SECURITY FOR COSTS
9 Section 56 of the Federal Court of Australia Act 1976 (Cth) deals with the Court's power to order security for costs. The section provides as follows:
(1) The Court or a Judge may order an applicant in a proceeding in the Court or an appellant in an appeal to the Court to give security for the payment of costs that may be awarded against him or her.
(2) The security shall be of such amount, and given at such time and in such manner and form, as the Court or Judge directs.
(3) The Court or a Judge may reduce or increase the amount of security ordered to be given and may vary the time at which, or manner or form in which, the security is to be given.
(4) If security, or further security, is not given in accordance with an order under this section, the Court or a Judge may order that the proceeding or appeal be dismissed.
(5) This section does not affect the operation of any provision made by or under any other Act or by the Rules of Court for or in relation to the furnishing of security
Order 28 of the Federal Court Rules also deals with the issue of security for costs. Order 28, Rule 3, governs the exercise of the Court's discretion to order security, relevantly, as follows:
(1) When considering an application by a respondent for an order for security for costs under section 56 of the Act, the Court may take into account the following matters:
(a) that an applicant is ordinarily resident outside Australia;
(b) ...
10 The general principles relevant to the exercise of the discretionary power to order security are not in dispute, and were summarised by the Court in Equity Access Ltd v Westpac Banking Corporation (1989) ATPR 40-972, at 50,635. The Court referred to six specific matters that the authorities indicate are relevant, along with others, when deciding whether security for costs ought be awarded:
i The prospects of success;
ii The quantum of risk that a costs order will not be satisfied;
iii Whether the making of an order would be oppressive in that it would stifle a reasonably arguable claim;
iv Whether any impecuniosity of the party from whom security is sought arises out of the conduct complained of;
v Whether there are aspects of public interest which weigh in the balance against such an order;
vi Whether there are any particular discretionary matters peculiar to the circumstances of the case.
11 Notwithstanding the provisions of O52 r 20 (which provides that "[u]nless the Court or a Judge otherwise directs no security for costs of an appeal to the Court shall be required") it is also important to recognise that other considerations arise in relation to an application for security in the context of an appeal. As Spender J noted in Tait v Bindal People [2002] FCA 322 at [3] - [4]:
... [t]he difference is that, at the appellant level, there has already been a determination adverse to the person against whom security for costs is sought and, if it be shown that there is a substantial risk that even if successful the respondent to the application for leave to appeal, or to an appeal, will be deprived of his costs, such an outcome would clearly be unjust.
In a sense, it would be giving to a person who has been on the receiving end so to speak of a determination by the courts a free hit at great cost to the other party in the appeal proceedings. That consideration, it seems to me, is also reinforced by the judgment of Gummow J in Wiest v Director of Public Prosecutions and Anor (1988) 23 FCR 472. That case involved appeals against extradition with penal consequences. Such consequences were clearly very relevant considerations, but discretionary reasons moved the Court to order security for costs. Such discretionary considerations, which were particularly noted by Gummow J, included the delay between the filing of the papers and the bringing of the applications for security. His Honour referred to a particular circumstance which is relevant here, and that is that the applicant for security has a judgment in its favour. There was a reference by Gummow J toBethune v Porteous(1892) 18 VLR 493, again an old case. In that case, Hood J said (at 494):
"the reason underlying the numerous and varying cases in which appellants have been ordered to give security will be found in the injustice to a successful litigant that may be caused if he be compelled to contest the matter for a second time without a probability of obtaining his costs if ultimately successful."
That really is the fundamental question of justice behind my decision to order security for costs.
12 Also relevant is the fact that the applicant is outside the jurisdiction of the Court. The significance of this factor was discussed by McHugh J in P S Chellaram & Co v China Ocean Shipping Co (1991) 102 ALR 321. His Honour observed (at 323) that the fact that a party bringing proceedings is resident out of the jurisdiction and has no assets within the jurisdiction has been seen as a circumstance of great weight in determining whether an order for security for costs should be made.
13 There is no dispute that the applicant in the proceedings is both impecunious and is ordinary resident outside the jurisdiction.
14 As a general rule, in an application for security for costs, the Court should not be required to investigate in detail the likelihood or otherwise of success in the action or appeal. Having said this, it is necessary for the Court to canvass at some level the case the applicant seeks to put in determining whether an order for security should be made.
15 The applicant's draft notice of appeal is in the following terms:
I. The trial judge erred in law in concluding that Mr Nicholls' [who made the transfer decision] decision to transfer the Appellant to a state correctional facility was not void.
2. The trial judge erred in law in concluding that it was necessary for him to declare Mr Nicholls' decision invalid before it became such.
3. The trial judge erred in considering whether to grant a declaration by taking into account matters extraneous to that exercise of the discretionary power namely:
(a) the fact that the Appellant was permitted to make submissions as to the appropriateness of his detention after his transfer to the state prison system when that matter had no legal connexion with the legality of his detention;
(b) the proposition that the want of procedural fairness could not now be remedied when, in fact, it could by the damages suit being pursued by the Appellant; and
(c) the public interest in clarifying the law could best be addressed by the making of remarks without the need for the making of a declaration.
4. The trial judge erred in failing to conclude that the Appellant had been wrongfully imprisoned.
16 Central to the applicant's case is the contention that the primary judge erred in concluding that notwithstanding that the decisionto transfer the applicant to Silverwater Prison was attended with a denial of procedural fairness, it did not follow that his transfer to, and subsequent detention in, Silverwater Prison and later Long Bay Gaol was unlawful.
17 I presently do not see how the applicant's detention in Silverwater Prison and Long Bay Gaol could have been rendered unlawful by a decision to move him from Villawood even if that decision was infected by a denial of procedural fairness. It presently appears to me that at all times the applicant remained validly in "immigration detention" for the purposes of s 196 of the Act, given that "immigration detention" encompasses circumstances where an unlawful non-citizen is held "in a prison or remand centre of the Commonwealth, a State or a Territory "(s 5).
18 The decision to move him did not involve the exercise of an express statutory power which conditioned the detention. That is, a valid decision to transfer was not made, expressly, a statutory condition precedent to lawful detention in a state correctional facility. When in Villawood, the applicant was in immigration detention, as defined, and he remained in immigration detention, as defined, in Silverwater Prison and in Long Bay Gaol. The fact that the conditions in those last mentioned institutions were different to those in Villawood almost certainly could not bear upon the legality of the detention: Behrooz v Secretary of Department of Immigration and Multicultural and Indigenous Affairs (2004) 219 CLR 48.
19 In short, I consider that the applicant has little prospect of persuading a Full Court that the denial of procedural fairness, which attended the decision to transfer him to Silverwater Prison, rendered his subsequent detention in that prison, or otherwise in a state correctional institution, unlawful. I am presently assuming that the Commonwealth will not challenge, by way of notice of contention, the conclusion of the primary judge that there had been a denial of procedural fairness.
20 Given this conclusion, there is otherwise little in the applicant's favour that might warrant rejecting the Commonwealth's application for security. I accept there is a public interest element in this litigation, involving as it does the detention of an unlawful non-citizen in state correctional institutions established for the incarceration of criminals in circumstances where the applicant had neither been charged with nor convicted of criminal offences. However, as earlier noted, the prospects of the applicant succeeding in the appeal are, in my opinion, extremely slight. The applicant is impecunious and now resides overseas. The Commonwealth has the benefit of the judgment of the primary judge. These various matters point, in my opinion, to ordering the applicant to provide security.
21 It is now necessary to consider the issue of the quantum of that security. In support of its notice of motion for security for costs, the Commonwealth has filed an affidavit of Dale Watson, a solicitor employed by the Australian Government Solicitor. Ms Watson deposes that the respondent seeks security in the sum of $50,000, representing an amount of $30,000 for anticipated legal costs and $20,000, being the minimum amount required to enforce any judgment in Korea. In relation to the anticipated enforcement costs, Ms Watson relied on the following initial advice received by the Australian Embassy in Seoul from "Barun Law":
With regard to undertaking all procedures related to actually enforcing a judgment in Korea, until we have a final judgment from Australia, it would be premature for us to move forward. Enforcement costs would depend on numerous factors, including the nature of the judgment itself, whether the counterparty will retain counsel and/or mount a vigorous defense, etc. Such costs would likely range from KRW 20 million to KRW 60 million, but we would provide a more detailed estimate at a later stage if/when that becomes necessary. In the event that unforeseen complications arise, we would need to revisit our estimates. We also may wish to look at the practicalities of actually collecting on the judgment in more detail before proceeding against this particular party.