Bahr v Nicolay

Mr. and Mrs. Bahr are seeking special leave to appeal from part of a judgment of the Full Court of the Supreme Court of Western Australia given on 25 May 1987 which dismissed a claim by them against Mr. and Mrs. Thompson. The application for special leave is pending and is likely to be heard in Melbourne at the end of the August sitting of the Court. Affidavits have been filed in support of and in opposition to the grant of an order for security for costs. At the outset a question arises as to whether such an order is competent. The question arises in this way.

Since the amendments to s. 35 of the Judiciary Act 1903 Cth made by Act No. 12 of 1984, no appeal may be brought from a judgment of the Supreme Court of a State "unless the High Court gives special leave to appeal": s. 35(2). This requirement is reflected in the High Court Rules, O. 69A of which deals with applications for special leave to appeal, and O. 70 of which deals with appeals. As will appear later in these reasons, O. 70 contains express provision for security for costs; O. 69A does not.

Before Act No. 12 of 1984, s. 35 of the Judiciary Act provided an appeal as of right in certain cases, with a general provision whereby the High Court might grant special leave to appeal in respect of any judgment, final or interlocutory, and whether in a civil or criminal matter.

Section 77s of the Judiciary Act finds its place in Pt Xb which was inserted by Act No. 138 of 1979, some five years before the amendments to s. 35. Section 77s(1) reads:

The Rules of Court may make provision for and in relation to the giving, in an appeal to the Court, of security for the prosecution of the appeal without delay and for the payment of costs that may be awarded against the appellant. The sub-section has remained unchanged. The term "appeal" is defined in s. 2 as including "an application for a new trial and any proceeding to review or call in question the proceedings decision or jurisdiction of any Court or Judge".

Earlier the High Court Procedure Act 1903 Cth had contained provision for security in the case of appeals to the High Court from a judgment of the Supreme Court of a State: ss. 35, 36. That Act was repealed by the High Court of Australia Act 1979 Cth which has no provision relating to security.

Before the introduction of O. 69A and the reformulation of O. 70, both taking place in 1986, security for costs was dealt with by O. 70, r. 10 which had been made in 1985. Rule 10(1) simply empowered the Court or a justice to order an appellant to give security "for the prosecution of the appeal without delay and for the payment of such costs as may be awarded by the Court to the respondent". In Lucas v. Yorke [1] Brennan J. spoke of the discretion under O. 70, r. 10 as "absolute".

1. (1983) 58 A.L.J.R. 20, at p. 21; 50 A.L.R. 228, at p. 229.

Turning now to the present situation, mention has already been made of s. 77s of the Judiciary Act. Order 70, r. 7(1) provides that the Court or a justice may, "at any time on the application of a respondent to an appeal", order the appellant to give security for the prosecution of the appeal without delay and for the payment of such costs as may be awarded to the respondent. There is no such provision in O. 69A - "Applications for Special Leave to Appeal". There can be no doubt that O. 70, r. 7 is only available once leave to appeal has been given. This follows from the language of the rule and from the clear distinction drawn in the Rules themselves between an appeal and an application for special leave to appeal. See also Brennan J. in Jennings Constructions Ltd. v. Burgundy Royale Investments Pty. Ltd. [No. 1] [2] where his Honour said: "An application for special leave to appeal is not, in my opinion, an appeal within the definition of that term in s. 2 of the Judiciary Act."

Thus, neither within the Judiciary Act nor within the High Court Rules is any reference to be found on the subject of security for the costs of the prosecution of an application for special leave to appeal. Can Mr. and Mrs. Thompson pray in aid some inherent power of the Court?

In Parsons v. Martin [3] a Full Court of the Federal Court said:

In our opinion a court exercising jurisdiction conferred by statute has powers expressly or by implication conferred by the legislation which governs it. This is a matter of statutory construction. We are of opinion also that it has in addition such powers as are incidental and necessary to the exercise of the jurisdiction or the powers so conferred. 1. (1984) 5 F.C.R. 235, at p. 241.

Certainly there is no express power to order security for costs in the case of an application for special leave to appeal. Nor is such a power to be implied from anything in the Judiciary Act. If there is an inherent power, it must be because such a power is incidental and necessary to the exercise of jurisdiction conferred on the High Court or incidental and necessary to some power conferred. I can find nothing in the Judiciary Act or in the High Court Rules from which it might be inferred that a power to order security for the costs of an application for special leave to appeal is incidental and necessary to the exercise of some other power conferred on the Court. Inherent power, if it exists at all in the present case, must exist because it is incidental and necessary to the exercise of jurisdiction vested in the Court. This is only another way of acknowledging the power of a court to regulate its procedure and prevent the abuse of its process, a power which may include the awarding of costs and the provision of security: see Rajski v. Computer Manufacture & Design Pty. Ltd. [4] .

This, I think, was the approach taken by Brennan J. in Jennings Constructions Ltd. v. Burgundy Royale Investments Pty. Ltd. [No. 1], though in a different context. His Honour was concerned with an application to stay an order of the Supreme Court of the Northern Territory cancelling liens registered by the applicant over a Crown lease under the Workmen's Liens Act 1893 SA. His Honour said [5] :

The jurisdiction to grant a stay in the present case depends on whether a stay is necessary to preserve the subject matter of the litigation. If an application for special leave to appeal would be futile unless a stay is granted, the jurisdiction arises. 1. (1986) 161 C.L.R., at p. 683.

Subject to a reservation mentioned later in these reasons, an order by way of security for the costs of the prosecution of the present application for special leave to appeal is not incidental or necessary to the exercise of the jurisdiction conferred on this Court to entertain the application. The preservation of the subject-matter of the litigation does not arise nor is there any proceeding that would be rendered futile by the absence of such an order. The most that could happen is that the respondents to the application for special leave could incur costs which might be difficult, perhaps impossible, to recover.

Certainly one can understand the respondent to an application for special leave to appeal wanting to protect himself as much as possible on the question of costs. But, although O. 69A, r. 5 requires an application for special leave and any affidavit in support to be served on parties to the proceedings in the court below, it is not incumbent upon a respondent to appear at the hearing of the application. A respondent may decide in the particular circumstances, including the financial position of the applicant, not to appear and so avoid incurring costs. It will still be incumbent on the applicant to satisfy the Court that a grant of special leave is appropriate in terms of s. 35A of the Judiciary Act.

The reservation mentioned earlier in these reasons comes about in the following way. Counsel for Mr. and Mrs. Thompson submitted that the application for special leave to appeal made by Mr. and Mrs. Bahr was an abuse of the process of the High Court and that this afforded a basis for the exercise of an inherent power resting in the Court to prevent such an abuse, an aim best achieved by requiring the Bahrs to provide security for the costs of their application.

If the application for leave to appeal was an abuse of process that could be prevented only by ordering security for costs, the argument would have much force. But I am not persuaded that the application for special leave is an abuse of process. It is true that the Bahrs failed in their claim against the Thompsons, both at first instance and before the Full Court. That is a factor that may be taken into account if O. 70, r. 7(1) is invoked. But of itself it says nothing as to abuse of process.

It is not appropriate for me to express a view as to the likely outcome of the application for special leave. It is enough for present purposes to note that what the Bahrs sought to do in their litigation in the Supreme Court was to establish that an agreement they made with the first respondent, Mr. Nicolay, entitling them to repurchase land they sold to Mr. Nicolay, should prevail against the Thompsons who bought the land from Mr. Nicolay with knowledge of the agreement made by their predecessor in title. The Bahrs face some formidable authorities relating to the scope of indefeasibility of title under the Torrens system. And they have other difficulties relating to their readiness and ability to complete what was described in the court below as the "buy back" arrangement.

But having said that, I do not think it right to conclude that, in pursuing an avenue properly open to them, the Bahrs are abusing the process of this Court. It would be a strong case indeed that enabled a court to reach that conclusion.

Mr. and Mrs. Thompson point to the history of this litigation. They argue that the conduct of Mr. and Mrs. Bahr in connexion with a scheme of arrangement under Pt X of the Bankruptcy Act 1966 Cth and an application by them for legal aid evidence duplicity before the Supreme Court. The Bahrs have filed an answering affidavit in the course of which they accuse the Thompsons of having aggravated their financial difficulties. Having taken all matters in the affidavits into account, I am far from persuaded that the application for special leave to appeal is an abuse of process of the Court.

Needless to say, nothing in these reasons is intended to bear on the strength or otherwise of the application for special leave to appeal or on the question of security for costs should special leave be granted.

The second respondents' application for security for costs in respect of the application for special leave to appeal must be dismissed.