Rana v Commonwealth of Australia

REASONS FOR JUDGMENT 1 This is an application for security for costs by the Commonwealth of Australia against Ranjit Shamsher Jung Bahadur Rana, who is the appellant from a judgment delivered by Lander J on 17 June 2008 ([2008] FCA 907). 2 In those proceedings, Lander J acceded to an application by, amongst others, the Commonwealth of Australia to dismiss Mr Rana's proceeding, SAD 111 of 2007, as an abuse of process of the court, and also on the ground that that proceeding was vexatious. 3 It is relevant, in my opinion, to note that this is an appeal by an unrepresented litigant from a judgment which is founded on the application of s 31A of the Federal Court of Australia Act 1976 (Cth) (the Federal Court Act). As Lander J said in the judgment, the subject of the present appeal, at paragraph 49: Section 31A of the Federal Court Act was enacted by the legislature with full knowledge of the decisions of the High Court in relation to the summary dismissal of proceedings and, in particular, the decision of the High Court in Dey 78 CLR 62 at 91 and General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125. It may be thought, in those circumstances, that the purpose of the enactment of s 31A was to relax the rigours of the test imposed by the High Court in General Steel Industries 112 CLR 125 as to the necessary circumstances in which a proceeding may be struck out summarily: Jewiss v Deputy Commissioner of Taxation (2006) 65 ATR 222 and White Industries Australia Ltd v Commissioner of Taxation (2007) 160 FCR 298. 4 Lander J also derived support from the Attorney-General's Second Reading Speech on the Migration Litigation Reform Bill 2005, and his Honour set out observations by the Attorney in that speech in paragraph 49 of his Honour's judgment. His Honour noted in [49] that: So much is supported by the Attorney-General's second reading speech on the Migration Litigation Reform Bill 2005 (Cth) which was the legislative vehicle which introduced s 31A. He said: The bill strengthens the power of the courts to deal with unmeritorious matters, by broadening the grounds on which federal courts can summarily dispose of unsustainable cases. It is appropriate that this provision is of general application. It will be a useful addition to the courts' powers in dealing with any unsustainable case. 5 Order 20 rule 5 has to be considered in the light of section 31A. His Honour expressed the view that (at [51]): Notwithstanding that the purpose of s 31A was to relax those tests, a Court will still be cautious about finding that an applicant has no reasonable prospect of successfully prosecuting a proceeding. 6 That observation also applies in relation to an appeal; in particular, an appeal from one in which there has been a summary determination of an unrepresented applicant's proceeding. 7 It is important also to note the provisions of O 52 r 20 of the Federal Court Rules. Prior to the introduction of that rule, Hill J, in Equity Access Limited v Westpac Banking Corporation (1989) ATPR ¶40-972 at p. 50,635, had set out some of the relevant factors on an application for security for costs: the chances of success of the applicant; whether the applicant's claim is bona fide or a sham; the quantum of risk that the applicant cannot satisfy a costs order; relevantly, whether the impecuniosity arises out of the act in respect of which relief is sought; whether there are aspects of public interest which weigh in the balance against the making of an order; and whether there are any particular discretionary matters peculiar to the circumstances of the case. Those considerations were indicated as being some only of the matters appropriate for consideration. 8 However, in respect of the particular operation of O 52 r 20, Hill J later in 1998, in Bates v Omareef Pty Ltd [1998] FCA 536 (4 May 1998) referred to the view expressed in Cowell v Taylor (1885) 31 Ch. D. 34 that appeals are an exception to the rule that poverty is no bar to a litigant who is natural person. Explaining the effect of O 52 r 20 on the principle in Cowell v Taylor, Hill Jsaid: … although the Court has a jurisdiction to order costs in an appeal … there is no presumption that a costs order will be made for security. 9 His Honour continued: Indeed, quite to the contrary, a cost order would not be made unless the party seeking security can persuade the Court that the general rule that security not be ordered should not apply in the circumstances of a particular case. 10 His Honour referred to the observations of Burchett J in Paton v Campbell Capital Limited [1993] FCA 449 (1 July 1993). In that case Burchett J said that the wording of O 52 r 20 places what his Honour referred to as "something of an onus" to demonstrate that security should be provided. 11 Assessing the prospects of appeal in the ordinary case prior to the development of submissions in support of grounds of appeal is a matter requiring caution. Nonetheless it seems to me that given the history of the matter, the nature of the proceedings before Lander J and the primary judge's clear understanding of the need for caution before summarily dismissing a matter, there are serious hurdles confronting the appellant if he is to succeed. It is fair, on this application, to express the view that, on the present material, the prospects of success do not seem great. 12 In this regard it is useful to have regard to the observations of French J, as he then was, in Carey Hazell v Getz Bros and Company (Aust) Pty Ltd [2004] FCA 1334. 13 In that case French J said: It is plain from the manner in which the rule is expressed that there is a discretion, but that there is something of an onus resting upon one who says that an appellant must be required to provide security. A feature of an appeal, which marks it out from litigation at first instance from this point of view is that there has already been a decision given by the judge who heard the matter at first instance, and that the appellant has, in other words, had a day in court, has had an opportunity to present his case and has had a ruling which may be presumed to be correct. 14 French J went on to observe that: It is unreal to ignore the reality that a significant proportion of appeals succeed. 15 Accepting that the prospects of success of the applicant's appeal do not appear to be strong or, in fact, may be regarded as quite poor, there is in my view a relevant factor (apart from the nature of the order appealed from and what may be said to be the "something of an onus" cast by the wording of O 52 r 20) in the circumstances of this case against ordering security. 16 That is the fact that the judgment under appeal was given on 17 June 2008. An appeal was lodged within time, and the application for security for costs was not made until 2 October. 17 Senior Counsel for the Commonwealth has indicated that it was not until August that a sequestration order was made against Mr Rana and that an Amended Notice of Appeal was filed raising grounds which, it is said, require a considerable amount of preparation on the part of the Commonwealth, and which, by inference, means that there will be an expenditure of costs which are unlikely to be recovered should the appeal fail. 18 Notwithstanding these matters, I dismiss this application for security for costs, principally because of the significant delay between the filing of the appeal and the application for security for costs. 19 Gummow J in Wiest v the Director of Public Prosecutions [1988] FCA 568 (5 September 1988) dismissed two applications for security for costs which were founded upon that discretionary reason. In Friends of Hinchinbrook Society Inc v Minister for the Environment [1997] FCA 295 (14 April 1997) Davies J refused an application for security for costs given that the appeal was set down for hearing six weeks from the date of application for security. Davies J acknowledged that it was not the case that security for costs could not be ordered against a public interest body, but said that where that body is a conservation body the litigation is often urgent and the hearing date imminent, with that latter factor becoming the paramount consideration. 20 This is not a case involving public interest considerations, but it is a case where the disposition of the appeal is about six weeks from now; it is an appeal from a judgment delivered on 17 June, and the application for security was not made until 2 October. 21 Notwithstanding what I regard as the poor prospects of Mr Rana's appeal, having regard to the basis of the orders of Lander J, the provisions of O 52 r 20, the delay between the filing of the appeal and the application for security for costs, and the fact that the accused is unrepresented and was unrepresented below, I am not satisfied that it is appropriate in the particular circumstances of this case to order security for costs. The application for security for costs is refused. 22 The order of the court is that the application for security for costs by the Commonwealth is refused. I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Spender.