First Tiffany Resource Corporation v Hill End Gold Limited [2014] NSWSC 1713

Supreme Court New South Wales

Medium Neutral Citation: First Tiffany Resource Corporation v Hill End Gold Limited [2014] NSWSC 1713 Hearing dates: 7 November 2014 Decision date: 07 November 2014 Before: Rein J Decision: Motion granted. Catchwords: EQUITY - Interlocutory application - motion for summary dismissal - where an order for security for costs has been made - where the plaintiff has failed to pay security - where the plaintiff is an overseas resident and provided no evidence of ability to provide security - where there is prejudice to the defendant Legislation Cited: Civil Procedure Act 2005 (NSW) Uniform Civil Procedure Rules 2005 Cases Cited: Aon Risk Services Australia Limited v Australian National University [2009] HCA 27 Ballard v Brookfield [2013] NSWCA 82 Idoport Pty Limited v National Australia Bank [2002] NSWCA 271 Lawrence Waterhouse Pty Ltd v Port Stephens Council [2008] NSWCA 235 Porter v Gordian Runoff No 3 [2005] NSWCA 377 Category: Interlocutory applications Parties: First Tiffany Resource Corporation (Plaintiff) Hill End Gold Limited (Defendant) Representation: Counsel: D Michael (solicitor) (Plaintiff) C N Bova (Defendant) Solicitors: M&A Lawyers (Plaintiff) Kelly Hazell Quill Lawyers (Defendant) File Number(s): 2014/94639

EX TEMPORE Judgment 1These proceedings concern claims over mining tenements. The claims relate to the mining of gold and silver in the years 20 June 2008 to year ending 30 June 2010. The gold said to have been mined in the period up to 30 June 2008 is 400 ounces and the balance for later years, more than 11,000 ounces. This is potentially relevant to one matter to which I shall return. 2The defendant sought security for costs from the plaintiff, an application which was initially resisted and the defendant was forced to put on a motion with a supporting affidavit, affidavit of Victoria Jayne Keller, 6 June 2014. 3The history of the matter is recorded in an affidavit of James William Berman of 31 October 2014, filed and read today in support of the defendant's motion. 4Today's motion seeks an order pursuant to Pt 42, r 42.21(3) of the Uniform Civil Procedure Rules 2005 ("UCPR") or, alternatively pursuant to the Court's inherent jurisdiction, that the proceedings be dismissed. 5The basis of dismissal is that on 8 August, Hammerschlag J ordered the plaintiff to provide security in the amount of $250,000 and to do so by providing an unconditional bank guarantee paid into court on or before 26 September 2014. 6His Honour ordered that failing such provision the proceedings were to be stayed. The money was not paid and has not been paid by the plaintiff in accordance with his Honour's orders. 7On 1 October, the defendant's solicitors wrote to the plaintiff's solicitors advising that they were seeking to have the proceedings dismissed for failure to pay the security. 8Her Honour Bergin CJ in Eq made orders on 3 October 2014, putting in place a time-table for the hearing of the motion for dismissal, which motion was made returnable for today. 9The defendant has served the affidavit of Mr Berman, to which I have referred, and relies on that earlier affidavit of Ms Keller. Mr Bova of counsel appears for the defendant, applicant on the motion, and Mr Michael, solicitor, appears for the plaintiff, as respondent to the motion. 10There is evidence which comes from the respondent's affidavit that the plaintiff has been seeking litigation funding or at least indications were given to that effect and Mr Michael referred to that again today. An indication was given on 3 October 2014 that funding would likely be achieved within four weeks of 3 October. 11Mr Michael informed me today that the funding attempt has failed. He resists the application for dismissal on the basis that it would be prejudicial to the plaintiff, that no prejudice will be suffered by the defendant if further time is provided to the plaintiff for obtaining funding. Mr Michael did not indicate how long a further period was sort other than "a short period". 12There is no affidavit detailing any efforts made by the plaintiff to obtain funding. 13Mr Bova has referred me to the decision of McColl JA in Lawrence Waterhouse Pty Ltd v Port Stephens Council [2008] NSWCA 235 in which an application such as this was considered. 14Her Honour made reference to the well-known decision of Einstein J in Idoport Pty Limited v National Australia Bank [2002] NSWCA 271 (at [28]) in which his Honour set out the five factors that need to be considered in determining such an application, these being: one, the period that has elapsed since security was ordered; two, the fact that the plaintiff has been on notice of the application for dismissal; three, the seeming inability of the plaintiff to further fund the proceedings; four, prejudice to the defendant; and five, the position of the Court. 15Before considering these five factors, I should also mention that my attention was also drawn to the decision of Ballard v Brookfield [2013] NSWCA 82 in which Ward JA at [99] made reference to the five matters identified in Idoport but also noted at [103] that it was said in Porter v Gordian Runoff No 3 [2005] NSWCA 377 that if a significant sum is ordered to be paid by the plaintiff by way of security and the plaintiff defaults, then if the plaintiff fails to satisfy the Court that there is any prospect of complying with the order the proceedings should ordinarily be dismissed. 16In relation to the five factors that were mentioned, the order was made on 8 August and notice was given of the intention to bring this application on 1 October. More than 2 months have elapsed since security was ordered. 17The plaintiff has still not been able to obtain the funds and has not produced any evidence of its efforts and there is really nothing to indicate that it is likely that there is a reasonable prospect that it will be able to obtain funding for this case. 18So far as prejudice to the defendant is concerned, the matter has been brought in the Commercial List where plaintiffs and defendants are expected to prepare and complete their cases with expedition. Parties in all matters are entitled to have their proceedings dealt with quickly and that there is a prejudice to litigants if they are, as it were, kept waiting whilst a plaintiff (or defendant) puts its house in order. There is an inherent prejudice to one party where there is delay in the conduct of the case by the other party. 19Here the plaintiff (an overseas resident) has not ensured that it has sufficient funds to bring the case and to provide a measure of protection to the defendant should the defendant be successful in resisting the proceedings. 20It was pointed out by both Mr Bova and Mr Michael that there has been a long history of litigation between these parties dating back to 2005. 21So far as the position of the Court is concerned, the Court has an interest in, as do the public and other litigants, matters being promptly dealt with, having regard to its limited resources which must be apportioned amongst litigants in a fair way: see Civil Procedure Act 2005 (NSW) ss 56-60 and Aon Risk Services Australia Limited v Australian National University [2009] HCA 27. 22If a party is not able to do what is necessary to continue with proceedings the matter should not be left hanging, as it were, and I have referred to the usual results referred to in Porter. 23Dealing with the question of prejudice, although there was a reference of prejudice to the defendant, I should make reference to Mr Michael's point, that his client may be statute barred in relation to the claim. It is not clear whether that would be so but accepting that there is at least some risk prima facie that it may fail on that portion of the claim, it is a relatively small portion of the claim and it is a consequence of the plaintiff's failure to prepare itself by adequate funding for the proceedings. 24Mr Bova pointed out that the proceedings were commenced in March this year. They are close to the limitation period which commenced in June 2008. If the consequence is that the plaintiff suffers in that a small proportion of this claim is not allowed by reason of it being statute barred, that potential prejudice must be weighed against the detriment to the defendant of being forced to wait, whilst the plaintiff ascertains within some unspecified period whether it can obtain funding which, on present indications, is unlikely. 25In the circumstances, I am satisfied that this is a case in which the proceedings should be dismissed. 26There is also an issue as to costs. The defendant seeks a costs order on the indemnity basis. The plaintiff resisted the application for security and the defendant was put to the expense of affidavits and putting on a motion in support of its application and in my view it ought not to have been put to that expense if there was no real defence to the application. When the orders were made, the plaintiff's position was, on that date, that it neither consented nor opposed the orders sought by the defendant for security. The defendant relied from the outset on the fact that the plaintiff was a foreign corporation. It was always entitled to security and nothing has been advanced today to say why there was any justification in refusing to accede to the application for security. 27Accordingly, it is a case in which it is appropriate to order indemnity costs, and I do so. 28The four orders which are sought are set out in the notice of motion. They include an order that the plaintiff not be able to commence fresh proceedings without paying the costs of these proceedings. I think that is an appropriate order in the circumstances. 29I make the orders sought in the notice of motion, orders 1 to 4.