The Jurisdiction to Order Security for Costs – Applications for Leave to Appeal or to Extend Time

Introduction

Where an appeal has been commenced in the Court of Appeal a respondent is entitled to apply for security for costs.

Rule 722 of the Uniform Civil Procedure Rules (‘UCPR’) provides, relevantly, as follows:

(1)     The Court of Appeal, or the court that made the decision appealed from, may order an appellant to give security, in the form the court considers appropriate, for the prosecution of the appeal without delay and for payment of any costs the Court of Appeal may award to a respondent.

…

(4)     The Court of Appeal may at any time set aside or vary an order made under this rule.

The purpose of this article is to consider a jurisdictional question that arises where there is merely an application for leave to appeal or, to extend time for filing a notice of appeal.1

In such a circumstance, does Rule 772 provide a source of jurisdiction for granting an order for security for costs? If not, what are the sources, if any, of jurisdiction to grant an order for security and does that grant of jurisdiction extend beyond the Court of Appeal?

Application of Rule 772

In Bell v Bay-Jespersen2 (“Bell”) the Court of Appeal had cause to consider the application of Rule 772.

In short the case involved an application by a wife for a domestic violence order against her husband under the Domestic and Family Violence Act 1989. The husband had, wrongly, sought judicial review in the Trial Division of the Supreme Court of the Magistrate’s decision to grant the domestic violence order. Mackenzie J refused the application for judicial review and the husband decided to appeal. The wife applied pursuant to Rule 772 for security for costs.

There were numerous procedural problems with the process adopted by the husband, none of which are relevant to this discussion. Suffice it to say, as the proceeding was constituted, it was properly an application for leave to appeal and not an appeal.

McPherson JA (with whom McMurdo P and While J agreed) determined that, as the proceeding was not an appeal and was not ordained as such until leave was granted, Rule 772 did not confer jurisdiction to grant an order for security.

In support of this proposition McPherson JA referred to his reasoning in Stone v Copperform Pty Ltd.3  In that case His Honour was concerned with an application for the stay of execution of a judgment appealed from under Rule 761 of the UCPR. Similarly to Rule 772, Rule 761 contemplates the existence of an appeal before jurisdiction to grant a stay is enlivened. 4McPherson JA determined that there was only an application for leave to appeal on foot, and not an “appeal” as contemplated by Rule 761. It followed that there was no jurisdiction, at least under that Rule, for the Court to grant a stay.

After determining that Rule 772 was not a source of jurisdiction, McPherson JA went on to consider what other sources of jurisdiction the Court of Appeal had at its disposal to grant an order for security for costs in the context of an application for leave to appeal.  His Honour observed:

“Rule 772 of the UCPR is, however, not the only source of power to make an order for security for costs of proceedings in the Supreme Court. Rule 670 of the Rules confers on the court authority to order a plaintiff to give security for the defendant’s costs of and incidental to the proceeding. On any view of it, the husband’s application for leave to appeal to this Court is a “proceeding” within the meaning of that Rule. The expression “the court” is defined in Schedule 4 to the Rules by reference to Rule 3(2), where the court is declared to include the Supreme Court. For reasons explained in Capricorn Inks Pty Ltd v Lawter International (Australasia) Pty Ltd [1989] 1 Qd R 8, 12-14, the Supreme Court includes the Full Court, whose jurisdiction was transferred to the Court of Appeal by s. 29 of the Supreme Court of Queensland Act 1991 at the time when the Court of Appeal was constituted under that Act in 1991.

It follows that in referring to the “court” and Rule 3(2) to the Supreme Court in this context, UCPR 670 vests in the Court of Appeal the power to order the plaintiff to give security for the defendant’s costs of the proceeding to obtain leave to appeal from the Court of Appeal.”5

In summary, Rule 772 has no application unless there is an appeal on foot. However, the Court does have an alternate jurisdiction under the general grant of power contained in Rule 670 to order security for costs of an application for leave to appeal, or, an application seeking leave to file a notice of appeal out of time.6

The question which then arises is whether the reasoning in Bell facilitates the use of Rule 670 as a source of jurisdiction for the Trial Division of the Supreme Court to make an order for security for costs in respect to an application for leave to appeal or leave to file a notice of appeal out of time.

Jurisdiction of the Supreme Court

As the passage from the judgment of McPherson JA in Bell explains, a reference to the “Supreme Court” includes the Court of Appeal.  By Section 16 of the Supreme Court of Queensland Act 1991 (“the 1991 Act”), the Supreme Court of Queensland has 2 divisions, namely the Trial Division and the Appellate Division constituted by the Court of Appeal.

Section 29 of the 1991 Act confers jurisdiction on the Court of Appeal, which includes:

•    All of the jurisdiction of its predecessor, the Full Court;

•    Such additional jurisdiction conferred on it by statute; and

•    In proceedings before it, all of the jurisdiction or power of “the court”.

Subsection 29(c) of the 1991 Act is germane to this discussion. The grant of jurisdiction there referred to relates to the jurisdiction of the Court of Appeal in proceedings “before it”. Although McPherson JA found in Bell that a reference to the Supreme Court includes the Court of Appeal, it does not follow, and His Honour did not find, that a reference to the Court of Appeal includes the Trial Division of the Supreme Court.

However, Subsection 55(2) of the 1991 Act provides that:

The jurisdiction and powers of the court that are not required only to be exercised by the Court of Appeal, may be exercised by the court in the Trial Division. [Emphasis added]  

Is Subsection 55(2) a source of jurisdiction allowing the Trial Division to determine an application for security for costs in respect to a proceeding before the Court of Appeal seeking leave to appeal?  

The answer to this question requires a descent into the detail of some of the matters touched on above, including the reasoning in Bell.

The Supreme Court is constituted by Section 57 of the Constitution of Queensland Act 2001. Subsection 58(1) of that statute provides that the Supreme Court has all of the jurisdiction necessary for the administration of justice in Queensland.  Subsection 58(2) provides that the Court is a superior court of record of general jurisdiction and, subject to the Commonwealth Constitution, has unlimited jurisdiction.

Prior to the establishment of the Appellate Division of the Supreme Court under the 1991 Act, a reference to the “Supreme Court of Queensland” was also a reference to the Full Court of the Supreme Court, with certain aspects of that jurisdiction granted to a single judge.7

Section 6 of the Judicature Act 1876 provides that any part of the jurisdiction of the Court could be exercised by a single judge subject to the qualification that:

•    The exercise had to be in respect to a matter that could have been heard by a single judge prior to the enactment of the Judicature Act 1876; and

•    In respect to so much of that jurisdiction that it was authorised by the Rules of Court to exercise thereafter.8

Sections 16, 29 and 55 of the 1991 Act visited a change to the jurisdiction and operation of the Supreme Court such that the Trial Division was invested with  jurisdiction to hear any matter unless it is required to be heard by the Court of Appeal.  

In this regard, an application for leave to extend time for appealing pursuant to Rule 748 is a matter that is required to be heard by the Court of Appeal. The Trial Division has no jurisdiction to hear such an application.  With certain limited exceptions, all applications for leave to appeal to the Court of Appeal are required to be heard by that division of the Supreme Court.9 Rule 767 sets out a number of matters whereby one or more “judges of appeal may exercise the powers of the Court of Appeal.”  

It is self evident that a proceeding commenced in the Court of Appeal is a proceeding “before it”, and, barring some expressly granted jurisdiction to the contrary, that proceeding is “required to be heard” by the Court of Appeal.  Indeed, Rule 772 is an example of a circumstance where another Court is granted jurisdiction to hear an application in respect of a proceeding before the Court of Appeal.

Consequently, where there is a proceeding before the Court of Appeal – such as an application for leave to appeal – the better view is that the Trial Division has no jurisdiction to hear an application for security for costs under Rule 670 in respect to such an application for the reason that such an application is a proceeding which “is required” to be heard by the Court of Appeal as a necessary consequence of Rule 748.  The same reasoning applies to applications for leave to appeal.10

Comment

It is more often the case than not the practice of the Court of Appeal to hear an application for leave to appeal – or for an extension of time within which to appeal — at the same time as the appeal proper. The existence of different avenues for the making of applications for security for costs in such circumstances creates apparent anomalies.  

Rule 671 sets out a list of considerations of which the court must be satisfied of at least one before making an order for security for costs under Rule 670.  There are good reasons why considerations of the nature described in Rule 671 are not required to be satisfied when applying for security for costs of an appeal.  It follows that Rule 772 does not contain the same constraints upon exercise of the court’s jurisdiction to grant security which, as a matter of policy, is appropriate.

Further, Subrule 772(4) allows the Court of Appeal to review an order for security for costs and to make an order varying or setting aside that order at any time.  In contradistinction, where an order for security for costs is made under Rule 670 the Court can only set aside or vary such an order “in special circumstances”. Although those “special circumstances” are not prescribed in the Rules, it would seem that an applicant would need to show not only a change in material facts but circumstances demonstrating that an alteration to the original Order is fair.11

This potential problem with the operation of Rule 772 and its interaction with Rule 670, eloquently analysed by McPherson JA in Bell, it seems, are not matters practitioners are generally alive to.  If, for example, an application is brought seeking leave to file a notice of appeal out of time with a view to appealing a decision of the Trial Division of the Supreme Court and an application for security for costs of that application is brought in the Trial Division, it is liable to be dismissed with costs,  (and possibly indemnity costs).

In the circumstances, until the issue has been clarified by either a determination at appellate level or an amendment to the UCPR, it is better to be safe and commence all applications for security for costs, in respect to any proceeding before the Court of Appeal, in that Court.

John Faulkner

Footnotes

1.   The author is indebted to Richard Douglas SC for his assistance in the preparation of this article for publication.

2.    [2004] 2 Qd R 235. This decision has subsequently been cited with approval in Perovich & Anor v ASIC (2005) 56 ACSR 303 [2005] QCA 456 (another decision of McPherson JA on the point); Woolworths Ltd v Maryborough City Council [2005] 2 Qd R 203 (QCA; Williams JA, Keane JA, Douglas J); Hare v Mt Isa Mines Ltd and Ors [2008] QCA 328 (QCA; Holmes JA) and Cousins v HAL and Anor [2008] QCA 49 (QCA; Fraser JA).

3.    [2002] 1 Qd R 106.

4.   See Bell v Bay-Jespersen; Supra at 239.

5.   Supra at 239.

6.   Noting the matters in Rule 671 that need to be considered as a prerequisite to the exercise of the jurisdiction.

7.   See: Capricorn Inks Pty Ltd v Lawyer International (Australasia) Pty Ltd (1989) 1 Qd R 8, 13.

8.   Supra

9.   See for example s. 118 of the District of Queensland Act 1967 and s.48(5) of the Judicial Review Act 1991

10.   Contrast the unreported decision of Rockett v Zorzan BS 9525 of 2006 delivered extempore by Martin J on 9 April 2008 where his Honour formed a different view in concluding that Rule 670 gave the Trial Division of the Supreme Court jurisdiction to grant an order for security for costs in proceedings in the Court of Appeal where leave was sought to file a notice of appeal out of time under Rule 748.  In part, his Honour found comfort in his view from the philosophy contained in Rule 5 of the UCPR.

11.   RD Werner & Co Inc v Bailey Aluminium Products Pty Ltd (1988) 80 ALR 134. See also the commentary in Civil Procedure in Queensland (LexisNexis) [r. 675.1].