JONES & SMITH v LACKERSTEEN

Court of Appeal of the Northern Territory of Australia Martin J
16 March, 6 April 1989

Costs - Security for - On Appeal - Nature of Court's discretion - Factors in exercise of discretion - Conclusiveness of impecuniosity as a factor - general importance & merits of appeal as factors - Purposes served by making of order - Supreme Court Rule 85.13.

Cases applied:

Barton v Minister for Foreign Affairs (1984) 54 ALR 586 Beard v Prestige Baking Industries Pty Ltd (1980) 51 FLR 454 Brundza v Robbie & Co (No 2) (1952) 88 CLR 171
Ciappina v Ciappina (1983) 50 FLR 287
DJE Constructions  v Maddocks (1981) 38 ALR 185 Hall v 53-55 Hall Street Pty Ltd (1978) 1 NSWLR 311
King v Commercial Bank •Of Australia Ltd (1920) 28 CLR 289 Lucas v Yorke & Anor (1983) 50 ALR 228

Cases considered:

Cowell v Taylor (1885) 31 Ch D 34 O'Callaghan v Duhst & Anor (1931) SASR 369

Cases referred to:

Darcey v The Preterm Foundation unreported Federal Court, Burchett J, 18 May 1987
Hedrlin v The Proprietors Strata Plan No 3770 unreported Federal Court, Merling J, 4 August 1982
Karunakaran v The Minister for Immigration & Ethnic Affairs unreported Federal Court, Neaves J, 20 November 1984
Riv-Oland Marble Co v Settef, unreported, Federal Court, Jenkinson u, 2 May 1988
Swain v Fallows (1887) 18 QB D 585

Rules referred to:

Supreme Court Rules 85.13, 62.02 Federal Court Rules 52.20

Counsel for Appellants

J B Waters

Solicitor for Appellants	:

Counsel for Respondent Solicitor for Respondent

Water, J s	& O'Neil
C McDonald Loftus & Cameron

mar890069

mar890069

IN THE COURT  OF APPEAL OF THE NORTHERN TERRITORY OF AUSTRALIA
No. AP13 of 1988

BETWEEN:
MELVIN LAWRENCE JONES
First Appellant

AND:
KENNETH GRAEME SMITH
Second Appellant

AND:
GARY MARK LACKERSTEEN
Respondent

CORAM:	MARTIN J.

REASONS FOR JUDGMENT
(Delivered 6 April 1989)

The respondent applies for an order that the appellants provide security for the costs of their appeal to the Court of Appeal from a judgment of Asche C.J. in this Court.	Rule 85.13 provides that unless the Court of Appeal or a Judge otherwise directs, no security for the costs of an appeal to the Court of Appeal is required.

The respondent's claims against the appellants were for damages, aggravated damages and exemplary damages for

assault, wrongful arrest and false imprisonment occurring in April 1982.	The hearing occupied about 14 days during 1988. Much turned upon the learned trial judge's assessment as to the credibility of the parties.	His Honour preferred the evidence of the plaintiff and gave judgment for $32,000, including aggravated and exemplary damages and ordered the appellants to pay the respondent's costs.	They were taxed and allowed in the sum of $94,859.49.

The grounds of appeal, which are common to each appellant, number 31.		At paragraph 32 they say His Honour "erred on such further or other grounds of appeal as are advised by counsel."	No further or other such grounds were mentioned to me.

Most of the grounds of appeal allege that His Honour erred in his findings of fact, including findings by way of inference, in that they were against the evidence and the weight of evidence.	Others go to error of law in relation to evidence, and statutory interpretation.	Another asserts that there was no occasion for awards of aggravated and exemplary damages.

The opinion of an articled clerk in the office of the solicitor for the respondent, is that it would take 4 days to prepare for the hearing of the appeal, and that the hearing would occupy 2 to 3 days.	Those estimates were not

disputed by counsel for the appellants.	He did argue against the estimated costs of $27,300, including senior and junior counsel's fees and solicitors costs.

The judgment and costs awarded have not been paid. Attempts to levy execution against assets of each appellant have been unsuccessful and the warrants returned nulla bona. Both appellants were police officers and both retired from the force on the grounds of invalidity due to ill health, during December 1988.	There is no evidence as to what, if anything, they each received upon retirement, but a personnel officer said they were not entitled to any pension.

On 3 October 1988 the wife of the appellant Jones applied to the Family Court for orders for maintenance for the children of the marriage and in relation to property.  On 4 November 1988, the Family Court made orders in terms of a consent filed by the parties on 11 October 1988, whereby, amongst other things, Jones agreed to pay maintenance of
$150 per week, to transfer his interest in the matrimonial home to his wife (she indemnifying him in relation to mortgages on the property), to forego all his interest in furniture and other items in the home.	He retained a motor vehicle, a boat and motor, and monies standing to his credit.	As already mentioned, by the time the bailiff arrived he apparently had no assets.

The appellant Smith apparently no longer resides in the Territory.	His whereabouts were not shown before me, although it may be that he now resides in Melbourne.

Counsel for the respondent pointed to the evidence showing that neither appellant had the means to meet any order for costs of the appeal which might be made in favour of his client.	On the other hand, it seems to me unlikely, on that evidence, that either appellant could provide monies or other security for costs, and that they could be effectively precluded from prosecuting the appeal any further if such an order was made.

This is not an application for security for costs upon proceedings at first instance, as to which see
r. 62.02.	It has long been the view that poverty is no bar to a litigant, although there was said to be an exception in the case of appeals not to exclude an insolvent party, but to prevent him, if he cannot find security, "from dragging his opponent from one Court to another" (Bowen L.J. in Cowell v Taylor (1885) 31 Ch D 34 at p. 38: see also A.L. Smith J. in Swain v Fallows (1887) 18 QBD 585 at p. 587).

Angas Parsons and Richards J.J. acted in conformity with those views in O'Callaghan v Duhst & Anor (1931) SASR 369, in the exercise of the inherent jurisdiction of the Supreme Court of South Australia, in an appeal to that Court from the Local Court, where the appellant was without means.

Impecuniosity may not conclude the matter. "Considerations of possible frustration of an apparently genuine appeal or concerning the subject matter of the appeal, such as appeals involving matters of great moment or the liberty of the subject, may provide reasons to refuse an order" (Hall v 53-55 Hall Street Pty Ltd (1978) 1 NSWLR 311 at p. 312).	Under the then rules the appellant was obliged to show that there were special circumstances justifying the making of an order for security for costs on appeal and the Court, (Moffitt P, and Reynolds and Glass JJ.A) noted, at p. 313, that the exercise of the power will often provide the appropriate procedure to protect a litigant from unreasonable or harassing appeals.	If the appeal raises an arguable question of law, that may be a factor going to the exercise of the Courts discretion (per Gibbs C.J. in
DJE Constructions v Maddocks (1981) 38 ALR 185).	That decision also draws attention to the need to look at all the circumstances of the case.

Again, in the High Court, Brennan J. in Lucas v Yorke & Anor (1983) 50 ALR 228, affirmed that the discretion is not fettered by an appellant's poverty, but is absolute, depending on all the circumstances of each case.	The discretion must be exercised judicially, which means in each case that the judge has to enquire how, on the whole, justice will be best served (per Rich J. in King v Commercial Bank of Australia Ltd (1920) 28 CLR 289 at 292).

If there is an important question of law, that is a factor, though the importance of such a question should not override the interests of the parties (Lucas p. 230).

The rule of the Federal Court of Australia (0. 52
r. 20) as to security for costs on appeal is to th	same effect as that of this Court.

In Beard v Prestige Baking Industries Pty Ltd (1980) 51 FLR 454, Northrop J. affirmed that poverty of the appellant was not the only factor for consideration.	See also Ciappina v Ciappina (1983) 70 FLR 287 at p. 290 and at
p. 291 where Neaves J. drew attention to the remarks of Fullagar J. in Brundza v Robbie & Co (No. 2) (1952) 88 CLR
171 at 175, "..•. in ordering security for costs, the court does not set out to give complete and certain indemnity to a respondent.•.•. It is not, of course, to be assumed  that the appellant will fail."	I have also looked at unreported decisions of the Federal Court, Hedrlin v The Proprietors Strata Plan No. 3770 Morling J., 4 August 1982; Darcey v
The Preterm Foundation, Burchett J., 18 May 1987;
Karunakaran v The Minister for Immigration and Ethnic Affairs, Neaves J., 20 November 1984; Riv-Oland Marble Co v Settef, Jenkinson J., 2 May 1988.	There does not appear to be anything in those decisions which take the matter any
further.

Unlike an application for security for costs at first instance, the discretion does not arise upon proof of the particular case out of which the power to exercise the discretion arises (r. 62.02 and see Barton v Minister for Foreign Affairs (1984) 54 ALR 586 on that point and as to the breadth of the Court's discretion to tailor an order to the circumstances of the case).

The appellants are impecunious, and there is no evidence to show their prospects of earning or otherwise obtaining monies, which might go to providing a source from which any costs they are ordered to pay might be satisfied. The general principles applying to considerations upon appeal lead me to think that they have not much prospect of success on those grounds of appeal going to the learned trial Judge's findings of fact based upon their credibility and that of the respondent (which appears to be all in favour of the respondent).	The Appeal Court can, of course, draw its own inferences from the findings of primary facts, and in that field the appellants prospects must be enhanced to some degree.	The matters of statutory interpretation are of importance governing, as they do, the powers of arrest of members of the Police Force without warrant and the requirement that actions for anything done in pursuance of the Police Administration Act shall be brought within 2 months after the act complained of was committed (ss. 123 and 162, Police Administration Act).	So far as I am aware

,

those provisions have not been previously the subject of judicial attention in this jurisdiction.

The relationship between damages, aggravated damages and exemplary damages, especially in the circumstances as found by His Honour in this case, and the occasion giving rise to the award of aggravated and exemplary damages, are matters of general importance and not, I think, free from doubt.

In all the circumstances, I consider justice will be done between the parties, by ordering that the appellants jointly or severally provide security for costs in total in the sum of $10,000, to the satisfaction of the Master, within a period of 28 days from today, failing which the appeal is to stand dismissed.	The costs of this application are to be the respondent's costs in the appeal.

Certified fit for counsel.