New South Wales Court of Appeal CITATION: Batterham v Makeig (No 2) [2009] NSWCA 314 HEARING DATE(S): 14 September 2009 JUDGMENT DATE: 16 October 2009 JUDGMENT OF: Macfarlan JA (1) Order that the first appellant furnish security for the costs of the respondent of and incidental to the appeal in the amount of $30,000. DECISION: (2) Stay the proceedings in this Court until such security is provided. (3) Order that the first appellant pay the costs of the respondent of the respondent's Notice of Motion filed on 26 August 2009. (4) Order that the costs of the parties of the Notice of Motion filed by the appellants on 24 August 2009 be part of the costs of the appeal to this Court. CATCHWORDS: PROCEDURE - security for costs of appeal - first appellant ordinarily resident outside New South Wales - Rule 42.21, Uniform Civil Procedure Rules 2005 - whether a "plaintiff" the subject of the Rule includes an appellant who was not a plaintiff in the court below Civil Procedure Act 2005 LEGISLATION CITED: Interpretation Act 1987 Uniform Civil Procedure Rules 2005 CATEGORY: Procedural and other rulings Brian Joseph Batterham (First Appellant) PARTIES: Batterham's Bus Lines Pty Ltd (Second Appellant) Peter John Makeigh (Respondent) FILE NUMBER(S): CA 40266/09 COUNSEL: G R Graham (Appellants) G A Sirtes SC (Respondent) SOLICITORS: Emery Partners (Appellants) Somerville & Co (Respondent) LOWER COURT JURISDICTION: Supreme Court - Equity Division LOWER COURT FILE NUMBER(S): SC 4373/07 LOWER COURT JUDICIAL OFFICER: Ward J LOWER COURT DATE OF DECISION: 7 May 2008 LOWER COURT MEDIUM NEUTRAL CITATION: Makeig v Batterham [2009] NSWSC 344 IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40266/09 MACFARLAN JA FRIDAY 16 OCTOBER 2009 BATTERHAM v MAKEIG (NO 2) Judgment 1 HIS HONOUR: By Notice of Motion dated 26 August 2009, the respondent sought orders that the hearing of the appeal be expedited and that the appellants pay $50,000 into Court as security for the respondent's costs of the appeal. I granted expedition and, on the application of the appellants, a conditional stay of execution of the judgment below, by my judgment of 18 September 2009 ([2009] NSWCA 295). I will not repeat the description which I gave in that judgment of the nature of the proceedings and of the circumstances of the parties. 2 It remains for me to deal with the respondent's application for security for costs of the appeal and with the costs of both Notices of Motion. The application for security is pressed only as against the first appellant. 3 Power to order security for costs of an appeal is conferred by Rule 51.50 of the Uniform Civil Procedure Rules 2005 ("UCPR"). That rule permits the Court to order security "in special circumstances". The Rule states that it does not affect the powers of the court under Rule 42.21. Rule 42.21(1)(a) empowers the court to order security for costs where "a plaintiff is ordinarily resident outside New South Wales". It is upon Rule 42.21, and in particular Rule 42.21(1)(a), that the respondent relies in seeking an order that the first appellant provide security for costs. He does not rely upon the power in Rule 51.50 to award security for costs of an appeal "in special circumstances". 4 The first point that needs to be addressed is whether a "plaintiff" referred to in Rule 42.21(1)(a) includes an appellant who, as here, was not a plaintiff in the court below. The respondent has submitted that it does and the appellant has not submitted otherwise. Whilst the UCPR does not contain a definition of "plaintiff", s 3 of the Civil Procedure Act 2005 (the "CPA") does. That definition is in my view applicable to the UCPR (see s 11 of the Interpretation Act 1987 and the definition of "instrument" in s 3 of that Act). 5 Section 3 of the CPA defines a "plaintiff" as, relevantly, "a person by whom proceedings are commenced". The term "proceedings" is not defined in either the CPA or the UCPR although the expression "appeal proceedings" appears in several parts of the UCPR, including Rule 51.2 which states: " Appeal proceedings " means proceedings in the Court that are commenced by filing and serving a summons seeking leave to appeal or a notice of appeal." 6 The term "proceedings" can thus aptly be used in connection with the appeal process. In these circumstances, my view is that the word "plaintiff" in Rule 42.21(1)(a) encompasses an appellant, even if the appellant was not a plaintiff in the court below. 7 It is common ground that the first appellant is, within the meaning of that rule, "ordinarily resident outside New South Wales", he being a resident of Rabaul, Papua New Guinea. 8 The residence of the first appellant outside Australia is a powerful factor in favour of the ordering of security. Its force is emphasised in the present case by the difficulties which the respondent encountered in serving a Bankruptcy Notice on the first appellant. In response to an attempt by the respondent to serve a Bankruptcy Notice by forwarding it to the first appellant at Kitchener, New South Wales, he received a letter from the appellants' solicitors' Cessnock office. That letter asserted that there were a variety of respects in which service of the Notice was deficient, not least that leave to serve it outside Australia had not been obtained. It was further asserted that the appellant would resist any petition for a sequestration order on the basis that: "(a) Brian Batterham [the first appellant] is not personally resident or ordinarily resident in Australia; (b) He does not live at Kitchener, nor does [he] have a place of business in Australia; (c) He is not carrying on business in Australia; and (d) He is not a member of a [firm] or partnership carrying on business in Australia". 9 In my view there are no significant factors pointing against the ordering of security. Whilst the appellant owns land in New South Wales and it is said that the monthly payments referred to in paragraph [6] of my previous judgment are "sourced in New South Wales", there is no certainty that this will remain the position at the time the respondent comes to enforce any order which he might obtain for the costs of the appeal. 10 The first appellant's residence outside Australia, his manifested preparedness to place what hurdles he can in the path of enforcement by the respondent of the judgment to which he is presently entitled, and the limited financial resources available to the first appellant (as to which see paragraph [7] of my previous judgment), combine to require security to be ordered. I should add that I am not suggesting that there was any impropriety in the position taken by the first appellant through his solicitors' letter. The relevance of the letter is simply to illustrate the difficulties of enforcement which the respondent is likely to encounter. 11 The respondent seeks security for costs in the sum of $50,000, this being the amount of costs which the respondent's solicitors estimate that the respondent will incur in connection with the appeal. It was however accepted during the hearing of the application that that figure has been estimated on the solicitor and client basis. The respondent did not contend that 60 percent of that amount, namely, $30,000, would not fairly represent the likely party and party costs. That is the amount which I consider should be ordered to be paid by way of security. 12 I should add that I do not consider that the presence of Batterham Bus Lines Pty Ltd as the second appellant should dissuade me from ordering the other appellant, Mr Batterham, to provide security for costs. Whilst that company is within the jurisdiction, there is no evidence that it has substantial assets which would be available to meet an order for costs of the appeal. 13 The remaining question is as to what orders should be made for the costs of the Notices of Motion filed by the appellant and the respondent and dealt with in this and my previous judgment. 14 The respondent should have his costs of his own Motion as he has been successful in obtaining security (and in obtaining expedition, although that was not opposed). Each party had partial success on the other Notice of Motion. The appellants obtained a stay of the judgment below but did so on condition that a substantial monthly payment be paid to the respondent. In these circumstances, I consider that the costs of that Motion should be treated as costs of the appeal. 15 I make the following orders: (1) Order that the first appellant furnish security for the costs of the respondent of and incidental to the appeal in the amount of $30,000. (2) Stay the proceedings in this Court until such security is provided. (3) Order that the first appellant pay the costs of the respondent of the respondent's Notice of Motion filed on 26 August 2009. (4) Order that the costs of the parties of the Notice of Motion filed by the appellants on 24 August 2009 be part of the costs of the appeal to this Court. ********** 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. 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