Weissora, B. v Official Receiver in Bankruptcy

[1986] FCA 97

CATCHWORDS

Practlce and procedure - security for casts of appeal -

discretion - impecuniosity of appellant - resident outside

jurisdiction.

Bankruptcy Act 1366 5.131

Federal Court of Australia Act 1375 5.56

Federal Court of Australla Rules 0.28 0.52

Beard v. Prestise Bakinq Industries PtV. Ltd.

(1980) 51 F.L.R. a54

Willey v. Svnan (1935) 54 C.L.R. 175

BOHUMILA WEISSORA v. THE OFFICIAL RECEIVER IN BANKRUPTCY

N. No. G 229 of 1985

l

Northrop S .

Sydney

20 February 1986

(Not considered appropriate for general distribution.)

IN THE FEDERAL COURT OF AUSTRALIA	l
1
NEW SOUTH WALES DISTRICT REGISTRY	) N . No. G 223 of 1385
1
GENERAL DIVISION	)
BETWEEN :

BOHUMILA WISSORA Appellant

and

THE OFFICIAL RECEIVER IN BANKRUPTCY Respondent

COURT: NORTHROP J.

W: 20 FEBRUARY 1986

PLACE: SYDNEY

MINUTES OF ORDER

THE COURT ORDERS THAT:-

1.	The proceedings, being the	appeal, be stayed until the
appellant provides security	for costs in accordance with

clause 2 of thls order or until	23 April 1386, whichever
first occurs.

2. On or before Wednesday, 23 April 1986, the appellant do give security for costs by way of payment into Court of the sum of $1,800.

3 . In default of compliance by the appellant wlth order 2,

the appeal is to stand dismissed and the appellant is to'
pay to the respondent, the respondent's costs of the appeal.
4.	The costs of this application to be the respondent's

costs in the appeal.

I	5.	The appeal date for hearing on	26 February	1356 be
vacated.

(Settlement and entry of Orders	is dealt with in 0.36 of the
Rules of Court.)

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IN THE FEDERAL COURT OF AUSTRALIA	)
1
NEW SOUTH WALES DISTRICT REGISTRY	1 N. No. G 229 of 1985
1

DIVISION GENERAL )

BETWEEN :	, I
I,'

BOHUMILA WEISSORA Appellant I

and

THE OFFICIAL RECEIVER IN BANKRUPTCY Respondent

COURT:	NORTHROP 3.
U:	20 FEBRUARY 1986

PLACE : SYDNEY

M TEMPORE REASONS FOR JUDGMENT

The respondent to this appeal, the Official

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Receiver in Bankruptcy, is moving the Court for orders that the appellant, Bohumila Weissora, give security for costs of

the appeal by way of payment into Court of the sum of $2,500.

That amount is calculated on the basis of the costs incurred

to date on a party and party basis, approximately $676, and

the anticipated future costs fur the hearing of the	appeal,
approximately $1,800.

In the present appeal, judgment was given by the

Federal Court on 30 July 1985 on an application by the

respondent to the appeal, that certain property registered in

the name of the appellant, was property divisible amongst the

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credltors of the bankrupt, Zdnenek Weiss, the son of the respondent, being property that was acquired by the bankrupt

after the commencement of his bankruptcy and before his

discharge. The orders made on that application to the

Federal Court are set out at pages 43 and 44 of the appeal

book herein and need not be referred to in detail. It is

sufficient to say that the appellant gave notice of appeal

against that judgment on 19 August 1985; that the appellant

has prepared appeal books, and a date has been fixed for the

hearing of the appeal on 26 February 1986.

The present motion was taken out on 14 February

1986 and is supported by an affidavit by Judith Ann Denise

Trembath, a legal officer in the employ of the Australian

Government Solicitor. The facts yiving rise to the orders

made by the Fedet-a1 Court, the subject of the appeal, are set

out in the reasons for judgment of Lockhart J., commencing at

page 35 of the appeal book and need not be repeated in any

detail. It is sufficient to say that the bankrupt became

bankrupt on his own petition on 28 April 1978 and is still an

undischarged bankrupt.

The property in dispute is a flat in Bellevue Hill

and is registered in the name of the mother of the bankrupt, the present appellant, although she provided no money towards

its purchase. The appellant resides In Prague in

Czechoslovakia. She was last in Australia some 10 or 15

years ago and she paid no part of the consideration for the

transfer of the property in dispute, Flat 5/157 Vlctoria

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Road, Eellevue Hill. The consideration was provided by the

bankrupt. The appellant is a pensioner. She has always resided in Czechoslovakia and is aged 77 years, and from the

material before the Court, the Court draws the inference that

she would be unable to pay the costs of the appeal if her

appeal is dismissed. In addition, the Court is conscious of

the fact that she resides overseas and that if the respondent

succeeds in defeating the appeal, in all probability the

respondent would not be able to recover the costs of the

appeal from any person.

In those circumstances, questions arise as to

whether the respondent is entitled to an order for security.

Sub-sections 56(1) and ( 2 ) of the Federal Court of

Australia Act 1976 provide:- , .

"56. (1) The Court or a Judge may order a plaintiff 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.

( 2 ) The security shall be of such amount, and

given at such time and in such manner and fQrm, as

the Court or Judge directs."

Order 28 of the Federal Court Rules deals with security for costs and on its face it appears to be directed to the original jurisdiction of the Federal Court, although the interpretation rule, rule 1, gives a wide meaning to the

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wards "applicant" and "respondent", for Instance, under that

rule, references in Order ZB to an applicant extend to any person who makes a claim for relief in any proceeding, and

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references to a respondent extend to any person against whom

a claim f o r relief is made in any proceading.

Rule 3 refers to grounds for the ordering of

security. The relevant provision is that where in any

proceeding it,appears to the Court on the application of a

respondent that an applicant is ordinarily resident outside

Australia, the Court may order the applicant to give such

security as the Court thinks fit for the costs of the respondent of and incidental to the proceeding. In addition

to that, under 0.52 r.20, which provides for security for

costs on an appeal in the appellate jurisdiction of the , -

Court, it provides that unless the Court or a Judge otherwise I.

directs, no security for costs of an appeal to the Court

shall be required. _ .

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In Beard v. Prestiqe Bakinq Industries Ptv. Ltd.

(1980) 51 F.L.R. 454, I had occasion to consider the question

of the ordering of security for costs in the appellate

jurisdiction of the Federal Court. In the appellate

jurisdiction the discretion is wider than in the original

jurisdiction, and in the present case questions of the

poverty of the appellant is a relevant circumstance for

consideration whereas, except in relation to matters where

the applicant in proceedings in the original jurisdiction is

a corporation, the poverty of	an applicant is normally not a
relevant conslderation.

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In the present case, counsel for the appellant has

urged the Court that it should exercise Its discretion in

favour of the appellant, and in so doing, has urged the Court

that in reality and on a proper analysis of the matter, the

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appellant is seeking to protect her rights of property in

Australia and because she is doing that, she should be

treated as a defendant and not as an applicant, or in the

appeal, should be treated as the respondent and not as an

appellant because of her interest in maintaining her rights

of property in Australia. Counsel referred to and relied

upon the expressions of opinion in the case of Willev v.

Svnan (1935) 54 C.L.R. 175 and in particular what was said by

Dixon J. as then he was at page 184.

That was a case decided on its own very special

facts where, because of the provisions of the Customs Act, a

person who claimed goods which had been seized was compelled

to take proceedings in the High Court, otherwise those goods

wet-e forfeited to the Commonwealth. In those circumstances,

on proper analysis, it was held that a person who commenced

proceedings under those provisions, although a plaintiff, was

in reality a defendant and therefore should not be ordered to	’. L .
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give security for costs of those proceedings.
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That is a very different type of case to the

present. Here, the respondent took proceedings under s.131

of the Bankruptcv Act in relation to certain property. The

appellant was named as a respondent to that application and

the Court made orders against her. She is now seeking to

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review that decision by way of appeal and in my opinion,

there is no basis for saylnq that she is in the nature of a

defendant seeking to protect her rights of property and

therefore, in the exercise of its discretion, the Court

should not compel her to give security.

In my opinion, this is a case where security should

be awarded and in	so doing, I	rely upon the very special	, L
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circumstances of the case as disclosed in the facts glven in the reasons for judgment of Mr. Justice Lockhart. The fact

that on the face of it, the appellant is outside the

jurisdiction and with the possible exception of the subject matter of the dispute, has no assets in Australia and on an inference drawn from the facts, being a pensioner, she has no

assets at all from which costs of the respondent could be

paid and that therefore her impecuniosity is such that she is

unlikely to be in the position to be able to pay costs if the

appeal fails. This is a case where the appellant should not

be allowed to proceed unless security is given.

Against that is the fact that the respondent has

delayed in seeking the order for security for costs. I

adverted to this at the very opening of these reasons for

judgment. Delay may be a reason for refusing to order

security for costs. Because of that delay, the appellant has

incurred costs in the preparation of the appeal book and the

respondent has incurred costs which are claimed to be in	the
sum of about $676.

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In all the circumstances, the security for costs

should relate only to future costs, although there is

authority for the preposition that past costs can also be

included in such an order for security, but is a matter for

discretion. The order I propose to make is limited to the

future costs which are estimated to be approximately $1,800.

The orders that the Court makes, therefore, are as

follows : -

1. The proceedings, being the appeal, be stayed

I ! until the appellant provides security for

costs in accordance with clause 2 of this

order or until 2 3 April 1986, whichever first

occurs.

2 . On or before Wednesday, 23 April 1986, the

appellant do give security for costs by way of

payment into Court of the sum of $1,800.

3. In default of compliance by the appellant with

order 2 , the appeal is to stand dismissed and

the appellant is to pay to the respondent, the

respondent's casts of the appeal.

4 . The costs of this application to be the

respondent's costs in the appeal.

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5.   The appeal date for hearing on 26 February

1986 be vacated.

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