STOREY v JOHNS SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL MASON, HANDLEY and COLE JJA 8 December 1997 [1997] NSWCA 298 Cole JA Before this Court is a summons seeking leave to appeal against the first, second and seventh interlocutory orders made by Twigg DCJ on 23 October 1997. His Honour had before him a Notice of Motion filed, or at least dated, 13 October 1997. The Notice of Motion sought orders relevantly, that the defendant provide security for costs. His Honour gave judgment and made orders: "(1) On the plaintiff's motion dated 13 October 19971 order that the defendant pay costs assessed at $15,000 to provide for any order for costs that may be made in favour of the plaintiff at the hearing. (2) That the defendant pay the sum of $15,000 to his own solicitors Messrs Makinson & d'Apice, 68 Pitt Street, Sydney, such costs to be held by them in their trust account and to be invested by them in an interest bearing deposit in trust for the defendant for costs to abide the further order of the Court; and (3) That the costs of the motion be costs in the cause." The motion seeking the orders that the defendant pay security for costs was filed on 13 October in circumstances where application had been made for an adjournment of a hearing. The application for an adjournment was heard by Garling DCJ and was granted. On that application, costs were reserved. However, the motion seeking costs was filed apparently at or shortly prior to the granting of that adjournment. There was material placed before the Court to suggest that the solicitor for the applicant in the Notice of Motion thought that by filing the Notice of Motion she might protect her client in relation to costs. It is an unusual circumstance for a court to order that a defendant give security for costs. The authorities are referred to in the judgment of Twigg DCJ and it is unnecessary to repeat them. It is sufficient to say that it is a rare circumstance indeed that a court would order a defendant to provide security for costs for the simple reason that a plaintiff may commence proceedings but a defendant is dragged willingly or unwillingly into the litigation. In those circumstances, there is rarely justification for an order that a defendant should provide security for costs. It has been said that the exercise of discretion to order a defendant to provide security for costs will normally be regarded as a wrong exercise of discretion, even if there be a power to do so. It is not entirely clear as to how the learned trial judge approached the matter. In his judgment he said: "Tn my view there is ample power to make the orders sought by the plaintiff. It is not, although it is in terms, seeking security for costs but seeking the sum to be paid which may be provided for in the event the defendant is unable to meet any order for costs or disbursements that may be incurred by the plaintiff in the preparation of a case." 2 UNREPORTED JUDGMENTS Apparently there was material before Twigg DCJ which might have suggested that the defendant in the proceedings was seeking to disburse his assets so that in the event of a judgment or an order for costs against him in the proceedings being made, there would be no funds to meet either the judgment or the order for costs. From the passage I have quoted, it seems as though his Honour thought that he may have been dealing with the matter on the basis it was some sort of Mareva injunction seeking to secure in favour of the plaintiff some sum so that if the defendant did not appear at any subsequent hearing and an order for costs was made in favour of the plaintiff, there would be a fund from which it could be met. Counsel for the opponent did not seek to uphold the judgment on the basis on which it was given. However, he sought to file, and was given leave to file, a Notice of Contention seeking to uphold the judgment on the basis that there was jurisdiction to make the order sought pursuant to s46 of the District Court Act and, further, that there was jurisdiction to make the orders as a condition of the adjournment granted on the application of the claimant/defendant on 14 October 1997. It is sufficient to dispose of the second ground in that Notice of Contention by simply noting that the adjournment was granted by a different judge reserving costs and not on the basis of any condition that there be paid to the solicitor for the defendant costs to await the ultimate hearing. It is unnecessary now to decide whether the District Court has jurisdiction to grant a Mareva injunction. It is sufficient to note that the trial judge did not have before him any application for a Mareva injunction. There was no such order sought nor was there any proffering of any undertaking as to damages and, accordingly, it is inappropriate to regard the proceedings before the trial judge as an application for such an order. In the result, it seems to me that there was no basis which was available to his Honour to ground an order that the defendant should pay costs assessed at $15,000 to his solicitors or otherwise There had been no contested hearing at that time; there had been no order for costs made against the defendant. There was only an application that the defendant provide security for costs and there was no proper basis on which any discretion could have bean exercised to make an order for such security for costs. There was no application for a Mareva injunction even if there be jurisdiction in the District Court to grant such an order and the application did not purport to be an application for such an injunction. The consequence is, in my view, that leave to appeal should be granted, that the appeal should be upheld and that O(1), O(2) and O(7) made by Twigg DCJ on 23 October 1997 should be set aside and, in lieu thereof, the Notice of Motion before Twigg DCJ dated 13 October 1997 as to O(2) be dismissed and that the opponent should pay the costs of that Notice of Motion in the District Court and the costs of the appeal but that the respondent should, if qualified, have a certificate under the Suitors Fund Act. Mason P I agree. The power of the District Court to grant a Mareva injunction has recently been upheld by this Court in Registrar v Pelechowski. The upholding of this appeal in no way is to be seen as from my point of view precluding a proper application for a Mareva injunction on the part of the opponent. I agree with the orders proposed subject to an order that the claimant must first file a Notice of Appeal. Counsel for the claimant has offered to the Court to do so. That should be done together with the appropriate filing fee as a condition of the orders. URJ STOREY v JOHNS (Mason P) 3 Handley JA I agree with the other judgments. Mason P The orders of the Court will be as indicated. "(1) On the plaintiff's motion dated 13 October 19971 order that the defendant pay costs assessed at $15,000 to provide for any order for costs that may be made in favour of the plaintiff at the hearing. (2) That the defendant pay the sum of $15,000 to his own solicitors Messrs Makinson & d'Apice, 68 Pitt Street, Sydney, such costs to be held by them in their trust account and to be invested by them in an interest bearing deposit in trust for the defendant for costs to abide the further order of the Court; and (7) That the costs of the motion be costs in the cause."