Johnson v Hone & Anor

Category: Procedural rulings

Parties: Plaintiff:
Mr Toyin Johnson
Defendants:
First Defendant: Mr Michael Hone
Second Defendant: Ms Kate Macken

Representation: Counsel:
Plaintiff: Mr W Finch (Solicitor for the plaintiff)
Defendants: Mr M Lewis
Solicitors:
Plaintiff: HFK Lawyers
Defendants: Baker McKenzie

File Number(s): 2025/00167775

Publication restriction: Nil

Judgment

The application before the Court

1. The defendants, who are fellow employees of the plaintiff, bring an application for security for costs on the basis that, despite giving a residential address in Sydney, New South Wales, the plaintiff is in fact ordinarily resident in the United States (Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”) r 42.21(1)(a)) and has given a misstated or false address (UCPR r 42.21(1)(b)).

2. I heard the application on 14 August 2025 and made the orders set out at the end of this judgment. These are my reasons for making these orders.

The proceedings commenced by the plaintiff

3. The plaintiff commenced proceedings in the District Court for defamation for publication of a series of slanders between 8 March 2024 and 3 April 2024. The text of the defamatory words spoken, and the context in which they were spoken, have not been set out in proper form in the statement of claim, and the claim cannot go further until this error is rectified. For the purposes of this application, these publications may be summarised as follows:

(a) The first matter complained of, published to staff members including named persons in the office of the second defendant, was to the effect that “that black guy” (the plaintiff) was dangerous and violent and made other people feel unsafe because of his violent nature. (b) The second matter complained of, published in the course of a telephone call to other staff members, was to the effect that the plaintiff was as unprofessional as he was folder and that he had a habit of “hazing” his juniors in a manner that made him unfit to manage staff. (c) The third matter complained of published to 2 or more staff members in the course of a telephone conversation, was to the effect that the plaintiff did not make himself available for mentoring and remained away from meetings. (d) The fourth matter complained of, published to 2 or more staff members in the course of a telephone conversation, was to the effect that he was absent from work without reason and put clients’ contracts in jeopardy in circumstances where attempts to locate him were unsuccessful. (e) The fifth matter complained of, which was published in the course of a conversation taking place in Port Moresby with two staff members, was to the effect that the plaintiff had menaced another staff member all day and made her feel uncomfortable and unsafe. (f) The sixth matter complained of, which was published in the course of a telephone conversation to another employee responsible for human resources, was to the effect that the plaintiff ridiculed and disdained junior staff members and behaved inappropriately as a manager.

4. A concerns notice was served on 8 March 2025 on each of the defendants. On 1 May 2025, a statement of claim was filed; this was amended on 23 May 2025. The address given for the plaintiff, in both the original and amended statement of claim, was an apartment in Ultimo, Sydney, New South Wales.

The procedural history of the claim

5. On the first return date, service had yet to be effected on both defendants. On the second return date, 12 June 2025, orders were given for the bringing of an application for security for costs on behalf of the defendants. That notice of motion was filed on 20 June 2025. The orders sought in the notice of motion are as follows:

6. An order pursuant to r 42.21(1) of the Uniform Civil Procedure Rules 2005 (NSW) that the Plaintiff provide security for the Defendants’ costs of this proceeding in the sum of $105,456.00, or any other such amount to be determined by the Court by way of a first tranche.

7. The Plaintiff is to give the above security within 28 days by either:

(a) paying the above sum into Court; or (b) by delivering to the Registrar of the Court a bank guarantee for the payment of that sum issued by an Australian Bank; or (c) any other method that is agreed in writing by the parties.

3. The proceedings be stayed until the Plaintiff has paid the above security in accordance with Orders 1-2 above.
4. If the Plaintiff fails to comply with Orders 1-2 within 28 days of entry of these orders, the Defendants shall be at liberty to apply to the Court to have the Plaintiff’s claim dismissed.
5. The Defendants are at liberty to apply for further security.
6. The Plaintiff shall pay the Defendants’ costs of this motion.

The evidence

6. The defendants tendered a Court Book containing the affidavit evidence.

7. An affidavit sworn by Andrew Stewart, the solicitor for the defendants, sets out correspondence between the parties concerning the defendant’s place of residence, property searches and a breakdown of the sum sought for security.

8. Mr Stewart sets out information about the plaintiff having earlier commenced separate proceedings in the Federal Circuit and Family Court of Australia against his former employer. It is not in dispute that, in paragraph 29(b) of the plaintiff’s second statement of claim in that court, he has deposed to the fact that he “had to leave Australia and incur the costs of doing so”. It was this statement that caused the solicitor for the defendants, although proceedings had not yet been commenced against them, to enquire as to the plaintiff’s status as a resident in Australia and whether he had any assets in this jurisdiction, and to foreshadow the intention to seek security for costs.

9. This did not result in any reply of substance. Issues of fact such as where a client resides should not require lengthy consideration.

10. Undeterred, Mr Stewart continued to make inquiries about the plaintiff’s whereabouts, and sent the following email on 16 June 2025:

“Dear Mr Hyland,

We refer to your email below and your conversations with Ms Choo on the same day.

We note that in your email, you state that it would be in the interests of both parties’ costs for your client to response to our letter of 4 June 2025. You intimated to Ms Choo that there would be matters your client will raise which will be pertinent to our client’s application for security for costs.

The central issue raised in our letter of 4 June 2025 is whether your client is currently ordinarily resident overseas. This appears to be a relatively straightforward issue.

While we appreciate that Mr Finch is overseas, we note that the automated reply we received to our letter of 4 June stated:

Thank you for your email. I am currently travelling in the United Kingdom and will be out of the office from 22 May to 16 June 2025.

During this period, I will have intermittent access to email and internet. Please note that due to the time zone difference, there may be delays in my response.

If your matter is urgent, please contact Luke Hyland on (02) 9307 8900 or via email at l.hyland@hfklawyers.com.au.

You were copied to both that 4 June communication and our subsequent letter of 6 June. Mr Finch’s automated reply did not indicate that he was totally indisposed and further indicated that during his travel you should be contacted in relation to any urgent matters, which was done in the course of both communications.

Given that the fundamental issue is one of fact as to your client’s country of residence, it is not apparent why instructions cannot be sought while Mr Finch is travelling. Noting Mr Finch’s return to the office is today, it is similarly not apparent as to why it would take up to a further 5 days for a response to be provided.

In any case, we encourage you to respond substantively to our letter of 4 June as soon as possible.”

11. The plaintiff swore an affidavit which required a correction to be made on oath (namely a description of his employment as “solicitor”) and was cross-examined both on this correction and concerning his address and financial position. In the course of that cross-examination, he made concessions about his place of residence, financial circumstances and employment, details of which are referred to in the summary of submissions set out below.

The parties’ submissions

12. The position taken by the plaintiff changed during the argument. Initially, it was as follows:

(a) No order for security for costs should be made, as the plaintiff has been obliged to leave Australia by reason of the conduct of the defendants, in that he was unable to obtain the sponsored employer after ceasing employment on 11 May 2024 and had to leave Australia as a result. Had it not been for the conduct of the defendants as set out in the matter complained of, the plaintiff submits that he would have remained an employee and would have had a visa permitting this. (b) Any order for security for costs would stifle the proceedings: UCPR r 42.21(1A)(f). As a result of losing his job by reason of the defendant’s conduct, the plaintiff was unemployed and would not be able to pursue what Mr Finch referred to as his “genuine and very strong claim”. (c) The addresses given by the plaintiff in the statement of claim and in the amended version of this document were given in circumstances where, Mr Finch asserted, the plaintiff sought to “adhere to his obligations to provide an address in New South Wales”. The plaintiff was not impecunious as claimed and had provided details of his assets in his affidavit.

13. After the plaintiff’s cross-examination, when the plaintiff conceded he did not reside at the addresses in New York or Ultimo and that there were errors in his affidavit about his finances, Mr Finch essentially conceded that the plaintiff was an overseas resident and that the financial position set out in his affidavit was insufficient to comply with any security costs order of any size. He submitted that any such sum should be of modest size and payable later in the litigation, in tranches.

14. Mr Lewis SC submitted that, in addition to the concessions made by Mr Finch, the plaintiff’s shifting answers in cross-examination meant that none of his testimony could be relied upon and that the sum for security for costs should be substantial, as there were likely to be significant interlocutory applications including the determination of serious harm.

The relevant statutory provisions

15. UCPR rule 42.21 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 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.

(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.

(1B) If the plaintiff is a natural person, an order for security for costs cannot be made merely on account of his or her impecuniosity.

(2) Security for costs is to be given in such manner, at such time and on such terms (if any) as the court may by order direct.

(3) If the plaintiff fails to comply with an order under this rule, the court may order that the proceeding on the plaintiff's claim for relief in the proceedings be dismissed.

(4) This rule does not affect the provisions of any Act under which the court may require security for costs to be given.”

16. Although r 42.21(1A) UCPR provides a list of factors, these are not exhaustive: Etnyre v Australian Broadcasting Corporation [2021] FCA 610 at [17]. Any relevant factor that may be taken into account by the Court are unrestricted, providing that the discretion is exercised judicially. Such cases generally turn upon their own facts. There are no special provisions for the making of security for costs orders in defamation.

17. Applications for security for costs in defamation proceedings were comparatively rare until the uniform legislation was enacted in 2005, but are now increasingly common (Corby v Channel Seven Sydney Pty Ltd [2008] NSWSC 245; Moran v Schwartz Publishing Pty Ltd (No 6) [2016] WASC 168; Kazal v Fairfax Media Publications Pty Ltd (No 2) [2017] NSWSC 1252). This is the case in courts of Federal as well as State jurisdiction, where such applications are generally determined at the first opportunity despite the reluctance of some courts to permit interlocutory applications in defamation (see, for example, Schiff v Nine Network Australia Pty Ltd (No 5) [2023] FCA 753 and Etnyre v Australian Broadcasting Corporation at [14]). Particular care is taken where the place of residence is a country like the United States, where enforcement of the judgment will be difficult: Ezzo v Grille [2003] NSWSC 776 at [48]. Undertakings may be proffered where this is the case: Etnyre v Australian Broadcasting Corporation at [21] and [27] – [28].

18. The requirements for providing an address are set out in UCPR r 4.5, which provides:

“Address for service

4.5 Address for service

(1) Subject to subrule (2), a person's address for service is to be the address of a place in New South Wales (other than a DX address)--

(a) at which documents in the proceedings may be left for the person during ordinary business hours, and

(b) to which documents in the proceedings may be posted for the person.

(2) The address for service of a person who has a solicitor on the record is to be--

(a) the office of the solicitor on the record, or

(b) if the solicitor on the record has another solicitor acting as agent, the office of the agent.

(3) Despite subrules (1) and (2)--

(a) the address for service of a defendant who is served with originating process outside New South Wales, but in Australia, may be any address in Australia, whether inside or outside New South Wales, and

(b) the address for service of a person who files a notice under section 19(1) of the Mutual Recognition Act 1992 of the Commonwealth (other than a person who is represented by a solicitor) may be any address in Australia, whether inside or outside New South Wales, and

(c) the address for service contained in an application to set aside a subpoena made under section 35 of the Trans-Tasman Proceedings Act 2010 of the Commonwealth (other than a person who is represented by a solicitor) may be--

(i) any address in Australia, whether inside or outside New South Wales, or

(ii) any address in New Zealand, and

(d) the address for service of a person who has entered an appearance under the Service and Execution of Process Act 1992 of the Commonwealth is to be the address for service stated in relation to the appearance.”

19. The requirement for the giving of a correct address is no mere technicality. A correctly stated current residential address has always been a prerequisite to the commencement of proceedings. In Sheen v Burke [1993] 1 VR 584, Beach J noted that the address a plaintiff is required to endorse on a writ is a current residential address, adding that this provision was designed to deter persons from making fraudulent or mischievous claims or avoiding orders for costs or security for costs (see also Anderson v Beldev MI Pty Ltd [2025] NSWSC 471). Addresses of businesses run by third parties (Kostov v Zhang; Kostov v Fairfax Media Publications Pty Ltd (No. 3) [2017] NSWDC 89 at [28]: fast food restaurant) or post office boxes (Kelly v Mosman Municipal Council [2010] NSWCA 370; 178 LGERA 136) are similarly unacceptable.

The plaintiff’s evidence of his address and finances

20. The plaintiff gave the following addresses, each of which failed to comply:

(a) He gave an address for a residential apartment in Ultimo at which he admits that he does not reside, although he claims he lived there for a period of time when he was in Australia and working for the company. The identity of the actual resident is a mystery. (b) He gave his current address in Australia as 161 Elizabeth Street, which he said could be used for mail purposes, but this is the address of a hotel in the Sheraton chain, not a residential address. In addition, he provided no evidence he was actually staying at the Sheraton. (c) His address in the State of New York is, he conceded, not an address at which he resides, although he claims that mail can be sent there. He did not give an actual address as his place of residence in the United States although he had been living there until he arrived back in Australia, which I infer from the evidence was within a few days after his solicitor wrote to the defendants’ solicitors advising the plaintiff was absent overseas. (d) He referred to having family members who lived in Canada and Nigeria, asserting that these persons gave him support of a financial (but not, apparently, residential) nature. He also referred to a former work colleague in Sydney who was storing some of the “personal items” referred to in his list of assets but refused to provide his name as he feared retribution from the defendants’ employer.

21. The plaintiff’s belligerence in the witness box included refusing to answer questions and attempting to argue with Mr Lewis SC. That did not help his case.

22. The plaintiff’s evidence of his financial position was similarly unhelpful. His only asset of substance appears to be his share of a property his family in Nigeria sold. There are caps on the amounts of money permitted to be sent from Nigeria, the plaintiff stated, so his family in Canada are sending him this sum in dribs and drabs. There is no documentation in relation to this real estate sale.

23. The end result is that the court cannot be satisfied that it has any address for the plaintiff, either in Australia or in the United States, or that the statement of financial matters is correct.

24. I take into account, in relation both to the making of an order for security for costs and its size, the reluctance frequently expressed concerning the making of orders for security for costs against persons as opposed to corporations.

25. Mr Finch submits that I should also take into account his description of the plaintiff having a strong claim and the likelihood that the litigation would be stifled if I were to make an order for security of any substance.

26. The strength of the plaintiff’s claim cannot be ascertained because it is not properly pleaded. All that can be ascertained is that it is a publication of a limited nature to fellow employees at a time when their employer was considering terminating the plaintiff’s services. This is not a factor to which any weight should be given. Similar problems arise in relation to the claim that the litigation would be stifled: Etnyre v Australian Broadcasting Corporation at [31].

Conclusions: security for costs should be ordered

27. By reason of the plaintiff’s failure to give a satisfactory residential address and the fact that he clearly resides overseas, the defendants have established that security for costs should be ordered. The sole question remaining is the quantum.

28. In the notice of motion, the sum of $105,456.00 was sought as a “first tranche” which will cover the period up to the matter being ready for a serious harm hearing or alternatively an early hearing date. During the hearing, Mr Lewis SC put this figure down to just over $75,000. Both Mr Lewis SC and Mr Finch submitted a range of figures likely to represent the costs of conducting proceedings in the District Court.

29. I recently had the benefit of seeing an expert report prepared by a costs assessor for the cost of defamation proceedings for a six-day hearing, including interlocutory steps: Prouten v Buxton (No 2) [2024] NSWDC 445. On an ordered basis, those costs came to $178,223.50. There was no separate determination of serious harm because the publication occurred prior to the legislative amendments introducing serious harm, but the cases are otherwise quite factually similar, and the methodology of the costs assessor (Mr Chris Wall) is of assistance in determining quantum issues.

30. One difference is that Mr Lewis SC charges at senior counsel rates, but he does not have a junior, so the total sum for counsel is likely to be similar to a case run by two juniors, as was the case in the costs report prepared in that litigation.

31. Adopting the approach taken by the costs assessor, Mr Wall, and factoring in the serious harm issue, I consider an appropriate sum representing the first tranche up to preparation for (but not including) a serious harm determination to be $70,000. That sum should be paid in two tranches, as is set out in the orders I made.

Costs and other orders

32. The defendants have been successful in their application and proposed a sum very close to that which was ordered. The plaintiff should pay the defendants’ costs.

Orders:

1. An order pursuant to r 42.21(1) of the Uniform Civil Procedure Rules 2005 (NSW) that the Plaintiff provide security for the Defendants’ costs of this proceeding in the sum of $70,000 to be paid in two tranches as set out below.
2. The first tranche of $25,000 is to be paid by 4 September 2025 and the second tranche of $45,000 is to be paid by 6 November 2025 in the manner set out in order 3 below.
3. The plaintiff is to give such security on the dates set out in the previous order by either:

(a) paying the above sum into Court on the respective dates; or (b) by delivering to the Registrar of the Court a bank guarantee for the payment of that sum issued by an Australian Bank; or (c) any other method agreed in writing by the parties.

4. Apart from compliance with the requirement to file an Amended Statement of Claim (order 5 below), the proceedings be stayed until the Plaintiff has paid each of the above securities in accordance with Orders 1-2 above.
5. The plaintiff is to file an Amended Statement of Claim setting out the full text (including context) of each of the matters complained of and provide residential addresses in both Australia and the United States.
6. The Defendants are at liberty to apply for further security or striking out of these proceedings in the event of non-compliance with the orders set out above.
7. The Plaintiff shall pay the Defendants’ costs of this motion.
8. Matter listed for directions on 20 November 2025.

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