Pro Teeth Whitening (Aust) Pty Ltd v Parliamentary Secretary to the Treasurer, David Bradbury MP

REASONS FOR JUDGMENT 1 The appellant has appealed against a judgment of the Federal Circuit Court dismissing his application for judicial review of decisions made by the respondent. 2 The respondent applies for security for the costs of the appeal pursuant to s 56 of the Federal Court of Australia Act 1976 (Cth), r 36.09 of the Federal Court Rules 2011 (Cth), and s 1335(1) of the Corporations Act 2001 (Cth). Each of those provisions confers a broad discretion upon the court. The factors relevant to the exercise of the discretion include: (a) the risk that an order for costs will not be satisfied; (b) the prospects of success for the appeal; (c) whether the making of an order for security would be oppressive insofar as it would stifle a reasonably arguable claim; (d) whether any impecuniosity of the appellant arises out of the conduct that is the subject of the complaint in the relevant proceeding; (e) whether there are any aspects of public interest that weigh against granting security; (f) whether there are any other particular discretionary matters peculiar to the circumstances of the case. See Dye v Commonwealth Securities Limited [2012] FCA 992 at [26]. 3 The respondent has pointed to substantial factors favouring an order for security for costs. The appellant has failed to pay any part of the costs of $11,956.50 awarded against it in the Federal Circuit Court. It is clear that the appellant has no assets of any significance and will be unable to pay any costs of the appeal that may be awarded against it. The appellant's sole director and shareholder, Mr Harrison, asserts that he has no assets from which he could meet any costs ordered against the appellant. While the respondent has had limited opportunity to investigate that assertion, there is no particular reason to doubt its truth. 4 If security for the costs of the appeal is not ordered, then the appellant will be given a "free hit". That is a significant factor in favour of ordering security for costs. 5 There has been no relevant delay by the respondent in applying for security for costs. 6 There are, however, several matters that weigh against an order for security for costs. 7 There does appear to be a reasonably arguable ground of appeal obscured amongst the verbiage that comprises the amended notice of appeal. That ground concerns whether the Australian Competition and Consumer Commission or the respondent was required to specifically inform the appellant of any intention to recommend or decide to certify that a recall notice should be issued without delay pursuant to s 132J(1) of the Competition and Consumer Act 2010 (Cth). That issue was not dealt with by the primary judge. As the appellant and Mr Harrison have no apparent capacity to meet an order for security for costs, the effect of such an order would be to stifle a reasonably arguable claim. 8 There is some material that suggests that the appellant's impecuniosity is due, at least in part, to the decisions made by the respondent that are the subject of the litigation. The primary judge said in his reasons: For all intents and purposes that business was brought to a halt when, on 6 February, 2012 the respondent certified that compulsory recall notices in respect of two of the products sold by the applicant should be issued without delay. 9 The respondent disputed that finding, but it would be surprising if the appellant's business was not affected by the decisions made by the respondent. 10 The appeal is set down for hearing on 5 November 2013. Some of the preparation for the appeal must already have been done and a significant part of the respondent's costs of the appeal has already been incurred. For example, the respondent's evidence is that it would incur substantial expense in respect of communications with the appellant, reviewing and considering the notice of appeal and appearing at the call-over. Those expenses must already have been incurred, at least to a substantial extent. 11 The matter is finely balanced, but, in the end, the existence of a reasonably arguable ground of appeal, the public interest in allowing the appeal to proceed and the fact that the appeal would be stifled if security for costs were ordered persuades me that I should not make such an order. 12 I dismiss the application. The costs of application will be reserved. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rangiah.