Supreme Court New South Wales Medium Neutral Citation: Llorente v Marshall Bodyguard & Security P/L [2017] NSWSC 1212 Hearing dates: 8 September 2017 Date of orders: 08 September 2017 Decision date: 11 January 2017 Jurisdiction: Common Law Before: Bellew J Decision: (1) Pursuant to r 42.21 Uniform Civil Procedure Rules, the seventh defendant/cross-claimant and/or the eighth defendant/cross-claimant is to give security in the sum of $50,000 in respect of the costs of the second plaintiff/cross-defendant of the cross claims brought against him. (2) The amount the subject of order 1 is to be paid into court by 5 pm on 25 September 2017. (3) I list the matter for further directions before me at 9.30 am on 26 September 2017. (4) I reserve the question of costs of the motion until 26 September 2017. Catchwords: PRACTICE AND PROCEDURE – Costs – Security for costs – Cross-claimants resident overseas – Whether cross-claimants impecunious – Whether order for security would stultify the proceedings Legislation Cited: Compensation to Relatives Act 1897 (NSW) Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: Jones v Dunkel (1959) 101 CLR 298 KP Cable Investments Pty Limited v Meltglow Pty Limited (1995) 56 FCR 189 Li v State of New South Wales (2013) NSWCA 165 Singer v Berghouse (1993) 114 ALR 521; [1993] HCA 35 Category: Procedural and other rulings Parties: Raquel Allison Llorente - Plaintiff Marshall Bodyguard & Security P/L - Defendant Representation: Counsel: R Hanrahan – Cross-claimants / Respondents D R Hooke SC – Cross-defendants / Applicants Solicitors: Macarthur Law Group P/L - Cross–claimants / Respondents Beilby Poulden Costello – Cross-defendants / Applicants File Number(s): 2013/00380377 Publication restriction: Nil Judgment – EX TEMPORE (REVISED) 1. By a notice of motion dated 14 August 2017 the applicants (who are plaintiffs and cross‑defendants in the principal proceedings) seek an order pursuant to r. 42.21 Uniform Civil Procedure Rules 2005 (NSW) that the respondents (who are cross-claimants in the principal proceedings) give such security as the Court thinks fit, in such manner as the Court may direct, in respect of the applicants' costs of the cross-claims brought against them. The motion seeks a further order that until such time as security is given, the cross‑claims be stayed. 2. The orders sought are opposed by the respondents. 3. The notice of motion was supported by the following affidavits, all of which were read without objection: 1. Scott Hall-Johnston of 10 August 2017; 2. Scott Hall-Johnston of 11 August 2017; 3. Nida Warraich of 31 August 2017; and 4. Raquel Allison Llorente of 1 June 2017. 1. In addition, the applicants tendered a document relating to wage rates in Colombia, which was admitted without objection and marked as exhibit A. 2. The respondents relied on two affidavits, namely that of Aida Castillo of 1 September 2017 together with that of Leonardo Zapata of 1 September 2017. Mr Zapata is an interpreter who assisted Ms Castillo in the preparation of her affidavit. Accordingly his affidavit does not bear upon the merits of the issues that I am required to determine. 3. Before I come to the issues raised on the motion, there is a preliminary matter to which I must make reference which arose in the course of the hearing. 4. In the course of making submissions at the close of the evidence, senior counsel for the applicants argued that I should draw a number of Jones v Dunkel-type inferences arising from what was said to be the absence of material evidence in the affidavit of Ms Castillo which was relied upon by the respondents. At the conclusion of those submissions counsel for the respondents sought leave to adduce oral evidence to address one of the matters which had been raised in submissions. Although not articulated in these terms, the effect of what was put was an application for leave to re-open the respondents' case on the motion. Having heard argument on that issue I indicated that I was not prepared to grant that application and that I would incorporate my reasons into my final judgment. 5. The determination of such an application is discretionary. In light of the fact that this was the third occasion upon which this motion was before the Court, and having regard to the fact that the subject of the submission by senior counsel related to a matter of a kind that ought to have been anticipated by those appearing for the respondents, I took the view that my discretion should be exercised by refusing the application. 6. I turn then to set out, in brief terms, the background which leads to the current motion. 7. On 18 December 2010 Wilson Castillo ("the deceased") died as the consequence of an assault. He left a widow, Raquel Llorente, and a young son. Ms Llorente brought proceedings pursuant to the Compensation to Relatives Act 1897 (NSW) against a number of defendants, including the security company who apparently contracted the services of the person said to have been responsible for the assault which killed the deceased. Those proceedings were settled on what might be described as a "commercial" basis, on terms which provided for the payment of a sum of $150,000.00 plus costs. Ms Llorente herself recovered nothing in the proceedings. The terms of settlement provided that the entirety of the settlement monies be paid to her son on attaining his majority. I was told from the bar table in the course of the hearing of the motion (and there was no dispute about it) that the net sum available for Ms Llorente's son after the payment of all costs and associated expenses is approximately $130,000. 8. The respondents are the parents of the deceased. They reside in Colombia. Each has brought a cross-claim against Ms Llorente and her son claiming a share of the settlement monies. Those claims are brought pursuant to the Compensation to Relatives Act 1897 (NSW). 9. On the basis of what I was told in the course of the hearing of the motion, there seems to be some doubt as to whether or not either respondent intends to travel to Australia for the hearing, which is listed in a matter of a few weeks' time. They have apparently executed a power of attorney in favour of another of their children who lives in Sydney, for the purposes of his conducting the proceedings on their behalf. The fact that the respondents reside outside of the jurisdiction is relied upon by the applicants pursuant to r. 42.21(1)(a) of the Uniform Civil Procedure Rules. 10. In support of the orders sought senior counsel for the applicants made a number of submissions. Firstly, it was submitted that the respondents' case against Ms Llorente was, as senior counsel described it, "hopeless". It was submitted that the lack of prospects of success of that claim arose from the simple fact that Ms Llorente herself recovered nothing whatsoever from the settlement of the proceedings. Whilst senior counsel acknowledged that the same could not be said in respect of the case against her son, he submitted that discretionary considerations which I was entitled to take into account included the fact that he was a six year old boy. 11. Senior counsel urged me not to accept the proposition that the respondents were impecunious. He pointed out that there was evidence in Ms Castillo's affidavit that she had received in excess of $65,000 from a combination of a share of the deceased's superannuation entitlements, and an amount in victim's compensation. Senior counsel pointed out that the evidence was silent as to what had happened to that money. He submitted, in particular, that there was no evidence that the money had been dissipated and that I would infer in all of the circumstances that it remained available to the respondents to be applied to the costs of pursuing the cross-claims. He also pointed out the significance of such a sum, taking into account average wage rates in Colombia as set out in exhibit A. Senior counsel submitted that if I were to find that those monies were still available, I would also conclude that the proceedings would not be stultified in the event that an order for security was made. 12. Senior counsel also pointed to the evidence that the proceedings were apparently being conducted by the respondents' son, in their absence overseas. He submitted that I would come to the conclusion from the affidavit of Ms Castillo that it is clearly part of the Colombian culture that children support their parents and that in those circumstances I should find that this was precisely what was occurring in the present case. 13. Senior counsel further submitted that there had been no relevant delay in bringing the present application. Finally, he pointed out that the affidavit of Ms Warraich established that if the applicants successfully defended the cross-claims, there was no procedure by which the judgment could be registered and enforced in Colombia. It was submitted that this would necessitate the commencement of fresh proceedings in Colombia in order to recover any costs which might be awarded. 14. The submissions made by counsel for the respondents centred essentially upon the respondents' asserted impecuniosity. Counsel submitted that I would conclude, on the basis of the affidavit of Ms Castillo, that she and her husband were "poor", and that in those circumstances the order which was sought would stultify the proceedings. In advancing that submission counsel accepted, as I understood it, that the onus of establishing that an order for security would have that effect was on the respondents. 15. The principles which apply to an application of this nature were helpfully set out by Beazley J (as her Honour then was) in KP Cable Investments Pty Limited v Meltglow Pty Limited (1995) 56 FCR 189. At 197 her Honour made reference to the fact that the discretion to order security is unfettered, but that notwithstanding the nature of that discretion there were nevertheless a number of well established guidelines which a court would typically take into account in determining any such application. Those guidelines included the need to bring applications promptly; an assessment of the strength and bona fides of the case; whether any impecuniosity was caused by an opposing party; and whether the application was oppressive, in the sense that it was merely being used to deny an impecunious party a right to litigate. 16. The absence of any avenue through which the applicants, if successful, could register and enforce their judgment in Colombia is also a relevant consideration. In Li v State of New South Wales [2013] NSWCA 165, Ward JA made reference to the judgment of Gaudron J in Singer v Berghouse (1993) 114 ACR 521; [1993] HCA 35 where her Honour observed that the need to bring an action in a foreign court to enforce an order for costs would be a factor which would weigh very heavily in favour of an order for security being made, notwithstanding the fact that such orders necessarily involve the exercise of a broad discretion. 17. Applying those various principles to the present case, I reach the following conclusions. 18. Firstly, I am satisfied that in all of the circumstances there has been no relevant delay in the present application being brought. Indeed as I read it, any recent delay has been the fault of the respondents rather than the applicants. This is the third occasion on which the motion has been listed for hearing. The matter could not proceed on either of the first two occasions due to the fact that the respondents had not properly prepared their affidavit material. 19. Secondly, in terms of the strength of the respondents' case, there is considerable merit in the submission advanced by senior counsel for the applicants that any case that the respondents seek to bring against Ms Llorente is doomed to fail, for the simple reason that the settlement of the principal proceedings did not result in her recovering any money. The same could not be said, however, for the case against the deceased's young son. That claim would appear to be bona fide. There is certainly nothing to suggest the contrary. 20. Thirdly, there is no evidence before me which would suggest that the application for security for costs is in any way oppressive, in the sense that it is being used merely to deny the respondents a right to litigate. 21. Fourthly there is, in my view, a real issue as to whether the respondents are impecunious. The highest that counsel for the respondents could put it was to point me to an assertion in Ms Castillo's affidavit that they were "poor". What was precisely meant by that is not at all clear. Moreover, the issue raised by senior counsel for the applicants as to the whereabouts of the substantial sum of money received by the respondents following their son's death is a point well made. The evidence is completely silent as to what has happened to it. In the absence of any evidence, and in particular in the absence of any evidence concerning the money being dissipated, I infer that it remains available. That is a factor of some significance in circumstances where the onus of establishing that an order for security would be stultifying is on the respondents. 22. Fifthly, even if I were to come to the conclusion that the respondents were impecunious, that does not operate as an absolute bar to the making of the order sought. Whether or not the order should be made remains a matter for the Court's discretion taking all relevant factors into account: see Li at [24]. 23. Sixthly, the fact that in the event that the applicants are successful in these proceedings they will not be able to automatically register and enforce, in Colombia, any judgment to which they might be entitled following an order for costs in their favour, is a powerful factor which favours the making of the order sought. 24. In all of these circumstances I am satisfied that the orders sought by the applicant on the motion should be made. I propose to allow a period of 14 days for the security to be lodged. I will then have the matter brought back immediately before me and in the event that the monies have not been lodged, and subject to hearing any further submissions by either party as to what should happen in that event, a stay of the proceedings would prima facie appear to be appropriate. 25. Accordingly for those reasons I make the following orders: 1. Pursuant to r. 42.21 Uniform Civil Procedure Rules, the seventh defendant/cross-claimant and/or the eighth defendant/cross-claimant is to give security in the sum of $50,000 in respect of the costs of the second plaintiff/cross-defendant of the cross-claims brought against him. 2. The amount the subject of order 1 is to be paid into court by 5 pm on 25 September 2017. 3. I list the matter for further directions before me at 9.30 am on 26 September 2017. 4. I reserve the question of costs of the motion until 26 September 2017. ********** Amendments 18 September 2017 - Correction to coversheet 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: 18 September 2017