v SA Power Networks, the applicant, Thrower, sought an order for security for costs from the South Australian Supreme Court. The case involved a claim for damages arising from a bushfire allegedly caused by the respondent's negligence. The legal issues at hand focused on whether the court should grant an order for security for costs in the context of a representative action, particularly considering the applicant's financial standing and the potential implications for other represented parties.

The court examined the principles set forth in Kurray v Brinkworth, which established that a represented party in a representative action could be subject to an adverse costs order if the action were unsuccessful. The court also considered whether the applicant was deliberately chosen due to his financial status, potentially to avoid adverse costs orders. The court found that Thrower was not a "nominal" applicant, as he had suffered both property loss and personal injury, thereby justifying his right to sue. The court further highlighted that the ability to make a costs order against represented parties mitigated the risk of selecting an impecunious applicant. The central question in determining whether to order security for costs was whether it was necessary to preserve the efficacy of the costs order.

Upon reviewing the criteria outlined in previous cases, the court concluded that it was not bound to order security for costs, though it retained discretion to do so based on the usual factors. These factors included the applicant's financial ability to pay costs, the promptness of the application, the strength of the claim, and whether the applicant had been deliberately selected to avoid costs. The court found that an order for security would not be appropriate in this instance, as it would not serve to preserve the efficacy of the costs order. Consequently, the application for security for costs was dismissed.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

The applicant rejects the respondents’ contention that he was deliberately chosen because he was a “man of straw”, as a result of which he would bear no risk in the event of an adverse costs order. He is clearly not a “nominal” applicant as he suffered both loss of property and personal injury as a result of the bushfire, for which he is entitled to sue. Consideration I have already set out the salient findings in Kurray v Brinkworth. They can be summarised as follows:·A represented party in a representative action may be subject to an adverse costs order in the event that the action is unsuccessful.·The applicant in the representative action brings the action in two capacities: his personal capacity on his own behalf; and for the benefit of others, the represented parties.·The risk that an impecunious applicant may have been selected to defeat an adverse costs order is ameliorated by the ability of the Court to make a costs order against represented parties.·In determining whether an order for security for costs should be made in a representative action, the critical question is whether “it is necessary to preserve the efficacy of the costs order”.[15][15] [2023] SASC 16, [24]. Contrary to the submission of Mr Williams, I am bound by this decision, and do not have the power to depart from the principles set out therein. As a result, I have not addressed the submissions relating to alleged errors by the Honourable Chief Justice. I do, of course, retain a discretion, based on the usual factors in determining whether to make an order for security for costs. In Its Eco Pty Ltd v BPS Financial Ltd[16] Derrington J summarised the factors to be taken into consideration when dealing with an application for security for costs in a class action. Derrington J said:[16] Supra.The Full Court also approved of the primary judge’s identification of a number of criteria which may be useful in the exercise of the Court’s discretion on such applications in class actions. They were identified by his Honour (at [13]) in the following manner:13 The considerations relevant to the exercise of my discretion under s 56 in the context of a class action can be distilled from the various authorities I detail below. They were usefully summarised by Hollingworth J in Hall v FinanceDirect Ltd [2005] VSC 306 (“Hall”) at [107] and they include the following:(a) Whether there is reason to believe that the applicants will be unable to pay the respondents’ costs if so ordered, that is, whether the applicants are impecunious?(b) Whether the applicants’ insufficiency of means is caused by the conduct which is the foundation for the action?(c) The promptness of the application and the stage of the proceedings at which an application for security is brought.(d) Whether the proceeding has become bogged down with “interminable and expensive interlocutory applications” for which the applicants bear responsibility?(e) The strength and bona fides of the applicants’ claim for relief from the respondents.(f) Whether the applicants have been deliberately selected as “persons of straw”, in order to immunise from costs orders group members of substantial means?(g) Whether the proceeding is essentially defensive in nature?(h) Whether the applicants are suing for someone else’s benefit?(i) The characteristics of the group members. For example do they include corporations or natural persons, and are they rich or poor?(j) Whether someone who stands to benefit from the litigation is funding the applicants?(k) Whether security would have been ordered if separate actions had been brought by the group members?(l) Whether an order for security would stifle the action and shut the applicants out from pursuing an arguable claim?[17][17] Supra, [9].