Mentink v Registrar of Ships

Federal Court of Australia|2009-07-23|Before: Rares J

REASONS FOR JUDGMENT (REVISED FROM THE TRANSCRIPT) 1 This is an application by the respondents for security for costs of these proceedings. Wilfred Mentink has sued the Registrar of Ships, the Minister for Foreign Affairs and the Commissioner of the Australian Federal Police. Mr Mentink has sought relief in his amended application based essentially on his claim that in August 2004 the vessel, Larus II, was wrongfully removed from the register of ships in which he was recorded as its owner.

The nature of Mr Mentink's Claims 2 His application seeks that the Registrar correct the register, in accordance with his claims that previously have been refused, so as to record once again him as the owner of the Larus II. Additionally, Mr Mentink sought damages or compensation against the respondents based on what he alleged were a number of forms of wrongdoing in relation to him. The application sought orders that the respondents pay him in respect of the following claims: · $100,000 in respect of the value of the Larus II, including items of his personal property on board the vessel when it was Dili Harbour in the State of Timor-Leste in 2003, together with a sum by way of adjustment in respect of its current value. · a further $100,000 in compensation for the loss of use of the vessel since September 2003; · compensation for the expenses he has incurred allegedly as a result of the actions of the respondents between September 2003; · compensation for his emotional stress and suffering since September 2003, which he claims to have been due to the actions of the respondents. 3 In his written submissions in reply to the motion Mr Mentink summarised the essence of his complaints in those respects. He said that the Registrar had engaged in "hypocrisy" by failing to accept Mr Mentink's assertions that he was entitled to re-registration, or correction of the register, to record him as owner and by requiring him to pay a fee and submit acceptable verification of his ownership or a court order. He claimed that he had no alternative but the present application for which the [Registrar] now seeks security for his costs. 4 The submission then argued that the Minister was involved because of "the involvement of Consul Giddings in Dili and the legal questions concerning the role of a "proper officer" under the Shipping Registration Act and "Australian protection offered to registered ships". Mr Mentink submitted that his assertions raised a prima facie case that the Minister had failed to adhere to some obligations under law and he claimed that it was oppressive that he be required to give security for costs. 5 Mr Mentink asserted that the Commissioner was "involved" because he ought to have investigated and assessed the conduct leading to the closure of the register and removal of Mr Mentink's registration arising from: · all of the issues concerning the circumstances in which the Larus II's registration in his name had been removed from the register; and · the closure of the register since the person claiming to be the owner had not sought to register his ownership on it. Mr Mentink argued that there may have been no need to include the Commissioner as a respondent if he had properly investigated complaints made by him earlier. 6 In effect Mr Mentink's submission argued that the respondents had acted towards him from June 2003 in a manner that: "… reveals an unlawful intent and conduct to effect the applicant's exclusion from certain territories, including Indonesia. The making of an order for security for costs would assist the [Minister and Commissioner] in dislocating the applicant from his life in Indonesia."

The application for security for costs 7 The respondents' application for security for costs has been based upon their claims that: · Mr Mentink is an applicant ordinarily resident outside Australia, so as to fall within O 28 r 3(1)(a) of the Federal Court Rules; · Mr Mentink's prospects of succeeding in his claims, as presently formulated, warrant the grant of security. 8 The respondents seek security in the sum of $38,000 based on the affidavit of Ms Kirsty Alexander, solicitor with the Australian Government Solicitor. She gave unchallenged evidence, which I accept, that the likely party/party costs that would be recoverable by the respondents were they to succeed in the proceedings would be in the order of $38,000. She anticipated that this included the costs of preparation for what would be likely to be a hearing extending up to three days. There is no reason not to accept Ms Alexander's estimate based on what is currently revealed in Mr Mentink's evidence, and the submissions made by the parties before me. 9 Mr Mentink has filed a number of affidavits and he relied on five of them in support of his resistance to providing security. He has represented himself and acknowledges that he is not legally trained, although he has sought, as best he can, to present his claims and evidence in support of them. His five affidavits contain a considerable amount of material that, at a final hearing, would be inadmissible. But, no objection has been taken to my receiving them for the purposes of today's hearing and I have considered their contents. In substance they seek to establish, in a variety of ways, the basis on which Mr Mentink says that he is entitled to compensation and rectification of the register.

Is Mr Mentink ordinarily resident outside Australia? 10 The first issue for consideration in the present application is whether Mr Mentink is, in fact, ordinarily resident outside Australia. The respondents have the onus of establishing this. In Mr Mentink's fourth affidavit, as he has described it, he gave the following evidence. First, he identified three bank accounts in which he holds various sums of money. The location of those banks or the branches at which the accounts are held are not clear from the computer print outs of bank statements annexed to his affidavit. However, each of the three statements referred to the state of the account at either a Sydney or Australian eastern standard time on a date in June 2009. In particular, one statement for an account with ING Direct as at 19 June 2009 recorded over $80,000 in credit funds. 11 Mr Mentink said that all of the moneys in the accounts were the residue of superannuation funds that he had withdrawn in order to establish and support his life outside Australia and that he had no remaining superannuation. He said: "My wife and I intend to reside permanently in Ruteng on the island of Flores in the Republic of Indonesia. Under the current Indonesian immigration law I am presently required to extend my visa every month at considerable cost. I have applied for permission to reside with a visa that is renewable annually. A requirement of permission to remain in Indonesia is the ability to demonstrate the existence of funds to support oneself." He also said in the fourth affidavit that from June 2003 until the present time he had decided to persist in seeking residence in Indonesia and to establish a meaningful life among the people of Flores saying: "My marriage gives effect and marks my commitment to that decision." 12 Mr Mentick deposed to being in the process, with his wife, of buying suitable land and building a house in Ruteng. He expressed their hope that his wife would be able to develop a small business in order to gain an income. In his amended application as filed, Mr Mentink gave his address as being in Ruteng in Indonesia. In his written submissions for the first directions hearing, filed on 11 June 2009, he said that he had married an Indonesian woman and "live in Indonesia with two dependent children". He also said that he had withdrawn all of his superannuation funds "in order to support my life overseas". And, again, he referred to his decision to buy land and build a house in Indonesia. 13 In his submissions in reply Mr Mentink addressed the question of whether he truly fell within the description of "ordinarily resident outside Australia". He referred to a number of authorities, including those in the written submissions filed by the respondents. He argued that following the expiry of a sentence of imprisonment which he had served in Queensland in late 1999 until the present time, his life had exhibited virtually all of the attributes of not being ordinarily resident in any place, especially Australia. 14 The question of whether a person is ordinarily resident outside the jurisdiction has long been regarded as being of significance for the purposes of determining a liability to provide security for costs. The principle on which this jurisdiction is exercised is that the person who ordinarily is resident outside the jurisdiction may be unlikely to have funds or assets within it with which to satisfy any order for costs against him should the proceedings result in such a liability being imposed. Where a person comes to the jurisdiction and seeks the assistance of the court in obtaining remedies against others they must be prepared to submit to the ordinary processes of that jurisdiction that are associated with its exercise. 15 The question of whether Mr Mentink is ordinarily resident outside Australia is a question of fact. The evidence to which I have referred, together with its confirmation in Mr Mentink's submissions, showed that he has a settled purpose or intention of residing outside Australia, indeed seeking to live permanently, or indefinitely, in Indonesia where he has married and, as he said, seeks to establish a home. His evidence also demonstrated that he has no present residence in Australia. I do not accept his claim that he is not ordinarily resident anywhere. 16 I am satisfied on the evidence that at the time he began these proceedings and at the present time Mr Mentink was and is ordinarily resident outside Australia. He has sought to make his settled home, abode and place of residence in Indonesia where he is seeking to establish his new life: see e.g. the discussion in LK v Director General, Department of Community Services (2009) 253 ALR 202 at 214-215 [38]-[42] and 217 [49] per French CJ, Gummow, Hayne, Heydon and Kiefel JJ. In my opinion there is no basis to conclude that Mr Mentink is resident in Australia on any view of the evidence. He has determined to pursue a life in Indonesia with his new wife and the family that he has established there. I am satisfied, having regard to all of the evidence, that he is a person who falls within the description of an applicant ordinarily resident outside Australia.

Impecuniosity 17 Mr Mentink argued that an order for security ought not be made against him on the ground of his impecuniosity. He has said that he requires the funds held in his bank accounts to use in pursing his life in Indonesia and, among other things, to demonstrate to the Indonesian authorities that he has a source of funds with which to support himself, and to the extent necessary, his family. 18 Impecuniosity is not, of course, a bar to an individual bringing proceedings within this jurisdiction, even though, were the individual a corporation, it would be required to provide security. And impecuniosity can be relevant to the question of exercise of the discretion to order security having regard to all of the relevant circumstances of the case. 19 Mr Mentink referred to the decision of Morling J in Barton v Minister for Foreign Affairs (1984) 2 FCR 463 at 469. Morling J pointed to the anomaly that would result if an impecunious plaintiff were ordered to give security merely because he was ordinarily resident outside Australia, although that absence from Australia had little, if any, prejudicial effect on a respondent's prospects of recovering its costs. 20 It is at this point that Mr Mentink confronts a dilemma. If the funds in the ING bank account are situated in Australia then he has assets within the jurisdiction against which the respondents would be able to obtain enforcement of any judgment for costs in their favour. On the other hand, Mr Mentink does not want to make those funds available to provide such a resource to the respondents because it will imperil his ability to conduct his life in Indonesia and to survive in the future. However, the existence of those funds demonstrates, prima facie, that Mr Mentink is not relevantly impecunious in the sense of not having assets that, if he chooses to make them available, would be available to satisfy an order for costs in the future. And if his action were to succeed it would be he, rather than the respondents who would be entitled to an order for costs. So it seems to me that having regard to the evidence it will be a choice of Mr Mentink whether he wishes to make the assets he clearly has available as security for costs of the action he seeks to pursue. He is not relevantly impecunious in the sense that he would not be able to proceed if he were required to provide security. 21 I am of opinion that Mr Mentink's reliance on his relatively low net worth, or what he called his "impecuniosity", is an important circumstance to weigh in exercise of my discretion to order security. I am not satisfied that ordering security in the amount of $38,000 would stifle Mr Mentink in bringing, or prosecuting these proceedings, should he chose to do so, or that he is relevantly impecunious for the purposes established in the authorities: cf The Airtourer Co-operative Ltd v Millicer Aircraft Industries Pty Ltd [2004] FCA 1400 at [15]-[23] per Branson J and the authorities to which her Honour refers.

The strength of the Case 22 The next relevant factor to be considered in the present application is the nature and apparent strength of Mr Mentink's claims. His principal claim is the correction of the Register of Ships. Mr Mentink pleaded in his amended statement of claim that in August 2007 a citizen of the United States of America, Mr Robert Arrand, sought from the Registrar a document stating that the Registrar had removed the registration of the Larus II in August 2003 because it had been sold to a foreigner, Lee Thackeray. Mr Mentink pleaded that the vessel was currently in Kupang, Indonesia where Mr Arrand claimed to be the lawful owner of Larus II, having, he claimed, provided the Indonesian authorities with a document from the Registrar denying Mr Mentink's claim of ownership. 23 Therefore, it is clear, as the respondents pointed out in argument, and as I have raised with Mr Mentink in previous directions hearings, that any claim for Mr Mentink to be registered as the owner of the Larus II necessarily requires Mr Arrand's joinder as a party to the proceedings. This is because Mr Arrand's claim to be the owner, and his possession, of the Larus II, as alleged in the amended statement of claim, will be disturbed by any amendment or rectification of the register which restores Mr Mentink to the position he wishes to enjoy as owner of the vessel. In that situation Mr Mentink, as yet, has not chosen to join Mr Arrand. Looking at the matter as it presently stands I must conclude that there are almost no prospects that Mr Mentink would be able to succeed in having the register amended with the consequence that Mr Arrand might be denied or deprived of whatever rights he has without having had the opportunity to have his own entitlements tested, or to have notice that they were in fact being challenged with the object of removing them from him. 24 The second species of relief sought in Mr Mentink's claims, and elaborated in his five affidavits, involves his claims for compensation to which I have referred. Mr Mentink wishes to make out a case against the respondents that, in some way, they were involved in the circumstance that Mr Thackeray claimed to have become the owner of the Larus II pursuant to a bill of sale purporting to have been signed by Mr Mentink in Mr Thackeray's favour. Mr Mentink asserts that the bill of sale, so far as it involves his own signature, was a forgery and that Mr Thackeray obtained no rights to the Larus II through any conduct of Mr Mentink's. Whether or not Mr Thackeray is a proper or necessary party to the proceedings is not a matter I need to consider at present. However, his role in allegedly depriving Mr Mentink of his ownership of the Larus II would be critical to determining whatever liability he seeks to sheet home to the respondents. 25 It is at this point that the conceptual difficulty arises of the precise cause or causes of action Mr Mentink claims against the respondents. It is difficult to see how officials of government can be found to be responsible in substantial damages for the frauds, or alleged frauds, of third parties with which they are not complicit. If, as Mr Mentink alleges, Mr Thackeray presented a bill of sale with a forged signature it is very difficult to conceive that this conduct gives rise to the cause of action for damages pleaded against the officials to whom that forgery was presented for registration. That is not to say such an action may be impossible, but as it is formulated in Mr Mentink's affidavits and pleadings it is not at all clear to me how that claim could, let alone will, be made out so as to give him an entitlement to the relief he claims. And, that relief depends principally upon his establishing that he is, or was, the owner of the Larus II at all relevant times prior to any situation in which an innocent third party, if that is what Mr Arrand is, obtained possession and/or ownership of the vessel. 26 There will also be questions as to the operation of law of ownership of both Timor-Leste where some of these events occurred, including those involving Mr Mentink's loss of possession of the Larus II,and the law of Indonesia, where Mr Arrand currently is and has, at least as at August 2007, asserted possession and ownership of the vessel. Once again, it is not clear whether Mr Mentink will be able to establish that he has a claim for compensation against any of the respondents because of the consequences of the alleged fraud by which he claims to have been deprived of his property. The allegations which he makes will involve, if they are to be made good, further amendments to the pleadings and a considerable amount of factual and legal investigation. No doubt Mr Mentink feels a sense of grievance, which he may be entitled to have, if it is correct that he was defrauded of his vessel. But whether it is a sense of grievance correctly directed against the respondents is a matter that will have to await any trial of the action. 27 One circumstance in which a court may refuse to order security for costs is that to do so would frustrate the litigation because the plaintiff or applicant would be prevented from pursuing a claim that appeared to have sufficient prospects of succeeding. These proceedings appear to me to involve, as they are presently framed and constituted, very considerable problems that Mr Mentink will need to overcome before I could be satisfied that he has sufficient reasonable prospects of succeeding for these purposes. There is no evidence before me, or suggestion that, it would be possible for the respondents readily to execute against, or recover money from, Mr Mentink in Indonesia were they to obtain an order for costs here in their favour. 28 The proceedings will not be frustrated if Mr Mentink chooses to make available the money that he clearly has in his ING bank account as security for the costs of the proceedings. Mr Mentink is ordinarily resident out of Australia. He either has no assets here, or if he does, does not wish to make them available to the respondents as security. These facts, together with my current impression and, possibly ultimately wrong, assessment of Mr Mentink's prospects of succeeding in his proceedings, satisfy me that I should exercise my discretion to order that he provide security in the amount sought. Having regard to all of the matters before me I am of opinion that it would be just and appropriate to make such an order. 29 Therefore, I will order that Mr Mentink provide security for the respondents' costs of the proceedings in the sum of $38,000 in a form acceptable to the respondents, and in default of agreement between him and the respondents as to the form, in a form to be settled by a Registrar of the Court. I certify that the preceding twenty-nine (29) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares.

Dated: 14 August 2009 The Applicant: Appeared in person

Solicitor for the First, Second and Third Respondents: Mr A Markus of the Australian Government Solicitor

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