FEDERAL COURT OF AUSTRALIA Carey-Hazell v Getz Bros & Co (Aust) Pty Ltd [2006] FCAFC 186 APPEALS – security for costs – appeal stayed until security provided or further order – later order of the Full Court that the proceeding be dismissed if security not provided by particular date – security not provided within time allowed – application for the orders of the Full Court to be varied to allow appeal to be maintained – whether 'special circumstances' within meaning of O 28 r 5(3) – factors relevant to discretion to vary security for costs – Held: not appropriate to set aside or vary the orders of the Full Court Federal Court Rules O 28 r 5(3) Jess v Scott (1986) 12 FCR 187 cited KAREN CAREY-HAZELL v GETZ BROS & CO (AUST) PTY LTD ACN 005 932 654, PETER THOMPSON AND TREVOR NICHOLLS WAD 176 OF 2004 SPENDER, BRANSON AND SIOPIS JJ 13 DECEMBER 2006 perth (via video link to sydney and brisbane) IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY WAD 176 OF 2004 BETWEEN: KAREN CAREY-HAZELL Applicant AND: GETZ BROS & CO (AUST) PTY LTD ACN 005 932 654 First Respondent PETER THOMPSON Second Respondent TREVOR NICHOLLS Third Respondent JUDGES: SPENDER, BRANSON AND SIOPIS JJ DATE OF ORDER: 13 DECEMBER 2006 WHERE MADE: PERTh (via video link to sydney and brisbane) THE COURT ORDERS THAT: 1. The application be dismissed. 2. The applicant pay the costs of the first respondent, and the costs of the second and third respondents, of and incidental to the motion, to be taxed if not agreed. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY WAD 176 OF 2004 BETWEEN: KAREN CAREY-HAZELL Applicant AND: GETZ BROS & CO (AUST) PTY LTD ACN 005 932 654 First Respondent PETER THOMPSON Second Respondent TREVOR NICHOLLS Third Respondent JUDGES: SPENDER, BRANSON AND SIOPIS JJ DATE: 13 DECEMBER 2006 PLACE: PERTH (via video link to sydney and brisbane) REASONS FOR JUDGMENT SPENDER J: 1 I agree that the application should be dismissed for the reasons given by Justice Branson. I certify that the preceding one (1) numbered paragraph is a true copy of the Reasons for Judgment herein of the Honourable Justice Spender. Associate: Dated: 20 December 2006 IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY WAD 176 OF 2004 BETWEEN: KAREN CAREY-HAZELL Applicant AND: GETZ BROS & CO (AUST) PTY LTD ACN 005 932 654 First Respondent PETER THOMPSON Second Respondent TREVOR NICHOLLS Third Respondent JUDGES: SPENDER, BRANSON AND SIOPIS JJ DATE: 13 DECEMBER 2006 PLACE: PERTH (via video link to sydney and brisbane) REASONS FOR JUDGMENT branson j 2 On 6 July 2004 Kiefel J dismissed with costs the application by which Ms Carey‑Hazell sought relief against the respondents following the implant of a mechanical valve in her heart. Ms Carey‑Hazell had claimed that the implant of the valve led to her experiencing symptoms attributable to thromboembolisms and their aftermath. She sought relief against the first respondent in its capacity as the supplier of the valve in Australia; against the second respondent as her cardiologist and against the third respondent as her surgeon. 3 On 27 July 2004 Ms Carey‑Hazell instituted an appeal against the judgment pronounced by Kiefel J on 6 July 2004. On 15 October 2004 French J ordered her to provide security for the first respondent's costs of the appeal in the sum of $75 000 and for the second and third respondents' costs of the appeal also in the sum of $75 000. His Honour stayed the appeal until the security was provided or until further order. 4 On 31 March 2006 this Full Court declined to dismiss Ms Carey-Hazell's appeal on the ground that she had not provided the security required by the order made by French J. We also declined to set aside the order made by French J or to reduce the amount of security which she was required to provide. Rather we made the following orders: '1. The security for costs ordered by French J on 15 October 2004 to be provided by the appellant for the first respondent's costs of the appeal, and for the second and third respondents' costs of the appeal, be provided by 4pm on Friday 5 May 2006. 2. If the appellant fails to comply with the order to provide security for the first respondent's costs by 4pm on Friday 5 May 2006, the proceeding be dismissed as against the first respondent; if the appellant fails to comply with the order to provide security for the second and third respondents' costs by 4pm on Friday 5 May 2006, the proceeding be dismissed as against the second and third respondents. 3. The costs of the parties on the Notices of Motion be costs in the appeal.' 5 On 4 May 2006 Siopis J stayed the above orders of the Full Court, relevantly, until the decision of the High Court on Ms Carey-Hazell's application for special leave to appeal from the judgment of the Full Court. That application for special leave was determined pursuant to Rule 41.10.5 of the High Court Rules and dismissed on 5 October 2006. Consequently, as Ms Carey-Hazell had not provide security for costs as ordered by French J, her appeal from the judgment of Kiefel J was dismissed by operation of order 2 of the orders made by the Full Court on 31 March 2006. 6 On 8 November 2006 Ms Carey-Hazell filed a notice of motion seeking, in effect, an order that the orders made by the Full Court on 31 March 2006 be varied to the extent necessary to allow her to maintain her appeal from the judgment pronounced by Kiefel J, on the condition that she provide the security for costs ordered by French J within seven days of the date of the order sought by her. 7 As Ms Carey‑Hazell's appeal stands dismissed, this Court may only set aside or vary the orders made by it on 31 March 2006 'in special circumstances' (see O 28 r 5(3) of the Federal Court Rules). I would reject the contention that the orders may be set aside pursuant to O 35 r 7(2)(e) on the basis that they do not reflect the intention of the Court. Assuming that O 35 r 7 has any application in the present circumstances, the terms of the orders do reflect the intention of the Full Court. 8 There will be 'special circumstances' within the meaning of O 28 r 5(3) if the circumstances of this case distinguish it from the usual or ordinary case in such a way that it is appropriate to depart from the general rule that finality should attend the dismissal of a proceeding (Jess v Scott (1986) 12 FCR 187 at 195). 9 The circumstances upon which Ms Carey‑Hazell relies are: (a) that she was effectively insolvent, and thus unable to provide security for the respondents' costs, until she learnt on 6 November 2006 that a substantial tax bill which she had received would be forgiven; (b) she is now able, as she claims, to borrow $150 000 from a close friend for the purpose of providing security for the respondents' costs; (c) she has applied to the Court promptly after learning of the change to her circumstances; (d) unless she obtains an order on appeal setting aside the costs order made by Kiefel J she will become bankrupt; and (e) there is a public interest element in her appeal from the judgment pronounced by Kiefel J. 10 In my view little, if any, weight is to be given on the present application to the asserted public interest in the appeal from the judgment pronounced by Kiefel J. This circumstance, assuming it to exist, may be understood to have been taken into account when the order was made requiring Ms Carey-Hazell to provide security for the respondents' costs of her appeal. Nor do I attribute weight to the risk that Ms Carey‑Hazell may become bankrupt if she does not obtain an order setting aside the costs order made by Kiefel J. Regrettably, it is neither unusual nor out of the ordinary for a party to litigation to be unable to meet from his or her own funds a costs order made at the completion of complex litigation. 11 I am inclined to doubt that the circumstance that Ms Carey-Hazell has only recently found herself in the financial position to borrow $150 000 is appropriately characterised as 'special' in the relevant sense. Many applications to set aside or vary an order for security for costs when the relevant proceeding stands dismissed will be made because the applicant is, or hopes soon to be able, to raise funds to provide the security. However, it is unnecessary for me to express a concluded view on this issue. Even were I satisfied that special circumstances have been demonstrated in this case I would not consider it an appropriate exercise of the Court's discretion to vary the orders made by the Full Court on 31 March 2006 so as to allow Ms Carey‑Hazell now to maintain her appeal from the judgment pronounced by Kiefel J. 12 First, I consider delay to be a significant factor suggesting against variation of the orders. It is now more than ten years since the events occurred which gave rise to the proceeding before Kiefel J. If Ms Carey-Hazell's appeal is re-instated it is unlikely to be heard until, at the earliest, mid 2007; that will be at least three years from the date of the judgment pronounced by Kiefel J. It is over two years since the order for the provision of security for costs was made. Additionally, Ms Carey‑Hazell's application to the Tax Relief Board to have her tax bill forgiven was received on 28 August 2006. She provided no explanation in her affidavit evidence for not making her application to the Board earlier nor did she explain why, having applied to the Board, she did not seek to have the stay order made by Siopis J extended but rather allowed her appeal to be dismissed. Ms Carey-Hazell has today submitted that her delay in applying to the Board was necessitated by the need to have the relevant assessment issue first. However, she has provided no explanation for not seeking to have the stay order made by Siopis J extended. 13 Secondly, the respondents have incurred significant additional costs since the date of the orders made by French J. Payment of these costs is not secured by his Honour's orders. Ms Carey‑Hazell has indicated today that she is not able to provide any security for the respondents' costs in addition to that required by his Honour's orders. 14 Finally, I am not satisfied that Ms Carey-Hazell's grounds of appeal from the judgment of Kiefel J are strong. 15 As O 28 r 5 recognises, the finality of an order of dismissal ought not lightly to be disturbed. Having regard to all of the circumstances I do not consider that it would be appropriate to set aside or vary the orders made on 31 March 2006. 16 It is appropriate to record that were I satisfied that it was appropriate to vary the orders earlier made, I would accept the submission of the respondents that (a) the amount of security to be provided by Ms Carey-Hazell should be increased and (b) the security should be provided in a form that provides protection to the respondents should Ms Carey-Hazell become bankrupt. 17 For the above reasons I would dismiss the application. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Branson. Associate: Dated: 18 December 2006 IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY WAD 176 OF 2004 BETWEEN: KAREN CAREY-HAZELL Applicant AND: GETZ BROS & CO (AUST) PTY LTD ACN 005 932 654 First Respondent PETER THOMPSON Second Respondent TREVOR NICHOLLS Third Respondent JUDGES: SPENDER, BRANSON AND SIOPIS JJ DATE: 13 DECEMBER 2006 PLACE: PERTH (via video link to sydney and brisbane) REASONS FOR JUDGMENT siopis j 18 I too agree that the application should be dismissed for the reasons given by Justice Branson. I certify that the preceding one (1) numbered paragraph is a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis. Associate: Dated: 18 December 2006 Counsel for the Applicant: The Applicant appeared in person Counsel for the First Respondent: Mr DF Villa Solicitor for the First Respondent: Kennedys Counsel for the Second and Third Respondents: Mr CL Zelestis QC and Mr MJ Feutrill Solicitor for the Second and Third Respondents: Clayton Utz Date of Hearing: 13 December 2006 Date of Judgment: 13 December 2006