Bampton v Vourlides[2024] QCA 44

SUPREME COURT OF QUEENSLAND

1. [1]
   MORRISON JA:  The respondent in the appeal has applied for an order that the appellant provide security for the costs of the appeal in the sum of $50,000.00, or such other amount as the court thinks fit.
2. [2]
   The relevant applicable principles were stated in Loel v Miller^[1] in the following terms:^[2]

3. “[2]
   Rule 772 of the Uniform Civil Procedure Rules 1999 (Qld) confers on this Court a broad discretion to order a party to give security for the costs of an appeal. It relevantly provides:

3. [3]
   The power under r 772 has been described as an ‘unfettered’ discretion whether to order security and, if so, in what amount. Relevant factors include that the party has ‘had their day in court and lost’, that party’s financial position and the prospects of success on appeal. As to those factors this Court said in Toms v Fuller:

3. ‘There is no comprehensive list of the factors which might be taken into account on an application for security for the costs of an appeal; Natcraft Pty Ltd v Det Norske Veritas [2002] QCA 241, but where the prospects of success on appeal are ‘bleak’, and the appellant is without funds, there are powerful reasons for ordering security: Murchie at 530.’

3. [4]
   Further, as McMurdo JA said in Woolworths Ltd v Berhane:

3. ‘Another of the considerations referred to in Murchie is the fact that the plaintiff has had his day in court. Put another way, the discretion which is to be exercised under r 772 has a different content from that to be exercised where security for costs is sought ahead of a trial. In particular, the authorities which show a predisposition against the ordering of security for costs against a personal plaintiff ahead of a trial are of less relevance in the present context.’”

The prospects of success on appeal

3. [3]
   The claim made at the trial by the appellant sought two forms of relief:

   1. to set aside a transfer of $300,000.00, made by him to the respondent; and
   2. a declaration that he was induced to make the transfer by way of a gift, by the respondent’s undue influence or unconscionable conduct.
4. [4]
   The appellant failed in the proceedings below.^[3]  The appellant’s case rested upon an allegation that there was an argument between himself and the respondent and as a consequence of that and the behaviour of the respondent during that argument, he felt overwhelmed and considered he had no alternative but to give in to what, as he described, were his daughter’s demand for $300,000.00.  By contrast the respondent’s case below was that the $300,000.00 was a gift made of the appellant’s own instigation and in the exercise of his own free will.
5. [5]
   Both the appellant and respondent gave evidence at the trial, as did family members.  The evidence of the family members was put to one side by the trial judge.^[4]
6. [6]
   The circumstances surrounding the events on the day of the argument were explored by reference to the evidence of both the appellant and the respondent.  It is trite to say that the accounts differed.  There was also evidence concerning the appellant’s capacity as well as his mental health.  Ultimately the trial judge rejected the evidence of the appellant that the alleged argument took place for the time and in the manner stated by him.^[5]
7. [7]
   In the end the trial judge did not accept that the $300,000.00 cheque was presented as a result of the appellant being bullied into that.^[6]  Further, her Honour rejected the suggestion that the appellant was at a special disadvantage because of illness, ignorance, inexperience, impaired faculties or financial need.  Her Honour concluded that she could not accept that the respondent took unconscientious advantage of the appellant.^[7]
8. [8]
   Notably the trial judge’s findings do not turn upon findings of credit as such.  Whilst finding that the appellant was more strident in his approach to the account of what happened, than was the respondent, there are no findings that any evidence was given falsely, recklessly, or incoherently.  Further, there are no findings which seem to turn upon the particular demeanour of either the appellant or the respondent.  Rather, the findings below were based on an assessment of the likelihood of each account.
9. [9]
   I have considered the notice of appeal and the appellant’s outline.  It challenges the findings below on the basis that:

   1. on the pleaded issues the trial judge accepted the appellant’s case, concluding, contrary to the respondent’s denial, that an argument occurred in the days immediately prior to the impugned payment of $300,000.00;
   2. despite that, the trial judge proceeded to determine the outcome on a basis which was neither pleaded, litigated nor argued, and contrary to the only evidence regarding the altercation at the heart of the case;
   3. further, it is contended that the trial judge drew conclusions contrary to authority, relating to the conduct of the stronger party (the respondent), treating subjective motivation as a determinative factor, and not approaching it from the viewpoint of the person detrimentally affected as a consequence of the provident transaction.
10. [10]
    Those themes are developed in some detail in the outline.  Also attacked is the trial judge’s conclusion that emotional dependence was the only circumstance suggested to affect the appellant’s ability to conserve his own interests.  That is said to be contrary to the submissions made at the trial and, further, the finding proceeded from a misunderstanding of the facts and submissions at the trial.
11. [11]
    In addition, the trial judge’s conclusion that it was unlikely that the appellant would have taken any notice of independent advice, was a matter not put in cross-examination and the trial judge’s reliance upon Birch v Birch^[8] was erroneous.
12. [12]
    Finally, the appeal contends that the trial judge’s findings were infected by legal error and a failure to follow the only unchallenged evidence before the court.
13. [13]
    On an application such as this the court is only able to venture a preliminary assessment of the prospects of success.  No fine or detailed analysis is called for, nor any final conclusions.
14. [14]
    I am unable to conclude, contrary to the respondent’s submissions, that the prospects of success are “bleak”.  Equally, however, I do not determine that there are strong prospects of success.  All that can be said, and should be said, is that the appeal has prospects of success, and one cannot proceed on the basis that the prospects are poor or bleak.

The appellant’s financial position

15. [15]
    The application proceeds on the basis that the appellant is not impecunious.  His affidavit reveals assets which can be summarised as:

    1. a 40 per cent interest in real property-$388,000.00
    2. cash at bank (Commonwealth Bank)-$  68,141.28
    3. cash at bank (ANZ)-$  10,857.55

TOTAL$466,998.83

16. [16]
    The 40 per cent interest in the real property is as tenant in common with the appellant’s son.  The property is a unit and it is not subject to any mortgage.
17. [17]
    Otherwise the appellant, a 93 year old man who resides in an aged care facility, derives income from an indexed and untaxed Commonwealth Superannuation Scheme Pension, in the amount of $1,321.90 per fortnight.  In addition, he receives partial support from the Commonwealth for his care and accommodation costs in the aged care facility.
18. [18]
    As against that, the appellant’s liabilities can be summarised as:

    1. the recurring payment for his accommodation at the aged care facility;
    2. payment of the costs ordered against him in the trial, estimated at about $260,000.00; I shall return to this factor below;
    3. payment of his own legal costs of the appeal; and
    4. payment of his usual living expenses; the applicant accepts that these costs will be largely covered by his payment to the aged care facility.
19. [19]
    The costs of the trial have not been assessed or determined by an assessor or the trial judge.  The estimate of the amount comes from the solicitor for the applicant, who merely asserts the total, without particularity.^[9]  That affidavit deposes that the applicant will seek to have the trial judge fix the costs.  Nothing is proffered as to the probability of that occurring, particularly given where the costs are said to exceed $260,000.00 on the solicitor’s estimate.
20. [20]
    The applicant’s solicitor expresses the view that enforcement against the 40 per cent tenancy in common “is likely to be quite expensive”.^[10]  No particulars are given to ground that opinion.  Therefore, I am unable to reach a concluded view about the likely expense involved.
21. [21]
    Similarly, by way of mere assertion, the applicant’s solicitor says that it seems likely that the appellant will not cooperate in that enforcement, and the applicant will have to bankrupt him.  No foundation for that opinion is proffered beyond suspicion.  The solicitor also advances a hearsay indication of the costs of an insolvency firm in the event of bankruptcy.^[11]  The figure may be reasonable, but no belief is expressed in what has been related to him.
22. [22]
    As for the costs of the appeal, there are two disparate views expressed.  Mr Treherne gives his “best estimate” of his client’s costs at around $100,000.00.^[12]  That figure is then increased by Mr Treherne, estimating extra costs in relation to the retainer of Silk, and the amount to be spent in preparing the appeal.  Mr Treherne comes up with a figure of $190,000.00.^[13]
23. [23]
    I am unable to accept the evidence of Mr Treherne in this respect.  In particular that is because the applicant also relies upon the affidavit of Ms Goss, a cost assessor.  Her conclusion is that the assessable costs of the appeal will be about $58,000.00.  It is on the basis of her estimate that the applicant seeks security in the sum of $50,000.00.  Her estimate allows less for the fees of a Kings Counsel than does the solicitor, but even so the total is so far below that of the solicitor that I cannot conclude that the higher figure is appropriate.
24. [24]
    On the basis that the respondent’s costs of the appeal ($58,000.00) may be some guide as the costs that will be incurred by the appellant, it is plain that the appellant’s assets well exceed the possible liability.  Even if the costs of the appeal were increased in the way Mr Treherne suggests, it is still a figure well within the value of the 40 per cent co-tenancy.
25. [25]
    The same conclusion can be reached even if one adds in the costs of the trial estimated without particularity by Mr Treherne at $260,000.00.
26. [26]
    The conclusion that follows is that the appellant has available assets which would exceed the respondent’s costs of the appeal.

Delay by the applicant

27. [27]
    This factor is not relevant in the current circumstances.  There is no suggestion of delay on the part of the applicant in bringing this application.

Other relevant matters

28. [28]
    It is true to say that the appellant has had his day in court at the trial and lost.  That factor is merely one which distinguishes between the approach taken to security at a trial, as opposed to security on appeal.  Its effect is to enable the court to more readily come to the view that security should be ordered, than not.
29. [29]
    In my view, a far more relevant matter is that the appellant has proffered an undertaking, which his counsel confirmed on the application, in these terms:^[14]

“I hereby undertake that, subject to the outcome of the Appeal, the subject of this proceeding, I will not to (sic) remove from Australia or anyway dispose of or deal with or diminish the value of my assets save for payment of my reasonable legal costs, my usual reasonable living expenses, and my accommodation expenses payable to Estia Health Ltd deposed to herein.”

30. [30]
    The appellant has deposed that there is no mortgage over the unit.  It is by far the greatest asset of the appellant, the value of his interest being estimated at $388,000.00.
31. [31]
    In my view, that undertaking is of considerable force in the context of this application.  In effect, the undertaking will preserve the unencumbered 40 per cent interest from being eroded while the appeal is undertaken.  It provides an asset sufficient to meet the costs of the appeal incurred on the respondent’s part.
32. [32]
    As against that the applicant has raised the question whether the appellant’s solicitors will seek to secure an equitable charge over the appellant’s 40 per cent interest, to secure their fees.  However, nothing of the kind has been said by the appellant’s solicitors, and the basis for that concern consists of speculation on the part of the respondent’s solicitor.^[15]  Whilst Mr Treherne says the taking of equitable charges is a common practice, there is no basis for me to conclude that it is likely in this particular case.
33. [33]
    The applicant also contends, through the solicitor’s affidavit, that she is concerned that upon the appellant’s death, her brother (the 60 per cent co-tenant) “will resist and delay the payment of any costs order she obtains in this appeal in terms of it being paid from the estate”.^[16]
34. [34]
    No basis is given for such a concern other than the view, expressed not by the respondent herself but rather by her solicitor on information and belief, that she regards the brother as “having taken her father’s side in the litigation below, is antagonistic to her”.  That assertion is not, in my view, sufficient to raise the issue to any form of likelihood, nor to the point that it would lessen the force of the undertaking offered.

Conclusion

35. [35]
    In my view, the undertaking proffered by the appellant is, in the circumstances a factor which weighs heavily against ordering security for the costs.  The asset it protects is available as a source of funds to meet such costs, even if doing so requires a statutory order for sale.  That enforcement might take some time or require special steps, does not reduce its value of the undertaking in this context.  The value of the asset far exceeds the likely costs of the appeal.
36. [36]
    For these reasons, upon that undertaking being given, the application should be dismissed.  In the course of hearing Mr Erskine of counsel confirmed that the undertaking is still proffered.
37. [37]
    I therefore order:

Upon the appellant, by his counsel, undertaking that, subject to the outcome of the appeal the subject of this proceeding, he will not remove from Australia or any way dispose of or deal with or diminish the value of his assets save for payment of his reasonable legal costs, his usual reasonable living expenses, and his accommodation expenses payable to Estia Health Ltd.

1. The application is dismissed, with costs.