Florida Kitchens Pty Ltd v Number One Cutting (T/S Number One Marble and Granite)

1. [1]

   By notice of motion filed on 17 June 2019 the plaintiff, Florida Kitchens Pty Ltd (“Florida Kitchens”), appeals from the decision of Harrison AsJ of 20 May 2019 ordering that it provide security for costs to the defendant, Number One Cutting T/S Number One Marble and Granite (“Number One Cutting”). Florida Kitchens has appealed to this court against a decision of the Appeal Panel of the New South Wales Civil and Administrative Tribunal (“NCAT”): Florida Kitchens Pty Ltd v Number One Marble and Granite [2019] NSWSC 574. Number One Cutting seeks an order for security for costs in relation to that appeal.

Background

1. [2]

   In 2016, Number One Cutting manufactured and installed Caesarstone bench tops and splashbacks at three separate building sites for Florida Kitchens. Florida Kitchens refused to pay the three invoices rendered in a total amount of $20,130 as they denied there was any contract. The three tax invoices were issued for jobs in Bondi, Vaucluse and Allawah for amounts of $14,190, $2,090 and $3,850, respectively. By a statement of claim filed on 1 June 2016, Number One Cutting commenced proceedings against Florida Kitchens in the Local Court seeking payment of the $20,130 said to be owed to it.

2. [3]

   Florida Kitchens sought that the Local Court proceedings be transferred to NCAT pursuant to s 48K of the Home Building Act 1989 (NSW). Before the proceedings were transferred, the pleadings had closed and on 27 July 2016 Number One had been ordered to pay Florida Kitchen’s costs “thrown away” by an amendment to its statement of claim.

3. [4]

   On 8 March 2017, Florida Kitchens’ lawyers sent a “Tax Invoice” to Number One Cutting with a reference “Re: Florida Kitchens Pty Ltd –ats- Number One Cutting Services Pty Ltd t/as Number One Marble and Granite – Proceedings No. 2016/00168715”. It was then headed “Memorandum of Costs and Disbursements” and described as “To our Professional costs of and incidental to the aforesaid matter and pursuant to the Court Costs order made on 27 July 2016 in favour of the Defendant Florida Kitchens Pty Ltd”. The “Tax Invoice” listed 106 items commencing from 10 June 2016 to 14 September 2016 totalling $29,527.50 inclusive of counsel fees of $10,862 and GST in the amount of $1,665. This amount is said by Florida Kitchens to be the amount “thrown away” by the amendment to the statement of claim in the Local Court.

4. [5]

   On 5 December 2017, NCAT Senior Member G Meadows found in favour of Number One Cutting. Florida Kitchens was ordered to pay $20,130 to Number One Cutting and costs.

5. [6]

   On 29 December 2017, Florida Kitchens paid the amount of $20,130 to Number One Cutting. An issue has arisen as to whether that payment was made by a third party. The invoice describes the payer as “Florida FK Business Trans Acct”.

6. [7]

   On 12 June 2018, NCAT Senior Member G Meadows ordered that Florida Kitchens pay Number One Cutting’s costs on an indemnity basis.

7. [8]

   Shortly thereafter, on 13 August 2018, Florida Kitchens’ solicitor emailed Number One Cutting’s solicitor attempting to “settle” the proceedings. Number One Cutting responded on 22 August 2018 by making a counter-offer. Florida Kitchens’ solicitor responded on 28 August 2018 making another counter-offer to “settle” the matter. On 30 August 2018, Number One Cutting’s solicitor advised that Florida Kitchens’ offer was rejected and put the same counter-offer again.

8. [9]

   On 31 August 2018, six emails were exchanged between the solicitors of the Florida Kitchens and Number One Cutting concerning a possible settlement of the matter: At 11:14am, Florida Kitchens’ solicitor advised that the counter-offer was rejected and put another counter-offer; at 11:21am Number One Cutting’s solicitor advised that the instructions would be sought and requested that Florida Kitchens execute and provide the Deed with a changed date of payment so that there would be no delay should Number One Cutting agree; at 11:43am Florida Kitchens’ solicitor responded that an amended Deed would be sent for executing and exchanging once Number One Cutting’s instructions are confirmed; at 11:48am, Number One Cutting’s solicitor responded that a copy of Florida Kitchens’ executed Deed should be sent to them in order to be signed by Number One Cutting should the offer be accepted. In his response at 12:35pm, Florida Kitchens’ solicitor advised that his client would only be prepared to change the payment date if confirmation from Number One Cutting was received by close of business that day at which time the amended Deed would be provided. His response also included that they “do not intend to spend any more time on this issue or engage into any further correspondence apart from having to deal with confirmation as to whether the offer is accepted or not”.

9. [10]

   At 2:26pm Number One Cutting’s solicitor responded rejecting Florida Kitchens’ offer and making a counter-offer. The counter-offer was open until 5 pm that day. There was no response to that email from Florida Kitchens’ solicitor.

10. [11]

    Following this correspondence, Florida Kitchens appealed to the Appeal Panel of NCAT on 10 July 2018.

11. [12]

    On 27 November 2018, the Appeal Panel refused leave to appeal and the appeal against both the Tribunal Member’s decision and the costs award was dismissed. No costs order was made in relation to that Appeal.

12. [13]

    On 20 December 2018, Florida Kitchens filed a summons in this court seeking leave to appeal the decision of the Appeal Panel under s 83 of the Civil and Administrative Tribunal Act 2013 (NSW). Such an appeal is confined to a “question of law”. The summons contends that the Appeal Panel erred in law in not finding that the Tribunal Member erred in law and/or in the exercise of his discretion.

13. [14]

    The summons is described as an “Appeal from NCAT”. The first paragraph then reads:

14. [15]

    The Summons sets out 70 grounds of appeal, the first of which has 36 sub-grounds, totalling 106 grounds of appeal. They are as follows:

15. [16]

    On 27 December 2018, Number One Cutting’s solicitor wrote to Florida Kitchens’ solicitor and noted that their client was likely (in their estimation) to incur costs of over $60,000 in defending the appeal. He requested a profit and loss report and balance sheet for the 2017 and 2018 financial years. He also requested bank statements for the period 1 July 2018 to 20 February 2019. The request was made so that Number One Cutting could be satisfied that Florida Kitchens would be able to comply with any adverse costs order that might be made in the proceedings.

16. [17]

    Florida Kitchens’ solicitor advised he would be on leave until 21 January 2019. Number One Cutting’s solicitor sent an email on 22 January 2019 seeing an urgent response to his email of 27 December 2018. Further emails were exchanged between 22 January and 12 February 2019.

17. [18]

    On 5 February 2019, Florida Kitchens’ solicitor emailed Number One Cutting’s solicitor and stated that he could not see how Number One Cutting could be concerned about his client’s ability to meet costs because: the appeal has “merits and prospects of success”, their attempt to resolve the matter was unreasonably rejected, their client had no issues in paying $20,130 under protest and Number One Cutting had not paid the tax invoice sent in March 2017.

18. [19]

    On 7 February 2019, Number One Cutting’s solicitor, having noted that the documents sought were not produced, wrote to advise that in the absence of provision for adequate security they could not be satisfied that any costs order would be able to be satisfied and that a motion would be filed seeking costs on an indemnity basis on the basis of refusal.

19. [20]

    On 12 February 2019, Florida Kitchens’ solicitor further responded that their client was not under a legal obligation to deal with unreasonable or unjustified requests.

20. [21]

    Following these email exchanges, on 20 February 2019, Number One Cutting issued a subpoena to produce on Florida Kitchens (with subpoena notice and declaration) seeking production of profit and loss reports and balance sheets for the 2017 and 2018 financial years and bank statements for the period 1 July 2018 to 20 February 2019.

21. [22]

    On 20 February 2019, Number One Cutting also made an application under r 42.21 of the Uniform Civil Procedure Rules (“UCPR”) for security for costs. In support of this motion, an affidavit of David Simons sworn 20 February 2019 was relied upon. Mr Simons is Number One Cuttings’ solicitor. Mr Simons stated that he had not found evidence that Florida Kitchens had any assets or was trading profitably and that he had reason to believe that Florida Kitchens would not be able to pay Number One Cutting’s costs of defending the proceedings.

22. [23]

    In a subsequent affidavit on 7 March 2019, Mr Simons deposed that on 20 February 2019 he served the subpoena issued that day on Florida Kitchens by posting it to its registered office. He deposed that he also emailed a copy to Florida Kitchens’ solicitor advising of its service that day.

23. [24]

    Annexed to a further affidavit of Mr Simons sworn on 26 April 2019 is Florida Kitchens’ response to the subpoena. It consists of production of a note that reads simply:

24. [25]

    Florida Kitchens opposed the application for security for costs on the basis that the appeal was in fact in the nature of judicial review proceedings and security for costs are not generally awarded in such proceedings, apart from in “exceptional circumstances” (UCPR r 59.11). It also argued that there was no basis for the Director of Number One Cutting to have any concerns about payment for costs in this matter.

25. [26]

    The matter came before Harrison AsJ for hearing on 7 May 2019.

26. [27]

    On 20 May 2019, her Honour allowed the application for security for costs. Her Honour considered the threshold question of whether there was reason to believe that Florida Kitchens was unable to meet the costs of Number One Cutting in the event that it was ordered to do so. Her Honour held that this threshold question had been answered in the positive, as Florida Kitchens refused on numerous occasions to provide their financial details to Number One Cutting (namely in the emails of 5 and 12 February 2019 and response to the subpoena of 20 February 2019). Furthermore, in Mr Simons’ affidavit he stated that he “found no evidence that the plaintiff has any assets”.

27. [28]

    Her Honour then turned to consider the principles outlined in KP Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189; [1995] FCA 76 at 197-198. Applying these principles, her Honour considered that the application had been brought promptly and that (having regard to the decisions of the Appeal Panel), the application for leave to appeal by Florida Kitchens had poor prospects of success. She then went on to note that there were no submissions made by Florida Kitchens that its impecuniosity was caused by the conduct of Number One Cutting. Furthermore, in relation to whether the application was oppressive, she concluded that “there is no evidence that the application is oppressive. Neither does the application stifle Florida Kitchens’ right to litigate.” She noted that Florida Kitchens (via an unidentified third party) paid the verdict money and filing fee in this Court and there had been no undertaking provided by Florida Kitchens.

28. [29]

    In the exercise of her discretion, her Honour subsequently found that the factors that she was required to consider “overwhelmingly” weighed in favoured of an order for security for costs.

29. [30]

    In relation to the quantum of costs, her Honour relied on the assessment of Number One Cutting’s solicitor and observed that “the sheer number of grounds of appeal will mean that a substantial amount of work will have to be undertaken to deal with the summons”. Florida Kitchens disputed this assessment but failed to offer evidence of a more preferable quantum of costs. Furthermore, her Honour noted that the existing costs order already required Florida Kitchens to pay far more than Number One Cutting because the costs order made by the Tribunal Member was for costs on an indemnity basis. On this basis, she ordered that Florida Kitchens was to lodge $40,000 as security for costs.

30. [31]

    As stated above, Florida Kitchens now appeals against this decision.

Nature of this Appeal

1. [32]

   An appeal from an Associate Justice of this Court to a Judge of this Division is provided for in UCPR r 49.2, which provides that:

2. [33]

   An appeal lies to the Court of Appeal against the decision of an Associate Justice in the matters listed in Part 60, r 17 of the Supreme Court Rules 1970 (NSW) as follows:

3. [34]

   There is no reference to any appeal lying from the decision of an Associate Justice to the Court of Appeal in relation to an order that security for payment be lodged. Accordingly, I am satisfied that I have jurisdiction to hear this appeal.

4. [35]

   Where the decision under appeal follows a hearing, the appeal is by way of rehearing: s 75A(5) Supreme Court Act 1970 (NSW). This is a rehearing on the record, as Gibbs ACJ, Jacobs and Murphy JJ indicated in Warren v Coombes (1979) 142 CLR 531 at 553; [1979] HCA 9. The court has the powers and duties of the court, body or person from whom the appeal is brought, as per s 75A(6):

5. [36]

   The decision appealed against is a decision by Harrison AsJ to order security for costs. In NSW, the ability to order security for costs in relation to corporations (such as Florida Kitchens) derives from two sources: UCPR r 42.21(d) and s 1335 of the Corporations Act 2001 (Cth). UCPR r 42.21(d) provides:

6. [37]

   Section 1335 of the Corporations Act provides:

7. [38]

   Although the two powers are not expressed in identical terms, it has been held that they involve a similar discretionary exercise (Lesvos Pty Ltd v Penrith Whitewater Stadium Ltd (2006) 58 ACSR 481; [2006] NSWSC 823). As Cohen J commented in Fitzpatrick v Waterstreet (1995) 18 ACSR 694, 699:

8. [39]

   Having regard to the language of both UCPR r 42.21 and s 1335 of the Corporations Act as well as the relevant principles, it is clear that a decision to order security for costs is discretionary. Her Honour dealt with the application under UCPR r 42.21. Therefore, Florida Kitchens must establish that Harrison AsJ erred in the exercise of her discretion in one or more ways identified in House v The King (1936) 55 CLR 499 at 505; [1936] HCA 40.

9. [40]

   The material before me on this appeal consisted of all of the material that was before Harrison AsJ. This consisted of three lever arch folders.

10. [41]

    The first folder contained Number One Cutting’s documents including the notice of motion filed on 20 February 2019; the summons seeking leave to appeal; Mr Simons’ affidavits of 20 February 2019; 19 March 2019 and 26 April 2019 and a further notice of motion dated 18 March 2019.

11. [42]

    The second and third folders contained the documents relied upon by Florida Kitchens. It comprised the affidavit of Florida Kitchens’ solicitor, George Elias, dated 14 March 2019 with approximately 680 pages of exhibits.

Submissions

1. [43]

   I will address the submissions of the parties below in my consideration.

Consideration

1. [44]

   In its motion appealing against the decision of Harrison AsJ, Florida Kitchens relies upon 30 separate grounds of appeal. All of these grounds were pressed at the hearing before me, although it was accepted by counsel for Florida Kitchens that there was a degree of repetition in relation to some of them. Accordingly, I will deal with the grounds of appeal collectively where appropriate but otherwise in chronological order.

2. [45]

   Four grounds of appeal related to her Honour’s treatment of the costs orders already made in this ongoing litigation. They were as follows:

3. [46]

   At [6] of her reasons her Honour listed the orders made by the Appeal Panel of NCAT on 27 November 2018. Complaint is made under Ground 1 that her Honour failed to mention that no costs order was made by the Appeal Panel at that time. Her Honour was dealing at that part of the judgment with the “Background” of the matter and I do not consider it of any significance that her Honour did not mention the lack of a costs order in that paragraph.

4. [47]

   Her Honour went on at [7] of the judgment to note that there were three costs orders made, one in favour of Florida Kitchens and two in favour of Number One Cutting:

5. [48]

   It was common ground that although three costs orders have in fact been made in this matter, the third one is a variation of the second. Those three orders are:

   1. (1)

      On 27 July 2016 a Magistrate ordered that Number One pay Florida Kitchens’ costs thrown away by an amendment to the statement of claim;

   2. (2)

      On 5 December 2017 NCAT Senior Member G Meadows member ordered that Florida Kitchens pay Number One’s costs of the hearing; and

   3. (3)

      On 12 June 2018, the NCAT Senior Member G Meadows ordered that Florida Kitchens pay Number One’s costs on an indemnity basis.

6. [49]

   The complaint made is there is, in reality, only one cost order made in favour of Number One Cutting because the second order varied the first order. It is to be noted that later in her Reasons, her Honour stated the following at [61]:

7. [50]

   The difficulty with grounds 2, 5 and 16 is that even if there is some ambiguity at [7] as to whether the three costs orders are in effect only two costs orders, any doubt that her Honour was under any misapprehension about this is put to rest by her Honour’s clear statement at [61] that there are only two costs orders outstanding.

8. [51]

   None of these four grounds disclose House v The King error or any error at all. They are without merit.

9. [52]

   A number of separate complaints were made about the significance of the fact that Number One Cutting is yet to pay the “invoice” rendered to it by Florida Kitchens for its costs “thrown away” for the amended Statement of Claim shortly after the proceedings were transferred from the Local Court to NCAT. The five grounds related to this complaint are as follows:

10. [53]

    At [38] of her Reasons her Honour observed:`

11. [54]

    It was submitted on behalf of Florida Kitchens that it was not open for her Honour to find that its claim for costs thrown away would be reduced when assessed because she was not in a position to fully assess the bill of costs. It was submitted that this was relevant to whether the value of what is owed to Florida Kitchens is greater than any costs order that might be imposed on Number One Cutting.

12. [55]

    The invoice referred to in this ground is that described above at [4]. Florida Kitchens’ submission in relation to this ground is apparent from the terms of the ground. There are a number of difficulties with it.

13. [56]

    First, Florida Kitchens rendered it whilst the proceedings are still on foot rather than waiting until after the proceedings have concluded.

14. [57]

    Second, it is described as a “Taxation Invoice”. As was submitted by counsel for Number One Cutting, the Invoice does not appear to be in accordance with the order made.

15. [58]

    Third, it is sent on Cadmus Lawyers letterhead to Number One Cuttings’ solicitor. It was not suggested that Cadmus Lawyers has ever undertaken any legal work for Number One Cutting. It was not entitled to issue Number One Cutting with any invoice. Nor is Cadmus Lawyer entitled to charge Number One Cutting any GST.

16. [59]

    Fourth, the particular cost order pertains to the costs thrown away because of the need to amend a statement of claim in the Local Court. The amount claimed is $29,527.50. I have had regard to the statement of claim and defence filed in the Local Court as well as the amended statement of claim and amended defence. It was submitted on behalf of Number One Cutting that when one compares the amended pleadings with the relevant invoice it is apparent from the invoice that it claims costs well in excess of those relevant to being “thrown away” by the amended pleading,

17. [60]

    I am satisfied that it was open for her Honour to make the observation that a claim for nearly $30,000 for costs thrown away as the result of an amended pleading in the Local Court was excessive.

18. [61]

    Nor am I satisfied that any error is disclosed in her Honour’s findings that Number One Cutting is awaiting the finalisation of the proceedings before preparing its bills of cost. This is consistent with standard practice. This also applies to Ground 4, where complaint is made that her Honour failed to have regard to the fact that Number One Cutting has not made an offer, rejected or replied to this invoice whilst the proceedings are still on foot.

19. [62]

    As for Ground 28, putting to one side the obvious repetition of matters already raised under Grounds 4 and 14, this ground concerns her Honour’s finding that Number One Cutting’s anticipated costs payable on an indemnity basis by Florida Kitchens would exceed those owed by it to Florida Kitchens under the Local Court costs order.

20. [63]

    I am satisfied that it was open to her Honour to find that the indemnity costs order of the entire proceedings awarded in favour of Number One Cutting would be greater than the costs order pertaining to the costs thrown away, payable on the ordinary basis, in the Local Court in relation to an amended pleading.

21. [64]

    Further, I am not satisfied, having regard to the explanation for the failure, that the failure to move or take any action on that invoice assists Florida Kitchens’ argument.

22. [65]

    None of these four grounds disclose House v The King error or any error at all. They are without merit.

23. [66]

    It was submitted before Harrison AsJ that “an appeal from NCAT is a judicial review of the decision made by NCAT” and that “these appeal proceedings are governed by sections 65 and 69 of the Supreme Court Act and UCPR r 59.11”. Accordingly, it was submitted that the issue of security for costs is governed by UCPR r 59.11. Her Honour was not satisfied that this was the case and found accordingly.

24. [67]

    As I indicated to counsel for Florida Kitchens during the hearing of this appeal, the summons in this matter clearly states that it is an appeal from the decision of NCAT. The fact that some of the 106 grounds of appeal set out in the summons reflect bases for judicial review rather than appeals on a question of law does not transform the nature of those proceedings into judicial review proceedings. There is no reference to UCPR r 59 anywhere in the summons.

25. [68]

    As I also indicated during the hearing of this matter, it is open to Florida Kitchens to seek to amend the summons to include proceedings for judicial review. However, merely stating that this appeal is in fact a summons seeking that this court exercise its supervisory jurisdiction does not make it so. Proceedings brought for judicial review are not “an appeal”. Section 83 of NCAT Act is a statutory appeal.

26. [69]

    None of these four grounds disclose House v The King error or any error at all. They are without merit.

27. [70]

    The tenth Ground of appeal advanced by the plaintiff was as follows:

28. [71]

    The complaint under this ground is that her Honour used the word “numerous” at [29]-[40] of her Reasons to describe the efforts made by Number One Cutting to obtain material about Florida Kitchens’ financial circumstances. As the chronology set out above at [16]-[21] sets out, there were five emails exchanged, three of which were sent from Number One Cutting and two responses were received from Florida Kitchens. A subsequent subpoena was also issued. These constituted the efforts made by Number One Cutting to obtain profit and loss statements of balance sheets for the financial years ending 30 June 2017 and 2018 and bank statements for the period of 1 July 2018 to date.

29. [72]

    This correspondence was not disputed and nor was it suggested that Florida Kitchens had ever in fact provided any of these documents to Number One Cutting. Her Honour had the correspondence and evidence of the subpoena before her. I am satisfied that it was open to her to describe these efforts in the manner in which she did.

30. [73]

    This ground does not disclose House v The King error or any error at all. It is without merit.

31. [74]

    A number of complaints were made in relation to her Honour’s findings regarding the subpoena issued on Florida Kitchens after it refused to provide any information as to its financial circumstances. The following grounds address this topic:

32. [75]

    These grounds concern the evidence I have summarised above at [21]–[24]. After Number One Cutting’s requests to Florida Kitchens to provide documents to allay their fears in regard to Florida Kitchens ability to pay any costs order were refused, a subpoena was subsequently issued to the same effect.

33. [76]

    The portion of her Honour’s reasons complained of is at [30] where her Honour simply noted:

34. [77]

    After questioning counsel for Florida Kitchens as to why error is disclosed in relation to this finding, it was submitted that the subpoena was not properly served but only “provided” and, in any event, no conduct money had been provided. That is, the complaint under Ground 13 is that it was not open to her Honour to find that it had in fact been “served”.

35. [78]

    Mr Simons’ evidence is that service was affected. In any event, the subpoena was answered thus any argument that it was not served and/or that Florida Kitchens was not aware of it is of little significance.

36. [79]

    In any event, as I indicated to counsel for Florida Kitchens at the hearing, it is difficult to see how Florida Kitchens’ intransience regarding requests for it to provide any evidence of its liquidity including non-compliance with a subpoena assists its case. In particular, the fact that the subpoena was responded to by a note stating simply: “NO PROPER SERVICE, NO CONDUCT MONEY, NO DOCUMENTS” leaves open one interpretation that Florida Kitchens has “no documents” meeting the description of “profit and loss statements”. It seems to me that whether or not there is an actual requirement for conduct money, taking these technical points does not improve Florida Kitchens’ case as to its ability to pay any costs order.

37. [80]

    None of these grounds disclose House v The King error or any error at all. They are without merit.

38. [81]

    Grounds 17, 18, 19, 21 and 29 can be addressed together. They all go to the ultimate question of the available evidence to conclude that there were reasonable grounds to believe that its costs could not be paid in the event Florida Kitchens is unsuccessful in this court. Those grounds are as follows:

39. [82]

    These grounds all contend that it was not open to her Honour to make the threshold finding she did. That is, it was contended that it was not open to her Honour to find that there is reason to believe that Florida Kitchens, being a corporation, will be unable to pay Number One Cutting’s costs if ordered to do so.

40. [83]

    Pursuant to UCPR r 42.21(1)(d), the Court must be satisfied that there are reasons to believe that Florida Kitchens will be unable to pay Number One’s costs if ordered to do so (“the threshold issue”).

41. [84]

    I have had regard to her Honour’s judgment and the relevant material before her Honour. I am not satisfied that any of these grounds can be made out either. In considering this threshold test her Honour stated the following at [40]-[42]:

42. [85]

    No error is disclosed in this reasoning. It was not suggested that her Honour misstated the relevant principles. Rather, the complaint under these grounds is, in effect, that her Honour ought to have found in favour of Florida Kitchens. It could not be said that there was “no” evidence upon which this finding could be made nor that her Honour acted unreasonably.

43. [86]

    None of these grounds disclose House v The King error or any error at all. They are without merit.

44. [87]

    The plaintiff’s twenty-second Ground of appeal is as follows:

45. [88]

    At [43]-[44] her Honour set out the relevant principles applicable to the discretionary decision to make an order for costs as stated by Beazley J (as her Excellency then was) in KP Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189

46. [89]

    This ground of appeal asserted that, after her Honour set out the relevant principles applicable to an application for security for costs; she expressly stated that she would not consider the application of these principles to the present case.

47. [90]

    I am satisfied that the word “not” as it appears in paragraph [44] is a typographical error. The correct word is “now”. I am satisfied of this for two reasons. First, her Honour did in fact go on to consider the relevant principles as is evident from the paragraphs of the judgment that follow [44]. Second, it defies logic that her Honour would carefully set out the relevant principles and then state that she was not going to apply them before going on to do so.

48. [91]

    This ground does not disclose House v The King error or any error at all. It is without merit.

49. [92]

    Grounds 27 and 30 are as follows:

50. [93]

    These grounds contend that it was “not open” to her Honour to have made an order for security for costs. To use the language of House v The King, it was contended that the finding was “unreasonable” or “plainly unjust”: Markarian v The Queen (2005) 228 CLR 357; [2005] HCA 25 at [25].

51. [94]

    I am not satisfied that her Honour’s ultimate finding was “unreasonable”. No basis for contending it was was ever put by Florida Kitchens beyond an over-arching complaint that her Honour ought to have arrived at a different result.

52. [95]

    Neither of these grounds disclose House v The King error or any error at all. They are without merit.

53. [96]

    In their written submissions, Florida Kitchens maintain that the “verdict moneys” were paid for by Florida Kitchens and there was “no evidence before her Honour to suggest that the filing fee of $3,074.00 was not paid for by Florida Kitchens”.

54. [97]

    In reply, Number One Cutting submitted that Florida Kitchens produced no accounts and no bank statements to the Supreme Court.

55. [98]

    It could not be said that it was not open to the Court to come to the conclusion that it appeared a third party paid the money. There was a conflict on the evidence and she made a finding based on that evidence.

56. [99]

    This ground does not disclose House v The King error or any error at all. It is without merit.

57. [100]

    Under this ground Florida Kitchens contends that it was not open to Harrison AsJ to find that the application for security for costs was bought “promptly”.

58. [101]

    The evidence discloses that the summons was filed just before Christmas 2018 and that Florida Kitchens solicitor was on leave until late January 2019. During the Christmas break and the solicitor for Number One Cutting sought to obtain information from Florida Kitchens, first by way of email and later by way of subpoena before resorting to bringing the application for security for costs. Taking into account the Christmas break in the efforts made by Number One Cutting to avoid having to bring such an application, I am satisfied that it was open to her Honour to find that the application for security for costs was brought “promptly” as that term is used in Meltglow at [43(1)].

59. [102]

    The reference by her Honour to this being a matter about which there was “no dispute” obviously means that there was no dispute as to the relevant dates involved, rather than as to how those dates are to be categorised.

60. [103]

    This ground does not disclose House v The King error or any error at all. It is without merit.

61. [104]

    Grounds 24 and 25 were in identical terms. These grounds pertain to her Honour’s consideration of the merits of the appeal from NCAT to this Court. It was contended on behalf of Florida Kitchens that there are merits to the appeal and her Honour misunderstood the nature of its case.

62. [105]

    It was common ground that there were two lay witnesses for Number One Cutting and one expert witness. The Tribunal member did not accept the evidence of the expert and relied on the tax invoices issued by Number One Cutting instead in determining quantum merit. Florida Kitchens submitted that the tax invoices were not quantum merit evidence and complained that her Honour failed to mention in this part of her Reasons that the Tribunal Member did not accept the expert evidence. I am not satisfied that any error is disclosed in the way in which her Honour summarised this aspect of the procedural history of the matter.

63. [106]

    Under a heading “The strength and bona fides of Florida Kitchen’s case” Harrison AsJ stated at [46]:

64. [107]

    To the extent that Florida Kitchens suggests that it was “not open” to her Honour to find that the application for leave to appeal to this court has “poor prospects of success”, I am satisfied that her Honour properly addressed this issue and provided reasons for her conclusion. I am not satisfied that her Honour’s conclusion was “not open” to her.

65. [108]

    Florida Kitchens contended that the importance of her Honour’s mis-stating of whether there were two or three witnesses is that her Honour was required to assess the prospects of success of the appeal to this court. I am not satisfied that is the case. It is to be accepted that in Meltglow Beazley J stated that one of the relevant discretionary factors to have regard to in any security for costs application was “the strength and bona fides of the applicant’s case”, but that does not mean that her Honour was required to, in effect, conduct a preliminary hearing of the appeal. The prospects of success will always be a matter of impression at this interlocutory stage. In the present matter that impression was made all the more difficult by the excessive number of grounds and the failure by Florida Kitchens to apply any effort to focussing on the real issues in those grounds. Although her Honour was satisfied of the bona fides of the claim that may well have been a matter on which judicial minds may differ.

66. [109]

    None of these grounds disclose House v The King error or any error at all. They are without merit.

Conclusion

1. [110]

   I am satisfied that none of the 30 grounds of appeal have been established. No error is established in her Honour’s judgment. I am satisfied that the decision is correct and that the relevant statutory prerequisites for making an order for security of costs are established in this matter.

Costs

1. [111]

   At the hearing of this appeal counsel for Number One Cutting foreshadowed that, in the event that it was successful, it would be seeking a personal costs order against the director of Florida Kitchens. I indicated that I would reserve the question of costs and I propose to do so.

ORDERS

1. [112]

   Accordingly, I make the following orders:

   1. (1)

      The notice of motion is dismissed.

   2. (2)

      The stay of Harrison AsJ’s order of 20 May 2019 is lifted.

   3. (3)

      The question of costs is reserved.

   4. (4)

      The relevant time from which time commences for security to be lodged is 15 November 2019.