Byrne v Hamilton

District Court of NSW|2017-11-16|Before: Lightman J

Judgment

By notice of motion filed on 11 October 2017, the defendant seeks orders as follows: 1. The statement of claim filed herein on 11 August 2017 be set aside pursuant to s 63(3) Civil Procedure Act 2005 (NSW) as a result of the plaintiff having failed to comply with r 4.2(1)(g) Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") by not including his address ("the failure"); 2. Alternatively, the proceedings be stayed pursuant to s 67 Civil Procedure Act 2005 (NSW) as a result of the failure; 3. As an alternative to orders (1) and (2) above, or in addition to either of them, pursuant to r 42.21 UCPR, the plaintiff give such security as the Court thinks fit, in such manner as the Court directs, for the defendant's costs of the proceedings and that the proceedings be stayed until the security is given, upon the ground that: 1. The plaintiff is ordinarily resident outside Australia; and/or 2. The address of the plaintiff has been misstated in his originating process and there is reason to believe that the misstatement was made with intention to deceive. 1. The plaintiff pay the defendant's costs of this application. 2. The plaintiff pay the defendant's costs of the proceedings. 3. Any further or other order or orders that the Court deems fit or necessary.
The relief sought in orders (1) was abandoned at the commencement of the hearing and I have granted leave to the plaintiff to file an Amended Statement of Claim correcting the plaintiff's address. The parties have agreed that the plaintiff to pay the costs thrown away and occasioned by the amendment to the Statement of Claim.

The matter complained of

These are proceedings for defamation for publication of an anonymous letter placed in the letterbox of the mother of the plaintiff, as well as "a number of the plaintiff's mother's neighbours, the number and identities of which the plaintiff is currently unaware" (statement of claim, paragraph 1). The text of the matter complained of is set out as an annexure to this judgment.
The basis on which the defendant is claimed to be the author is the asserted similarity in tone and content of a letter the defendant wrote to a Magistrate in other court proceedings involving the plaintiff and defendant. Mr Goldsmith stated from the bar table that his client denied publication and noted that the extent of publication appears to be to the plaintiff's mother.

The basis upon which security for costs is sought

The defendant submits: 1. The evidence demonstrates that since October 2003, the plaintiff has conducted his business activities in and from Dubai. 2. While he travels to Australia from time to time to reside with his family at the Turramurra property rented in his name, the plaintiff is present in Australia only on a "sporadic basis", to use the language of the letters from his solicitors dated 2 and 6 October 2017. 3. The defendant has zero income in Australia, has no banking accounts (save for two ING Direct accounts with a total of slightly more than $3), lives in rented premises and has no assets in Australia. 4. The plaintiff already has judgment against the plaintiff for the sum of $165,000, which is unpaid. An appeal from that judgment was abandoned. Costs of those proceedings (approximately $20,000) are also outstanding, although it is acknowledged that those costs were only brought to the attention of the plaintiff's legal representatives the day before the hearing of this application.
The plaintiff's evidence may be summarised as follows: 1. While his business lies in Dubai, his wife and teenage children live permanently in Australia, in accommodation rented in the plaintiff's name. The plaintiff is in Australia for at least six months a year and is present for Christmas, birthdays and other family events. He plays an active part in the activities of his children's private school, including holding positions of some importance in relation to school activities. 2. The plaintiff's mother and other members of the family live in Australia. 3. The plaintiff is registered to vote in Australia and has voted at every election. 4. The plaintiff holds only Australian nationality, not dual nationality of any kind, and has never been a national of, or entitled to nationality for, any other country. He holds only a residency card as a citizen of the UAE which will expire in April 2020 and has no future plans to reside in Dubai, either personally or with his family.

Evidence tendered by the parties

The plaintiff's passport, Skywards membership records, boarding passes for the past financial year and a chart summary of periods of absence from Australia (the latter as an aide-memoire only) were tendered. As Ms Cowden pointed out in her written submissions (paragraph 30), this demonstrates that the plaintiff has spent less than 25% of his time over the past year overseas, although his absences in other years appear to have been for much longer.
The affidavit of the plaintiff attaches a number of personal records including family photographs and documents from the school describing the plaintiff as a parent representative for Year 9, this being the relevant year for one of his children. The school calendar sets out a list of busy school activities, one of which was the school fair earlier this month, at which the plaintiff was in charge of the cake stall. His name appears on the brochure for a bake-off competition with an Australian email address and mobile telephone number.
That includes material about the financial transactions between the plaintiff and defendant which led to the proceedings in which the defendant obtained judgment against the plaintiff. This is an important issue in these proceedings, in that the plaintiff is seeking to set aside a bankruptcy notice issued in relation to that judgment debt.

The parties' contractual dispute

The plaintiff and defendant had prior business dealings which resulted in the defendant lending the sum of $100,000 to the plaintiff's company in exchange for a guarantee from the plaintiff personally.
On 24 September 2010, the plaintiff sent the following letter to the defendant confirming the guarantee: "Dear Gary, Re: AUD$100,000 short term funding. I Nicholas Byrne of [address], hereby declare that the sole purpose of the requested loan (in the amount of USD [sic] $100,000) is to aid in the payment of the Call Option and Pre-Advice fees for the issuance of a SBLC/Bank Guarantee arranged by Swiss Security Trust A.G. The purpose of the SBLC/Bank Guarantee is to provide the required funding to acquire Montfall Pty Ltd's gold mining tenements. This loan and the fees associated with it will be repaid on or before the expiry of the forty five (45) days from the day that these funds are deposited in the requisite bank account. It is my understanding that a Joint and Several Guarantee may be required to support this loan in conjunction with Anthony Bishop who is providing security over a residential property at [address] and a Contract between QNA Equity International Pty Ltd and Lamco International Resourses [sic] Co. Such is the case, I Nicholas Byrne hereby personally guarantee Mr Garry Hamilton payment of the AUD$100,000 loan on or before the expiry of forty five (45) days from the date of transfer to my account as specified in the Agreement and Deed of Assignment dated 24 September 2010."
The Agreement and Deed of Assignment referred to in this letter is the following terms: "AGREEMENT & DEED OF ASSIGNMENT Made this 24th day of September 2010 I Anthony Bishop, of [address] in my capacity as Managing Director of A D Bishop Pty Ltd CAN 124 408 564 hereby agree to assign $100,000 of the security held via caveat over the property located at [address], as per the loan agreement for steel rails, the value of which is $2,344,000, forthwith upon receipt of $100,000 paid by Garry Hamilton into the account of Nicholas Byrne, as specified below, and to then register such assignment, this agreement and forward copies of both to Garry Hamilton via his email [email address]. This Deed of Assignment is for the amount of $100,000 only and is provided as security in lieu of a loan issued to Nicholas Byrne of [address], phone [telephone numbers], email [email address]. Bank: HSBC Bank Australia Address: [address] Account Name: OPSEC Operational Security International Pty Ltd Account No: [number] BSB No: [number] Agreement by the parties hereto: This agreement is individually and jointly guaranteed by Mr Anthony Bishop and Mr Nicholas Byrne, as defined above whom hereby guarantee the reimbursement of the loan monies provided by Garry Hamilton within 45 days and in the event of default of repayment within the 45 day loan period, shall also pay forthwith, all costs of recovery of the $100,000 loan incurred by Garry Hamilton in recovery of the loan as advised via email. The $100,000 loaned by Garry Hamilton, is loaned to Mr Nicholas Byrne to meet part of the fees incurred in accessing money against a $200,000,000 SBLC, specifically for the purchase of Gold mines from Garry Hamilton (refer attached commitment) and expansion of gold mining activities and shall be returned on or before the expiry of 45 days from the date the funds are deposited in Nicholas Byrne's account, along with a profit margin as previously assured by email from Mr Nicholas Byrne. Executed as a Deed We, the undersigned, have executed this Agreement on this 24th day of September, 2010. We understand and agree that the execution of this Agreement constitutes an acceptance of all of the mutually protective covenants, terms and conditions contained in it."
On 6 February 2011, the plaintiff wrote to the defendant as follows: "Garry as I said previously, you will receive repayment of the loan on or before 31 March 2011. Interest in the amount of $50,000 is fair Garry. I never once said it wouldn't be repaid. Once again you are reading into things that were not said. We were always going to repay it as part of our contractual agreement. Bottomline is this, you either want to sell the mines or not… Nick 06/02/11 Nick Byrne Chairman & Group Managing Director"
The plaintiff sent another email to the defendant on 9 March 2011, the text of which are as follows: "From: Nick Byrne - OPSEC Sent: Wednesday, 9 March 2011 10:17 AM To: Garry Hamilton Subject: Repayment is STILL 31-03-11 Garry, How I repay the loan is none of your fucking business, least of all am I relying on Bishop to do anything. He hasn't got a pot to piss in and if you want to know, owes me over $30,000. You have breached all of our agreements right form [sic] the start Garry. I am not going to elaborate, other than to remind you of the breaches of confidentiality among other things. You do remember that your computer was compromised, that is just the start, let alone talking to other people about the agreement and contracts, in clear breach of the confidentiality provisions contained in them. Garry, I am not getting into a slanging match with you, however, I will reiterate, what I have fucking said previously; and that is that you will be repaid on or before the 31 March, 2011. In relation to profit on the loan, that was providing that you performed and you evidently did not. You will receive a total of $150,000 and that is it. I have never tried to "scam" anyone Garry. I have not defrauded anyone and if I had, where is the financial gain for your alleged action. You looked a gift horse in the mouth Garry. You could have and would have been a very wealthy man by now. I don't know what you think my "tactics" are Garry, but once and for all you will be repaid on or before the 31 March 2011, I can not [sic] be any clearer than that. Should you choose to reply to this email that is your prerogative, however, no further communication will be entered into until we settled the $150,000 repayment. Nick Nick Byrne Chairman & Group Managing Director"
The defendant wrote to the plaintiff on 9 March 2011 as follows: "From: Garry Hamilton Sent: Wednesday, 9 March 2011 11:11 AM To: 'Nick Byrne - OPSEC' Subject: RE: Repayment is STILL 31-03-11 I am totally convinced that you are a serial con-man that resorts to presentation of fraudulent documents, I shall initiate a police investigation of your fraudulent activities… I look forward to your story for the court."
In the morning of 31 March 2011 at 7:26am, the defendant followed the previous email up with the following email: "From: Garry Hamilton Sent: Thursday, 31 March 2011 7:26 AM To: 'Nick Byrne - OPSEC' Subject: Repayment is STILL 31-03-11 Yeeeeaaah riiiiiiiigggghhhhtttt, 31first & no sight of repayment. Karma will catch [illegible] Garry"
Later on that day, on 31 March 2011 at 11:01am, the plaintiff sent the following email to the defendant, with the subject matter "Repayment is on the way", stating: "From: Nick Byrne - OPSEC Sent: Wednesday, 31 March 2011 11:01 AM To: Garry Hamilton Subject: Repayment is on the way G'day Garry, I hope this finds you well. How'd the operation go??? Successful I hope. Repayment is on the way. We are are [sic] expecting a gold delivery in Dallas today with which we were pulling your repayment and interest, however, it was held up a day or so by Customs during transit through France. It is still coming, so please bare [sic] with me another couple of days. Nick"
On 12 March 2012, the defendant wrote to the plaintiff as follows: "From: Garry Hamilton Sent: Monday, 12 March 2012 6:37 PM To: 'Nick Byrne - OPSEC' Subject: RE: Repayment is on the way Dear Mr Nickolas Byrne, despite all your promises/assurances, you just STOLE MY MONEY. I told you that if you were just scamming & did not repay me the money it would kill me & [illegible] I cannot afford anymore medication/MRI, investigations/specialists. KARMA will catch you up."
On 23 January 2013, the defendant wrote to the plaintiff as follows: "From: [sic] To: [sic] Cc: [sic] Sent: Wednesday, January 23, 2013 8:25 PM Subject: UNREPAID LOAN Dear Nicholas Byrne, I had been advised by Mr Tony Bishop that you were going to about to repay the loan + the interest in the near future, about 6 months ago? I have also been hanging on assertions of imminent loans by Mr Grofski, in conjunction with Mr bishop [sic], but I now believe that will not happen. I am left with option to proceed with secondary action against you of fraud & responsibility as guarantor by Mr bishop [sic]. I would appreciate your current status, & when you intend to make payments. Garry Hamilton"
On 13 February 2013, the plaintiff wrote to the defendant as follows: "From: Nick Byrne - OPSEC Sent: Wednesday, 13 February 2013 10:30 PM To: garry hamilton Subject: Montfall and Loan G'day Garry, I trust this finds you well and I hope you are over your cancer. I have been away and only just returned. I can tell you that Grofski nor [sic] Bishop have the funds to settle on Montfall. I still wonder if it was that good why it is still for sale. Mr Bishop can say what he likes, he owes me $40k Garry and I don't see it being retuned [sic] any time soon. If you are waiting for them to buy the mines, your [sic] waiting with false hope. Its [sic] a shame you didn't fulfil our contract Garry, you could have been a truly wealthy man. That aside, I am bringing money back to Australia as soon as I can get a few things finalised. I was hoping to have it back in by now, however, circumstances dictated otherwise so things got held up, however, I am not going to discuss that side of things further, other than to say the wheels are in motion. If you still want to sell Montfall Garry, perhaps we could begin discussions again once your loan has been repaid. There would be a number of provisos, that being, that you sign another confidentiality agreement, and we would want the land lease included for both Mt Tymm and Ringwood. You would not be able to discuss the offer with anyone including the above, and that includes details of this email. If I find that anyone is CC'd or BCC'd there will be no further discussions. I will call you in the next few days to discuss the above further. Regards, Nick Nick Byrne Chairman & Group Managing Director"
On 5 April 2013, the defendant replied as follows: "From: garry hamilton [email address] Sent: Friday, 5 April 2013 11:30 AM To: 'Nick Byrne - OPSEC' Subject: RE: Montfall and Loan Dear Nicholas, [illegible] reply to the emails you requested, no repayment of loan, no prognosis."
The proposed Defence in those proceedings asserted a loan between the plaintiff (Mr Hamilton) and OPSEC Operational Security International Pty Ltd, not the defendant (Mr Byrne) and set out that Mr Byrne denied receipt of the monies, which were paid to OPSEC Operational Security International Pty Ltd on or about 27 September 2010. A copy of the agreement and deed of assignment is attached (see the Agreement and Deed of Assignment as set out above). Mr Byrne signed a personal guarantee (as set out above).
The financial transaction between the plaintiff and defendant would appear to be a straightforward loan with a personal guarantee given by the plaintiff. After demands were made for return of the money in 2013, the defendant commenced proceedings and obtained a default judgment in the District Court at Gosford. The sum in question was unpaid and application was made for an examination order, which was served on the plaintiff by the Sheriff on 24 August 2016. The subsequent unsuccessful attempts of the plaintiff to appeal that judgment (which were later abandoned) then took place. It was at about this time, namely in or about September 2016, that the matter complained of was published. It certainly bears considerable similarity to the defendant's letter to the court which was received by the Civil Registry on 23 August 2016.
One of the issues to which Ms Cowden points is the absence of any explanation for the long delay in commencement of proceedings and enforcement of judgment. Analysis of the timeline demonstrates that the defendant was in fact moving in a relatively expeditious fashion.
On 13 October 2011, Mr Hamilton had obtained a default judgment against Mr Byrne in the sum of $109,235.24 inclusive of costs.
On 24 February 2014, the following orders were made by the court: "All debts due and accruing from HONG KONG BANK of EXCHANGE CENTRE 28 BRIDGE Street SYDNEY NSW 2000 to NICHOLAS JOHN BYRNE at the time of service of this order, other than any wage or salary, are attached, until the amount of $109235.24, the judgment debt plus any interest which may accrue, is paid or until the Court otherwise orders. The Garnishee is ordered to pay any amount so attached to the judgment creditor within 14 days after the date on which the order is served on the garnishee or, if the debt attached is a debt that falls due after that date, within 14 days after the date on which the debt becomes due."
On 4 November 2015, further orders were made by the court, which are as follows: "All debts due and accruing from ANZ BANK of 163 CASTLEREAGH Street SYDNEY NSW 2000 to NICHOLAS JOHN BYRNE at the time of service of this order, other than any wage or salary, are attached, until the amount of $148061.12, the judgment debt plus any interest which may accrue, is paid or until the Court otherwise orders. The Garnishee is ordered to pay any amount so attached to the judgment creditor within 14 days after the date on which the order is served on the garnishee or, if the debt attached is a debt that falls due after that date, within 14 days after the date on which the debt becomes due. All debts due and accruing from Westpac Banking Corporation of 275 KENT Street SYDNEY NSW 2000 to NICHOLAS JOHN BYRNE at the time of service of this order, other than any wage or salary, are attached, until the amount of $148061.12, the judgment debt plus any interest which may accrue, is paid or until the Court otherwise orders. The Garnishee is ordered to pay any amount so attached to the judgment creditor within 14 days after the date on which the order is served on the garnishee or, if the debt attached is a debt that falls due after that date, within 14 days after the date on which the debt becomes due. All debts due and accruing from HSBC BANK of 580 GEORGE Street SYDNEY NSW 2000 to NICHOLAS JOHN BYRNE at the time of service of this order, other than any wage or salary, are attached, until the amount of $148061.12, the judgment debt plus any interest which may accrue, is paid or until the Court otherwise orders. The Garnishee is ordered to pay any amount so attached to the judgment creditor within 14 days after the date on which the order is served on the garnishee or, if the debt attached is a debt that falls due after that date, within 14 days after the date on which the debt becomes due."
The defendant informed the Sheriff that he had been unable to locate the plaintiff and that he was forced to hire a private detective agency named "Spouse Busters" to locate them. This evidence does not paint the plaintiff in a very flattering light in terms of his being established in Australia. While the plaintiff was not required for cross-examination on his affidavit, this material is of concern.
This material also is suggestive of the plaintiff carrying out business activities within New South Wales about which he had not provided information. Although he states that he has no financial activities within Australia, these documents suggest to the contrary. The company of which he is described as the "Chairman and Group Managing Director" has a bank account in Australia (see Exhibit F) and the plaintiff's residential tenancy agreement provides an address at 141 Walker Street, North Sydney, as well as stating that he had been an employee of the company for 19 years.
This brings me to the relevant provisions for the determination of applications for security for costs.

The relevant provisions

Rule 42.21(1)(a) UCPR permits the making of an order where the plaintiff is "ordinarily resident outside Australia": "(1) If, in any proceedings, it appears to the court on the application of a defendant: (a) that a plaintiff is ordinarily resident outside Australia, or (b) that the address of a plaintiff is not stated or is mis-stated in his or her originating process, and there is reason to believe that the failure to state an address or the mis-statement of the address was made with intention to deceive, or (c) that, after the commencement of the proceedings, a plaintiff has changed his or her address, and there is reason to believe that the change was made by the plaintiff with a view to avoiding the consequences of the proceedings, or (d) that there is reason to believe that a plaintiff, being a corporation, will be unable to pay the costs of the defendant if ordered to do so, or (e) that a plaintiff is suing, not for his or her own benefit, but for the benefit of some other person and there is reason to believe that the plaintiff will be unable to pay the costs of the defendant if ordered to do so, or (f) that there is reason to believe that the plaintiff has divested assets with the intention of avoiding the consequences of the proceedings, the court may order the plaintiff to give such security as the court thinks fit, in such manner as the court directs, for the defendant's costs of the proceedings and that the proceedings be stayed until the security is given."
Rule 42.21(1A) provides: "(1A) In determining whether it is appropriate to make an order that a plaintiff referred to in subrule (1) give security for costs, the court may have regard to the following matters and such other matters as it considers relevant: (a) the prospects of success or merits of the proceedings, (b) the genuineness of the proceedings, (c) the impecuniosity of the plaintiff, (d) whether the plaintiff's impecuniosity is attributable to the defendant's conduct, (e) whether the plaintiff is effectively in the position of a defendant, (f) whether an order for security for costs would stifle the proceedings, (g) whether the proceedings involves a matter of public importance, (h) whether there has been an admission or payment in court, (i) whether delay by the plaintiff in commencing the proceedings has prejudiced the defendant, (j) the costs of the proceedings, (k) whether the security sought is proportionate to the importance and complexity of the subject matter in dispute, (l) the timing of the application for security for costs, (m) whether an order for costs made against the plaintiff would be enforceable within Australia, (n) the ease and convenience or otherwise of enforcing a New South Wales court judgment or order in the country of a non-resident plaintiff."

The relevant principles

Although r 42.21(1A) UCPR provides a list of factors, these are not exhaustive. The factors that may be taken into account by the Court are unrestricted, providing they are relevant. Such cases generally turn upon their own facts. There are no special provisions for the making of security for costs orders in defamation, although such applications are comparatively rare (see, for example, Moran v Schwartz Publishing Pty Ltd (No 6) [2016] WASC 168; Corby v Channel Seven Sydney Pty Ltd [2008] NSWSC 245; Kazal v Fairfax Media Publications Pty Ltd (No 2) [2017] NSWSC 1252).
The relevant principles are most helpfully set out in Logue v Hansen Technologies Ltd (2003) 125 FCR 590, a case very similar to the present, in that the applicant was a businessman who largely conducted his activities outside Australia.
Weinberg J noted the meaning of "ordinarily resident out of the jurisdiction" at [20]: "[20] The meaning of the expression "ordinarily resident out of the jurisdiction", which is the English formulation, is discussed in some detail in Vol 1 of the White Book Service 2001 at para25.13.2. In Levene v Inland Revenue Commissioners [1928] AC 217 Lord Warrington of Clyffe observed at 232 that "ordinarily resident" had no technical or special meaning. In particular, it was impossible to restrict its connotation to its duration. For the purpose of determining whether under the Income Tax Act a person is "ordinarily resident" in the United Kingdom in any given year, "the usual ordering of his life must be judged by what he does in that and preceding years ..."."
After considering early decisions such as Inland Revenue Commissioners v Lysaght [1928] AC 234, R v Barnet London Borough Council, Ex parte Nilish Shah [1983] 2 AC 309 and similar cases where the expression "ordinarily resident" had been considered, Weinberg J concluded: "[26] What these cases, and others like them seem to establish is that the test for ordinary residence depends to a significant degree upon the state of mind of the person whose residence is in question. The language used in a number of the cases focuses upon whether the person habitually and normally resides in the jurisdiction, and does so for a settled purpose."
Crucially for the purposes of this application, his Honour also noted earlier authorities suggested that (at [24]): "It may also be possible for a person to have two ordinary residences, one within the jurisdiction and one outside. In such a case the Court has power to order security for costs, but that person's connection with the [jurisdictional forum of the proceedings] will be relevant to the exercise of that discretion. The closer the connection, the greater the relevance. If the claimant has an established home, and is resident, though not "ordinarily resident" in that country, security will rarely be ordered. If the claimant has an established home and is ordinarily resident in that country, security will be ordered even more rarely: Leyvand v Barash (unreported, Chancery Division, 15 February 2000, per Lightman J)."
Mr Goldsmith drew my attention to these earlier decisions identified by his Honour, as well as to statements by McHugh J in PS Chellaram & Co Ltd v China Ocean Shipping Co (1991) 102 ALR 321 at [7].
The relevant passage from Leyvand v Barash (unreported, Chancery Division, 15 February 2000, Lightman J) is set out by McMurdo J in Robson v Robson [2010] QSC 378 at [35]: "The fact that the claimant is ordinarily resident out of the jurisdiction confers on the Court jurisdiction to order him to provide security. It is well established that a claimant may have two ordinary residences, one within the jurisdiction and one outside. The fact that a claimant who is ordinarily resident outside the jurisdiction is also ordinarily resident within the jurisdiction does not preclude the Court ordering security. For Order 23 confers jurisdiction to order security in the case of a claimant "ordinarily resident out of the jurisdiction" and not in the case of a claimant "not ordinarily resident within the jurisdiction". But the connection of the claimant with this country is of course relevant to the exercise of discretion, and the closer the connection, the greater the relevance. If the claimant has an established home and is resident here, security may rarely be required; if the claimant has an established home and is ordinarily resident here an order for security may even more rarely be ordered."
McMurdo J cited the observations of Weinberg J in Logue with approval, adding: "[36] That passage was followed in Corbett v Nguyen, where White J said that where a person is ordinarily resident both within and outside the jurisdiction, "it would only be in a rare case that security for costs would be ordered against him or her, even though there is jurisdiction to do so on the basis that the person is also ordinarily resident outside Australia. [37] From the very limited evidence on the point, I find that Mr Gary Robson is ordinarily resident outside Australia, but also ordinarily resident in Australia and more specifically at that address at Riverhills. That seems to be a different address from another place in Brisbane where he was living in late 2007, when the defendants last applied for security for costs. The evidence fairly indicates that he regularly lives at that address at Riverhills and that there is a sufficient permanence in his living in Brisbane to demonstrate that he ordinarily resides here. But as he is also ordinarily resident outside Australia, the operation of subr 617(e) is established and thus there is power to order security for costs. The trust case is of the kind described in Corbett v Nguyen." [Footnotes omitted]
Mr Goldsmith also relies upon what are asserted to be admissions by the plaintiff's solicitors, in their correspondence, that the plaintiff only came to Australia "from time to time on a sporadic basis" (letters dated 2 and 6 October 2017).
Mr Goldsmith also relied upon the absence of any assets within the jurisdiction. It does appear that the plaintiff has no assets whatever in the jurisdiction. However, this is not determinative because, as Weinberg J states in Logue v Hansen Technologies Ltd at [53]-[54]: "[53] I do not find the suggestion that the applicant may be impecunious to be persuasive, particularly in the absence of any evidence from him as to what, if anything, he has done with the money which he received from the respondents: Jones v Dunkel (1959) 101 CLR 298. [54] Any person is entitled to render themselves "litigation proof" if they so choose. Many high wealth individuals in this country have done so, sometimes for sound commercial reasons. That fact alone will not be sufficient, in my view, to warrant the making of an order for security for costs under s 56."
An order for security for costs was made in Logue v Hansen Technologies Ltd. The following facts from that case were different to the facts here: 1. Although the applicant had family in Australia, he was separated from his wife and there were doubts as to whether he had any "settled purpose" in remaining in Australia (at [33]); 2. His name did not appear on the electoral roll (at [35]); 3. He declined to provide any evidence about his financial position in relation to any of his assets or their location (at [12]); 4. He gave a Hong Kong address for the time of entering into agreement the subject of the proceedings.
These principles were also considered in Corby v Channel Seven Sydney Pty Ltd at [25], where McCallum J noted: "[25] In Logue v Hansen Technologies Ltd [2003] FCA 81, Weinberg J noted that the English authorities suggest the possibility for a person to have two ordinary residences, one within the jurisdiction and one outside. His Honour stated that, in such a case, the Court has power to order security for costs, but that person's connection with the jurisdiction in which the proceedings were commenced will be relevant to the exercise of the discretion. His Honour said "the closer the connection, the greater the relevance. If the claimant has an established home, and is resident, though not "ordinarily resident" in that country, security will rarely be ordered". Weinberg J expressed the view in Logue that the issue whether or not the plaintiff was ordinarily resident in Australia in that case depended heavily on his purpose for being here at the time of the application and, in particular, whether he had formed a "settled purpose" to reside in Australia."
As the above extracts from Logue v Hansen Technologies Ltd and Corby v Channel Seven Sydney Pty Ltd illustrate, these are cases which turn very much on their facts but, crucially, where those facts demonstrate residency in more than one jurisdiction, an order for security for costs may still be made if the "discretionary considerations" (McMurdo J at [36]) warrant it.
In considering the facts of this case, I take into account that it is possible to detect, particularly in more recent cases such as Corby v Channel Seven Sydney Pty Ltd, a degree of judicial recognition of the profound changes to methods of doing business caused by the greater ease of international air travel and of technological innovation, both of which have impacted on many areas of the law. By contrast, at a time when overseas travel was expensive and less often embarked upon, the mere fact of living overseas to carry on business was regarded in a very different light and the possibility of a person having residence in more than one jurisdiction would have been regarded as exceptional.
In terms of the interaction between history and security for costs, it is worth noting some of the very early cases where a party applied related not only to overseas residence but also to interstate residence. In Williams v Nationwide News Pty Ltd [1965] NSWR 1517, an application for security for costs in defamation proceedings was made on the ground of residence outside New South Wales, in relation to a plaintiff who lived in the State of Queensland.
Courts today must recognise that it is common for persons conducting business activities to travel extensively and to spend considerable periods of time not merely doing business but living in other jurisdictions even though their permanent home may be elsewhere.
It was perhaps with these factors in mind that Weinberg J made the observations that he did in Logue v Hansen Technologies Ltd at [25], which were noted with approval by McCallum J at [25] in Corby v Channel Seven Sydney Pty Ltd. McCallum J applied the principles in Corby v Channel Seven Sydney Pty Ltd as follows (at [26]-[28]): "[26] It is clear enough on the evidence that, in the recent past and at least since publication of the matters complained of, the plaintiff has from time to time been ordinarily resident in Bali. In that respect, I accept the submission put by Mr TDF Hughes that it is more accurate to say that she has lived in Bali and occasionally visited Australia than the other way around. On the other hand, the plaintiff clearly has significant ties with Australia. She was born and raised in Queensland; she and her three children are all Australian citizens and her husband is an Australian resident; she is on the Australian electoral roll and is enrolled to vote in Queensland and her two eldest children are currently enrolled at a Queensland State school. Mr TDF Hughes submitted that the evidence discloses only an intention to remain in Australia up to and including the time of the trial, after which the plaintiff could easily remove the boys from school in Queensland and return to Bali. That is plainly so (the same can be said of their enrolment at schools in Bali last year), but that does not derogate from the proposition that there are indications of a settled purpose to remain in Queensland for the time being. [27] Whilst I accept Mr Littlemore's submission that the relevant time to consider where the plaintiff is ordinarily resident is the time of the hearing of the application, I have not found that issue easy to resolve having regard to the very short period of time since the plaintiff moved back to Australia. One of her motives for doing so may be the need to spend substantial periods of time here for the purpose of the trial. It is difficult to see that as a settled purpose to reside in Australia. Nonetheless, the fact that she has enrolled her children in a school in Queensland and has an established home there (living with her mother) is more indicative of a settled purpose to remain there. [28] I have come to the conclusion that, although the plaintiff has recently moved back to Queensland, the true position is that she is ordinarily resident in Bali. In Australia, she has an established home and is presently resident, though not "ordinarily resident". Accordingly, the power to order security for costs is enlivened and it is necessary to consider whether I should exercise my discretion to do so. In doing so, I am mindful of the remarks of Weinberg J in Logue at [24] that, in such a case, security will rarely be ordered."
All of the factors point to the plaintiff conducting his business in Dubai for a very substantial part of the year, from at least 2003 and possibly earlier, but continuing to still call Australia "home" for family-related purposes such as birthdays and social events.
While the length and degree of the plaintiff's connection with the UAE must mean that he is ordinarily resident there, the plaintiff is also resident within this jurisdiction, but the closeness of his connection is sufficient that, to use the words of Weinberg J in Logue v Hansen Technologies Ltd at [25], security "would rarely be ordered". This factor is the central issue for determination when considering the discretionary factors.

A security for costs order where a party resides in two jurisdictions?

As Weinberg J notes in Logue v Hansen Technologies Ltd at [24], where a person is ordinarily resident in two jurisdictions, one within the jurisdiction and one outside, the court would still retain its power to order security for costs, although it would do so "even more rarely" than would otherwise be the case. I shall consider each of the issues going to discretion in the light of that warning.

The unpaid judgment debt owing to the defendant

Where there are concluded proceedings between parties and there is an appeal, courts have generally been more prepared to make orders for security for costs: see for example, Gunasegaram v Blue Visions Management Pty Ltd [2017] NSWCA 187. Do any of those principles apply where the judgment debt relates to other proceedings? I am of the view that the prior financial dealings between the parties and the unpaid judgment debt are factors which have some relevance, albeit limited, to the exercise of discretion.
Perhaps more helpful are the observations of McCallum J in Kazal v Fairfax Media Publications Pty Ltd (No 2) where her Honour took into account the prior hostile relationship between the parties (at [21]-[24]). Her Honour noted at [25] the observations of the High Court in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 at [92]-[93] and [98], adding that these remarks "are of the highest relevance in the conduct of a list such as the Defamation List" (at [26]), as there was "perhaps no other field of the law in which a more robust approach is required in tackling the technical and the arcane" (at [26]). Her Honour ordered the plaintiff give security for the defendant's costs in the sum of $20,000 within 14 days, taking into account the nature of the case and the parameters of the trial.

The prospect of success in the proceedings

The defendant denies publishing the matter complained of and Mr Goldsmith submits that there is nothing in the matter complained of containing information to suggest that the defendant published it. If the matter complained of is anonymous, that goes without saying. However, there is a compelling degree of similarity between the matter complained of and the letter the defendant wrote to the Magistrate. There would be very few persons who would know about these issues, or have a copy of the plaintiff's driver's licence.
I am satisfied that there are reasonable prospects of success. However, the extent of publication is unknown. On the evidence before me, the only certainty is that the matter complained of is to the plaintiff's mother. Assuming that publication was also made to several of her neighbours, this is still a publication of limited extent. This is a relevant factor when determining the issue of security for costs.

The timing and proportionality of the security sought

The application for security for costs had been brought at the earliest opportunity and there is no challenge to the proportionality of the security sought.

Whether an order for costs made against the plaintiff would be enforceable within Australia

Not only does the plaintiff have no assets in Australia, but he is a subject of a judgment debt which has been unpaid, to his knowledge, for some years. That judgement debt relates to a guarantee he gave to the defendant in circumstances which must cast some doubt on the plaintiff's bona fides. The problems with enforcement while the plaintiff could not be located in Australia are also a significant issue in relation to the discretion to order security for costs.

Other relevant factors

A reason often given for not ordering security for costs is that to do so would stultify the claim: see Corby v Channel Seven Sydney Pty Ltd at [31]ff. No such claim is made in this matter. My understanding is that, although there is no evidence before the Court as to the plaintiff's financial circumstances, he would be able to comply with an order for payment in the sums sought.

Conclusions concerning security for costs

The exceptional circumstances in this case require careful consideration in terms of the appropriate order to be made. I had been guided in this regard by many of the observations of McCallum J in Kazal v Fairfax Media Publications Pty Ltd (No 2) and by the observations of Weinberg J in Logue v Hansen Technologies Pty Ltd.
Taking all of the discretionary factors into account, and in particular noting the prior financial transaction history between the parties and the outstanding judgment debt, I am satisfied that the circumstances of the plaintiff's residency in both the UAE and Australia (where the former is his place of residence for financial purposes and for a significant portion of each year over the last 1 - 2 decades) warrant the making of an order for security for costs.
The next question is that of quantum.

The amount of security to be ordered

Mr Goldsmith has set out an estimate of costs including costs of mediation and asserting he proposes to brief counsel for the trial. He has provided costs on a solicitor/client basis. Some of the steps he proposes, such as discovery and interrogatories, would seem to have limited relevance to proceedings where the principal issue is that of publication. This issue was not addressed by Ms Cowden, although she referred to the observations of McCallum J in Kazal v Fairfax Media Publications Pty Ltd (No 2).
Taking all of the above into account, I consider the appropriate order to make in these proceedings is the same amount as that made by McCallum J, namely an amount of $20,000.

Costs

I was not addressed as to costs. I consider costs should follow the event, but will grant liberty to apply.

Orders

Accordingly, I propose to make the following orders: 1. The plaintiff give security for the defendant's costs of these proceedings in the sum of $20,000 within 14 days. 2. In the event that security is not given within that period, that the proceedings be stayed until the security is given. 3. Plaintiff pay defendant's costs, with liberty to apply.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 23 November 2017

At a glance

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Judgment (19 paragraphs)

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Legislation Cited (2)

Cases Cited (10)