FEDERAL COURT OF AUSTRALIA

Neat v AWB Limited [2001] FCA 496

SECURITY FOR COSTS – costs of appeal to Full Court notice of appeal served on Respondents on 2 February 2001 – Appeal to be heard on 21-22 May 2001 – application for security not made until 9 April 2001 when hearing date for appeal already fixed.

Federal Court Rules O 35 R 6

Mark Foys Pty Ltd v TVSN (Pacific) Limited [2000] FCA 1419 referred to

Bell Wholesale Co Ltd v Gates Export Corporation (1984) 2 FCR 1 referred to

Weist v The Director of Public Prosecutions (Gummow J, 5 September 1988, unreported) referred to

Bates v Omareef Pty Limited (Hill J, 4 May 1988, unreported) referred to

Yates Property Corp Pty Limited v Boland (Davies J, 8 October 1997, unreported) referred to

NEAT DOMESTIC TRADING PTY LIMITED v AWB LIMITED

& AWB (INTERNATIONAL) LIMITED

No N 0084 of 2001

CONTI J

27 APRIL 2001

SYDNEY

THE COURT ORDERS THAT:

1.                  Application for Order for Security of Respondents’ costs in relation to the Applicant’s appeal to the Full Federal Court be dismissed.

2.                  There be no order as to costs of the Application for Security.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

1                     On 18 December 2000, Mathews J dismissed with costs the Application for Review of certain decisions of the Second Respondent made under the Wheat Marketing Act 1989 (Cth). On 30 January 2001, the Applicant filed a Notice of Appeal against such decision of her Honour, and served such Notice of Appeal on the Respondents on 2 February 2001. The appeal will be heard by a Full Court on 21-22 May 2001.

2                     On 9 April the Respondents lodged an application by Notice of Motion to the Court for security in relation to the Respondents’ costs of the proceedings at first instance and on appeal. Prior to the hearing of the Notice of Motion, the Respondents gave notice that they would withdraw the application for security for costs in relation to the hearing at first instance. In that regard, I record that I held in Mark Foys Pty Ltd v TVSN (Pacific) Limited [2000] FCA 1417 that there was no such entitlement available under Order 35 Rule 6 of the Federal Court Rules, being a decision in relation to which Hely J subsequently refused leave to appeal.

3                     Subject to a consideration of the evidence filed on behalf of the Appellant to the effect that its presently adverse financial position has been caused by or materially contributed to by the Respondents’ decision-making, the subject of the appeal, being a consideration which I ultimately found unnecessary to undertake, and subject to the delay of the Respondents in making the present application for security for costs of the appeal, NDT’s case for security for their costs of the appeal is prima facie viable. The paid-up capital of NDT is nominal, and certain companies relevantly related to NDT are financially inadequate. The Respondents did not press for an order for security in respect of the proceedings at first instance, because they “… decided… to allow [the Appellant] to have its day in Court” (Affidavit of A.Z. Sactiak sworn 9 April 2001).

4                     On 24 February 2001, a Full Court comprising Justices Lee, Finn and myself dealt with an application for security for the costs of a pending appeal made by the respondent thereto in not dissimilar circumstances to the present (Endormer Pty Limited and Other v AGC (Advances) Limited. Such decision has not yet been published. That Full Court decided that the application for such security should be dismissed, because of the delay in bringing the application promptly after service of the notice of appeal upon the respondent to the appeal. The circumstances of delay in Endormer were comparable to the circumstances of the present application. The Full Court emphasised the need for prompt action on the part of applicants for security at least before hearing dates for the appeal have been fixed. The reasons for such need are readily apparent. It is not just the circumstance that appellants need to know where they stand at an early point in time after lodgment of their appeal. In the event that security for costs not be addressed at an early point in time, the potential for inconvenience to the Full Court and other prospective litigants in the Court is obvious, given that the order for security not be subsequently complied, and the appeal hearing date consequently vacated.

5                     Mr Tonkin of Counsel, who appeared for the Respondent decision-makers, presented a carefully and thoughtfully prepared basis for the grant of security in the particular circumstances of the case. He referred me to the decision of a Full Court in Bell Wholesale Co Ltd v Gates Export Corporation (1984) 2 FCR 1 and subsequent decisions in this Court in Weist v The Director of Public Prosecutions (Gummow J, 5 September 1988, unreported), in Bates v Omareef Pty Limited (Hill J, 4 May 1998, unreported), and in Yates Property Corp Pty Ltd v Boland (Davies J, 7 October 1997, unreported). It suffices to say however that I do not think that anything appearing in the reasons for decision in the particular circumstances of those cases weighs sufficiently against the significance of the delay in bringing the present application for security in the present circumstances.

6                     In short, the delay on the part of the Respondents in bringing the present application for security weighs too heavily in my discretion to allow for the success thereof. I therefore dismiss the Application, but in all the circumstances, including the fact that the reasons for decision in Endormer had not been published at the time of hearing of the present application, I do not make an order as to costs.

Associate:

Dated:              2 May 2001