Strike Out Application for Failure to Pay Security

The ACT Court of Appeal has considered a strike out application of the proceedings in Hussain & Anor -v- Ngep & Anor (No. 3) [2105] ACTCA 50 following the failure of the Applicant to comply with an earlier order to pay an amount as security of costs.

The Applicant (Respondent on Appeal) sought an order under Rule 425 which states that the Court may strike out the whole or any part of the proceedings if the pleading r425(1):

(a)   discloses no reasonable cause of action or defence appropriate to the nature of the pleading; or

(b)   may tend to prejudice, embarrass or delay the fair trial of the proceeding; or

(c)   is frivolous, scandalous, unnecessary or vexatious; or

(d)   is otherwise an abuse of the process of the court.

The Applicants had previously been awarded judgment in the Magistrate’s Court for the sale of a vehicle, the sum of this sale was not stayed. Further a Statutory Demand from the Applicant for the judgment debt went unanswered.

The application was appealing a decision of a single judge of the Court of Appeal awarding a security of costs in the substantive appeal against the party appealing the Magistrate’s Court decision. The Appellant had his matter put over to the Registrar by Robinson AJ at first instance on the appeal for an apparent lack of jurisdiction concerning whether the Court of Appeal can hear an appeal on an interlocutory decision (security of costs) from a single Judge of the Court of Appeal.

Before the matter could be progressed before the Registrar, the Applicant made the current application for the proceedings to be struck out for lack of payment on the security of costs order.

Chronology

  • Magistrate’s Court decision
  • leave to appeal out of time denied
  • appeals the denial
  • Statutory Demand made
  • security of costs application made
  • security of costs appealed, reverted back to registrar
  • applicant applies for strike out based on non-compliance with security of costs

The Appellant pleaded that a range of health concerns and apparently a clash with unrelated proceedings in Sydney as part of the reason for non-compliance.

There were a number of difficulties associated with the application, namely that rule 425 concerns deficient pleadings and the application was being sought on the grounds of non compliance with an order. The Applicant was permitted to alter their application to correctly plead rule 1904 which allows the Court to dismiss the proceedings if the security order is not complied with.

Interestingly in the published decision the Court also made a statement on the apparent strength of the appeal without ruling on it. The appeal purported to appeal a decision which of itself involved a decision not to grant leave to appeal to the Court, therefore no jurisdiction had ever been correctly invoked in the making of the actual appeal.

Given the inadequacy of the position of both parties the Court declined to make a ruling but has adjourned the matter before another Judge (as Murrell CJ had made the Security for Costs order) whilst also providing some clues about how the application will play out if it were to proceed;

Which is probably that the Court will look grimly on a failure to pay a security of costs order and if that were not enough to have the pleadings struck out, then there is no jurisdiction or even if there is then the appeal would probably fail anyway. Let’s hope the parties read the decision. 

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