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AIA Australia Ltd v Reynolds


[2016] QCA 233






Appeal No 6764 of 2016

DC No 2353 of 2014



ACN 004 837 861Applicant/Respondent




LISA ANNE REYNOLDSRespondent/Applicant








PHILIP McMURDO JA:  This is an application for security for costs of a proposed appeal against a judgment in the District Court.  The case in that Court was a claim by the proposed appellant for a sum ultimately of $75,000, together with interest, as money owing to her under an insurance policy.  Therefore an appeal lies to the Court of Appeal only by the leave of this Court according to s 118(3) of the District Court of Queensland Act 1967 (Qld).  At present, there is an application for leave to appeal filed within time, but not yet a grant of leave.

The security is sought against the proposed appellant upon the basis that the appeal would have little or no prospect of success and that it appears that she would be unable to meet the costs of the appeal if unsuccessful and ordered to pay those costs.  Her evidence as to her financial position bears out that second proposition.  That is to say, she is a person with little income receiving some money from Centrelink to supplement her income, but otherwise earns a modest living from being self-employed and using a quilting machine, which appears to be her only substantial asset and is valued at approximately $16,000.  In her affidavit, she says that she has:

“…no means for obtaining a loan to satisfy any security for costs order because of my low income and lack of assets –”

and that she has no:

“…family or friends that would be able to lend money to me for any significant sum.”

In another part of her affidavit, she says that:

“If any order for security for costs is made in any significant sum, I’ll be unable to satisfy it.”

In yet another part of the affidavit, she appears to go further, saying:

“Because I would be unable to satisfy any security for costs order, that would, in all probability, stifle my appeal, and it would not proceed.”

Overall, her evidence leaves me with the impression that whilst, as I’ve said, she has no substantial assets apart from that machine, which she needs for her living, the prospect of her prosecuting her application for leave to appeal, if she is ordered to provide security, would depend upon whether the security is ordered in what she has described as a “significant sum”.

The amount which is sought by the respondents to the application for leave to appeal is of the order of $38,000.  There is evidence from a costs assessor, which is to the effect that an amount of that order might be expected to be assessed as the costs of the appeal.  There is also evidence of yet a higher assessment if allowance were made for both senior and junior counsel on the respondent’s side of the appeal, the evidence being that the respondents intend to engage senior counsel, notwithstanding the small amount of money involved in the case.

The discretion which arises under r 772 of the Uniform Civil Procedure Rules to order security for costs of an appeal is, on any view, a broad one.  In Murchie v Big Kart Track Pty Ltd (No 2) [2003] Qd R 528, in the joint judgment of Justices Davies, Jerrard and Wilson, it was said that the court under this rule has:

“…an unfettered discretion whether to order security and, if so, in what amount.”

Their Honours added that:

“The fact that the plaintiff has already had her day in Court and lost, her impecuniosity, and her prospects of success on appeal –”

were factors relevant to the exercise of that discretion.  Those comments may be generally applied to the present case.  Moreover, it is of some relevance that the proposed appeal is one which, as I’ve mentioned, does require the leave of the Court under s 118, and that is because of the relatively small sum which was in issue on the claim in the District Court.

Clearly, also it is relevant to consider the apparent prospects of success in the appeal.  In this context, it must be recognised that there is a limitation upon the ability of a judge hearing such an application to consider the proposed arguments in the appeal and to reach a concluded view in a way which would surely predict the outcome upon a full argument before a court of three judges.  Nevertheless, the apparent merit or demerit of an appeal can often be a critical consideration when exercising the present discretion.

I have had the benefit of submissions in some detail by the counsel for each party, each of whom appeared at the trial.  The judgment in the District Court involved legal and factual questions.  There was an extensive discussion by the trial judge of the meaning of the critical term in the policy of insurance under which the plaintiff claimed.  Ultimately, the question for the trial judge was whether the plaintiff had proved that it was:

“…unlikely that she will ever again be able to be gainfully employed in any occupation for which she is reasonably suited by education, training or experience.”

In an apparently comprehensive discussion of what were said to be the relevant authorities, his Honour expressed a number of conclusions of law as to the proper interpretation of that phrase.  It was strongly argued for the defendants, that is, the applicants for security for costs, that his Honour’s reasoning is supported by decisions of intermediate Courts of Appeal in other Australian jurisdictions which are not clearly wrong and therefore would have to be followed in the present case with the consequence that the proposed appeal would fail.  It must be said, however, that in none of those cases was the policy in question and, in particular, the key provision of that policy in identical terms to the phrase which his Honour construed.

The other questions for his Honour were ones of fact.  Clearly the plaintiff established, as was conceded at the trial, that she had developed what can be broadly described as a serious skin condition which makes her unable to perform any outdoor work, including that which for much of her working life she had undertaken which was gardening.  There was evidence, again discussed in detail in the trial judgment, as to the extent to which she would need ongoing treatment for that condition.  On any view she will require treatment which would involve periods of recuperation and the treatment itself, which in total will amount to several weeks over a year.

His Honour found, in effect, that she was able to be gainfully employed in some relevant occupations and that the need for constant treatment and recuperation would not preclude her from being so employed.  That conclusion involved both the adoption of a certain interpretation of the meaning of the clause and an assessment of the relevant facts.  It may be noted that the question in this case was one of her ability to be employed or gainfully employed.  That is a question of capacity, which as I see it is different from a question of her physical capacity to perform work of a relevant kind.  But as I understand the arguments before the trial judge which are proposed to be put again in the Court of Appeal, the proposed Appellant will not argue otherwise.

As I understand the essence of her case, it is that the matter must be assessed by reference to the extent to which her ongoing need for periods away from work, while she undergoes necessary treatment for her condition and recovers from that treatment, disadvantage her in finding and maintaining employment.  In that argument my impression is that her case is neither obviously strong nor plainly weak.  It is, for example, not a case with the obvious weaknesses which existed in Murchie v Big Kart Track Pty Ltd.  My impression is that the proposed appeal is arguable, but I would not put its merits any higher than that.

I have mentioned already the financial circumstances of the appellant and the likely costs according to the evidence which would be incurred by the respondents.  The present context of course is one in which the proposed appellant has had a trial and in which she must obtain the leave of the Court to appeal against that judgment.  She wishes to do so where the amount of money involved in her claim, although very considerable measured against her own financial position, is relatively small compared with the high costs of an appellate proceeding.  In my judgment this is a case where in the interest of justice, some security for costs should be ordered.  But as is well recognised an order for security for costs is just that and that it is not an order for the indemnification of the respondents.

In quantifying the amount of the security I have had regard to two other considerations.  One is that I have tried to assess the amount of the security such that it could be provided.  The second is that there is a need for some proportionality here in fixing the amount of the security having regard to the very small amount, relatively speaking, which is in issue.  The conclusion I have reached is that security for costs should be ordered in the sum of $12,000.

The respondent’s costs of and incidental to this application will be its costs in the application for leave to appeal.


Editorial Notes

  • Published Case Name:

    AIA Australia Ltd v Reynolds

  • Shortened Case Name:

    AIA Australia Ltd v Reynolds

  • MNC:

    [2016] QCA 233

  • Court:


  • Judge(s):

    McMurdo JA

  • Date:

    14 Sep 2016

Litigation History

Event Citation or File Date Notes
Primary Judgment [2016] QDC 129 07 Jun 2016 Judgment for the defendants on the plaintiff's claim pursuant to a total and permanent disability benefit as a member of the superannuation trust Sunsuper (determination that the plaintiff was not totally and permanently disabled within the meaning of the Sunsuper insurance policy): Dorney QC DCJ.
QCA Interlocutory Judgment [2016] QCA 233 14 Sep 2016 -
Notice of Appeal Filed File Number: Appeal 6764/16 04 Jul 2016 -
Appeal Discontinued (QCA) File Number: Appeal 6764/16 02 Nov 2016 Appeal dismissed by consent.

Appeal Status

{hollow-slash} Appeal Discontinued (QCA)