The appropriate approach in principle
32 Like the costs power itself, the Court's power under s 56 is widely expressed. It is closely linked to the Court's general costs power and I see no reason to construe s 56 in a way which introduces discordance between the established approach to the costs direction in s 43 of the Federal Court Act. There is nothing in the text, context or purpose of either provision which suggests Parliament intended to constrain the discretions in s 43 or s 56 so as to place a litigation representative appointed under the Federal Court Rules in a different position in terms of potential exposure to costs to a party who had the conduct of a proceeding. A variety of factors may well mean the discretions are differently exercised, but the power exists.
33 The power conferred on the Court by s 56 to order payment of security for costs is a "wide power", which "must be exercised judicially, but that is the only relevant limitation", and "each case must depend on its own circumstances": Bell Wholesale Co Ltd v Gates Export Corporation (1984) 2 FCR 1 at 3-4.
34 The potential chilling effect of requirements to provide security for costs on individual litigants are well recognised, and the impediment which such orders could otherwise impose on access to justice means, at first-instance level, an individual impecunious litigant will rarely be ordered to provide security.
35 The State of Victoria contended there was a different approach generally taken on appeal and there are authorities which support that proposition. One explanation is that the judgment under appeal, representing the exercise of the litigant's right to access the court, is presumed to be correct: see Kennedy v McGeechan [1978] 1 NSWLR 314 at 315; Fletcher v Commissioner of Taxation (1992) 37 FCR 288 at 292 per Hill J.
36 Many authorities, and the State's submissions, refer to a case from the 19th century, Cowell v Taylor (1886) 31 Ch D 34, where Bowen LJ said (at 38):
The general rule is that poverty is no bar to a litigant, that, from time immemorial, has been the rule at common law, and also, I believe, in equity. 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.
37 It might be thought that a statement such as this is taken from a time where the law's performance on access to justice issues was less than admirable. For example, it was not until 1882 in England that a married woman was under general law entitled to own property, transact against it, or sue in her own name to enforce her rights in relation to such property in the courts: see Married Women's Property Act 1882 (UK). In Australia, similar provisions recognising the property rights of married women were first enacted in Tasmania and South Australia in 1883, with the other states following, some much later: see Married Women's Property Act 1883 (Tas); Married Women's Property Act 1883-4 (SA); Married Women's Property Act 1884 (Vic); Married Women's Property Act 1890 (Qld); Married Women's Property Act 1892 (WA); Married Women's Property Act 1893 (NSW).
38 For my own part and with respect to those who take a different view, I am not persuaded by an authority such as this that there should necessarily or generally be a different approach taken on appeal. Nor am I persuaded that some kind of presumption is to be applied on an appeal where an appellant is said to be impecunious, which seemed to be the import of the State's submissions. There is no authority binding on me which compels such an approach. The circumstances which obtained in litigation in the 19th century are too far removed from those of the 21st century for dicta such as this to be applied too literally. That is particularly so where there is, as here, a right of appeal. That right of appeal is not of any lesser quality than a right to issue proceedings in the first place. The task of a court on appeal by way of rehearing being the correction of error (see Branir v Owston Nominees (No 2) (2001) 117 FCR 424; [2001] FCA 1833 at [22] per Allsop J, and the cases cited therein), access to an appellate court is a central aspect of the administration of justice. More so, it might be said, where a litigant under a legal incapacity is concerned.
39 In Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 at [24], Gleeson CJ, Gummow and Kirby JJ observed:
mistakes, including serious mistakes, can occur at trial in the comprehension, recollection and evaluation of evidence. In part, it was to prevent and cure the miscarriages of justice that can arise from such mistakes that, in the nineteenth century, the general facility of appeal was introduced in England, and later its colonies.
40 Orders for security for costs are capable of interfering with the free exercise of that right both at an individual level and at a more general level because they are capable of being seen as a deterrent to the exercise of the right. When the applicant for security is a regular or repeat litigant in a particular court, or a particular jurisdiction, as is the case here, the possibility of a deterrent effect is greater.
41 In Dye v Commonwealth Securities Ltd [2012] FCA 992 at [26], in a proceeding considering applications for security for costs in two appeals from two separate proceedings heard together, Emmett J described some of the considerations which might be relevant to whether an order for security for costs should be made on an appeal:
The relevant considerations include, at least, the following matters:
(a) the prospects of success for the appeals;
(b) the risk that an order for costs will not be satisfied;
(c) whether the making of an order for security would be oppressive insofar as it would stifle a reasonably arguable claim;
(d) whether impecuniosity of an appellant arises out of the conduct that is the subject of complaint in the relevant proceeding;
(e) whether there are any aspects of public interest that weigh in the balance against granting security; and
(f) whether there are any other particular discretionary matters peculiar to the circumstances of the case.
42 There is no doubt these considerations can relevantly inform the exercise of the power. Where the third and fifth factors set out by Emmett J are present, their combination might carry some weight against the ordering of security: see Cameron's Unit Services Pty Ltd v Kevin R Whelpton & Associates (Australia) Pty Ltd (1986) 13 FCR 46 at 50, 52 per Burchett J. There is a burden however, on the party resisting security to show that the making of an order to provide security for costs would stultify the proceeding (or appeal): see Madgwick v Kelly (2013) 212 FCR 1; [2013] FCAFC 61 at [81] per Allsop CJ and Middleton J.
43 Accepting the broad discretion in s 56 is not constrained by lists of factors or considerations, like many other discretionary powers to be exercised by a Court in the conduct and management of a proceeding or an appeal, the touchstone may be summarised as fairness. In Madgwick 212 FCR 1; [2013] FCAFC 61 at [92], Allsop CJ and Middleton J identified two components of fairness in the exercise of the s 56 discretion - fairness as to whether security should be ordered, and then fairness as to the amount. Their Honours referred (at [82]) with approval to the reasons of Hodgson JA in Dae Boong International Company Pty Ltd v Gray [2009] NSWCA 11, where his Honour used fairness as the touchstone. Dae Boong [2009] NSWCA 11 involved an application for security pursuant to s 1335(1) of the Corporations Act 2001 (Cth), and Madgwick 212 FCR 1; [2013] FCAFC 61 involved an application in a class action proceeding, so the circumstances were different to those in the present appeal. The differences in circumstances do not, in my opinion, mean that it is inappropriate to see fairness as a relevant touchstone in the exercise of the s 56 discretion on this application.
44 There are authorities which describe allowing an impecunious appellant to proceed on an appeal without paying security as giving that appellant a "free hit" (see Skyring v Sweeney [1999] FCA 61 at [6] per Spender J; Tait v Bindal People [2002] FCA 322 at [3] per Spender J). Yet there are large numbers of appeals conducted in this Court every year where the appellant is impecunious and would, if the descriptions in those authorities were applied, be given a "free hit". Many of those appeals might be thought to enjoy little prospects of success. However, neither this Court nor respondents approach these appeals as if they are a "free hit" for the appellant because no security for costs is ordered. Thus, it is not the existence of impecuniosity, nor the fact of having lost at first instance and having appealed, nor the prospects of success on the appeal, which are the driving forces behind those appeals running through to their conclusion without an application for security for costs. Rather, an appeal in this Court is as of right and is treated as such, and this Court's appellate processes are allowed to run their course. Frequently in such circumstances the respondent is a government respondent or public authority.
45 To restrict reliance on principles of access to justice to trial level, in my opinion, fails to accord to the appellate process (where it is of right) its fundamental role in the administration of justice. For my own part, and with respect to those who take a different opinion, I prefer to avoid the characterisation of appeals by impecunious appellants as a "free hit".
46 The practical difference between the large numbers of appeals which run through to their conclusion in the usual way, and the circumstances in which observations have been made about the considerations which inform the exercise of the power to order security for costs, is first and simply the fact of an application for security. This compels the Court to examine the considerations which might be relevant to the exercise of the discretionary power to order security. In that sense, the unilateral decision-making of a respondent determines the occasions on which the Court must consider awarding security for costs, rather than any particular features of a given appeal. Why particular respondents (whether at trial or on appeal) make the decision to seek security for costs is not something which is generally revealed on the evidence in such applications. There may be any number of forensic, policy or strategic reasons, which are matters confidential to those respondents. Once such a unilateral decision is made, the Court is then required to confront the circumstances in which the power should appropriately be exercised. The lack of uniformity or consistency about the circumstances in which these unilateral decisions are taken, and the fact that the Court does not and cannot know what has motivated the decision to apply, means, in my opinion, care must be taken in extrapolating to the point of "rules" any of the considerations which might inform the exercise of power.