Szanto v Bainton

Judgment 1HER HONOUR: Listed for hearing before me on 12 August 2011 was an application brought by notice of motion dated 11 May 2011 by the first and second defendants (Mr Mark Bainton and Ms Claire Bainton respectively), broadly seeking two kinds of relief: first, the provision of security for costs by the plaintiff (Mr Peter Szanto) (in the sum of $55,000 inclusive of GST) and, secondly, for the striking out in whole or in part of the plaintiff's First Amended Statement of Claim. 2Although the notice of motion also seeks an order that the claim be dismissed pursuant to Rule 14.28 of the Uniform Civil Procedure Rules 2005 (NSW) as vexatious and embarrassing, when the matter came before me on 12 August 2011 I was informed by Counsel appearing for Mr Bainton (Mr Emmett) that he was not pressing this relief on the present hearing and sought that this part of the notice of motion be stood over (pending the re-pleading by Mr Szanto of his claim, assuming leave to do so were to be given, and the provision of security for costs, assuming that were to be ordered). This was submitted to be the appropriate course on the basis, as I understood it, that the application for relief under Rule 14.28 would be pressed at a later stage if any further amended pleading were to suffer from the same perceived deficiencies as the present pleading. 3Prior to the hearing of that notice of motion, I heard an application by Mr Szanto (brought by a document entitled Notice of Emergency Motion filed on 8 August 2011) to vacate the hearing on 12 August due, principally, to the non-compliance by the first and second defendants with an order made on 25 May 2011 by Registrar Walton that they file and serve affidavits in support of the motion by 6 July 2011. In that regard, there is no issue as to compliance with the order that there be service of any such affidavits on the specified date. Rather, Mr Szanto took issue with the fact that the affidavit sworn by Mr Bainton's solicitor (Mr John Chapman) on 6 July 2011 was not physically filed in the Registry on that date (that being due to the refusal of the Registry to accept the affidavit when it was sought to be filed on that day). 4Mr Szanto, who is self-represented and currently residing in Los Angeles in the United States of America, applied for leave to attend the hearing on 12 August 2011 by telephone link. I granted that leave, over the objection of the first and second defendants, on the basis that it was made clear by my Associate to Mr Szanto that if his motion to vacate the hearing were to be unsuccessful then I would then proceed to deal with the motion listed for hearing on 12 August 2011 (with the obvious consequence that he would be in attendance only by telephone link for that hearing). I should also add that there has been no appearance in the proceedings to date by either of the third or fourth defendants (and it is unclear to me whether they have been served with the originating process). 5For the reasons given orally on 12 August 2011, I dismissed the motion to vacate the hearing of Mr Bainton's security for costs/strike out applications. Mr Szanto then objected to me proceeding to hear those applications on the grounds of procedural fairness, having regard to the fact that he was self-represented and not physically in court for the hearing - the latter being said to be due to his confusion as to the procedures in this Court and in particular as to the fact that leave might be granted for the filing in court of the affidavit on which Mr Bainton relied in support of his application (namely, Mr Chapman's 6 July 2011 affidavit). (As to Mr Szanto's stated confusion in relation to the procedures applicable in this division of the Court for the filing of affidavits, he had been put on notice by Mr Chapman by email of 3 August 2011 of the applicable practice note in that regard.) 6As to Mr Szanto's status as a self-represented litigant, he referred me to the Court of Appeal decision in Leybourne v Permanent Custodians Ltd [2010] NSWCA 78, where the Court of Appeal considered an appeal in which one of the grounds (unsuccessfully) raised was denial of procedural fairness (the appellant, a practising solicitor though not with expertise in the area of conveyancing or civil litigation, being self-represented), holding that there had not been a failure to afford procedural fairness appropriate to the appellant's position and that the ground should not have been raised. In that regard, Mr Szanto's position is not that of someone completely unfamiliar with legal systems. He deposes in his affidavit of 20 June 2011, for example, to having been a court officer in several US states [9], to having served as a clerk in the United States Federal Court [10], to having had legal training in the UK and Canada [11], to having done legal research and analysis for numerous judges and justices [12] and to having "read and heard hundreds of cases" [13]. He thereby asserts a familiarity and level of knowledge of court procedure and the law beyond that of a person with no legal training or court experience (on which he relies to ask the Court to accept that his claim is not frivolous or without merit). 7The duty to afford procedural fairness is not, of course, one limited to self-represented litigants. Furthermore, the practice of the Court in giving assistance to unrepresented litigants (recognised in Rajski v Scitec Corporation Pty Ltd (unreported, NSWCA, 16 June 1986), cited in National Australia Bank Ltd v Rusu [1999] NSWSC 539) is not one that should deprive the other party of its entitlements. In Rajski , Samuels JA said: In my view, the advice and assistance which a litigant in person ought to receive from the Court should be limited to that which is necessary to diminish, so far as this is possible, the disadvantage which he or she will ordinarily suffer when faced by a lawyer, and to prevent destruction from the traps which our adversary procedure offers to the unwary and the untutored. But the Court should be astute to see that it does not extend its auxiliary role so as to confer upon a litigant in person a positive advantage over the represented opponent. ... At all events the absence of legal representation on one side ought not to induce the Court to deprive the other side of one jot of its lawful entitlement. It may ad weight on the unrepresented party's side of the scale; it must not lighten the other. 8I was not satisfied that Mr Szanto's status as a self-represented litigant should preclude me proceeding to hear a motion that had been set down quite some time before (on a date that then suited Mr Szanto's convenience). 9As to the predicament that Mr Szanto said he faced by not being physically in the court during the hearing (which was that he was unable to satisfy himself as to what physically had been filed in court), not only was that a matter wholly of his own making (and an election made in the knowledge that if his own motion to vacate were to be unsuccessful then the matter might well proceed) but in any event the affidavit filed in Court (together with an affidavit of Mr John Chapman dated 11 August 2011 responding to Mr Szanto's motion to vacate) had been forwarded to Mr Szanto and he confirmed that he had copies of that material before him during the course of the telephone hearing. Therefore, I was not satisfied that there was any procedural unfairness to Mr Szanto in dealing with the security for costs/strike out application with Mr Szanto's attendance being by telephone link. (I should also add that in the course of the hearing of the application, Mr Emmett was careful to put squarely to the Court arguments that he anticipated that Mr Szanto might raise or that might otherwise be against his client's interests to ensure that there was a balanced picture of the parties' respective positions.) 10On the hearing of the substantive motion, Mr Emmett relied on three affidavits sworn by Mr Chapman (of 11 May, 6 July and 11 August 2011); Mr Szanto relied on a document entitled "Plaintiff's Response and Objection to Motion to Provide Security", as part of which there was an affidavit sworn and affirmed by Mr Szanto on 18 May 2011; a document entitled "Plaintiff's Evidence in Reply to John Chapman's Affidavit Regarding Motion on May 11, 2011", as part of which there was an affidavit sworn and affirmed by Mr Szanto on 18 July 2011; and a document entitled "Plaintiff's First Amended Response and Objection to Motion to Provide Security", as part of which there was an affidavit sworn and affirmed by Mr Szanto on 20 June 2011. 11Mr Emmett objected to the reading of Mr Szanto's affidavits on the basis that he had been required for cross-examination and it was said that any cross-examination over the telephone would be prejudicial to the defendants because the Court would not have the benefit of observing Mr Szanto's demeanour and because he would not be able to put documents physically before Mr Szanto. From my review of Mr Szanto's affidavits, it appeared to me that they largely comprised assertions or submissions by Mr Szanto and I therefore indicated that I would read the affidavits as assertions by him (with such weight as they might bear having regard to the fact that they were untested). 12Written submissions had been served on behalf of the first and second defendants and for his part Mr Szanto relied upon the written material (in the form of memoranda to which affidavits were appended) that had been filed in response to the application. I heard oral submissions from both Mr Emmett and Mr Szanto and reserved my decision. I have considered the evidence and the submissions and now publish my reasons for the decision to which I have come on the security for costs/strike out application. 13In summary, I consider that security for costs should be provided (and consequential orders made in relation thereto) and that the First Amended Statement of Claim should be struck out with leave to replead certain particular causes of action (subject to the provision of security and to compliance with an earlier undertaking proffered by Mr Szanto to the Court). Before setting out my reasons, I summarise briefly the factual background to the dispute that has arisen between the parties.

Factual Background 14These proceedings were commenced by Mr Szanto on 14 December 2010 seeking an order for the extension of a caveat that he had lodged over property in Woolloomooloo, the registered proprietors of which are the first and second defendants. That caveat claimed an interest in the property described as follows: "Option to purchase, without recourse, property described herein." White J heard the application for an extension of the caveat in the duty list on 2 March 2011 and dismissed the application for reasons published on 12 April 2011 ( Bainton v Szanto [2011] NSWSC 278). 15The interest claimed by Mr Szanto follows the entry by the registered proprietors of the Woolloomooloo property into a Put and Call Option Deed on or around 10 March 2010 with the third defendant (Mr Troy Douglas), who was at that time the tenant under a residential tenancy agreement to which reference was made in the Deed. Under the Deed an option to purchase the Woolloomooloo property was granted to Mr Douglas or his nominee. On 30 March 2010, Mr Douglas entered into an agreement with Mr Szanto pursuant to which Mr Douglas irrevocably appointed Mr Szanto his nominee for the purposes of the Put and Call Option Deed. Under the Deed a fee of $20,000 was payable on execution of the deed and a further fee of $10,000 was payable on the exercise of the option (to be offset as against the purchase price but forfeited if the contract did not complete). 16On 30 June 2010, into a contract for the sale of the property was entered into between the Baintons as vendor and Mr Szanto as purchaser for sale of the property at a price of $815,000. There was no deposit provided for under the contract for sale (but the Baintons had received fees totalling $30,000 that were to be applied to the purchase price if the contract were completed as set out above). 17I was taken to various provisions of the Contract for Sale (a copy of which had been exhibited to Mr Szanto's affidavit and which was admitted into evidence by White J on the March 2011 application, together with the nomination agreement, on the basis of Mr Szanto's undertaking to the Court to submit those documents to the Commissioner for State Revenue). 18Special condition 35.1.2 of the Contract for Sale provided that the purchaser would not make any objection, requisition or claim for compensation, nor rescind, terminate or delay completion because of various matters, including the condition or state of repair of the property; the suitability of the property for any use; any matter disclosed in any sewerage service diagram; the presence of any sewer, drain, manhole or vent on the property; any rainwater downpipe being connected to the sewer; the state of repair or condition of any service to or on the property (including drainage, stormwater and sewerage); and the nature, location, availability or non-availability of any such service. Special condition 35.2 of the Contract for Sale provided that the purchaser "accepts the property and improvements in their present state of repair and subject to any latent or patent defects or any infestation or dilapidation. The purchaser shall not call upon the vendor to carry out any repairs whatsoever in relation to the property, improvements and or inclusions". 19Special condition 41 contained a disclosure by the vendor and an acknowledgement by the purchaser that the drainage diagram attached to the contract was the only diagram available from Sydney Water in the normal course of administration and provided that the purchaser "shall not make an objection, requisition, claim for compensation, rescind, delay completion nor require the vendor to do any work to the property in relation to matters disclosed or any non-disclosure in the drainage diagram". 20There appears to be a factual dispute as to the occupancy of the property during the period at or around the time of entry into the contract for sale. Mr Douglas had been the tenant under the initial lease. At some stage there were two other persons in occupation of the property (described variously by Mr Szanto to White J as his tenants and in his pleading as his guests - see [26] of his Honour's judgment). 21There was no lease agreement (as such) between Mr Szanto and the Baintons. However, the Contract for Sale was drafted as if the purchaser named therein (Mr Szanto) was the tenant. Mr Szanto asserts that he was a tenant of the property in reliance on the sale contract provisions (and both before White J and before me he asserted that the property was subject to the protected tenancy legislation of the Landlord and Tenant (Amendment) Act 1948 (NSW), though the factual basis for this latter contention was unclear and, as White J noted, there had been no evidence that the legislation applied to these premises). White J, in his April judgment considered that there was a serious question to be tried as to the contention that Mr Szanto was a tenant of the premises as at the relevant time (to which I will refer shortly). 22Completion of the contract was due on 8 September 2010. Prior to that a problem apparently arose in relation to flooding on the property. The cause of the flooding, I am told, has not been finally determined but in any event that is not relevant to the current application. What is relevant is that Mr Szanto claims (and Mr Bainton denies) that Mr Bainton knew that the land was prone to flooding. Completion did not occur on 8 September 2010 and a notice to complete was issued on 10 September 2010, under which completion was required by 27 September 2010. Completion again did not occur on 27 September 2010. 23Mr Bainton took steps towards the end of 2010 to retake possession of the premises. He commenced proceedings in the Consumer, Trader and Tenancy Tribunal on 28 September 2010 against both Mr Douglas and Mr Szanto, seeking an order for payment of rent arrears, an order ending the "Tenancy Agreement" and an order for possession due to the rent arrears. At that stage the contract for sale had not been terminated. (Also at that stage it appears that Mr Szanto was represented by solicitors, a fact I note because the Tribunal order of 14 October 2010 seems to have been issued to Mr Szanto care of his lawyers' address.) 24The Tribunal on 14 October 2010 dismissed the application for want of jurisdiction on the basis that there had been "no termination notice". Mr Emmett submits, correctly at least insofar as the record of the Tribunal's orders discloses, that there was no determination on the merits but simply a dismissal of the application on a jurisdictional ground. 25Mr Szanto places reliance on the CTTT determination in a number of respects. Mr Szanto contends that Mr Bainton has, in effect, made an election to proceed in the Tribunal and, having done so, has waived and/or cannot now pursue claims he might have in this Court. Further, if I understand his submission correctly in this regard, he contends that the present proceedings are an impermissible attempt to revisit the Tribunal's ruling on the issue. (Neither of those propositions is tenable.) Thirdly, he maintains that the consequence of the Tribunal's order is that there could be no further application for possession of the premises within a 12 month period and hence, as I understand it, that the retaking of possession was wrongful (relying on s 68 Landlord and Tenant (Amendment) Act , which could only be applicable if these were prescribed premises - as to which there is no evidence - an issue to which Mr Szanto's attention was drawn when the matter was before White J). Fourthly, Mr Szanto maintains that the conclusion to be drawn from the history of the respective proceedings is that the real plaintiff in the present proceedings is Mr Bainton (a matter he raises in resisting the security for costs application and to which I refer later). Finally, he asserts that Mr Bainton intentionally misspelled his name on the Tribunal application in an attempt to prevent Mr Szanto becoming aware of the proceedings (something that he raises as a discretionary ground as I understand it). However, the allegation of intentional misspelling relies on an inference drawn from the fact that Mr Bainton had in his possession a contract in which Mr Szanto's name was correctly spelt and, in any evident, the document before me that was misspelt had emanated from the Tribunal. I draw no inference of any intentional misspelling or attempt at concealment of the Tribunal proceedings. 26A notice of termination was prepared by the solicitors acting for the vendor and said to have been sent to Mr Szanto on 26 October 2010, although there is a dispute as to when Mr Szanto received that notice of termination. White J noted that Mr Szanto had admitted receipt of a copy of the notice of termination on 2 February 2011 (see [28]). 27It is Mr Bainton's position that he did not wrongfully retake possession but, rather, that during November 2010 the two then occupants of the premises voluntarily vacated the premises and handed back the keys. However, there does not seem to be a dispute that possession of the premises was retaken around that time (voluntarily or otherwise) and the locks were changed. There were on the premises at that time various items of personal property. Mr Szanto asserts that they were his and were worth $75,000 (together with some items of sentimental value). That is the subject of dispute. Mr Bainton claims that they were worth very little. The possessions were sold for $800 (according to Mr Bainton, with Mr Szanto's authorisation; according to Mr Szanto, without his consent) and the moneys have been placed (without Mr Szanto's consent) in Mr Chapman's trust account pending the hearing of the dispute. (Mr Szanto criticises this conduct and submits both that it amounts to unjust enrichment and that Mr Chapman should have availed himself of the interpleader procedure to pay the money held in his trust account into Court. In that regard I see little point in requiring the moneys to be paid into Court when Mr Chapman is holding them in trust pending the outcome of these proceedings.) 28Mr Szanto lodged a caveat on the title and Mr Bainton then issued a lapsing notice. That led to the commencement of the present proceedings. The matter initially came before McDougall J in the duty list in December 2010 (on which occasion his Honour extended the operation of the caveat for a limited period and at which time Mr Bainton foreshadowed an application for security for costs). There was then an interlocutory application before Hall J in January 2011 a dispute as to the discovery sought by Mr Szanto (he then espousing the need for a "US style propounded discovery"), followed by the interlocutory application before White J on 2 March 2011 in relation to the extension of the caveat (misdescribed by Mr Szanto during the submissions before me, though I do not suggest this was intentional, as a summary dismissal or summary judgment application). 29In the course of his Honour's judgment dismissing the application for an extension of the caveat, his Honour made certain findings as to the existence or otherwise of a serious question to be tried on particular issues. Relevantly, his Honour said at paras [23] and [45] respectively: [23] There is a serious question to be tried as to whether or not there was an illegal sewer connection which caused or contributed to flooding on the property, and if so, what knowledge the defendants had of hat matter. There is also a serious question to be tried as to whether the adjoining owners are entitled to an easement to drain sewerage through pipes on the subject land to the sewer which has been omitted from the register. [45] I do not consider that there is a serious question to be tried that the defendants were not entitled to terminate the contract. While the plaintiff disputed that the conveyancer had served the notice of termination, it is clear that he became aware that the defendants asserted they had terminated the contract. He does not point to any conduct of the defendants whereby they might arguably have affirmed the contract. (my emphasis) 30Mr Szanto places weight on the matters set out in paragraph [35] of his Honour's judgment, which he says goes to the heart of his contention that he survived a summary judgment application: [35] The defendants also submitted that the plaintiff had not shown that there was a serious question to be tried that the contract for sale was still on foot and therefore had not shown an arguable proprietary interest that would support a caveat. The defendants contend that they were entitled to terminate the contract when the plaintiff failed to complete after time had been made essential. Whether time had become essential so as to justify termination for the plaintiff's failure to complete depends on whether the defendants were entitled to serve a notice to complete. The issue on the trial of a claim for specific performance [although his Honour later noted that no such claim had at that stage been made - according to Mr Szanto on that occasion by oversight] would be whether the defendants were no themselves ready, willing and able to complete because they were not able to provide good title to the plaintiff by reason of an illegal sewer connection or an omitted easement. The proneness of the property to flooding would not preclude the valid service of a notice to complete if it were a mere defect in quality, albeit that if there had been fraudulent concealment of the defect, the purchaser might be entitled to damages or be entitled to rescind (P Butt, The Standard Contract for Sale of Land in New South Wales, 2 nd ed (1998) at [0.13]). However, if there were a defect in title, then subject to the effect of specific contractual provisions referred to below, the vendors would not have been entitled to serve the notice to complete as they would not have been able to provide a clear title . (my emphasis) 31At [37], his Honour again noted that there was a serious question to be tried as to the nature of the problem and the extent of the defendants' knowledge, referring to authority for the proposition that if there is a defect in title of which the vendor is aware the vendor cannot rely on special conditions precluding the purchaser from taking objection in respect of such defects unless there had been full and frank disclosure of the defects and to cases that have considered the consequence of non-disclosure. 32On 29 April 2011, Mr Szanto filed the First Amended Statement of Claim. He raises various claims and seeks relief identified as restoration to possession of real property; specific performance and transfer of the Woolloomooloo property; $2 million for "expectation damages for breach of contract"; an award (unquantified) for "emotional injury"; an award "of constructive title to real property"; $75,000 compensation for "expropriation for personal property" and $10 million for punitive and exemplary damages. 33He cited various cases in argument before me both in relation to the claims he made and the security for costs application (including Jeffery & Katauskas Pty Ltd v SST Consulting Pty Ltd; Jeffery & Katauskas Pty Ltd v Rickard Constructions Pty Ltd (subject to Deed of Company Arrangement) (2009) 239 CLR 75; Lumbers v Cook; Devenish v Jewel Food Stores Pty Ltd (1990) 94 ALR 664 at [666]; Farrer v Lacy Hartland & Co (1885) 28 Ch D 482 at [485]; Kardynal v Dodek (1978) VR 414). I think it fair to say (and this was, in effect, indicated to be the case by Mr Szanto in his submissions) that Mr Szanto appears to have drafted his claims by reference to causes of action that he considers, as a result of his researches, address his version of understanding of the facts without necessarily having a clear understanding in each case of the legal principles espoused in those cases or what needs to be established to sustain such a claim (the clearest example being the assertion that the protective landlord and tenant legislation applied to preclude any termination of his tenancy arrangement at the relevant time). He described himself as "more of a scribe than an author". However, that has given rise to difficulty in the manner and content of the pleading, to which I refer later. 34Mr Szanto objected to Mr Emmett's opening submissions before me in which he outlined the factual background to the dispute as an attempt to revisit or undermine White J's judgment. However, as I explained, the opening submissions in this regard were necessary for me to understand the background to the present application. Mr Emmett made it very clear that Mr Bainton did not, for the purposes of the present application, cavil with any of his Honour's judgment or reasoning (and indeed he urged me to follow various of the findings his Honour had made as to the lack of any serious question to be tried on issues such as those relating to Mr Szanto's present claim for specific performance of the contract of sale). Mr Szanto, in his oral submissions, also took me to various matters he considered relevant in explaining the background to the present dispute. 35Insofar as Mr Szanto places weight on the conclusions drawn by White J in [35] and [37], it must be noted that what his Honour ultimately concluded (by reference to general condition 7 of the contract as amended by special condition 30.3) was (as set out in [45]) that there was not a serious question to be tried that the defendants were not entitled to terminate the contract. That, as Mr Emmett submits in the context of the present strike out application, is inconsistent with there being an arguable case that the contract remains on foot or is specifically enforceable. 36I note that when the matter came before White J in March this year, objection was taken by Mr Emmett to the admission into evidence of the option nomination agreement and the contract of sale as both were unstamped. Mr Szanto informed his Honour on that occasion that he had talked with the revenue officer and "their position was that so long as the matter was before the Court the payment was stayed". White J very clearly corrected any misapprehension Mr Szanto may have had in that regard and drew Mr Szanto's attention to s 304 of the Duties Act 1997 (NSW) (which renders an unstamped document on which duty is payable inadmissible in evidence unless either the duty is paid or an undertaking is given by the person tendering the document to submit the document for duty - in other words, to pay the duty). His Honour was given an undertaking by Mr Szanto, which his Honour confirmed in the transcript at T 5.38 was to the following effect: The usual undertaking is by the person liable given to the Court by a party in relation to the instrument referred to s 304(2) of the Duties Act is an undertaking the party will within time satisfy the Court to transfer the instrument to the State Commission of Revenue. 37White J specified 7 days as the period by which the instruments in question were to be transmitted to the Commissioner of State Revenue. 38When the matter was before me, Mr Emmett called on a notice to produce that had been served on Mr Szanto for the production of the original contract and nomination agreement. Mr Szanto (in Los Angeles) clearly was unable physically to produce any documents in answer to the call (and objected in any event to the notice to produce on the ground that it required production of his passport) but confirmed that the original documents had not been stamped. 39Mr Szanto told me that he had spoken with the stamp duties office and that his understanding was that he was not required to stamp them (referring to a s 66 Conveyancing Act notice - which might or might not have been a reference to the situation where a cooling off notice is given in relation to one or both of such documents). Mr Szanto, perhaps somewhat ironically given the submissions made by him as to the failure of the defendants to comply with Court orders, seems to be in the position where he has not himself complied with an undertaking given to the Court. He said words to the effect that he considered it was not necessary to stamp the document unless he succeeded in his claim for specific performance. That, however, is not to the point. Mr Szanto was made aware of the need for the documents to be submitted for stamping and he gave an undertaking to do so. It seems to me that it is incumbent on Mr Szanto to honour the undertaking he gave to White J and on the basis of which the documents that would otherwise not have been admissible in evidence were admitted. I was urged by Mr Emmett to take this into consideration as a discretionary matter. 40For completeness, I note that there remains a live dispute between the parties as to the adequacy of the discovery provided by Mr Bainton. Mr Szanto contends that when he attended at the Tribunal he was shown various documents going to the flooding issue, that he says have not been produced in the course of discovery. Whatever the rights and wrongs of this issue, I am not in a position to determine the adequacy of discovery on the present application. Mr Emmett noted that an affidavit verifying discovery had been served and submitted that it was not appropriate for me at this stage to seek to go beyond that affidavit. There is also a dispute (to which I will refer shortly) as to the circumstances in which a subpoena was issued to the Department of Immigration seeking the production of immigration records relating to Mr Szanto's entry into and exit from Australia over the relevant period (which Mr Szanto complains is an infringement on his privacy and of which he says he should have been given notice prior to its issue) and as to a notice to produce calling for documents (in particular his passport) that Mr Szanto says he is precluded by American law from producing. 41I turn then to the two issues now to be determined.

(i) Security for costs 42Rule 42.21 of the Uniform Civil Procedure Rules 2005 provides, inter alia, that if, in any proceedings, it appears to the court on the application of a defendant that a plaintiff is ordinarily resident outside New South Wales, then 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. 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. 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. 43The first factual issue that arises is as to whether it appears to the Court that Mr Szanto is ordinarily resident outside Australia. Mr Szanto certainly concedes that he is presently resident outside Australia. He maintains that this is because he was wrongly ejected from the Woolloomooloo premises. 44Mr Chapman's 11 August affidavit annexed copies of the documents obtained under subpoena from the Department of Immigration (which show that during the period from 30 January 2009 and 1 March 2011, Mr Szanto entered the country on 7 occasions and that on each occasion he noted his place of residence as the United States of America and his purpose in the country as either a holiday or visiting friends or relatives). Mr Emmett submits that either Mr Szanto was making a false declaration at that time or he is falsely asserting now that he was ordinarily resident in Australia. Mr Szanto objects as to the evidentiary foundation for this evidence - he objects to it as hearsay (although hearsay is permissible on an interlocutory application, as White J pointed out to him in the March proceedings); as lacking evidentiary foundation (since he says that the covering letter makes the qualification that not all records had been found - which seems to me to be an inaccurate summary of the effect of the letter with which the Department produced the documents under subpoena); and that it is inconsistent with the facts (since he says that the subpoena was only served on the address in Sydney and that it cannot be inferred that it covered all records of entry across the country). 45The Department of Immigration is a national department. I see no reason to read the letter with which the documents were produced on subpoena as limited to documents held in the Sydney office of the department. Nor do I read the letter as indicating the existence of other records. 46While I do not draw any inference from what Mr Szanto now says have been mistakes when he completed his immigration forms, it seems to me unarguable that Mr Szanto presently resides outside Australia and that at the relevant times his residence in Australia was for limited periods only. I find that his ordinary residence at the moment (and for some time) is and has been outside New South Wales. The fact that this may be due to the disputed exclusion of Mr Szanto from the premises is a matter I will take into account when weighing the factors for and against the making of an order for security for costs. I turn then to those factors. 47At the outset I note that it is recognised that the fundamental purpose of the power to order security for costs is to secure justice between the parties. Ritchie's commentary to the Uniform Civil Rules notes that this is done "principally by ensuring that unsuccessful proceedings do not occasion injustice to defendants". Further, it was made clear in KP Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189; 13 ALC 437 that one does not approach an application for security for costs with any predisposition in favour of the award of security and that the discretion to order security for costs is unfettered and should be exercised having regard to all the circumstances of the case. The court has a wide discretion in relation to security for costs and each case depends upon its own circumstances. 48The principles to be taken into account on applications for security for costs were set out by Beazley JA in Meltglow . Those principles include the following factors: the promptness with which the application is brought; the strength and bona fides of the plaintiff's case (including whether a costs order is likely to be made at the conclusion of the litigation); whether the plaintiff's impecuniosity has been caused by the defendant's conduct the subject of the claim; whether the application for security is being used to deny an impecunious plaintiff the right to litigate; whether there are any persons standing behind the plaintiff who are likely to benefit and who are willing to provide security; whether the persons standing behind the plaintiff have offered any undertaking for the costs; whether the plaintiff is in substance a plaintiff; and the public interest if any in the litigation. 49Of those factors, there is no suggestion that any persons are standing behind Mr Szanto or might be expected to offer any undertaking for the costs and I do not consider them further. As to the remaining factors of relevance to the present application, I note as follows:

• Promptness/delay 50Mr Szanto submits that security should not be ordered due to the delay of Mr Bainton in making the present application. The very first of the guidelines raised by Beazley JA in Meltglow related to the question of delay. Her Honour noted that applications of this kind should be brought promptly. However, delay is not an automatic bar to the making of the order for security for costs ( Commonwealth v Cable Water Skiing (Aust) Ltd (1994) 14 ACSR 760), the relevant question being the length of the delay and the reasons for it (consideration also being given to what has taken place in the interim). 51In relation to the question of delay, the promptness with which a party acts to seek security is relevant because it is said that a plaintiff is entitled to know its position in relation to the security at the outset and before it embarks to any real extent to its litigation (and before it is allowed to commit substantial sums of money towards litigating its claim). In this regard, I refer to what was said by Moffitt P in Buckley v Bennell Design & Construction Pty Ltd (1974) 1 ACLR 301 and I also note what was said by French J (as his Honour then was) in Bryan E Fencott & Associates Pty Ltd v Eretta Pty Ltd (1987) 16 FCR 497 to the effect that the further a plaintiff has proceeded in an action, and the greater the costs it has been allowed to incur without steps being taken to apply for an order for security for costs, the more difficult it will be to persuade the court that such an order is not, in the circumstances, unfair or oppressive. 52However, as was apparent from Mr Szanto's complaints as to what he referred to as the 'methodology' of the defendants' process in relation to this litigation, the litigation is still at an early stage. The notice of motion for security was filed on 11 May 2011, before the defence was due to be filed on the timetable put in place by White J. Not only has no defence yet been filed (a matter with which Mr Szanto takes issue) but the result of a successful application on the second part of this application would mean that the claim is yet to be properly pleaded by Mr Szanto. It cannot be said that this is a case where the litigation has been embarked upon to such an extent that the claim for security should be dismissed on that basis. 53Mr Szanto's summons in these proceedings was filed on 14 December 2010; the application for security for costs was foreshadowed by Mr Chapman when the matter first came before the Court (on which occasion McDougall J explained to Mr Szanto that the position taken by Mr Bainton in relation to the orders then made was not to be taken as waiving any right to apply for security for costs and the transcript records Mr Szanto saying that he understood this). Mr Emmett notes that Mr Bainton's intention to seek security for costs was foreshadowed again in two emails of 5 January 2011 and 7 January 2011 (those being annexed to Mr Chapman's affidavit of 11 May 2011 at [11]-[12]). Mr Szanto denies having received those emails (and explained in submissions the 'funny phenomenon' that international email servers noted when an email was received the day before it was sent). I find it unnecessary to determine this factual dispute because (even assuming that Mr Szanto is correct and that he did not receive the emails in question) Mr Szanto had earlier been put on notice that the defendants reserved their position in relation to a potential security for costs application and that they had consented to orders in relation to the conduct of the proceedings without waiving any right to make such a claim. 54I consider that even in the absence of notice to Mr Szanto (after the matter had earlier been raised before McDougall J) of an intention to seek security for costs, there has not been such a delay as would disentitle Mr Bainton to an order for security for costs.

1. The Plaintiff's First Amended Statement of Claim be struck out.
2. The Plaintiff provide security for the costs of the First and Second Defendants by paying the sum of $55,000 (inclusive of GST) into Court within six weeks of the date of this order.
3. The proceedings against the First and Second Defendants be stayed until security for costs is provided in accordance with order 2.
4. If security for costs is not provided in accordance with order 2 within six weeks of the date of this order, the proceedings be dismissed as against the First and Second Defendants with costs.
5. Subject to satisfaction by the Plaintiff of both of the following conditions within six weeks of the date of this order: (i) provision of the security for costs in accordance with order 2; and (ii) service by the Plaintiff on the First and Second Defendants' solicitors of an affidavit that evidences compliance by the Plaintiff with the undertaking proffered by the Plaintiff to White J on 2 March 2011 (as recorded at T 5.38 of the transcript of the hearing on that day before his Honour) and that evidences either the payment of duty on the documents the subject of that undertaking or a ruling by the Commissioner of State Revenue or his delegate that duty is not payable on the said documents; leave be granted to the Plaintiff to file and serve within eight weeks of the date of this order a Further Amended Statement of Claim, such pleading to be limited to causes of action for breach of tenancy, conversion, misleading or deceptive conduct, fraud, trespass, conspiracy and/or the tort of intentional interference with contract.
6. The balance of the Notice of Motion dated 11 May 2011 (namely, the application for the relief claimed in prayer 3 of that motion) be stood over to the Registrar's List on Monday 10 October 2011 (that being a date after any Further Amended Statement of Claim will have been filed in accordance with the leave granted in 5 above).
7. The Plaintiff pay the First and Second Defendants' costs of the application heard on 12 August 2011.
8. Liberty to apply on three business days' notice.

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