(a) the prima facie merits of the claim; (b) what property within the jurisdiction may be available to satisfy any order for costs against the plaintiff;
(c) whether the normal processes of the Court would be available within the jurisdiction for enforcement of any order for costs made against the plaintiff.
30 The factors specified under O 25 r 3 are also not exhaustive: see Engel Pty Ltd (In Liq) v Leeds (Unreported, WASC Full Court, Library No 940403, 20 July 1994) 3 (Malcolm CJ). 31 Any exercise by the court of its power to order security is always an order made to serve the interests of justice: Ailakis v Olivero [2013] WASCA 91. While the power has been described as being 'unfettered', it must be exercised judicially: Mann v Dabelstein [2006] WASCA 176 [16]. The circumstances that may bear upon the exercise of the discretionary power are broad.
32 Mabrouk Minerals Pty Ltd v Mabrouk Holdings Ltd [2008] WASC 132 dealt with an application for security for costs against a corporation, which raises a somewhat more liberal environment towards ordering security for costs. Nevertheless, Newnes J (as his Honour then was) observed at [57]:
It is well-established that the discretion to order security for costs is unfettered and depends upon an examination of all the relevant circumstances. The circumstances in which the discretion should be exercised cannot be stated exhaustively. They will vary from case to case and the weight to be given to any circumstance in a particular case will depend not only upon its own intrinsic persuasiveness but upon the impact of the other circumstances which have to be weighed: PS Chellaram & Co Ltd v China Ocean Shipping Co (1991) 102 ALR 321, 323.
33 In Knight v Beyond Properties Pty Ltd [2005] FCA 764 [32] Lindgren J observed upon a disinclination of courts to order a plaintiff who is a natural person to provide security for costs, at least in the absence of some other presenting factor beyond mere impecuniosity, citing numerous case authorities reiterating the policy importance of facilitating the ready access of natural persons to the courts. Relevantly, Lindgren J continued at [33] to observe:
In the cases in which natural persons have been ordered to provide security, some factor in addition to impecuniosity has been present: cf Barton v Minister for Foreign Affairs (1984) 2 FCR 463 (Morling J) at 594 (impecuniosity and residence outside Australia); Cunningham v Olliver (unreported, Burchett J, 21 November 1994) but for delay, security would have been ordered on ground of impecuniosity and bringing of claim to a significant extent for benefit of others); Chang v Comcare Australia [1999] FCA 1677 (Moore J) at [32] (impecuniosity and lack of prospects of success); Loque v Hanson Technologies Ltd [2003] FCA 81 (Weinberg J) (impecuniosity and residence outside Australia); Morris v Hanley [2000] NSWSC 957 (Young J) at [21], [38] and [39] (but for delay, Young J would have ordered security on grounds of impecuniosity and lack of prospects of success and large costs involved to defendants. Young J's decision was reversed on appeal on the ground that defendants had not adequately explained their delay in moving for security, but the Court of Appeal did not consider other aspects of his Honour's reasons: see Morris v Hanley & Ors [2001] NSWCA 374 at [30] - [31]); Melville v Craig Nowlan & Associates Pty Ltd (2002) 54 NSWLR 82 (CA) at [132] (per Heydon JA) (impecuniosity and applicant's failure to show that order would stultify proceeding and sum ordered by primary Judge not oppressive). (original emphasis)
34 It is necessary to point out that Western Australian RSC O 25 r 1 has been, at least until recently, somewhat unique in Australia among the many rules of different courts governing the power of a court to issue an order for security. This is because RSC O 25 r 1 expressly provides that an order for security for costs cannot be made merely on account of a plaintiff's impecuniosity. However, that position has now been adopted elsewhere. The Uniform Civil Procedure Rules 2005 (NSW) (UCPR) were amended in 2013 to include a new rule, r 42.21(1B), which provides:
If the plaintiff is a natural person, an order for security for costs cannot be made merely on account of his or her impecuniosity.
35 Prior to r 42.21(1B), the impecuniosity of a natural person plaintiff was 'one factor that may be relevant among many', although New South Wales courts looked to usually apply the recognised common law principle that poverty is no bar to a litigant, unless some extra factor was present - see NSW Law Reform Commission, Security for Costs and Associated Orders, Report 137 (2012) [2.65] - [2.69]; Morris v Hanley [2001] NSWCA 374; Idoport Pty Ltd v National Australia Bank Ltd [2001] NSWSC 744; Green v CGU Insurance Ltd [2008] NSWCA 148; Viavattene v Morton [2011] NSWSC 1173. I observe that Ritchie's Uniform Civil Procedure NSW currently states, at 42.21.10C:
… the mere impecuniosity of a 'natural person' plaintiff provides no basis for ordering security for costs: UCPR r 42.21(1B) and Idoport Pty Ltd v National Australia Bank Ltd [2001] NSWSC 744; BC 200105623 at [53]; O'Neill v De Leo[1993] 2 Tas R 225 (legal aided plaintiff). However, if the power to order security was authorised on other grounds, the impecuniosity of a natural plaintiff can be a relevant consideration in the exercise of the discretion.
36 There is no rule or provision analogous to RSC O 25 r 1, or UCPR r 42.21(1B) in the Federal courts. The comments by Lindgren J in Knight v Beyond Properties Pty Ltd are to be understood in that context. 37 For the present application it is also relevant to consider and weigh together the principles of case management which are necessarily applicable to matters in the Commercial and Managed Cases (CMC) List (see Trafalgar West Investments Pty Ltd As Trustee For The Trafalgar West Investments Trust v Superior Lawns Australia Pty Ltd [No 3] [2013] WASC 150 [9] - [10]. All defamation actions commenced in this court are case managed in the CMC List of an allocated CMC judge.
The issues raised
38 At the conclusion of counsel's arguments on 5 December 2014, it had become apparent that several of the defendants' initial arguments raised towards supporting seeking an order for security for costs had fallen away.
39 In particular, the defendants seemed to accept, or at least did not seek to contest, that Mr Moran was currently a person who was, albeit a German citizen, nevertheless ordinarily resident in Western Australia (hence RSC O 25 r 2(b) could not be engaged). Issues regarding a non-disclosure of Mr Moran's current residential address and his alleged overseas drug conviction were also not pursued. It was common ground that Mr Moran was personally impecunious. He did not own any real property or chattel property assets in the jurisdiction, save for his old Pajero vehicle.
40 The defendants nevertheless say that there is still good and proper reason why security for their costs should be ordered.
41 First, it was submitted that although Mr Moran himself was accepted to be personally impecunious and therefore was, in effect, 'judgment-proof' (ie, the defendants would be unlikely to recover any of their trial costs from him, if they were successful at a trial and obtained the usual order in their favour for their taxed costs to be met by Mr Moran as the unsuccessful plaintiff in the litigation). Nonetheless it was said an order for security for costs would not stultify the litigation, because Mr Moran nonetheless would still likely receive, to that end, financial support from third parties (ie, from his family and friends) to enable him to continue his action, much as he had received such support to date.
42 It was said by the defendants that it could be inferred that Mr Moran's third party financial support would likely continue, on the same basis of, inter alia, already considerable financial support provided on an informal basis by his family and friends to date, and as was pragmatically demonstrated by the plaintiff's engagement of an expensive and specialist team of defamation lawyers from Bennett + Co, who were not said or suggested to be acting pro bono.
43 On that basis then, the defendants submit that Mr Moran presented, so it was put, as only nominally or conveniently impecunious, in an exceptional sense, as his personal impecuniosity did not manifest, at least to date, as any actual bar to his continuing this litigation to a trial. It was submitted, in such exceptional circumstances, Mr Moran carried, in effect, an onus to show that an order for security for costs would actually stultify his action and that he had not discharged that onus by his inadequate materials. An alternative view for this proposition was that the likely prospect of the availability of third party financial support to assist Mr Moran in providing security, manifested as an additional ground beyond mere impecuniosity upon which security for costs might be ordered. This raised a circumstance relevant to the exercise of the Court's discretion in favour of the defendants.
44 Second, it was submitted that Mr Moran, by par 43 of his affidavit particularly, had been less than completely forthright, concerning whether or not, if an order for substantial security against him was made, he may nevertheless still be able to secure third party financial support from the same third party quarters to meet that demand. There was, for instance, nothing in his affidavit to say that he had approached those sources and had been rebuffed or, for instance, that some 'cap' had been placed upon the largess of his family and friends - which he had enjoyed so far - and presumably would for the meeting of his own trial cost liabilities to Bennett + Co.
45 Third, the likely very high legal expenses of proceeding with this defamation trial of some weeks' duration, would pose a great financial hardship for the defendants, which was not in the interests of justice. The high litigation costs suffered by the defendants therefore presented as a factor to be added to the impecuniosity of Mr Moran, weighing in overall favour of the court exercising its discretion to order security.
46 Against all that, for the plaintiff, it was submitted, resisting any level of security, that the defendants had not established any sufficient ground or a 'trigger' that could support in principle the court's assessment of the present application - beyond showing the plaintiff's mere impecuniosity under RSC O 25 r 1.
47 It was submitted that whether Mr Moran might secure some future access to support funds from family and friends to meet an order for security in the context of the broader issue as to whether an order for significant security would effectively stultify his action had not properly arisen for consideration by the court, given the state of the evidence submitted.
48 It was further submitted for Mr Moran that, to the extent the issue of whether third party financial support might be available to meet an order for security did arise, it was for the court to be satisfied, on the basis of all the evidence provided by the parties, whether this would occur. In that context, it was submitted that Mr Moran had been clear (and essentially unchallenged) about his lack of funds or assets, and that the defendants had made no attempt to cross-examine Mr Moran over or about his sources of financial support from family and friends.
Disposition of the defendants' application for security
49 This is indeed, on my assessment, an unusual application for security which is advanced against a natural person plaintiff. Evidently, the application does not meet any of the nominated grounds for possibly ordering security, as set out in RSC O 25 r 2 - but which, of course, are non-exhaustive.
50 This plaintiff is obviously not a corporation. Thus the wholly unfettered power of the court to order security for costs against an impecunious corporate plaintiff under s 1335(1) of the Corporations Act 2001 (Cth) does not manifest. Further, it was not contended that the present proceedings were vexatious, or that Mr Moran was a nominal or 'puppet' plaintiff - suing for the actual benefit of a third party, or to shield such parties from an award for costs. Rather, this plaintiff is simply a natural person - albeit personally impecunious in that he owns, it appears, no property in this jurisdiction, except his old car with a genesis dating to the year of Australia's bicentenary - who now resides in Western Australia and who seeks to vindicate his personal reputation by this defamation action.
51 Both parties seem to accept, as regards the absence of realisable assets owned by Mr Moran personally, that he would not be able to meet a costs award made against him after a trial. But the fact of Mr Moran being impecunious and likely being unable to presently meet a costs award is clearly not enough of itself to enliven this court's discretion to order security against Mr Moran, in the sense of providing a proper ground beyond impecuniosity upon which security might be granted.
52 RSC O 25 r 1 renders it very clear - 'no order shall be made merely on account of the poverty of the plaintiff or the likely inability of the plaintiff to pay any costs awarded against him'. Hence, something more is required to be shown by the defendants in order for the court to enliven a possible exercise of discretion against an otherwise impecunious natural person such as Mr Moran. The authors of Civil Procedure Western Australia at [25.1.1] observe that RSC O 25 r 1 reflects the principle, for which Cowell v Taylor (1885) 31 Ch D is often cited as the authority, namely that poverty itself is no bar to a personal litigant. The state of the law, in this respect, now differentiates very significantly between applications for security for costs made against a natural person, and security applications made against a 'corporation', pursuant to s 1335(1) of the Corporations Act 2001.
53 It is necessary then to very closely examine all the underlying circumstances in the present case to determine whether there may be some further relevant factors to possibly enliven the exercise of discretion to order security for costs against this natural person plaintiff.
Factors beyond the individual plaintiff's impecuniosity
54 I am left in no doubt that a defamation trial of the proportions the defendants postulate as being necessary to ventilate their foreshadowed justification of a Chase level 2 imputation of reasonable suspicion of guilt as regards the 2005 murder of Simone Strobel at Lismore, New South Wales, will be an expensive exercise. Clearly, such a trial will be an expensive exercise for all, consuming several weeks of trial time and, as the defendants forecast, require the evidence of a large number of witnesses, mostly from New South Wales and overseas.
55 Even if a more abbreviated trial could be run, the likely trial costs are still highly likely to run to several hundred thousand dollars.
56 To advance his case, Mr Moran has, on the submission of counsel for the defendants, engaged a law firm from the 'top end of the city' (clarified to mean, at ts 147, in regards to 'top end' high legal costs) for his defamation action in Western Australia. There is, I accept, nothing to suggest Mr Moran's solicitors and counsel are acting on a pro bono basis, or on a contingent fee arrangement in which payment of legal costs is conditional upon a successful trial outcome for the plaintiff - see, eg, Del Bosco v Outtrim [2008] NSWSC 105; Shackles v Broken Hill Pty Co Ltd [1996] 2 VR 427; Zakka v George Elias t/as Cadmus Lawyers [2012] NSWCA 277.
57 For present purposes, a hypothesis of an unsatisfied taxed costs award of roughly $500,000 after a successful trial defending this action would, I will accept, constitute a financial hardship for these defendants. But to recall the words of Darley CJ in McSharry - the 'same hardship' is experienced by many other defendants in actions involving impecunious natural persons. Without more, a high, irrecoverable potential legal costs outlay in this matter - and the factual circumstances attending the parties - does not of itself constitute a viable ground beyond impecuniosity to enliven a basis for making an order for security.
58 Concerning the assessed merits of the plaintiff's defamation action, it is not presently necessary, for the purposes of satisfying RSC O 25 r 3(a), to engage in a rigorous examination of the action for it to become apparent, to echo the words of Steytler J in Coyne, that there appears
at least enough in the proceedings to warrant their going to trial. While I would not, at this stage of the proceedings … be prepared to describe the plaintiff's claims against the defendants as strong, I am equally not, at this stage of the proceedings, prepared to describe the defendants' prospect of successfully defending the actions as being so good as, in itself, to warrant an order for the provision of security for costs by the plaintiff (70).
59 However, it was further submitted on behalf of the defendants that the family and friends of Mr Moran may be inferred to be 'standing behind' him, in a sense of them receiving some 'benefit' from his success in his defamation action, if it was successful, and that this consideration should weigh as the additional factor - supporting an order for security. 60 But I am not persuaded of this so-called benefit to others argument for several reasons. First, obviously, this is a defamation action by which Mr Moran, as the sole plaintiff, seeks to vindicate his own personal reputation against what he says is the very seriously defamatory imputation, on his case, that the defendants' Book went beyond just suggesting reasonable grounds for suspicion against him, but actually conveyed the imputation as to his guilty participation in what is a still unsolved murder of Simone Strobel at Lismore in 2005. Hence, this is a highly personal action concerned only with damage to the plaintiff's reputation. Second, to the extent Mr Moran's family might 'benefit' if his defamation action is successful, that outcome would be a surrounding reputational benefit at best. There is nothing to suggest that Mr Moran's family and friends would share, for example, in any award of damages to him. Broader reputational benefits would accrue only vicariously, through the familial association with Mr Moran and his vindication at trial. Third, it was not contended that the extended Moran family members bore any obligation to share in the financial risks of this lawsuit - indeed, had they attempted to participate they would have been rejected - lacking the necessary standing to participate, on the basis that they had not been defamed. Finally, there is no evidence of any Moran family members or friends attempting to direct this litigation, such as might, for instance, require a notification under RSC O 9A, an issue I discuss further below.
61 The absence of any benefits to others aside, the defendants at base still argue that Mr Moran's local family and friends should be assessed currently as more than likely to provide, and to continue to provide, whatever level of funds is required to enable the plaintiff to pursue his action and, if this court so orders, are more likely than not to assist Mr Moran financially to meet any obligations to the defendants for security for the costs of a trial that might be made against the plaintiff. In my view, this last factor is the real key.
62 As I have observed, this is a most unusual defamation case. It seems clear - as will be discussed further below - that an otherwise impecunious plaintiff has been and will be financially supported to run this case to a trial - even if the exercise runs to the order of several hundred thousand dollars for the plaintiff's incurred costs to his lawyers. But so far nothing at all is said about the amenability of these same beneficial supporters to assist Mr Moran in providing security for the defendants' costs, were the defendants to win the trial. The silence upon that key issue is, I find, rather deafening.