Schultz Toomey O'Brien Lawyers Pty Ltd v Jones
[2016] QCA 308
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- Schultz Toomey O'Brien Lawyers Pty Ltd v Jones[2016] QCA 308
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Schultz Toomey O'Brien Lawyers Pty Ltd v Jones[2016] QCA 308
Schultz Toomey O'Brien Lawyers Pty Ltd v Jones[2016] QCA 308
COURT OF APPEAL
FRASER JA
Appeal No 9155 of 2016
DC No 51 of 2016
SCHULTZ TOOMEY O'BRIEN
LAWYERS PTY LTDApplicant
ACN 136 676 714
v
IAN MICHAEL JONESRespondent
BRISBANE
WEDNESDAY, 23 NOVEMBER 2016
JUDGMENT
FRASER JA: The respondent to this appeal has applied for orders on two topics. In these reasons, I will discuss the application for the first of those orders, which is an application that the appellant provide security for the respondent’s costs of the appeal. The Court’s power to order security may find a source in the inherent jurisdiction, but it is sufficient in this case to refer to r 772 of the Uniform Civil Procedure Rules 1999 (Qld), which confers a power on the Court to order security in terms which do not fetter the discretion. The factors, though, which are usually take into account in such an application are listed, albeit not comprehensively, in Natcraft Pty Ltd & Anor v Det Norske Veritas & Anor [2002] QCA 241 at [9] (per Jerrard JA). Most relevantly, in this case, so far as the arguments are concerned, is the factor concerning the appellant’s prospects of success on the appeal.
The appeal arises out of a claim by the respondent for legal costs incurred when it acted for the appellant in family law proceedings against the appellant’s former wife. The respondent succeeded in obtaining judgment for its costs in the Magistrates Court. The appellant appealed against that judgment unsuccessfully to the District Court, and the appellant now seeks leave to appeal from the judgment of the District Court to this Court. The appellant has provided a draft notice of appeal. The only ground is that the evidence does not support the judgment. He elaborated upon that ground in argument, making two points at the forefront of his case. The first is that he had made an offer to compromise the respondent’s claim for costs against him before the proceedings were brought in the Magistrates Court. He sent an email in which he made this offer, and it was necessarily dependent upon the release of a caveat over property, the sale of which was to provide the appellant with the source of funds he required. He argues that the Magistrate made a mistake in dealing with that evidence and in holding, in effect, that the respondent’s failure to accept that offer did not result in a failure to compromise proceedings. The argument is a little more elaborate than that, but that’s sufficient to explain the point.
The Magistrate did not accept the argument, and the appellant reiterated the argument in his appeal in the District Court. The District Court Judge considered the argument and decided that the fact of the unaccepted offer did not have any bearing upon the result of the Magistrates Court. The appellant wishes to renew the argument a second time – or perhaps a third time – in this Court. There is a difficulty in finding that this argument is likely to give rise to good prospects in the appeal, in that the appeal, if leave is given, would be from a decision of the District Court exercising its appellate jurisdiction, not its own original jurisdiction. In such a case, s 119 of the District Court of Queensland Act 1967 (Qld) has the effect that on the hearing of the appeal to this Court, this Court does not have power to draw inferences from facts which are inconsistent with findings made by the District Court judge. That makes it seem unlikely that an appeal which is avowedly based only upon a factual matter in the evidence can succeed. In any event, I’m not persuaded that the argument is likely to be sufficient to overcome the reasoning of the District Court judge.
The second point the appellant wishes to argue is based upon a proposition which is said to be evidenced by a Queensland Law Society publication, that the respondent should not have had possession of the appellant’s ex-wife’s caveat, which the respondent held, being the caveat which held up the sale. The appellant frankly acknowledges that he did not argue this point in the Magistrates Court or in the District Court. It seems likely that had this point been argued, more evidence about it may have been adduced in the Magistrates Court. If it had been raised for the first time in the District Court, the District Court might have exercised a power to allow fresh evidence to be given about it. That circumstance makes it seem very unlikely that the appellant will be permitted to raise the point for the first time in the Court of Appeal. That being so – and, of course, whilst I am not in any position to make any final determination about the appellant’s prospects – on the basis of the material and arguments that have been put before me, I must conclude that the appellant has not shown that he has good prospects of success in the appeal.
The next factor of importance in considering this application concerns the appellant’s financial position. Upon the settlement of the sale of the house already mentioned, the proceeds from that settlement would appear, on their face, to put the appellant in a good financial position. He makes that point by way of showing that he is not in a poor financial position such as to require security. The respondent argues, though, that there is some evidence that the appellant may have, in the past, disobeyed a Court order. There was a Court order made in the Federal Circuit Court which required that the appellant not to encumber the relevant property. The appellant subsequently swore an affidavit in which he referred to having made a declaration of trust of the property in favour of someone else. The respondent argues that this, on its face, was a contravention of the Court order if it in fact occurred. It does seem to me that this factor of itself provides a legitimate ground for the respondent’s concern that, by the time any appeal is heard and determined, if the appeal fails and costs are ordered in favour of the respondent, the respondent may not be able to find a fund of money against which to execute its order for costs.
It seems to me, therefore, in these circumstances, that the appropriate exercise of the Court’s unfettered discretion in this case is to order security for costs. I take into account also that upon the appellant’s submissions, he should be able to supply security for those costs without that in any way preventing him from litigating his appeal.
…
I order that the appellant furnish to the registrar as security for the respondent’s costs of the appeal, a security in a form satisfactory to the registrar in the amount of $13,000, by 4 pm on 30 November 2016.
FRASER JA: The respondent to this appeal has applied for a freezing order, which may be summarised as amounting to an order which would have the effect of preventing the appellant from disposing of approximately $50,000 of assets, being part of the net proceeds of the sale of the property, mentioned in the previous reasons. The applicant, in response to the appeal, has quantified that amount with reference to costs orders which have been made in various courts. In the applicant’s favour, the applicant contends that there is an evident risk the appellant may dispose of property in a way which would have the result that there will be insufficient property left for the applicant to execute against, to recover upon its costs orders. The applicant put forward various bases to support that proposition, but it strikes me that the most telling basis is that which I mentioned in my earlier reasons, namely, that the appellant swore that he made a declaration of trust of the property, which on its face, would appear, if it did occur, to have been in conflict with a previous court order.
I express no conclusion, one way or the other about that, but it does seem to me to provide a sufficient ground for the applicant’s concern I consider that, notwithstanding that Mr Jones has frankly told me in persuasive terms from the bar table that he will, in fact, comply with his legal obligations, that factor does justify the freezing order which has been sought by the applicant.
Upon the undertakings given to the court by the applicant, which are recited in schedule A to the draft order which I’ve initialled, and upon the applicant’s further undertaking in the terms which I recited in the course of argument and which counsel informed the court the applicant gave to the court, I make the orders set out in the draft order initialled by me and placed with the papers.
I order that the costs of both applications today be reserved.