PRACTICE AND PROCEDURE - Security for costs - Application for leave to appeal - Delay - Application for security for costs made four months after application for leave to appeal filed - Application made less than two months before date on which application for leave to appeal fixed for hearing - Delay unacceptable - Application for security for costs dismissed.

Merribee Pastoral Industries Pty Ltd v Australia and New Zealand Banking Group Ltd [1998] HCA 41; (1998) 193 CLR 502; Wu v Bi [2022] VSCA 22 and Hoser v Pelley [2023] VSCA 1 referred to.

1. In November 2019, YZ (the plaintiff) commenced a proceeding claiming damages for personal injuries he alleges he suffered as a result of sexual assaults perpetrated on him between late December 1974 and late January/early February 1975. The plaintiff was a member of Beit Habonim Pty Ltd (the first defendant). He alleges that the sexual assaults were committed by another member of the first defendant, Alan Weiden (the second defendant). His case against the first defendant is that it is vicariously liable for the tortious conduct of the second defendant and/or negligent in its supervision of him and failure to implement protective systems to minimise the risk of harm to its members from sexual misconduct.
2. On 17 May 2022, the second defendant filed a summons seeking a permanent stay of the plaintiff's proceeding on the basis that it was an abuse of process. In the alternative, the second defendant sought an order staying the proceeding 'until such time that it had been determined that there was no prospect of any criminal proceeding being brought against the second defendant'. On 15 July 2022, following a hearing on 7 June 2022, the second defendant's stay application was dismissed by Irving AsJ.[1]
3. On 29 July 2022, the second defendant filed a notice of appeal from the orders of Irving AsJ. On 30 September 2022, Matthews AsJ (as her Honour then was) made an order requiring the second defendant to pay $15,000 as security for the plaintiff's costs in relation to the appeal from the orders of Irving AsJ. On 2 May 2023, following a hearing on 21 February 2023, the second defendant's appeal from the orders of Irving AsJ was dismissed by Tsalamandris J.[2]
4. On 30 May 2023, the second defendant filed an application for leave to appeal from the orders of Tsalamandris J. In his application for leave to appeal, the second defendant advances three proposed grounds of appeal as follows:

(1) The judge erred in finding that allowing the proceeding to continue would be neither manifestly unfair to [the second defendant] nor bring the administration of justice into disrepute.

(2) The judge erred in failing to find that [the plaintiff's] allegations were vague, unreliable and could not be acted upon safely.

(3) The judge erred by failing to find that the associate judge had fallen into error in holding that expert evidence was required to determine the extent to which [the second defendant] was prejudiced by the loss of medical records.

1. On 6 June 2023, the solicitors for the plaintiff wrote a letter to the solicitors for the second defendant advising that the plaintiff sought security for his costs in respect of the second defendant's proposed appeal to this Court. The letter identified the bases upon which security for costs should be ordered as including the fact that the second defendant is a resident in Israel and has no assets within the State of Victoria; the existence of untaxed costs orders, made against the second defendant, which the second defendant is said by the plaintiff to be unwilling to pay; and the second defendant's lack of prospects of success of his proposed appeal. The letter demanded payment of $37,100 as security for costs, in accordance with a table of estimated amounts of costs contained in the letter. The letter concluded by saying that if the second defendant did not agree to provide security, then the plaintiff reserved his rights to apply for security without further notice.
2. On 13 June 2023, the solicitors for the second defendant sent a letter to the plaintiff's solicitors disputing any requirement by their client to pay security for the plaintiff's costs of the appeal. The second defendant's solicitors then went on to assert that, notwithstanding that their client was not required to pay security for the plaintiff's costs of the appeal, if the Court were minded to award security, then 'the quantity of security will be limited to the costs that will be incurred by [the plaintiff] in seeking to enforce an order made against [the second defendant] in Israel'. The solicitors referred to specific provisions of Israel's Foreign Judgments Enforcement Law 1958 in support of an argument that any judgment obtained against the second defendant in this Court would be enforceable against him in an Israeli court. The letter concluded:

We are in the process of determining the quantum of costs that are ordinarily incurred with respect to enforcing a foreign judgment in Israel and will revert to you shortly in relation to same and our client's proposal dealing with your client's request for security of his costs.

1. On 14 June 2023, the solicitors for the plaintiff wrote a letter to the solicitors for the second defendant disputing some of the propositions in the 13 June 2023 letter and stating that they had 'grave concerns' about the second defendant's ability to pay a further costs order that might be made against him. The letter concluded:

In light of the above, we are instructed to make an application to the court by 4:00 pm Friday 16 June 2023 should we not receive confirmation that your client will pay the security sought by our client.[3]

1. On 9 August 2023, the parties were advised that the second defendant's application for leave to appeal and, if leave is granted, the appeal were listed for an oral hearing in this Court on 24 November 2023.
2. On 8 September 2023 the second defendant's solicitors filed and served his Amended Written Case and an Amended Agreed Summary. On 21 September 2023, the plaintiff's solicitors referred to the June correspondence - three months earlier - and requested a copy of the Israeli law. On 3 October 2023, in response to a further request, the second defendant's solicitors provided a copy of that law to the plaintiff's solicitors.
3. On 5 October 2023, the plaintiff filed an application for security for his costs of the application for leave to appeal. The application seeks orders that the second defendant provide security for the plaintiff's costs pursuant to r 64.38(2) of the Supreme Court (General Civil Procedure) Rules 2015 ('the Rules'); the application for leave to appeal be stayed until the security is provided; and the application for leave to appeal be dismissed with costs if the security is not provided as ordered. This is the hearing of that application.
4. The application for security for costs is supported by an affidavit sworn by one of the plaintiff's solicitors, Luke Balassis. The affidavit exhibits affidavits that were sworn in August and September 2022 in the proceeding below and various other documents, including the correspondence passing between the parties to which we have referred.
5. Rule 64.38(2) of the Rules provides that the Court of Appeal, on the application of a party, may make an order for security for costs of an appeal or an application before the Court. The relevant principles have been summarised many times, most recently in Wu v Bi[4] and Hoser v Pelley,[5] and are well known. The factors relevant to the exercise of the Court's discretion whether to grant security for costs include the prospects of success of the appeal; the degree of risk that a costs order might not be satisfied; whether the making of an order would be oppressive by stifling a reasonably arguable claim; whether any impecuniosity of the applicant for leave to appeal arises out of the conduct about which complaint is made; whether there are any aspects of public interest militating against the making of an order; and whether there are any particular discretionary matters relevant to the application.
6. Relevant considerations in any application for security for costs include whether the hearing of the matter is close at hand and whether the moving party has delayed its application for such an order.[6]
7. While this Court may have been prepared to make some limited order for security for costs as was made by Matthews AsJ in relation to the costs of the appeal from Irving AsJ if the application had been made in a timely fashion and not in the shadows of the hearing of the application for leave to appeal and appeal (if leave is granted), in our view it is now too late to sensibly make any orders for security for the plaintiff's costs. The application for security for costs should have been made in June, as was foreshadowed in the plaintiff's solicitor's letter of 14 June 2023 when no response was received from the second defendant's solicitors by the deadline of 16 June 2023. The delay by the plaintiff in making this application is simply unacceptable.[7] In the period of approximately four months between the June correspondence and the filing of this application, the second defendant has, as appears from the chronology, proceeded to prepare and file documents in relation to the forthcoming application for leave to appeal. Despite the best endeavours of counsel for the plaintiff during oral argument this morning, no satisfactory explanation has been given by the plaintiff for the delay.
8. This is not the occasion on which to engage in any detailed analysis of the second defendant's prospects of success in his application for leave to appeal and appeal. It is sufficient to say that we are not persuaded that his prospects of success are so lacking in merit as to support the last minute making of an order for security for costs with a timetable for a stay and then dismissal of the application for leave in the event of any non-compliance with an order requiring security for costs to be provided.
9. The application for security for costs is dismissed.

[1] YZ v Beit Habonim Pty Ltd [2022] VSC 402.

[2] YZ v Beit Habonim Pty Ltd [2023] VSC 222.

[4] [2022] VSCA 22 (McLeish and Emerton JJA).

[5] [2023] VSCA 1 (Emerton P and J Forrest AJA) ('Hoser').

[6] Merribee Pastoral Industries Pty Ltd v Australia and New Zealand Banking Group Ltd [1998] HCA 41; (1998) 193 CLR 502, 513-4, [26] (Kirby J). See also Hoser [2023] VSCA 1, [38]-[39].

[7] Cf Hoser [2023] VSCA 1, [39].