Federal Court of Australia

Frigger v Banning (Application for Security for Costs on Review of Taxation) [2024] FCA 1207

ORDERS

THE COURT ORDERS THAT:

1.    On or before 8 November 2024, the applicants provide security for the respondents' costs in the amount of $10,000 by payment into Court.

2.    These proceedings be stayed pending the provision of security.

3.    The applicants pay the respondents' costs of the application for security.

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

REASONS FOR JUDGMENT

COLVIN J:

1    Mrs and Mr Frigger were ordered to pay costs of the respondents in these proceedings. An amended bill of costs was delivered for taxation. The taxed costs were estimated by a registrar at $106,987.09. Mrs and Mr Frigger objected to the estimate. The taxation was conducted on 1 and 2 July 2024. At taxation, the total costs were taxed at $160,098.41.

2    On 3 July 2024, Mrs and Mr Frigger applied to review the taxation. On review they challenge all 598 items in the amended bill of costs. They also claim that the respondents were not permitted to attend the taxation. They seek the removal of the respondents' response to the grounds of objection from the Court file. They say that retainer agreements of the lawyers for the respondents were not in existence or were void. They also allege that counsel in the proceedings entered into impermissible direct retainers and took steps to conceal that fact. They also make allegations about a charge obtained from one of the respondents to secure payment of legal fees. They say that the charge is a sham for the purpose of defeating creditors of that respondent. They say that the respondents have admitted allegations in the proceedings in the Supreme Court of Western Australia that entitle them to recover any amount assessed under the costs orders in these proceedings as damages in those proceedings. They seek an order that the certificate of taxation be set aside and an amount of $62,000 that has been paid into Court by way of security for the costs of the proceedings to be paid out to them with accrued interest. Manifestly, they are seeking to raise an army of arguments in an effort to resist paying any costs.

The respondents' application for security for costs of the review

3    The respondents seek security for the costs of the review application. I made directions for submissions and affidavits to be filed in relation to the application for security and for the application to be dealt with on the papers. I directed that no further documents be filed and served without leave first being sought and obtained.

4    Security is sought on the basis of an estimate provided by the solicitor for the respondents to the effect that the costs that would be expected to be incurred would be of the order of $15,000. That estimate includes the costs of the present application. Given the extent of the issues that Mrs and Mr Frigger seek to agitate on the review, I am satisfied that the estimate is reasonable, at least as to the overall amount.

5    The hearing of the review will likely occupy a day's hearing. This Court often fixes costs for a day's hearing in review proceedings in amounts around $10,000. The extent of the issues that Mrs and Mr Frigger seek to raise means that costs incurred in answering those matters may well exceed what is usual.

6    In substance, the respondents advance the following contentions in support of their application for security:

(1)    Mrs and Mr Frigger have pursued 'a series of unsuccessful litigation' against the respondents in this Court and the Supreme Court;

(2)    in the present proceedings, Mrs and Mr Frigger had sought relief to the effect that a number of Supreme Court orders be set aside and to recover costs ordered in those proceedings as damages (Frigger v Banning (No 3) [2017] FCA 221);

(3)    the only funds available at present to meet any costs order against Mrs and Mr Frigger if they are unsuccessful on their application for review is the existing security of $62,000 which will be insufficient to meet the taxed costs to be recovered if the review application is unsuccessful;

(4)    numerous cost orders have been made against Mrs and Mr Frigger which remain unpaid;

(5)    Mrs and Mr Frigger were bankrupted on the basis of debts owed under court orders for the payments of costs; and

(6)    Assets outside the control of trustees in bankruptcy of the estates of Mrs and Mr Frigger are held within their self-managed superannuation fund and are not monies against which execution might be levied if a costs order was to be made in favour of the respondents.

Previous litigation by Mrs and Mr Frigger

7    Mrs and Mr Frigger are prodigious litigants in this and other courts over two decades. In most instances, they have conducted the proceedings as litigants in person. Much of it has involved the respondents in some way.

8    The genesis for the litigation conducted by Mrs and Mr Frigger was described by the Court of Appeal in Western Australia in Frigger v Professional Services of Australia Pty Ltd [No 2] [2016] WASCA 68 and Frigger v Professional Services of Australia Pty Ltd [2022] WASCA 119. The latter is a decision in which security for costs was ordered to be paid by Mrs and Mr Frigger in respect of an appeal brought by them against some of the respondents and others (including counsel for the respondents in these proceedings).

9    In 2018, sequestration orders were made in respect of the estates of Mrs and Mr Frigger: Kitay, in the matter of Frigger (No 2) [2018] FCA 1032. Those estates are still being administered by their trustee in bankruptcy. However, they have been discharged from bankruptcy.

10    The bankruptcy of Mrs and Mr Frigger arose from their failure to pay costs in earlier court proceedings in an amount of about $61,000. The petition was supported by other creditors who claimed to have unpaid costs orders against Mrs and Mr Frigger. One of the matters advanced in opposition to the application for sequestration orders (and not accepted) was alleged fraud in the conduct of the taxation fixing the amount of costs due pursuant to those orders.

11    There have been very substantial proceedings heard and determined by this Court as to the extent of the property being administered by the trustee in bankruptcy of the estates of Mrs and Mr Frigger: Frigger v Trenfield (No 10) [2021] FCA 1500; Frigger v Trenfield (Application for Stay Pending Appeal) [2021] FCA 1605; Frigger v Trenfield (No 3) [2023] FCAFC 49 and Frigger v Trenfield (Application for Release from Undertaking) [2023] FCA 1284.

12    Mrs and Mr Frigger are now pursuing proceedings for the removal of the trustee in bankruptcy in which they claim that the trustee is not entitled to remuneration by reason of the arrangements made with her employer as to fees and as to remuneration for administration of the estates: Frigger v Trenfield (Application to Amend) [2024] FCA 508.

13    The above brief summary is by no means comprehensive as to the extent of proceedings brought by Mrs and Mr Frigger in this and other courts.

General principles

14    The power to order security for costs is an order made to serve the interests of justice: Philips Electronics Australia Pty Ltd v Matthews [2002] NSWCA 157; (2002) 54 NSWLR 598; and Gentry Brothers Pty Ltd v Wilson Brown & Associates Pty Ltd (1992) 8 ACSR 405 at 411. Historically, the general rule was that the courts would not order security against a natural person on the basis of poverty. It was a rule born of concern about access to the courts for all. However, there was an exception in the case of appeals because the party had already had the benefit of a decision: Cowell v Taylor (1885) 31 Ch D 34 at 38.

15    The jurisdiction that is now most usually exercised by this Court where security for costs is sought against an individual is a statutory jurisdiction: s 56(1) of the Federal Court of Australia Act 1976 (Cth) (as also reflected in r 19.01 of the Federal Court Rules 2011 (Cth)). The jurisdiction is broad and unfettered and the outcome in each case must depend on its own circumstances: Bell Wholesale Co Pty Ltd v Gates Export Corporation (No 2) (1984) 2 FCR 1 at 4; and Madgwick v Kelly [2013] FCAFC 61; (2013) 212 FCR 1 at [6].

16    I explained the principles that apply in a case like the present in Frigger, in the matter of Computer Accounting & Tax Pty Ltd (in Liq) (No 2) [2018] FCA 612 at [5]-[10].

Outcome

17    For reasons which follow, I have determined that Mrs and Mr Frigger should be ordered to provide security for the costs of the review application in the amount of $10,000 and the review application should be stayed pending provision of the security.

Reasons for security

18    On the basis of the above matters, I accept the contentions advanced by the respondents as to the extent of litigation conducted by Mrs and Mr Frigger and the difficulties that parties have had in seeking to recover costs from them when orders for costs have been made.

19    It is not suggested by Mrs and Mr Frigger that they lack access to funds to meet an order for security. The affidavit by the solicitor for the respondents sworn in support of the security for costs application deposes that other than funds in the superannuation fund 'belonging' to Mrs and Mr Frigger, he is not aware of any assets other than those in the control of a trustee in bankruptcy of the estates of Mrs and Mr Frigger upon which execution could be made for payment of any costs ordered to be paid. This is not disputed by Mrs and Mr Frigger.

20    Mrs and Mr Frigger have retired. They have access to their superannuation funds. Further, they do not suggest that they could not access funds required to provide security if security was ordered. The difficulty for creditors is in executing against those superannuation funds.

21    In opposition to the application, Mrs and Mr Frigger have advanced various points that they will seek to rely upon at the hearing of their review application. In addition, as has been mentioned, they have filed an affidavit and made submissions that rely upon events that have occurred in proceedings in the Supreme Court of Western Australia brought by them against the respondents and others (including counsel in these proceedings) being CIV 1986 of 2023. They suggest that by reason that some respondents have filed notices to abide by any court orders and another has not filed an appearance that those parties have admitted the allegations in those proceedings and that Mrs and Mr Frigger are entitled to the costs they have been ordered to pay in these proceedings as damages in the Supreme Court proceedings. These submissions are misconceived. They also involve a form of circularity whereby cost orders ordered in one set of proceedings are sought to be recovered as damages in subsequent proceedings. It is a form of allegation that has been adopted by Mrs and Mr Frigger in other proceedings.

22    Significantly, the litigation history of Mrs and Mr Frigger supports the concern that the respondents will face considerable difficulty in seeking to recover costs pursuant to any order for costs that might be made in these proceedings.

23    The present case seeks review in circumstances where Mrs and Mr Frigger have had the benefit of a taxation which extended over two days. They seek to object to every item of costs and raise numerous other points.

24    In all of those circumstances, the interests of justice will be served by requiring security for costs to be provided. Having regard to what I have said about the amount of security I consider it appropriate to order that security be provided in an amount of $10,000.

Costs of the application for security

25    The respondents have succeeded on an interlocutory application. It concerns an issue which does not bear upon the substantive application. They should be awarded their costs of the application.

Associate:

Dated:    18 October 2024