Smith v Tony Separovic t/as Separovic Injury Lawyers

[2020] WADC 69

JURISDICTION     :   DISTRICT COURT OF WESTERN AUSTRALIA

IN CHAMBERS

LOCATION:   PERTH

CITATION:   SMITH -v- TONY SEPAROVIC t/as  SEPAROVIC INJURY LAWYERS [2020] WADC 69

CORAM:   REGISTRAR KINGSLEY

HEARD:   6 MAY 2020

DELIVERED          :   22 MAY 2020

FILE NO/S:   CIV 4630 of 2019

BETWEEN:   RAEWYN ANITA SMITH

Plaintiff

AND

TONY SEPAROVIC t/as  SEPAROVIC INJURY LAWYERS

Defendant

Catchwords:

Practice - Security for costs - Plaintiff ordinarily out of the jurisdiction

Legislation:

Rules of the Supreme Court 1971 (WA)

Result:

Security ordered

Representation:

Counsel:

Plaintiff	:	Mr Hawkins
Defendant	:	Mr S Popperwell

Solicitors:

Plaintiff	:	Chapmans Barristers & Solicitors
Defendant	:	Popperwell & Co

Case(s) referred to in decision(s):

Bryan E Fencott & Associates Pty Ltd v Eretta Pty Ltd (1987) 16 FCR 497

Lawless v MacKendrick [No 3] [2011] WASC 298

Mabrouk Minerals Pty Ltd v Mabrouk Holdings Ltd [2008] WASC 132

PS Chellaram & Co Ltd v China Ocean Shipping Co (1991) 102 ALR 321

REGISTRAR KINGSLEY:

1. This is the defendant's application dated 19 March 2020 seeking orders pursuant to O 25 of the Rules of the Supreme Court 1971 (WA) (RSC) that, within 14 days of the date of this order, the plaintiff give security for the defendant's costs of the action, up to and including a mediation/pre-trial conference.

2. For the reasons set out below I am satisfied that an order for security for costs should be made.  In support of the application the defendant has filed an affidavit of Phylicia Elizabeth Fenwick affirmed 19 March 2020 (Fenwick affidavit).  There is no affidavit in opposition by the plaintiff.  Both plaintiff and defendant have filed submissions on the application.

3. These proceedings were commenced by writ of summons lodged 22 November 2019.  The plaintiff's claim is for damages as a result of the negligence and/or breach of contract by the defendant law firm in relation to the legal advice and representation it provided to the plaintiff in the period leading up to, and on or about, 28 May 2014, and on or about 16 June 2014.

4. Relevantly, there were prior proceedings against the same defendant.  Those proceedings were commenced on 4 May 2017 with an indorsement of claim in the same terms as the indorsement in these proceedings.  The plaintiff filed a statement of claim dated 20 March 2018 giving details as to the claim for loss of a chance, breach of statutory duty and breach of fiduciary duties.

5. The 2017 action was discontinued by the plaintiff by notice of discontinuance lodged 20 February 2020. As a result of the defendant's O 16 r 1 RSC application filed in the 2017 action the plaintiff became liable to pay to the defendant $3,117.54, by way of the taxing officer's certificate dated 10 February 2020. That sum has not been paid.

6. The sole ground for the defendant's application is that the plaintiff ordinarily resides out of the jurisdiction, namely New Zealand.  It is common cause that the plaintiff does ordinarily reside in New Zealand.

7. Order 25 r 3 RSC provides that:

   The granting of security should be in the discretion of the court and the court in exercising its discretion shall take into consideration:

   (a)the prima facie merits of the claim;

   (b)what property within the jurisdiction maybe 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.

8. The court has an unfettered discretion to order security for costs.  The discretion is to be exercised with regard to the circumstances of each particular case, and as Newnes J observed in Mabrouk Minerals Pty Ltd v Mabrouk Holdings Ltd [2008] WASC 132 [57]:

   It is well‑established that the discretion to order security for costs is unfettered and depends upon an examination of all of 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…

1. Justice Newnes went to say in Mabrouk that the fact a plaintiff is ordinarily resident out of the jurisdiction, whilst enlivening the court's jurisdiction, is not of itself a sufficient ground for making an order [58].

2. Justice Newness at [59] goes onto say, citing McHugh J in PS Chellaram & Co Ltd v China Ocean Shipping Co (1991) 102 ALR 321, the fact a party is resident out of the jurisdiction and who has no assets within the jurisdiction is usually a factor weighing heavily in favour of an order for security. In fact, McHugh J in Chellaram used the phrase 'a circumstance of great weight in determining whether an order for security for costs should be made'.

3. There is a line of authority to support the proposition that where a claim is prima facie regular on its face and appears to disclose a cause of action, then it is rarely appropriate to minutely assess the potential merits of a case that must ultimately be determined at trial (see Bryan E Fencott & Associates Pty Ltd v Eretta Pty Ltd (1987) 16 FCR 497 and Lawless v MacKendrick [No 3] [2011] WASC 298).

4. A statement of claim had been filed in the 2017 proceedings.  That statement of claim may or may not be adopted in these proceedings.  Even if that statement of claim in the 2017 proceedings is adopted in these proceedings, all I am prepared to say is that the plaintiff's claim appears bona fide and appears to have a reasonable prospect of success.

5. The evidence from Fenwick's affidavit is that the plaintiff has no property in this jurisdiction which would be available to satisfy any order and, obviously, the normal processes of the court would not be available within the jurisdiction for enforcement of a costs order.

6. There is no evidence from the plaintiff about the effect of a successful order for security for costs.  The plaintiff's counsel submits that New Zealand is in a state of lockdown and it was impossible for the plaintiff to provide any evidence.  Whilst taking note of the unusual circumstances surrounding the COVID-19 pandemic, some statement from the plaintiff would have been expected as to the impact of a security for costs order.

7. The plaintiff would appear to have a claim against the defendant which has a reasonable prospect of success but the plaintiff is ordinarily resident out of the State.  I have no evidence as to the financial circumstances of the plaintiff, and so have no reason to consider that any security for costs order will stultify the plaintiff's action.  There is no evidence that the imposition of security would be oppressive for the plaintiff.

8. The defendant seeks the sum of $29,396 as security for costs up to and including a mediation conference.  Plaintiff's counsel made no serious objection to the quantification of the items save for the sum of $5,000 for medical expert evidence. 

9. The plaintiff's claim, as indorsed, is a loss of chance and/or breach of contract claim.  The plaintiff's claim arises out of an injury at work and, as a consequence, the question of 'whole of person impairment' would need to be analysed.  That by necessity would require medical evidence being obtained.

10. The defendant seeks an amount of $12,375 for preparation of the case.  In my opinion that figure is slightly optimistic.  I would allow a security at $25,000.

11. Plaintiff's counsel submitted that if an order for security for costs were to be made that the plaintiff be given 60 days to give security.  The defendant did not object.

12. Accordingly, my orders are:

    1.Within 60 days of the date of this order the plaintiff do give security for the defendant's costs of the action up to and including a mediation/pre-trial conference in the sum of $25,000.

    2.Pending provision of security as provided in par 1 of this order the action be stayed.

    3.The defendant have leave to re-list this application seeking further security for costs.

13. I have heard submissions from both counsel on the issue of costs on the application.  The defendant's counsel submitted, and the plaintiff's counsel agreed, that if the application were successful the appropriate order would be the plaintiff pay the defendant's costs on the application in any event.  That will be my order.

I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.

DH
Court Officer

4 JUNE 2020