Outstanding costs
34 In the Supreme Court action, prior to the hearing of this application, Mr Trkulja had not paid costs of $200 of the adjournment ordered by Master Kings, although the sum was due in mid October and was, therefore, about two months overdue. Mr Trkulja said that, in the course of the hearing, he forwarded a cheque to the State of Victoria for the $200 costs. As it was not cashed by 16 December 1998, he hand delivered a bank cheque for $200 on that day and stopped payment on the previous cheque. Mr Trkulja has not paid the costs of the two applications before Master Wheeler and the appeal to Beach J. But these latter costs have not been taxed. That is not surprising, because a number of other orders for costs remain outstanding in proceedings taken by Mr Trkulja against, inter alia, the State of Victoria. For instance, on 18 September 1997, Judge Meagher ordered judgment against Mr Trkulja as a result of a jury verdict in an action for defamation which Mr Trkulja brought against the State of Victoria, arising out of events associated with the events the subject of the present claim. Judge Meagher ordered Mr Trkulja to pay costs fixed at $13,200. Mr Trkulja appealed against the decision. On 21 November 1997, the Full Court ordered that, by 2 February 1998, Mr Trkulja provide security for costs of the appeal fixed at $6,000. The security was not paid and the appeal was dismissed as a result. There are a number of other smaller orders for costs outstanding. For example, on 2 September 1997, Judge Meagher ordered Mr Trkulja to pay costs fixed at $1,000. Mr Trkulja gave evidence that he was not able to pay the outstanding costs, or any costs of the action if unsuccessful, without the assistance of others. He said that his sister would pay the costs of the State of Victoria if he lost the action in the Supreme Court of Victoria to which the present application relates. I am not satisfied from his cryptic, unparticularised and uncorroborated evidence that those costs would be met. In a letter to the solicitor for the State of Victoria dated 16 December 1998, which accompanied the bank cheque for $200, Mr Trkulja said:
ÒI await the taxation of the other cost orders which were ordered to be taxed.Ó
It is significant that, even after the argument put by the State of Victoria on the hearing of the application, Mr Trkulja, when addressing the question of the taxed costs, gave no indication of any arrangements for payment. If the trustee had elected to continue the action, he would have been liable for such costs.
35 Mr Hardy, who appeared as counsel for Mr Trkulja, submitted that the ability of Mr Trkulja to meet a costs order should be considered by the Supreme Court in an application for security for costs brought by the State of Victoria if it was so advised. In my view, the capacity of the proposed assignee to pay the costs of the litigation is a relevant factor in determining whether to extend time. The power to extend time is a broad discretionary power. It is unfettered and must be exercised with a view to doing justice between the parties. On the material before me, an application for security for costs would be highly likely to succeed and Mr Trkulja would not be able to provide such security. The State of Victoria would suffer the prejudice of incurring costs of the application, which costs would be unlikely to be met by Mr Trkulja if the application succeeded. Mr Hardy suggested that the Court should not refuse orders to Mr Abeyratne on the basis of the financial position of Mr Trkulja. But, in my view, it would be unreal to limit consideration to the position of Mr Abeyratne and not take into account the capacity of Mr Trkulja to pay the costs of the proceeding when the only purpose for seeking the orders is to allow Mr Abeyratne to assign the causes of action to Mr Trkulja.
36 On an application for security for costs, it is a relevant consideration that the making of an order might stifle the litigation. In my view, the same consideration is relevant in the exercise of the broad discretion in this case. It is a serious step to refuse orders when the practical result will be to prevent a party proceeding with a case which is not shown to be hopeless. Further, even if the orders are refused, the State of Victoria will still have to defend the Supreme Court action, insofar as the action relies upon the causes of action particularised in paragraphs 37 (c) and (d) of the amended statement of claim. That will involve the State of Victoria in cost. The fact that it will have this involvement in the action is a reason in favour of extending the time. However, I am satisfied that the additional causes of action for which the extension of time is sought will involve additional expense in preparation for and conduct of the trial by the State of Victoria.
37 Mr Hardy relied upon Lines v Tana [1987] VR 641, to argue that the failure of Mr Trkulja to pay costs which have not yet been taxed should not be taken into account in determining whether security for costs should be ordered. In allowing the appeal against an order for security, the Full Court dealt with the facts of the particular case before it. At 643-644, the Court said:
ÒHowever, it is unnecessary and, indeed, profitless to search for and identify other circumstances in which the jurisdiction might be invoked. It is sufficient to say we are firmly of the view that neither non-payment of costs in the circumstances disclosed in this case nor delay in prosecution of the action afford the occasion for ordering security.Ó
38 In my view, the circumstances of the present case make it relevant to consider, not whether Mr Trkulja would attempt to avoid compliance with a costs order, as was the allegation in Lines, but whether the State of Victoria would be prejudiced by Mr TrkuljaÕs financial position in all the circumstances of the case.