Visscher v Teekay Shipping

REASONS FOR JUDGMENT 1 This is an application for security for costs of an appeal. The amount of security which is claimed is $60,000. The appellant, Mr Visscher, appeals against orders made by the primary judge, Katzmann J, on 9 November 2012 dismissing his application with costs. In a later judgment given on 29 January 2013, her Honour ordered Mr Visscher to pay the costs on a party and party basis up to 9 March 2012 and thereafter on an indemnity basis. 2 The primary judge succinctly explained Mr Visscher's case and the issues that arose at [3] to [6] of her 9 November 2012 judgment. In summary, Mr Visscher claimed to be entitled to be paid approximately $7.4 million for unpaid wages by reason of an alleged underpayment of entitlements in respect of two voyages undertaken by him while in the employment of the respondent (Teekay). 3 Notwithstanding the fact that the alleged underpayment for the voyages appears to have amounted to $3000 in once instance and $15,000 in the other, Mr Visscher claimed that the effect of ss 75 and 78 of the Navigation Act 1912 (Cth) was that he had an entitlement to the substantial sum which I have mentioned. 4 The principles upon which security for costs are ordered for an appeal are well settled. They were identified by Jagot J in Thomson v STX Pan Ocean Co Ltd [2011] FCA 254 at [7] and were usefully summarised by Emmett J in Dye v Commonwealth Securities Limited [2012] FCA 992 at [26] as follows: The relevant considerations include, at least, the following matters: (a) the prospects of success for the appeals; (b) the risk that an order for costs will not be satisfied; (c) whether the making of an order for security would be oppressive insofar as it would stifle a reasonably arguable claim; (d) whether impecuniosity of an appellant arises out of the conduct that is the subject of complaint in the relevant proceeding; (e) whether there are any aspects of public interest that weigh in the balance against granting security; and (f) whether there are any other particular discretionary matters peculiar to the circumstances of the case. 5 I do not need to set out in detail the arguments that were put in the comprehensive written and oral submissions made by Teekay and by Mr Visscher. In my opinion, an order for security is warranted in order to prevent Mr Visscher from obtaining a "free hit" in the appeal: see Skyring v Sweeney [1999] FCA 61 at [6]. 6 There are a number of reasons for this. First, whilst Mr Visscher is not impecunious, there are serious concerns about his financial position. It is true that he is employed in a well paid position, but it is plain that he would need to continue working for a very substantial period to meet the costs order made below and an adverse costs order in the appeal if he is unsuccessful. The respondent's total costs of defending the proceedings at first instance were nearly $650,000, of which approximately $280,000 was incurred after 9 March 2012. As I have said, Mr Visscher is subject to an indemnity costs order in respect of that latter period. 7 The costs order has been stayed by consent, but it is clear that in order to overcome the effect of the order Mr Visscher would need to have a substantial prospect of success on the appeal. It is that matter which, in my opinion, leads to the need for me to exercise my discretion under s 56 of the Federal Court of Australia Act 1976 (Cth) to order security. 8 This brings me to the second issue which is the prospects of success. In this regard, I accept that Mr Visscher faces a very high hurdle in light of the findings made by the primary judge, in particular, at [184] and [243] of her reasons for judgment. Her Honour there dealt with the essential issues in the case which turned upon whether Mr Visscher had been constructively dismissed from his employment at the end of two voyages, the first ending on 3 March 2004, and the second on 26 May 2004. 9 It is evident to me that her Honour's findings in the paragraphs that I have mentioned are findings in respect of the factual element of the issues which were issues of mixed fact and law. 10 Mr Visscher has referred me to the decision of Flick J in Robertson v Knott Investments Pty Ltd (No 2) [2010] FCA 796 at [31]. The authority to which his Honour referred in that paragraph makes it plain that security may be ordered where an appeal turns largely on questions of fact. However, it is not correct to say, as Mr Visscher endeavoured to put to me, that the appeal turns solely on questions of law. What is critical to the appeal is the factual findings made by the primary judge. 11 It is true that in an application such as the present, I am not able to explore fully the prospects which Mr Visscher may have of success on an appeal. However, it is evident to me that the essential questions which bear upon any monetary claim which Mr Visscher may be found to have turn upon factual findings. 12 It follows, in my opinion, that the appeal concerns largely an attempt by Mr Visscher to reagitate the matters of fact on which he failed at first instance. The position therefore seems to me to be similar to that which I considered Mead v Mead [2010] FCA 288 at [8] to [10]. 13 Mr Visscher endeavoured to persuade me that there are many other issues of law which arise other than those which are the subject of the mixed questions of fact and law to which I have referred. However, I am satisfied that those matters do not give rise to any substantial claim sounding in a monetary award. 14 Third, I do not consider that the making of an order for security would be oppressive to Mr Visscher. This is because the evidence demonstrates that he has the ability to draw down an amount of approximately $114,000 which is available on a facility extended to him by the Greater Building Union Society. Moreover, it is plain that this is not a case in which any impecuniosity or financial hardship to Mr Visscher arises out of the conduct of Teekay that is the subject of the complaint in these proceedings. 15 Mr Visscher attempted to press an argument that the case concerns aspects of public interest, in particular the construction and effect of s 78 of the Navigation Act. However, the case is no more than a claim for monetary compensation brought by Mr Visscher, and the provision of the Act on which he relies has now been repealed. 16 Fourth, insofar as there are any discretionary considerations, in my opinion they go against Mr Visscher and in favour Teekay. This is because the primary judge at [273] of her 9 November 2012 judgment found that even if she were to be wrong in the view that she had taken about one of the essential issues in the case, the amount of Mr Visscher's claim was $53,764.23. 17 What is important to bear in mind in this regard is that her Honour relied upon this in determining to order indemnity costs. Teekay offered Mr Visscher $200,000 plus costs in an offer of compromise in exchange for him discontinuing the proceedings and all interlocutory applications and appeals with no order as to costs. It follows that Mr Visscher rejected an offer which would have given him approximately four times the maximum amount which the primary judge would have ordered in the event that Mr Visscher had been entirely successful in the proceeding below. 18 The amount which is claimed for security is not large. It is based upon a calculation made in an affidavit of Ms Martin sworn on 30 January 2012. The amount is explained in a schedule which estimates the total cost at slightly in excess of $72,000. The amount sought is $60,000 and it is not a claim on an indemnity basis but is an estimate of the party and party costs. 19 However, I do have a fairly broad discretion as to the amount to be ordered. In my opinion, doing the best I can, the amount of costs which I estimate on a party and party basis is $50,000, and I propose to order that amount by way of security. 20 The orders that I will therefore make are: 1. Pursuant to rule 36.09 of the Federal Court Rules 2011, within 14 days of today the appellant is to provide security for the respondent's costs of the appeal in the amount of $50,000 in a suitable form, or otherwise by way of payment into Court. 2. The appeal be stayed until security for the respondent's costs is given in accordance with order 1. 3. The appellant is to pay the respondent's costs of this application on a party and party basis in amount to be agreed or assessed. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson.