Roe v Howard

[2020] VSC 212

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE
PRACTICE COURT

S ECI  2020 01108

SARAH ROE (a pseudonym)	Plaintiff
v
LINDA HOWARD	Defendant

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JUDGE:	Macaulay J
WHERE HELD:	Melbourne, ex parte
DATE OF HEARING:	5 March 2020
DATE OF JUDGMENT:	11 March 2020
CASE MAY BE CITED AS:	Roe v Howard
MEDIUM NEUTRAL CITATION:	[2020] VSC 212

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FREEZING ORDER – r 37A.02 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (Rules) – Interlocutory relief is sought ex parte - Usual undertaking for damages not proffered by the plaintiff – Whether plaintiff should be relieved of the requirement to give the usual undertaking as to damages due to her low financial means - Freezing order not granted but would be granted if usual undertaking as to damages was given.

PSEUDONYM ORDER – Leave to commence proceedings under pseudonym – Plaintiff not to comply with r 5.07(1)(a) of the Rules – Substantive proceeding for recognition of foreign judgment granted in the United States of America – Foreign judgment concerned plaintiff’s forced labour and sexual servitude - Pseudonym orders are appropriate in the interests of justice.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Ms C Cunliffe	Jones Day
For the Defendant	No appearance

HIS HONOUR:

1. Sarah Roe (a pseudonym) obtained an award of damages for the sum of USD$3 million in the United States District Court for the Eastern District of Virginia, upheld on appeal to the United States Court of Appeal for the Fourth Circuit (‘the US Judgment’). By Originating Motion filed in this Court, Ms Roe has applied to register the US Judgment in this Court to enable her to enforce it in this jurisdiction. The judgment debtor, Ms Linda Howard, owns real estate in Victoria.

1. The proceeding is yet to be served upon Ms Howard. Interlocutory relief is sought, ex parte, for two things: an order permitting the proceeding to be commenced without identifying the plaintiff by her real name but by means of a pseudonym and a freezing order to restrain Ms Howard, until further order, from disposing of her assets in the jurisdiction.

1. Several affidavits have been sworn and filed in support of these applications. Upon reading them I am comfortably satisfied that this is a case in which it is appropriate to permit the plaintiff to commence her proceedings by the use of a pseudonym and to make necessary ancillary orders.[1] Her cause of action against Ms Howard upon which she obtained judgment in the United States was based upon breaches of the Trafficking Victims Protection Act of 2000, for having recruited Ms Roe to provide forced labour, including forced sexual servitude. The details of that sexual servitude are harrowing and degrading. Her proceeding was conducted in the United States by use of a pseudonym. This is the very type of case for which pseudonym orders are appropriate in the interests of justice.

   [1]The principles to be applied in the exercise of the discretion are set out in ABC v D1 [2007] VSC 480.

1. The second application is for a freezing order. The purpose of such an order is to prevent frustration or abuse of the court’s process. In this case, again upon the affidavit material, I observe the following matters:

·although Ms Roe has yet to prove her entitlement to register the US judgment upon the common law grounds,[2] she starts from the position that she has already proven her claim against the defendant in another jurisdiction (and I add, in the face of opposition from Ms Howard);

·despite Ms Howard’s active opposition, another young woman (Jane Doe, a pseudonym) succeeded in a proceeding in this court to register a United States judgment against her based upon similar conduct to that which Ms Howard subjected Ms Roe;[3]

·it appears clear that Ms Howard owns real estate in Docklands, Victoria;

·soon after the United States judgment was obtained in favour of Ms Roe, in January and February 2018 the Docklands property was listed for sale, although was it was not sold, and has since been advertised for rental on a number of occasions (leading me to infer it is likely to be tenanted);

·Ms Howard is not presently in Australia and her whereabouts are otherwise unknown: she was last known to be in Thailand in 2017 but her Australian Resident Return Visa was cancelled in November 2017 so that she has been unable to lawfully re-enter Australia since;

·on previous occasions Ms Howard has instructed solicitors in Australia to contest legal proceedings on her behalf.[4]

[2]Doe v Howard [2015] VSC 75 at [56], citing Bhushan Steel Ltd v Severstal Export GmbH [2012] NSWSC 583 at [146]-[147], Benefit Strategies Group Inc v Prider (2005) 91 SASR 544 at [18], and Davies, Bell and Brereton, Nygh's Conflict of Laws in Australia (Lexis Nexis Australia, 8th ed. 2010), [40.2]).

[3]Doe v Howard [2015] VSC 75 (J Forrest J) (‘Doe’).

[4]Ibid; Howard v Minister for Immigration [2017] FCCA 2916.

1. Upon these facts, and considering the common law principles to be applied, I regard Ms Roe’s prospects of success in this proceeding as good, if not strong. I also think that unless Ms Howard is restrained from doing so, there is a danger she will dispose of her assets in Australia and that any prospective judgment of the court, assuming the United States judgment is registered, will go unsatisfied.

1. The affidavits filed in support of the application satisfy the requirements in rule 37A.02 (5) of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (‘Rules’).

1. Notwithstanding the above, there is one issue that potentially stands in the way of me making the freezing order that is sought: that is, the applicant does not proffer the usual undertaking as to damages. On her behalf it was submitted that I ought not require her to do so.

1. Mr Holloway, whose affidavit sworn 3 March 2020 was filed in support of the application, deposes, on information and belief, that Ms Roe is a single mother of a young daughter,  is currently employed in part time employment albeit with difficulty due to the effects of the trauma she has suffered, and is living in a small, low income apartment in the United States. It was submitted that her “poverty” prevents her from tendering a meaningful undertaking and that this is an exceptional case in which the usual undertaking should not be required.

1. Quite properly, given that this application is made ex parte, counsel for Ms Roe brought to my attention a number of cases which bear upon the question whether an applicant for an injunction may be relieved of any requirement to proffer an undertaking as to damages as the price of the injunction. The cases referred to in the written submission are Alan v Jambo Holdings Pty Ltd [1980] All ER 502; Szentessy v Wu Ran Pty Ltd (1985) 82 FLR 298; Custom Credit Corp Ltd v Whitehall Holdings Pty Ltd (unreported, Supreme Court Western Australia, Ipp J, 7 April 1992); and Goater v Commonwealth Bank of Australia [2014] NSWCA 265 (citing Kerridge and Another v Foley and Another (1968) 70 SR (NSW) 251, Southern Tableland Insurance Brokers Pty Ltd (in liq) v Schomburg (1986) 11 ACLR 337 and De Boar v Williams [2004] NSWSC 351). A further case was brought to my attention by an email to the court after the hearing: ACCC v Get Qualified Australia Pty Ltd (2016) 244 FCR 538.

1. It appears from those cases that, in relation to the requirement of an undertaking as to damages, the following approach should guide the exercise of my discretion whether or not to grant an interlocutory injunction:

·the usual undertaking as to damages is required in every case where an interlocutory injunction is sought, unless there are exceptional circumstances;

·one possible exception to the requirement of giving the usual undertaking is that by reason of his or her poverty the applicant is unable to give a meaningful undertaking;

·the giving or absence of an undertaking as to damages, or of a satisfactory undertaking, is a factor to take into account in assessing the balance of convenience;

·impecuniosity or lack of financial means, of itself, ought not be a bar to a litigant being able to vindicate legal rights.

1. I would emphasise that there is a difference between not giving an undertaking at all, and giving one which may prove unsatisfactory because of lack of financial means to make it good.  It is not uncommon for an applicant for an injunction to have doubtful means to make good the usual undertaking as to damages should it have to be called upon. Frequently, in those circumstances, when considering the balance of convenience and thus whether to grant the injunction, the court will weigh the consequences of not granting the injunction at all against those of granting the injunction with uncertain protection to the restrained party should it be found the injunction ought not to have been granted.  

1. A number of the cases referred to above were cases where the undertaking was proffered but there was reason to doubt that it would ultimately be of meaningful protection to the beneficiary of the undertaking.

1. Here, I am informed that Ms Roe will not press for a freezing order if I am of the view that she should give the usual undertaking as to damages. Put differently, Ms Roe is not prepared to give the usual undertaking as to damages as the price of the freezing order.

1. I bear in mind that this application is made ex parte and Ms Howard has not yet been heard on the question of whether any undertaking as to damages ought to be given. Because Ms Howard is not represented on this application I have not heard from her as to what detriment, if any, she may suffer should I grant the injunction. On its face, it seems unlikely that Ms Howard will suffer any immediate detriment; the property appears to be tenanted, there is no evidence of any present attempts to sell it, so that restraining its disposal would not likely disrupt her current use of the property. But, of course, I cannot be sure of that.

1. In summary, the situation appears to be this: Ms Roe has good prospects of success in the proceeding and, as best as I can tell at this point, the likelihood that she will have to pay Ms Howard damages for restraining the disposal of her property seems low. Further, given that the evidence suggests the property is currently tenanted, any damage that might be suffered in the immediate to short-term is likely to be modest, if any. Ms Roe has an income but is clearly vulnerable and is supporting a child on her own. Her litigation was conducted on a pro bono basis. Although I do not conclude that she is destitute, she is plainly of low financial means at the present time. Of course, a person’s financial situation can change for better or worse over time.

1. It is not suggested there is any immediate detriment for Ms Roe by her giving an undertaking as to damages. I am not told, for example, that it would trigger some other financial obligation or adverse consequence, or cause her to be deprived of some valuable benefit, other than by creating a contingent liability for an award of damages to Ms Howard should she fail in her proceeding and the court find Ms Howard to have suffered loss and damage by reason of the freezing order.  Requiring Ms Roe to give the usual undertaking as to damages will not prevent or bar her from continuing her litigation against Ms Howard.  But it will expose her to the risk of loss of her assets should she ultimately fail in her proceeding against Ms Howard. 

1. I do not see why I should relieve Ms Roe of the requirement to give the usual undertaking as to damages. Her low financial means of itself is no reason why she should not have to place them at risk as the price of obtaining an ex parte injunction. Her undertaking may prove to be of little worth in the sense that it will not yield sufficient to cover Ms Howard’s loss should it ultimately be called upon. On the other hand, her financial means may be sufficient, in due course, to meet some modest loss which Ms Howard suffers by reason of the freezing order being made. Why should she be spared that risk?

1. In the end, I do not see why the balance of convenience in this case requires Ms Roe to be relieved of having to risk whatever financial resources she possesses as the cost of the court imposing an interlocutory restraint on Ms Howard. The restraint is for the benefit of Ms Roe and it might cause Ms Howard to suffer some unjustified financial detriment.

1. But for the absence of an undertaking as to damages, I would otherwise grant the freezing order. It follows that any adverse consequence to Ms Roe from Ms Howard disposing of her assets before Ms Roe is able to register and enforce a judgment against those assets would not stem from Ms Roe’s “poverty” or “impecuniosity”; rather, it would stem from her choice not to proffer any undertaking as to damages in the usual form. Perhaps unfortunate, but there would be no injustice in that outcome.

1. Should Ms Roe decide to change her position, and to avoid the need for any further hearing, I will state that I am prepared to make a freezing upon Ms Roe, through her legal representatives, giving a written undertaking as to damages in the usual form.