Mobilia v Voudiotis [2002] VSCA 72

Court of Appeal (Vic)|2002-05-17|Before: BATT and EAMES, JJ.A.

[2002] VSCA 72 1st Revision - 27 May 2002

PRACTICE AND PROCEDURE - Appeal - Security for costs - Appellant impecunious - Discretion - Liberty of subject - Wholly suspended committal to prison for contempt - Family company able to provide security - Security ordered - Rule 64.24(2).

This is an application for security for costs made by the plaintiff below, who is now respondent to an appeal by the second defendant below by leave, if necessary, granted on 15 March 2002 against an order made by his Honour Judge Duggan on 17 December 2001 convicting her of contempt of court constituted by breach of an undertaking and ordering that she be imprisoned for four months with that period being wholly suspended for two years, and that she pay the respondent's costs on a solicitor-client basis. Adapting the language of Rich, J. in , counsel for the applicant submitted that the appellant was indulging in the luxury of this appeal and was dragging the respondent from one court to another, always hiding behind her impecuniosity and refusing to pay any orders including orders for costs along the way.

This Court's discretionary power to order that security be given for the costs of an appeal is conditioned in Rule 64.24(2) upon there being "special circumstances". The probable inability of an appellant to meet an order for the respondent's costs of an appeal is a special circumstance: Scerri v. Northam Holdings Pty Ltd[2]. Such probability is amply established here, where the appellant is an undischarged bankrupt and with her husband, the first defendant below, has failed to pay to the present respondent any of the costs ordered to be paid by three separate orders. The Court's discretion is therefore enlivened and, but for one matter, I would have no hesitation in exercising it favourably to the respondent, the applicant for security.

The matter that has caused me hesitation is that the order against which the appellant appealed is one that seems directly (in the sense used by French, J. in Bond v. Trustee of the Property of Alan Bond, a Bankrupt[3]), even if not immediately (in the sentencing sense), to affect the liberty of the subject. Even though the appellant was not by that order immediately deprived of her liberty, the notion of suspension seems - at this stage I need say no more though I note Rich v. Attorney-General (Vic)[4] - necessarily to involve that the suspension may in a certain event or certain events be removed so that the order for imprisonment becomes fully operative. Whilst the court's discretion here in question is an untrammelled one whose exercise depends upon the circumstances of the particular case, the fact that the liberty of an appellant is in question or highly penal consequences are entailed upon an appellant by an order appealed from is a very important circumstance to be taken into account in exercising the discretion. As a general rule, and subject to other relevant circumstances, the discretion will in such a case be exercised against the ordering of security for costs. All this is explained in the judgment of Lord Esher M.R. (with whom the other members of the Court of Appeal agreed) in Hood Barrs v. Heriot[5]. That decision has been accepted in Australia in a number of cases, of which I mention King v. Commercial Bank of Australia Ltd[6], a single justice decision of Rich, J., Kennedy v. McGeechan[7], a decision of the New South Wales Court of Appeal, and Wiest v. Director of Public Prosecutions[8], an unreported decision of Gummow, J. when a member of the Federal Court; but the decision in Hood Barrs has rarely been applied in Australia. Chen v. Pyramid Building Society (in liq.)[9], a decision of Moore, J., is, however, a case where security was refused on the basis of the "very important circumstance" identified in Hood Barrs. In Re Carroll[10] relevantly stands only for the proposition that the fact that the appeal related to an application for habeas corpus, and so concerned the liberty of the subject, was of itself no ground for preventing the court from ordering security for the costs of the appeal as it did.

Support for a refusal of security might be found in the consideration that the question whether the appellant was bound by the undertaking recorded in the authenticated order of Judge F.B. Lewis made on 13 May 1998, along with the question whether she was in breach of it in relation to the transfer of the property of which she was not a registered proprietor, seems worthy of investigation. In saying that I wish to make two things clear. First, I express no view one way or the other on the answer to those questions. In particular, I am conscious that the implied authority of counsel would fall for consideration, though the appellant's non-ownership of 115 Hume Street, Wodonga might still affect whether she was bound by or in breach of the undertaking. Secondly, I do not put the existence of those questions (or indeed some of the other interesting questions raised during discussion, particularly about contempt) forward as an independent reason for refusing to order security for costs, nor am I to be taken as expressing the view that the likelihood that a point of public importance or novelty will be raised in an appeal itself warrants the refusal of an order for security for costs of the appeal, as to which reference may be made to Kardynal v. Dodek[11] and cases there cited, and Symes v. Crisp[12] and, in the somewhat different context of an appeal to the High Court pursuant to special leave, Perre v. Apand Pty Ltd[13] and Lucas v. Yorke[14].

Against the liberty of the subject point, counsel for the respondent raised by way of rejoinder, as it were, although of course in his opening argument, a number of points. Only one is of substance, but in the end it has persuaded me that security should be ordered. It is that on the evidence (including the fact that eight properties including 115 Hume Street, Wodonga, the property the subject of the undertaking, were before bankruptcy transferred by the appellant and her husband, or the appellant or her husband, to Trispar Pty Ltd, the trustee of their family trust, whose director is the appellant's father) and in the absence of rebutting evidence, it is to be inferred not only that the appellant's costs of the appeal are likely to be funded by Trispar Pty Ltd but also that that company can provide security for the respondent's costs of the appeal: compare Bond's Case. Mr Dane accepted that an answering affidavit could have been filed to the effect that the company would not be able to assist in the provision of security or that for some other reason if security were ordered the appeal would be stifled. But no affidavit was filed, nor, if there was a shortness of time preventing its filing today, was any application for adjournment made, and that is significant because whether security will be able to be provided is a matter within the knowledge of the appellant, not the respondent to the appeal.

Two other matters need to be mentioned. There are in evidence certificates of title to some of the properties only, and on one of those only is there a caveat recorded in favour of the trustee in bankruptcy of the appellant and her husband. That means that registrable dealings with at least the other properties the certificates of title to which are before the Court could, if commercially feasible, go ahead as a matter of law. As to the other properties the appellant was, as I say, in the position to lead evidence, if it existed, that caveats were recorded on the titles to them, but there is no such evidence. The other matter is that a composition was proposed. In his report the trustee in bankruptcy suggested that if it were not approved actions to set aside the transfers of the properties to Trispar Pty Ltd would be open. If such actions were taken and Trispar was stripped of the eight properties, it may be - I do not know - that it would have no other assets from which, or with the aid of which, it could supply security for costs. We were told from the Bar table that the composition proposed has not been approved, but we were also told that any actions were dependent upon the oral examinations of the bankrupts and they themselves have been deferred pending the hearing of the appeal in this matter. I would, in the absence of sworn evidence, simply proceed on the footing of what is revealed by way of the present assets of Trispar Pty Ltd as disclosed by the evidence. The parties could have made the position clearer, but in the absence of evidence from either side I proceed on the footing of the ownership at present by Trispar of the properties.

7 Reviewing all the circumstances, I do not believe that an order for security of the amount I have in mind will stifle the appeal, and therefore I consider that the important consideration of the liberty of the subject is overridden, or perhaps shown to be unlikely to be affected, by the special circumstance of the ability of Trispar Pty Ltd to fund any security for costs ordered. The liberty of the subject is only one factor in an overall review of all the circumstances, though ordinarily it is an important one, indeed a very important one.

As to the amount of security, although no issue is taken by way of expert evidence, or indeed any evidence, with the figure sought, I consider that the latter is somewhat high. For one thing, costs of transcript will not be incurred, although that is not a large figure. I would propose $30,000, and that it be provided within one month, subject to anything counsel may say about that time provision.

I agree with the order proposed by the learned presiding judge and I agree with the reasons given therefor.

The Court is of the view that the respondent to the appeal, having succeeded in a contested application, should have his costs, and that certainly is what was ordered in Lagarna Pty Ltd v. Bridge Wholesale Acceptance Corporation (Australia) Ltd[15]. The Court therefore orders that:

1. The appellant give security to the satisfaction of the Prothonotary by 4 p.m. on 18 June 2002 in the sum of $30,000 for the costs that may be awarded against her upon the appeal and that unless such security be so given the appeal be stayed.

2. The costs of the respondent to the appeal of its summons filed 18 April 2002 be paid by the appellant.

[8] Unreported, Gummow, J., 5 September 1988 at p.8.

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