FEDERAL COURT OF AUSTRALIA

Balderrama v The Commissioner for Australian Federal Police [2001] FCA 577

PRACTICE AND PROCEDURE – Security for costs –– Extradition proceedings – whether Court should decline to exercise discretion under Order 28 Rule 3(1)(a) Federal Court Rules – allegations of fraud and bad faith – applicants in custody – whether proceeding a defensive proceeding

Extradition Act 1988 (Cth) ss 12, 15, 16, 19, 22

Federal Court Rules Order 28 Rule 3(1)(a)

Freedom of Information Act 1982 (Cth)

P.S. Chellerman Co Limited v China Ocean Shipping Co & Anor (1991) 102 ALR 321 cited

FRANCESCO JAVIER RIOS BALDERRAMA v THE COMMISSIONER FOR AUSTRALIAN FEDERAL POLICE

N 383 OF 2001

EMMETT J

10 MAY 2001

SYDNEY

THE COURT ORDERS THAT:

1.      Security be provided by the applicants jointly in the sum of $10 000 for each of the first, second and fifth respondents.

2.      Such security is to be furnished within 21 days in a form satisfactory to the Registrar.

3.      The matter be stood over for further directions on Friday 8 June at 9.30am.

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

REASONS FOR JUDGMENT

1                     The applicants, Francesco Javier Rios Balderrama and Eduardo Mandez Garcia Quiroz (“Messrs Balderrama and Quiroz”), seek relief pursuant to ss 39B, 79 and 80 of the Judiciary Act 1903 and s 23 of the Federal Court of Australia Act 1976 in relation to proceedings that have been commenced against them under the Extradition Act 1988 (Cth) (“the Extradition Act”).  Messrs Balderrama and Quiroz are presently in custody and proceedings are on foot under s 19 of the Extradition Act.

2                     In this proceeding they seek to impugn part of the process that has been undertaken pursuant to the Extradition Act by the second respondent, the United States of America.  They allege that the arrest and detention of Messrs Balderrama and Quiroz pursuant to the Extradition Act was unlawful and seek declaratory relief and unspecified damages. 

3                     Each of Messrs Balderrama and Quiroz is a citizen and resident of Mexico.  All of their financial resources are located in Mexico.  They have no assets within Australia with which to meet any adverse order as to the costs, if such an order were made.  Accordingly, certain of the respondents have by notice of motion sought security for the costs of the proceeding.  Order 28 Rule 3(1)(a) provides that:

“(1)     Where, in any proceeding, it appears to the Court on the application of the respondent –

(a)        that an applicant is ordinarily resident outside Australia;

the Court may order that applicant to give such security as the Court thinks fit, for the costs of the respondent and incidental to the proceeding.”

4                     The Court’s power to order security for costs is discretionary.  There is no doubt of the Court’s power, which must be exercised after weighing all of the circumstances of the case.  While ordinary residence outside Australia is a prerequisite in the present case, it is not necessary that an order be made simply because the applicant resides out of the jurisdiction. 

5                     On the other hand, the fact that a party being in proceedings is resident out of the jurisdiction, and has no assets within the jurisdiction has, for at least 200 years, been seen as a circumstance of great weight in determining whether an order for security for costs should be made. For many years the practice has been to order such a party to provide security for costs, unless that party can point to other circumstances which overcome the circumstance that the person is resident out of and has no assets within the jurisdiction (see P.S. Chellerman Co Limited v China Ocean Shipping Co & Anor (1991) 102 ALR 321 at 323).

6                     The thrust of the claim made by Messrs Balderrama and Quiroz is that the second respondent, the United States of America, has engaged in fraudulent conduct and bad faith, in relation to the production of evidence relied on to support the application under the Extradition Act.  They say that this proceeding is, in effect, a defensive proceeding and that in those circumstances the Court should decline to order security.

7                     The Extradition Act contemplates four stages in an extradition proceeding as follows:

(1)        commencement of the proceeding;

(2)        remand of the persons in respect of whom extradition orders are sought;

(3)        determination by a magistrate of eligibility of those persons for surrender; and

(4)        executive determination that the persons in question are to be surrendered.

8                     Proceedings are commenced by the issue of a provisional warrant under s 12 of the Extradition Act or by the giving of notice under s 16.  Once arrested, the persons involved are required by s 15 to be taken before a magistrate, and remanded in custody or on bail for such a period as may be necessary for eligibility proceedings to be taken under s 19.

9                     Where a person is on remand under s 15 and the Attorney-General has given a notice under s 16, provision is made under s 19 for a magistrate to conduct proceedings to determine whether the person is eligible for surrender.  If eligibility is so determined by the magistrate, s 22 provides that the Attorney-General, who is the fifth respondent to this proceeding, decide whether the person is to be surrendered.

10                  There is therefore an opportunity in the proceeding, pursuant to s 19, for the validity of any remand to be put in issue.  Insofar as there is any issue as to the identity of the persons who are in remand, that question is also determinable under s 19.

11                  On 14 November 2000, the Attorney-General issued a notice of receipt of an extradition request from the United States in respect of each of Messrs Balderrama and Quiroz.  On 22 September 2000, a magistrate of the Local Court of New South Wales, Mr Leslie Brennan, who is the third respondent in this proceeding, issued a provisional arrest warrant under s 12.  On the same day each was arrested pursuant to the arrest warrants.

12                  The proceedings contemplated by s 19 were originally fixed for hearing on 4 May 2001, but were adjourned because of the currency of this proceeding.  Clearly, this proceeding is a collateral challenge to the proceedings currently before the Local Court.  It appears to me that many of the issues that are likely to be raised in the proceeding in this Court, as I understand the proceeding, could be determined in the Local Court.  In particular, substantial allegations of fraud and bad faith are made in this Court.  However, as presently advised, I do not see why most of those questions could not be raised in the Local Court proceeding.  While in a sense this proceeding is defensive, it is, nevertheless, a proceeding brought collaterally to the proceeding in the Local Court, which provides a forum where most of the issues appear likely to be capable of being resolved.

13                  Messrs Balderrama and Quiroz say that even if these proceedings are not properly characterised as defensive, so as to disentitle the respondents to an order for security, the conduct of the Attorney-General has been such as to disentitle him to security at this stage.  The complaint is that the Attorney-General has been requested to provide documents to Messrs Balderrama and Quiroz relating to the internal consideration of the application for extradition from the United States of America, but has failed to do so.  No application has been made under the Freedom of Information Act 1982 (Cth). Counsel for Messrs Balderrama and Quiroz was unable to point to any provision from which it could be said that an obligation on the part of the Attorney-General would arise.  Rather, he says that it is simply to be implied from the terms of the Extradition Act.  I do not understand how such an implication could arise. Any failure on the part of the Attorney-General to produce documents does not appear to me to have any bearing on the question presently before me.

14                  I have given leave for Messrs Balderrama and Quiroz to file an amended application and a statement of claim.  They are to be filed no later than 15 May 2001.  The proposed statement of claim contains 143 paragraphs.  It appears to me that it is appropriate to order that security for costs be furnished by Messrs Balderrama and Quiroz.  However, the security should simply cover the costs of the respondents up to the time of joinder of issue.  When defences have been filed and issues have been joined, it will be possible to make a better assessment of the nature of the questions that are going to fall for determination by this Court, and the likely costs of determining those questions.

15                  I have evidence before me that the likely costs of the first respondent would be in the vicinity of $33,000.  I also have evidence that the likely costs of the fifth respondent would be in the vicinity of $46,000.  The appropriate order I think is to require the provision of security by the applicants jointly in the sum of $10,000 for each of the first, second and fifth respondents, such security is to be furnished within 14 days, in a form satisfactory to the Registrar of the Court.

Associate:

Dated:              10 May 2001