Eugene Liu v Fairfax Media Publications Pty Ltd

Judgment 1On 4 March 2013 I ordered the plaintiff to provide security for the defendant's costs in these proceedings in the sum of $300,000 within 28 days, and the proceedings be stayed until the security has been provided. These are my reasons. 2By further amended statement of claim filed 24 June 2011 the plaintiff claims damages for the publication in the newspaper "The Sydney Morning Herald" on 21 October 2009 of an article under the heading "Grinning all the way to the bank - until watchdog started sniffing", and of an article under the heading "ASIC silent on order against Trio". The imputations alleged include imputations that the plaintiff was the subject of criminal charges, filed against him by ASIC in October 2009, and that the plaintiff behaved in such a way as to warrant ASIC filing charges against him in the equity division of the NSW Supreme Court in October 2009. By its further amended defence filed 10 July 2012 defences raised by the defendant include those of truth, and contextual truth. The trial is fixed to begin on 11 June 2013 for which three weeks have been set aside. 3The defendant's application is under Uniform Civil Procedure Rules 2005 Pt 42, r 42.21(1) which relevantly provides: "42.21 Security for costs (1) If, in any proceedings, it appears to the court on the application of a defendant: (a) that a plaintiff is ordinarily resident outside New South Wales, or... 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." 4In support of its case that the plaintiff is ordinarily resident outside New South Wales the defendant relied on the following evidence. 5On 19 November 2010 the plaintiff was issued with a Criminal Justice Stay Visa (the visa), the terms of which included the following: "(the plaintiff) IS A CITIZEN OF THE UNITED STATES OF AMERICA AND HOLDS VALID UNITED STATES OF AMERICA PASSPORT NUMBER ## ##, EXPIRY ## ## ##. YOUR STAY IN AUSTRALIA AS A CRIMINAL JUSTICE STAY VISA HOLDER HAS BEEN APPROVED UNTIL THE CRIMINAL JUSTICE STAY CERTIFICATE IS CANCELLED." 6Documents produced by the Department of Immigration and Citizenship on subpoena included an advice that the visa had been revoked on 17 September 2012. Although required to do so by the subpoena, the Department produced no documents evidencing, or relating to, any application by the plaintiff for an Australian visa. By letter of 2 November 2012 to the defendant's solicitors, the plaintiff's then solicitors advised that the plaintiff left Australia on 14 September 2012, and, since 1 October 2012, had been attempting to obtain a visa to enable him to re-enter Australia, but without success. 7By letter of 22 January 2013 to the plaintiff's then solicitors, the defendant's solicitors requested the plaintiff to provide security for its costs in these proceedings, failing which application would be made to the court on 4 February 2013. By letter of 30 January 2013 to the plaintiff's then solicitors, the defendant's solicitors advised of the intention to proceed with the application on 4 February 2013, and enclosed a copy of the notice of motion and a notice to the plaintiff to produce documents in the categories specified therein. Although various documents were produced in response to the notice, none was produced which was within the category of documents referring to and/or evidencing the plaintiff's attempts to obtain a visa to enable him to re-enter Australia from the period 14 September 2012 to date. Furthermore, no document was produced which was in the category of documents referring to and/or evidencing the plaintiff's place(s) of residence for the period 15 September 2012 to date. 8In my opinion, the evidence taken overall supports the findings, which I make, that the plaintiff is a citizen of the United States of America, but is without any legal entitlement to enter Australia. It also appears that the plaintiff has made no application, or any successful application, for a visa which would allow him entry to Australia. These facts are sufficient, in my opinion, for the finding that the plaintiff is ordinarily resident outside New South Wales and, accordingly, the court's jurisdiction under r 42.21 is enlivened. 9The next ground relied upon by the defendant was that there was no evidence that the plaintiff had any assets in Australia or, indeed, in any foreign jurisdiction. 10There was evidence that on 14 September 2012 the Deputy Commissioner of Taxation obtained judgment against the plaintiff for the sum of $750,000 for unpaid taxes. Documentary evidence produced by the plaintiff in response to the notice to produce indicates that the Deputy Commissioner has commenced recovery proceedings under a garnishee notice served on AMP Bank Ltd, and advised the plaintiff's then solicitors by letter of 7 November 2012 that it would neither consent to nor oppose, any leave application which the plaintiff might file in respect of the lodgement of a notice of intention to appeal. The evidence does not disclose whether any appellate proceedings have been initiated by the plaintiff. 11The notice to produce also required the production of documents in various categories relevant to the disclosure of the plaintiff's financial position in Australia, including his assets and liabilities. No document within these categories was produced. 12The upshot is that the evidence demonstrates that the plaintiff is indebted to the Deputy Commissioner for a very substantial sum of money, and there is no evidence that he has any assets either in Australia or elsewhere. His failure to provide evidence of such assets although given the opportunity to do so permits an inference that he has no assets in Australia against which execution could be levied in the event of a costs order against him (cf: Ezzo v Grille [2003] NSWSC 776, pars 37, 38). 13In the exercise of the court's discretion regard must be had to the following observation of McHugh J in P S Chellarm & Co Ltd v China Ocean Shipping Co & Anor [1991] HCA 36; (1991) 102 ALR 321, p 323: " ... However, for over 200 years, the fact that a party, bringing proceedings, is resident out of the jurisdiction and has no assets within the jurisdiction has been seen as a circumstance of great weight in determining whether an order for security for costs should be made. Indeed, for many years the practice has been to order such a party to provide security for costs unless that party can point to other circumstances which overcome the weight of the circumstance that that person is resident out of and has no assets within the jurisdiction." 14Relevant factors for consideration were stated in Dalton & Anor v TCN Channel Nine Pty Ltd & Ors [2009] NSWSC 492, par 25 by Hall J to include: "25 The following matters in particular I note:- (1) An order for security for costs is entirely discretionary in nature. The discretion, furthermore, is a broad one. (2) In the exercise of the discretion, it is necessary to identify the specific matters that are relevant to the exercise and the factual issues raised in relation thereto by the parties. (3) The fact of the plaintiffs' overseas residence is not only a circumstance which triggers jurisdiction to make an order for security for costs, but it is also plainly a relevant matter to be taken into account in the exercise of the discretion. See Ezzo v Grille (supra) at [37]. (4) The fact that a plaintiff is a foreign resident who does not have assets within the jurisdiction is also a relevant matter. (5) The mere fact of overseas residency, even when coupled with the absence of assets within Australia, is not determinative of the application, but it is nevertheless a factor of some weight: Ezzo v Grille (surpa) at [39]). (6) It has been the practice of the Federal Court and other superior courts to order a plaintiff who is ordinarily resident outside the jurisdiction to provide security unless that party can point to other factors which overcome the weight of the circumstances that the person is resident out of and has no assets within the jurisdiction. See Readymix Holdings International Pty Limited v Wyeland Process Equipment Pty Limited [2008] FCA 373 per Flick J at [12] and the authorities to which his Honour refers." 15Although the mere fact of overseas residence, even when coupled with the absence of assets within Australia, is not necessarily determinative of an application for security nevertheless, in this case, absent evidence to overcome these factors I find the order sought should be made. 16The defendant's solicitor, a practitioner of extensive experience, has provided a detailed estimate as to costs of further preparation and for the hearing. In his assessment the total amount of costs and disbursements would be in the sum of $770,887. In the present circumstances, in my opinion, the appropriate amount to be ordered for security is $300,000. It will be open to either party to apply to vary the order should it become necessary to do so.