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[2012] NSWSC 1033
Supreme Court of NSW
2012-08-17
Lindsay J, Holland J, Hodgson JA, Young J
Original judgment source is linked above.
INTRODUCTION 1Before the court is a notice of motion filed by the defendant on 5 June 2012. It seeks an order that the plaintiff, a natural person, provide security for the costs of the principal proceedings. 2The defendant is represented by counsel and an instructing solicitor. The plaintiff appears in person, his solicitor's retainer having been terminated some time ago. 3The principal proceedings involve a dispute between the parties as to the beneficial ownership of a residential property known as 18 Betty Hendry Parade, North Ryde. That is the land contained in folio identifier 612/28915. The property was initially acquired by the parties in their joint names. It was subsequently transferred into the name of the defendant alone. The plaintiff contends that that transfer was effected without his consent, or at least without his fully informed consent, and in any event, for no consideration. He contends that the defendant presently holds the property on trust for the two of them, perhaps in proportions to be determined by the court. 4As it happens, the plaintiff resides at the property, and has done so for some years, albeit with a break in between two reasonably lengthy periods of residency. The defendant is ordinarily resident in China. 5The defendant's motion invokes the inherent jurisdiction of the court. It must do so because it does not fall within the circumstances limited by the Uniform Civil Procedure Rules 2005 (NSW), rule 42.21 for the making of an order for the provision of security for costs.
THE NATURE OF THE COURT'S INHERENT JURISDICTION 6The existence of the court's inherent jurisdiction to stay proceedings, unless and until security for costs is provided, is beyond dispute. It is conventionally taken to have been established by the judgment of Holland J in Rajsky v Computer Manufacturer and Design Pty Ltd [1982] 2 NSWLR 443 at 447E, 448C-D, 448G-449A and 451F. Holland J's judgment was the subject of an appeal to the Court of Appeal, limited to a question that assumed the correctness of his Honour's opinion about the nature of the court's inherent jurisdiction. 7The Court of Appeal's disposition of the appeal demonstrates an acceptance of that opinion. This can be seen in the report, [1983] 2 NSWLR 122 at 124B-D, 128B-D, 128E-f, 129A and 129D. 8Section 23 of the Supreme Court Act 1970 (NSW) might be an independent head of jurisdiction to make on order for security against a natural person - as suggested by Hodgson JA in Green (as liquidator of Arimco Mining Pty Ltd) v CGU Insurance Limited [2008] NSWCA 148; 67 ACSR 105 at 111-112 [20] and 115 [32] - but it does not add anything to the inherent jurisdiction on the facts of this case. 9Reference might also be made to the exposition of the inherent jurisdiction (or, as he describes it, the "inherent power") by Young J in Morris v Hanley [2000] NSWSC 957. 10The order for security made by his Honour in that case was set aside on appeal in a judgment (by a Court of Appeal constituted by Heydon JA, Foster AJA and Rolfe AJA) published as Morris v Hanley [2001] NSWCA 374. Nevertheless, as noted by Hodgson JA in Philips Electronics Australia Pty Ltd v Matthews (2002) 54 NSWLR 598 at 610 [52], Young J's exposition of the law was not questioned by the Court of Appeal. 11In his analysis of the law, Justice Young suggested that the inherent power of the court to make an order for security comes from the same roots as the inherent power to summarily dismiss actions as frivolous and vexatious: See [11]-[14]. 12That may be so, and importance might attach in a particular case to characterisation of a plaintiff's case as one which, without an order for security, it would be an abuse of process to conduct. However, for myself, I would prefer to ground the jurisdiction at a higher level of abstraction, in terms more positive but not more extensive, by reference to "the interests of justice" in the due administration of justice, aspects of which are the regulation by a superior court of its own processes and prevention of abuses of those processes. That approach is consistent with the observations of Hodgson JA in Philips Electrical at 609 [47]. Of course, characterisation of a plaintiff's case, in negative terms, as potentially susceptible to description as an abuse of process may be likely, on the facts of any case, to provide a solid foundation for intervention of the Court. 13Speaking of the statutory jurisdiction of the District Court of New South Wales (not a superior court), his Honour said: "...[in] my opinion, apart from any effect that Pt 40, r1 of the District Court Rules might have, s 156 of the District Court Act is wide enough to give the district court power to make an order staying proceedings unless and until security for costs is given, where the judge considers this reasonably necessary in order to do justice between the parties. In my opinion, it is not a necessary pre-condition for making such an order that the proceedings are an abuse of process, or would be an abuse of process unless security for costs is given." 14This approach is also consistent with, both, the terms of the Supreme Court Act section 23, and those of sections 56-58 of the Civil Procedure Act 2005 (NSW). 15Section 23 is in the following terms: "23 Jurisdiction generally The Court shall have all jurisdiction which may be necessary for the administration of justice in New South Wales." 16So far as presently material, sections 56-58 are in the following terms: "56 Overriding purpose (1) The overriding purpose of this Act and of rules of court, in their application to a civil dispute or civil proceedings, is to facilitate the just, quick and cheap resolution of the real issues in the dispute or proceedings. (2) The court must seek to give effect to the overriding purpose when it exercises any power given to it by this Act or by rules of court and when it interprets any provision of this Act or of any such rule. (3) A party to civil proceedings is under a duty to assist the court to further the overriding purpose and, to that effect, to participate in the processes of the court and to comply with directions and orders of the court." ... "57 Objects of case management (1) For the purpose of furthering the overriding purpose referred to in section 56(1), proceedings in any court are to be managed having regard to the following objects: (a) the just determination of the proceedings, (b) the efficient disposal of the business of the court, (c) the efficient use of available judicial and administrative resources, (d) the timely disposal of the proceedings, and all other proceedings in the court, at a cost affordable by the respective parties. (2) This Act and any rules of court are to be so construed and applied, and the practice and procedure of the courts are to be so regulated, as best to ensure the attainment of the objects referred to in subsection (1)." "58 Court to follow dictates of justice (1) In deciding: (a) whether to make any order or direction for the management of proceedings, including: ... (ii) any order granting an adjournment or stay of proceedings, and (iii) any other order of a procedural nature ... (b) the terms in which any such order or direction is to be made, the court must seek to act in accordance with the dictates of justice. (2) For the purpose of determining what are the dictates of justice in a particular case, the court: (a) must have regard to the provisions of sections 56 and 57, and (b) may have regard to the following matters to the extent to which it considers them relevant: (i) the degree of difficulty or complexity to which the issues in the proceedings give rise, (ii) the degree of expedition with which the respective parties have approached the proceedings, including the degree to which they have been timely in their interlocutory activities, (iii) the degree to which any lack of expedition in approaching the proceedings has arisen from circumstances beyond the control of the respective parties, (iv) the degree to which the respective parties have fulfilled their duties under section 56(3), (v) the use that any party has made, or could have made, of any opportunity that has been available to the party in the course of the proceedings, whether under rules of court, the practice of the court or any direction of a procedural nature given in the proceedings, (vi) the degree of injustice that would be suffered by the respective parties as a consequence of any order or direction, (vii) such other matters as the court considers relevant in the circumstances of the case." 17However one might, at a high level of abstraction, describe the source and nature of the court's jurisdiction to make an order for security against a natural person, the fact that the jurisdiction is discretionary in character, and relates to business of the court captured by the expression "practice and procedure", means that attention has to be given to identification of factors to be taken into account in exercise of the jurisdiction. 18The nature of the jurisdiction demands that any enumeration of a list of factors be clearly labelled as "non-exhaustive", nothing more than a set of guidelines and necessarily conditioned on the facts of each case. 19With that, and four additional caveats, the list of factors enumerated by Young J in Morris v Hanley at [23], provides a convenient structure for consideration of whether or not to make an order for security1. 20His Honour wrote: "23 The leading cases show that the factors a Court must take into account when considering the general question as to whether the inherent power should be exercised to order security for costs include: (a) whether the plaintiff's claim is bona fide and not a sham; (b) whether the plaintiff has a reasonably good prospect of obtaining the orders he or she seeks; (c) whether an order for security would bring the proceedings to an end; (d) whether the plaintiff has a want of assets and how this was brought about; (e) whether there is anyone standing behind the plaintiff who might benefit from the action but who is unwilling to contribute to the risk involved in the action; and (f) the question of delay." 21The first caveat is reflected in the observations of Heydon JA, on appeal, in Morris v Hanley. His Honour said: "Though applications for security for costs are matters of practice and procedure, they can have a significant impact on the substantive rights of plaintiffs, because if the order is made, the plaintiff may not be able to provide security for costs where one of the grounds for the application is that plaintiff's lack of funds. If so, that will prevent the plaintiff being able to have a judicial examination of the complaints made on the merits [22]. It is never easy for defendants to succeed in an application for security for costs against a natural person where that application is in part based on the ground of that natural person's lack of funds. It becomes significantly harder for defendants to succeed where they permit the plaintiff to throw money away on the litigation which will never be recoverable in a costs order against the defendants by reason of the successful application for security. [29 ]" 22The second caveat is that Young J's guidelines need, now, to be read in the context of the case management principles given statutory force by ss56-58, and other provisions, of the Civil Procedure Act 2005. 23The third caveat is that the nature of the jurisdiction necessarily means that an application for security should not, at least in the abstract, be viewed as an "all or nothing" proposition. 24Where, as in the present case, proceedings have been prepared for trial on the basis that the evidence to be adduced at trial will, principally, be adduced by way of affidavits served well in advance of the trial, there may be scope for orders of the nature considered in Stanley-Hill v Kool [1982] 1 NSWLR 460. 25That is to say, in an appropriate case and in lieu of an order for the provision of security for costs of proceedings generally, the Court may order: (a) that a party (in this case the plaintiff), in the first instance, meet expenses of his opponent's witnesses attending Court for cross-examination on their affidavits; and (b) that the party charged with meeting those expenses do so, in advance of the trial, by the provision of security. 26The statutory regime considered by the Court of Appeal in Stanley-Hill v Kool has changed but, in substance, only in a way that confirms that the Court, in the exercise of all branches of its civil jurisdiction, has no less power than was formerly exercised as a special feature of, "commercial" cases. 27Sections 5-6 of the Commercial Causes Act 1903 (NSW), expressed in the language of New South Wales' Pre-Judicature Act system of court administration, provided a template for s 56(3) of the Supreme Court Act 1970 (NSW), upon these state's adoption of a Judicature Act system. 28Section 5 of the 1903 Act and s 56(3) of the 1970 Act now have their analogues in the Civil Procedure Act 2005, ss 56(1) and 61(1), and in UCPR r 2.1, formerly found in s 76(A) of the Supreme Court Act and Pt 26 r 1 of the Supreme Court Rules 1970 (NSW)2. 29The terms of s 56(1) have already been set out. The terms of s 61(1) and r 2.1 are as follows: "61 Directions as to practice and procedure generally (1) The court may, by order, give such directions as it thinks fit (whether or not inconsistent with rules of court) for the speedy determination of the real issues between the parties to the proceedings. (2.1) Directions and orders The court may, at any time and from time to time, give such directions and make such orders for the conduct of any proceedings as appear convenient (whether or not inconsistent with these rules or any other rules of court) for the just, quick and cheap disposal of the proceedings". 30The fourth caveat is that, in the exercise of the Court's jurisdiction generally, allowance must now be made for the power of the Court to compel participation of parties in a process of mediation. 31That power was conferred on the Court, by amendment to the Supreme Court Act 1970 to insert s 110K, in August 2000. Section 110K now finds reflection in s 26(1) of the Civil Procedure Act 2005. 32I am particularly mindful of that weapon in the Court's armoury because particular features of the present case are that, first, the parties are brothers; secondly, although the plaintiff commenced his proceedings with the benefit of representation by a solicitor (Mr Churchill), that solicitor filed a notice of ceasing to act on 5 April 2012, before the date upon which the defendant's motion for security was filed; and, thirdly, there is at least a possibility of a consensual resolution of the proceedings emerging from direct engagement between the brothers and their broader family. 33In all this, I bear in mind, also, what the motion presently before the Court is not. I do not have before me an application for summary dismissal of the plaintiff's claims for relief as frivolous or vexatious, or otherwise as an abuse of process of the Court (in respect of which type of application UCPR r 13.4 provides a statutory foundation in parallel with the Court's inherit jurisdiction). 34Nor has the defendant moved the Court for an order (under UCPR r 14.27 or otherwise) that the plaintiff's statement of claim be struck out in whole or in part. 35Finally, I remind myself that no party has formally moved the Court for an order (under CPA s 26) for a mediation, although (in an affidavit affirmed on 2 July 2012 in opposition to the defendant's motion for security) the plaintiff has plainly foreshadowed a request for such an order. 36I note these matters as precaution against the possibility that, by too robust an exercise of the jurisdiction to order security, I stray unconsciously into other realms.
The Plaintiff's impecuniosity 37The point of commencement for an analysis of the facts of the case is that there is evidence before the Court probative of impecuniosity on the part of the plaintiff, sufficient to cast doubt on his ability to meet any order for costs in favour of the defendant. 38That evidence includes, most graphically, statements of the plaintiff himself in correspondence sent in April 2012. 39On 3 April 2012 he sent an email to his former wife. She is prospectively a witness against him at any trial of the proceedings as she has sworn an affidavit against his interests. 40Via that email, the plaintiff purported to give his former wife notice of an application to the Family Court of Australia for: (a) variation of a "financial agreement" apparently signed by them in 2010; and (b) interim "maintenance" in the sum of $50,000 to assist his conduct of these, Supreme Court proceedings. 41Incidentally, it should be noted, the email purported to provide to the plaintiff's former wife formal disclosure of his alleged interest in the property the subject of these proceedings, and suggested that disclosure had been first made to her in a letter dated 7 September 2011 sent on his behalf by his then solicitor, Mr Churchill. 42The email records the plaintiff's residential address as being the subject property. 43By a letter dated 11 April 2012 the defendant's solicitor wrote to Churchill Lawyers what might be described as a letter of demand in anticipation of the motion currently before the Court. In extracted form, it included the following passages: "You have now been served with our evidence and my clients case is clear. You will note he is supported by other members of the family who have given Affidavits. It has been brought to my attention your client recently requested a loan of money from his former wife, Shirley. I am also advised that at an earlier time your client requested a loan from his brother Charles. I understand that your client is not working. It is a matter of concern to my client as to where your client is getting the money and resources to prosecute this matter in Court I am not suggesting that a plaintiff does not have a right to commence proceedings when they are in financial difficulties. However, I am concerned that your client has resources to be able to not only pay for his own legal costs but also, more importantly, my clients legal costs when this matter is ultimately decided in favour of my client. As you know, my client lives overseas. He will be forced to return to Australia for the hearing. On one view, the hearing could be very short. On the other view, a trial could take a number of days. It is going to cost my client an inordinate amount of money to defend the proceedings. We will seek those costs from your client in recovery. We will be seek costs on an indemnity basis. In the circumstances, I require from you, detailed advice as to your clients financial resources. What resources does he have to draw upon to be able to cover costs in the event he fails in this case. I want detailed information in order that I can obtain instructions from my client. In the event that such information is not provided, then it is my intention to seek a security of costs order from the court. Lastly, with respect to your clients current living arrangements, as you know, he resides at the property which is at the centre of the dispute between the parties. One of the witnesses lives at the property. It is inappropriate that your client continue to reside at the property. In the circumstances, my client requires your client to vacate the premises within seven days from the receipt of this letter. Should he fail to vacate, then we intend to approach the court for appropriate orders to be made." 44That letter elicited a reply addressed by the plaintiff himself to the defendant's solicitors. It enclosed, for their information, a copy of Mr Churchill's notice of ceasing to act, and noted that the plaintiff might henceforth be dealt with personally. 45It then recorded the plaintiff's contact details, including his residency at the subject property, and proceeded as follows: "I Chau Ting Yung, the plaintiff, is not working at present. I am looking for full time career. It include as Accountant, Account Officer and Real Estate salesperson. I completed Bachelor of Business since 1992. I am Real Estate Agent. I believe myself able to get my career very soon. Lastly, I am going to apply Family Court for Property Division with ex wife Shirley Yung. Our family pool asset approximately one apartment in Maroubra. Therefore, there are enough asset to support prosecute this matter in Court. There are not need to seek a security of costs order from the Court. I Chau Ting Yung agree 18 Betty property is centre of dispute between plaintiff and defendant. I have equitable interest as share interest owner of 18 Betty property. I will state in 18 Betty property. Since Chow Mo Yung, the witness of the Defendant referred to in the last paragraph of the Defendant's solicitor's letter, as witness of this case matter. I Chau Ting Yung will sent letter in writing to Chow Mo Yung to move out 18 Betty property ASAP." 46With this broader context in mind, I turn my attention to each of the factors enumerated by Young J in Morris v Hanley.
Bona Fides of the Plaintiff's Claim 47The principal proceedings were commenced by way of a statement of claim filed on 6 September 2011, accompanied by an affidavit verifying the pleading in more than the usual, prescribed formula. 48Judged by the standards of Pts 14 and 15 of the UCPR (which,45respectively, lay down rules for the pleading and particularising of claims for relief) the statement of claim might readily attract criticism. The drafting shows passing familiarity with rules of Court, but barely that. 49However, read in conjunction with the accompanying affidavit (non-compliant though it may be with the provisions of UCPR r 14.23), the statement of claim makes tolerably clear the nature of the case the plaintiff seeks to advance at trial. 50He contends that: (a) The subject property (land registered under the Real Property Act 1900 NSW) was purchased in the co-ownership of the defendant and himself, in circumstances in which the common intention was that he was to have a beneficial interest as well as a legal interest in the property. (b) He made a financial contribution to the purchase of the property. (c) In the ownership of the defendant and himself, the property was the subject of mortgages to secure borrowings on the property, and he made contributions to the repayment of at least the second of those mortgages. (d) He also paid building insurance premiums for the property for several years, as well as rates, and he undertook maintenance work on the property. (e) Under cultural, if not also physical, pressure from the defendant (an elder brother, like him governed by norm's of Chinese society) he signed a memorandum of transfer (and, a few years later, was called upon to sign a replacement form of memorandum of transfer) in favour of the defendant. (f) He signed the memorandum of transfer under protest, for "record" purposes only, and on the basis that no such memorandum was to be registered without his express consent and, apparently, an opportunity, at the time of proposed registration, to obtain legal advice. (g) The defendant registered the memorandum of transfer in his favour, as signed by the plaintiff, without the knowledge or consent of the plaintiff. (h) No consideration passed from the defendant, or to the plaintiff, for transfer of the property out of the joint names of the parties into the name of the defendant alone. (i) The plaintiff did not know that his name had been removed from the title of the property until 2009 or thereabouts. (j) Delays by the plaintiff in the commencement of proceedings can be explained by reference, inter alia, to apprehensions by him arising from his family connection with the defendant and his ignorance of legal rights. 51In summarising my understanding of the substance of the plaintiff's contentions, I am not to be taken as binding him to my formulation of them. Still less am I to be taken as in any way binding the defendant to that formulation of the plaintiff's contentions or in any way restricting the defendant's response to them. 52The plaintiff has served three affidavits in the principal proceedings, respectively affirmed by him on 6 September 2011, 2 December 2011, and 7 April 2012. 53The first two of these affidavits appear to have been drafted with the benefit of legal assistance. The third, not. It suffers, as does the affidavit of the plaintiff affirmed in opposition to the defendant's motion, from syntactical and other problems that may arise from the deponent not being a native speaker of English. About that, I do not speculate, but the form of the documentation leaves that inference open. 54A problem for the plaintiff at trial might be that various members of his family - not only his former wife and the defendant - appear to have lined up against him. 55Affidavits have been affirmed, in opposition to him and in support of the defendant's case, by some five witnesses, including his former wife and the defendant. 56During the course of the hearing of the motion for security, counsel for the defendant foreshadowed that, before any trial, the defendant will seek such leave as may be necessary to file a further two affidavits. 57Insofar as the plaintiff has several witnesses apparently lined up against him, there might be a sense that presentation of his case at trial is likely to be problematical. However, it must be said that the outcome of any prospective trial cannot be predicted simply on the basis of a head count, or anything like it, and the hearing of a motion for security does not provide an occasion to resolve disputed questions of fact more appropriately to be determined at a trial on the merits. 58Even if the plaintiff's case might be characterised, forensically, as unlikely to succeed, I cannot exclude the possibility of its succeeding and, still less, can I characterise it as lacking bona fides. 59The fact that (with the acquiescence, if not full consent, of the defendant) the plaintiff is, and has for some time been, living at the subject property might be thought to be a practical impediment to a summary, judicial determination that the plaintiff's case is totally without merit. 60In the course of argument in support of the motion counsel for the defendant cast doubt on the bona fides of the plaintiff's claim for relief based, inter alia, on delays in the plaintiff's assertion of that case, and his apparent failure to obtain legal advice in the period of some years following his execution of a memorandum of transfer, supposedly under pressure exerted by the defendant. 61It is not apparent to me that I can do more than notice this criticism in the course of the interlocutory hearing presently before the Court. There are plainly substantial questions of fact that need to be resolved when the parties' dispute is examined on the merits. Without embracing either side of the debate, I pass over the existence of a variety of disputes of a factual nature.
Whether the Plaintiff has reasonably good prospects of obtaining the Orders he seeks 62If the plaintiff were to be believed, and the witnesses lined up against him disbelieved, then it is at least conceivable that he would succeed. 63That might be a tall order - I cannot speculate on that score - but it cannot be discounted in any material way at this time. 64The defendant's submission is that the plaintiff's case is "weak", rather than necessarily "non-existent". 65Characterisation of the plaintiff's case as "weak" is not, in the circumstances of this case, a decisive factor in favour of a grant of security. On the contrary, it counsels caution against making any order that might have the effect of a summary disposal order unattended by the need to meet the General Steel test3, or something akin to it, upon a consideration of summary relief. 66Whether an Order For Security Would Bring the Proceedings to an End 67It is difficult to know with any certainty whether an order for security would in fact bring these proceedings to an end. Much might depend on the amount ordered and the plaintiff's success, or otherwise, in obtaining employment in the near future. 68Very responsibly, counsel for the defendant has, on behalf of his client, conceded for the purposes of the current motion that it would appear that the effect of an order for security would in fact be to stifle the plaintiff's claim. 69I proceed to deal with the motion on that basis.
Whether the Plaintiff has a want of assets and how this was brought about 70Plainly, the plaintiff has a want of assets. The plaintiff's submissions on the motion appear to confirm that insofar as he complains of an inability to borrow money on the security of the subject property pending a determination of these proceedings. 71The defendant contends that the plaintiff's want of assets is not causally connected with any conduct on his part. That appears to be correct. The plaintiff's present impecuniosity can be explained - if it needs to be - by reference to his present lack of employment and social dislocation in his personal life.
Whether there is anyone standing behind the Plaintiff who might benefit from the action, but who is unwilling to contribute to the risk involved in the action 72There is no suggestion, either emanating from the defendant, or from the evidence adduced on the motion for security, that there is in fact any person standing behind the plaintiff seeking to avoid responsibility for, or exposure to, a costs order.
The question of delay 73If the relevant measure of delay is tied to the defendant's motion for security - as it may well be - there seems little foundation for attribution of delay to the defendant. The plaintiff's correspondence of April 2012 presented the defendant with a stark picture of impecuniosity. The defendant rose to the occasion by filing a notice of motion on 5 June 2012. 74Insofar as the defendant seeks to attack the plaintiff's pleadings, on the security motion, he might himself be criticised for delay. He was prepared to plead to the plaintiff's statement of claim and to serve most, if not all, of his affidavits in the principal proceedings founded upon the present pleading. 75On the question of "delay" generally, I note the observations of Heydon JA in Morris v Hanley (extracted above) about the fact that delay in the filing of a motion for security can be thought to have placed a plaintiff's investment in the proceedings at risk. 76Without dwelling to any great extent on the question of delay, or attributing blame to any party, I note that the plaintiff has in fact invested apparently scarce resources in preparation of the proceedings for trial, at least to the extent of obtaining legal advice in the early stages of the proceedings.
Other considerations of a Sundry or General Case Management Nature 77An Order for the payment of Witness' Travel Expenses: During the course of argument the parties' attention was drawn to Stanley-Hill v Kool and the possibility that, on an application made for that purpose, the Court might, in due course, make an order for the payment by the plaintiff, or for the provision of security by him, referable to expenses of the defendant's witnesses in attendance for cross-examination on their affidavits at any trial. 78In my assessment, the time has not arrived when any decision can be made on that score. However, the plaintiff is on notice that he may have an exposure to an order that he pay, up front, travel costs of some or all of his brother's witnesses in the event of requiring them for cross-examination. 79If, in the fullness of time, an order of the type discussed in Stanley-Hill v Kool is sought, the Court may be required to give consideration to a variety of ancillary issues, including whether or not evidence from overseas witnesses can reasonably be given via a video link procedure. All that is, however, for the future. 80The state of the pleadings: In the course of oral argument counsel for the defendant drew to my attention the fact that in Bhagat v Murphy [2000] NSWSC 892 Young J took into account against a plaintiff the unsatisfactory nature of the plaintiff's pleadings. 81Although I am prepared to take the form of the plaintiff's statement of claim into account against him, the fact that I might do so does not, in the circumstances of this case, amount to much. That is because, as I have said, the defendant has, substantially, acquiesced in the state of the pleadings and prepared his case on that footing. 82As it seems to me, looking at the whole picture, the defendant has an appreciation of the case he has to meet, and this motion is not a convenient vehicle to debate the particular merits of the pleadings. 83Mediation: During the course of argument, and bearing in mind that the plaintiff had foreshadowed the topic, I raised for consideration the question whether the case might not benefit from an order for there to be a mediation before a court appointed mediator. 84The plaintiff reiterated his desire for such an order. 85Mr Pickering, again acting responsibly and fairly, indicated on behalf of the defendant that the defendant would submit to such an order. 86In those circumstances, as foreshadowed in the course of argument, I am minded to make an order for mediation. 87Quantification of costs: In light of the conclusion I have reached about the provision or otherwise of security at this stage of the proceedings, it is not necessary for me to form any view about what might be an appropriate quantification of security. 88Nevertheless, and as a cautionary tale for the plaintiff, I record my impression that the estimate of costs set out in one of the affidavits in support of the defendant's motion (sworn by the defendant's solicitor) appears to me to be reasonable. 89In the course of discussions which, I hope, the parties will have in coming days, both parties - not merely the plaintiff - should bear in mind the costs of a trial in this Court. 90Process for Withdrawal of a Caveat on the Title: In the course of argument on the motion my attention was drawn to the fact that, as the title to the subject property presently stands, there is noted on the title a caveat lodged by the plaintiff. Upon an assumption that the proceedings are not to be disposed of by mediation the dictates of s 63 of the Supreme Court Act suggest that the defendant will need to file a cross-claim seeking an order that that caveat be withdrawn. 91The Plaintiff's continued occupancy of the Property: Although there is, in some of the materials placed before me, a suggestion that the defendant desires to have the plaintiff vacate the subject property, I have not been presented with any hot contest on that score. There is no present suggestion, in anything like concrete terms, that the plaintiff's occupancy of the property is to be disturbed pending the determination of the proceedings. 92I make that observation, not for the purpose of constraining the parties in anything they might do, or not do, but to place on record my present appreciation of the determination of the parties to have any disputes between them litigated in an orderly way.
CONCLUSION 93Weighing all factors in the balance, in my opinion the interests of justice would not be best served by a general order for the provision of security in this case. Nor, in my opinion, would the processes of the Court be abused by the plaintiff's maintenance of his claims for relief without the provision of security for costs at this stage of the proceedings. I am mindful, in particular, that substantial preparations have been made for trial on both sides of the record; there are disputes of fact that, ultimately, can only be resolved by a trial judge; and, as it presently appears to me, the proceedings may benefit from "case management" directions. 94In these circumstances, in my opinion, the appropriate course for me to adopt is to dismiss the defendant's motion. 95However, dismissal of the motion should not be taken as a decision against an order for the provision of security, or for the payment of expenses, limited in scope to a reasonable contribution to the expenses of witnesses of the defendant - perhaps not the defendant himself - required to attend Sydney for cross-examination. 96Whether or not such an order should be made at some future time must remain an open question. The proceedings have not yet been set down for trial. There may be at least some additional evidence to be prepared in advance of trial. It is desirable, in my opinion, that the parties engage in a process of mediation before gearing up for a trial. The appropriate time to consider whether or not in all the circumstances, the Court can or should make an order of the type contemplated by Stanley-Hill v Kool, is likely to be in the aftermath of a mediation if the parties should be so unfortunate as to fail in their endeavours to reach a negotiated outcome at mediation. 97In summary, I propose to dismiss the current motion, reserving to the defendant (should he be so advised) an opportunity to apply in due course for a limited form of order of the nature discussed in Stanley Hill v Kool. I propose to make an order for a compulsory mediation before a court appointed mediator. I propose, in that light, to order that the proceedings be stood over to a nominal date before the Registrar, sufficiently distant in time to enable a mediation to be held. 98I will hear the parties as to the desirability of any other directions at this stage, including on the topic of whether or not the defendant should be required now to file a cross-claim for withdrawal of the plaintiff's caveat.
ORDERS 99Subject to any submissions that may be made about particular orders, I propose to make the following orders: (a) Order that the notice of motion filed by the defendant on 5 June 2012 be dismissed. (b) Order pursuant to section 26 of the Civil Procedure Act that the proceedings be referred for mediation before a mediator appointed by the court. (c) Order that, in anticipation of the earlier conduct of a mediation, the proceedings be listed for directions before the Registrar at 9 am on 4 February 2013. (d) Order that any cross-claim to be filed by the defendant seeking an order for withdrawal of caveat number AG 911977 from the title to the subject property (folio identifier 612/28915) be filed and served on or before 4 February 2013 or such other date as may be appointed by the court. (e) Order that the costs of the defendant's motion be the parties' respective costs in the proceedings. (f) Order that the proceedings be referred to the Registrar for the purpose of giving such directions as may be necessary for the conduct of a mediation or for incidental purposes. (g) Reserve liberty to apply on three days notice. 100In my assessment it is appropriate that costs of the motion be costs in the cause because it was not unreasonable for the defendant to file his motion in light of the plaintiff's correspondence and changed circumstances, and because the motion has provided an occasion, I hope constructively, for the state of readiness of the proceedings to be reviewed in circumstances in which the plaintiff was available to make submissions generally. 101[After allowing the parties on opportunity to make submissions about the form of orders to be made, orders were made as here proposed].
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: 04 September 2012
Chau Ting Yung
Chau Ming Yung
(1964) 112 CLR 115
(2002) 54 NSWLR 598