FEDERAL COURT OF AUSTRALIA Frigger v Banning (No 6) [2018] FCA 787 File number: WAD 607 of 2015 Judge: COLVIN J Date of judgment: 28 May 2018 Cases cited: Frigger v Banning [2016] FCA 359 Frigger v Banning (No 3) [2017] FCA 221 Knight v Beyond Properties Pty Ltd [2005] FCA 764 Date of hearing: 28 May 2018 Registry: Western Australia Division: General Division National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Category: No Catchwords Number of paragraphs: 17 Counsel for the Applicants: The Applicants appeared in person Counsel for the Respondents: Mr TR Stephenson Solicitor for the Respondents: Eastwood 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: COLVIN J DATE OF ORDER: 28 MAY 2018 THE COURT ORDERS THAT: 1. The application for further security for costs be dismissed. 2. There be liberty to apply for further security for costs in the event of a change in circumstances or upon the determination of the applicants' application for an interlocutory injunction and the application for leave to amend the statement of claim. 3. There be no order as to costs on the application for further security. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT COLVIN J: 1 These proceedings were commenced by Mr and Mrs Frigger in October 2015. In February 2016 the respondents sought orders for the summary dismissal of the proceedings by reason of a lack of standing and for orders striking out the statement of claim and, in the alternative, that Mr and Mrs Frigger give security for costs in an amount of over $350,000 by payment into Court. Mr and Mrs Frigger brought an interlocutory application for orders that certain lawyers be restrained from acting for the respondents. The interlocutory applications were listed for hearing on 5 April 2016. 2 Shortly prior to the hearing, Mr and Mrs Frigger gave notice that they wished to proceed by reference to a proposed amended application and statement of claim. In the result, only the application for security for costs was heard on 5 April 2016, and on 13 April 2016 Barker J ordered that Mr and Mrs Frigger provide security up to and including the hearing of any application by the respondents for summary dismissal and any application by Mr and Mrs Frigger to restrain certain lawyers from acting in the proceeding: Frigger v Banning [2016] FCA 359. 3 The amount of security required was $75,000, later reduced to $60,000. The security was provided. Thereafter, applications by Mr and Mrs Frigger to file a substituted originating process and statement of claim, and for orders restraining certain lawyers from acting were heard. Those applications encompassed the issues as to standing that were raised by the respondents on their application for summary dismissal. Barker J provided detailed reasons for refusing both applications: Frigger v Banning (No 3) [2017] FCA 221. 4 Cursory review of those reasons reveals that the application required a consideration of a detailed history of litigation involving Mr and Mrs Frigger and an examination of the extent to which matters in the proposed statement of claim were an abuse of process because they sought to reargue matters that had been determined in earlier proceedings as well as other defects with the proposed statement of claim. Mr and Mrs Frigger were ordered to pay forthwith the costs of the dismissed applications. In an affidavit before me from Mr Eastwood, the solicitor for the respondents, the costs have been estimated to be between $35,000 and $40,000. 5 Mr and Mrs Frigger brought an application for leave to appeal the decision of Barker J. The application was unsuccessful and an order was made for indemnity costs. These are estimated to be a further $35,000 to $40,000. However, the costs on the application for leave to appeal are a separate matter and I do not bring them to account on the present application. 6 Mr and Mrs Frigger have also brought an application for an interlocutory injunction and affidavits have been filed by both parties in respect of that application and it has not yet been heard. However, the respondents have incurred costs in relation to that application in considering its terms and in dealing with affidavit materials. 7 That application was not in view at the time that his Honour entertained and dealt with the application for security for costs. It was filed after the reasons on that application were published, but before his Honour's decision to reduce the amount to $60,000. In the view which I take of his Honour's reasons, the security that was provided was not intended to include the costs associated with determining the interlocutory injunction. Rather, as his Honour's orders stated, they were intended to be security for the costs up to and dealing with the two applications then before him relating to the statement of claim and restraining lawyers from acting. 8 On my review of the proceedings, those are the matters which have been substantially in dispute between the parties in these proceedings. That is to say, there have not been considerable other costs other than ordinary costs associated with case management that were not the subject of the orders previously made by Barker J. 9 Mr and Mr Frigger now seek to file a new statement of claim and at my direction they have filed a minute of proposed statement of claim and a submission as to why they say that it conforms to the reasons of Barker J. I have reviewed the proposed statement of claim and the submissions and real issues arise as to whether it suffers from the same defects identified by Barker J in the previous pleading. 10 In those circumstances, it is likely that similar issues will arise in considering that statement of claim to those which were dealt with on the previous application. There may be additional issues as well, but that is the context in which to view whether further security is required at this stage of the proceedings. 11 I must say I express no concluded view on the question as to whether the statement of claim suffers from similar defects; I simply note that those issues are likely to be in similar terms, and counsel appearing for the respondents accepted that when that proposition was put to him today. 12 The respondents seek, as I understand it, further security in the sum of $40,000 at this stage. The application is brought pursuant to directions made by Barker J programming the hearing of any application for further security. In those circumstances, the application before me is for further security; it does not invite me to reconsider or revisit the previous security that was provided by Barker J up to the determination of the previous applications. And the issue before me today is to what amount by way of further security should be made in respect of costs beyond those matters by way of a further tranche of security. 13 The reasons provided by Barker J previously dealt with the principles to be applied on an application for security for costs and the reasons for the previous grant of security are listed in his Honour's reasons: Frigger v Banning [2016] FCA 359 at [78]. There was no submission made before me today that those reasons do not apply, and I accept that they continue to apply. Further, that security was appropriate in this case because of the presence of an additional factor of the kind that is required to make an order for security for costs against individuals personally. Examples are given in that regard by Lindgren J in Knight v Beyond Properties Pty Ltd [2005] FCA 764 at [33]. 14 The question for me today is what appropriate amount of security should be ordered, if any, by way of a further tranche having regard to the fact that the applications that have been dealt with are expected to result in a liability after assessment of between $35,000 and $40,000 and the security which has been ordered up to this point is an amount of $60,000. There is no evidence before me as to the cost that might be incurred relating to the present applications which need to be dealt with. Rather, the affidavit evidence that has been filed takes the form of a statement of the costs that have actually been incurred and are expected to be incurred by the respondents in respect of the conduct of the entire proceedings. 15 The difficulty with an affidavit in that form is that it encompasses costs the subject of his Honour's earlier order for security up until this stage of the proceedings. In those circumstances, faced with the estimate given by Mr Eastwood as to the taxation of costs associated with the two applications that have been dealt with and my view that those applications constitute the substantial part of what has been the subject of the proceedings up until today, save only for the application for an interlocutory injunction, in my view, the existing security is sufficient and I would make no further order for security at this time. 16 In accordance with the approach that has been adopted in this matter of providing security for costs by way of tranches, I would reserve liberty to apply for further security in the event of a change in circumstances or upon completion of the hearing of the applications in relation to the interlocutory injunction and the current application for leave to amend the statement of claim. In reaching these views, I note that security that is to be provided is not provided as a complete indemnity and is not intended by the Court to deal comprehensively with the costs and is, in effect, extended as a way of balancing the positions at this stage. 17 For the reasons that I have given, I am not persuaded on the evidence before me that there should be a further order for security, and I would make orders dismissing that application today. I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Colvin. Associate: Dated: 28 May 2018 SCHEDULE OF PARTIES WAD 607 of 2015 Respondents Fourth Respondent: BANNING HOLDINGS PTY LTD (ACN 009 006 437)