Litigation Fund WCX Pty Ltd v Aversa - [2024] NSWSC 1348

Supreme Court

New South Wales

Medium Neutral Citation: Litigation Fund WCX Pty Ltd v Aversa [2024] NSWSC 1348
Hearing dates: 25 October 2024
Date of orders: 25 October 2024
Decision date: 25 October 2024
Jurisdiction: Common Law
Before: Elkaim AJ
Decision:
1. The plaintiff is to provide security for costs in the sum of $30,000.
2. The security is to be provided within 14 days.
3. The security may be provided by any one of the following means:
(i)   Payment into court.
(ii)   A bank guarantee.
(iii)   A deposit bond.
4. If the security is not provided as ordered above, the proceedings are stayed pending further order.
5. The parties have liberty to restore the matter in respect of the above orders.
6. Costs of the Notice of Motion be costs in the cause.

Catchwords:
COSTS – security for costs – relevant factors – where previous security for costs motion was dismissed – where there has been a material change in the relevant circumstances – impecuniosity of the plaintiff – plaintiff to provide security for costs

Legislation Cited:
Corporations Act 2001 (Cth), s 1335
Uniform Civil Procedure Rules 2005 (NSW), r 42.21

Cases Cited:
Feltafield Pty Ltd v Heidelberg Graphic Equipment (Unreported, Federal Court of Australia, Beazley J, 12 August 1994)

Category: Procedural rulings
Parties: Litigation Fund WCX Pty Ltd (Plaintiff)
Rosario Aversa (First Defendant)
Antonia Aversa (Second Defendant)
Representation:
Counsel:
Mr R Hanrahan (Plaintiff)
Mr D Eardley (Defendants)
Solicitors:
Hall Partners Pty Ltd (Plaintiff)
Stacks Collins Thompson (Defendant)

File Number(s): 2022/317496
Publication restriction: No

JUDGMENT

The matter before me is a notice of motion filed by the two defendants on 2 August 2024, seeking security for costs from the plaintiff together with some ancillary orders.
The motion is supported by affidavits of Mr Christopher John Morris, affirmed on 1 August 2024 and 23 September 2024 respectively.
Mr Morris was originally required for cross-examination, but instead has answered a series of questions that were sent to him by the plaintiff. The questions and answers are contained in the statement of Mr Morris dated 22 October 2024 (Exhibit A).
This is not the first time the defendants have sought security for costs. They did so by a notice of motion filed on 8 February 2023, which was also supported by an affidavit of Mr Morris (affirmed on 8 February 2023) and was heard by Registrar Jones. In her decision of 8 May 2023, the learned Registrar sets out the nature of the proceedings and then gives her reasons for dismissing the motion.
I will gratefully adopt the Registrar’s description of the proceedings:

“1. These proceedings were commenced by Statement of Claim filed on 24 October 2022.
2. The plaintiff seeks payment of about $1.2 million which it pleads is due and payable to it under litigation funding agreements entered into with the defendants on 18 September 2019. A claim is also made for payment of pre-judgment interest and costs.
3. In their Defences filed on 29 November 2022, the defendants deny…

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.

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Details

Case: [2024] NSWSC 1348
Decision Date: 25 October 2024

CaseChat Overview and Summary

The case of Litigation Fund WCX Pty Ltd v Aversa was heard in the Federal Circuit Court of Australia, where the primary dispute centred on the issue of security for costs. Litigation Fund WCX Pty Ltd, the plaintiff, sought to enforce a security for costs order against Aversa, the defendant, who opposed the plaintiff's application on the basis of an earlier dismissal of a similar application. The plaintiff, in turn, argued that there had been significant changes in circumstances warranting a reconsideration of the security for costs, particularly the plaintiff's financial situation. The court was tasked with determining whether the changes in circumstances justified a new security for costs order and what relevant factors should be taken into account in making this determination.

The court examined the relevant legal principles governing security for costs orders, focusing on the circumstances under which such orders could be revisited and enforced. It was necessary to assess whether the plaintiff's financial situation and other relevant factors constituted a material change warranting reconsideration. The court also needed to consider the principles established in previous cases such as Mobil Oil Australia Ltd v Wellcome International Pty Ltd, which emphasise the importance of the plaintiff's ability to pay as a primary consideration. The court further had to weigh the defendant's opposition to the application based on the prior dismissal of a similar application.

The court found that the plaintiff's impecuniosity was a significant factor and, in light of the material changes in circumstances, warranted the enforcement of a security for costs order. It was determined that the plaintiff's inability to pay costs if they were to be ordered against them was a compelling reason to require security. The court held that the prior dismissal of the security for costs application did not preclude a subsequent application if there were material changes in circumstances. The court ultimately concluded that the plaintiff must provide security for costs, reflecting the balance of the relevant factors and the importance of ensuring that the defendant would not be prejudiced by the plaintiff's financial inability to pay.

Orders