Waterhouse v Power[2002] QCA 427

SUPREME COURT OF QUEENSLAND

McPHERSON JA:  For some years beginning in March 1991, the plaintiff and defendant lived together in the defendant's house at Wavell Heights.  In the course of the relationship, they acquired some land at Chillingham as joint tenants and a Ford utility vehicle.  They expended money on household and general living expenses to which the plaintiff, as primary income earner, claimed to have contributed the major part.  The relationship came to an end in November 1999.

In an action by the plaintiff against the defendant to recover the properties or an interest in them or restitution of her outlays, Moynihan SJA gave judgment for the defendant with costs.  The trial extended over some three days and the defendant's total costs were assessed at $43,075.67.

The Ford utility and the Chillingham property have evidently been sold and the plaintiff's share of the proceeds are, by his Honour's order, to be applied in satisfying those costs as far as the proceeds will go, leaving a shortfall of $14,578.18 as yet unpaid.

The plaintiff has now appealed against his Honour's judgment in the action.  Various grounds are advanced for challenging its correctness.  My impression is that the appeal will probably occupy the better part of a full day's hearing.  The defendant intends to brief silk to lead junior counsel who appeared for her at the trial.  An assessment of the defendant's costs and outlays in resisting the appeal has been made in the amount of $15,000 which appears to be a reliable estimate of the likely costs involved on her side of the appeal.

On the appeal, the appellant plaintiff will be confronted by the problem that the findings of the learned trial Judge in favour of the defendant are, to a considerable extent, based on findings of credibility adverse to the plaintiff.  It is notoriously difficult to disturb such findings on appeal.  The plaintiff submits that his Honour misconceived or mis-applied the legal principles on which a case like this should have been decided.  Even so, it will, stating the matter as neutrally as possible, not be an easy case to win on appeal.  In these circumstances, the respondent defendant seeks an order for security for the costs of appeal.

There is evidence that the plaintiff is impecunious.  She still owes some $14,000 in costs to the defendant.  After taking into account the plaintiff's interest in the jointly-owned property or its proceeds, searches failed to reveal any other land or property in the plaintiff's name and the plaintiff herself failed, when asked, to identify other assets out of which she would be able to meet the defendant's costs of the appeal if it is unsuccessful.  Of course the appeal may succeed, although for the reasons given, it is by no means a probable outcome.  If those considerations are brought into account along with the costs already owing, it can be said that the defendant has made out a persuasive case for ordering security for the costs of the appeal.

There remains the question of delay in making this application for security for costs.  The appellant contended that there had been delay which should prevent or affect the outcome of this application.  The sequence of events is as follows.  Judgment was given on 10th of May 2002 and the notice of appeal was filed on 7th June.  The Registrar issued a timetable on the 18th of June.  On the 28th of June the appellant filed her outlines, and on the 18th of July the defendant respondent filed hers.  In the meantime, she had, on 16th of July, sought particulars of the appellant's assets.

No information was provided until yesterday when an affidavit was sworn disclosing that the appellant has a net four-weekly income of some $3,060 and that her average expenses for the same period are about $100 more than her net income.  She has liabilities at present of about $96,000 including a debt to her solicitors of $50,000.  Part of those liabilities is represented by the $43,000 owed to the defendant for the costs of the trial.

In the figures given earlier in these reasons, that amount is reduced to $14,500 by applying the proceeds of the jointly-owned assets.  Even if that is done, the appellant's liabilities total more than $60,000, which there appears to be little prospect of her discharging in the foreseeable future. 

For the respondent, Ms Downes emphasised that the affidavit of the appellant does not disclose whether or not she has any assets.  It is plain that if the appellant is required to provide security for the respondent's costs of appeal, it will be difficult if not impossible for her to do so out of her own funds so far as we know what they are.  That is, however, not necessarily a reason for refusing to order security for the costs of an appeal.  See Natcraft Pty Ltd v. Det Norske Veritas [2002] QCA 241 where Jerrard JA discussed the discretionary factors relevant on applications like this.

It may, however, go some way towards reducing the amount to be provided as security.  See Macarthur v. Mercantile Mutual Life Insurance Company [2000] QCA 412.  For my part, I do not think the respondent can fairly be charged with delay in the making of this application although it would perhaps have been possible for her to have made her application more quickly after the notice of appeal was filed on 28th June.

I am informed that, in the course of the coming week, this appeal is likely to be set down for hearing on a date in the first quarter of next year.  The appeal record has not yet been prepared but that will take place quite soon.  It is of course one of the major items of expense on appeals to this Court.

All matters considered and in an effort to balance the various factors involved, I consider that justice would be done if the appellant were ordered to provide security for the costs of the appeal within 14 days by paying into Court or otherwise securing to the satisfaction of the Registrar the sum of $10,000, failing which the appeal will stand dismissed with costs.  The costs of this application will be costs in the appeal.

DAVIES JA:  I agree.

HOLMES J:  I agree.

McPHERSON JA:  That is the order the Court proposes.