Rockett v Moneycorp Securities P/L & Anor

SUPREME COURT OF QUEENSLAND

CITATION: Rockett v Moneycorp Securities P/L & Anor [2008] QCA 142

PARTIES: LYNETTE JOY ROCKETT (plaintiff/first respondent) v MONEYCORP SECURITIES PTY LTD ACN 115 414 803 (first defendant/second respondent) ZORZAN – 003 PTY LTD ACN 107 476 004 (second defendant/applicant)

FILE NO/S: Appeal No 965 of 2008 SC No 9525 of 2006

DIVISION: Court of Appeal

PROCEEDING: Miscellaneous Application – Civil

ORIGINATING COURT: Supreme Court at Brisbane

DELIVERED EX TEMPORE ON: 5 June 2008

DELIVERED AT: Brisbane

HEARING DATE: 5 June 2008

JUDGES: Holmes JA, Mackenzie AJA and Daubney J

ORDER: Order that unless the applicant, by 4.00 pm on Thursday 12 June 2008 provides security for the costs of the first and second respondents in the amounts and on the terms (other than as to time) set by the orders of Justice Martin, the applicant’s application for an extension of time to appeal be dismissed****The applicant to pay the respondent’s costs of the application for extension of time

CATCHWORDS: APPEAL AND NEW TRIAL – APPEAL – PRACTICE AND PROCEDURE – QUEENSLAND – TIME FOR APPEAL – EXTENSION OF TIME – where applicant ordered at trial to provide security for costs to each of the respondents – where respondent declined applicant’s later proposal to extend or alter the orders for security for costs – where applicant did not provide security within the required 21 day period – where applicant sought, on appeal, to have the order set aside or altered – where applicant filed notice of appeal outside of time – whether application for extension of time should be granted / Uniform Civil Procedure Rules 1999 (Qld), r 670, r 674, r 675, r 772 / Goodman v Lorenzen [2000] QCA 11

COUNSEL: J C Faulker for the applicant J C Bell QC, with A I James, for the first respondent J W Lee for the second respondent

SOLICITORS: H W Litigation for the applicant Ffrench Commercial Lawyers for the first respondent Gladstones Solicitors for the second respondent

HOLMES JA: The applicant asks the Court, under Rule 675 of the Uniform Civil Procedure Rules 1999 (Qld), to vary orders for security for costs made in the trial division. The applicant owned two units. It was the second defendant in a successful action for specific performance of contracts of sale of those units brought by Ms Rockett, the first respondent here. She had entered into the contracts with Moneycorp Securities Pty Ltd, the second respondent here, as mortgagee exercising power of sale. Moneycorp was first defendant to her action.

At trial the applicant raised a number of defences, contending inter alia, that it had redeemed the mortgages so that Moneycorp had no interest capable of transfer to Ms Rockett, that Moneycorp had acted in bad faith in exercising its power of sale and that Ms Rockett had acted in breach of fiduciary duty. It wishes to appeal against a number of the learned trial judge's findings in respect of those matters, but having filed the appeal notice shortly outside the time limit, has an application for an extension of time on foot. I should say that I accept for present purposes that there may be merit in its proposed grounds of appeal.

Each respondent sought security for its costs of the applicant's application for an extension of time. Because no appeal as such was under way, the security for costs order was made by the judge at first instance pursuant to Rule 670 rather than Rule 772, and it was common ground that this application was brought under Rule 675. The first respondent, Ms Rockett, has brought a cross-application under Rule 674 for dismissal of the applicant's application for extension of time.

On the application at first instance, there does not seem to have been any suggestion that the applicant was other than impecunious. Mr Ucchino, the applicant's sole director, and an associate, Mr Visick, had both offered personal guarantees in respect of any costs orders made on the prospective appeal, together with the security of a second mortgage over property they own as tenants in common at Deagon. A real estate agent's appraisal of the property at $330,000 was put before the Court, together with a statement from the first mortgagee indicating the debt under that mortgage as at December 2007 at $194,000. At that time there were two caveats over the property.

The orders for security for costs made by the learned judge at first instance required that the applicant provide, within 21 days, security for each of the respondents' costs; respectively in an amount of $26,596 for Ms Rockett's costs and $18,574 for Moneycorp's costs, in a form agreed by the parties or in default as determined by the Registrar.

On 23rd of April the applicant proposed to the respondents that it be granted an extension to 16th of June for payment of the amounts or alternatively that the respondents accept the security of the second mortgage over the Deagon property. That offer was not accepted and on 30th of April the applicant's solicitors wrote to the Registrar proposing the second mortgage as security for the costs. That was one day before the expiry of the 21 day period.

Here a similar arrangement is proposed. As to the special circumstances justifying the setting aside or varying of the order at first instance, counsel for the applicant says that there are these changes: where there were two caveats on the title at the time the judge at first instance was considering security, one has now been removed, and the second caveator will consent to the removal of its caveat on conditions. No formal valuation was available at the time of the hearing at first instance, but now there is such a valuation, which puts the property's value at $335,000.

By way of broader context, the applicant reiterates points presumably made below: that the proposed appeal can be seen to raise some important issues in circumstances where the exercise of power of sale was unusual to say the least; that the application to leave to file the notice of appeal was only just out of time and that at the time the security for costs applications were brought on, every step required for the appeal, short of its hearing, had been complied with, the applicant having expended $13,000 by then. And, counsel for the applicant says, it is not in breach of the orders for security for costs because the Registrar has made no determination.

The respondents make these points. The evidence is essentially the same as that put before the judge at first instance. The evidence of Mr Ucchino and Mr Visick's present indebtedness under the mortgage is unclear: they rely still on the December 2007 first mortgagee's statement of debt. While Mr Ucchino swears that there has been no subsequent increase in indebtedness, he was found by the learned trial judge to be an unreliable and dishonest witness. No independent confirmation, for example by the applicant's solicitor, of the amount owing has been attempted and there is no undertaking by the first mortgagee that it will not advance any further moneys. The respondents have sought general material in relation to the financial positions of Mr Ucchino and Mr Visick and have not received it.

Counsel on all sides suggested that the test for special circumstances should be regarded as akin to that for seeking to set aside or vary and interlocutory order: that one would generally require new material with evidence of additional facts which have arisen or been discovered since the order was made so as to require a different order; see Goodman v Lorenzen [2000] QCA 11 at [6]. I do not think it necessary in this matter to attempt any definitive test of what is required under Rule 675. What is plain in my view is that nothing in the applicant's material amounts to special circumstances, either in the form of new material or in any broader sense. The fact that a more formal valuation is available hardly suffices, and the removal of the caveats does not make the offer of the second mortgage a strikingly better proposition than was before the learned judge at first instance. No basis has been shown for variation of the order under Rule 675.

The orders made at first instance were, in my view, clear in their terms. They required the applicant to provide security as agreed or determined by the Registrar within 21 days. That has not occurred and the first respondent is entitled to make the application under Rule 674 for dismissal of the application for an extension of time to appeal.

In the circumstances, an order for dismissal ought to be made in these terms: that unless the applicant by 4.00 pm on Thursday 12 June 2008 provides security for the costs of the first and second respondents in the amounts and on the terms (other than as to time) set by the orders of Justice Martin, the applicant's application for an extension of time to appeal be dismissed, with the applicant to pay the respondent's costs of it.

MACKENZIE AJA: I agree.

DAUBNEY J: I agree.