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[2012] NSWDC 84
District Court of NSW
2012-05-29
Mr P
Original judgment source is linked above.
The application was not made at the first opportunity 33An application for security for costs should be made promptly. The defendant waited between filing a defence in these proceedings in February 2011 until 22 September 2012, when a request for security was made. 34The defendant submits that during the time in question, necessary inquiries, including requests for particulars and the obtaining of evidence about the claim, had to be carried out. 35The delay in question is not a significant one. The defendant was entitled to explore issues of liability and quantum before bringing this application. In Ellis v Uniting Church in Australia [2008] QCA 38, the Queensland Court of Appeal made an order for security for costs despite a greater degree of delay by a defendant, albeit in relation to an appeal from a personal injury verdict. 36I am satisfied that the failure to raise this claim prior to September 2011 should not disentitle the defendant from bringing such a claim now.
The defendant's costs cannot exceed $10,000 37The plaintiff submits that, as the plaintiff is likely to receive less than $100,000 in damages, the defendant's costs are capped at $10,000 and the claim for $40,000 is misconceived. 38The plaintiff relies upon s 338(1)(b) Legal Profession Act 2004 (NSW), which provides: "(1) If the amount recovered on a claim for personal injury damages does not exceed $100,000, the maximum costs for legal services provided to a party in connection with the claim are fixed as follows: ... (b) in the case of legal services provided to a defendant-maximum costs are fixed at 20% of the amount sought to be recovered by the plaintiff or $10,000, whichever is greater." 39The defendant submits that the limitation of costs under s 338 applies only if the damages actually awarded fall within this range, and that this limitation does not apply where the defendant is successful. The defendant argues that the provisions of the offer of compromise scheme would prevail over any such restriction. In addition, whether there was an offer of compromise or not, an application could be made, if this provision did have the meaning contended for by the plaintiff, for costs in excess of this sum to be awarded, by reason of the very substantial additional costs incurred by having to retain expert witnesses, issue subpoenae and take evidence (all of which must take place in Ireland). These amounts might well add up to an amount in excess of $10,000, as Mr Huckerby's affidavit makes clear. 40Accordingly, I do not regard the provisions of s 338 as constituting a bar to the making of an order for security for costs.
Conclusions 41The above are the principal matters for consideration relevant to the exercise of discretion to award security for costs. While the claim is reasonably arguable, it is a borderline case. The plaintiff may lack the cash funds to meet an order for security for costs, but she has an asset against which she may borrow, as well as family members in the United States who have loaned her money in the past. Any financial problems the plaintiff suffers from have not been caused by the defendant, although the loss of her part time seasonal employment has contributed to her financial problems generally. 42More importantly, these factors are insufficient to outweigh the difficulty associated with the plaintiff currently residing in Ireland. It is appropriate that security for costs be ordered in these proceedings, for the reasons explained by Gaudron J in Singer v Berghouse at [5]. This is particularly the case where the plaintiff does have assets in the foreign jurisdiction which she is reluctant to encumber. Nor would the making of such an order ensure that the doors of the court are not barred to a resident plaintiff simply because he or she is impecunious (Fiduciary Ltd v Morningstar Research Pty Ltd [2004] NSWSC 664 at [48]).
Terms of the security 43The court has a broad discretion as to the terms upon which security may be ordered. The court does not provide a complete indemnity for costs: Brundza v Robbie & Co (No 2) (1952) 88 CLR 171 at 175. In determining the amount of security, the issues are the applicant's probable recoverable costs if the plaintiff fails and the plaintiff's ability to continue the litigation (Chen v Keddie at [29]). 44The statements as to the likely costs made by Mr Huckerby have not been the subject of challenge. 45Having regard to the orders made by Murrell DCJ in Porter v Aalders Auctioneers and Valuers Pty Ltd at [29] - [30] and by Davies J in Chen v Keddie at [32] - [33], I propose to make an order for more than one payment, with the proviso that if the plaintiff does not make the first payment, then the defendant may move to have these proceedings stayed or dismissed. 46Accordingly, I propose to order the plaintiff to pay $20,000 security for costs by 4 pm on Friday 24 August 2012, and a further $20,000 by 23 November 2012, in anticipation that these proceedings will be listed for a hearing date in early 2013. 47The costs order generally made in these applications is that the costs should be the defendant's costs in the cause: Chen v Keddie at [34]. I propose to make that order.
Orders (1)The plaintiff give security for the costs of the defendant as follows: (a)Payment of $20,000 on or before Friday 24 August 2012; (b)Payment of $20,000 on or before Friday 23 November 2012. (2)The defendant's notice of motion stood over for further directions on Monday 27 August 2012. (3)If the first payment in order 1(a) is not made, the defendant may on 27 August or any day thereafter bring an application for the proceedings to be dismissed. (4)Costs of the application to be the defendant's costs in the cause.
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: 18 June 2012
Jennings-Kelly
Gosford City Council
The issues for determination 5It is conceded that the plaintiff, an Irish national who suffered her injury while on holidays in Australia, is ordinarily resident outside New South Wales (Corby v Channel Seven Sydney Pty Ltd [2008] NSWSC 245 at [6]). The question is whether, in those circumstances, an order for security for costs should be made. The purpose of ordering security for costs against a plaintiff who is ordinarily resident outside the jurisdiction is to ensure that a successful defendant will have a fund available for recovery of costs rather than being forced to seek recovery in a foreign jurisdiction: Singer v Berghouse (1993) 114 ALR 521; (1993) 67 ALJR 708 at [5] per Gaudron J; P S Chellaram & Co Ltd v China Ocean Shipping Co (1991) 102 ALR 321 at 323 per McHugh J; Re Energy Drilling Inc v Petroz NL [1989] FCA 146 at [24]. 6The power to make an order for security for costs is discretionary: Barton v Minister for Foreign Affairs (1984) 2 FCR 463. The relevant considerations are: (a)Whether the plaintiff's claim is made in good faith and appears to be reasonably arguable; (b)Whether the plaintiff's lack of funds has been caused or contributed to by the conduct of the defendant; and (c)Whether the making of the order would unduly stultify the plaintiff's ability to pursue the proceedings.
Whether the plaintiff's claim is in good faith and reasonably arguable 7It is not in dispute that the plaintiff's claim was brought in good faith; the defendant challenges whether the claim is reasonably arguable. 8The track in question is one of five tracks for use by beachgoers. Use of this track is restricted to beachgoers with dogs. It would appear, from track marks, that it is also used for Council beach cleaning vehicles. The plaintiff relies upon expert reports of H L Burn & Associates, which state that the track's use by Council vehicles (which use this access to drive onto and sweep the beach) has degraded the timber boards. Consequently, the crushed sandstone grains underneath the boards can be moved by these vehicles, making it easier for pedestrians bringing their dogs to slip. Mr Burns recommends construction of a ramp, or a grass and board path for dog use, with vehicles banned, or directing persons with animals to another of the four separate routes available to the beach. 9The plaintiff, who is now 61 years of age, came to Australia for a holiday. She has been in receipt of a disability pension since 2003, which she has supplemented, during the past three years, with part time seasonal employment as a hotel receptionist in Ireland, for which she is paid 200 euros a week for about 10 - 12 weeks a year. Other than that, she has no work history. 10The plaintiff's personal injury claim is governed by the Civil Liability Act 2002 (NSW). The injury the plaintiff suffered from her fall was a broken ankle requiring surgery. The plaintiff claims non-economic loss, past and future economic loss, and a claim for home care. A Schedule of Damages tendered on the plaintiff's behalf assesses her non-economic loss as 22% ($20,500), to which are added estimates for past economic loss of $90 per week on average ($20,610) and in the future ($16,108). The total of the claim is assessed at around $57,298. The claim for home care was conceded to be difficult to make out. 11The plaintiff submits that the test of "reasonably arguable" is a low bar, and is readily satisfied by the facts of the accident and by the expert report. 12The defendant has pleaded a defence of obvious risk (s 5F), a defence which the plaintiff asserts is "a matter of opinion and conjecture" (written submissions, paragraph 5). A defence under s 43 has not been, but will be, pleaded. The defendant also makes a claim of contributory negligence. 13The defendant submits that the absence of proper explanation for the circumstances or mechanics of the fall are significant. The plaintiff fell while walking along a bush or beach path, where it was obvious, from the state of the terrain, that care needed to be taken. There was a likelihood that the claim would fail, in that the state of this bush (or beach) path was an obvious risk akin to walking over sand or along any bush path. In the alternative, contributory negligence would be of a very high order. 14It is not appropriate for me to consider the merits of the case in any detailed fashion; the test is whether the claim is reasonably arguable. There is, however, a long line of authority concerning the obligations (or lack thereof) of public authorities for the many parks, beaches and walking or hiking pathways which can be found in scenic and recreational locations throughout Australia: Romeo v Conservation Commission of the Northern Territory [1998] HCA 5. 15In addition, the defendant proposes to rely upon s 43 Civil Liability Act, 2002. The parameters of this defence are unknown, but the environmental undesirability of graveled roads onto beaches, and the problems of policing use, may be matters raised, and were referred to as such by Mr Cummings. 16Taking all of the above into account, this is not an easy case for the plaintiff on liability. It is arguable, but close to the borderline of reasonably arguable. 17As to quantum, the plaintiff's treating specialist, Dr O'Carroll, states that the plaintiff's fracture has healed "very satisfactorily", giving her an "excellent" range of movement; he concludes that he does not anticipate "any major long-term problems with her ankle", although she has had difficulty wearing high heels and intermittent ankle pain. Professor Ghabrial, in a medico-legal report, takes a much less optimistic view, but he has never seen the plaintiff, and makes this assessment base on "her records". 18The plaintiff's claim for non-economic loss is towards the bottom of the range. In addition, the plaintiff's claim for economic loss is somewhat speculative. It would appear that there are no wage or other financial records to support the claim for part time employment, although a request for copies of tax returns has now been made to the appropriate authorities in Ireland. Any claim for damages is likely to be very modest, particularly if there is a reduction of damages for contributory negligence. This is of relevance because the size of the damages claimed, in proportion to the costs, is a factor courts have taken into account when security for costs has been sought in personal injury appeals: Norris v McGeachy [2010] TASSC 20. 19The plaintiff may well have difficulty succeeding with this claim. It is reasonably arguable, but the facts of the case are close to the borderline.
Whether making the order would unduly stultify the plaintiff's ability to pursue these proceedings 24Counsel for the plaintiff submits that the plaintiff's limited means, based on the evidence, would be likely to result in a permanent stay or dismissal, causing significant hardship to the plaintiff, because the plaintiff has no ready ability to meet a security for costs order. 25The plaintiff does have assets upon which she can borrow, and family members in the United States from whom she could request a loan. It is her argument that she should not be called upon to do so. She is not impecunious, nor is any submission made that she does not have the assets with which to comply with an order for security for costs. The submission is that she should not have to use these assets. 26Parties in civil proceedings, particularly personal injury proceedings, may well have insufficient means to conduct their case, and may have arrangements with their legal representatives of a conditional fee agreement nature. There have been statements to the effect that security for costs is an order rarely made in relation to personal injury cases, not only in relation to any appeal, but generally: De Groot v Nominal Defendant [2004] NSWCA 88 at 29 - 30 per Handley JA. However, there is no settled law to this effect. The fact that a plaintiff has brought a case on a conditional fee agreement basis is not of itself sufficient grounds to warrant the refusal of an order for security for costs: Hughes v Janrule Pty Ltd [2011] 177 ACTR 1. While caution needs to be exercised in applying these principles to the case in question, in that the granting of security in relation to appeals turns on different principles, such cases may be of limited assistance as an analogy. 27I am satisfied that the making of such an order will not stultify the proceedings, particularly if, as was the case in Chen, orders for payment in stages are made.
Ease of enforcement in Ireland 29Counsel for the plaintiff sought to distinguish Chen v Keddie [2009] NSWSC 762 on the basis that there were enforcement problems peculiar to China and Thailand, whereas the legal system in Ireland is one where the common law prevails: O'Keefe v Seafresh Holdings Pty Ltd trading as Westmore Seafoods [2009] NSWSC 1090 (15 October 2009 at [16], citing RDCW Diamonds Pty Ltd v Da Gloria [2006] NSWSC 450). Enforcement would, therefore, be relatively straightforward. 30However, as was the case in Porter v Aalders Auctioneers and Valuers Pty Ltd [2011] NSWDC 96 (security ordered where the plaintiff resided in Thailand and owned assets in China) as well as in Chen v Keddie, Australia and Ireland have no agreement for the reciprocal enforcement of judgments: Foreign Judgments Act 1991 (Cth); Schedule 2 to the Foreign Judgments Regulations 1992 (Cth). 31Enforcement in another common law jurisdiction which is not listed in the regulations is neither straightforward nor efficient. In P Blazey & P Gillies, "Recognition and Enforcement of Foreign Judgments in China", International Journal of Private Law (November 2008) (cited in Chen at [18]), the point is made that not only is the system of enforcement in China ineffective, but so is the common law system in Australia: "In Australia for instance, in the absence of reciprocal legislative arrangements with selected foreign jurisdictions for the mutual recognition and enforcement of each other's judgments, the restrictive common law rules govern recognition and enforcement. This common law regime is ineffective." 32Enforcement of the judgment in Ireland is likely to be time-consuming and expensive. This article's description of the Australian system is "ineffective". In the same way, Davies J relied upon its description of the Chinese system of judgment enforcement as ineffective.
[2008] QCA 38
[2010] TASSC 20
[1989] FCA 146
(1984) 2 FCR 463
(1952) 88 CLR 171
(1991) 102 ALR 321
(1993) 114 ALR 521
(1993) 67 ALJR 708