DISTRICT COURT OF QUEENSLAND

1. [1]
   This is an application made pursuant to rule 772 of the Uniform Civil Procedure Rules 1999 (Qld) for an order the respondent to the application provide security for payment of any costs the Court of Appeal may award to the applicant following disposal of the appeal.  The respondent to the application is the appellant.

2. [2]
   On 1 April 2003 the applicant brought a claim in the Maroochydore registry of the District Court for orders pursuant to section 286 of the Property Law Act 1974 (Qld).  The application was principally concerned with obtaining an order that a dwelling at Noosaville (the property) acquired by the applicant and the respondent whilst in a de facto relationship and jointly owned by them be sold and the proceeds divided.

3. [3]
   On 18 September 2006 a consent order was made which had it operated as on its face was intended, would have disposed of the matter.  See paragraph 11 of the order.  Paragraph 10 of the order provided the parties have liberty to apply.

4. [4]
   The effect of the order was that the respondent was to pay $77,000 to the trust account of solicitors for the applicant within 90 days. The respondent was also to pay to the applicant’s father the sum required to discharge a loan to the applicant and the respondent used in the purchase of the property. The loan was secured by mortgage. The respondent was also to be responsible for all monies owing by the respondent and/or the applicant to the respondent’s father whether pursuant to a loan secured by mortgage or otherwise (the respondent’s father had also lent money to the applicant and the respondent to assist in the purchase of the property). Upon those matters occurring the applicant was transfer all of her right, title and interest in the property to the respondent

5. [5]
   The respondent failed to pay the money as ordered. It appears he was unable to secure the necessary funds.

6. [6]
   On 5 April 2007 an application was made to the court by the applicant for a variation of the consent order.  The variation sought was opposed by the respondent.

7. [7]
   On 27 April 2007 the court made an order which varied the consent order of 18 September 2006.

8. [8]
   The effect of the order as varied was that the applicant and respondent enter into a listing agreement with a nominated real estate agent for the sale of the property:

For the periods of exclusive agency and open listing, the advertised sale price was to be that recommended by the President of the Real Estate Institute of Queensland, but to achieve a sale price of not less than $650,000.  If the property went to auction the reserve price was to be set at not less than $650,000.  Further orders were made regarding the proceeds of sale, for payment of the amounts and to the people referred to in the consent order, for government duties on sale and discharge of mortgages, for fees and charges of the selling agents and for legal fees, with any balance to be paid to the respondent.

9. [9]
   The respondent has appealed this order to the Court of Appeal.

10. [10]
    Rule 772 of the Uniform Civil Procedure Rules provides:         

(1) The Court of Appeal or the court that made the decision appealed from may order an appellant to give security in the form the court considers appropriate-- for payment of any costs the Court of Appeal may award to a respondent.

11. [11]
    In Natcraft Pty Ltd & Anor v Det Norske Veritas & Anor [2002] QCA 241, Jerrard JA set out some factors relevant to assessment of an application of this kind.  Davies and Williams JJA observed that the factors set out by Jerrard JA were not the only factors and that an application must be looked at in the light of all relevant circumstances.

12. [12]
    The factors contained in the list set out by Jerrard JA which may apply in this case include:

13. [13]
    In Murchie v The Big Kart Track Pty Ltd (No 2) [2003] 1 Qd R 528, the Court of Appeal speaking of an application for security for costs before the court observed that the discretion under rule 772 was unfettered.  An appellant’s impecuniositys and prospects of success on appeal were relevant to the exercise of the discretion (pages 529-30).  Pre-judgement of the outcome of the appeal was not appropriate but if the prospects of success were “bleak--- that would be a powerful factor in favour of ordering security”.

14. [14]
    The appeal in question here was filed on 25 May 2007.  On 28 May 2007 the solicitors for the applicant received the appeal timetable.  The appellant’s outline was to be provided by 15 June 2007 and the respondent’s outline by 6 July 2007.  In the event the appellant’s outline was not provided until 29 June 2007.  In the meantime the applicant was waiting for the transcript of the proceeding when the varied order was made to complete her outline.  Trying to expedite things her solicitors wrote to the respondent on 6 July 2007 seeking to obtain a copy of the transcript from him and undertaking to pay his photocopying expenses.  On 10 July 2007 contact was made with the respondent by telephone.  He informed he had sent his copy of the transcript to the Court of Appeal.  As it turns out this was not true.  Thereafter on 11 July 2007 the applicant made this application.  There has been no undue delay in bringing the application.

15. [15]
    According to the respondent he is impecunious. If security as sought is ordered he will be unable to provide it.

16. [16]
    Reference to the grounds of appeal reveal assertions that the Judge:

• Did not allow him to make submissions;

• Demonstrated bias by receiving submissions from the applicant;

• Relied upon the “irrelevant”;

• Accepted advice from the applicant’s legal representative, but not from the respondent;

• Failed to instruct the respondent about his rights;

• Refused to consider an adjournment;

• Made orders without considering the “financial ramifications” of those orders or the “processes which would be involved in the lieu of those orders”;

• Made “procedural orders” which unfairly disadvantaged the respondent and advantaged the applicant;

• Failed to avail himself of all evidence available in the courtroom;

• Made “pre-emptive” orders;

• Failed to consider the rights of the mortgagee;

• Failed to understand the significance of correspondence annexed to the applicant’s solicitor’s affidavit;

• Made a judgement without taking into account “relevant considerations”;

• Conducted himself in a manner suggesting bias indicating he had made a decision without “educating himself as to the evidence”.

17. [17]
    The orders sought on the appeal are that the varied orders of 27 April 2007 be set aside, in lieu that the orders of 26 September 2006 be reinstated varied only to remove the respondent’s liability to pay interest on monies he was to pay pursuant to that order after 9 January 2007 and that the property be listed for sale immediately, the price to be determined by the respondent.

18. [18]
    The respondent wants the jointly owned property sold. So does the applicant. If and when it is sold the amount remaining, if any, after other payments is to be paid to the respondent. See Order 5(1)(i). To that extent he may not ultimately be entirely impecunious. The payments required by the order to the applicant and the two fathers total $367,000. The loans by the fathers secured by mortgage were made in 2000 and interest has been accruing.

19. [19]
    The property needs to be sold so that the effect of the consent order can be carried out and financial matters between these two people can be finalised. The ongoing disputing revolves around how it should be sold. The respondent wants to control the way the sale proceeds. The orders made on 27 April 2007 were designed to achieve an equitable result for both as they had earlier agreed, with an independent person and process achieving the sale. 

20. [20]
    It seems to me the grounds of appeal against the background I have set out present bleak prospects of success of the appeal.

21. [21]
    I propose to order the respondent provide security for costs of the appeal in the amount of $13,000. In arriving at this amount I have had regard to paragraphs 17, 20 and 21-23 of the affidavit of the applicant’s solicitor filed 11 July 2007.  Given the history of this matter and the nature of the appeal, I have ignored paragraphs 18 and 19 of that affidavit.  Contingencies have been included at $2000, care and consideration at 20%.

22. [22]
    Order per amended draft, initialled by me and placed with the papers.