Industrial Court of New South Wales CITATION: Sharbine v Harkham and another [2007] NSWIRComm 177 Applicant: Samuel Sharbine PARTIES: First respondent Benjamin Harkham Second respondent J Hillyard Pty Ltd (formerly Aussie Sweets Pty Ltd, formerly Aussie Sweets & Chocolates Pty Limited) FILE NUMBER(S): IRC 7035 of 2003 CORAM: Backman J CATCHWORDS: Practice and procedure - application for security for costs by respondents - jurisdiction - general principles - applicant resident in United Arab Emirates - whether applicant unable to meet a costs order - whether applicant has an arguable case in s 106 proceedings - weight to be attributed to applicant's overseas residence and lack of assets within New South Wales - whether there is a relationship between the applicant's current financial situation and the subject matter of the s 106 application - whether applicant would be stifled or "shut out" from pursuing his claim under s 106 if the respondents' application was granted - the proximity of the respondents' application to the date of the hearing of the substantive proceedings - whether if respondents' application granted and applicant unable to meet costs order he will be prejudiced on the ground that the respondents' claim against the applicant in a related s 106 application will proceed - quantum of costs - respondents' application for security granted - orders. LEGISLATION CITED: Foreign Judgments Act 1991 (Cth) Industrial Relations Act 1996 Connop v Varena Pty Ltd [1984] 1 NSWLR 71 Energy Drilling Inc v Petrox NL (1989) ATPR 40-954 Great Scott International Pty Ltd v Cosmetic Suppliers Pty Ltd and Another [2005] NSWIRComm 133 Innovare Displays plc v Corporate Services Ltd [1991] BCC 174 Kenoss Contractors Pty Limited v Allied Constructions Pty Limited (No 2) (2001) 104 IR 218 CASES CITED: Kent Heating Ltd v Cook on Gas Products Pty Ltd and Another (1984) 59 ALR 277 Knott v Signature Security Group Pty Limited (2001) 104 IR 84 Matiukevitch v AG&S Building Systems Pty Ltd [2007] NSWIRComm 174 Re Town and Country Sport Resorts (Holdings) Pty Ltd & ors (unreported Federal Court, 19 July 1991) Shannon v Australian New Zealand Banking Group Ltd (No 2) [1994] 2 Qd R 563 Williamson v Service Corporation International (Australia) Pty Limited (2003) 130 IR 247 Yandil Holdings Pty Ltd v Insurance Co. of North America & Ors (1985) 3 ACLC 542 HEARING DATES: 12 July 2007 DATE OF JUDGMENT: 17 July 2007 Applicant: Mr P Moorhouse of counsel Solicitors: Leitch Hasson Dent LEGAL REPRESENTATIVES: Respondent: Mr A Britt of counsel Solicitors: Kalmath Lawyers JUDGMENT: - 15 - INDUSTRIAL COURT OF NEW SOUTH WALES CORAM: Backman J Tuesday, 17 July 2007 Matter No IRC 7035 of 2003 Samuel Sharbine v Benjamin Harkham and Another Application for relief under s 106 of the Industrial Relations Act 1996 JUDGMENT [2007] NSWIRComm 177 1 Before the Court is an application by way of notice of motion filed on 3 July 2007 by Benjamin Harkham and J. Hillyard Pty Ltd (the respondents) seeking an order that Samuel Sharbine (the applicant) provide security for the respondents' costs by 18 July 2007 in the sum of $98,000. This amount was amended during submissions to $45,000. A further order conditional upon the first order being granted seeks that the proceedings be stayed in the event a security for costs order is not complied with by the required date. The proceedings to which the notice of motion refers concerns an application by way of amended summons for relief filed on 27 July 2005 brought under s 106 of the Industrial Relations Act 1996 (the Act). 2 The substantive proceedings were commenced by way of summons for relief on 9 December 2003. A reply to the summons was filed by the respondents on 25 March 2004. On the same day the respondents filed a summons for relief nominating the applicant as the respondent to those second proceedings. On 12 May 2004 Marks J, by consent, ordered that both sets of proceedings be consolidated and heard together and that at the trial of each proceedings, evidence adduced in one proceedings be evidence in the other proceedings. Both proceedings are set down for hearing for 5 days to commence on Monday 23 July 2007. 3 The proper approach in relation to applications for security for costs is set out in Kenoss Contractors Pty Limited v Allied Constructions Pty Limited (No 2) (2001) 104 IR 218, Wright J, President. In that judgment (at [11]) his Honour adopts as correct the reasoning of Sir Robert Megarry VC in Pearson v Naydler [1977] 1 WLR 899 at 906-907 where Megarry VC identified the issues commonly underlying such applications and offered guidance as to the proper application of those issues: [11] As observed by Phillips JA, the judgment of Sir Robert Megarry VC in Pearson v Naydler [1977] 1 WLR 899 at 906 - 907 usefully identifies the issues commonly underlying an application for security of costs and affords useful guidance for their proper application. His Lordship said: It seems plain enough that the inability of the plaintiff company to pay the defendants' costs is a matter which not only opens the jurisdiction but also provides a substantial factor in the decision whether to exercise it. It is inherent in the whole concept of the section that the court is to have power to order the company to do what it is likely to find difficulty in doing, namely, to provide security for costs which ex hypothesi it is likely to be unable to pay. At the same time, the court must not allow the section to be used as an instrument of oppression, as by shutting out a small company from making a genuine claim against a large company. For this reason, Mars-Jones J. was not prepared in the Parkinson case to make an order for security for costs for more than the £1,500 that the master had ordered: see [1973] Q.B. 609, 617. As against that, the court must not show such a reluctance to order security for costs that this becomes a weapon whereby the impecunious company can use its inability to pay costs as a means of putting unfair pressure on a more prosperous company. Litigation in which the defendant will be seriously out-of-pocket even if the action fails is not to be encouraged. While I fully accept that there is no burden of proof one way or the other, I think that the court ought not to be unduly reluctant to exercise its power to order security for costs in cases that fall squarely within the section. 4 As the above passage identifies, some of the significant issues falling for consideration in applications for security for costs will include as a foundational issue the inability of an applicant to pay a respondent's costs. At the same time a Court must take into account whether the granting of the application might impede an applicant from making a genuine claim. Against that consideration a court must weigh the prospect of an impecunious applicant using its inability to pay costs as a means of putting pressure on the moving party where that party may by seriously out of pocket: see also Matiukevitch v AG&S Building Systems Pty Ltd [2007] NSWIRComm 174 at [11]. 5 The applicant against whom the order for security for costs is sought is a natural person. In Knott v Signature Security Group Pty Limited (2001) 104 IR 84, Wright J, President adopted as correct a proposition extracted from a judgment of Williams J in Shannon v Australian New Zealand Banking Group Ltd (No 2) [1994] 2 Qd R 563, that it is only in exceptional circumstances that a court would order a natural person who is an applicant to pay security for costs: at [24]. In the same passage Wright J identified as "one of the few exceptional cases" the circumstance where the natural person is, "...a foreign or merely nominal plaintiff". Later in the judgment (at [28]) his Honour, in summarising a number of relevant authorities in relation to security for costs applications, recognised, "as an important consideration... the long standing view that where a plaintiff or applicant is resident out of the jurisdiction and has no assets within it, that is a circumstance of great weight in favour of an order for security for costs". 6 The parties have raised the following factors for consideration on the application: (i) whether the applicant is unable to meet a costs order; (ii) the merits of the applicant's case in the substantive proceedings; (iii) the weight to be attributed to the fact that the applicant resides outside Australia in Dubai, United Arab Emirates (U.A.E.) and has no assets within Australia; (iv) whether there is a correlation or relationship between the applicant's current financial situation and the subject matter of the s 106 application; (v) whether the applicant would be stifled or "shut out" from pursuing his s 106 claim if the respondents' application was granted; (vi) the proximity of the respondents' application to the date of the hearing of the substantive proceedings; (vii) whether if the respondents' application is granted and the applicant is unable to pay the costs order he will be prejudiced on the ground that the respondents' claim will still proceed; (viii) the quantum of costs if the order providing for security for costs is granted. 7 I intend to examine each of the above factors by reference to the evidence and material relied upon in the respondents' application, the parties' submissions and the relevant principles extracted from the authorities referred to above. Whether the applicant is unable to meet a costs order 8 The applicant's legal representative, David King, solicitor, prepared an affidavit which sets out on information and belief the applicant's current financial state. The applicant presently works in Dubai. He says that he does not receive a base salary. He is provided with accommodation, a company car and receives "bonuses" that are, "dependant on his business activities". No further details were given in relation to how these bonuses were earned; or the proceeds to date from bonuses, if any. Following his termination of employment by the respondents on 15 September 2003 he says that he was unemployed for about 6 months. On 22 March 2004 he commenced employment as a manager in a financial planning business in Belrose, Sydney. His total salary package at the time he commenced employment was $80,000. His employment was again terminated after the position was made redundant in December 2005. Thereafter for most of 2006 the applicant says he was unable to find employment locally and that this prompted him to consider employment outside Australia. The applicant says that the two extended periods of unemployment resulted in the accrual of debts and an inability to save moneys or make further payments on a mortgage loan. During these periods the family lived on his wife's earnings. In addition he says funds were borrowed from banks and from family members residing overseas. These borrowed funds were used to pay for a car loan and children's extra curricular activities such as tennis camps and piano and violin lessons as well as private tuition for his eldest daughter. 9 In relation to his work in Dubai the applicant says he has not earned enough money to save but , "in light of various opportunities that have recently been instigated" he expects that he will soon be, "well remunerated and will then be able to save money for his future and the future of his children." No further details have been forthcoming as to what these "various opportunities" might be and when the anticipated remuneration may be expected to eventuate. 10 The applicant has also provided information in relation to the family residence he owned at 20 Orchard Street, Pennant Hills. According to him it was sold in November 2006. The reason, he says, that it was put up for sale was that it, "...was too cold and it did not get enough sun... his two daughters were always cold and were not able to swim comfortably in the pool, even in the summer." He also said that in July 2006, during the period when the house was up for sale, he and his wife separated and she and their two daughters moved out. The house was sold for $820,000. Of that amount the applicant says about $400,000 was required to pay out the outstanding mortgage loan. This appears to conflict with evidence given by the applicant in an affidavit filed in the s 106 proceedings on 16 May, 2005. In that affidavit the applicant says $200,000 was borrowed from the bank in order to purchase the house. I say "appears to conflict" because there is no evidence in the material to suggest that, between the filing of this affidavit (16 May 2005) and the date the house was put on the market (sometime in mid 2006), a further loan of $200,000 was taken out by the applicant on the residence. 11 According to the applicant, out of the funds remaining following the sale and after deducting the repayment of the mortgage in the amount of $400,000 he paid $15,000 for a car loan, $15,000 for real estate commission, solicitor's fees of $2,214, funds to his wife totalling $36,000 and $25,000 for the applicant's expenses. The balance was used to repay moneys borrowed from relatives overseas and in satisfaction for losses incurred as a result of an investment in Lebanon. No further details have been provided as to the amounts paid to relatives, to whom the moneys were paid, details of the amounts borrowed, or any details concerning the investment in Lebanon. 12 The applicant says the he currently owns no real property or other assets in New South Wales, Dubai or elsewhere. He holds a bank account with the ANZ Bank in Australia which has a credit balance of $10,045.38 but that the bulk of these moneys he intends to use for travel to Australia, a planned skiing holiday to Thredbo with his daughters and their school fees, leaving an amount of $3,245 which may be available in order to meet a security for costs order. Moreover the applicant says that as a non-citizen of the U.A.E. he is not permitted to hold a bank account there and that the ANZ account in New South Wales is his only account. A one page bank statement for the period between 11 June 2007 and 3 July 2007 for the amount shows one deposit of $400. 13 The effect of this evidence is that applicant is without any assets inside or outside the jurisdiction with which to pay a costs order except to the extent that he is perhaps able to pay a nominal amount of $3,245 towards any costs order made against him. The merits of the applicant's case 14 The proper approach to the issue concerning the merits of the applicant's case is to assess whether the applicant has an arguable case in the proceedings to which the application for security for costs relates: see Great Scott International Pty Ltd v Cosmetic Suppliers Pty Ltd and Another [2005] NSWIRComm 133 at [40]-[45]; Williamson v Service Corporation International (Australia) Pty Limited (2003) 130 IR 247. In the present proceedings the material in the amended summons suggests that the applicant has at least an arguable case in relation to his application under s 106. 15 According to the amended summons one of the allegations is that the applicant's employment with the respondents was summarily terminated after he had worked for almost two years under a contract of employment for a fixed term of 3 years, with no provision for early termination. The unfairness referable to a term or terms of the contract is said to arise by reason that the contract (or a wider arrangement) allowed the respondents to deal unfairly with the applicant by permitting them to summarily dismiss the applicant without affording him an opportunity to respond to the allegations made against him. 16 The circumstances, in brief, leading up to the applicant's termination are that the second respondent manufactured and sold confectionary. The applicant was appointed general manager of the business in September 2001 for a fixed term of 3 years, due to expire on 24 September 2004. His base salary was $75,000. In addition he was entitled to bonuses and a fully maintained car. For the following two years the business apparently did not operate at a profit. The applicant alleges that he was unfairly blamed for the downturn and that in August 2003 his weekly entitlements were unilaterally reduced by the first respondent to $800 and one week later, on 15 August 2003, without prior consultation or notification, his employment was summarily terminated. Applicant's residence outside Australia 17 There is no issue that the applicant currently resides out of the jurisdiction in Dubai and intends to reside there for at least the next 2 to 5 years. He has been living in Dubai since December 2006. An additional but related feature of the applicant's residence in Dubai, and upon which the respondents rely, concerns the attendant difficulties involved in enforcement of any judgment order made against the applicant by reason of his residence in the U.A.E. which is not a country with which Australia has any arrangements, by way of reciprocity of treatment, for the enforcement of any costs orders made by the Court: see Foreign Judgments Act 1991 (Cth) and Schedule to Foreign Judgments Regulation 1992. 18 The applicant informed the Court that he believes he will reside in Dubai for the next 2 to 5 years after which he intends to return to Sydney. He says he has close ties to Sydney. His wife and his two daughters live in Sydney. He says that the sale of the matrimonial home in November 2006 (a month before he left for Dubai) was not an attempt to divest himself of his assets within the jurisdiction but arose because of his separation from his wife and the need to repay outstanding overseas debts. These factors he says also provide the reasons why he did not purchase another property in Sydney following the sale of the house. His father who suffers from dementia is currently in a nursing home in Peakhurst. His mother passed away in 2006. In addition the applicant relies on s 17 of the Limitations Act 1969 which provides in effect for a period of 12 years in which to enforce a judgment. 19 In Energy Drilling Inc v Petrox NL (1989) ATPR 40-954 Gummow J in the Federal Court explained the purpose of ordering security for costs against an applicant ordinarily resident out of the jurisdiction (at 50, 422): [to] ensure that a successful respondent will have a fund available within the jurisdiction of this Court against which it can enforce the judgment for costs, so that the respondent does not bear the risk as to the certainty of enforcement in the foreign country and as to the time and complexity of the action there which might be necessary to effect enforcement. 20 In Connop v Varena Pty Ltd [1984] 1 NSWLR 71, a case relied upon by the applicant, Rath J ordered the plaintiffs to pay security for costs on the basis that they were ordinarily resident out of New South Wales, in New Zealand, and had "meagre assets" within New South Wales (at 75A-B). The amount ordered to be paid was limited however to the costs of registration and execution in New Zealand of a judgment for costs obtained in New South Wales as permitted under New Zealand legislation. Kent Heating Ltd v Cook on Gas Products Pty Ltd and Another (1984) 59 ALR 277 per Sheppard J provides a further illustration of an order made granting security for costs against an applicant resident in New Zealand. In the judgment a significant factor was that the requisite legislation existed for facilitating the means of enforcing judgments obtained in New South Wales in a foreign jurisdiction: see also Holt v Kirby [2003] NSWIRComm 164 at [7]. 21 The present circumstances are different however. There is no legislation or equivalent formal mechanism whereby a judgment obtained in New South Wales may be enforced in U.A.E. Whether there is a correlation between applicant's current finances and subject matter of s 106 application 22 The applicant submits that his impecuniosity has been caused, "at least in part" by the unfairness of the contract. Simply stated, as a direct result of the applicant's termination, he was unemployed for 6 months. 23 The evidence on the present application discloses that the applicant obtained full time employment on 22 March 2004 as a manager and on a commencing salary of $80,000 per annum inclusive of superannuation. In December 2005 his position was made redundant. The applicant concedes, quite properly, that the respondent cannot be held responsible for the applicant's redundancy in relation to an employment position held with an unrelated entity. It must follow from this that the weight the Court can give to this particular discretionary factor (in the applicant's favour) is limited to both the time and the duration of the applicant's unemployment immediately following his termination from the respondents' employ. The applicant's present financial position cannot be said, therefore, to be due primarily to the alleged unfairness in the contract, the subject of his application under s 106. Following his 6 month period of unemployment up to 22 March 2004 he obtained full-time employment on a yearly salary of $80,000. He continued in that employment until December 2005, a period of some 21 months. His contention that he is now without assets both inside and outside the jurisdiction falls to be assessed against the amount of time that has elapsed from the time of his summary termination (15 September 2003) and the intervening events which include two periods of full-time employment (including his employment in Dubai) as well as the period of unemployment by reason of the redundancy. Whether an order for security will stifle the applicant's claim 24 The applicant contends that an order for security for costs in any significant amount would, given his lack of finances, prevent him from proceeding with his s 106 application. This factor the applicant says significantly outweighs the competing factors of overseas residence and impecuniosity. The applicant relied upon Yandil Holdings Pty Ltd v Insurance Co. of North America & Ors (1985) 3 ACLC 542 in support of the contention. In that case the plaintiff against whom an application for security of costs was made, claimed that its right to litigate would be "stultified" if the order was made because of its poor financial state. In determining to grant the order Clark J said (at 545): The Court is vested with an unfettered discretion as to whether an order is made and, if so, upon what terms. The fact that the ordering of security will frustrate the plaintiff's rights to litigate its claim because of its financial condition does not automatically lead to the refusal of an order. Nonetheless it will usually operate as a powerful factor in favour of exercising the Court's discretion in the plaintiff's favour. 25 The respondents at the conclusion of submissions informed the Court that if their application for security for costs was granted, but the applicant was unable to meet the terms of the order, they would agree to adjourning the substantive proceedings and would not proceed with the hearing of their claim against the applicant, on the date set down for hearing, that is 23 July 2007. In addition there was evidence led on the present application by the applicant that although his employment earnings in Dubai to date have not been sufficient to allow him to set aside any moneys for savings, he expects to be "well remunerated" in the future, "...in light of various opportunities that have recently been instigated." Although these remarks are based on expectation only they nevertheless, together with the respondents' concession, operate to considerably lessen the impact of the applicant's contention that any order granted will "stultify" his claim. Proximity of respondents' application to hearing of s 106 proceedings 26 An adjournment of both sets of proceedings would effectively provide an answer to another factor relied upon by the applicant in the present application, namely that he is prejudiced by reason of the close proximity of the respondents' application to the hearing date of both sets of proceedings under s 106. 27 The respondents have sought to impress upon the Court that the lateness of their application does not arise from any delay on their part but rather because of very recent information that the applicant had left the jurisdiction to take up residence in Dubai. 28 A notice of appearance filed by the applicant's solicitors dated 21 June 2007 tends to confirm the respondents' version of events in this regard. The notice of appearance nominates the applicant's address as "20 Orchard Street, Pennant Hills" even though the applicant had not resided there from about November 2006. The applicant's solicitor, Mr King in cross-examination explained the mistake as to the address as an "oversight". He also said that he had become aware only in May 2007 that the applicant resided in Dubai and, the first time he had informed the respondents about the applicant's new address was on 2 July, 2007. The respondents' notice of motion for security for costs was filed on the following day on 3 July 2007. 29 Although these events confirm that the respondents acted promptly, the applicant, if the respondents' application was granted, will have very little time and opportunity to obtain any security which may be ordered given the proximity of the hearing date of the substantive proceedings to the filing and hearing of the present application. The respondents have sought to meet this practical difficulty by their undertaking to consent to any application that the applicant may make to adjourn the hearings of the substantive applications, thereby affording the applicant both time and opportunity to obtain any security that he may be ordered to pay, in order to proceed with his substantive application at some future date. Although on a pragmatic level the applicant, if ordered to pay security would in the circumstances undoubtedly be placed in a difficult situation if the substantive proceedings were not adjourned, I should emphasise here that no blame may be attributed to the respondents for the lateness of their application. Whether any prejudice will suffered by the applicant should the respondents' s 106 application proceed, and the applicant's s 106 application be stayed. 30 The applicant also raised at the commencement of his submissions as a significant issue, the fact that any order for security made against him in circumstances where the applicant is unable to meet the order would result in a stay of his application under s 106 while the respondents' application under s 106 would proceed. 31 The applicant described this potential outcome as entirely unsatisfactory. The respondents' claim under s 106 was characterised by the applicant as a cross-claim because there is "almost complete overlap" between the factual matters relevant to each claim. In addition pursuant to the order made by Marks J, earlier referred to, both matters have been prepared for hearing on the basis that the evidence in one proceeding will be evidence in the other proceeding. An order for security against the applicant, which he cannot meet, and which has the effect therefore of staying his s 106 application will mean, says the applicant, in the absence of any undertaking from the respondents (that they will not proceed with their own s 106 application), that the respondents remain free to prosecute their claim. This in turn causes distinct disadvantages to both parties, for example both parties would be required to lead all, or virtually all, of the evidence with the respondents incurring the same legal costs. The applicant will be denied an opportunity to offset any orders which may be made against him, against any orders made in his favour in his claim. If at some later stage the applicant is able to provide the security which has been ordered, the Court would be required to hear again the same or similar evidence. 32 A similar course of events was expressly disapproved by O'Loughlin J in Re Town and Country Sport Resorts (Holdings) Pty Ltd & ors (unreported Federal Court, 19 July 1991). In that judgment the Court had before it an order for security for costs. One issue which arose for consideration was the possible outcome in the event the order was granted that although the applicants would be unable to prosecute their claims, the respondent could still prosecute its cross-claim. His Honour said (at [13]): My decision is that it would be in everyone's interests to have all issues between these parties resolved. I have been influenced in coming to this decision as a result of Mr Callinan informing me that his present instructions were such that there is no reason to believe that the respondent will not prosecute its cross-claim. Consider then the state of the confusion that would arise. First, if security for costs were ordered, there is at least a strong possibility that the applicants will be unable to prosecute their claims; secondly, the respondent may still prosecute its cross-claim; thirdly, if the respondent pursues its cross-claim, the applicants will be entitled to defend and will be entitled to raise by way of defence and/or by way of set off or counter-claim, most if not all of the issues that they would have raised if their proceedings had not been stayed. It need hardly be said that such a situation would be wholly unsatisfactory. 33 In Innovare Displays plc v Corporate Services Ltd [1991] BCC 174 at 177 McCowan LJ (with whom Leggatt LJ agreed) dismissed an appeal against an order granted in the High Court for security for costs. In the proceedings below the trial judge made certain observations in relation to an issue raised by the plaintiffs that a counterclaim by the defendants should be taken into account on the side of declining to make the order. In responding to this issue the trial judge said: ...it does seem to me that there is force in the submission that it would be unjust to stay the plaintiff's claim, while allowing the defendants to continue with their counterclaim... But the sting is taken out of this by the offer of the defendants, that should I make an order for security and stay if security is not given that they will undertake not to proceed on the counterclaim so long as the stay remains in force. 34 The context in which the remarks were made is similar to the circumstances confronting the present application. Any injustice that may be occasioned by the granting of the order for security which effects a stay of the applicant's s 106 application but allows the respondents' s 106 application to proceed, may be removed by the respondents' undertaking to consent to any adjournment of the applicant's s 106 application and not proceed with their own s 106 application, on 23 July 2007. Quantum of costs 35 The respondents have amended the amount sought for security from $70,000 to $45,000. As I pointed out to the parties during submissions the Court has a wide discretion, should the application be granted, to decide on the quantum of costs. Nor is the Court bound to accept the respondents' estimate of costs likely to be incurred. The respondents have produced an interim memorandum of costs and disbursements in relation to both sets of proceedings, itemising in detail from 16 December 2003 to date, their total professional costs in the sum of $68,532.20. A relevant consideration here, should the Court grant the order for security, is, as observed by Wright J, President in Knott (at [28]), that applications for security for costs, generally speaking, would not be ordered on a full party and party basis. 36 As observed earlier in this judgment, the success of the respondents' application for security is dependant upon the respondents establishing exceptional circumstances: Knott at [24]. An exceptional circumstance identified in that passage by Wright J was where the natural person is, "...a foreign or merely nominal plaintiff". In my view the application's residence in a foreign jurisdiction falls into the category of exceptional circumstance for the purposes of the present application. 37 The factors in favour of granting the respondents' application include first, therefore, that the applicant is currently resident in Dubai, U.A.E. and expects to reside there full-time for at least 2 to 5 years, after which he says he plans to return to Sydney. This factor of overseas residence is a factor of significant weight in deciding whether to grant the respondents' application. This is especially so when consideration is also given to the potential difficulties the respondents will face in the event they attempt to enforce in U.A.E. any judgment obtained by them against the applicant because of the absence of any legislative scheme, such as the Foreign Judgment Act and accompanying regulations, or other formal mechanism, which otherwise allows for enforcement and registration of judgments overseas. Secondly, a factor closely related to the first factor, is the applicant's lack of ownership of any assets both inside the jurisdiction as well as overseas, apart from a modest sum of $3,245 which he says is available in his ANZ bank account after deductions are made for overseas travel and his planned skiing holiday with his daughters. Much of the evidence given by the applicant in relation to this particular factor was vague and sketchy. A sizeable amount of money from the sale of the matrimonial home in November 2006 he says went overseas to relatives in Lebanon as well as in satisfaction of losses incurred as a result of an investment in Lebanon. I found this evidence unsatisfactory and unconvincing but the acute lack of detail does not enable me to make any adverse findings against the applicant in relation to his ability or otherwise to meet an order for security. The state of the evidence therefore in relation to this factor leads me to conclude that the applicant is impecunious and unable to meet a costs order. Taken together with the first factor this adds more weight in favour of granting the respondents' application. Thirdly, there would appear to be little correlation, if any, between the applicant's present financial situation and the subject matter of his s 106 application. The relatively short period of unemployment (6 months) following the applicant's summary termination by the respondents has been largely superseded by later events which include a period of lengthy full-time employment in Australia as a manager after which the position was made redundant by employers having no connection to the respondents, and also his full-time employment overseas in Dubai which could not be said to have arisen directly as a result of his summary termination of employment by the respondents. This is because a large period of time has elapsed between the two events with significant intervening events including the period of full-time employment with another employer for about 21 months: cf Knott at [34]; Williamson v Service Corporation International at [51]. 38 A factor against the granting of the application is that the applicant has an arguable case. At this stage I am unable, based on the material before me (which consists solely of the originating processes in both s 106 applications) to make a strong assessment. The applicant relied heavily in the present application on three factors, namely that an order for security would "stultify" his s 106 claim; the proximity in time between the respondents' application and his s 106 claim; and, in the event the order for security was made, the stay of his s 106 claim by reason of his inability to meet the order, with the result that the respondents' s 106 claim would proceed alone. The impact that these three factors might otherwise have had as factors against the granting of the respondents' application for security has been significantly diminished by the respondents' undertaking that they would consent to any adjournment of the applicant's s 106 proceedings and would not seek to proceed on their own s 106 application. 39 Taking all of these factors into account I find that the balance falls in favour of granting the respondents' order. I have been particularly persuaded by the fact of the applicant's overseas residence and attendant potential difficulties involved in enforcing and registering a judgment order, as well as the applicant's inability to pay an order for security by reason of his impecuniosity. I am mindful that any order for security should take into account, insofar as possible, the applicant's current financial situation. The quantum of the order should therefore not be so high as to impose an insurmountable difficulty upon the applicant from being able to prosecute his claim at some stage in the future should he be unable to meet the order at the present time. 40 Accordingly I make the following orders: 1. The applicant provide security for costs to the respondents in the amount of $30,000 by 10am Monday 23 July, 2007. 2. The proceedings are stayed unless otherwise ordered by the Court in the event security for costs in the amount of $30,000 is not paid by 10am Monday 23 July, 2007. 3. Costs are reserved. _________________ 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. 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