COSTS – application for security for costs – principles to be applied in exercise of discretion as to whether to grant an order for security for costs – difference in principle in relation to ordering of security for costs in a first instance matter and at an appellate level – where an order for security for costs would stultify the appeal – whether the public interest associated with the appeal outweighs the appellant’s impecuniosity so not to warrant an order for security for costs in the respondent’s favour.
Held: respondent’s notice of motion seeking security for costs dismissed.
1.The notice of motion filed 8 July 2009 be dismissed.
2.The respondent pay the appellant’s costs of the notice of motion, as agreed or taxed.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 537 of 2009
BETWEEN:
VAN TOL TRAN Appellant
AND:
THE COMMONWEALTH Respondent
JUDGE:
JAGOT J
DATE:
14 AUGUST 2009
PLACE:
SYDNEY
REASONS FOR JUDGMENT
THE APPLICATION FOR SECURITY
By a notice of motion filed on 8 July 2009 the Commonwealth, the respondent in this appeal, seeks an order that the appellant, Van Tol Tran, provide security for the costs of the appeal in the sum of $25,000, failing which the appeal be stayed or dismissed.
(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…
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.
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Details
AGLC
Tran v The Commonwealth [2009] FCA 921
Case
[2009] FCA 921
Decision Date
CaseChat Overview and Summary
In the matter of Tran v The Commonwealth, the respondent sought security for costs in relation to an appeal against a decision made at first instance by Cowdroy J, who dismissed the appellant’s claim for compensation. The appellant, Mr Tran, had argued that he was entitled to compensation for the confiscation of his vessel under the Migration Act 1958 (Cth). The legal issues before the court were whether the appellant should be required to provide security for costs in relation to the appeal, and if so, the amount and form of that security.
The court considered the principles regarding the ordering of security for costs, particularly the distinction between first instance matters and appellate proceedings. It was noted that, while poverty is no bar to litigating, there is a different consideration when it comes to appeals, as the appellant has already faced an adverse determination. The court also noted the discretionary considerations mentioned in Wiest v Director of Public Prosecutions and Anor, such as the delay between filing the papers and bringing the application for security, and the fact that the applicant for security has a judgment in its favour. The court concluded that, while the appellant’s situation was unfortunate, it was not of such a nature as to warrant the ordering of security for costs in the appeal proceedings.
The orders made by the court were that the notice of motion filed by the respondent be dismissed, and that the respondent pay the appellant’s costs of the notice of motion, as agreed or taxed.
Orders
Orders of the court
1. The notice of motion filed 8 July 2009 be dismissed.
2. The respondent pay the appellant’s costs of the notice of motion, as agreed or taxed.
Note:
Background
Background to the litigation
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Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
JAGOT J
This difference has been explained by Spender J in Tait v Bindal People [2002] FCA 322 at [2]–[4] in these terms:[2] The position in relation to security for costs in the present matter is governed by s 56 of the Federal Court of Australia Act 1976 (Cth). Section 56 provides that security is to be of such amount and given at such time and in such manner and form as the Court or Judge directs. As to whether security for costs should be ordered, Cowell v Taylor (1885) 31 Ch D 34 at 38, a case of more than 100 years ago, sets out the fundamental principle:“The general rule is that poverty is no bar to a litigant, that, from time immemorial, has been the rule at common law. 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”.[3] What that passage demonstrates is that there is a difference in principle in relation to the ordering of security for costs in a first instance matter and the ordering, or the consideration of the ordering, of security for costs where one is at the appellate level. The difference is that, at the appellant level, there has already been a determination adverse to the person against whom security for costs is sought and, if it be shown that there is a substantial risk that even if successful the respondent to the application for leave to appeal, or to an appeal, will be deprived of his costs, such an outcome would clearly be unjust.[4] In a sense, it would be giving to a person who has been on the receiving end so to speak of a determination by the courts a free hit at great cost to the other party in the appeal proceedings. That consideration, it seems to me, is also reinforced by the judgment of Gummow J in Wiest v Director of Public Prosecutions and Anor (1988) 23 FCR 472. That case involved appeals against extradition with penal consequences. Such consequences were clearly very relevant considerations, but discretionary reasons moved the Court to order security for costs. Such discretionary considerations, which were particularly noted by Gummow J, included the delay between the filing of the papers and the bringing of the applications for security. His Honour referred to a particular circumstance which is relevant here, and that is that the applicant for security has a judgment in its favour. There was a reference by Gummow J to Bethune v Porteous (1892) 18 VLR 493, again an old case. In that case, Hood J said (at 494):“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.”THE FIRST INSTANCE DECISIONS Cowdroy J dismissed Mr Tran’s claim for compensation at first instance (Tran v The Commonwealth (2008) 103 ALD 290; [2008] FCA 901 (Tran No 1); Tran v The Commonwealth (2009) 108 ALD 531; [2009] FCA 474 (Tran No 2)). The principal basis upon which his Honour did so in Tran No 2 turned on the construction of ss 261A and 42 of the Migration Act 1958 (Cth). Section 261A(1)(a) of the Migration Act provides for forfeiture to the Commonwealth of a vessel used or involved in a contravention of the Act (where the contravention occurred in Australia), if the contravention involved: (i) the bringing or coming to Australia of one or more persons who were, or upon entry into Australia became, unlawful non-citizens; or (ii) the entry or proposed entry into Australia of one or more such persons. Section 42(1) provides that a non-citizen must not travel to Australia without a visa that is in effect.