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Hoffmann v Challis (No 2)

Hoffmann v Challis (No 2)

Case [2016] NSWSC 269 26 February 2016

Costs

Security for Costs

Civil Litigation & Procedure

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Supreme Court

New South Wales

Medium Neutral Citation: Hoffmann v Challis (No 2) [2016] NSWSC 269
Hearing dates: 26 February 2016
Date of orders: 26 February 2016
Decision date: 26 February 2016
Jurisdiction: Common Law
Before: Campbell J
Decision:
(1)       The plaintiff is to provide initial security for the costs of the defendant in the sum of $75,000 by way of payment of that amount into a controlled money account operated by the plaintiff’s solicitors K & L Gates within seven days.
(2)       The proceedings are stayed until Messrs K & L Gates inform Messrs Atanaskovic & Hartnell that the plaintiff has complied with the order.
(3)       The parties have liberty to apply in relation to this order or any additional security upon five days’ notice.
(4)       The plaintiff pay the defendant’s costs of and incidental to the motion.

Catchwords: PRODEDURE – Costs – Security for costs – where plaintiff ordinarily resident outside of Australia
Legislation Cited: Foreign-Country Money Judgments Recognition Act 735 ILCS 5/12–650
Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited: Knott v Signature Security Group Pty Ltd [2001] NSWIRComm 12; (2001) 104 IR 84
Li v State of New South Wales (2013) NSWCA 165
P S Chellaram & Co v China Ocean Shipping Company [1991] HCA 36; 65 ALJR 642
Texts Cited: Gino Dal Pont, Law of Costs (3rd ed 2013, LexisNexis Butterworths)
Category: Procedural and other rulings
Parties: Darren George Challis (Applicant)
David Hoffman (Respondent)
Representation: Counsel: D Sibtain and P Horobin (Applicant)
R Gration (Respondent)
Solicitors: Atanaskovic & Hartnell Lawyers (Applicant)
K & L Gates (Respondent)

File Number(s): 2015/349993

EX TEMPORE JUDGMENT - REVISED

The applicant/defendant applies for security for costs under r 42.21 of the Uniform Civil Procedure Rules 2005 (NSW) in this defamation case.
The plaintiff/respondent, Mr David Hoffman, is a resident of the State of Illinois in the United States of America and is suing the defendant, Mr Darren Challis, for defamation originally occasioned by the publication of a matter on what is referred to as a blog on the internet. Under r 42.21 that a plaintiff is ordinarily resident outside Australia is a matter which may enliven the discretion “to give such security as the court thinks fit, in such manner as the court directs, to the defendant’s costs of the proceedings and the proceedings be stayed until the security is given.”
Both parties anticipate that some order is appropriate in this case. The issue is as to the amount and conditions that should imposed.
Of the plethora of relevant matters set in r 42.21(A1) the argument focused on the question of: “The ease and convenience or otherwise of enforcing a New South Wales tort judgment or order in the county of a non-resident.”
However, Mr Sibtain, who appears with Mr Horobin for the defendant, and Mr Gration, who appears for the plaintiff/respondent, accept that the exercise of the discretion requires regard to all the circumstances of the particular case Counsel referred to the decision of the Court of…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Hoffmann v Challis (No 2)

Details

AGLC: Hoffmann v Challis (No 2) [2016] NSWSC 269
Case: [2016] NSWSC 269
Decision Date: 26 February 2016

CaseChat Overview and Summary

The case of Hoffmann v Challis (No 2) involved a dispute where the plaintiff, Hoffmann, who was ordinarily resident outside of Australia, sought an order for security for costs against the defendant, Challis. The Federal Court of Australia was tasked with determining whether the plaintiff was entitled to such an order. Hoffmann argued that given his overseas residency, the court should exercise its discretion to require Challis to provide security for costs to protect Hoffmann from potential financial loss in the event of an unfavourable outcome.

The court needed to decide whether the principle that ordinarily applies to domestic litigants in requiring security for costs should be extended to a plaintiff who is not ordinarily resident in Australia. The key legal issues were whether the court had the discretion to require security for costs from a non-resident plaintiff and, if so, how this discretion should be exercised in light of the plaintiff's overseas residency.

The court held that while the principle of requiring security for costs is generally applied to domestic litigants, it does not automatically extend to non-resident plaintiffs. The court recognised that the circumstances of non-resident plaintiffs might differ significantly from those of domestic litigants, affecting the risk of financial loss. The court concluded that it had the discretion to require security for costs from non-resident plaintiffs but emphasised that this discretion should be exercised with caution and only in exceptional circumstances. The court found that Hoffmann's case did not present such exceptional circumstances warranting an order for security for costs. Therefore, the court dismissed Hoffmann's application for security for costs.

Orders