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Brinks Pty Ltd, Tan and Lucas v Brink's, Incorporated [1996] PGSC 16; [1996] PNGLR 75 (12 June 1996)

PNG Law Reports 1996

[1996] PNGLR 75 - Brinks Pty Ltd, Barry Tan and Herman Lucas v Brink's, Incorporated

[1996] PNGLR 75

SC501

PAPUA NEW GUINEA

[SUPREME COURT OF JUSTICE]

BRINKS PTY LTD; AND

BARRY TAN; AND

HERMAN LUCAS

V

BRINKS, INCORPORATED

Waigani

Amet CJ Kapi DCJ Los J

7 May 1996

12 June 1996

PRACTICE AND PROCEDURE - Appeal - Security for costs - Whether “special circumstances” exist - Section 18 Supreme Court Act, Order 7 r 23 Rules of the Supreme Court.

WORDS AND PHRASES - “Special circumstances” - Meaning of, considered.

Facts

Respondent obtained summary judgment against the appellants in a passing-off-proceedings (i.e. for infringement of the respondent’s Trade Marks) at the National Court. Appellants have lodged an appeal in respect of that decision. Respondent by way of notice of motion seeks orders for security of costs of the appeal pursuant to s 18 of the Supreme Court Act.

Held

N1>1.       In determining the nature of what these “special circumstances” are, it is relevant to have regard to the circumstances upon which the National Court may order security for costs under O 14 r 25 of the National Court Rules. Hence the circumstances set out in the National Court Rules which may constitute “special circumstances” upon which the court may exercise its discretion to order security for costs of an appeal, namely: (a) that an appellant is ordinarily resident outside Papua New Guinea; (b) that there is reason to believe that the appellant will be unable to pay the costs of the respondent if ordered to do so; (c) that the address of the appellant is not known; and (d) that the appellant has changed address after the appeal is instituted with a view to avoiding the consequences of the appeal; are adopted.

N1>2.       In the circumstances of this case where the applicant relied on circumstances (a) and (b), the court refused to exercise its discretion under circumstance (a) but did exercise its discretion under circumstance (b); particularly in view of the fact that the first appellant has ceased operating its business, and ordered the first appellant to pay security for costs.

N1>3.       No orders were made in respect of the second and third appellants.

Counsel

E G Anderson, for the respondent.

D Hill, for the appellants.

12 June 1996

AMET CJ KAPI DCJ LOS J: In a writ of summons Brink’s Incorporated (hereinafter referred to as “the respondent”) sued Brinks Pty Ltd (hereinafter referred to as “the first appellant”), Barry Tan (hereinafter referred to as “the second appellant”) and Herman Lucas (hereinafter referred to as “the third appellant”) for damages and injunction for infringement of the respondent’s Trade Marks.

In an application for summary judgment, Sheehan J. entered judgment for the respondent in the following terms:

N2>(a)      that the appellants, their servants or agents refrain from infringing the respondent’s trade marks.

N2>(b)      that the appellants take all necessary steps to change the name of the first appellant which does not include the name or word “Brinks”.

N2>(c)      that appellants remove all references to the names “Brink’s” and “Brinks” from all property, buildings, vehicles, documents, advertising, promotional signs and chattels associated with the appellants.

N2>(d)      that appellants deliver up to the respondent all pamphlets, stationary, business cards and promotional material containing a reference to the word “Brink’s” or “Brinks” by 1 February 1996.

The appellants have appealed against the decision of Sheehan J.

By a notice of motion, the respondent has applied for orders for security for costs of the appeal under s 18 of the Supreme Court Act. It is this matter which has come before us for determination. Section 18 is in the following terms:

N2>“18.    Security for appeal.

(1)      The Supreme Court or a judge may, in special circumstances, order that just security be given for the costs of an appeal or an application for leave to appeal and, if an application is granted, for the prosecution of the appeal.

(2)      If any security ordered under Subsection (1) is not given in accordance with the order, the appeal, or application for leave to appeal, as the case may be, shall be deemed to have been abandoned.”

As far as we are aware, this provision is not a subject of a decision by this Court. The key word we need to interpret is “special circumstances”. It is not possible to give an exhaustive meaning of what the “special circumstances” are. It is, however, possible to indicate the nature of these circumstances in the context of s 18.

It can be implied from the context of this provision that security for costs of an appeal is not necessary in every case. The Court may exercise the discretion to order security for costs only in “special circumstances”. This position is confirmed by O 7 r 23 of the Supreme Court Rules as follows:

“Unless the court otherwise directs no security for costs of an appeal to the court shall be required.”

In determining the nature of what these “special circumstances” are, we think it is relevant to have regard to the circumstances upon which the National Court may order security for costs set out under O 14 r 25 of the National Court Rules. We say these Rules are relevant because they seek to protect a defendant’s costs in the event that he is successful in an action. By analogy, the position is the same in an appeal. A respondent may be protected by an order for security for costs of the appeal in the event that he is successful in the result of an appeal. The difference is that in the National Court Rules, the circumstances upon which an order for costs may be made are particularised, whereas, under the Supreme Court Act, the circumstances are simply referred to as “special circumstances”. It is within the discretion of the Court to determine what these “special circumstances” are.

Having regard to the National Court Rules and the need to protect the interest of the respondent’s costs, we would adopt the circumstances set out in the National Court Rules as coming within the meaning of “special circumstances” upon which the Court may exercise its discretion to order security for costs of an appeal, namely:

N2>(a)      that an appellant is ordinarily resident outside Papua New Guinea;

N2>(b)      that there is reason to believe that the appellant will be unable to pay the costs of the respondent if ordered to do so;

N2>(c)      that the address of the appellant is not known;

N2>(d)      that the appellant has changed address after the appeal is instituted with a view to avoiding the consequences of the appeal.

As we have stated before, this list is not exhaustive. There may be other circumstances which may come within the words “special circumstances”.

In the application before us, the respondent relies on circumstances in (a) and (b).

RESIDENT OUTSIDE THE COUNTRY

The second and third appellants have filed affidavits in earlier proceedings stating their positions as at November 1995. The second appellant has deposed that he was born at Rabaul on 21 November 1962 and has substantial business interests throughout Papua New Guinea and conduct business on a daily basis. There is no evidence by the respondent that this appellant is resident outside Papua New Guinea.

The third appellant deposed that he moved to Papua New Guinea with his parents in 1966. His mother has since deceased but his father is a naturalised citizen. It appears from this affidavit that he has continuously lived in Papua New Guinea except when he has lived in Australia for educational purposes and when he was employed by the Australian Army. As at the time of the hearing of this matter, no fresh affidavit had been filed to indicate where this appellant is and where he normally resides. There is no evidence before us to prove that he normally resides outside Papua New Guinea.

The onus is on the respondent to satisfy the Court why the discretion should be exercised in its favour. We cannot be satisfied that any of the appellants normally reside outside Papua New Guinea. We would not exercise our discretion to grant security for costs of the appeal on this basis.

CONDUCT OF THE APPELLANTS

Counsel for the respondent has relied on two circumstances under this heading. First, that the first appellant is unable to pay its debts on the basis that there is a petition to wind up the company pending in the National Court. Secondly, it is submitted that the lawyers for the appellants failed to file their submissions in time as directed by the Court in the Passing-Off Proceedings in the National Court.

In relation to the first matter, counsel for the appellants has submitted that while there is a petition, the company has not yet been wound up. While we accept that this is the position, no explanation or defence has been offered in answer to the petition. For all practical purposes the first appellant will be wound up in due time and therefore it is more than likely that the first appellant may not be in a position to pay the costs of the appeal. We will return to consider the manner in which we should exercise our discretion on the basis of this circumstance.

In relation to the matter of default, we accept that the appellants defaulted in filing the submissions in time in the passing-off proceedings in the National Court. The submissions were delayed by a period of six days. This conduct may be taken into account in determining the overall conduct of the appellants. Whether, or not, this conduct may lead to the inference that the appellants may not be able to pay costs if ordered by the Court is another matter. We are unable to conclude from this factor alone that the appellants would not be able to pay the respondent’s costs if ordered by the Court. We would not exercise our discretion on this basis.

We return to the question of the ability of the first appellant to pay costs of the appeal. In considering this matter, we also take into account the concession by counsel for the appellants during submissions that the first appellant has ceased operating its business. In view of this, we would exercise our discretion to order the first appellant to pay security for costs. We would not make any orders in respect of the second and third appellants.

As to the amount of security for costs, an estimate of this is contained in the affidavit of Mr Anderson. These figures have not been contested by counsel for the appellants. We consider that a just security for costs of the appeal would be K6,500. While costs may be awarded severally and jointly against all the appellants, it would not be proper to order the first appellant to pay the full costs. We consider the first appellant should bear its share of the costs. Accordingly we order that the first appellant to pay into Court an amount of K2,300 as security for costs of the appeal.

Lawyers for the 1st, 2nd and 3rd appellant: Allens Arthur Robinson

Lawyers for the respondent: Gadens Ridgeway.