[2017] QCA 67

COURT OF APPEAL

GOTTERSON JA

Appeal No 13524 of 2016
DC No 22 of 2016

PERMANENT CUSTODIANS LIMITED	Respondent/Applicant
ACN 001 426 384

v

ROSS GREGORY FELS 	Appellant/Respondent

BRISBANE

WEDNESDAY, 19 APRIL 2017

JUDGMENT

GOTTERSON JA:  On the 23rd of December 2016, Ross Gregory Fels, who is the respondent to this application and who acts on his own behalf, filed a Notice of Appeal in this Court against orders made in the District Court of Queensland at Beenleigh on the 25th of November 2016.  Those orders struck out a claim and statement of claim that Mr Fels had filed against Permanent Custodians Limited, the respondent to the appeal and applicant in this application, and ordered him to pay costs.  The strike out order was made pursuant to r 171(2) of the Uniform Civil Procedure Rules on the basis that the claim, as pleaded, disclosed no reasonable cause of action within the meaning of r 171(1)(a).
Permanent Custodians filed an application on the 15th of March 2017 for an order pursuant to r 772(1) that Mr Fels give security for costs of his appeal.  Security in the amount of $37,500 by payment into court within seven days is sought.  Alternative orders, in the event that the security is not so paid, are also sought.
The substantive relief sought by the District Court claim was payment of the discrete sums of $152,070.48, $60,000 and $14,358.45, which Mr Fels pleaded that he had paid to Permanent Custodians on the 21st of February, 4th of March and 3rd of April 2014, respectively.  He paid the amounts, he says, under “protest” or “duress” in order to stop Permanent Custodian from “illegally depriving his daughter and his grandchildren of their home”.  As well, $452,000 was claimed by way of exemplary damages.
Ms Susan Forest, solicitor, who acts for Permanent Custodians, has filed an affidavit in support of the application.  The following facts are stated in it.  They are not materially disputed in an affidavit sworn by Mr Fels on the 18th of April 2017.
The payments had been made in circumstances where Permanent Custodians held a mortgage over the daughter’s residential home for a loan made to her to acquire it. She had defaulted.  Permanent Custodians began proceedings against the daughter in the District Court at Beenleigh in February 2011.  An application by Permanent Custodians for summary judgment was determined in its favour on the 14th of December 2012 by Judge Kingham.  Orders for recovery of possession of the property and that the daughter pay $126,403.59 including $24,310.97 for interests were made.  The daughter was ordered to pay the costs of the application.
An enforcement warrant issued in May 2013 for an eviction on the 22nd of June that year.  On the 21st of June 2013, a stay was granted by her Honour and Permanent Custodians was ordered to provide the daughter with a costs statement.
The costs statement was prepared and delivered.  The daughter filed a notice of objection to it with no resolution being reached, the sum of $150,070.48 was tendered to Permanent Custodians in February 2014.  Permanent Custodians accepted it as part payment of the daughter’s indebtedness.  A further eviction was scheduled for the 5th of March 2014.
In the meantime, the daughter again applied to have the warrant set aside.  The application was heard on the 4th of March 2014 by Judge McGill.  Orders were made that the sum of $60,000 be paid into court that day, failing which the scheduled eviction could proceed.  Although the $60,000 was not paid into court, tender was made of a bank cheque payable to Permanent Custodians in that amount.  Permanent Custodians accepted the cheque and agreed to stay the eviction, pending determination by the court of the amount of the daughter’s outstanding indebtedness in respect of costs she had been ordered to pay in the litigation.
The matter returned to court on the 11th of March 2014 when orders were made for filing of affidavits with respect to Permanent Custodian’s legal costs.  On the 27th of March 2014, the matter was heard by Judge McGill.  His Honour found, but did not make formal orders, that the daughter was required to pay an additional amount of $14,358.45 on or before 4pm on the 3rd of April 2014 in return for a release of the mortgage.  That amount was tendered by the daughter to Permanent Custodians by bank cheque on the 3rd of April 2014 in exchange for which a release of mortgage was provided to her.
This application has been made promptly.  Of very significant relevance to the exercise of the unfettered discretion to order security for costs are the prospects that Mr Fels has of succeeding in his appeal.
I have read the reasons of the learned primary judge who made the orders under appeal.  His Honour described Mr Fels’ claim in the following terms:
“[11]	Accompanying the plaintiff’s claim is a 27 page statement of claim, which recites a lot of detailed facts which in essence complain of the conduct of the defendant, and alleges misleading and deceptive conduct on its part in the litigation before her Honour Judge Kingham, and also before his Honour Judge McGill SC.
[12]	It is apparent from the material that the plaintiff in order to help his daughter made various payments as a result of court orders.  In para [145] of the statement of claim it is asserted that the plaintiff paid the defendant $152,070.84 on 21 February 2014.  It appears on 4 March 2014 a bank cheque for $60,000 was made out to the defendant, but the cheque was not accepted by the Brisbane Registry of the District Court because it did not comply with the Court Funds Regulation 2009.  Ultimately the solicitors for the defendant accepted the cheque, it seems in unusual circumstances if one takes at face value the statements made by the plaintiff in paragraphs [119]-[124] of his statement of claim.
[13]	It appears from para [136] of the statement of claim that the plaintiff on 11 March 2014 tried to raise his concerns about the falsity of evidence stated in exhibits attached to the affidavit of one Andrew Patterson.  He claims that his Honour Judge McGill SC denied or rejected his submissions concerning the falsity of such evidence.  To put it simply, the statement of claim of the plaintiff is replete with serious allegations that a number of lawyers deliberately made false statements in affidavits and in other material placed before the courts in the earlier hearings.  It appears that no appeals have been sought from either the decisions of Kingham DCJ or McGill DCJ.  As it was made clear to the plaintiff at the hearing of this matter on 8 November 2016, I could not sit in judgment of decisions of other judges of the District Court, and therefore could not entertain the myriad claims he was making about widespread perjury and attempts to pervert the course of justice.
[14]	The failure to lodge any appeals is in part explicable by the fact that of course the plaintiff was not a party to the proceedings between his daughter and the defendant.”
His Honour referred to r 171 and to High Court authority on striking out.  He then expressed the following conclusions:
“[19]	It is undoubted that the plaintiff has been put to considerable expense in order to allow his daughter and his grandchildren to remain living in the house which was the subject of the recovery of possession claim lodged by the defendant in 2011.  It is also undoubted that the plaintiff is very unhappy with the defendant, and the lawyers that have represented the defendant in the past in the current proceedings.  The reality is however that the plaintiff decided to provide the financial support for his daughter to allow her to keep the house.  He was not a party to the earlier proceedings before Kingham DCJ and McGill DCJ, and as I stated earlier, no appeals had been brought from their respective decisions.”
[20]	In my view the claim lodged by the plaintiff on 27 July 2016 does not disclose any reasonable cause of action.  I therefore strike out all of that claim pursuant to rule 171(2).”
There are four grounds of appeal stated in the notice of appeal filed by Mr Fels.  None of them complains of a specific error of law which, it is said, was made by the learned primary judge.  Grounds 1 and 3 complain that Mr Fels has been denied “his legal right” to have evidence and his allegations of unconscionable actions on the part of Permanent Custodians determined by a court.  That is not a complaint of legal error.
Grounds 2 and 4 are somewhat related.  The former complains that the learned primary judge ought to have found that evidence filed in the Beenleigh Registry of the District Court by Permanent Custodians in support of its application “supported the allegation that Permanent Custodians fraudulently obtained money from” Mr Fels.  The question before his Honour was as to the adequacy of the pleading.  That question was not one to be determined by reference to evidence filed in separate proceedings.  The latter ground is also not concerned with the adequacy of the pleading, but with the availability of evidence and submissions to support it filed in the Beenleigh Registry of the District Court by Permanent Custodians.
The failure to raise any specific error of law in the grounds of appeal is a very serious impediment for Mr Fels in prosecuting his appeal.  It requires, in my view, an assessment of his prospects of success as very poor.  That weighs in favour of an order for security.
A further consideration that also favours an order is that Permanent Custodians has released the security it held for payment of moneys owed by the daughter.  No offer is made to Permanent Custodians to restore its security in the event that the moneys paid to avoid the exercise of its security rights, or their equivalent, were to be ordered to be repaid to Mr Fels.
In my judgment, an order for security for costs should be made.  Ms Forest has estimated that Permanent Custodians will incur legal costs and outlays of $37,500 (including counsel’s fees of $14,000) in responding to the appeal.  That figure approximates with what Permanent Custodians would seek to recover if costs were awarded to it on an indemnity basis.
In the exercise of the discretion, I would fix the amount of the security at $20,000.  I am not prepared to make an order, as is sought, for the summary dismissal of the appeal in the event that the security is not provided as ordered.  However, Permanent Custodians should have liberty to apply in that regard.  I am prepared to order that the appeal be stayed pursuant to r 774 of the Uniform Civil Procedure Rules 1999, pending compliance with the provision of the security as ordered.  Costs of the application are to be reserved.
The orders of the Court are:
1.	Pursuant to rule 772 of the Uniform Civil Procedure Rules 1999 (Qld) (“the Rules”) the appellant is within 21 days of today to provide security for the respondent’s costs of the appeal in the amount of $20,000 in a form suitable to the Registrar.
2.	Pursuant to rule 774 of the Rules the appeal is stayed pending compliance by the appellant with Order 1.
3.	Liberty to apply in the event of non-compliant with Order 1.
4.	The application is otherwise dismissed.
5.	The costs of the application are reserved.