(vi) the amount claimed by way of security is, in any event, excessive.
14 It is convenient to address those matters in turn.
15 There is evidence that the defendant has the benefit of an insurance policy of professional malpractice indemnity insurance which is provided to members of the Australian Physiotherapy Association. According to the wording of the policy, the defendant is covered against an award to the limit of indemnity, ("$2,000,000 any one claim and $4,000,000 in the aggregate"), and in addition against "the costs and expenses incurred by or on behalf of the insurer and the costs and expenses incurred by the member…in the defence…of any claim." Mr Lovas submitted the existence of this policy is a relevant consideration. He drew attention to the decision in Remm Construction (SA) Pty Limited v Allco Newsteel Pty Limited & Ors (1992) 57 SASR 180 and to the dicta of King CJ concerning an application for security for costs. In that case King CJ said (at 186):
"…I can see no reason to treat an action against a defendant who is insured against liability differently from one in which the defendant has no such insurance. In weighing the factors affecting the provision of security for costs, the ability of the defendant to absorb the costs, if he is unable to recover them from the plaintiff, is a relevant consideration. Any insurance cover would be relevant in assessing that factor."
16 With the judgment of Chief Justice the other members of the court in Remm agreed, and those dicta were cited by Burley J in Jeffcott Holdings Limited (In Liq) v Paior & Anor 14 ACSR 239. Having cited the passage from Remm, Burley J went on, at 241, to say:
"It is clear from the Chief Justice's statement of principle that it does not follow that, because a defendant has a right of indemnity against an insurer in relation to costs incurred in defending proceedings, security for costs will not be granted on the application of that defendant. It is merely a factor to be taken into account in the context of the defendant's ability to absorb the costs should the defendant be successful and the plaintiff impecunious."
17 Mr Curtin has drawn attention to the decision of Rolfe J in Rickard Constructions Pty Limited v Bonacci Rickard [2000] NSWSC 1124. In that case, Rolfe J was considering an application for security for costs. In defending the application the plaintiff issued a notice to produce to the defendant requiring the production of its professional indemnity policy. Rolfe J determined that the existence of a professional indemnity policy was irrelevant in that case and set aside the relevant paragraphs of the Notice to Produce. His Honour went on to make an order for security for costs. In that case his Honour considered Remm, saying of that decision:
"I do not accept that the Full Court in South Australia in Remm …laid down some general principle that the existence of insurance cover is always relevant. In that case, there was a contractual stipulation that the party seeking security should have insurance against the risk which had come to pass. The court held that it had not been shown that the master or the judge on appeal had acted on an incorrect principle in taking into account the ability of the defendant to absorb the costs which otherwise would fall upon it.
But that, in my view, falls far short of saying, as the plaintiff's submission would have it, that it is necessary for the defendant not only to disclose the nature or extent of any insurance cover but also that if the defendant has insurance, no security should go because it has looked after its own interests in that regard."
18 What Rolfe J determined in Rickard is recorded in paras 26-28 of the judgment:
"26 In my respectful opinion, the fact that the applicant is able to absorb a costs' order, either from its own funds or from the proceeds of an insurance policy, does not preclude its recovering an order for security in appropriate circumstances. The provisions for granting security for costs look to the protection of defendants, whether solvent or insolvent, against insolvent plaintiffs so that, to use the words of Heerey J in Brookfield , the insolvent plaintiff is precluded from "getting the benefit of a proceeding should it succeed, but is protected from the risk of an order for costs should it fail". His Honour referred to this as an 'obviously unjust situation'.
27 I do not see that these principles are any different when applied to a wealthy or an impecunious defendant. The whole focus of an application for security for costs commences with the proposition that the plaintiff is unlikely to be able to meet an order for costs. Thereafter, the Court is given a very wide or unfettered discretion to consider whether, in all the circumstances of the case, it will order security. However, one of those circumstances is not, as a general rule, the capacity of the defendant to absorb the costs by reason of its own financial position or of its being insured in relation to them. It would be, in my opinion, surprising if this was a relevant factor for the reasons I have sought to explain. The general rule has not been shown to be inapplicable in this case.
28 As with Hayne and Heerey JJ, I consider that the existence of a professional indemnity policy, whether at present or in the past and on the facts of the present case, is totally irrelevant to the application and, accordingly, I would set aside paragraphs 1 and 2 of the Notice to Produce."
19 His Honour's references to Hayne and Heerey JJ in the above passages are references to decisions by those judges in cases referred to in Rickard.
20 In Brookfield & Anor v Davey Products Pty Limited & Ors (unreported, Federal Court of Australia, 7 April 1994), Heerey J, in considering an application for security for costs, said:
"There were some other matters which I do not regard as relevant. It was stated on behalf of the company that the respondents were or might be protected to some extent by insurance. With respect to what was said in Remm, I do not regard that as a relevant factor, and I do not take that into account in support of the company's case."
21 Then in Quichorn Pty Limited v Broad & Anor (unreported, Supreme Court of Victoria, 24 January 1994), Hayne J, in referring to cases where an insurer was the defendant, said:
"I consider the better view to be that the fact that an applicant for security is an insurer and that it is resisting a claim by a party on a contract into which it voluntarily entered are matters that may be taken into account in the exercise of the discretion whether to order security, but that there is no general predisposition against the granting of security to insurers. The question will always be one for the exercise of an unfettered discretion …
There is, in my view, no general principle of the kind which the plaintiff's submission suggests might apply to defendant insurers who seek security for costs. Rather, in each case, the position of the applicant must be considered having regard to all of the circumstances that affect an application in those proceedings without any predisposition one way or the other in favour or against the granting of security."
22 Heerey J then went on to consider the relevance of the defendant's ability to absorb costs:
"What then of the other matters mentioned by the plaintiff? It submitted that the second defendant had not disclosed whether it was able to absorb costs that it might have to bear having regard to the benefit of any insurance that it may have. I do not consider that it is right to say that there has been some relevant failure on the part of the second defendant to disclose whether it is able to absorb costs having regard to any insurance it may have.
The plaintiff sought to have me require the second defendant disclose whether or not it was insured. I declined to require the second defendant to do so. In my view, it was not appropriate to make such a requirement of the second defendant. It is for the party seeking security to make out its case, it is for the plaintiff then to set about challenging that case as made.
Even if I were to accept that there is, or at least may be, some such insurance cover of the kind that the plaintiff was enquiring about, numerous other questions would then arise e.g. about the extent of that cover, both as to amount and to the basis on which that cover would extend.
I do not accept that the Full Court in South Australia in Remm .. laid down some general principle that the existence of insurance cover is always relevant. In that case, there was a contractual stipulation that the party seeking security should have insurance against the risk which had come to pass. The Court held that it had not been shown that the Master or the Judge on appeal had acted on an incorrect principle in taking into account the ability of the defendant to absorb the costs which otherwise would fall upon it.
But that, in my view, falls far short of saying, as the plaintiff's submission would have it, that it is necessary for the defendant not only to disclose the nature or extent of any insurance cover but also that if the defendant has insurance, no security should go because it has looked after its own interests in that regard."
23 Mr Lovas submitted that I should not follow Rickard, but, on the contrary, that I should follow Remm. I do not read Remm as authority for the proposition that the existence of insurance cover necessarily defeats an application for security for costs, but rather that the court may take into account the applicant's ability to absorb the cost of the litigation as a relevant consideration. With respect, I consider what Burley J said in Jeffcott (supra) as being a correct analysis of what was relevantly to be drawn from Remm. However, having carefully considered what Rolfe J wrote in Rickard, consistent as it is with the approach of Heerey J in Brookfield and of Hayne J in Quichorn, I consider I should follow Rickard. As a consequence, in recognition of the general rule as stated by Rolfe J in para 27 of his judgment, I consider I should treat the existence of the policy of indemnity in favour of the defendant as irrelevant to this application. I should add that even if it was relevant to bring into account the existence of the policy as one matter to be weighed, such existence would not alter the outcome that I conclude should be reached on the view that I take of this application overall.
24 The next matter raised by Mr Lovas concerned the plaintiff's asserted lack of funds. As I indicated during the hearing of this application, I consider the evidence about this to be unsatisfactory. There is no evidence before the Court from the plaintiff and the only evidence in point is to be found in paras 28, 29 and 30 of the affidavit of Janine Smith:
"28. I am instructed by the Plaintiff and verily believe that the Plaintiff does not have, and cannot afford to pay into Court, the sum of $50,000.00 which the Defendant seeks as security for costs.
29. It is the Plaintiff's evidence that she has suffered significant loss of income to date and loss of earning capacity in the future due to the Defendant's negligence. The Plaintiff's loss of earnings is particularised in the further and better particulars provided to the Defendant's Solicitors on 13 August 2002 and is set out in the Part 33 Rule 8A Statement of Particulars filed on 2 May 2003. The Defendant's negligence has placed the Plaintiff in a position of financial disadvantage relative to her pre-injury position and means that she cannot afford to pay into Court the sum sought by the Defendant.
30. I am instructed by the Plaintiff and verily believe that if the Court orders the payment of security for costs by the Defendant, the Plaintiff will be unable to pursue her claim."
25 This evidence does not permit me to make an assessment of the plaintiff's ability to comply with an order for security for costs be it in the amount of $50,000 or in some lesser amount. There is no evidence as to the plaintiff's resources and the particulars filed under Pt 33 r 8A are an unsatisfactory and inadequate source of information. Still less do those particulars constitute evidence.
26 Having regard to the same shortcomings in the evidence, the submission that the making of an order for security would frustrate the pursuit of the proceedings has not been established.
27 Mr Lovas has submitted that this application should be dismissed because of the delay in making it. Any delay is, of course, a relevant consideration to be carefully weighed. The statement of claim was filed in April 2001 but it was not served until 19 September 2001. The defendant is not to be blamed for that delay. An appearance was filed promptly after service of the originating process and then the defendant requested further and better particulars, and these were requested promptly enough. There was then, however, delay on the plaintiff's part because the particulars were not supplied until 13 August 2002. I do not consider it was unreasonable for the defendant to seek particulars in the matter before pursuing an application for security. There was delay from the provision of the particulars until December before the defendant's solicitors first raised the question of security for costs. The plaintiff's solicitors responded by telephone on 17 December 2002 that the plaintiff was unlikely to consent to the provision of security but the notice of motion was not filed until the following April.
28 A consideration of the history of this matter does not lead me to conclude that I should refuse to order security although there was delay between the provision of particulars and the filing of the notice of motion. In assessing the significance of delay, I do not overlook the evidence to be found in para 22 of the affidavit of Janine Smith that the plaintiff has incurred costs by way of professional costs and disbursements in preparing this matter in excess of $21,000. However, whilst I do not know what proportion of those costs were incurred before an application for security for costs could have been made had all due expedition been exercised, I consider it likely that, costs of the present application aside, most of the plaintiff's costs thus far incurred would have been incurred by the time the request for particulars was answered in August 2002.
29 Part 53 rule 2 affords a wide discretion in the exercise of which I must have due regard to all the circumstances of this case and the overriding consideration of doing justice between the parties. I conclude that in this case a consideration of all the circumstances requires that I should make an order for security for costs
30 For what sum should security be given? Mr Lovas has submitted that the amount sought, that is $50,000, is excessive. He has drawn attention to one of the estimated costings in annexure B to the affidavit of Deborah Jackson, namely the costings in the preparation of documents for the application for security for costs. According to the estimate, twenty-five hours were required for the preparation of these documents and, presumably, the documents mentioned in that annexure are the affidavit of Deborah Jackson and the notice of motion itself. It does seem to me that twenty-five hours is a very long period indeed to be provided for in the preparation of those documents, and hence I have reservations about the calculation of costs for this item in excess of $5750.
31 Annexed to the affidavit of Janine Smith is a memorandum prepared by an in-house legal costs consultant employed by the plaintiff's solicitors. In that memorandum, the author joins issue with the number of hours calculated in annexure B to Ms Jackson's affidavit. It is pointed out that the defendant is claiming to date some $6000 more than the cost of the work in progress for the plaintiff, including as the latter's costs do, solicitor and client attendances. It is contended that it would be reasonable to provide for less hours to date for the defendant's professional costs than for the plaintiff's professional costs. In the defendant's estimates, the total number of hours claimed for work already undertaken is 129 hours as opposed to the hours undertaken by the plaintiff's solicitors of seventy-four hours, and it is put that a more reasonable claim for hours by the defendant to date would be between fifty-five and sixty hours.
32 It is not possible for me to be precise in the provision I now intend to make but, as indicated earlier, the estimated hearing time for the cause I regard as conservative.
33 Assessing all the material before me at present, I am not persuaded that I should order security in the amount sought but rather for three-fifths of such amount, namely the sum of $30,000.
34 The formal orders of the Court then are as follows: