District Court New South Wales Medium Neutral Citation: Drozda v Kishida [2021] NSWDC 281 Hearing dates: 16 June 2021 Date of orders: 28 June 2021 Decision date: 28 June 2021 Jurisdiction: Civil Before: Scotting DCJ Decision: (1) The Notice of Motion filed on 16 February 2021 is dismissed. (2) The defendant is to pay the plaintiff's costs of the motion on the ordinary basis as agreed or assessed. (3) The matter is listed for directions in the online court on or before 19 July 2021. Catchwords: COSTS — Security for costs — Effect — Dismissal Legislation Cited: Uniform Civil Procedure Rules 2005 Cases Cited: PS Chellaram & Co Ltd v China Ocean Shipping Co (1991) 102 ALR 321 Category: Costs Parties: Claudia Drozda (Plaintiff) Daiya Kishida (First Defendant) Representation: Counsel: S Maybury (Plaintiff) B Kelleher (First Defendant) Solicitors: Stacks Goudkamp (Plaintiff) HWL Ebsworth (First Defendant) File Number(s): 2020/225985 Publication restriction: None Judgment Introduction 1. The defendant, by Notice of Motion filed on 16 February 2021, seeks an order for security for costs against the plaintiff, on the basis that the plaintiff is ordinarily resident outside Australia. 2. In the proceedings, the plaintiff seeks damages for personal injury arising from cosmetic surgery performed by the defendant. The plaintiff alleges that liposuction on her upper arms was performed negligently by the defendant causing her nerve damage and resulting in disfigurement. Evidence 1. The defendant read three affidavits of Stacey Marie King, solicitor, sworn 16 February 2021, 9 April 2021 and 28 May 2021. 2. The plaintiff reads an affidavit of the plaintiff affirmed 19 April 2021, two affidavits of Julie Mahony, solicitor, sworn 26 April 2021 and 17 May 2021 and an affidavit of Alexander Hairs, solicitor, affirmed 9 June 2021. 3. No application was made to cross-examine any of the deponents. Relevant Law 1. Rule 42.21 Uniform Civil Procedure Rules 2005 (UCPR) provides: (1) If, in any proceedings, it appears to the court on the application of a defendant-- (a) that a plaintiff is ordinarily resident outside Australia, or (b) that the address of a plaintiff is not stated or is mis-stated in his or her originating process, and there is reason to believe that the failure to state an address or the mis-statement of the address was made with intention to deceive, or (c) that, after the commencement of the proceedings, a plaintiff has changed his or her address, and there is reason to believe that the change was made by the plaintiff with a view to avoiding the consequences of the proceedings, or (d) that there is reason to believe that a plaintiff, being a corporation, will be unable to pay the costs of the defendant if ordered to do so, or (e) that a plaintiff is suing, not for his or her own benefit, but for the benefit of some other person and there is reason to believe that the plaintiff will be unable to pay the costs of the defendant if ordered to do so, or (f) that there is reason to believe that the plaintiff has divested assets with the intention of avoiding the consequences of the proceedings, the court may order the plaintiff to give such security as the court thinks fit, in such manner as the court directs, for the defendant's costs of the proceedings and that the proceedings be stayed until the security is given. (1A) In determining whether it is appropriate to make an order that a plaintiff referred to in subrule (1) give security for costs, the court may have regard to the following matters and such other matters as it considers relevant-- (a) the prospects of success or merits of the proceedings, (b) the genuineness of the proceedings, (c) the impecuniosity of the plaintiff, (d) whether the plaintiff's impecuniosity is attributable to the defendant's conduct, (e) whether the plaintiff is effectively in the position of a defendant, (f) whether an order for security for costs would stifle the proceedings, (g) whether the proceedings involves a matter of public importance, (h) whether there has been an admission or payment in court, (i) whether delay by the plaintiff in commencing the proceedings has prejudiced the defendant, (j) the costs of the proceedings, (k) whether the security sought is proportionate to the importance and complexity of the subject matter in dispute, (l) the timing of the application for security for costs, (m) whether an order for costs made against the plaintiff would be enforceable within Australia, (n) the ease and convenience or otherwise of enforcing a New South Wales court judgment or order in the country of a non- resident plaintiff. (1B) If the plaintiff is a natural person, an order for security for costs cannot be made merely on account of his or her impecuniosity. (2) Security for costs is to be given in such manner, at such time and on such terms (if any) as the court may by order direct. (3) If the plaintiff fails to comply with an order under this rule, the court may order that the proceeding on the plaintiff's claim for relief in the proceedings be dismissed. (4) This rule does not affect the provisions of any Act under which the court may require security for costs to be given. Consideration 1. The Court may have regard to the non-exhaustive list of matters set out in rule 42.21(1A) together which such other matters that it considers relevant. The Court cannot make an order against a natural person merely on account of his or her impecuniosity: rule 42.21(1B). 2. The threshold issue that enlivens the court's discretion is that the plaintiff is ordinarily resident outside of Australia. The plaintiff moved in August 2016 to the United States to live with her husband, who serves in the US military. Since moving to the US the plaintiff has relocated a number of times coinciding with her husband's postings. The plaintiff has only had one job in the US that lasted for about three weeks. She has no assets in Australia. 3. The defendant placed heavy reliance on the facts that the plaintiff is ordinarily resident outside of the jurisdiction and has no assets in the jurisdiction. He contended that those were matters to which great weight should be afforded, requiring the plaintiff to show special circumstances to avoid an order for security: PS Chellaram & Co Ltd v China Ocean Shipping Co (1991) 102 ALR 321 at 323 (McHugh J). 4. I have considered the expert evidence on liability that has been served by each party. I am unable to resolve on this application whether or not the plaintiff is likely to succeed in the action. However, I am satisfied by reading the expert evidence on both sides, that the plaintiff's claim is clearly arguable and that the plaintiff's claim has some prospects of success. 5. I am satisfied that the proceedings are genuine. The expert evidence relied on by the plaintiff supports her claim that she has suffered injury and may be entitled to damages. 6. I am satisfied on the evidence that the plaintiff is impecunious and that she would not have the funds to meet an adverse costs order. She is currently supported by her husband who earns $48,000 USD per annum. She owns a motor vehicle valued at approximately $25,000 USD and has savings of about $9,000 USD. 7. The defendant criticised the plaintiff's evidence for failure to trace her savings over an extended period. The plaintiff's evidence was that she had saved about $35,000 that was transferred to her in the US after she moved there. It was accepted that she purchased a motor vehicle for about $25,000 in about December 2019, leaving $10,000 unaccounted for. I am not satisfied that the plaintiff should have to provide a complete explanation for her expenditure of these funds in a period before she commenced proceedings. The plaintiff has some savings presently which could be the same as the "missing" funds, but in my view, it is not necessary for the plaintiff to provide a precise reconciliation of the entirety of her financial position. 8. The plaintiff alleges that she has difficulty working as a result of disability arising from her injuries. In particular, the plaintiff alleges that she has difficulty with repetitive movements of her arms or lifting objects above her waist or shoulders. 9. Prior to leaving Australia the plaintiff had a continuous history of employment in full time roles based on her qualifications in communications and media and part time roles in retail. Her practice was to have a full time job and a part time job to supplement her income. After the surgery, the subject of these proceedings, the plaintiff coped with the demands of her employment by modifying the tasks she was required to perform and asking for alternative duties. 10. Since moving to the US the plaintiff has applied for a large number of jobs. She provided evidence of applications and rejections for certain periods. The plaintiff deposed that in the US, when she has applied for work that she has been routinely asked if she has a disability and that she has usually answered that question by the response "prefer not to say". The plaintiff deposed that she has usually not received a response or request for an interview when she has adopted that response. 11. In September 2019 the plaintiff was employed by the Intercontinental Hotels Group at a hotel near the Fort Sill Army Base in Oklahoma where she was living with her husband. As a result of the proximity and convenience of this employment opportunity, the plaintiff indicated to IHG that she did not have a disability when applying for the position. She was employed for a three week period before resigning because she could not cope with the repetitive nature of the receptionist work at the hotel. 12. The plaintiff deposed that she has been unable to find another job in the US. 13. The plaintiff also relied on the expert report of Susan Green, an expert in vocational rehabilitation, dated 12 May 2021. The effect of Ms Green's opinion can be summarised as follows: 1. It is generally illegal for a prospective employer to discriminate against a person with a disability; 2. It is generally illegal for a prospective employer to ask questions of a candidate to elicit that they have a disability, but they may ask questions that do so, if those questions are asked of all candidates; 3. A candidate for employment may voluntarily disclose that they have a disability but they are not required to do so, but if the candidate requires accommodations in their work it will be necessary to do so; 4. Statistics demonstrate that people with disabilities experience significantly lower rates of employment compared to their non-disabled counterparts. 1. For the purposes of this application, I accept the plaintiff's evidence that she has difficulty working as a result of the disability arising from her injuries allegedly sustained in the surgery that is the subject of these proceedings for the reasons that follow. 2. First, the defendant did not seek to cross-examine the plaintiff on her affidavit. Second, the plaintiff's evidence is corroborated by the medical evidence on which she relies and to some extent by her extensive and continuous work history in Australia. Third, I do not accept the defendant's submission that her evidence is weakened by the fact that the rejection letters supplied by the plaintiff do not refer to her disability. As I understand Ms Green's evidence, that would involve an admission of illegal conduct by the prospective employer. 3. For the purposes of this application, I am also satisfied that the plaintiff's inability to find suitable work is impaired by her disability arising from the surgery. It follows that I am satisfied that there is a direct relationship between the defendant's tort and the plaintiff's impecuniosity. 4. The defendant submits that there is no explanation as to why the plaintiff delayed bringing her claim until 2020, when the surgery took place on 23 February 2015. However, the defendant does not allege any actual prejudice arising from that delay. I accept that there would be some presumed prejudice by reason of that delay. 5. The proceedings will involve the calling of a number of expert medical witnesses over four days and that will come at some cost. I am satisfied that the amount of security for costs sought is proportionate and to the subject matter of the dispute. The defendant has sensibly sought an amount for security of about one third of the remaining cost in the proceedings. 6. The application for security has in my view been brought late. The proceedings were commenced on 3 August 2020. The application was brought in February 2021. The residency of the plaintiff was stated on the Statement of Claim and was always known to the defendant. The plaintiff has been required to prepare her case and a substantial amount of costs have been incurred. Those costs would be wasted, if an order for security had the effect of stifling the proceedings. 7. The defendant contended that he was entitled to explore issues of liability and quantum before bringing this application. Whilst that may be true, it was done in a way that required the plaintiff to continue to incur costs. The parties agreed on directions that required the plaintiff to continue to prepare the case for hearing to incur the costs of complying with those orders. 8. On the other hand, the defendant has only sought part of its costs relating to the finalisation of the proceedings and this can be taken into account against the delay in seeking an order for security. 9. I am satisfied that an order for security would stifle the proceedings. The plaintiff is impecunious and I am satisfied that she would not be able to find any meaningful sum of money to pay by way of security. If the proceedings were brought to a premature end by an order for security, the plaintiff would be denied her right to seek compensation for not insubstantial injuries. 10. The plaintiff conceded that it would not be straight forward for the defendant to enforce a costs order in the United States. 11. I note that the defendant's interests are protected by his insurer. 12. Taking into account all of these matters, I am not persuaded that I should make an order for security for costs. 13. The orders I make are as follows: 1. The Notice of Motion filed on 16 February 2021 is dismissed. 2. The defendant is to pay the plaintiff's costs of the motion on the ordinary basis as agreed or assessed. 3. The matter is listed for directions in the online court on or before 19 July 2021. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 28 June 2021