Labaj v Lollo Plumbing Pty Limited
[2003] QDC 232
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- Unreported Judgment
- Appeal Determined (QCA)
- Labaj v Lollo Plumbing Pty Limited[2003] QDC 232
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Labaj v Lollo Plumbing Pty Limited[2003] QDC 232
Labaj v Lollo Plumbing Pty Limited[2003] QDC 232
DISTRICT COURT OF QUEENSLAND
CITATION: | John Labaj v Lollo Plumbing Pty Limited [2003] QDC 232 |
PARTIES: | JOHN LABAJ Appellant v LOLLO PLUMBING PTY LIMITED Respondent |
FILE NO/S: | Appeal No. D 441 of 2002 |
DIVISION: | District Court |
PROCEEDING: | Appeal |
ORIGINATING COURT: | Townsville |
DELIVERED ON: | 30 July 2003 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 16 June 2003 |
JUDGE: | Boulton DCJ |
ORDER: | Appeal allowed in part. Orders for security for costs with costs of $300 set aside. No order as to costs of the Appeal. |
CATCHWORDS: | Security for costs – individual plaintiff – undischarged bankrupt – absence of exceptional circumstances – justice of the case |
COUNSEL: | Not applicable |
SOLICITORS: | Appellant in person; Wilson Ryan and Grose for Respondent |
- [1]This is an appeal against two decisions made by a Stipendiary Magistrate at Townsville on 25th December 2002. On that day the plaintiff was ordered to pay into court the sum of $1,500 by way of security of costs for the action and counterclaim on or before 1st February 2003 and that in the event of non-compliance the action be stayed. Costs of the application fixed in the sum of $300.00 were ordered against the plaintiff. A further application for dismissal of the counter-claim was dismissed and the plaintiff appeals here against that decision as well. The Stipendiary Magistrate ordered that the defendant (presumably the defendant by counterclaim) pay the plaintiff’s (presumably the plaintiff by counterclaim) costs of that application fixed in the sum of $200.00.
- [2]It was never appropriate for the Plaintiff to be ordered to pay security for costs in respect of the defendant’s counter-claim. This may well be a slip in the formulation of the order. However, in light of the over-all view that I take it is of no consequence.
- [3]There is a long standing principle that security for costs will not be granted against an individual plaintiff except in certain specified situations or in very exceptional circumstances. Some of those specified situations are referred to in UCPR 671(a)-(f), and none of them are applicable to the present case. Sub-paragraph (g) does not apply either. The final pre-requisite is the one relied upon:
“(h) The justice of the case requires the making of the order.”
- [4]In Harpur v Ariadne (1984) 2 QR 523 the leading judgment of the Full Court of the Supreme Court of Queensland was written by Connolly J. At page 526 he stated the ancient principle:
“Now, apart from s.533(1) of the Companies (Queensland) Code, to which I must return, the principles which are applicable in a situation such as this have long been well settled. So far as natural persons are concerned poverty was no bar to a litigant and this principle is said by Bowen LJ in Cowell v Taylor (1895) 31 CH.D.34 at p 38 to have been the rule both at law and in equity from time immemorial.”
- [5]At page 530 the Judge returns to the topic referring to:
“… the long-standing principle to which I have already referred that the door of the court should not be barred to a prospective plaintiff, resident within the realm, because he is impecunious. Thus as between residents within the jurisdiction, prosecuting what could properly be described as their own suits, the law required the defendant to accept the risk that the plaintiff might not be able to satisfy the order as to costs.”
- [6]It does not appear that the Stipendiary Magistrate was referred to Harpur which is perhaps the leading Queensland case on the topic.
- [7]Apart from the power to order security for costs under the rules of court, there is an inherent power in courts to prevent abuse of their process. In Shannon v Australia and New Zealand Banking Group Limited (No.2) 1994 2 QR 563, Williams J dealt with an application for security for costs against two individual litigants who were resident within the jurisdiction. At p 563 he refers to a concession made by the senior counsel for the applicant concerning the above-mentioned rule involving individual litigants. However, there was compelling evidence that the plaintiffs had been divesting themselves of assets in order to defeat an order of the court. Williams J found the situation to come within the exceptional category.
- [8]As recently as the 21st March 2003 in Moloney and Anor v Fred Marsh Pty Ltd (in liq) [2003] QCA 120, 21st March 2003, the Court of Appeal considered a situation where there was an individual plaintiff and a corporate plaintiff. The judge at first instance had ordered security for costs against both. The plaintiffs appealed on a number of grounds one of them being that the ordering of security for costs against Mr Moloney in person was contrary to the principles contained in rr 671 and 672 of the UCPR and/or common law. The respondents did not seek to support that part of the order against Mr Moloney in person.
- [9]The respondents in written submissions refer to a decision of the Court of Appeal in Bond v Cerruto and ors [2002] QCA 255 (23 July 2002). This, however, related to security for costs of an appeal. In the material filed the appellant did not indicate any basis for overturning the findings of the Trial Judge.
- [10]The considerations governing security for costs on an appeal are different. This is made obvious in the reasons of Jerrard JA where he outlines matters which are particularly relevant to the application, one of them being “the fact that she has already had a “day in court” and has lost on the merits …”. The decision in Bond does not assist in the present matter.
- [11]Rule 671(h) does not then enliven the discretion to order security for costs against an individual plaintiff unless the circumstances are exceptional and therefore call for the making of an order in the interests of justice. The circumstances are not considered to be exceptional merely because the plaintiff is impecunious or bankrupt or because “there is a distinct prospect in these proceedings resulting in a judgment against him”. It could fairly be said in respect of a large number of cases that come before the courts that there is a distinct prospect that the other side will win.
- [12]The defendant’s defence and counter-claim have been pleaded in the present case with commendable particularity. However, there is nothing on the face of the pleadings from either side to establish that the plaintiff’s claim lacks merit or that the defendant enjoys a very high probability of success.
- [13]This case then did not fall into any exceptional category with the result that the pre-requisites for the making of an order for security for costs against an individual plaintiff were not made out. That order with its associated order for costs should be set aside.
- [14]I am less impressed with the plaintiff’s second appeal against the Stipendiary Magistrate’s refusal to dismiss the counter-claim.
- [15]Prior to the hearing of the application the Stipendiary Magistrate had adjourned it to enable consideration to be given to the plaintiff’s status as an undischarged bankrupt. On the return date the defendants relied upon an affidavit of Renee Anne Bennett sworn 22nd November 2002 which exhibited a letter of the defendant’s solicitors dated 21st November 2002, a facsimile transmission from the South Australia Branch of the Insolvency and Trustee Service (Australia) along with a letter of 22nd November 2002 which advises:-
“I refer to your fax dated 21 November 2002 and advise that the consent of the Official Trustee in Bankruptcy is not required for the bankrupt to bring the action against the defendant nor is it required for the defendant to counter-claim against the bankrupt.
Yours sincerely
Bill Scalzi for Official Receiver”
- [16]The Stipendiary Magistrate was persuaded by the above-mentioned communication that there was no obstacle to the matter proceeding as a result of the Bankruptcy Act. Ms Bennett’s affidavit with it’s exhibits appeared to allay the Magistrate’s concerns. While he is criticised in the appellant’s material for having raised the question in the first place, that criticism seems misguided. It was, with respect, prudent on the part of the Magistrate to ensure that the proceedings were regular. In the circumstances the contention of the appellant that the defendant had failed to obtain the consent of the trustee and that this was sufficient reason for the Stipendiary Magistrate to strike out the counter-claim is simply without foundation. The appeal against the Stipendiary Magistrate’s refusal with its accompanying order for costs therefore fails.
- [17]The Appellant was self-represented. He has had some partial success. There will be no order as to the costs of the appeal.