Johnson v Hone & Anor (No.2)

Legislation Cited: Civil Procedure Act 2005 (NSW) s 98(4)(c)
Uniform Civil Procedure Rules 2005 r 42.21

Cases Cited: Abi-Rizk v BB Dundas Pty Ltd in its capacity as Trustee of the BB Dundas Trust [2025] NSWSC 1063
Ballard v Brookfield Australia Investments Ltd [2013] NSWCA 82
Johnson v Hone [2025] NSWDC 319
Mananti Plumbing Pty Ltd v Universal Property Group Pty Ltd (No 2) [2025] NSWCA 185
Tripod Fund Management Pty Ltd v Shao [2014] NSWSC 1722

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. On 19 August 2025 (see Johnson v Hone [2025] NSWDC 319) I made the following orders in relation to the defendants’ security for costs application:

“(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 Australian 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 for directions.”

2. The first payment was not made on the due date. In response to inquiries, the plaintiff’s solicitor revealed that the plaintiff had left the jurisdiction and was currently residing in Thailand, at an address he was not prepared to give in full. His explanation for leaving Australia without any prior notice to the defendants included a claim that he believed the defendants had hacked his email account but his principal reason for travelling to Thailand was financial impecuniosity.

3. On 15 September 2025, the defendants filed a notice of motion seeking the following orders:

4. Order pursuant to Part 42.21(3) of the Uniform Civil Procedure Rules 2005 (“UCPR”) that the amended statement of claim filed 23 May 2025 be dismissed.

5. In the alternative, order that pursuant to UCPR 14.28(1), the amended statement of claim is struck out.

6. An order the plaintiff pay the defendants’ costs of the proceeding as assessed or agreed.

7. I heard this application on 18, 25 and 29 September 2025. These are my reasons for granting the defendants’ application and making a gross sum costs order for the sum of $85,052.16.

The evidence

5. The plaintiff sent material direct to the Court without consulting his solicitor on 26 September 2025, making a number of serious allegations. Mr Finch told the Court that he did not read this material but I have taken it into account in relation to costs, at the request of Mr Lewis SC. The plaintiff swore a brief affidavit in Thailand on 17 September 2025.

6. The defendants rely on the affidavit of Andrew Gavin Steward affirmed on 15 September 2025, as well as his previous three affidavits.

The defendants’ application comes before the board

7. On 10 September 2025, the defendants wrote a letter to the plaintiff’s solicitor as follows:

“Dear Colleagues

Toyin Johnson v Michael Hone and Anor. — NSW District Court 2025/00167775

We refer to the above matter, and to the Orders made by Judge Gibson on 14 August 2025, and in particular to Order 2 which requires the first tranche of security for our clients' costs in the amount of $25,000 to be paid by 4 September 2025.

We have not received any communication from you confirming that payment has been made. Our inquiries with the Registry indicate that no such payment has been made.

On this basis, it would appear that the Plaintiff has failed to pay the first tranche of security in compliance with Order 2.

Additionally, we understand that no Amended Statement of Claim has been filed in accordance with Order 5.

Please let us know as a matter of urgency if our understanding of the above matters is incorrect. Unless we receive any information to the contrary by 12 noon on Friday, 12 September, our clients will apply to the Court to strike out these proceedings as permitted under Order 6.”

8. On 15 September 2025, Mr Finch advised that his client was no longer in the jurisdiction.

9. The plaintiff filed an affidavit on 17 September 2025 seeking a stay of proceedings “until at least 4 November 2025… so I may attempt to organise for funds to be transferred from overseas and to the court in Australia”.

10. When the matter came before the court on 18 September, the plaintiff sought an adjournment to put funds together. I stood the defendants’ motion over for argument to 25 September 2025 and granted the defendants leave to file an amended motion seeking a gross sum costs order. That amended notice of motion was filed on 25 September 2025.

11. It was on the basis of this procedural history and this evidence that I heard the application on 29 September 2025.

The relevant principles of law

12. Where a plaintiff fails to comply with an order for security, the court is conferred with power to order that the proceedings on the plaintiff’s claim for relief in the proceedings be dismissed: UCPR r 42.21(3).

13. The exercise of that power to dismiss requires consideration of the seven following matters:

(a) The period of time which has passed since the security was ordered. (b) The likely ability to provide security in the light of the circumstances of the case. (c) The extent to which the plaintiff has been on notice of the dismissal application. (d) The likelihood of prejudice to the parties, in terms of whether to stay or continue the order, or terminate the proceedings, or vary the order. (e) The impact on the court of continuing stay, including court resources. (f) The ability of the plaintiff to commence fresh proceedings. (g) Prejudice to the plaintiff by reason of striking out proceedings, such as the expiry of the limitation period. That is relevant in this case is the limitation period has expired.

14. In Tripod Fund Management Pty Ltd v Shao [2014] NSWSC 1722, Rein J stated at [11]:

“The authorities establish that, if a significant sum is ordered by way of security and the plaintiff with due notice of the dismissal application fails to satisfy the Court that there is any prospect of complying with the order, the proceedings should ordinarily be dismissed: see Porter v Gordian Runoff No 3 [2005] NSWCA 377 and Ballard v Brookfield [2013] NSWCA 82 per Ward JA at [103].”

15. The court is reluctant to strike out proceedings where the company the subject of the security for costs order falls at the first hurdle. However, repeated failures are viewed in another light. In Ballard v Brookfield Australia Investments Ltd [2013] NSWCA 82, where there was partial compliance followed by failures to pay, Ward JA stated at [103]:

“The unfortunate position for Mr Ballard is that he has no funding for an appeal if (as it has been) the outcome of his motion is unsuccessful and on that basis has no prospect of being able to continue with the appeal. In Porter v Gordian Runoff Ltd (No 3) [2005] NSWCA 377, it was said that if a significant sum is ordered by way of security and the plaintiff with due notice of the dismissal application fails to satisfy the court that there is any prospect of complying with the order, the proceedings should ordinarily be dismissed.”

16. The court will always look first to alternatives to dismissal, such as variation and reduction of the sum claimed. The proposals put by Mr Finch on behalf of his client were to that effect. Essentially what was put to the court was that $12,500 could be paid relatively quickly. If that occurred, the question would then be one of whether a variation for that figure would be appropriate.

17. Instead, however, the plaintiff has provided no security at all. Not only is this contrary to his evidence in court on the first occasion, but it is strongly suggestive of the likelihood that the plaintiff has no funds of significance.

Conclusion: the proceedings should be dismissed

18. The plaintiff has now had several adjournments to enable him to come up with funds he assures the court are available to him. These include a loan of $50,000 from a relative, advancements from members of his family against his real estate holdings overseas, and funds he claims to have his own account.

19. Despite claiming to have access to such assets, the plaintiff has not paid one penny of the security sum. In the circumstances, the proceedings should be dismissed.

20. Although the time period involved is short, I am satisfied that there is no likelihood of the plaintiff ever paying any sum at all by way of security for costs.

21. It was for the above reasons that I made the order dismissing proceedings set out in my orders of 29 January 2025.

Costs

22. The defendants bring an application for a gross sum costs order pursuant to s 98(4)(c) of the Civil Procedure Act 2005 (NSW).

23. The relevant principles with the making of a gross sum costs order have been most recently considered in Mananti Plumbing Pty Ltd v Universal Property Group Pty Ltd (No 2) [2025] NSWCA 185 and in Abi-Rizk v BB Dundas Pty Ltd in its capacity as Trustee of the BB Dundas Trust [2025] NSWSC 1063. The issues for determination are essentially whether the matter is an appropriate one for a gross sum costs order and whether there is sufficient information before the Court to enable such an assessment to be made.

24. As to the first of these, applications for gross sum costs orders are particularly well-suited to certain circumstances, such as the costs of costs appeals, applications for security for costs and matters where the parties are of limited means. I have already had occasion to look at the likely costs in this matter which include costs to date as well as future costs.

25. As to the second, Mr Stewart has set out, in careful detail, how he has arrived at a total cost of $218,082.46. Applying a significant discount of 65% to allow for vicissitudes, he was able to reduce this figure to $141,753.60. When the attention of Mr Stewart was drawn to the Costs Assessment Rules Committee guidelines, he applied a further 40% discount and reduced the sum to $85,052.16. That is the sum sought.

26. Mr Finch submitted that this was a very substantial sum of money for proceedings which have done little more than commence and where the application had been dealt with expeditiously, albeit over several return dates.

27. In reply, Mr Lewis SC emphasised the reasonableness of the sum having regard to the issues of fact and complexities of defamation law and the repeated adjournments resulting from the plaintiff’s response to the application. In addition, the defendants have been put to substantial extra expense by reason of the contents of the correspondence the plaintiff had directed to the Court. The plaintiff not only sent this correspondence to the court but to disciplinary bodies, journalists and other persons wholly unconnected with this litigation, and it had been necessary to seek advice as to what steps to take in relation to the very serious allegations made about not only the defendants but their legal representatives.

28. Costs in defamation proceedings are generally higher than in other causes of action, and an allowance must be made for this. In addition, where a party has put an opponent to additional cost by reason of making the making of allegations to a wide range of persons, requiring answers or other action of the kind that has occurred here, the making of a gross sum costs order of this kind is both fair and reasonable in the circumstances.

29. It was for these reasons that I made the costs orders reflected in the orders I made on 29 September 2025.

Orders

1. Pursuant to Part 42.21(3) of the Uniform Civil Procedure Rules 2005 that the Amended Statement of Claim filed 23 May 2025 be dismissed.
2. Pursuant to s 98 of the Civil Procedure Act 2005 (NSW), the plaintiff is to pay the defendants' cost in the gross sum $85,052.16.

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