Findlay v State of Victoria & Ors [2008] VSCA 255

Court of Appeal (Vic)|2008-12-10|Before: MAXWELL P and ASHLEY JA

PRACTICE AND PROCEDURE - Appeal - Application for security for costs - Impecunious appellant - Impecuniosity of litigant sufficient to constitute exceptional circumstances at appellate level - Whether countervailing considerations - Prospects of success on appeal - Whether issues of general importance raised by appeal - Whether appellant's financial position brought about by conduct of respondent - Application refused - Tait v Bindal People [2002] FCA 322 considered.

2 At the relevant time, Ms Findlay was a senior constable with Victoria Police based in Melbourne. She was in a relationship with another police officer (K). She successfully applied for a position with the Swan Hill Traffic Operations Group and was due to commence duty on 24 July 1995. Shortly before that date, she was, as she claimed, assaulted by K. K had also applied for a vacant position at Swan Hill, but was unsuccessful. He told Ms Findlay that he did not want her to go to Swan Hill.

3 Ms Findlay claims that, soon after she arrived in Swan Hill and took up her new duties, she was suffering from mental health problems as a direct result of the assault. She alleges that she was bullied and harassed by members of Victoria Police stationed at Swan Hill, which further affected her mental health. The Swan Hill division of Victoria Police was, at the relevant time, under the control of the second defendant, Chief Inspector Button. The Mildura division was under the control of the third defendant, Chief Inspector Henry, who subsequently became the District Commander for Victoria Police District N, which included both the Mildura division and the Swan Hill division.

4 Ms Findlay claims that the State of Victoria, and her superiors (Button and Henry) were in breach of their respective duties to take reasonable care for her safety while she was working as a member of Victoria Police, so as to protect her from being unnecessarily exposed to a reasonably foreseeable risk of injury. She relies on the common law duty of care and, in the case of the State of Victoria, on what is said to be a contractual obligation to the same effect.

5 The judge dismissed all of Ms Findlay's claims. His Honour was satisfied that both Button and Henry had taken reasonable care for her safety and welfare at all relevant times, 'in what was clearly a most difficult workplace situation.' Likewise, in his Honour's view, the State, acting through its servants and agents, had taken reasonable care of Ms Findlay's safety.

6 In relation to the contract claim, the Court accepted in part the submission made on behalf of Victoria Police that no contract of employment existed between the State of Victoria and Ms Findlay. His Honour held that the contractual position was subject to the provisions of s 14(4) of the Accident Compensation Act 1985, under which a member of the police force is deemed - for the purposes only of that Act - to be employed by the Crown under a contract of service.

7 Ms Findlay had also sued two other police officers (C and L), alleging intentional infliction of psychiatric injury through bullying. Those claims were also dismissed. Ms Findlay appealed against the dismissal of those claims but that part of the appeal has been resolved. Accordingly, the appeal now concerns only Ms Findlay's claims against the State and Messrs Button and Henry.

8 Under rule 64.24(2), the Court of Appeal may 'in special circumstances' make an order that security be given for the costs of an appeal. The applicable principles were summarised by Nettle JA in Li v Herald and Weekly Times Pty Ltd,[1] as follows:

There are then a number of authorities as to what may be regarded as constituting special circumstances. According to some, the ordinary rule in an appeal is that the poverty of the appellant is sufficient in itself to ground an order for security for costs of the appeal. Thus, for example, in Scerri v Northam Holdings Pty Ltd[2] and Smail v Burton,[3] it was said that it is the long and well established practice of the court that the inability of an appellant to pay a successful respondent's costs of an appeal constitutes special circumstances justifying an order that the appellant give security. Those authorities recognise, however, that the grant of security is an exercise in discretion, and so the general rule may yield to other considerations such as the likelihood of success in the appeal, whether the appeal raises an issue of general importance, whether the appellant's impecuniosity has been brought about by the respondent's conduct, and the nature of any property involved in the appeal. According to other authorities, the proper approach is to recognise that an appellant's impecuniosity is a significant consideration in favour of making an order for security for costs, but that it is not decisive of whether an order should be made, and thus that in each case it is necessary to weigh an appellant's impecuniosity in light of all the considerations arising in the case. The matter has been dealt with in this Court in recent times, and most recently, perhaps by my brother Redlich in Kenyon v Akeroyd.[4]

One consideration which may be relevant in that exercise is the appellant's chance of success on appeal. It has been said that entry into the merits of that appeal should be resisted unless there is a high degree of probability of failure. But a lack of prospects of success is nevertheless a significant consideration in favour of a grant of security.

9 The State argues that Ms Findlay's impecuniosity - which is not in dispute - is 'particularly oppressive' to the respondents. The State points out that Ms Findlay already has a significant existing liability, in that she is the subject of a substantial order for costs after the lengthy trial, and it is unlikely that she will be able to satisfy that order for costs. Further, according to the submission:

There is an anomaly in that it appears that despite her poverty [Ms Findlay] brings an appeal in which there will be great expense in the preparation of her appeal, including the preparation of massive appeal books, and yet when invited to do so is unable or unwilling to provide security for the respondents' costs.

The State argues that Ms Findlay's prospects of success on the appeal are low.

10 Reliance is placed on what was said by Spender J in Tait v Bindal People,[5] where his Honour said that the following passage from Cowell v Taylor[6] set 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.

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 appellate 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.

In a sense, it would be giving to a person who has been on the receiving end so as to speak of a determination by the courts a free hit at great cost to the other party in the appeal proceedings.[7]

His Honour also cited the following passage from Bethune v Porteous:[8]

[T]he 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.

11 The State is, of course, a model litigant and accepts that it must maintain a standard of fair play and must act reasonably, fairly and in accordance with good conscience. The State submitted, however, and we accept, that its obligations as model litigant do not prevent the State and its agencies from taking proper steps to protect their interests in litigation.

12 The submission for Ms Findlay accepted that, on appeal, an appellant's impecuniosity may be a sufficient reason to justify an order for security for costs. It was submitted, however, that no order should be made, because of a series of countervailing factors to which we now turn.

13 Ms Findlay's case at trial was that she had been subjected to bullying, obstruction, harassment, intimidation and abuse by other police officers. She alleged that there had been a large number of incidents, including a death threat. She made a number of complaints to Mr Button and to Mr Henry but alleges that, despite her complaints, there was no adequate investigation of the bullying and no investigation at all of the death threat. The bullying and harassment continued, according to Ms Findlay, until she became medically unfit for work and resigned from Victoria Police. She suffered very serious psychiatric injury for which she continues to receive ongoing treatment. Ms Findlay attributes the mistreatment in part to the fact that other officers at Swan Hill were aware, when she arrived, that she was making allegations of assault against K, a police officer.

14 The case for Ms Findlay on appeal will be that, in view of her having given uncontradicted evidence about 'numerous incidents', the judge erred in concluding that the bullying allegations were not made out. It will be submitted that Button and/or Henry knew, or ought to have known, that:

(b) L's posting to Swan Hill had been delayed because of that assault;

It will be further submitted that the judge ought to have found that:

(a) Both C and L had told Mr Button that Ms Findlay had mental problems;

(b) Mr Button formed the view, and told Mr Henry, that Ms Findlay's mental and emotional condition was a matter of serious concern;

(c) Mr Button formed the view, and told Mr Henry, that the conduct of C and L had 'aggravated a very serious condition of [Ms Findlay's] health'; and

(d) Ms Findlay had made complaints that her treatment by C and L was a cause of her emotional condition.

15 The central contention is that both Button and Henry failed to investigate Ms Findlay's complaints and that, had they done so, the severe deterioration in her condition which took place would have been prevented. Particular reference was made on this application to a tape recording of an interview between Ms Findlay and Mr Button in June 2006, in which she described very clearly to Mr Button the nature of the mistreatment by C and L, and the adverse effect it was having on her. Further, it is said that Mr Henry was asked by the Victoria Police Equal Opportunity Employment Office to investigate the death threat and the other circumstances but failed to do so. It is said that these matters raised squarely the scope of the duty owed to Ms Findlay by her superiors and by Victoria Police.

16 The submission from Ms Findlay was that her appeal had, at least, reasonable prospects of success. It was submitted, moreover, that this was a case where the appellant's impecuniosity resulted directly from the acts and omissions of the defendants (now respondents) during her employment with Victoria Police. Finally, it was submitted that issues of general public importance were raised by the appeal.

(a) the nature of the relationship between police officers in the course of their employment and, in particular, whether such officers are deemed to be in a relationship of master and servant with the State, or whether they remain servants of the Crown in accordance with Enever v The King;[9] and

(b) the development of the law of negligence and/or breach of employment contract in circumstances of workplace bullying, obstruction, harassment, intimidation and abuse.

18 There was some debate on the hearing of the application as to whether the first of these issues would arise. Senior counsel for the respondents argued that the case would stand or fall as one of negligence and that it would not be necessary for the Court to examine the contractual relationship between Ms Findlay and the State of Victoria. On the other hand, an affidavit filed on behalf of the respondents foreshadowed that the State would file a Notice of Contention which, we were informed, will challenge the finding of the trial judge that s 14(4) of the Accident Compensation Act 1985 'was enacted for the principle purpose of circumventing the problem raised by reason of the adoption and application ... of the Enever principle.' Senior counsel for the State conceded that, depending on how the issues on appeal came to be resolved, the question of the contractual relationship might indeed fall for determination. That is plainly a matter of importance.[10]

19 In our view, the appellant's submission should be upheld. We are satisfied that the countervailing factors relied on are of sufficient weight, in the circumstances, to outweigh the risk - which undoubtedly exists - that the appeal will ultimately fail and that the appellant will be unable to pay the respondents' costs of the appeal.

20 While it is not possible to undertake any detailed examination of the prospects of success on appeal, we are satisfied that there are some significant matters which warrant investigation on an appeal, both as to the events which happened and as to the more general question of the content of the duty to provide a safe workplace. The issue of workplace bullying and harassment is still relatively unexplored as an aspect of the general topic of workplace safety. It is also a significant factor on this application that, on the case which Ms Findlay brings, her state of impoverishment might have been avoided had her superiors discharged their duty of care and taken appropriate steps to investigate her complaints and to ensure that her psychological difficulties were addressed promptly.

[1] (Unreported, Supreme Court of Victoria, Court of Appeal, Nettle and Redlich JJA, 25 July 2007).

[7] Tait v Bindal People [2002] FCA 322, [3]-[4].

[10] See, in this regard Police Regulation Act 1958 s 13(3); Applicants A1 and A2 v Brouwer (No 2) [2007] VSCA 269; Kirkland-Veenstra v Stuart (No 2) [2008] VSCA 211.

Compensation Act 1985

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