New South Wales Court of Appeal CITATION: PIRAS v EGAN & ANOR [2007] NSWCA 26 HEARING DATE(S): 19/02/07 JUDGMENT DATE: 26 February 2007 JUDGMENT OF: Bryson JA at 1 DECISION: The Notice of Motion is dismissed with costs. CATCHWORDS: PRACTICE - security for costs in Court of Appeal - review of Registrar's order for cash $25000 deposit by appellant - impecunious while awaiting trial since arrest in 2002 - Italian citizen, no resources, limited visa prevents employment or Social Services - assisted by friend and manages significant expenditure for friend - entitled to large credits on Credit Card accounts - consideration of Special Circumstances SCR Pt.51 r.16 - Order for Security for costs confirmed. Family Provision Act 1982 LEGISLATION CITED: Supreme Court Act 1920 s.121(3) Uniform Civil Procedure Rules rr.42.21, 49.20 Supreme Court Rules Pt.51 r.16 Transglobal Capital Pty Ltd v Yalarno Pty Ltd [2004] NSWCA 136 CASES CITED: Porter v Gordian Runoff Ltd [2004] NSWCA 171 Piras v The Queen [2006] NSWCCA 396 Augusto Piras - Claimant PARTIES: Michael Andrew Egan - 1st Opponent Renate Judith Egan - 2nd Opponent FILE NUMBER(S): CA 40311/2006 COUNSEL: D. Smallbone - Claimant M. Bridger - Opponents SOLICITORS: Anderson Lawyers - Claimant Robilliard Lawyers - Opponents LOWER COURT JURISDICTION: Supreme Court LOWER COURT FILE NUMBER(S): 40311/06 LOWER COURT JUDICIAL OFFICER: Registrar Schell LOWER COURT DATE OF DECISION: 09/10/2006 IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40311/2006 BRYSON JA MONDAY 26 FEBRUARY 2007 AUGUSTO PIRAS v MICHAEL ANDREW EGAN & RENATE JUDITH EGAN Judgment 1 BRYSON JA: By Notice of Motion of 3 November 2006 the claimant, (appellant in the appeal), seeks review of an order for security for costs made by Registrar Schell on 9 October 2007. 2 The Late Roberta Anne Egan died on 21 April 2003 and the opponents, who are her half sister and half brother, obtained Letters Of Administration of her intestate estate. Mr Piras claimed that he was the de facto spouse of the deceased at the date of her death, that he was thus entitled to receive the whole of her estate, and that administration should be granted to him, with revocation of the present grant. Alternatively he claimed provision under the Family Provision Act 1982 and alleged that he had had a close personal relationship with the deceased, alternatively was a person who was part of her household and partly dependent on her. Macready AsJ dismissed the proceedings. Mr Piras' grounds of appeal make extensive challenges to the trial judge's findings of fact and to his conclusions. 3 The opponents applied for an order for cash security of $25,000 and for a stay of the appeal in the event of default. Registrar Schell made orders to those effects on 9 October 2006 for reasons then published. 4 The power of review exists under Supreme Court Act s.121(3) and is regulated by UCPR r.49.20. 5 UCPR r.42.21 states circumstances in which the Court may order a plaintiff to give security for costs; but that rule is not exhaustive as the Court's powers have their source in the inherent powers of the Court. A requirement special to the Court of Appeal is made by Pt.51, r.16 which imposes a test of special circumstances, while not affecting the powers in UCPR r.42.21. Impecuniosity alone will not ordinarily constitute special circumstances for the purpose of Pt.51, r.16: see Transglobal Capital Pty Ltd v Yalarno Pty Ltd [2004] NSWCA 136. After extensive consideration of case law relating to the meaning of "special circumstances" the Court of Appeal said: 30 These and other cases were reviewed by Hodgson JA sitting alone, in Porter v. Gordian Runoff Ltd. & Anor. [2004] NSWCA 69. His Honour considered that the weight of authority in New South Wales supported the view " that impecuniosity " can of itself amount to special circumstances within Pt.51 r.16(1). His Honour qualified this view by saying "I also accept that orders would not normally be made simply because an claimant is impecunious." 31 We would not state the conclusion to be drawn from the cases in the same terms as did Hodgson JA. If anything, the weight of authority is to the effect that something more is usually required. It may be however, that our view may involve no more than looking through a different edge of the prism of this line of authority. 6 A wide range of considerations can have a bearing on a decision whether or not to order security for costs, which is a discretionary decision. Even where there is no "special circumstances" test, the simple fact that an claimant or plaintiff is impecunious would not usually move the Court to make a discretionary decision to order security for costs. Cases do not present themselves in starkly simple terms, and the facts put forward as relevant are considered in each case. 7 See too Porter v Gordian Runoff Ltd [2004] NSWCA 171, which dealt with an application to review the decision of Hodgson JA considered in Transglobal. The High Court of Australia refused special leave to appeal from that decision. 8 In his reasons the Registrar referred to the opponents' claim supported by evidence that the claimant is impecunious and unlikely to meet any obligation as to payment of costs if he is unsuccessful in the appeal; that the claimant did not deny his impecuniosity and that it was contended on his behalf in submissions that he was unable to meet his own costs of the proceedings at first instance or on appeal. The claimant's presence in Australia depended on a criminal visa pending criminal proceedings in the District Court; there was no evidence when the proceedings were likely to be heard. The opponents pointed to the possibility that should he be convicted he might be deported from Australia, with difficulties for conduct of the appeal. In relation to special circumstances it was contended before the Registrar that the appeal did not have immediately obvious merit. It was the Registrar's assessment that the appeal was arguable but that the claimant would face a difficult task to convince the Court that he should succeed. The Registrar addressed the contention that an order that the claimant provide security would in effect stultify the appeal because of his impecuniosity. After referring to Transglobal and the meaning of "special circumstances" the Registrar referred to and discounted the significance of there being funds in the estate to cover the opponents' exposure to unfavourable cost orders. The Registrar said "While I do have regard to the fact that the opponents is impecunious, and that any order for security would have the effect of rendering nugatory an appeal, I must also have regard to the opponent's status of being a resident in this jurisdiction for a limited purpose. In my view, that status constitutes a special circumstance which warrants the imposition of the order for security, as sought by the claimants." 9 The facts before me on the hearing of the review go further than the facts before the Registrar. There is now available and I take notice of the decision of the Court of Criminal Appeal in Piras v The Queen [2006] NSWCCA 396 of 13 December 2006 the effect of which was that the claimant did not obtain leave to withdraw his plea of guilty, made some days after commencement of his trial in the District Court to a charge of having knowingly taken part in the supply of heroin, a plea bargain which discharged an indictment for having supplied a commercial quantity of heroin. The reasons of the Court of Criminal Appeal show that the trial commenced on 15 June 2004, that the plea was changed to a plea of guilty on 24 June 2004; that an application to change the plea to a plea of not guilty was heard on five days on and after 16 March 2006. The claimant is now awaiting a sentence hearing in the District Court on the plea of guilty to having knowingly taken part in the supply of heroin. 10 The opponents have put in evidence before me a number of records of banking and credit card accounts conducted by the claimant; these records were not before the Registrar and were produced on subpoena by the claimant and his lawyers on 23 November 2006. These documents show many transactions which fall to be considered in relation to the impecuniosity of the claimant and the availability of resources to him. An affidavit of the opponents' solicitor, made for the review proceedings, annexed these documents. 11 The claimant did not give evidence of his resources or lack of resources before the Registrar. Evidence of Mr Michael Egan in his affidavit of 22 September 2006 gave a history of the proceedings in the Equity Division, and some brief facts relating to the criminal charge which did not amount to full or clear account. Mr Egan's affidavit also showed: 13. The Claimant is an Italian National. Documents that were tendered during the hearing indicated that he has no permanent immigration status in Australia. I note that the Claimant gave evidence in his Affidavit sworn 29 April 2005 and filed in the Court below that he had been granted a criminal justice visa pending the resolution of matters in the District Court. 16. The Claimant says he has no assets and no income. There appears to be little or no ability of the Claimant to meet the payment of the costs ordered against him in the Court below. 12 In the review proceedings affidavit of the claimant's solicitor Mr Aspite stated that the claimant had informed his solicitor that he is a citizen of Italy, and said at para. 6 of his affidavit: 6. I am informed by Mr Piras and verily believe that his only substantial asset comprises an amount of approximately $6,000 in his personal bank account held in New South Wales and that he has no other funds on which to live and is presently living on the generosity of his friends, principally, Mr Butler. 7. I am informed by Mr Piras and verily believe that the terms of his visa do not permit him to work in Australia and he is not in receipt of any income. I am informed by Mr Piras and verily believe that he is not eligible for and is not in receipt of any social security benefits. 8. I am informed by Mr Piras and verily believe that the only person who in his expectation might be willing to lend him money for the purpose of him providing security for costs of the appeal and on the footing that in the event that he were unsuccessful in the appeal, those funds would not be available for repayment, is Mr Nigel Butler. I am informed by the plaintiff and verily believe that Mr Butler has offered to lend to the plaintiff a maximum $4,000 for that purpose. 13 The first series of banking records (Annexure A) relates to the claimant's account 5930-41659 at the North Sydney branch of the ANZ bank. Statements for the period from 23 June 2006 to 23 October 2006 show a series of small transactions; the highest balance throughout the period is the opening balance $255.61 except that there was a deposit of $3000 on 16 October 2006. The deposit is attributed to "Rehco Pty Ltd". The documents in Annexure A are consistent with the picture of the claimant's affairs which Mr Aspite's evidence shows he gave to Mr Aspite. 14 The documents in Annexure B are statements relating to the claimant's Award Saver Account 06212410585018 at the Bondi Junction Branch of the Commonwealth Bank. Eight pages of statements cover transactions from an opening balance of nil on 7 December 2004 to 5 September 2006. The opening deposit was $500; there are a number of small transactions, a deposit of $1148.22 on 8 August 2005, a deposit of $1125 on 2 December 2005, several smaller deposits and a closing balance of $3261.41. Annexure B is not inconsistent with the position referred to by Mr Aspite. 15 Annexure C is a bundle of statements and documents relating to the claimant's ANZ Gold card account 4564 -- 6490 -- 2986 -- 6849. These documents record a very great number of credit card transactions from 29 September 2004 to 29 January 2006. At first the credit limit is shown as $14,000 but in the statement ending 30 January 2005 and later statements the credit limit is $17,000. There are many credit payments shown in these accounts; in the first account there is $1100 on 29 September 2004; then $400 on 24 February 2005, $450 on 31 May 2005 and $150 on 14 June 2005. These payments kept under control a steady flow of relatively small transactions of various kinds to a veterinary hospital, to restaurants, a dentist, to Foxtel and Virgin Blue, and other unremarkable small transactions. These are not altogether consistent with the picture of the claimant's affairs which he narrated to Mr Aspite but not seriously anomalous. From June 2005 onwards there were many transactions which were completely inconsistent with that picture including payments to hotels in Milan, Florence, Bristol, New York, Chicago, Santa Fe, Sedona Arizona, payments to restaurants and airlines and many other payments both in Australia and overseas which could not be reconciled with the picture of his affairs which he gave his solicitor. The debit balance rose very high, at one point $18,572.38, at one point $20,573, kept in control by a series of payments the largest of which was $16,547.34 on 14 November 2005. The payments overseas and the scale and rate of payments within Australia are entirely inconsistent with the picture of the claimant's affairs which has been put forward. 16 Annexure D contains statements relating to the claimant's ANZ Gold credit card account 4564 -- 6990 -- 0298 -- 2204. These statements relate to transactions from 30 January 2006 to 28 September 2006, with a credit limit first $17,000 later $21,000, with expenditures both in Australia and overseas of many kinds and on a large scale altogether inconsistent with the kind of life and state of affairs asserted on behalf of the claimant. The largest expenditure which I have noted from this account is $37,959.42 charged on 16 March 2006 apparently for accommodation in Sedona, Arizona. 17 Annexure E relates to another ANZ Gold card account, 4564 -- 6990 -- 0369 – 2901, with a credit limit of $21,000, from 29 September 2006 to 29 October 2006; but showing that there were earlier transactions. This shows a steady flow of transactions within Australia with one small credit coming from overseas. Credits in the course of a month totalled $6,597.92, and kept the account well in control. 18 In answer to the banking records the claimant read three affidavits. His own affidavit of 15 February 2007 referred to the dismissal of his appeal by the Court of Criminal Appeal and said that proceedings in the District Court had been adjourned for sentence to 30 March 2007. After referring to the bank documents the claimant said: 7. I live with my friend Nigel Butler who has been very generous to me. 8. I do as [much] as I can to assist Mr. Butler with his day-to-day affairs. 9. Mr. Butler travels extensively. When he is away I assist him and organise things for him when he needs my assistance. 10. When requested by Mr. Butler I organise flights, accommodation, car rental and other items of expenditure for his business. I am the person on the telephone making the bookings and I use my credit card to pay for those expenses at first instance. 11. Once I receive the bank statement and the various invoices I attend Mr. Butlers accountant Mr. Robert Horsell. I provide him with the documents and Mr. Horsell checks them and provides me with a cheque. Sometimes the cheque is issued by way of cash. At other times they are issued in my name which are reimbursed to me as expenses incurred for and on behalf of Mr. Butler. 12. I have no income. 19 The claimant's affidavit went on to refer to a list which identified a small number of items on his credit card statements as relating to him and said that all other items relate to Mr Butler and his companies; and that all items of credit came from Mr Butler. An affidavit of Mr Butler of 15 February 2007 confirms this account and says: 7. Mr Piras uses his credit card to assist me in my day to day affairs. I then have my accountant, Robert E Horsell, reimburse Mr Piras. 8. Sometimes I leave cheques in the home for him to cash when necessary and I assist him with money when he requires it. 20 An affidavit of Mr R.E. Horsell, Accountant of 16 February 2007, an accountant also confirms the account of events and practices given by the claimant and Mr Butler. Mr Horsell said that Rehco Pty Ltd is a business interest of Mr Butler, and a trustee for him. 21 These witnesses were not cross-examined; there was no cross-examination of any person. The arrangements described in which the claimant maintained several credit card accounts out of which expenses of for Butler were met, with money provided by Mr Butler are not usual or businesslike arrangements; they are rather strange, but I see no good reason for disbelieving the explanations which have been given. It is safe to assume that the claimant's liberty has been subject to bail pending the criminal proceedings, and extremely unlikely that, with no Australian citizenship and with no claim to be present in Australia other than a visa granted to him so that he can conduct his criminal litigation, he has himself been incurring expenditures overseas, for accommodation or otherwise. The credit card expenditures within Australia represent a scale of expenditure and a scale of living which there is no reason to think that the claimant could sustain, in the circumstances in which he speaks in which he has no employment or social welfare income and is dependent on Mr Butler's goodwill. 22 It is relevant and striking however that the claimant has several credit card accounts, and that the credit limits available to him, cumulatively, are quite significant amounts. 23 In the circumstances, as the evidence is significantly different to the evidence before the Registrar, I should address again the discretion whether or not to order security for costs, and the question whether there are special circumstances, upon the facts before me, which should be taken with the Registrar's finding of impecuniosity. 24 Impecuniosity has implications for and against ordering security for costs. A foreigner who has no resources here would ordinarily be ordered to give security; but if he has no resources anywhere, the impact of an order for security as in effect becoming the disposition of the case has to be considered: but so too do the circumstances in which he has no resources anywhere. 25 This is to my mind is no ordinary case of an impecunious person seeking to advance a judicial remedy for a claim which might be stifled if he were required to give security for costs. His impecuniosity must be closely related to his being involved in criminal proceedings since 4 December 2002 when he was arrested. He is not in his own country, but on the other side of the world. His circumstances in which he does not and cannot work and maintain himself, and has no access to social welfare benefits, are related closely to his criminal charges. He has pleaded guilty to a serious offence and is awaiting sentence, which conceivably could be of some severity, and may involve him losing his liberty, being deported from Australia or both successively. The charge against him and his plea of guilty establish that he is not rightly regarded as simply the victim of adverse circumstances or vicissitudes in his impecuniosity; his troubles are of his own making. Without resources, he has conducted litigation, civil and criminal, over some years, without success and appears to be in a position to continue to conduct litigation civil and criminal. On the face of things he has incurred and been able to incur, considerable obligations. He has been of service to Mr Butler in assisting Mr Butler while he was away on his extensive travels, organising business such as flights, accommodation, car rental and other expenditures; making telephone bookings and attending his accountant. Although he is not in employment, he is able to dispose of his time and efforts in a way which has incurred Mr Butler's generosity and provision of funds. 26 Several indications which have repeatedly disposed courts towards ordering security for costs are present here. One is that an obligation for costs in a significant amount has already been incurred and it is his case, well supported, that he is not in a position to meet that obligation. Another is that he is not in his homeland but is a citizen of a foreign country, and has no resources here. Another is his general impecuniosity, as to resources in any place. Whatever the reasons for it, his impecuniosity is not to be attributed to hostile or adverse action by the opponents. Another circumstance is that, remarkable though it may be, he has significant credit available to him from a bank on several different accounts, and has an active and responsible part in a steady flow of significant resources, not, indeed, resources which he owns as they are Mr Butler's; yet his part in the flow of resources is striking. The resources he needs are available to him: he is trusted with significant money and affairs, and he has activities to attend to. 27 Clearly the claimant can find resources of legal services to conduct the litigation he wants to conduct in his own interest. How this is I do not know: but not knowing how it is does not dispose of its significance. 28 Whatever else might be said of his circumstances they are not ordinary or commonplace. In my judgment there are special circumstances on which the Court may act in deciding whether to order security. The risk to the opponents is absolute; in the eye of reality, there are no prospects that they will ever recover any costs which he may be ordered to pay in respect of the appeal, and no reality can be seen in their prospects of enforcement of the order for costs which they have already obtained. Without an order for security for costs they and those interested in the estate have no protection against the loss involved should the claimant lose the appeal, as he lost at first instance, and be ordered to pay costs. The disposition at first instance was clear and firm and, as the Registrar found, while it appears that the appeal is arguable, his prospects should not be put any higher. 29 Overall, this is, in my judgment, a case where there are special circumstances and it is appropriate to make an order for security for costs, in the terms of the order which the Registrar made. 30 My order is: The Notice of Motion is dismissed with costs. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.