Wagdy Hanna & Associates Pty Ltd v National Library of Australia
[2013] ACTCA 24
•30 May 2013
WAGDY HANNA & ASSOCIATES PTY LTD v NATIONAL LIBRARY OF AUSTRALIA
[2013] ACTCA 24 (30 May 2013)
Corporations Act 2001 (Cth)
ACT Limitation Act
Supreme Court Act1933 (ACT)
Court Procedures Rules 2006 (ACT)
Hughes v Janrule Pty Ltd (2011) 177 ACTR 1
EX TEMPORE JUDGMENT
ON APPEAL FROM A SINGLE JUDGE OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
No. ACTCA 42 of 2012
No. SC 236 of 2003
Judge: Nield AJ
Court of Appeal of the Australian Capital Territory
Date: 30 May 2013
IN THE SUPREME COURT OF THE )
) No. ACTCA 42 of 2012
AUSTRALIAN CAPITAL TERRITORY ) No. SC 236 of 2003
)
COURT OF APPEAL )
ON APPEAL FROM A SINGLE JUDGE OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
BETWEEN:WAGDY HANNA AND ASSOCIATES PTY LTD
Appellant
AND:NATIONAL LIBRARY OF AUSRALIA
Respondent
ORDER
Judge: Nield AJ
Date: 30 May 2013
Place: Canberra
THE COURT ORDERS THAT:
The appellant give security in the amount of $55,000 for the respondent’s costs of the appeal by lodging $55,000 cash or a bank guarantee in the amount of $55,000 with the Registrar of the Court within 28 days from today, that is on or before 27 June 2013.
The appellant pay the respondent’s costs of the application for security for costs, such costs to be assessed on a party-party basis and to be paid on completion of the hearing of the appeal or, if the security is not given within 28 days from today, that is, on or before 27 June 2013 on the expiration of 28 days from today.
The appeal be stayed pending the appellant giving security in the amount of $55,000 for the respondent’s costs of the appeal.
If the appellant fails to give security in the amount of $55,000 for the respondent’s costs of the appeal within 28 days from today, that is, on or before 27 June 2013, the appeal be deemed to have been dismissed and the orders of Refshauge J confirmed, in which event the appellant is to pay the respondent’s costs of the appeal to date, such costs to be assessed on a party-party basis.
IN THE SUPREME COURT OF THE )
) No. ACTCA 42 of 2012
AUSTRALIAN CAPITAL TERRITORY ) No. SC 236 of 2003
)
COURT OF APPEAL )
ON APPEAL FROM A SINGLE JUDGE OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
BETWEEN:WAGDY HANNA AND ASSOCIATES PTY LTD
Appellant
AND:NATIONAL LIBRARY OF AUSRALIA
Respondent
Judge: Nield AJ
Date: 30 May 2013
Place: Canberra
REASONS FOR JUDGMENT
NIELD AJ:
The appellant is Wagdy Hanna & Associates Pty Ltd. It is a company incorporated in the Australian Capital Territory under the Corporations Act 2001 (Cth). It is a company limited by shares, of which 10 have been issued, of which six are held by Mr Wagdy Hanna and the others are held by members of his family. It has not lodged an annual return with the Australian Securities and Investment Commission (“ASIC”) since the return lodged on 20 January 2003, although it has lodged documents with ASIC changing its registered address and its principal place of business address.
The respondent is the National Library of Australia. It is an entity which may sue and be sued in its name.
On 3 August 2012 Refshauge J gave his judgment on the claim brought by the appellant against the respondent. His Honour answered a series of questions which were the issues which arose during the hearing:
1. Was there a duty of confidence reposed on the defendant in respect of the plaintiff’s tender?
Answer: Yes
2. What were the specific matters in the plaintiff’s tender that were subject to any duty of confidentiality on the part of the defendant?
Answer: Unnecessary to answer.
3. Did the defendant breach that duty of confidence by revealing to Decoin before it chose Decoin as its successful tenderer to provide the repository, the confidential matters that it was bound not to reveal from the plaintiff’s tender? This perhaps, requires an answer to the question of whether any feature of the repository as constructed by Decoin incorporated any features that were confidentially included in the plaintiff’s tender?
Answer: No.
4. If so, what loss has been suffered by the plaintiff and how should it be assessed?
Answer: Unnecessary to answer as the plaintiff has suffered no loss compensable by the defendant.
5. Did the act of any disclosure by the defendant amount to deliberate concealment such as to extend the time for in the ACT Limitation Act? Answer: As there was no disclosure, unnecessary to answer.
6. Did the Deed of Settlement release the defendant from the claims made in these proceedings?
Answer: Yes.
7. If not, should the Deed of Settlement be rectified so as to include a release that encompassed claims such as those made in these proceedings?
Answer: Unnecessary to answer.
8. Is the plaintiff stopped from bringing these proceedings because they should have been included in the Federal Court proceedings?
Answer: No.
9. If so, does the defendant’s conduct prevent it from relying on any such estoppels in these proceedings?
Answer: unnecessary to answer.
10. Has the plaintiff breached the Deed of Settlement by bringing these proceedings?
Answer: Yes.
11. Is the Deed of Settlement void, or in the alternative, terminated by the defendant, or, in the alternative, is the plaintiff released from its terms?
Answer: No.
12. Has the defendant suffered loss from the alleged breach of the Deed of Settlement? If so, how should that be calculated?
Answer: Yes and the damages should be calculated on the basis of an award for indemnity costs.
On 30 August 2012 the appellant, being dissatisfied by his Honour’s judgment, filed a notice of appeal. The notice of appeal was not filed by a solicitor, rather, it was filed by the appellant itself. The notice of appeal stated that:
The grounds of appeal are facts supported by documentary evidence have been disregarded in favour of incorrect oral evidence given by mistake or deliberately by the defendant [sic] representatives and his Honour mistook the facts and/or did not refer to relevant matters and this led to the wrong application/ interpretation of the law.
The notice of appeal stated that: “The appellant will seek to put further evidence before the court of appeal”, that evidence being: “Discovered documents contradicts [sic] the statements made under oath by the defendant.” and: “Conditions of tender which formed part of the contract were not considered”.
On 4 October 2012 the appellant filed its draft index for the appeal papers. This index was inappropriate because it included references to the documents which the appellant wished to adduce before the Court of Appeal and which had not been adduced before Refshauge J and incomplete because it did not state the transcript references to the various exhibits. Therefore, the respondent refused to certify the draft index as accurate.
By a letter dated 17 September 2012 (annexure 1 to the affidavit of Mr Matthew Roser) the respondent’s solicitor informed the appellant that:
1) the respondent’s costs of the appellant’s claim and the respondent’s cross-claim assessed on an indemnity basis exceeded $590,000;
2) the respondent would accept the amount of $590,000 if paid within 28 days otherwise a bill of costs would be prepared for assessment, and;
3) as the appellant appeared not to be operating because it had not filed an annual return since the return lodged on 31 January 2003 [sic] the respondent would seek an order for security for costs of the appeal unless details of the appellant’s financial position were provided within 14 days.
By email sent 1 October 2012 (annexure 2 to the affidavit of Mr Roser) the appellant asked the respondent’s solicitor for details of the respondent’s estimate of its costs for the appeal.
By a letter dated 2 October 2012 (annexure 3 to the affidavit of Mr Roser) the respondent’s solicitor provided the appellant with details of his estimation of the respondent’s costs for the appeal, the estimation being between $45,000 and $65,000, and again asked for details of the appellant’s financial position to be provided before 2.30pm on 4 October 2012 otherwise the respondent would file an application seeking an order for security for costs of the appeal.
Because the draft index to the appeal papers was inappropriate and inaccurate, on 29 November 2012 the Deputy Registrar of the court ordered by consent that:
1) By 23 January 2013 the appellant provide to the respondent all transcript references confirming whether any or all of the 100 documents under the heading “Discovered Material” in the draft appeal papers index, were adduced as evidence in the hearing in the Supreme Court in the form in which they are included in the draft appeal papers index.
2) By 23 January 2013 the appellant provide to the respondent all transcript references confirming whether any or all of the affidavits of Brian Horan, Robert Grieves, Ernest & Young and Peter Toscan were adduced as evidence in the hearing in the Supreme Court.
3) By 23 January 2013 the appellant provide to the respondent all transcript references confirming whether the documents marked “MFI 1” and/or “MFI 2” were adduced as evidence in the hearing in the Supreme Court.
4) By 6 February 2013 the appellant file and serve any application seeking the leave of the Court of Appeal to receive further evidence and/or undertake a site visit.
5) The settling of the appeal papers index adjourned until 14 February 2013 at 2.30pm.
On 6 February 2013 the appellant filed an application seeking leave:
To refer to and rely upon important documents and parts of documents that were left out of evidence either inadvertently or deliberately by the lawyers involved, as well as documents that were discovered during the course of litigation in the case and that evidence contained in the discovered material in the form as presented in the draft index to appeals [sic] papers be received and accepted by the court.
and, in addition, seeking orders that:
(1) the draft appeal index lodged on 2 October 2012 be declared a competent and an acceptable document to proceed to the next stage with the proviso that dates of affidavits listed from 12 to 32 be added, and
(2) any other orders that the court considers appropriate, including,
(a) ordering the defendant [sic] to produce a complete clean copy of Exhibit number 97, being a letter from the NLA to DOCITA , and
(b) releasing documents marked MFI 1 and/or MFI 2 for reproduction.
On 27 February 2013 the appellant’s application filed on 6 February 2013 came on for hearing before me. Mr Hanna, as the secretary and majority shareholder of the appellant, appeared on behalf of the appellant and Mr Roser appeared for the respondent. After hearing submissions, I ordered that:
1) the appellant’s application to adduce fresh or additional evidence be heard by the Court of Appeal on the day before or on the day of the hearing of the appeal
2) the appellant file an amended index to appeal papers excluding reference to the additional documents which it seeks to adduce on the hearing of its appeal within 28 days, and
3) the costs of the day be costs in the appeal.
On 11 April 2013 the appellant’s appeal came on for hearing before me for directions. Again, Mr Hanna appeared on behalf of the appellant and Mr Roser appeared for the respondent. After hearing from them, I ordered that:
1) the appellant file the amended index to appeal papers before 24 April 2013,
2) the respondent file any application for security for costs of the appeal before 24 April 2013, and
3) the appeal be listed for directions on 24 April 2013.
On 24 April 2013 the appellant’s appeal came on for hearing before me for directions. Again, Mr Hanna appeared on behalf of the appellant and Mr Roser appeared for the respondent. After hearing from them, I ordered that:
1) Mr Hanna may uplift the exhibits admitted into evidence by Refshauge J and any documents marked for identification by Refshauge J held by the court,
2) the respondent file and serve any application for security of costs of the appeal by 4 pm on 10 May 2013, and
3) the appeal be listed for further directions on 16 May 2013.
By a letter dated 6 May 2013 (annexure 5 to the affidavit of Mr Roser) the respondent’s solicitor;
1) informed the appellant that the current estimation of the respondent’s costs of the appeal was $65,000,
2) again invited the appellant to provide details of its financial position, and
3) informed the appellant that:
If you provide by 12 noon on Thursday 9 May 2013 information that establishes that Hanna has the capacity to pay any adverse costs order that may be made against it our client may not proceed with the application for security for costs. If by 12 noon on Thursday 9 May 2013 you have not provided the information requested in this letter or if you are otherwise unable to demonstrate Hanna’s ability to meet an adverse costs order in the amount of $65,000, our client will proceed to file and serve an application for security for costs.
I understand that the appellant did not reply to this letter.
Thus, on 9 May 2013 the appellant filed its application for security of costs of the appeal. This application is supported by the affidavit sworn 9 May 2013 by Mr Roser. Mr Roser estimates that the respondent’s costs of the appeal assessed on a party-party basis for a two day hearing would be between $55,000 and $65,000.
On 16 May 2013 the appellant’s appeal for directions and the respondent’s application for security for costs of the appeal both came on for hearing before me. As before, Mr Hanna appeared on behalf of the appellant and, on this occasion, Mr Bird, solicitor, appeared for the respondent. As the appellant had not responded to the respondent’s application for security for costs of the appeal, I stood over the appellant’s appeal and the respondent’s application to today.
On 28 May 2013 the appellant filed Mr Hanna’s affidavit sworn 27 May 2013. This affidavit is 29 pages in length, it contains 145 paragraphs and it has 31 annexures. It sets out, in broad terms, the basis upon which a court may make an order for security for costs, whether in relation to a claim to be heard or in relation to an appeal. It is a rambling critique of the evidence adduced before Refshauge J. It sets out in detail, with some parts highlighted in yellow, the appellant’s complaints about the hearing before Refshauge J and his Honour’s findings of fact and application of the law. However, it does not, as it should have, set out details of the assets, if any, and the liabilities, if any, of the appellant.
It is beyond argument that the court has the power to order the appellant give security for the costs of the appeal (see Hughes v Janrule Pty Ltd (2011) 177 ACTR 1; section 37J(1)(k) of the Supreme Court Act1933 (ACT); and rule 5302 of the Court Procedures Rules 2006 (ACT)).
Also, it is beyond argument that an application by a party that another party give security for costs, whether for a hearing at first instance or an appeal, should be made promptly. As I said to Mr Roser on 24 April 2013: “The longer your client delays on any application for security for costs the less likely it is that security would be ordered.” However, the respondent raised the issue of security for costs of the appeal in Mr Roser’s letter dated 17 September 2012 (see paragraph 7 above) and it cannot be said that the appellant is either surprised or prejudiced by the respondent’s application filed on 9 May 2013.
The court may, and often will, make an order that an appellant give security for the costs of an appeal when the appellant is a corporation and the court has reason to believe that the appellant will not be able to pay the respondent’s costs if ordered to pay them (see, by analogy, rule 1901(a) of the Court Procedures Rules 2006 (ACT)).
So, the first question is: does the evidence show that there is reason for the court to believe that the appellant will be unable to pay the respondent’s costs of the appeal if it is successful on the appeal? The evidence shows these things:
1) the appellant is a company limited by 10 $1 shares;
2) the appellant has not lodged an annual report since the return lodged on 20 January 2003;
3) the appellant is the registered proprietor of units 1 and 2, section 39, block 42, volume 1815, folios 21 and 22 in the District of Mawson in the ACT;
4) units 1 and ,2 section 39, block 42, volume 1815, folios 21 and 22 are subject to a caveat lodged on 4 June 2007 by Mr Hanna on behalf of the Trustee for the Wagdy Hanna Superannuation Fund preventing the registration of all instruments relating to the units.
I conclude, accordingly, that the appellant does not have any assets and that, therefore, there is strong and compelling reason to believe that the appellant would be unable to pay the respondent’s costs of the appeal if it is ordered to pay them. I note, and am comforted by, the fact that the appellant has not given any details of its assets, if any, and its liabilities, if any. Accordingly, I am confident in my conclusion that there is a reason to believe that the appellant would be unable to pay the respondent’s costs of the appeal if it is ordered to pay them.
The next question is this: should, in the exercise of discretion, an order that the appellant give security for the costs of the appeal be made?
This question might require, by analogy, a consideration of the discretionary factors referred to in rule 1902(1) of the Court Procedures Rules 2006 (ACT) that are relevant to the appellant’s appeal, as to which I comment:
a) I do not know anything about the means of Mr Hanna who, as I have said, is the secretary and majority shareholder of the appellant and who has appeared on behalf of the appellant;
b) although I have not read the entire transcript of the hearing before Refshauge J, I consider that the appellant’s prospects of success, both with and without the fresh or additional evidence that the appellant wishes to adduce on the hearing of the appeal, are slim at best and, as to the appeal related to the issue of the deed of settlement entered into by the appellant and the respondent in relation to the Federal Court proceedings, are nil;
c) I accept that the appeal is genuine in the sense that Mr Hanna believes that the appellant was treated unfairly during the hearing before Refshauge J, although it is clear that Mr Hanna cannot accept that Refshauge J made his decision on the evidence placed before him by both the appellant and the respondent;
d) I have concluded already that the appellant lacks financial resources to pay the respondent’s costs of the appeal if it is ordered to pay them;
e) I cannot see that the appeal involves a matter of public importance;
f) I have said already that the respondent’s delay in filing its application seeking an order that the appellant give security for the respondent’s costs of the appeal did not cause either surprise or prejudice to the appellant.
Thus, I am of the opinion that the appellant should give security for the respondent’s costs of the appeal.
I order that:
1) The appellant give security in the amount of $55,000 for the respondent’s costs of the appeal by lodging $55,000 cash or a bank guarantee in the amount of $55,000 with the Registrar of the Court within 28 days from today, that is on or before 27 June 2013;
2) the appellant pay the respondent’s costs of the application for security for costs, such costs to be assessed on a party-party basis and to be paid on completion of the hearing of the appeal or, if the security is not given within 28 days from today, that is on or before 27 June 2013, on the expiration of 28 days from today;
3) the appeal be stayed pending the appellant giving security in the amount of $55,000 for the respondent’s costs of the appeal;
4) if the appellant fails to give security in the amount of $55,000 for the respondent’s costs of the appeal within 28 days from today, that is, on or before 27 June 2013, the appeal be deemed to have been dismissed and the orders of Refshauge J confirmed, in which event the appellant is to pay the respondent’s costs of the appeal to date, such costs to be assessed on a party-party basis.
I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court.
Associate:
Date: 6 June 2013
Counsel for the appellant: In person
Counsel for the respondent: Mr M Roser
Solicitor for the respondent: Ashurst Australia
Date of hearing: 27 February, 11, 24 April, 16, 30 May 2013
Date of judgment: 30 May 2013
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