FEDERAL COURT OF AUSTRALIA Frigger v Banning (No 4) [2017] FCA 900 File number: WAD 607 of 2015 Judge: BARKER J Date of judgment: 4 August 2017 Catchwords: PRACTICE AND PROCEDURE – security for costs – application for variation of costs order – whether costs should be payable forthwith – where quantum of security varied previously – application dismissed Cases cited: Frigger v Banning [2016] FCA 359 Frigger v Banning (No 2) [2016] FCA 749 Date of hearing: Determined on the papers Registry: Western Australia Division: General Division National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Category: Catchwords Number of paragraphs: 17 Counsel for the Applicants: The Applicants were self-represented Counsel for the Respondents: Mr TR Stephenson Solicitor for the Respondents: Eastwood Sweeney Law ORDERS WAD 607 of 2015 BETWEEN: ANGELA CECILIA THERESA FRIGGER First Applicant HARTMUT HUBERT JOSEF FRIGGER Second Applicant AND: SANDRA MAY BANNING First Respondent DONALD CAMPBELL-SMITH Second Respondent PROFESSIONAL SERVICES OF AUSTRALIA PTY LTD ACN 082 879 641 (and another named in the Schedule) Third Respondent JUDGE: BARKER J DATE OF ORDER: 4 AUGUST 2017 THE COURT ORDERS THAT: 1. The respondents' application dated 17 February 2017 for variation of the costs order made 13 April 2016 be refused. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT BARKER J: 1 On 13 April 2016, I handed down a reserved decision on the respondents' application for security for costs. I allowed that application and made an order that the applicants pay $75,000 into Court by way of security. I also ordered that the applicants do pay the respondents' costs of the application to be taxed, if not agreed. 2 In relation to the order for costs, I did not expressly order that the costs should be payable "forthwith". 3 See the reasons for decision at Frigger v Banning [2016] FCA 359. 4 These reasons were handed down in open court on 13 April 2016. 5 Subsequently, the applicants applied to vary the amount of the security. On 24 June 2016, I made an order varying the quantum so that it was then required to be paid in the sum of $60,000. 6 So far as the costs of the applicants' interlocutory application for such relief was concerned, which they filed 31 May 2016, I ordered that the costs be costs in the cause. 7 See the reasons for decision in Frigger v Banning (No 2) [2016] FCA 749 8 The respondents subsequently, on 17 February 2017, requested the Court to amend the order for costs made 13 April 2016 so that those costs would be payable forthwith. 9 In their letter dated 17 February 2017, the solicitors for the respondents advanced the following submissions in support of the request for variation of the costs order: It is our understanding that counsel understood that the orders made by Justice Barker could be taxed prior to the conclusion of the matter and accordingly, no order was sought that those costs be payable forthwith. … By way of submission in support of the proposed orders sought, we note that the Applicants put the Respondents to the cost of a fully argued application for security for costs without any offer to agree the quantum of a security order. The Applicants' conduct in both not paying costs to the Respondents in other actions, and, in placing assets beyond the reach of creditors by mortgage to a company in which they are directors and were previously the shareholders, and, in making unsubstantiated claims of impecuniosity and hardship (see his Honours Reasons at [68] - [69] & [78]) justify the making of an Order to be paid forthwith. Finally, there is no part of the application for security which is in some way related to the merits of the balance of the proceedings such that it should abide the result of the matter generally. 10 The Court then sought submissions from the applicants with a view to determining the requested variation on the papers. 11 By written submissions filed 27 February 2017, the applicants made the following submissions: 1. By 'Minute of Orders Sought' the respondents have applied to vary order in paragraph 2 dated 13 April 2016 which currently reads: 'The applicants do pay the respondents' costs of this interlocutory application for security for costs, to be taxed if not agreed.' 2. By applying the respondents' variations, the order would read: 'The applicants do pay the respondents' costs of this interlocutory application for security for costs in any event, to be taxed and paid forthwith, if not agreed.' 3. The commonly understood meaning of the phrase 'in any event' is that those costs are taxable and payable at the conclusion of the litigation. 4. Rule 40.13 states: 'If an order for costs is made on an interlocutory application, the party in whose favour the order is made must not tax those costs until the proceeding in which the order is made is finished.' It is respectively submitted that this rule seeks to eliminate unnecessary use of court resources and parties' time and costs. 5. The applicants have paid $60,000 into court as security for costs, including the costs referred to in the order dated 13 April 2016. The respondents face no risk that those costs will not be paid. If the variation is made, then the applicants will effectively be paying the costs twice, already paid into court, and then directly to Mr Stephenson and Mr Eastwood. 6. The parties are awaiting reserved decisions in three separate interlocutory applications: the applicants' amended documents, and restraint of Mr Stephenson and Mr Eastwood; the respondents strike out. If the applicants are successful, then they will also be entitled to interlocutory cost orders, which on the respondents' submissions, the applicants will be entitled to tax immediately. If the respondents are successful, then the applicants will seek to again amend their documents. This is not the time for the proceeding to be again interrupted, in circumstances where this proceeding has been on foot since mid-October 2015, with very little progress being made. The applicants have now been in litigation with these respondents since 2003, which litigation resulted from the respondents misleading and deceptive, the tort of deceit, and intentional misrepresentation and concealment of facts. 7. By their minute of orders, the respondents seek to effectively use the applicants' funds to pay their lawyers. This is not the first time the respondents are attempting to use the processes of a court collaterally and for ulterior purposes. The applicants' proposed statement of claim lists collateral abuses of process in paragraphs 21 – 41. 8. At present the respondents have conducted at least 10 'Means Inquiries' in Supreme Court CIV2265/2006 in an attempt to force the applicants to pay Mr Stephenson's and Mr Eastwood's charges from 2009 until the present: Eastwood Affidavit dated 9 December 2016 @ [9]. In the latest Means Inquiry on 14 February 2017, when Mrs Frigger was aggressively cross-examined by Mr Stephenson, His Honour Justice Martino commented that the respondents were requesting orders that were beyond the Court's jurisdiction in a means inquiry, and ordered the respondents to file written submissions in relation to the request. 9. By letter dated 17 February 2017, Mr Eastwood demonstrates he does not understand the processes of the court and has not read or understand the court rules. Furthermore, despite the applicants' pleading at paragraph 28(c) of the Proposed Amended Statement of Claim, Mr Eastwood continues to make unsubstantiated allegations of wrongdoing against the applicants in the third paragraph of his letter. This is in addition to Mr Eastwood's allegation in 2014 that the applicants had perpetrated a 'fraud on the court' in the judgment of Simmonds J dated 9 July 2008: Affidavit of Angela Frigger 26/11/15 @ AF10. 10. In those circumstances, the applicants submit the respondents' application be dismissed. 12 Without canvassing all of the contentions advanced in the applicants' submissions, I am not satisfied that it is appropriate to vary the costs order of 13 April 2016 in the manner proposed on behalf of the respondents. 13 First, the costs order was made in open court and the question of its appropriate terms could and should have been raised at the time. The Court is not aware of any common misunderstanding between the parties and the Court that the costs were intended to be payable forthwith. 14 Furthermore, the respondents' long delay in seeking a variation militates against the making of any such order. While some explanation has been provided, in that it was not until the solicitors for the respondents endeavoured to tax those costs with a view to having their immediate payment that they encountered difficulty, that is not a sufficient reason to justify the making of a variation to that costs order now. 15 Moreover, when I amended the security order, I ordered that the costs of that variation application on behalf of the applicants should be "in the cause". That plainly envisaged that the costs on that part of the security for costs proceeding would be payable at the conclusion of the matter in the Court overall. 16 It seems to me that the same rule should apply in respect of the earlier costs order made 13 April 2016, as the terms of that order imply. 17 For these reasons I would refuse the application for the variation of the 13 April 2016 costs order. I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Barker. Associate: Dated: 4 August 2017 SCHEDULE OF PARTIES WAD 607 of 2015 Respondents Fourth Respondent: BANNING HOLDINGS PTY LTD ACN 009 006 437