New South Wales Court of Appeal CITATION: Hastings v Hastings [2009] NSWCA 294 HEARING DATE(S): 14 September 2009 JUDGMENT DATE: 22 September 2009 JUDGMENT OF: Macfarlan JA (1) Set aside the orders made by Registrar Schell on 22 June 2009. DECISION: (2) Dismiss the respondent's application for security for costs. (3) Order that the costs of the appellant of that application and of the motion for the review of the Registrar's decision be paid by the respondent. CATCHWORDS: PROCEDURE - security for costs of appeal - appeal would be stultified if security ordered LEGISLATION CITED: Family Provision Act 1982 Uniform Civil Procedure Rules 2005 CATEGORY: Procedural and other rulings Bell Wholesale Co Ltd v Gates Export Corp (No 2) (1984) 2 FCR 1 Pioneeer Park Pty Ltd (in liq) v Australia and New Zealand Banking Group Ltd [2007] NSWCA 344; (2007) 65 ACSR 383 Piras v Egan [2007] NSWCA 26 CASES CITED: Porter v Gordian Runoff Ltd [2004] NSWCA 171 Preston v Harbour Pacific Underwriting Management Pty Ltd [2007] NSWCA 247 Singer v Berghouse [1993] HCA 35; (1993) 114 ALR 521 Tomko v Plasty (No 2) [2007] NSWCA 369; (2008) 71 NSWLR 61 Transglobal Capital Pty Ltd v Yolarno Pty Ltd [2004] NSWCA 136; (2004) 60 NSWLR 143 PARTIES: Phillip Hastings (Appellant) John William Hastings (Respondent) FILE NUMBER(S): CA 40063/09 COUNSEL: C M Simpson SC (Appellant) L J Ellison SC (Respondent) SOLICITORS: Coode and Corry (Appellant) Thomas McDarra & Co (Respondent) LOWER COURT JURISDICTION: Supreme Court LOWER COURT FILE NUMBER(S): 40063/09 LOWER COURT JUDICIAL OFFICER: Registrar Schell LOWER COURT DATE OF DECISION: 22 June 2009 IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40063/09 MACFARLAN JA TUESDAY 22 SEPTEMBER 2009 HASTINGS v HASTINGS Judgment 1 HIS HONOUR: This is a motion for review, pursuant to rule 49.19 of the Uniform Civil Procedure Rules 2005 ("UCPR"), of orders made by Registrar Schell on 26 June 2009. The Registrar ordered the appellant to provide security for costs of his appeal in the amount of $22,000 and to pay the respondent's costs of the motion seeking security. 2 The proceedings at first instance were the subject of a judgment of White J on 9 December 2008. His Honour dismissed the summons by which the appellant sought an order for provision, pursuant to s 7 of the Family Provision Act 1982, out of the estate of his late mother who died on 29 February 2008. The deceased was survived by two sons, the appellant and the respondent. The appellant was aged 57 at the time of the hearing at first instance and the respondent was aged 61. The deceased appointed the respondent as her executor and left him all of her estate. The estate was initially valued for probate purposes at $643,789. This figure was increased somewhat as a result of market appraisals of the house property which is the main asset of the estate. 3 White J described the principal question in the case as whether the appellant's "criminal conduct and long absences disentitled him from being considered as a proper object of his mother's testamentary bounty". The effect of his Honour's conclusions was that they did. 4 At the hearing before me, Counsel for the appellant described the bases upon which the appellant proposes to challenge the judgment of White J. It is not possible, nor would it be appropriate, for me to express a view as to the likely outcome of the appeal. It is sufficient for me to conclude, as I do, that the appeal is not a hopeless one or one lacking in bona fides. As a result, the appeal should be treated as reasonably arguable. 5 Registrar Schell concluded that there were "special circumstances" which warranted him ordering the provision of security pursuant to rule 51.50 of the UCPR. Those circumstances, as found by the Registrar, were essentially as follows: - That the trial judge found against the appellant "primarily on the basis that his circumstances were as a result of he being the author of his own misfortune". - That the appellant had credit card debts in the vicinity of $20,000 which he had been unable to satisfy during the previous twelve months. This suggested to the Registrar that the appellant may well not be able to meet his costs of the appeal, let alone comply with an order for provision of security. - That the appellant has not been in a position to meet the legal costs he has already incurred. - The appellant's general impecuniosity. 6 The Registrar referred to the judgment of Bryson JA in Piras v Egan [2007] NSWCA 26 as indicating the relevance of the last two matters. 7 Whilst in my view these matters are of some significance, there was another matter of considerable importance that should have been, but was not, taken into account, namely, that it was agreed for the purposes of the hearing before the Registrar that if an order for security were made the prosecution of the appeal would be stultified. Whilst the Registrar mentioned this agreement at the commencement of his decision, he did not refer to it later when identifying the factors which led him to his conclusion that security should be ordered. 8 The concept of "special circumstances" in relation to orders for the provision of security for costs was considered by this Court in Transglobal Capital Pty Ltd v Yolarno Pty Ltd [2004] NSWCA 136; (2004) 60 NSWLR 143 and Porter v Gordian Runoff Ltd [2004] NSWCA 171. In Preston v Harbour Pacific Underwriting Management Pty Ltd [2007] NSWCA 247, Basten JA (with whom Ipp JA and Hoeben J agreed in relevant respects) summarised the principles to be derived from those cases as follows: "(1) no order for security should be made in the absence of 'special circumstances'; (2)consideration of what may constitute special circumstances should not be fettered by some general rule of practice; (3) impecuniosity, without more, will usually be insufficient; (4) an order may be appropriate if the appeal is shown to be hopeless, unreasonable or of an harassing nature; (5) where a bona fide and reasonably arguable appeal would be stifled by an order for security, such an order should usually not be made, and (6) the subject matter of the appeal, including an issue as to the liberty of the individual, or a public interest may provide a reason for not imposing a security order which would stifle the continuation of the appeal" (at [18]). 9 Understandably, the fact that a bona fide and reasonably arguable appeal would be stifled by the ordering of security is accorded some significance by these principles (see principle (5)). It is a serious matter to prevent a litigant pursuing such an appeal. Strong reasons are required if that course is to be taken. 10 The nature of a review of a Registrar's decision pursuant to rule 49.19 was discussed by this Court in Tomko v Palasty (No 2) [2007] NSWCA 369; (2008) 71 NSWLR 61. In that case, Hodgson JA (with whom Ipp JA agreed) said: "5 I agree that the view expressed by Basten JA in Pioneer Park Pty. Limited (In Liquidation) v. Australia & New Zealand Banking Group Limited [2007] NSWCA 344, on the basis of limited argument, that the review of a registrar's decision with respect to an order for security for costs is constrained by the principles stated in House v. The King (1936) 55 CLR 499, is not strictly correct. 6 I agree that a review of a decision of a registrar is not an appeal, subject to s.75A of the Supreme Court Act; and that in such a review a court must exercise its own discretion. 7 In my opinion, this discretion extends to a discretion as to whether, and if so how, to intervene; and in my opinion, there is an onus on a person seeking to have a court set aside or vary a registrar's decision to make out a case that the court, in the interests of justice, should exercise its discretion to do so. 8 In the case of a decision on practice or procedure, this will normally require at least demonstration of an error of law, or a House v. The King error, or a material change of circumstances, or evidence satisfying the strict requirements for fresh evidence. Even then, a court may not think that the interests of justice require intervention. This could be so, for example, if the error of law is a deficiency of reasons and the result is on its face not an unreasonable one" (at [5-8]). 11 In the same case, Basten JA took the view that upon a review of a Registrar's decision it was not necessary to demonstrate error, nor was the review restricted to reconsideration of the material before the Registrar (at [52]). 12 For the reasons I have given earlier, my view is that an error has been established in the failure to take into account the fact that the appeal would be stultified by the making of an order for security. I consider that the interests of justice require intervention, and, as a result, I will re-exercise the discretion conferred by rule 51.50 and decline the order for security. 13 In doing so, I take into account the matters referred to in [5] above also taken into account by the Registrar but in the circumstances of this case place decisive significance upon the fact that the appeal, which I have concluded is to be regarded as bona fide and reasonably arguable, would be stifled or stultified by the making of an order for security. 14 I also take into account the fact (as to which see Pioneer Park Pty Ltd (in liq) v Australia and New Zealand Banking Group Ltd [2007] NSWCA 344; (2007) 65 ACSR 383 at [51]) that a finding or concession that a plaintiff is impecunious does not of itself establish that the relevant proceeding would be stultified. The possibility remains in many cases that there are others, such as litigation funders, family or associates, who may step in to assist the plaintiff (see also by way of example Bell Wholesale Co Ltd v Gates Export Corp (No 2) (1984) 2 FCR 1 at 4). In the present case, the parties' agreement as to the effect of a security order obviates the need to consider such a possibility. I note that in Pirus v Egan, where the order for security made by the Registrar was affirmed, Bryson JA concluded that despite the claimant's apparent impecuniosity, the claimant had resources available to him which would enable him to conduct the litigation, apparently whether or not the security was ordered. 15 Also of relevance to my decision is the evidence that the estate is of significant size. Further, whilst the evidence does not suggest that the respondent is affluent, it nevertheless suggests that he does not suffer from the same impecuniosity as the appellant. 16 I add in passing a reference to the decision of Gaudron J in Singer v Berghouse [1993] HCA 35; (1993) 114 ALR 521 indicating that because of the special nature of Family Provision Act cases so far as costs are concerned, there is a somewhat greater reluctance to order security for costs against a plaintiff (or appellant) in such cases than in other cases. 17 The orders I make are as follows: (1) Set aside the orders made by Registrar Schell on 22 June 2009. (2) Dismiss the respondent's application for security for costs. (3) Order that the costs of the appellant of that application and of the motion for the review of the Registrar's decision be paid by the respondent. ********** 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.