FEDERAL COURT OF AUSTRALIA

Nyoni v Pharmacy Board of Australia [2018] FCA 1313

ORDERS

THE COURT ORDERS THAT:

1.    Within 28 days of the date of this order, the Appellant is to provide security in the sum of $20,000 for the Respondents’ costs of the appeal.

2.    Such security is to be provided by way of payment into Court or by the provision of a bank guarantee in a form acceptable to the Registrar.

3.    The appeal be stayed until the security is given.

4.    There be liberty to the parties to apply.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

WHITE J:

1    This judgment concerns an application by the Respondents to an appeal to the Full Court for an order that the Appellant (Mr Nyoni) provide security for their costs on the appeal.

Background

2    Mr Nyoni formerly conducted a pharmacy at Kellerberrin in the Western Australian Wheatbelt. Events arising from his operation of the pharmacy have given rise to a considerable amount of litigation.

3    Following an audit of the pharmacy by officers of the Department of Health in Western Australia, Mr Nyoni was convicted in June 2012 on six offences under the Poisons Act 1964 (WA) and the Poisons Regulations 1965 (WA) made under that Act. His appeal to the Supreme Court of Western Australia against the convictions was unsuccessful but his appeal against sentence succeeded: Nyoni v Murphy [2013] WASC 298. Mr Nyoni’s application for leave to appeal to the Court of Appeal against that judgment failed: Nyoni v Murphy [2014] WASCA 70.

4    On 13 March 2013, Mr Nyoni entered into a contract for the sale of the Kellerberrin Pharmacy and the land on which it is located. When he refused to settle on the contracts, the purchasers obtained orders for specific performance in the Supreme Court of Western Australia: Hee v Nyoni [2014] WASC 44. Mr Nyoni then ceased operation of the Kellerberrin Pharmacy in April 2014.

5    Mr Nyoni commenced proceedings in this Court against the purchasers of the Kellerberrin Pharmacy, but they obtained summary judgment in the action: Nyoni v Chee Koon Hee (No 4) [2013] FCA 948.

6    In 2010, Mr Nyoni commenced an action in this court against the Shire of Kellerberrin and certain of its office holders and employees in relation to conduct said to have occurred while he operated the Kellerberrin Pharmacy. He raised a number of causes of action, including misleading or deceptive conduct, misfeasance in a public office and trespass. Mr Nyoni’s claims were dismissed: Nyoni v Shire of Kellerberrin (No 6) [2015] FCA 1294. An appeal by Mr Nyoni against that judgment succeeded in part: Nyoni v Shire of Kellerberrin [2017] FCAFC 59; (2017) 248 FCR 311.

7    In 2014, Mr Nyoni commenced the proceedings which give rise to the present appeal. There were initially three respondents but one (the Second Respondent) obtained summary judgment in his favour: Nyoni v Pharmacy Board of Australia (No 2) [2016] FCA 1397. The remaining respondents were the Pharmacy Board of Australia and the Australian Health Practitioner Regulation Agency (AHPRA). Mr Nyoni claimed that each was liable to him for damages for conduct which he alleged contravened s 18 of the Australian Consumer Law (which is Sch 2 to the Competition and Consumer Act 2010 (Cth)). The conduct in question was the recording on a National Register and on the website of AHPRA in December 2013 of a condition on his registration as pharmacist that he was “prohibited from taking or self-administering Schedule 8 drugs, save for those that may be legally prescribed for him” (the First Condition). The primary judge rejected Mr Nyoni’s claim, holding that the Respondents’ publication of the First Condition on the Register was pursuant to a mandatory statutory duty and was not conduct “in trade or commerce”.

8    Mr Nyoni’s alternative claim in the same action for damages for defamation based on the publication of the First Condition also failed. The primary Judge held that the publication of the First Condition in respect of Mr Nyoni’s registration occurred on an occasion of absolute privilege, at [219]. His Honour did not decide whether that defence was available to AHPRA, but concluded that it (and for that matter the Board too) could rely on the Public Document defence contained in s 28(1) of the Defamation Act 2005 (WA), at [282], [319].

9    The primary Judge did not express a conclusion on the applicability of the defence of qualified privilege, but did find that Mr Nyoni had not established that either the Board or AHPRA had acted with malice in publishing, and continuing to publish, the First Condition, at [321].

10    Finally, the primary Judge rejected Mr Nyoni’s claim based on injurious falsehood.

11    The Judge also held that Mr Nyoni had not established that he had suffered any actual loss by reason of the misleading or deceptive conduct, defamation or injurious falsehood he alleged, at [121], [168].

12    On 8 May 2018, Mr Nyoni filed the Notice of Appeal in respect of which the Respondents seek the security. On 21 August 2018, I granted Mr Nyoni leave to amend the Notice of Appeal. In its amended form, it will contain 11 grounds. The Respondents have filed a Notice of Contention containing eight grounds. Mr Nyoni is representing himself on the appeal, as he did in the proceedings before the primary Judge.

The application for security

13    At the case management hearing on 2 July 2018, the Respondents foreshadowed an application for an order that Mr Nyoni provide security for their costs. That application was filed on 13 July 2018. The Respondents seek security in the sum of $40,000 and an order that the appeal be stayed until the security is provided.

14    The principal basis on which the Respondents bring the application is the impecuniosity of Mr Nyoni. They point to the evidence that a sequestration order was made under the Bankruptcy Act 1966 (Cth) against the estate of Mr Nyoni on 17 February 2017 and that he remains an undischarged bankrupt. That being so, the Respondents submit that there is a patent risk that any order for costs in their favour at the conclusion of the appeal will not be satisfied. Mr Nyoni did not dispute that he is bankrupt, or that he is impecunious.

Applicable principles

15    The Court’s power to order an appellant to provide security for the costs of an appeal, and to stay the proceedings until the security is provided, is found in s 56 of the Federal Court of Australia Act 1976 (Cth) (the FCA Act). Rule 36.09 of the Federal Court Rules 2011 (Cth) (the FCR) also provides for applications for security for costs.

16    There was no issue between the parties as to the principles which inform the exercise of the Court’s discretion in applications of the present kind. Mr Nyoni referred the Court to the decision of Mortimer J in Nyoni v Shire of Kellerberrin (No 9) [2016] FCA 472 concerning the application for security made by the Shire of Kellerberrin and others in relation to his appeal against the judgment dismissing his claims against those respondents.

17    It is not necessary to refer to the authorities in detail. They indicate that the power to order the provision of security must be exercised judicially and that each case depends on its own circumstances: Bell Wholesale Co Ltd v Gates Export Corporation (1984) 2 FCR 1 at 3-4. The authorities also indicate that a number of matters may be pertinent in the determination of an application for the provision of security for costs in relation to an appeal, including:

(a)    the prospects of success of the appeal;

(b)    the risk that an order for costs will not be satisfied;

(c)    whether the making of an order for security would be oppressive insofar as it would stifle a reasonably arguable claim;

(d)    whether the impecuniosity of the appellant arises out of the conduct which is the subject of complaint in the relevant proceeding;

(e)    whether there are any aspects of public interest that weigh in the balance against granting security; and

(f)    whether there are any other particular discretionary matters peculiar to the circumstances of the case.

Prospects of success

18    Both parties made some submissions concerning Mr Nyoni’s prospects of success. Mr Nyoni has confidence in the merits of his appeal. The Respondents contended to the contrary, pointing out that some of the findings by the primary Judge impugned by Mr Nyoni were based on conclusions of law, which are consistent with previous decisions of the Court. In respect of other findings, the Respondents submitted that Mr Nyoni has not shown a basis for doubting their correctness.

19    I consider it inappropriate for the Court to attempt, at this stage, a detailed evaluation of the prospects of success of Mr Nyoni’s appeal. I consider it appropriate instead to proceed on the basis that it should not be concluded at this stage that Mr Nyoni’s appeal has no prospects of success but nor should it be concluded that the appeal has strong prospects.

The risk that a costs order will not be satisfied

20    As noted, Mr Nyoni did not dispute that he is presently an undischarged bankrupt. Nor did he contend that he has (or will have) the ability to satisfy any adverse order as to costs. In fact, Mr Nyoni said “there wouldn’t be any possibility” of him satisfying a costs order in favour of the Respondents.

The stifling of a reasonably arguable claim

21    Although Mr Nyoni did not provide direct evidence to the effect that his ability to pursue the appeal would be stultified by a costs order, he submitted that that would be so. I am satisfied that it is appropriate to determine the application on that basis. I say that because it is not readily to be expected that, as an undischarged bankrupt, Mr Nyoni will have access to resources permitting the provision of security of the order sought.

22    The potential for stultification of the appeal is an important consideration. In general, courts take the view that impecuniosity ought not to be a barrier to access to justice. However, the application of that approach is often moderated in the case of appeals, especially when the appeal is brought by an applicant who was unsuccessful at first instance.

23    In Moore v Macks [2007] FCA 509, Mansfield J said:

[20]    The cases suggest that, in the case of an appeal, where an impecunious litigant has had the benefit of a full hearing at first instance, the significance of the fact that a security for costs order may frustrate the exercise of the right of appeal should carry less weight than in the circumstances where a litigant at first instance may be put out of litigating a matter at all. As long ago as Cowell v Taylor (1885) 31 Ch D 34 at 38, Bowen LJ said:

The general rule is that poverty is no bar to a litigant, that, from time immemorial, has been the rule at common law, and also, I believe, in equity. There is an exception in the case of appeals, but there the appellant has had the benefit of a decision by one of Her Majesty’s courts, and so an insolvent party is not excluded from the courts, but only prevented, if he cannot find security, from dragging his opponent from one court to another.

Spender J in Skyring v Sweeney [1999] FCA 61 at [6] said:

Impecuniosity is a factor which can be taken into account as justifying the grant of security. Impecuniosity ought not to be a bar to a person prosecuting at first instance a claim, but the position on appeal seems to me to be fundamentally different. In effect, in the absence of an order for security for costs in the circumstances of this case, Mr Skyring, in effect, is given a free hit, and that seems to me to be intrinsically unfair.

See also Clack v Collins (No 1) [2010] FCA 513 at [7]-[8]; Tait v Bindal People [2002] FCA 322 at [3] and Dye v Commonwealth Securities Ltd [2012] FCA 992 at [27]-[28].

24    In Kiefel v State of Victoria [2014] FCA 604, Mortimer J said in respect of the passage in Cowell v Taylor (1885) 31 Ch D 34 to which Mansfield J referred in Moore v Macks:

[38]    For my own part and with respect to those who take a different view, I am not persuaded by an authority such as this that there should necessarily or generally be a different approach taken on appeal. Nor am I persuaded that some kind of presumption is to be applied on an appeal where an appellant is said to be impecunious, which seemed to be the import of the State’s submissions. There is no authority binding on me which compels such an approach. The circumstances which obtained in litigation in the 19th century are too far removed from those of the 21st century for dicta such as this to be applied too literally. …

25    I respectfully agree with Mortimer J that there should not be a presumption applied in the case of appeals. Nevertheless, the circumstance that security is sought in respect of an appeal brought by an unsuccessful applicant at first instance is, in my opinion, a matter relevant to the exercise of the Court’s discretion. Numerous contemporaneous authorities, some of which are referred to above, support that approach.

The cause of Mr Nyoni’s impecuniosity

26    As already noted, Mr Nyoni did not dispute that he is impecunious. He submitted that no significance should be attached to his impecuniosity because it is caused by the conduct of the Respondents of which he complains in these proceedings. His submission was that the Respondents should not be able to rely upon the impecuniosity which they have caused. If established, this too would be a particularly important consideration.

27    However, there are difficulties for Mr Nyoni with this submission. The first is that the primary Judge made express findings that Mr Nyoni had not established that he had suffered any actual economic loss by reason of the publication of the First Condition on the National Register and on the AHPRA website, at [168], [330]. Mr Nyoni challenges those findings in the appeal but, while they stand, they present an impediment to the Court accepting his submission.

28    Another difficulty is that it seems reasonable to attribute Mr Nyoni’s impecuniosity, at least in part, to the liabilities for costs which he has incurred in his pursuit of unsuccessful litigation. I will mention these liabilities again shortly, but note at this stage that a liability for unpaid costs was one of the matters leading to the making of the sequestration order.

29    Mr Nyoni himself has attributed his impecuniosity to the fact that he had been denied access to the proceeds of sale of his pharmacy. In his affidavit of 25 July 2018, Mr Nyoni deposed:

[7]    As a result of a campaign against myself and my business by the Shire of Kellerberrin, the Department of Health WA, the Pharmacy Board of Australia, AHPRA and others, any process of sale from my pharmacy were distributed among these conspirators leaving me impecunious since 2014.

As counsel for the Respondents pointed out, there is no suggestion that either the Pharmacy Board or AHPRA participated in 2014 in the proceeds of the sale of the pharmacy, and it is not easy to see a basis on which they could have done so.

30    I observe that in the litigation against the Shire of Kellerberrin and others, Mr Nyoni claimed significant damages from the Respondents in those proceedings, including economic loss.

31    Furthermore, Mr Nyoni complains in these proceedings of the publication of only the First Condition, not its imposition. Nor does he complain of the other eight conditions imposed by the Pharmacy Board. These are set out in the reasons of the primary Judge at [30]. It is those conditions which are more likely to have had an effect on Mr Nyoni’s continuing ability to practice as a pharmacist.

The public interest

32    The fact that the subject matter of the appeal is a claim of defamation does not indicate that the Court should adopt an approach which differs from the usual: Trkulja v Dobrijevic [2015] VSCA 281 at [46]. In any event, Mr Nyoni’s appeal is not confined to his claim in defamation.

33    The Respondents placed considerable emphasis on the persistence with which Mr Nyoni pursues litigation. They noted that litigation commenced by Mr Nyoni has been the subject of six judgments of the Court of Appeal of the Supreme Court of Western Australia, 24 judgments by single judges in this Court, and two judgments of the Full Court of this Court. Almost all these proceedings were commenced by Mr Nyoni and in most, but not all, cases he has been the unsuccessful party. Mr Nyoni did point to some litigation in which he has been successful but it is plain that this has been so in only a small number of the cases in which he has been involved.

34    While litigants should not be precluded from accessing the courts by reason of their impecuniosity, it is appropriate for the courts, in the public interest, and in the interest of particular respondents, to take account in the exercise of the discretion under s 56 of the FCA Act of the persistence with which a particular litigant has brought proceedings of an unmeritorious kind. This is so even if the conduct of the litigant does not rise to the level of characterisation as vexatious.

35    It is apparent that on occasions courts have been critical of the extent to which Mr Nyoni has pursued proceedings without merit. In Nyoni v Hee [2014] WASCA 84 at [27], Pullin and Newnes JJA said:

From what has been observed in the arguments presented before the acting master and in this appeal, and from the observations made by Gilmour J in the Federal Court, it is clear that Mr Nyoni is prepared to pursue proceedings which are without merit and which vex other parties. There is sufficient information, therefore, to direct the principal registrar to refer these reasons for decision to the Attorney General for him to consider whether proceedings should not be brought against Mr Nyoni under the Vexatious Proceedings Restriction Act 2002 (WA).

36    On numerous occasions, costs orders have been made against Mr Nyoni. On one occasion, an order that Mr Nyoni pay costs on an indemnity basis was made: Nyoni v Shire of Kellerberrin (No 3) [2013] FCA 1090. It is apparent that at least some of the costs orders remain unpaid as the creditors’ petition which led to the making of a sequestration order against Mr Nyoni was founded in part on an unsatisfied costs order. Mr Nyoni’s own affidavit included certificates of two taxations of costs, indicating that he has a costs liability in those matters exceeding $80,000.

37    I consider that the fact that Mr Nyoni has had frequent access to the courts at unrecompensed expense to respondents and defendants to be a very pertinent matter. There are limits to the extent to which he should be permitted to pursue litigation without respondents having any prospect of recovery of their costs in the event that his claims fail: Sands v State of South Australia [2013] SASC 105 at [14].

38    As a separate matter, the Respondents noted that, although Mr Nyoni was informed of his right to appeal to the State Administrative Tribunal against the imposition of the First Condition, he had not exercised that right. They submitted that that was the forum for Mr Nyoni to contest the appropriateness of the First Condition. They also submitted that, when given the opportunity to comment on the conditions which were proposed, Mr Nyoni had not asserted that the First Condition was defamatory of him. I am not inclined to attach much weight to these considerations. Whether Mr Nyoni could have adopted other courses of actions is to my mind not particularly pertinent.

Conclusion on the discretion

39    I am particularly conscious that an order for security in the present case may have a stultifying effect on Mr Nyoni’s appeal. This is a significant consideration. However, other considerations lead me to conclude that an order for security is appropriate in the present case. These include the present uncertainty concerning Mr Nyoni’s prospects of success on the appeal, the fact that the Court cannot be satisfied that Mr Nyoni’s impecuniosity is attributable to the present Respondents, and the persistence with which Mr Nyoni has invoked the jurisdiction of the Courts, on many occasions in an unmeritorious way and, it seeming, without satisfying the adverse costs orders made against him.

The amount of the security

40    As indicated at the commencement of these reasons, the Respondents seek an order that Mr Nyoni provide security in the sum of $40,000. The Respondents’ solicitors have provided an itemised breakdown of the calculation of that sum. It is apparent that it includes the costs of the present application, the costs of an application to strike out “items of appeal” and an item described as “preparation of Respondents’ evidence on appeal”. In my view, these items ought to be excluded from these security. In particular, there is no need for the Respondents to be preparing evidence on the appeal. It may also be that the hourly rate used for computation of the Respondents’ solicitors’ rate exceeds that which would be allowable on a party and party basis. The security to be afforded to the Respondents should be in respect of costs yet to be incurred.

41    In the circumstances, I consider that security in the amount of $20,000 is appropriate and that is the sum I will order.

42    I will not make a self-executing order for the dismissal of the appeal in the event that security is not provided. In the event that the Respondents seek such an order, they can exercise the liberty to apply which I will grant.

Conclusion

43    For the reasons stated above:

(a)    Mr Nyoni is, within 28 days of the date of this order, to provide security in the sum of $20,000 for the Respondents’ costs of the appeal;

(b)    Such security is to be provided by way of payment into Court or by the provision of a bank guarantee in a form acceptable to the Registrar;

(c)    The appeal be stayed until the security is given; and

(d)    There be liberty to the parties to apply.

44    I will hear from the parties with respect to the costs of the Respondents’ interlocutory application of 13 July 2018.

Associate:

Dated:    28 August 2018