Liu v Fairfax Media Publications Pty Ltd

The Evidence 9In her affidavit affirmed 19 July 2013, Ms Norman stated that the plaintiff did not participate in the hearing of the Notice of Motion heard before Nicholas J in which the defendant sought an order for security for costs. 10In his judgment delivered on 7 March 2013, Nicholas J observed that whilst the fact that the plaintiff resided overseas, coupled with the absence of assets within Australia, was not necessarily determinative of the application for security, nonetheless, absent evidence to overcome those matters his Honour determined that an order should be made. 11Accordingly, his Honour ordered security in the amount of $300,000. His Honour noted that it was open to either party to apply to vary the order should it become necessary to do so. 12Ms Norman's first affidavit annexes correspondence, including emails sent to the plaintiff and the absence of any response to her email of 4 April 2013 concerning a directions hearing that was to take place on 5 April 2013 before Garling J. 13On the latter date, the Court was informed that the plaintiff had not provided the security in accordance with the order made on 7 March 2013. On the application of the defendant, the hearing due to commence on 11 June 2013 was vacated and the proceedings stood over for further directions before the Registrar on 10 July 2013. 14Notwithstanding correspondence by email to the plaintiff, the defendant's solicitor did not receive any response from the plaintiff prior to the directions hearing on 10 July 2013. There was no appearance for the plaintiff on that occasion. 15On 10 July 2013, Ms Norman sent a copy of the Short Minutes of Order made by the Registrar to the plaintiff. The Registrar's orders included an order that the defendant file and serve, on or before 19 July 2013, a Notice of Motion seeking dismissal of the proceedings pursuant to r 42.21(3) of the UCPR, together with any affidavit evidence relied upon in support of the motion, the motion being returnable before the Court on 29 August 2013. 16On 11 July 2013, the plaintiff sent to Ms Norman an email in the following terms: "Ms Norman Thank you for the notification. I have not yet been able to make arrangements for legal representation on this matter nor will I be able to meet your client's required costs undertaking. As such I will be opposing your client's dismissal motion unrepresented. Is there any chance that your client would consider a proposal to stay the matter for a period of around 6 months after which if certain conditions are not met the case can be dismissed? Additionally, can you check if the documents that Kennedys had previously requested from your client are available and sent to me via email? I believe that this request was around the same time that Fairfax had requested the interrogatories. If you have any questions or concerns please feel free to contact me via email. Alternatively you can reach me by phone at [number inserted]." 17On 12 July 2013, Ms Norman sent an email to the plaintiff in response to his email of 11 July 2013. In it, inter alia, Ms Norman stated in relation to the proposal that the plaintiff had raised in the second paragraph of his email, that if he would like to outline the nature of the "certain conditions" that he was proposing, Ms Norman said she would take instructions from her client as to the position on such a proposal. In the meantime, Ms Norman observed, "I will have to proceed with the preparation of the dismissal application." 18At the time of affirming her affidavit on 19 July 2013, Ms Norman stated that she had not received any response to her email of 12 July 2013. 19In her affidavit affirmed 28 August 2013, Ms Norman stated that, following the filing on 19 July 2013 of her previous affidavit, and the Notice of Motion, she caused both the Notice of Motion and her previous affidavit to be served on the plaintiff by email dated 19 July 2013. 20At the time of affirming her affidavit on 28 August 2013, Ms Norman had not received any further contact from the plaintiff either orally or in writing since receiving his email on 11 July 2013.

Submissions 21On the hearing of the Notice of Motion, Mr Dawson relied upon the defendant's written submissions supplemented by oral submissions. 22In his submissions on behalf of the defendant, Mr Dawson referred to the legal principles that apply to the exercise of the power of dismissal contained in r 42.21(3) of the UCPR. 23In this respect it was noted: (i) That the power arises when there has been a breach of an order for payment of security: Idoport Pty Ltd v National Australia Bank [2002] NSWCA 271 at [41] (Idoport). (ii) Principles touching the power to dismiss for want of prosecution do not control the power to dismiss contained in r 42.21(3): Idoport at [45]-[46]. (iii) The discretion to dismiss conferred by the latter provision is a broad one, unfettered by any express limitations: Idoport at [51]. 24In his written submissions, Mr Dawson noted that Einstein J in Idoport v National Australia Bank [2002] NSWSC 18 at [24] identified the following five factors that should be taken into account in determining whether the discretion to dismiss the proceedings should be exercised for failure to comply with an order for the payment of security for costs: (a) The period which has elapsed since the security was ordered: (b) The fact that the plaintiff has been on notice of the application for dismissal; (c) The seeming inability of the plaintiff to further fund the proceedings; (d) The prejudice to the defendant; and (e) The position of the court. 25Mr Dawson noted that this approach had been endorsed by the Court of Appeal in Idoport, and in subsequent decisions: Porter v Gordian Runoff Ltd (No 3) [2005] NSWCA 27 at [24]; Battenberg v Union Club [2007] NSWSC 265 at [32]. 26In the submissions for the defendant, it was noted that 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: Ballard v Brookfield Australia Investments Limited [2013] NSWCA 82 at [99] per Ward JA and Idoport v National Australia Bank [2002] NSWSC 18 at [24] per Einstein J; Idoport v National Australia Bank [2002] NSWCA 271 at [48].

Application of the Principles 27In the present case, it was observed that the period of time that has elapsed from the time that the security was ordered is almost five months (longer than the four month period in Ballard). 28During that period of time, it was noted that the plaintiff has not sought leave to appeal from the order for security, nor sought any extension for compliance and has not taken any steps to remedy his default. 29In relation to his email of 11 July 2013, despite the invitation put on behalf of the defendant to put forward a proposal for consideration by the defendant the plaintiff has not done so and has not communicated with the defendants since the time Ms Norman indicates in her affidavits. 30The plaintiff, it was observed, has been on notice of the defendant's application for dismissal since 9 July 2013. 31The apparent inability of the plaintiff to fund the proceedings was also relied upon as a circumstance in favour of making the dismissal order sought. It was noted that he has been unrepresented since he terminated the authority of his solicitor and that he stated to Ms Norman that he was not "able to meet your client's required costs undertaking" (annexure I to Ms Norman's first affidavit). 32In those circumstances, it was submitted, the Court would have no comfort that the order for security will be complied with and that that is a significant matter in favour of an order for dismissal. 33Additionally, it was submitted that there is obvious prejudice to the defendant in the proceedings remaining on foot with no prospect of resolution. 34It was also contended that it was significant that the plaintiff had not provided any evidence in relation to the defendant's Notice of Motion, despite clearly being on notice of the timetable that has been set by the Court. 35Finally, it was submitted in the circumstances that it is in accordance with the interests of justice that the order sought be made and that the weight of authority supports the making of such an order.

Consideration 36In the consideration of the present application it is appropriate to have regard to the facts and circumstances that led the Court (Nicholas J) to make the order whereby the plaintiff was required to provide security for the defendant's costs in the proceedings in the sum of $300,000 and that the proceedings be stayed until such security was provided. 37In his judgment Nicholas J stated: "8 In 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 ..." 38His Honour also examined the plaintiff's financial position, observing that there was no evidence that the plaintiff had any assets in Australia and that there was evidence of his indebtedness to the Deputy Commissioner of Taxation. On 14 September 2012, the Deputy Commissioner obtained judgment against the plaintiff for the sum of $750,000 for unpaid taxes. His Honour noted that the plaintiff's failure to provide evidence of assets, although given the opportunity to do so, permitted an inference that he has none in Australia against which execution could be levied in the event of a costs order against him. 39His Honour had regard to the relevant factors to be taken into consideration in ordering security for costs and noted the defendant's detailed assessment of costs for further preparation for the hearing and disbursements was approximately $770,000. It was in those circumstances that his Honour determined the appropriate amount to be ordered for security was $300,000. 40It is clear that the plaintiff's failure to comply with the order for security of costs was the basis on which the hearing of the proceedings was vacated. Since then the plaintiff has not personally or by a legal representative, appeared at subsequent interlocutory hearings. It is apparent from the evidence of Ms Norman, that he has been aware of the defendant's application for an order dismissing the proceedings on the basis of his failure to lodge security for costs as ordered. Although invited to put forward a proposal for consideration in respect of that order, he has failed to respond. His conduct to which I have referred above, indicates that the plaintiff has continued to disregard the order for lodging security of costs in the amount ordered and, notwithstanding such failure, has not sought to advance any proposal in respect thereof. 41As noted above, the plaintiff has not challenged the order for security. The period of time that has elapsed since that order is a significant period in the context of the case. 42Further, the conduct of the plaintiff supports an inference that he has no intention of providing the security as ordered or of making any proposal in respect of the same. His conduct since the order was made on 7 March 2013 is consistent with a decision to simply ignore the order. 43The evidence additionally supports an inference that the plaintiff does not have the financial ability to fund the proceedings. 44Finally, in the circumstances to which I have referred, the defendant will suffer prejudice to allow the proceedings to continue with the inevitable increase in costs associated therewith. 45In determining the present application I have had regard to the principles to which I have referred in the exercise of the power to dismiss the proceedings. On the bases of the matters to which I have referred above, I consider that this is an appropriate case in which the discretion should be exercised pursuant to r 42.21(3) in favour of making an order that the proceedings be dismissed, with costs. Accordingly, I make the following orders:

Orders (1) The proceedings herein be dismissed pursuant to rule 42.21(3) of the Uniform Civil Procedure Rules 2005. (2) That the plaintiff pay the defendant's costs of the proceedings.

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: 04 September 2013