Driver v Swanson [1977] PNGLR 30 (22 February 1977)

Papua New Guinea Law Reports - 1977

[1977] PNGLR 30 - Phyllis Vera Murray Driver v Gwendolene Mary Swanson 

[1977] PNGLR 30

N84

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

DRIVER

V

SWANSON

Waigani

Raine J

15 February 1977

22 February 1977

COSTS - Security for costs - Residence out of jurisdiction - Plaintiff resident in New South Wales - Plaintiff no assets within jurisdiction - Security for costs granted - Rules of the National Court O. XXXIII, r. 14[xxxiii]1.

Held

(1)      It is within the discretion of the court to order security for costs under O. XXXIII, r. 14 of the Rules of the National Court, but the court will order security as a matter of course where a plaintiff is out of the jurisdiction and there are no assets of the plaintiff which can be reached within the jurisdiction in the event of an order against the plaintiff for costs.

Demag-Lauchhammer Maschinenbau Und Stahlbau G.m.b.H. v. John Holland (Constructions) Pty. Ltd. (1965) 85 W.N. (Pt. 1) N.S.W. 231 adopted and applied.

(2)      Accordingly, where the plaintiff was permanently resident in New South Wales, and where the only property of the plaintiff within Papua New Guinea were dubious rights under a bill of sale, the defendant was entitled to an order for security for costs.

Application

This was an application by a defendant for security for costs against a plaintiff who resided permanently out of the jurisdiction.

Counsel

M. Kanet, for the applicant/defendant.

A. M. B. Crane, for the respondent/plaintiff.

Cur. adv. vult.

22 February 1977

RAINE J: The defendant seeks an order for security for costs against the plaintiff, it not being denied that the plaintiff is out of the jurisdiction, she is residing in northern New South Wales. Apart from such rights as she might have under a bill of sale in her favour, a bill of sale that is registered here, it is not contested that the plaintiff has no assets in this country. Her rights under the bill of sale are dubious for reasons given in paragraph 4 of Mr. Crane’s affidavit of 15th February, 1977, in the sense that the plaintiff probably cannot do more than use the bill of sale as evidence of an agreement rather than enforce it in the usual way. It is suggested that the existence of the registered bill of sale constitutes it as an asset here, as security for costs. In view of Mr. Crane’s frank admission as to its worth I feel that whatever worth the bill has in law it has no worth as a matter of reality and I put it aside.

Order XXXIII, r. 14 of the Rules of the National Court provides, inter alia, that “A plaintiff ordinarily resident out of the jurisdiction of the Court may be ordered to give security for costs of the cause, whether he is or is not temporarily within the jurisdiction.”

This rule clearly gives the Court a discretion whether to make an order for security for costs. The rule is in similar terms to the former O. XV, r. 1 of the old Supreme Court Rules of New South Wales. In that State Macfarlan J. in Demag-Lauchhammer Maschinenbau Und Stahlbau G.m.b.H. v. John Holland (Constructions) Pty. Ltd.[xxxiv]² said that O. XV, r. 1 gave the Court a discretion. See also Motakov Ltd. v. Commercial Hardware Suppliers Pty. Ltd.[xxxv]³.

In an unreported judgment of mine on 1st December, 1975, Ward v. The Government of Papua New Guinea[xxxvi]⁴, where a similar application was made, I said that my experience in New South Wales led me to believe that applications for security for costs were rarely even contested. Such applications as I had in mind were applications for security where plaintiffs merely resided in States of the Commonwealth other than New South Wales. Here, of course, the situation is very different, for the plaintiff lives in a foreign country. In Demag-Lauchhammer Maschinenbau Und Stahlbau G.m.b.H. v. John Holland (Constructions) Pty. Ltd.[xxxvii]⁵ at pp. 234, 235, Macfarlan J. said:

“In my opinion the meaning of O. XV, r. 1 (N.S.W.) is the same as the meaning which was given to R.S.C. O. 65, r. 6, and the English authorities which state the meaning of that rule also state the meaning of our rule as it is now in force. In Kohn v. Rinson & Stafford Ltd. ([1948] 1 K.B. 327) Denning J. (as he then was) was required to consider the effect of the Administration of Justice Act, 1920 (Imp.) on an application for security for costs in an action in England when the plaintiff resided in Palestine. It is not material for me to refer to the nature of the matters which were involved in that consideration, except to quote what the learned judge said in the course of his judgment with respect to the general rule which was applicable where the plaintiff was a person residing outside the jurisdiction and did not have assets within it. At p. 330 his Lordship said: ‘The law on the matter is plain, that it is in the discretion of the court to order security for costs, but it does so as a matter of course when a plaintiff is out of the jurisdiction and there are no assets of the plaintiff which can be reached within the jurisdiction, the reason being that if a judgment is thereafter obtained by the defendant against the plaintiff for costs, such an order cannot be enforced by the direct process of the English court.’

In Hudson Strumpffabrik G.m.b.H. v. Bentley Engineering Co. Ltd. ((1962) 2 Q.B. 587, at p. 589) Mocatta J., after quoting R.S.C. Order 65, r. 6, said: ‘Although this rule purports to leave an unfettered discretion to the court or judge the practice has for many years now been regarded as inflexible that such discretion should be exercised, provided application is made timeously in favour of making an order for security where the plaintiff is a person resident abroad and without assets within the jurisdiction ...’.

In Halsbury’s Laws of England, 3rd ed., vol. 30, p. 379, footnote (d), it is said: ‘Although it is in the discretion of the court whether to order security for costs, the court does so as a matter of course when the plaintiff is out of the jurisdiction and there are no assets of the plaintiff which can be reached within the jurisdiction.’

I therefore hold, contrary to the careful submission of learned counsel for the applicant-plaintiff, that the present rule in New South Wales bears a different meaning from that which has been embodied in the new rules in England, and the present meaning is the same meaning as that which previously was given in England to the rule which has now been repealed.”

(The words underlined by me might cause anybody reading the above extract some puzzlement. The reason that the plaintiff is referred to as the applicant-plaintiff is that it was the applicant as to other matters, but the respondent-defendant in fact applied for security for costs, and this application was heard together with the plaintiff’s several applications.)

The case of Ward v. The Government of Papua New Guinea[xxxviii]⁶ was not fully argued before me and I did not have the decision of Macfarlan J. before me. However, his Honour’s reasons confirm the impression that I then had as to the attitude taken by the judges and the profession in New South Wales to these applications.

I might say that I do not believe the “may” into “shall” situation discussed so authoritatively by McLelland J. (as he then was) in Re Fettell[xxxix]⁷ applies here.

Long Innes J. in In re T. Donnelly, Deceased[xl]⁸ held that where a plaintiff cannot give security for costs through want of means, the ordinary rule is that he should not be required to perform an impossibility as a condition precedent to the prosecution of proceedings which might be successful if litigated. His Honour was dealing with a different rule than was Macfarlan J. but its terms were identical.

Of course, where there is a discretion, all cases being different, one will see variations in the exercise of that discretion. The judgment and report of the case before Long Innes J. is not fully reported. I certainly do not put it to one side for that reason, but paraphrased judgments are never very satisfactory.

However, whilst respectfully agreeing with Long Innes J. that it is unfortunate to see a plaintiff denied possible victory because he has no means, and is out of the jurisdiction, there is another side to the coin. It is a very serious matter for a successful defendant in an action brought against him here when he cannot, or cannot without great worry and expense, when ultimately successful, get his costs from a person resident in a foreign country. Let us take what might be called an average expensive sort of case in the National Court, a claim for K5,000.00 to K40,000.00. To defend such a case, however poorly it is based, could cost many thousands.

Order that the plaintiff give security. (Counsel then discussed, and finally agreed, the amount of security.)

Orders accordingly.

Solicitors for the applicant (defendant): White, Reitano & Young.

Solicitors for the respondent (plaintiff): Francis & Francis.

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[xxxiii]Order XXXIII, r. 14 provides inter alia:

“A plaintiff ordinarily resident out of the jurisdiction of the court, may be ordered to give security for costs of the cause, whether he is or is not temporarily within the jurisdiction.”

[xxxiv](1965) 85 W.N. (Pt. 1) (N.S.W.) 231.

[xxxv](1952) 70 W.N. (N.S.W.) 64.

[xxxvi]Unreported Judgment of Raine J.— 1st December, 1975.

[xxxvii](1965) 85 W.N. (Pt. 1) (N.S.W.) 231 at pp. 234, 235.

[xxxviii]Unreported Judgment of Raine J. — 1st December, 1975.

[xxxix](1952) 69 W.N. (N.S.W.) 186.

[xl] (1927) 44 W.N. (N.S.W.) 72.