Security of costs of third defendant
59 The third defendant sought an order for security for costs. The third defendant submitted that firstly, the plaintiff's claim is manifestly unarguable in its present form; secondly, the plaintiff has no reasonable prospects of obtaining the relief sought, based upon the pleadings as they presently stand; thirdly, an order for security will not bring the proceedings to an end because the plaintiff has availed himself of the Bar Association pro bono scheme, and he has not shown that the provision of security would have that effect; and fourthly the plaintiff has substantial debts which have remained unpaid for a lengthy period of time.
60 The third defendant also submitted that it is unjust that a litigant who is prima facie impecunious and who is substantially indebted to a defendant should expose a defendant to irrecoverable costs where the claim is hopeless and the plaintiff has conducted the action in a manner which substantially increased the costs to the other parties. For these reasons the third defendant submitted that the plaintiff's assets must be directly exposed to a costs order.
61 The court possesses inherent jurisdiction to order such security and can also do so pursuant to Part 53 r 2 SCR. Power comes from the same roots as the inherent power to summarily dismiss actions as frivolous and vexatious: Morris v Hanley [2000] NSWSC 957 at para 11. While impecuniosity is not of itself sufficient to warrant an order for security it is generally a relevant consideration: Chang v Comcar Australia [1999] FCA 1677 at para 25.
62 To date the third defendant has incurred costs in the sum of $28,606.50. The third defendant's solicitor had calculated that the amount of $7,669 has been incurred for court attendances on 24 July 2000, 7 February, 7 March, 11 April, 26 April, 7 June, 9 August and 29 October 2001. The third defendant expects there to be a necessity for subpoenas, discovery and possibly interrogatories and believes that it will incur costs in the order of $60,000 in defending the claim to completion.
63 It is my view that it is not appropriate to order that the plaintiff is to provide security for costs and that there are not sufficient reasons to depart from the general rule laid down in Powell v Taylor (1885) 31 ChD 34, namely, that poverty is no bar to a litigant. Each case depends on its facts. It is my view that the plaintiff believes that he has a genuine cause of action to litigate against the second and third defendants. When he has become aware that he does not have a case against other litigants, he has discontinued against them. The plaintiff's claims have been refined.
64 The plaintiff's pleadings in relation to unconscionable conduct by the second defendant are struck out. The plaintiff's pleadings are however sufficient to found causes of action in breach of contract against the second and third defendants. The claim for negligence against the second defendant should proceed to trial. The claim for negligence in relation to the third defendant does not arise out of the same facts and is statute barred. Leave is not granted to the filing of an amended statement of claim which includes paragraphs 31 and 33. Subject to the explanation for delay being satisfactory, leave will be granted to file and serve the balance of the proposed amended statement of claim.
65 The orders I make at this stage are that: