Mathews v All Options Pty Ltd

• Jurisdiction: Australia Federal only
• Court: Federal Court (Australia)
• Judge: O’BRYAN J
• Judgment Date: 22 November 2019
• Neutral Citation: [2019] FCA 1972
• Date: 22 November 2019

FEDERAL COURT OF AUSTRALIA

Mathews v All Options Pty Ltd [2019] FCA 1972

File number:	VID 997 of 2019
Judge:	O’BRYAN J
Date of judgment:	22 November 2019
Catchwords:	PRACTICE AND PROCEDURE – appeal – application for security for costs – where orders for security only resisted against natural person appellant – whether orders for security would stultify appeal – security for costs of appeal ordered
Legislation:	Federal Court of Australia Act 1976 (Cth) s 56 Federal Court Rules 2011 r 36.09
Cases cited:	Carey v Freehills [2014] FCA 325 Clack v Collins (No 1) [2010] FCA 513 Cooper v Universal Music Australia Pty Ltd [2006] FCA 642 Cowell v Taylor (1885) 31 Ch D 34 Flujo Holdings Pty Ltd v Merisant Co [2019] FCA 594 Moore v Macks [2007] FCA 509 Norcast S.ar.L v Bradken Limited & Ors [2012] FCA 765 Sheather v Staples Waste Removals Pty Limited [2012] FCA 998 Skyring v Sweeney [1999] FCA 61 Trailer Trash Franchise Systems Pty Ltd v GM Fascia & Gutter Pty Ltd [2017] VSCA 293 Voxson Pty Ltd v Telstra Corporation Ltd (No 8) [2017] FCA 1427
Date of hearing:	15 November 2019
Registry:	Victoria
Division:	General Division
National Practice Area:	Commercial and CorporationsDelete these rows - not required
Sub-area:	Regulator and Consumer ProtectionDelete these rows - not required
Category:	Catchwords
Number of paragraphs:	38
Counsel for the Appellants:	Mr K E Mihaly
Solicitor for the Appellants:	Aughtersons Lawyers Pty Ltd
Counsel for the Respondent:	Mr D F McAloon
Solicitor for the Respondent:	HWL Ebsworth Lawyers

ORDERS

		VID 997 of 2019
BETWEEN:	DARREN MATHEWS First Appellant ; FLIGHTDECK GEELONG PTY LTD Second Appellant
AND:	ALL OPTIONS PTY LTD (ACN 123 320 169) Respondent

JUDGE:	o’bryan j
DATE OF ORDER:	22 NOVEMBER 2019

THE COURT ORDERS THAT:

1. Pursuant to s 56 of the Federal Court of Australia Act 1976 (Cth) and r 36.09(1)(a) of the Federal Court Rules 2011, the appellants are to give security for the respondent’s costs of the appeal in the sum of $62,000 to be provided by payment into Court in this proceeding pursuant to r 2.42 of the Federal Court Rules 2011.

2. Pursuant to r 36.09(1)(b) of the Federal Court Rules 2011, the appellants’ appeal be stayed until the security for costs has been provided by the appellants pursuant to Order 1.

3. Pursuant to r 36.09(1)(c) of the Federal Court Rules 2011, the appellants’ appeal be dismissed if the security for costs has not been provided by the appellants pursuant to Order 1 by 4.00pm on the forty second (42^nd) day after the date of these Orders.

4. The costs of the respondent’s interlocutory application for security for costs are to be costs in the appeal.

5. The remaining orders are to apply subject to Orders 1 to 3.

6. The appeal be listed before a Full Court in Melbourne during May 2020 for hearing of the appeal.

7. The hearing be listed for an estimate of one day.

8. In accordance with Practice Note APP 2, the appellants file and serve Parts A and B of the Appeal Book by 28 February 2020.

9. In accordance with Practice Note APP 2, not later than 4.00pm 20 business days before the hearing, the appellants file and serve on the respondent an outline of submissions and chronology of the relevant events.

10. In accordance with Practice Note APP 2, not later than 4.00pm 15 business days before the hearing, the respondent file and serve on the appellants an outline of submissions, a chronology of the relevant events and a list of materials to be included in Part C of the Appeal Book.

11. In accordance with Practice Note APP 2, not later than 4.00pm 10 business days before the hearing, the appellants file and serve on the respondent any submissions in reply.

12. In accordance with Practice Note APP 2, not later than 4.00pm 5 business days before the hearing, the appellants file four copies and serve on the respondent an appropriate number of copies of Part C of the Appeal Book.

13. Outlines of submissions are not to exceed 15 pages in length, including any annexures, and be easily legible using a font size of at least 12 points and one and a half line spacing throughout, including in any footnotes and annexures. Italics or underlining must be used for legislation and case citations and boldface or italics may be used for occasional emphasis.

14. Each party file and serve a list of authorities and legislation in accordance with Practice Note APP 2.

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

REASONS FOR JUDGMENT

O’BRYAN J:

Introduction

1. By notice of appeal filed on 13 September 2019, the appellants, Mr Darren Mathews and Flightdeck Geelong Pty Ltd (Flightdeck), appeal from orders of this Court made on 23 August 2019 reflecting reasons that were published on 30 April 2019. Mr Mathews is the sole director and shareholder of Flightdeck.

2. The Court found that the appellants had engaged in misleading and deceptive conduct in contravention of s 18 of the Australian Consumer Law in connection with the sale of a trampoline business to the respondent, All Options Pty Ltd, by inflating the quantum of past and future sales as well as past and future profitability. On 23 August 2019, the Court made orders requiring the appellants to pay the respondent damages in the sum of $1,440,730, interest in the sum of $227,783.36 and costs in an amount that remains to be fixed.

3. On 14 October 2019, the respondent filed an application seeking security for its costs of the appeal.

4. On 15 November 2019, I conducted an interlocutory hearing of the respondent’s application for security for its costs of the appeal and the timetabling of the appeal.

5. In support of its application for security, the respondent read the affidavit of its solicitor, Mr Polat Siva of HWL Ebsworth, affirmed on 14 October 2019. In his affidavit, Mr Siva estimated the respondent’s costs of the appeal as $87,900.50 and sought security in the amount of $84,440.45.

6. In opposition, the appellants read the affidavit of their solicitor, Mr Liam O’Brien of Aughtersons, affirmed 13 November 2019. The appellants oppose the application in so far as it seeks security from Mr Mathews, but do not oppose it in so far as it seeks security from Flightdeck. The appellants also oppose the quantum of security sought.

7. For the reasons that follow, I will order the appellants to give security for the respondent’s costs of the appeal in the amount of $62,000.

Background

8. The respondent commenced the proceeding below in August 2016. For some time, the appellants were legally represented by their current solicitors, Aughtersons. However, Aughtersons ceased to act in March 2018 and the appellants were not legally represented at the trial in September 2018.

9. The obligations of the appellants under the orders made by the Court on 23 August 2019 are joint and several. Neither of the appellants has paid any amount to the respondent in respect of the orders, nor have they sought or obtained a stay in respect of the operation of the orders.

10. Unbeknownst to the respondent, Flightdeck was deregistered as a company by ASIC on 2 March 2018, following an application for voluntary deregistration. However, its registration was reinstated following an application made by the respondent in May 2019.

11. The respondent has issued a bankruptcy notice in respect of Mr Mathews’ failure to pay the amounts required by the orders made by the Court on 23 August 2019. Mr Mathews has filed...