Kyriakou v State Transit Authority Division of the NSW Government Service

State Transit Authority Division of the NSW Government Service (Respondent) File Number(s): IRC 1558 of 2011 Decision under appeal Citation: Kyriakou v State Transit Authority [2011] NSWTAB 17 Date of Decision: 2011-09-08 00:00:00 Before: Bishop C File Number(s): TAB 1348 of 2010 TAB 1617 of 2010

Judgment 1Before the Court is an application by way of Notice of Motion filed by the State Transit Authority Division of the NSW Government Service. That entity is the respondent to an Application for Leave to Appeal and Appeal (the Appeal) lodged by the appellant, Mr Andrew Kyriakou. The appeal is currently set down for hearing for two days before the Full Bench as presently constituted on 21 and 22 June 2012. 2The Notice of Motion seeks an order that the appellant provide security for the respondent's costs of the appeal in the sum of $5,000. The appeal arises from a decision of the Transport Appeal Board New South Wales (the Board), in which Commissioner Bishop dismissed two appeals brought by the appellant against the respondent's decision to suspend him without pay and later to dismiss him from his employment as a bus operator stationed at Randwick Depot. 3The Notice of Motion is accompanied by an affidavit sworn by Elizabeth Allen (Ms Allen) currently acting in the position of Manager, Employee Relations and Equity for the respondent. 4Ms Allen represented the respondent in the proceedings below. In her affidavit she deposes that she cross-examined the appellant in those proceedings about his employment status following his dismissal. According to her, the appellant said that he had not made any job applications, or performed any work. She also deposed that during the proceedings, the appellant "insinuated he was suffering financially". According to Ms Allen, at a directions hearing on 13 October 2011, the appellant informed the Court that he would incur considerable cost in copying 1,200 to 1,500 pages of transcript of the proceedings below for the purpose of preparing the appeal books. Following the directions hearing, she said that the appellant expressed concern to her about his ability to meet the expenses associated with copying the transcript. 5On 9 November 2011, Ms Allen wrote to the appellant advising him of the respondent's concern about his ability to pay its costs of the appeal should he be unsuccessful, and informing the appellant that the respondent was considering making an application for security of costs. The letter invited the appellant to provide to the respondent certain information before a decision was made. The information requested fell into two categories: (i) his capacity to pay the respondent's costs in the event his appeal is not successful; and, (ii) the basis as to why the respondent should not pursue its application. 6The appellant responded the following day, asserting that he was very confident of his success in the appeal. His response was otherwise silent as to the two matters raised by Ms Allen in her correspondence of 9 November. Following an exchange of emails which failed to resolve those matters, Ms Allen, on 22 November, advised the appellant that unless the respondent received an adequate response from the appellant to the two matters by Friday, 25 November, that an application for security for costs would be made. Further correspondence between the parties failed to elicit any response by the appellant. 7Annexed to Ms Allen's affidavit is a Summons for Production filed on 28 December and served on the appellant. The Summons sought documents under a heading "Documents relating to Mitigation" which consisted of records of earnings and monies gained by the appellant following his suspension by the respondent on 13 August 2010, as well as any applications, including written applications, for employment made by him following his dismissal. Also annexed to the affidavit is the appellant's reply to the Summons by letter on 18 January 2011 in which the appellant informed Ms Allen that he was unable to produce any records because he has not been employed and has not sought employment since his suspension and subsequent dismissal. 8Documentation apparently received by Ms Allen from the appellant in purported answer to the Summons, including an application to the Consumer Trade & Tenancy Tribunal in which unpaid rent in the sum of $4,205.72 for the period 16 September 2010 to 18 November 2010 is sought to be recovered from the appellant. A second document is a copy of a travel itinerary in the appellant's name for a return trip from Sydney via Bangkok to Singapore between 5 October 2010 and 18 October 2010. 9Material handed up to the Court by the appellant was relied upon by him on the application. 10The approach in relation to applications for security for costs is set out in Kenoss Contractors Pty Limited (No 2) v Allied Constructions Pty Limited (No 2) [2001] NSWIRComm 36; (2001) 104 IR 218. In that judgment (at [11]) Wright P applied the reasoning of Sir Robert Megarry VC in Pearson v Naydler (1977) 1 WLR 899 at 906-907: As observed by Phillips JA, the judgment of Sir Robert Megarry VC in Pearson v Naydler [1977] 1 WLR 899 at 906 - 907 usefully identifies the issues commonly underlying an application for security of costs and affords useful guidance for their proper application. His Lordship said: It seems plain enough that the inability of the plaintiff company to pay the defendants' costs is a matter which not only opens the jurisdiction but also provides a substantial factor in the decision whether to exercise it. It is inherent in the whole concept of the section that the court is to have power to order the company to do what it is likely to find difficulty in doing, namely, to provide security for costs which ex hypothesi it is likely to be unable to pay. At the same time, the court must not allow the section to be used as an instrument of oppression, as by shutting out a small company from making a genuine claim against a large company. For this reason, Mars-Jones J. was not prepared in the Parkinson case to make an order for security for costs for more than the £1,500 that the master had ordered: see [1973] Q.B. 609, 617. As against that, the court must not show such a reluctance to order security for costs that this becomes a weapon whereby the impecunious company can use its inability to pay costs as a means of putting unfair pressure on a more prosperous company. Litigation in which the defendant will be seriously out-of-pocket even if the action fails is not to be encouraged. While I fully accept that there is no burden of proof one way or the other, I think that the court ought not to be unduly reluctant to exercise its power to order security for costs in cases that fall squarely within the section. 11As the above passage identifies, some of the issues falling for consideration in an application for security for costs will include the inability of an applicant to pay a respondent's costs. At the same time the Court must take into account whether the granting of the application might impede an applicant from making a genuine claim. Against that consideration the Court must weigh the prospect of an impecunious party using his inability to pay costs as a means of putting pressure on the moving party where that party may be seriously "out-of-pocket". 12The respondent essentially relies on two factors in support of its application. First, that the appellant will be unlikely or unwilling to pay its costs of the appeal proceedings in the event the appellant is unsuccessful, and, secondly, that the appeal has no prospects of success. 13With regard to the first factor, the evidence relied on by the respondent indicates that the appellant has limited means with which to pay the respondent in the event that the appeal is unsuccessful. There is no evidence which might disclose whether the appellant owns property, for example. The application to the Consumer Trade & Tenancy Tribunal suggests that the appellant resided in rented premises for a period of time up to mid-November 2010. Taking the evidence as a whole, the Court may reasonably infer that the appellant lacks the capacity to pay the respondent's costs, which it estimates to be in an amount of $10,000, should he be unsuccessful on appeal. 14A further factor which may be taken into account by the Court is whether the granting of the respondent's application might impede, or prejudice, the appellant from further pursuing his claim. Given the appellant's limited capacity to pay the respondent's costs, an order for security for costs representing a sum of money which is 50 per cent of the respondent's total estimate, may well have the effect of precluding the appellant from pursuing the appeal. At this stage of the proceedings, the appellant is self-represented, although the Court has been informed that he intends to obtain legal representation to appear for him at the hearing of the appeal. It is also relevant at this point, to refer to the observations of Wright P in Knott v Signature Security Group Pty Limited [2001] NSWIRComm 12; (2001) 104 IR 84 where his Honour said (at [24]) that a court will order an applicant who is a natural person to pay security for costs only in exceptional circumstances. No circumstances which might fall into the category of exceptional circumstances have been identified here by the respondent. The respondent, a government body, has pointed to no relevant prejudice to it should the application be refused. 15With regard to the second factor, the grounds and reasons, as set out in the Notice of Appeal, suggest matters which may or may not be supported by transcript references and exhibits in the proceedings below, but in any event, none of this material has been placed before the Court in support of the present application. There is nothing on the face of the appeal document which might otherwise suggest it is not regular or not properly instituted. Ground 9 of the Grounds of Appeal relies on an allegation of bias against Commissioner Bishop in that the Commissioner engaged in conversation with the respondent in the absence of the appellant during a break in the proceedings. Ground 10 alleges that the Commissioner failed to recognise inconsistencies in the evidence of witnesses which the appellant contended undermined the procedural basis for the respondent's direction to the appellant that he undergo a medical assessment. In oral submissions, on the present application, the appellant contended that the respondent failed to follow proper procedures during its investigation (into whether the appellant had failed to comply with a lawful and reasonable direction to attend a medical assessment). 16These matters would appear to involve issues consistent with a consideration as to whether the Commissioner's Decision discloses appealable error. 17The weight of the authorities suggests that the proper approach when considering the merits of the appeal is whether the appellant has an arguable case: see, for example, Melville v Craig Nolan & Associates Pty Ltd and Anor [2002] NSWCA 32; (2001) 54 NSWLR 82 per Stein JA at [27] and Heydon JA (as he then was) at [132]; Williamson v Service Corporation International (Australia) Pty Limited [2003] NSWIRComm 221; (2003) 130 IR 247 at [49]. On the basis of the material referred to above, whilst we have reservations we consider that the appellant has at least an arguable case. 18For these reasons, the respondent's application must fail. 19We have decided, however, the question of leave should be addressed as a preliminary issue. Accordingly, at the outset of the hearing on 21 June 2012 the parties will need to put their respective cases regarding whether leave to appeal should be granted and the Court will consider whether leave should be granted.