Quiroga v Belmar-Morales and Morales

[2010] VCC 477

IN THE COUNTY COURT OF VICTORIA Unrevised

Not Restricted

AT MELBOURNE
CIVIL DIVISION
COMMERCIAL

FAMILY PROPERTY DIVISION

Case No. CI-09-06163

LEIVA BRUNILDA DEL CARMEN QUIROGA	Plaintiff
v
SANDRA XIMENA BELMAR-MORALES	First Defendant
and
DAGOBERTO ANTONIO MORALES	Second Defendant

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JUDGE:	HIS HONOUR JUDGE MISSO
WHERE HELD:	Melbourne
DATE OF HEARING:	6 May 2010
DATE OF RULING:	14 May 2010
CASE MAY BE CITED AS:	Quiroga v Belmar-Morales & Morales
MEDIUM NEUTRAL CITATION:	[2010] VCC 0477

RULING

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Catchwords: PRACTICE AND PROCEDURE – application by the defendants for security for costs – Order 62.02 – considerations relevant to the exercise of the discretion to require security for costs.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr A Herskope	John Keating & Associates
For the Defendants	Mr M Muir	Lewis Holdway Pty Ltd
HIS HONOUR:

Background

1          The plaintiff married Arturo Enrique Belmar on 17 August 2002. He died on 24 March 2008.

2          The first defendant is the daughter of the deceased. The second defendant is the husband of the first defendant.

3          The plaintiff is a Chilean National, as was the deceased. They arrived in Australia in March 2008, intending to settle here permanently. According to the plaintiff, the deceased was an Australian citizen.

4          The plaintiff and the deceased opened a Westpac Bank account (“the banking account”) in their joint names. It held a balance of at least $169,887.92.

5          The plaintiff alleges that she attended the Westpac Bank, at its Melton branch, on 28 March 2001 with the first defendant. The first defendant acted as her interpreter. In the course of what occurred during their attendance at that branch, the plaintiff alleges that the first defendant procured a transfer of two sums of money totalling $169,887.92 from the banking account to herself.

6          The plaintiff alleges that the procurement occurred as a result of undue influence and unconscionability by the first-named defendant in taking advantage of the plaintiff's disability. The alleged disability is pleaded in paragraph 14 of the Statement of Claim.

7          In their Defence, the defendants admit that two sums of money totalling $169,887.92 were transferred from the banking account to the first defendant. They allege that the first defendant was entitled to receive those sums of money. Additionally, in particulars sub-joined to paragraph 19 of the Defence, the defendants allege that the sums of money were held on trust by the deceased for the first defendant.

The Application

8          By Summons filed 18 March 2010, the defendants have applied for an order pursuant to Order 62.02 for the plaintiff to provide security for costs.

9          The application is supported by the following affidavit material:

(a)	an affidavit of Anthony John Muir, solicitor, sworn 19 March 2010, and three exhibits.
(b)	two affidavits of the first defendant, sworn 20 April 2010, with two exhibits, and the second, sworn 5 May 2010, with one exhibit.
(c)	an affidavit of Cynthia Carter, sworn 5 May 2010.
(d)	an affidavit of Marianella Pacheco, sworn 6 May 2010.
(e)	an affidavit of Marco Pacheco, sworn 6 May 2010.

10        The plaintiff responded to the application by swearing an affidavit on 4 May 2010 with two exhibits.

11        Mr Muir, solicitor, appeared for the applicant/defendants, and Mr Herskope of counsel appeared for the plaintiff/respondent.

The Parties’ Submissions

12        Essentially, the submissions made by Mr Muir, based upon the evidence contained in the affidavits, were as follows:

(1) the plaintiff is not an Australian citizen.

(2)	She has no assets in Australia.
(3)	She has expressed an intention to return to Chile, where she intends to live permanently.
(4)	If the defendants are successful in resisting the plaintiff's claim then the plaintiff has no assets against which the defendants can execute any order for their costs.

13        Mr Muir relied upon Order 62.02, which is in the following terms:

" (1) Where—

(a)	the plaintiff is ordinarily resident out of Victoria;
(b)	the plaintiff is a corporation or (not being a plaintiff who sues in a representative capacity) sues, not for the plaintiff's own benefit, but for the benefit of some other person, and there is reason to believe that the plaintiff has insufficient assets in Victoria to pay the costs of the defendant if ordered to do so;

(c) a proceeding by the plaintiff in another court for the same claim is pending;

(d)	subject to paragraph (2), the address of the plaintiff is not stated or is not stated correctly in the plaintiff's originating process;
(e)	the plaintiff has changed his, her or its address after the commencement of the proceeding in order to avoid the consequences of the proceeding;
(f)	under any Act the Court may require security for costs—

the Court may, on the application of a defendant, order that the plaintiff give security for the costs of the defendant of the proceeding and that the proceeding as against that defendant be stayed until the security is given."

14        Mr Herskope essentially submitted that there is no merit in the application made by the defendants. In particular, he referred to the fact that the plaintiff is in Australia, has been granted permanent residency and has no assets in Australia because the defendants have wrongfully procured the moneys which were deposited in the banking account to which she is lawfully entitled.

Conclusions

15        The defendants’ application is wholly based upon paragraph (1)(a) of Order 62.02. The other paragraphs have no application, and indeed, Mr Muir did not rely on those other paragraphs in any way.

16        Paragraph (1)(a) requires me to consider making an order for security of costs where the plaintiff is ordinarily resident out of Victoria.

17        The fact is that the plaintiff is presently resident in Victoria. In her affidavit she described her address as Unit 1, 38 Norman Street, St Albans which is obviously an address in Victoria and the place where she is resident. The word "ordinarily" qualifies the word "resident", which must mean that the plaintiff does not have to be permanently resident in Victoria but ordinarily, in other words, usually or mostly.

18        The fact that the plaintiff is ordinarily resident in Victoria must mean that the application for security for costs is premature. How can it be, I ask rhetorically, that an application can be based upon the plaintiff being ordinarily resident out of Victoria when she is resident within Victoria?

19        Even if I were to accept what Marianella Pacheco and Marco Pacheco stated, that they had been informed by the plaintiff that she will leave Australia permanently in order to live in Chile, it is evidence of some future intention on the part of the plaintiff. It is not until the plaintiff is no longer ordinarily resident in Victoria that the defendants have a basis upon which they can invoke paragraph (1)(a).

20        The foregoing must be read in light of the findings I have made concerning the plaintiff's ordinary place of residence. If she were in fact to leave Australia to live in Chile, then the basis of the application for security for costs would change and it may change to such an extent that it would be looked upon more favourably.

21        Therefore, the orders that I make are:

(a)	The Summons is dismissed.
(b)	The defendants pay the plaintiff's costs to be taxed on County Court scale "D" on a party/party basis.

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