Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Charara v Integrex Pty Limited [2011] NSWCA 9 Hearing dates: 7th February 2011 Decision date: 07 February 2011 Before: BeazleyJA [25], Whealy JA [1], Handley AJA [26] Decision: Her Honour's order as to security of costs should stand. The stay order should operate for 14 days from today's date. The costs order her Honour made should be set aside and replaced by an order that each party pay its own costs of the application for security costs. I would further propose that otherwise the present motion for review be dismissed and that each party pay its own costs of this motion. Catchwords: PRACTICE & PROCEDURE - Court of Appeal - security for costs on leave application - inherent jurisdiction - whether correctly exercised - relevant factors - costs on leave application Cases Cited: Integrex Pty Ltd v Charara [2010] NSWSC 1131 Fleming v Marshall [2010] NSWCA 152 King v Commercial Bank of Australia Limited (1920) 28 CLR 289 at 292 House v The King (1936) 55 CLR 499 Category: Principal judgment Parties: Jamal Charara (Applicant) Integrex Pty Limited (Respondent) Representation: J Charara (Applicant, in person) D P O'Connor (Respondent) Mercantile Legal (Respondent) File Number(s): 2010/152993 Judgment 1WHEALY JA: This is a Motion to review a decision given by McColl JA on 7 December 2010. Her Honour ordered security for costs against the present application in the sum of $1,000. In addition, a stay of proceedings was ordered pending payment of the security. 2The respondent, Integrex Pty Limited, had in earlier proceedings before Palmer J secured an order setting aside a statutory demand relating to an alleged debt of $3,200 owed to the applicant. In those proceedings the applicant asserted that he had the benefit of assignment of a debt in his favour. Palmer J set the statutory demand aside, on the basis that there was a disputed matter of fact as to whether notice of assignment had been given. He directed that this issue must go to trial. (See Integrex Pty Ltd v Charara [2010] NSWSC 1131). 3The applicant filed a summons seeking leave to appeal from Palmer J's decision. Thereupon Integrex moved for an order that the applicant provide security in the sum of $20,000, hence the order sought to be reviewed. I turn now to the grounds of review. 4The applicant accepted that the Court possessed an inherent jurisdiction to make an order for security for costs on a leave application but argued that, in making the order, her Honour's discretion miscarried. It did so, the applicant maintained, for three essential reasons. 5First, on the authority of Fleming v Marshall [2010] NSWCA 152 at [12] per Handley AJA, the application for security should have been refused because a leave application was involved, not an appeal. Secondly, it was asserted that Integrex itself had been in breach of the Registrar's order and had otherwise misconducted itself concerning the proceedings in the Court of Appeal. Thirdly, and most importantly, the application for security was frivolous and was intended to prevent a proper case being presented before the Court. It was argued that there was no proper basis for the exercise of discretion. 6In oral submissions today, the applicant refined or added to his submission by arguing that the inherent jurisdiction should only be exercised sparingly in an application such as this, and only if there were a clear abuse of process or if there would be an injustice if an order were not made. 7In addition to these three arguments, the application also submitted that the costs order made by her Honour was flawed. The point made here was that Integrex had sought security for costs in the sum of $20,000 but the order ultimately made was for a much lower amount, namely, $1,000. The applicant argued that any costs order against him should have reflected this diminution, or should not have been made at all. 8I shall deal with each of these grounds briefly. As to the first, I think it really leads the applicant nowhere. Once it is accepted the Court had an inherent jurisdiction to order security on the leave application, then the point relied upon really has no validity. In relation to the second point the facts are somewhat complicated so I will summarise them briefly. 9On 5 October 2010, the applicant filed his Summons and White Folder plus a draft Notice of Appeal. Thus the leave to appeal application was instituted. It was to be listed for a return date on 15 November 2010. 10On 20 October 2010 the applicant faxed a letter to the Registrar informing him that he would be leaving Australia and not be back until after 13 January 2011. He asked that the matter be listed after that date and gave a range of dates suitable to him in the New Year. 11Now, the matter did nonetheless come on for mention before the Registrar on 15 November 2010. At the mention, the Registrar handed to the representative for Integrex a copy of the letter to which I have made reference. The Registrar then made the following orders: "Integrex is to serve its response to the White Folder by 6 December 2010, the summons for leave is to be listed for hearing on 8 February 2011, the motion for security is to be filed and it is to be listed for mention on 31 October 2010, and is to be served on the applicant by 6 December 2010". 12Now as it happened, Integrex's motion for security was in fact not filed until 18 November 2010. It was listed for hearing on 6 December 2010. This was contrary to the Court's order and, according to the applicant's submissions, it must have been done with the knowledge that the applicant would be overseas. As it happened, the applicant did receive electronically notice of the hearing date. Because of this, he returned to Australia much more rapidly than he had intended, and appeared on the hearing date. 13Surprisingly, Integrex was not ready to proceed on 6 th December 2010 and asked that the matter be stood down until late in the afternoon when its counsel would be available. It seems, however, that by the afternoon it had become clear that counsel would not be available. Integrex then sought an adjournment for two weeks. The applicant, not unnaturally, opposed this and her Honour, in the end, taking into account the inconvenience to the applicant, refused the application for the two weeks adjournment. She listed the matter for hearing on the next morning. 14There is no doubt that Integrex, through its lawyers, appeared to adopt something of a high-handed attitude to the applicant in the way all this happened. However, in my view, her Honour properly dealt with the matter. She exercised her discretion in relation to the selection of the hearing date, having regard to the difficulties that had confronted the applicant. I consider that the whole episode, although unfortunate, had no real bearing on the ultimate exercise of discretion that faced her Honour when she heard the application for security the next day. It can for that reason be put to one side in relation to the principal matter argued today. I now turn to the third ground. 15As to this, it must be stated that the Court's task in this matter is not to re-determine the inherent discretion exercised by her Honour unless the Court is satisfied that the discretion was wrongly exercised in one of the ways mentioned in House v The King (1936) 55 CLR 499. 16In my view the discretion is not confined to abuse of process, as argued by the applicant. Indeed, her Honour recognised this in her decision. It is no doubt a discretion that will be exercised sparingly and, of course, it is a discretion that will be concerned ultimately with the interests of justice as the applicant submitted, but there are many aspects of that consideration that can and will arise in individual cases. 17In this matter, her Honour took into account a number of matters which are set out in her decision. First, she was satisfied that the matter involved in the leave application was a short point which would be disposed of in a very brief period of time. Her Honour was also conscious that Mr Charara was a litigant in person and impecunious. She accepted that this was a factor, although not a decisive one, when considering costs. 18Thirdly, her Honour was concerned that the amount in issue was small, comparatively speaking, as indeed it was. Further, she said that she was concerned that the effect of Palmer J's decision was to send to trial an argument over a relatively small amount. 19Fourthly, she said that, on its face, Mr Charara's prospects of obtaining leave to appeal did not appear "great". She was at pains to say it was not, as far as she could see, an abuse of process. Nevertheless, her Honour took into account the prospects of success as one of the factors to be considered. 20Fifthly, her Honour took into account the financial position of the appellant as it had been demonstrated by the evidence from Mr Bosman. She noted that the applicant had not put in issue Mr Bosman's assertion about his ability to meet the costs of Integrex should his application for leave be unsuccessful. 21Finally, her Honour also took into account, importantly, that Mr Bosman's affidavit had proceeded on a misapprehension that the security for costs sought to be provided related to the appeal, rather than the application for leave to appeal. Her Honour said that, overall, the discretion that she proposed to exercise was one that she would exercise by determining "how on the whole justice will be best served in the matter", taking that expression from King v Commercial Bank of Australia Limited (1920) 28 CLR 289 at 292 . 22Her Honour then went on to make the orders that she did. In my opinion, each of the considerations taken into account by her Honour was not irrelevant to the exercise of the discretion. Secondly, it has not been shown that her Honour took into account any irrelevant matter. As to the ultimate decision, it could not be said to be unreasonable or plainly unjust. Rather, it appeared to be amply justified on the facts found. 23The position in relation to costs, however, in my opinion, is otherwise. In my view the only order for costs that should have been made in this matter was an order that each side pay its own costs. I say that because it is clear that the application had been brought under a misapprehension and I consider that was a powerful matter, particularly when regard was had to the quantum of the security offered, for ordering that each party pay its own costs. Because of the various matters that I have discussed, it seems to me that the appropriate order that should be made in this matter is that, save for the costs order, the order made by her Honour should not be disturbed. I would propose the following: 24Her Honour's order as to security of costs should stand. The stay order should operate for 14 days from today's date. The costs order her Honour made should be set aside and replaced by an order that each party pay its own costs of the application for security costs. I would further propose that otherwise the present motion for review be dismissed and that each party pay its own costs of this motion. 25BEAZLEY JA: I agree with the reasons and the order proposed by Justice Whealy. 26HANDLEY AJA: I also agree with the order of the Court, those proposed by Justice Whealy. ********** 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. Decision last updated: 11 February 2011