FEDERAL COURT OF AUSTRALIA Endormer Pty Ltd (In Liquidation) v Australian Guarantee Corporation Ltd [2001] FCA 510 ENDORMER PTY LIMITED (IN LIQUIDATION) & ORS V AUSTRALIAN GUARANTEE CORPORATION LIMITED & ANOR N 1354 OF 2000 JUDGE: BEAUMONT J DATE: 20 APRIL 2001 PLACE: SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 1354 OF 2000 BETWEEN: ENDORMER PTY LIMITED (IN LIQUIDATION) FIRST APPELLANT KWIKDAY PTY LIMITED SECOND APPELLANT GLENN ROBERT JARRETT THIRD APPELLANT DAVID COLIN PATERSON FOURTH APPELLANT JARRETT HOLDINGS PTY LIMITED FIFTH APPELLANT ALINBOW PTY LIMITED SIXTH APPELLANT AND: AUSTRALIAN GUARANTEE CORPORATION LIMITED FIRST RESPONDENT PETER JAMES HEDGE SECOND RESPONDENT JUDGE: BEAUMONT J DATE OF ORDER: 20 APRIL 2001 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The matter be stood over for a hearing by the Full Court Bench. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 1354 OF 2000 BETWEEN: ENDORMER PTY LIMITED (IN LIQUIDATION) FIRST APPELLANT KWIKDAY PTY LIMITED SECOND APPELLANT GLENN ROBERT JARRETT THIRD APPELLANT DAVID COLIN PATERSON FOURTH APPELLANT JARRETT HOLDINGS PTY LIMITED FIFTH APPELLANT ALINBOW PTY LIMITED SIXTH APPELLANT AND: AUSTRALIAN GUARANTEE CORPORATION LIMITED FIRST RESPONDENT ANOTHER SECOND RESPONDENT JUDGE: BEAUMONT J DATE: 20 APRIL 2001 PLACE: SYDNEY REASONS FOR JUDGMENT BEAUMONT J: 1 Before me is a notice of motion brought by the respondents to an appeal fixed for hearing late in the May sittings of the Full Court, seeking security in the substantial amount from the third appellant. 2 The appeal is brought from the dismissal of complex litigation after a trial lasting some thirty-six days. The estimate of the hearing time for the appeal is two days. The appeal books consists of more than 4,000 pages. It appears that although the third appellant appeared before me today unrepresented, counsel will be retained to appear on behalf of the third appellant on the hearing of the appeal. There is also evidence before me which is not contentious, that none of the appellants is in a position to make any provision for security in any amount. 3 Section 56(1) of the Federal Court of Australia Act 1976 ("the Act") provides: "56(1): The Court or a Judge may order an applicant in a proceeding in the Court or an appellant in an appeal to the Court to give security for the payment of costs that may be awarded against him." (Emphasis added) 4 Taken literally, this provision empowers a single Judge of the Court (even though, as in this case, that Judge will not be a member of the Full Court on the appeal) to order security for costs of the appeal. 5 I made such an order in a case which bears some similarity to the present case in Cummings v Lewis, unreported, 4 December 1991. The order in that case was in the usual form, that is to say, that unless, before a certain date, security for costs in the amount specified was provided, the proceedings on the appeal be stayed. Such an order is, in my view, interlocutory both as a matter of form and substance. In other words, in my view, a single Judge cannot exercise the appellant jurisdiction of the Court to dismiss an appeal in the event that security were not provided; or even to order a permanent stay of proceedings on the appeal. 6 It must follow, in my opinion, that the jurisdiction of the Court should more properly be exercised by the Full Court assigned to hear the appeal itself in a case such as the present where there is a substantial contest on the question of whether or not security should be provided, and where the appellants invite a single Judge of the Court who will not be participating in the appeal itself, to embark upon and make findings about questions that will be agitated on appeal (such as the history of the dealings between the parties and considerations of the kind considered by Brennan J in Lucas v Yorke (1983) 50 ALR 228). 7 As I have said, any order made for security, whether made by a single Judge or by a Full Court, is necessarily interlocutory and may therefore be varied or discharged by another Judge or by a Full Court with jurisdiction to deal with such an interlocutory question. It is clear from the terms of s 56(1) that the Full Court has this interlocutory jurisdiction. 8 It is true that there are considerations of logistics to be taken into account. As it happens, the Full Court Bench in the present appeal will be constituted by one resident Sydney Judge and two interstate Judges. The presiding Judge is an interstate Judge. However, this should not be an insuperable obstacle. Video-conference facilities are available and it may be possible for the matter to be dealt with, in part at least, on the papers. To my mind an overriding consideration in favour of the approach that this matter should be dealt with at all stages by the Full Court is that it would, or should, involve a saving of costs from the parties' perspective. If a single Judge were to embark upon the exercise I now envisage, the decision, being interlocutory in form and in substance, would be entirely open for review by the Full Court in any event. 9 The procedure I now propose will involve only one hearing on the substantial application. 10 I should add that the matter is before me today, at this stage, for directions. As I have mentioned, the appeal itself is fixed for hearing in the May sittings and it is appropriate, in any event, that the motion for security be dealt with expeditiously. It will be listed for hearing by video-conference on Tuesday, 24 April 2001. I will, however, list it earlier that day before Conti J at 9.30 am for directions to ensure that the application is then ready to proceed. I will arrange for my associate to provide copies of the papers to the Judges constituting the Full Court Bench before the video-conference. The matter is stood over accordingly. I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Beaumont. Associate: Dated: 20 April 2001 Solicitor for the Third Appellant: The third appellant appeared in person Counsel for the First and Second Respondents: Mr S Rushton SC Solicitor for the First and Second Respondents: Clayton Utz Date of Hearing: 20 April 2001 Date of Judgment: 20 April 2001