FEDERAL COURT OF AUSTRALIA

Silveira v Australian Institute of Management [2001] FCA 1358

PROCEDURE – security for costs of appeal – whether security can be ordered in respect of outstanding costs ordered to be paid at first instance – whether Court should exercise discretion under O 28 r 3(1)(a) of Federal Court Rules – amount to be ordered by way of security for costs

Federal Court of Australia Act 1976 (Cth) s 56(1)

Federal Court Rules O 28 r 3(1)(a), O 35 r 6(2)

Barton v Minister for Foreign Affairs (1984) 2 FCR 463 followed

Endormer Pty Limited (in liq) v Australian Guarantee Corporation Limited [2001] FCA 548 followed

Neat v AWB Limited [2001] FCA 496 followed

Energy Drilling Inc v Petroz NL (1989) ATPR 40-954 followed

P S Chellaram & Co Ltd v China Ocean Shipping Co (1991) 102 ALR 321 followed

Kent Heating Ltd v Cook-on Gas Products Pty Ltd (1984) 59 ALR 277 followed

Appleglen Pty Ltd v Mainzeal Corporation Pty Ltd (1988) 79 ALR 634 followed

Australian Broadcasting Tribunal v Bond (1990) 170 CLR 32 referred to

Mark Foys v TVSN (Pacific) Limited [2000] FCA 1417 followed

NICHOLA SILVEIRA v AUSTRALIAN INSTITUTE OF MANAGEMENT

N1040 of 2001

STONE J

SYDNEY

21 SEPTEMBER 2001

THE COURT ORDERS THAT:

1.                  unless the appellant provides security in the amount of nine thousand dollars ($9,000) on or before 19 October 2001 in a form satisfactory to the Registrar, the appeal be stayed until further order;

2.                  the parties have liberty to apply on forty-eight (48) hours notice;

3.                  the costs of the application for security be costs in the appeal.

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

REASONS FOR JUDGMENT

1                     The appellant in this proceeding is seeking a General Skills Visa (Class BN) for entry into Australia. Clause 1128C(3)(c) of Sch 1 of the Migration Regulations 1994 (Cth) provides that an application for this class of visa must be accompanied by satisfactory evidence that a relevant assessing authority has assessed the applicant’s skills for the nominated skilled occupation.  The respondent is the only relevant assessing authority for the Class BN visa. The appellant requested the respondent to provide her with an assessment of her skills in connection with her application. The respondent carried out the assessment and by letter dated 18 August 2000 informed the appellant that her skills had been assessed as not meeting the minimum requirements for the purpose of skilled migration. 

2                     The appellant filed an application for an order of review on 6 December 2000 seeking an order that the respondent reconsider her qualifications in accordance with the law.  The appellant alleged that the respondent should have assessed her qualifications in accordance with the ASCO Code, which is a skill-based classification published by the Australian Bureau of Statistics. On 27 June 2001, a judge of the Court dismissed the appellant’s application with costs. His Honour held that this Court has no jurisdiction to grant relief under the Administrative Decisions (Judicial Review) Act 1977 (Cth)because the making of an assessment by the respondent pursuant to a request by a prospective applicant for a visa is not a decision under an enactment for the purposes of that Act.

3                     On 9 July 2001, the appellant filed a notice of appeal from the learned primary judge’s decision.  By notice of motion filed on 2 August 2001, the respondent moves the Court for an order that the appellant provide security for in the amount of $9,000 for the respondent’s costs of appeal and $15,000 for the costs of the trial.

4                     Section 56(1) of the Federal Court of Australia Act 1976 (Cth) provides that:

“The Court or a Judge may order an applicant in a proceeding in the Court or an appellant in an appeal to the Court to give security for the payment of costs that may be awarded against him.”

Order 28 r 3(1)(a) of the Federal Court Rules provides that the Court may order an appellant to give security on the application of the respondent where, among other things, an appellant “is ordinarily resident outside Australia”; see O 28 r 1(a); Federal Court of Australia Act 1976 (Cth), s 4 (definition of “proceeding”). 

5                     A decision to order security for costs is a matter within the discretion of the Court; Barton v Minister for Foreign Affairs (1984) 2 FCR 463 at 468. An important consideration for the Court in the exercise of its discretion is that the application has been made in a timely manner; Endormer Pty Limited (in liq) v Australian Guarantee Corporation Limited [2001] FCA 548, Neat v AWB Limited [2001] FCA 496. As noted above, the notice of appeal in this proceeding was filed on 9 July 2001.  This was followed by a letter dated 13 July 2001 seeking security for costs sent on behalf of the respondent to the appellant’s solicitors.  Follow-up letters seeking a response to this request were sent on 20 and 27 July 2001 and the notice of motion was filed on 2 August 2001. I am satisfied that the application has been made in a timely manner.

6                     The respondent’s claim for security is primarily based on the appellant being resident outside Australia and having no assets in the jurisdiction. Evidence adduced by the appellant established that she normally resides in Dubai, United Arab Emirates and that she does not own any assets within Australia.  The purpose of an order for security in such a case is to create a fund within Australia against which a successful respondent may enforce judgment, thereby avoiding the difficulty of enforcing a judgment for costs in the foreign jurisdiction; Energy Drilling Inc v Petroz NL (1989) ATPR 40-954 at 50,422 per Gummow J. In P S Chellaram & Co Ltd v China Ocean Shipping Co (1991) 102 ALR 321, McHugh J outlined the considerations relevant to the exercise of the Court’s discretion where the appellant is not ordinarily resident in Australia and has no assets in Australia. His Honour stated (at 323):

“To make or refuse to make an order for security for costs involves the exercise of a discretionary judgment.  That means that the court exercising the discretion must weigh all the circumstances of the case.  The weight to be given to any circumstance depends not only upon its own intrinsic persuasiveness but upon the impact of the other circumstances which have to be weighed.  A circumstance which may have very great weight when only two or three circumstances have to be weighed may be of minor significance when many circumstances have to be weighed.  However, for over 200 years, the fact that a party, bringing proceedings, is resident out of the jurisdiction and has no assets within the jurisdiction has been seen as a circumstance of great weight in determining whether an order for security for costs should be made.  Indeed, 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 weight of the circumstance that that person is resident out of and has no assets within the jurisdiction.”

7                     One relevant circumstance is whether the appellant would financially embarrassed by such an order; Kent Heating Ltd v Cook-on Gas Products Pty Ltd (1984) 59 ALR 277. Evidence was adduced by the appellant that she has an annual income from her employment in Dubai of approximately $US 60,000 per annum.  Counsel for the appellant did not suggest that his client would be unable to provide security for costs or that the effect of such an order would jeopardise her pursuit of the appeal. 

8                     Counsel for the appellant submitted that the issues raised in the appeal are of considerable public interest and that the appellant’s chances of success on the appeal were such as to weigh against the Court’s exercise of its discretion to grant the security requested.  In so far as the prospects of success in the appeal are concerned, both parties made strong assertions as to their own prospects. I am not, however, in a position to express any opinion as to the likelihood or otherwise of success in the appeal nor is it appropriate that I do so; Appleglen Pty Ltd v Mainzeal Corporation Pty Ltd (1988) 79 ALR 634 at 635. It is sufficient for present purposes that the appellant has an arguable (ie not futile) case. 

9                     The submissions made by counsel for the appellant that the case had considerable public interest did not seem to me to be persuasive. It was submitted that, if the trial judge is correct in his conclusion (see [2] above), then an essential pre-condition to the making of a valid application for the relevant visa (that is, the assessment of an applicant’s qualifications) is not subject to judicial review. This may well be so, but the consequence is hardly novel in the context of immigration law.  The nature of reviewable decisions is discussed in Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 335-340. 

10                  I am satisfied that the appellant should be required to provide security in respect of the costs of the appeal.  The fact that the appellant does not normally reside in this country and has no assets in the jurisdiction means that, if the respondent were to succeed in the appeal, it could face considerable difficulty in enforcing any costs order. The competing concerns raised by the appellant are not, in my opinion, sufficient to outweigh this consideration. The respondent sought security in the amount of $9,000 in relation to the appeal and supported this amount by an assessment made by legal costs consultants.  The amount appears to be reasonable and I am prepared to order that $9,000 be provided by way of security for costs.

11                  In addition, the respondent requested the amount of $15,000 to secure the costs order made by the primary judge.  It was submitted on the part of the appellant that the Court is not entitled at this stage to make an order securing the payment of costs owing pursuant to an order made by the primary judge.  The decision of Conti J in Mark Foys v TVSN (Pacific) Limited [2000] FCA 1417 was cited in support of this proposition.  I respectfully agree with his Honour that O 35 r 6 of the Federal Court Rules does not extend to the making of an order staying an appeal for failure to pay the costs of the successful party at first instance.

12                  Where, as is commonplace, the hearing of the appeal is made subject to the provision of security for costs, the purpose of the order is that the party seeking security is not compelled to incur the costs of an appeal without some certainty that any costs order in its favour will be met.  This purpose can have no place in relation to the costs of the trial where the costs in question have already been incurred.  Like Conti J in Mark Foys v TVSN (Pacific) Limited (above), I would, as a matter of discretion, decline to make any order for security for the costs incurred at the trial if I am wrong in my construction of O 35 r 6.

13                  For the above reasons the orders will be that: 

1.                  unless the appellant provides security in the amount of nine thousand dollars ($9,000) on or before 19 October 2001 in a form satisfactory to the Registrar, the appeal be stayed until further order;

2.                  the parties have liberty to apply on forty-eight (48) hours notice;

3.                  the costs of the application for security be costs in the appeal.

Associate:

Dated:              21 September 2001