Charara v Integrex Pty Ltd [2010] NSWCA 342 | Case summary

7 December 2010 Charara v Integrex Pty Ltd Ex tempore judgment 1 McColl JA: This is an application for security for costs made by Integrex Pty Ltd, the respondent to an application for leave to appeal brought by Jamal Charara. The application for leave to appeal has been listed for hearing on 8 February 2011. 2 By notice of motion filed on 18 November 2010, Integrex seeks an order that Mr Charara provide security for costs in the sum of $20,000, or such amount as this Court deems fit, such security to be paid within 14 days and an order that, until such security is provided, the proceedings be stayed. 3 In the underlying proceedings Mr Charara seeks to recover from Integrex a debt in the amount of $3,200, which he asserts was assigned to him. He served a statutory demand for that amount on Integrex. Palmer J set the statutory demand aside on the basis that there was a disputed issue of fact as to whether notice of the assignment had been given and that that issue of fact must go to trial: Integrex Pty Ltd v Charara [2010] NSWSC 1131. Mr Charara seeks leave to appeal from that judgment. 4 The notice of motion was returnable on 6 December 2010 in the referrals list. When I called through that list at 10.15am yesterday, Mr Charara appeared as did Integrex's solicitor. That solicitor informed the court that counsel was not available for the hearing of the matter in the morning, but would be available at 2pm. I stood the matter down to 2.15pm to meet counsel's convenience. 5 At 2.15pm, Integrex's solicitor informed the court that counsel was not available and asked that the matter be adjourned until 12 December 2010. Mr Charara informed the Court that he had returned from overseas specifically for the hearing of the notice of motion and that an adjournment of that length would inconvenience him. In those circumstances, I adjourned the matter for hearing this morning. 6 This morning Mr O'Connor of counsel has appeared for Integrex and Mr Charara appears in person. 7 Mr O'Connor read the affidavit of Mr Bosman dated 17 November 2010. That affidavit, relevantly, recorded Mr Bosman's experience, the fact that he had sent a letter to Mr Charara seeking information as to his financial position and affairs and received no response. It also annexed a copy of a New South Wales Land Titles Registry search extract of 10 November 2010 disclosing that Mr Charara did not own any real property in this State. Mr Bosman also deposed to the fact that Integrex had incurred legal costs of approximately $26,500 in relation to the underlying proceedings. He estimated the costs likely to be incurred in defending "the defendant's appeal" to be in the vicinity of $20,000, including legal professional costs and disbursements in relation to the preparation of appeal books and the like, and briefing counsel. He estimated that a hearing would take approximately one day. 8 Mr Charara resists the application for security for costs. He filed an affidavit on 30 November 2010, which unfortunately had not, by today's date, been received by Integrex's solicitors, nor, regrettably, had it yet found its way to the court file. He set out some chronological matters dealing with his advice to the court about his departure overseas. He also points out, correctly, that when the leave application comes on the parties, in substance, will be given only a short amount of time to argue the point. He also points out, again accurately, that if he were granted leave, having regard to the narrow scope of facts apparently canvassed in the court below, this Court would most probably order that the White Book stand as the Appeal Book in the proceedings. 9 Mr Charara contends, in the light of those propositions that, based on his experience as a self-represented litigant in Australia since 1997, Mr Bosman's estimate of costs are - this is my word - excessive. 10 Prior to adjourning the matter yesterday, I drew Integrex's solicitor's and Mr Charara's attention to the decision of Handley AJA in Fleming v Marshall [2010] NSWCA 152. In that decision (at [12]) his Honour pointed out that the provisions in the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") 51.50 authorising the Court of Appeal to make orders for security for costs do not apply to an application for leave to appeal. I also drew the attention of those present to the alternative avenues for such an application, namely, either UCPR 42.21 or the inherent jurisdiction of the court. 11 Mr O'Connor submitted that this court would exercise the inherent jurisdiction of the court to make the order for security recognizing, as did Mr Charara, that none of the provisions of UCPR 42.21 would, on their face, give the court jurisdiction to make an order for security for costs against Mr Charara. 12 The fact that rules such as UCPR 51.50 do not apply to applications for leave to appeal is not apparently unique to New South Wales. My brief researches overnight have revealed two decisions, one of the Court of Appeal of the Supreme Court of Queensland, Bell v Bay-Jespersen [2004] QCA 68; 2 Qd R 235 and a decision of Mildren J in the Court of Appeal of the Supreme Court of the Northern Territory, Iskandar v Merpati Nusantara Airlines [2006] NTCA 3; (2006) 16 NTLR 22 in which, absent an explicit statutory power conferring jurisdiction to order security for costs on an application for leave to appeal, the court considered whether it could otherwise grant such relief. 13 Mildren J's decision is of particular utility because his Honour considered the circumstances in which the court would exercise its inherent jurisdiction to order security for costs in the case of leave applications. As his Honour pointed out (at [12]) in JH Billington Ltd v Billington [1907] 2 KB 106, Lord Alverstone CJ said that the court would be, "slow to order security for costs on an appeal from a Master or a judge in chambers, and would only do so in a very exceptional case." 14 Mildren J also drew attention to a decision of Toohey J in Bahr v Nicolay (No 1) [1987] HCA 32; (1987) 163 CLR 490 in which his Honour rejected an application for security for the costs for an application for special leave to appeal to the High Court in the absence of proof that the application was an abuse of process. In that case, Toohey J did not express a view on the likely outcome of the application for special leave. In Bell's case, the Queensland Court of Appeal did order security pursuant to r 670 of the Queensland Uniform Civil Procedure Rules 1999, which is broadly expressed in terms which in my view would encompass the breadth of the discretion available under the inherent jurisdiction. In that case, the Queensland Court of Appeal ordered security principally because the application for leave to appeal had no merits or prospects of success. 15 It is clearly established that there is an inherent jurisdiction in this court to order security for costs: Green v CGU Insurance Limited [2008] NSWCA 148; (2008) 67 ACSR 105 (at [33]) per Hodgson JA (Campbell JA agreeing). Hodgson JA referred with approval to Rajski v Computer Manufacture & Design Pty Ltd [1982] 2 NSWLR 443, in which Holland J analysed the question of whether there was an inherent jurisdiction to order security for costs and concluded (at 447) that there was as part of courts' "inherent power to regulate their own practice and procedure to procure proper and effective administration of justice and prevent abuse of process." His Honour rejected (at 448 - 449) a submission that the inherent jurisdiction was confined by reason of the limited past examples of its exercise, referring to Billington (at 109) where Lord Alverstone CJ in rejecting a like submission stated: "…the…Superior Courts had theoretically the power to order security to be given in all cases where they thought it just to do so." 16 Holland J's decision was affirmed on appeal in Rajski v Computer Manufacture & Design Pty Ltd [1983] 2 NSWLR 122, albeit in a part of that decision not necessary to the reason for disposing of the appeal. 17 Both Holland J's decision in Rajski and the matters to which I have referred in Iskandar, indicate the exceptional nature of the case in which the court, in exercise of its inherent jurisdiction, would consider ordering security for costs. Although Holland J referred to the jurisdiction as being one to "prevent abuse of process", I do not understand the jurisdiction to be confined to such cases - as is apparent from Green (at [7(2)], [36] - [40]). The factors informing the discretion cannot be stated exhaustively - the only limitation is that the discretion be exercised judicially by determining how "on the whole, justice will be best served": King v Commercial Bank of Australia Ltd [1920] HCA 62; (1920) 28 CLR 289 (at 292) per Rich J. 18 I am acutely conscious of the fact that what is involved in the leave application is a short point which will be disposed of, at least insofar as the leave application is concerned, in a very short period of time. I am also conscious that Mr Charara is a personal litigant and that the impecuniosity of such persons is a factor, albeit not a decisive one, in considering whether security for costs may be ordered. 19 I am concerned, however, that the amount involved is small and that the effect of Palmer J's decision is to send to trial an issue of fact over that small amount. Further, on its face, Mr Charara's prospects of obtaining leave to appeal do not appear great. I would not go so far as to say it is an abuse of process. Nevertheless, it is relevant, as the decision in Bell indicates, to take into account the prospects of success as one of the factors. 20 I am also conscious that, other than in Mr Bosman's affidavit, there is no evidence before the court of Mr Charara's financial position. He does not therefore put in issue Mr Bosman's assertions about his ability to meet Integrex's costs, should the application for leave be unsuccessful, let alone his ability to meet the costs incurred to date. 21 Mr Bosman's affidavit, however, proceeds on an apparent misapprehension that the security for costs which are sought to be provided relate to an appeal, as opposed to an application for leave to appeal. To that extent, I would agree with Mr Charara's statement in his affidavit and his submission that the costs estimates are excessive. 22 In my view, having regard to the considerations to which I have referred, however, it is appropriate to order Mr Charara to provide security for costs of the application for leave to appeal. I would not however order that security be provided in the amount set out in either paragraphs 13 and 14 of Mr Bosman's affidavit. 23 Having regard to the fact that the application is for leave only and the fact that courts ordering security are not bound by legal representatives' estimates of the costs of hearings in considering the quantum of such an order (Pioneer Park Pty Ltd (In liq) v Australia & New Zealand Banking Group Ltd [2007] NSWCA 344; (2007) 25 ACLC 1,707 (at [66])), I would order that Mr Charara provide security for Integrex's costs of these proceedings in the sum of $1,000, such security to be paid into court within 14 days and order that until such security is provided, these proceedings be stayed. 24 Integrex seeks an order for costs of and incidental to this motion. I would not be minded to order Mr Charara to pay costs of yesterday, having regard to the fact that Integrex was not ready to proceed. 25 I order Mr Charara to pay Integrex's costs of and incidental to this motion, with the exception of the costs of and incidental to it in respect of 6 December 2010. **********

Charara v Integrex Pty Ltd

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