Supreme Court New South Wales Medium Neutral Citation: Milosevska v Milosevski [2019] NSWSC 711 Hearing dates: 4 June 2019 Date of orders: 04 June 2019 Decision date: 04 June 2019 Jurisdiction: Equity Before: Hallen J Decision: The Court: (a) Orders that the Plaintiff pay the Defendant's costs of the notice of motion filed on 6 May 2019. (b) Orders that the whole of the proceedings be dismissed. (c) Orders that the Plaintiff pay the Defendant's costs, calculated on the ordinary basis, of the proceedings, up to and including 27 March 2019, and after 27 March 2019, the Plaintiff pay the Defendant's costs, calculated on the indemnity basis, of the proceedings (other than in respect of the costs of the notice of motion. (d) To the extent that the Defendant's costs, calculated on the indemnity basis, of the proceedings, are not paid by, or recovered from, the Plaintiff, those costs are to be paid, or retained, as the case may be, out of the notional estate of the deceased. Catchwords: CIVIL PROCEDURE – Interlocutory application –Claim by Plaintiff, a son of the deceased, for a family provision order – Application for security for costs by defendant, the spouse of the deceased in a long marriage – The Plaintiff not ordinarily resident in New South Wales but ordinarily resident in Macedonia – Plaintiff has no property in New South Wales – Plaintiff's solicitor conducting proceedings for Plaintiff on basis of a conditional costs agreement – Whether competing factors in favour of not granting order for security – Security for costs ordered – The Plaintiff and Defendant disagree as to the amount of security to be provided – Amount of security to be provided determined by the Court – When orders proposed to be made Plaintiff accepts no reason for proceedings to continue – Consent to dismissal of the proceedings COSTS – Security for costs – Plaintiff resident outside jurisdiction – Orders that Plaintiff pay the Defendant's costs of the notice of motion SUCCESSION – FAMILY PROVISION – COSTS – Following dismissal of the suit for family provision order – Offer of Compromise served about 4 months prior to the hearing of notice of motion for security for costs – Consent to dismissal of the proceedings - Defendant obtains order no less favourable than offer made in Offer of Compromise – Whether Court's discretion should be exercised to depart from UCPR – Overall justice of the case does not warrant exercise of the Court's discretion to "order otherwise". Legislation Cited: Civil Procedure Act 2005 (NSW) Family Provision Act 1982 (NSW) Foreign Judgments Act 1991 (Cth) Foreign Judgments Regulations 1992 (Cth) Legal Profession Uniform Law Application Act 2014 (NSW) Oaths Act 1900 (NSW) Succession Act 2006 (NSW) The International Private Law Act 2007 (Macedonia) Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: Acohs Pty Ltd v Ucorp Pty Ltd (2006) 236 ALR 143 Allison v Harmsworth [2018] SASC 27 Anderson v Hill [2017] NSWSC 1149 April Fine Macao Commercial Offshore Ltd v Moore Business Systems Australia Ltd (2009) 75 NSWLR 619; [2009] NSWSC 867 Ariss v Express Interiors Pty Ltd (In Liq) [1996] 2 VR 507 Ashington Capital Pty Ltd v Parissen Capital (Project X) Pty Ltd [2012] NSWSC 410 Bay of Plenty Pharmacy Services Limited v Chemworks Limited [2019] NZHC 785 Bladwell v Davis [2004] NSWCA 170 Bray v F Hoffman‑La Roche Ltd (2003) 130 FCR 317; [2003] FCAFC 153 Brundza v Robbie & Co (No 2) (1952) 88 CLR 171 Cetojevic v Cetojevic [2006] NSWSC 431 Chapple v Wilcox (2014) 87 NSWLR 646; [2014] NSWCA 392 Cheng Xi Shipyard v The Ship "Falcon Trident" [2006] FCA 759 Chocron v Onkoud [2018] NSWSC 1205 Corby v Channel Seven Sydney Pty Ltd [2008] NSWSC 245 Crupe Pte Limited v Stuart Kinnear Robertson [2018] NSWSC 2056 De Jong v Carnival PLC [2016] NSWSC 347 Del Bosco v Outtrim [2008] NSWSC 105 Dense Medium Separation Powders Pty Ltd v Gondwana Chemicals Pty Ltd (in liq) [2011] NSWCA 84 East Grace Corporation v Xing (No 1) [2005] FCA 219 FFE Minerals Australia Pty Ltd v Mining Australia Pty Ltd [2000] WASCA 69; (2000) 22 WAR 241 Fiduciary Ltd v Morningstar Research Pty Ltd, (2004) 208 ALR 564; [2004] NSWSC 664 Green (as liquidator of Arimco Mining Pty Ltd) v CGU Insurance Ltd [2008] NSWCA 148; (2008) 67 ACSR 105 Gujarat NRE Australia Pty Ltd v Williams [2006] NSWSC 992 Harkness v Harkness (No 2) [2012] NSWSC 35 Idoport Pty Ltd v National Australia Bank Ltd [2001] NSWSC 744 In the matter of Elsmore Resources Ltd [2014] NSWSC 1247 In the matter of Felan's Fisheries Pty Limited [2016] NSWSC 1351 In the matters of Shaolin Temple Foundation (Australia) Ltd [2016] NSWSC 1232 Jazabas Pty Ltd v Haddad [2006] NSWSC 880 King v Commercial Bank of Australia Limited (1920) 28 CLR 289; [1920] HCA 62 Lex Fitness Pty Ltd ATF Lex Family Trust v Australian Fitness Management Pty Ltd [2017] NSWSC 157 Live Board Holdings Ltd v Cody Live Pty Ltd [2017] NSWCA 302 Lo Surdo v Public Trustee [2003] NSWSC 837 LRSM Enterprise Pty Ltd v Zurich Australia Insurance Ltd [2014] NSWCA 88 Mentink v Registrar of Ships [2009] FCA 871 Narradine Pty Ltd v Mascot Steel and Tools Pty Ltd [2012] NSWSC 385 Ollerenshaw v The Uniting Church in Australia Oshlack v Richmond River Council [1998] 193 CLR 72; [1998] HCA 11 Oxley v Oxley [2018] NSWSC 91 Phillips Electronic Australia Pty Ltd v Matthews (2002) 54 NSWLR 598; [2002] NSWCA 157 Porzelack KG v Porzelack (UK) Ltd [1987] 1 WLR 420 PPK Willoughby Pty Ltd v Baird [2019] NSWCA 48 Property Trust (NSW) [2017] NSWSC 1637 PS Chellaram & Co Ltd v China Ocean Shipping Co (1991) 102 ALR 321; [1991] HCA 36 Rajski v Computer Manufacture & Design Pty Ltd [1982) 2 NSWLR 443 Re Coldham; Ex Parte Brideson (1989) 166 CLR 338; [1989] HCA 2 Re Estate Condon; Battenberg v Phillips [2017] NSWSC 1813 Re Salmon, Deceased [1981] Ch 167 Reekie v Attorney-General [2014] 1 NZLR 737; [2014] NZSC 63 Sas Global Forrestdale Pty Ltd v Samsera Pty Ltd [2010] WASC 309 Shackles & Daru Fish Supplies Pty Ltd v Broken Hill Proprietary Co Ltd [1996] 2 VR 427 Singer v Berghouse (1993) 114 ALR 521; [1993] HCA 35 Singer v Berghouse (1994) 181 CLR 201; [1994] HCA 40 Southern Cross Exploration NL v Fire & All Risks Insurance Co Ltd (1985) 1 NSWLR 114 Spiel v Commodity Brokers Australia Pty Ltd (1983) 35 SASR 294 Stone v Stone [2016] NSWSC 605 Sung v Malaxos (No 2) [2015] NSWSC 290 Verzar v Verzar [2012] NSWSC 1380 Verzar v Verzar (2014) 12 ASTLR 523; [2014] NSWCA 45 Texts Cited: Brereton J, "Proof of Foreign Law – Problems and Initiatives" [2011] NSWJ Schol 13 GE Dal Pont, Law of Costs (3rd ed, 2013, LexisNexis Butterworths, Australia) Category: Procedural and other rulings Parties: Pece Milosevski (Plaintiff/Respondent) Trajanka Milosevska (Defendant/Applicant) Representation: Counsel: Mr D Currie (Plaintiff/Respondent) Mr B Townsend (Defendant/Applicant) Solicitors: Bozinovska & Co Solicitors (Plaintiff/Respondent) Ajaka Gestakovski Lawyers (Defendant/Applicant) File Number(s): 2018/377664 Judgment 1. HIS HONOUR: Before the Court, for hearing on 4 June 2019, was a notice of motion, filed on 6 May 2019 (wrongly shown as having been filed on 3 May 2019), in which the Defendant, Trajanka Milosevska, the widow of Gorija Milosevski ("the deceased"), seeks "security for the [D]efendant's costs in these proceedings … in such manner as the Court thinks fit" (presumably pursuant to the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") r 42.21 or, perhaps, the court's inherent power to order security for costs); an order that the proceedings be stayed until the Plaintiff gives such security; and that if the Plaintiff fails to comply with such order, that the Summons be dismissed. (The notice of motion contained a typographical error in relation to the order for the stay in that it refers to the "Defendant" giving security. However, at the hearing, the typographical error was amended, by hand, on the notice of motion without objection: s 64 of the Civil Procedure Act 2005 (NSW).) 2. The Plaintiff, Pece Milosevski, who is the son of the deceased, commenced the substantive proceedings by Summons filed on 7 December 2018. He seeks a family provision order out of the estate and/or notional estate of the deceased pursuant to Chapter 3 of the Succession Act 2006 (NSW) ("the Act"); an order extending the time for the making of the application; an order under s 91 of the Act, that administration in respect of the estate of the deceased be granted, for the purposes of permitting the application to be dealt with, as administration of the deceased's estate has not been granted; an order that the costs of the proceedings be paid from the estate of the deceased, including notional estate; and such further or other order as the court sees fit. Accordingly, the application for security for costs brought by the Defendant is in the context of family provision proceedings. 3. There is no dispute that the Plaintiff is, and was at the date of commencing the proceedings, "ordinarily resident outside Australia", residing in Bitola, in the Republic of Macedonia, and that he has no assets in New South Wales. There is also no dispute that he has very few assets outside the jurisdiction. 4. By setting out what I shall describe hereunder as the facts, I do not, in any way, purport to determine any factual issues. My purpose is to give an overview in determining the question of whether security for costs ought to be ordered. The Plaintiff's claim 1. It is to be noted, at the outset, in relation to the affidavits relied upon, that there is a question whether each of the affidavits of the Plaintiff comply with s 27A Oaths Act 1900 (NSW), which provides: "27A Affidavits by persons unable to read written English If it appears to the person before whom an affidavit is made ('the authorised person') that the person making the affidavit ('the deponent') is blind, illiterate or otherwise unable to read written English, the authorised person must certify, in or below the jurat: (a) that the affidavit was read to the deponent in the presence of the authorised person, and (b) that it appeared to the authorised person that the deponent understood the affidavit, and (c) that the deponent subscribed the affidavit (by signature or mark) in the presence of the authorised person." 1. UCPR r 35.7 provides: "35.7 Affidavits by persons who cannot read An affidavit made by a blind or illiterate person may not be used unless: (a) the affidavit bears a certificate referred to in section 27A of the Oaths Act 1900, or (b) the court is otherwise satisfied: (i) that the affidavit was read to the deponent in the presence of the person before whom it was made, and (ii) that it appeared to that person that the deponent understood the affidavit." 1. Because of what is written in the affidavit of the Plaintiff explaining delay to which I shall refer, I note that none of his affidavits reveal whether it was read to him in the presence of the person before whom the affidavit was made, or that it appeared to that person that the deponent, (the Plaintiff) understood the affidavit. 2. No objection to the Plaintiff's affidavits was taken on this basis. However, the rule provides that the affidavit "may not be used". 3. The purpose of the rule was identified by Barrett AJA in In the matters of Shaolin Temple Foundation (Australia) Ltd [2016] NSWSC 1232, at [93]-[95]: "Each provision is, clearly enough, directed to a case in which the text of an affidavit is prepared in English and the person who is to swear or affirm it cannot read English. The aim, in each case, is to ensure that the court receive assurance, either within the affidavit itself or by some extraneous means, that the deponent, after being taken through the substantive content and had it explained in some way appropriate to his or her capacity to comprehend, has indicated that he or she understands that substantive content. Neither provision applies directly here. The references to a person who is 'illiterate' are references to a person who cannot read the language in which the affidavit is written. In the present case, it seems very likely that the person signing was not 'illiterate' because he could in fact read what was written in non-English characters. The concern here is, rather, with the question whether the officiating functionary in truth administered an oath or affirmation and whether there took place, as between the person signing and that functionary, an interchange of words accompanied by apparent comprehension on each side, sufficient to assure the court that the non-English content had been deposed to on oath or affirmation. The question for the court is whether it has been sufficiently shown that the person whose evidence is tendered through the supposed affidavit understood the content of the document and gave to the officiating functionary contemporaneous acknowledgment of understanding that the signing was occurring in circumstances of formality and solemnity consistent with the swearing of an oath or the making of an affirmation. The necessary assurance can only be achieved by evidence and, as the cases show, a practical approach [would] be taken: see, for example, Kazas-Rogaris v Gaddam [2014] NSWSC 1465; Commissioner of the Australian Federal Police v Vo [2016] NSWSC 711. Furthermore, there may be circumstances in which the court will dispense with strict proof because, for example, the affidavit is read without objection and no point is made about the apparent lack of comprehension: Bechara v Bechara [2016] NSWSC 513. This was not such a case." 1. More recently, the rule was referred to in GWM Goldmining Pty Ltd v Frerk [2018] NSWCA 162, in which Emmett AJA (with whom Payne JA and Simpson AJA agreed) wrote, at [24] and [26]-[27]: "If a proposed deponent of an affidavit does not have an adequate command of English, an interpreter should read to the deponent, in a language that is understood by the deponent, a translation of the affidavit and the oath or affirmation, or [to] give to the deponent a written translation of the affidavit and oath or affirmation. The translator would then certify that he or she has done so. The interpreter would first swear that he or she had truly interpreted the contents of the affidavit to the deponent and that the interpreter had truly interpreted to the deponent the oath or affirmation about to be administered. The interpreter would then certify that the interpreter understands both the English language and the language understood by the deponent and that the interpreter had truly interpreted to the deponent the contents of the affidavit and the oath or affirmation that was administered. The jurat would then provide that the affidavit has been sworn or affirmed by the deponent with the assistance of interpretation by the named interpreter, whose identity and qualification would be stated. There was no evidence that the Affidavit was sworn or affirmed in such circumstances. … It is significant that both provisions refer to an affidavit being 'read to the deponent'. Reading an affidavit must signify reading the words of the affidavit in the language in which it is expressed, namely, English, in the ordinary course. There is no suggestion in s 27A of reading English words in an affidavit by way of translating or interpreting the words into a different language. Section 27A of the Oaths Act and r 35.7 are concerned with the making of affidavits by persons who are blind, illiterate or otherwise unable to read written English. That is to say, they are concerned with persons who speak English but, for whatever reason, are incapable of reading written English. The provisions are not concerned with the making of affidavits by persons who have no knowledge of English. In any event, failure to comply with s 27A or r 35.7 does not appear to have been the basis upon which the primary judge rejected the Affidavit." 1. I considered whether the Plaintiff could rely upon s 64 of the Evidence Act 1994 (NSW) because the Court was informed by his counsel that the Plaintiff was present and available to give evidence about the asserted facts in the affidavits. 2. When this matter was raised, counsel for the Defendant accepted that no notice of an objection to the Plaintiff's affidavits on this ground had been given to the Plaintiff's legal representatives. He stated that he did not wish to take objection to the Plaintiff's affidavits being read on this interlocutory application. 3. In order to deal with the matter, in accordance with s 56 of the Civil Procedure Act, and without objection from the Defendant, the affidavits were read on the notice of motion. Background Facts 1. The Plaintiff is 52 years of age and lives in Macedonia. He is married with 2 children aged 21 and 20. 2. The Plaintiff deposes that the deceased divorced his mother when he was 2 years of age in about 1969. He gives evidence that the deceased paid no child support despite orders having been made in 1967, 1969, 1973, 1977, 1981, 1984 and 1986. (There is no evidence that the orders were served on the deceased, particularly the orders made after he moved to Australia, or that the deceased was otherwise made aware of them.) 3. He also says that he sought out the deceased, in Australia, by asking his aunties to have the deceased contact him. When he obtained an address, the Plaintiff says he wrote letters to the deceased. 4. On one occasion, he says (but the Defendant denies), that the deceased visited Bitola, Macedonia, but did not contact the Plaintiff. 5. Accepting the evidence of the Plaintiff at its highest, it is, at least, arguable that the Plaintiff's case is one of "bare paternity" only. That, of course, does not mean that "the bare fact of paternity" is not "of very great importance in morality": Gorton v Parks (1989) 17 NSWLR 1 at 9-10. 6. The Plaintiff asserts that he did not know of the deceased's death until about 10 June 2018. Towards the end of July 2018, he instructed his current solicitors, Bozinovska & Co., and in particular, Ms Gordana Bozinovska of that firm. He never came to Australia to give instructions. The firm, and Ms Bozinovska, continue to act for the Plaintiff. 7. There is evidence that his solicitors wrote a letter, dated 13 August 2018, to the Defendant (addressed to her home in Tempe, the relevance of which is discussed later in these reasons) requesting a copy of the deceased's Will, Inventory of Property, and Probate. The letter also stated that instructions had been received to make a claim for a family provision order. 8. The Plaintiff states that no response to this letter was received. 9. Proceedings were, ultimately, commenced on behalf of the Plaintiff on 7 December 2018. There is no explanation why there was a delay between August, after the Plaintiff instructed his solicitors, and December 2018, when the proceedings were commenced, other than the assertion that the Plaintiff says he could only contact his solicitor electronically, or by telephone, and that "[t]his has caused some difficulties for me obtaining advice and giving instructions". 10. The Plaintiff does not identify the precise difficulties referred to, although he does say that "[o]nce I engaged my solicitor it took a number of months to complete and translate the required documents". 11. In his affidavits, the Plaintiff does not disclose owning any real property, or other assets. He says that he has a net monthly income of $480 (about $5,760 per annum). His wife has a monthly income of $250 (about $3,000 per annum). The weekly expenses of the Plaintiff and his family equate to $387 (about $20,124 per annum). He does not disclose how the shortfall of income over expenditure is met. 12. Indeed, in his affidavit of 9 May 2019, at [9], he states: "In relation to the security for the Defendant's costs in these proceedings I have neither such amount of money nor the real property in North Macedonia or Australia to give such security." 1. Thus, on the Plaintiff's own evidence, he is devoid of assets and earns very little from his employment and therefore, he has "needs". No submissions, in writing, however, were made by the Plaintiff on the issue of the designation of property as notional estate of the deceased. 2. On the issue of enforcement in Macedonia, of any costs order against the Plaintiff, in written submissions only, the Plaintiff's counsel referred to the International Private Law Act 2007, published in the official gazette of the Republic of Macedonia, No. 87 of 12 July 2007, Article 100, which states: "A foreign court decision is equated with a decision of the court of the Republic of Macedonia and produces a legal action in the Republic of Macedonia only if it is recognized by the court of the Republic of Macedonia." 1. It should be noted that the proof of foreign law is a question of fact. However, the application of the foreign law to the facts of the particular case is a question of law: Brereton J (as his Honour then was), "Proof of Foreign Law – Problems and Initiatives" [2011] NSWJ Schol 13 (referred to by Pembroke J in Crupe Pte Limited v Stuart Kinnear Robertson [2018] NSWSC 2056). 2. There was no evidence concerning the International Private Law Act or its meaning. I do not propose to rely upon the written submissions of the Plaintiff on this topic. (In any event, counsel accepted that it would not matter as the Plaintiff would not be able to satisfy an order even if it were able to be enforced in Macedonia.) 3. On 29 May 2019, that is about 6 months after the commencement of the proceedings, and three working days before the hearing of the notice of motion, the Plaintiff's solicitor, Ms G D Bozinovska, swore an affidavit to which she annexed correspondence that she had sent to the Defendant's solicitors on 13 May 2019 and on 15 May 2019. She received a response from the Defendant's solicitors on 21 May 2019. The purpose of this evidence was to suggest that the amount in the jointly held bank account had been wrongly expended by the Defendant. 4. More importantly, it seems to me, the Plaintiff's solicitor disclosed that: "[t]he Plaintiff's legal representative is conducting this matter on a speculative basis. The Plaintiff has not paid any legal costs to date. The costs agreement that I hold with the Plaintiff, does not contain an uplift factor." 1. A copy of the costs agreement was not annexed to the affidavit, but I have assumed that the costs agreement referred to is a costs agreement (a conditional costs agreement) that provides that the payment of some, or all, of the legal costs is conditional on the successful outcome of the matter to which those costs relate, pursuant to Part 4.3, s 181 of the Legal Profession Uniform Law Application Act 2014 (NSW). 2. Counsel for the Plaintiff confirmed that this was so. In fact, he went further and informed the Court from the Bar table, without objection, that the Plaintiff is required to pay disbursements only in the event that he is unsuccessful. 3. There was no evidence given on the way in which the disbursements, which, presumably, include counsel's fees, would be met by the Plaintiff, or how he had been able to attend New South Wales for the notice of motion for security. 4. It is to be noted that the Plaintiff's solicitor had sworn a costs affidavit on 7 December 2018, which she said was made "in accordance with Practice Note SC Eq 7". No mention of conducting the proceedings on behalf of the Plaintiff "on a speculative basis" was disclosed in that affidavit. 5. I have, now, dealt with the obligation of a solicitor to disclose the existence of a conditional costs agreement in, at least, two other judgments, namely in Anderson v Hill [2017] NSWSC 1149, at [35]-[38], and at [40]-[41] and in Oxley v Oxley [2018] NSWSC 91, at [57]-[90]. 6. In Oxley v Oxley, at [88], I wrote: "It follows that if there is any conditional costs agreement, the nature of that agreement, and its effect on the payment of the costs of the party, including any term relating to an uplift fee, should be disclosed in each affidavit of costs that is relied upon by either party." 1. The information provided by the Plaintiff's solicitor should have been disclosed in her first costs affidavit. Clearly, it was a matter of relevance to the Defendant and is a matter relevant to the Court. 2. The Plaintiff seeks an order that the Defendant's notice of motion be dismissed with costs (thrown away), to enable the Plaintiff to properly pursue and prosecute his claim at a final hearing in accordance with the dictates of justice. 3. It was accepted by the Plaintiff's counsel, after obtaining instructions from the Plaintiff, that there would be no point in ordering the proceedings to be stayed if an order for security were made, as the Plaintiff would not be able to satisfy any order. In those circumstances, the proceedings should be dismissed: Tcpt, 4 June 2019, p 8(22) – 9(10). The Defendant's defence to the Plaintiff's claim 1. The Defendant is 72 years of age. She was born in northern Macedonia. She married the deceased in 1971 and remained married to him until his death in February 2017. It follows that they were married for about 46 years. There were four children of their marriage, all of whom are now adults. 2. Counsel for the Defendant stated from the Bar Table, without objection, that the deceased died intestate: Tcpt, 4 June 2019, p 9(34-38). There has been no grant of administration. 3. The Defendant gave evidence that the deceased "had no assets or liabilities of significant financial value which would form part of his estate. His personal effects had no commercial value. No grant of administration was required". He had no superannuation. 4. It follows, if the Defendant's evidence is accepted, that there is no actual estate out of which an order for provision in favour of the Plaintiff may be made. 5. The Defendant acknowledged that she and the deceased owned a property at Tempe, a suburb of Sydney, as joint tenants, and that since the death of the deceased, she has become the sole registered proprietor of that property ("the Tempe property"). At the date of death, the value of the property was said to be $970,000. 6. She also gave evidence that the Tempe property was purchased jointly by the deceased and her, in 1974; that it was their matrimonial home; and that it remains the home in which she currently lives. She has lived in the Tempe property for about 45 years and says that she wishes to continue to do so. Two of her children currently reside there with her, one of whom, Robert, is now her primary carer. 7. She stated that she had worked with the deceased to pay off the Tempe property and that she had worked for about 10 years longer than he did, in order to support the family after he had suffered a back injury and had stopped working. Until her retirement, in 1990, she worked continuously, apart from periods of maternity leave, and had earned an income, which was part of the income of the family. 8. The Defendant suffered a stroke in 2012, following which she was unable to care for the deceased as she had done until that time. Thereafter, their daughter, Sonia, became his primary carer. 9. It is unlikely that the Plaintiff would have any evidence to contradict the historical facts asserted by the Defendant. 10. The Defendant also stated that, at the date of his death, she and the deceased held a joint bank account, which, then, had a credit balance of $60,874. She gave evidence that, after the deceased's death but before the commencement of the substantive proceedings, she had expended a substantial part of the jointly held funds in burying the deceased and having an appropriate monument placed on his grave. 11. The Defendant's application for security for costs was brought following her complying with her obligations under Practice Note SC Eq 7, and having revealed to the Court, and to the Plaintiff, the circumstances of the estate and notional estate, and also revealing her own circumstances. 12. Based upon a recent affidavit served by Ms Bozinovska, there could be some dispute about the value of the property that may be able to be designated as notional estate. The substantive proceedings 1. As a child of the deceased, the Plaintiff's standing as an eligible person is not in dispute. The time for making the claim is calculated from the date of death of the deceased to the date of filing of the Summons in the Court Registry: s 58(3). The Plaintiff's Summons was filed about 10 months out of time. 2. As the Defendant does not consent to the time for the making of the application being extended, the Plaintiff must show "sufficient cause" for the Court to "otherwise order". 3. The time constraint imposed by s 58(2) on the making of a family provision application is not a mere formality: Verzar v Verzar [2012] NSWSC 1380, at [98]. (The equivalent section in similar UK legislation has been described as "a substantive provision laid down in the Act itself, and is not a mere procedural time limit imposed by rules of court which will be treated with the indulgence appropriate to procedural rules": Re Salmon, Deceased [1981] Ch 167 at 175.) 4. No extension of time will be granted unless the applicant would, in the event of the extension being granted, be entitled to an order for provision under the Act. As Meagher JA wrote in Verzar v Verzar (2014) 12 ASTLR 523; [2014] NSWCA 45, at [24], "[t]he sufficient cause or reason to which s 58(2) is directed is that for allowing an application to be made out of time". 5. Because, on the present evidence, it appears that there is no actual estate, any order for provision and for costs could be made only out of notional estate. 6. In the circumstances, the real issues in the Plaintiff's proceedings are likely to be: 1. Whether the Plaintiff has established sufficient cause for not having made the application within time and, if so, whether the time for the making of the application ought to be extended. (It is not likely that an order for the time for the making of the application to be extended to the date of the filing of the Summons will be by consent of the parties). 2. Whether the Plaintiff has been left with inadequate provision for his maintenance and advancement in life and, if so, what, if any, provision should be made for him; and 3. Whether a designating order should be made. This includes a consideration of not only the matters referred to above in s 87, but also whether there are "special circumstances" (for the purposes of s 90(2)(b) of the Act), notwithstanding that the application is made out of time. 1. The issues are not entirely distinct, but are related and overlap: the strength of the Plaintiff's substantive claim for provision is relevant to the discretion to extend time and whether there are "special circumstances", and considerations relevant to the extension of time can also inform whether there are "special circumstances" in respect of s 90: Stone v Stone [2016] NSWSC 605, per Brereton J (as his Honour then was), at [7]. 2. A family provision order may be made in relation to property that is not part of the deceased person's estate, but is designated as "notional estate" of the deceased person by an order under Part 3.3 of the Act: s 63(5). "Notional estate" of a deceased person is defined in s 3 of the Act to mean property designated by a notional estate order as notional estate of the deceased person. "Notional estate order" means an order made by the court under Chapter 3 of the Act, designating property specified in the order as notional estate of a deceased person. A person's rights are extinguished to the extent that they are affected by a notional estate order: s 84 of the Act. 3. Section 74 of the Act provides that "relevant property transaction" means a transaction, or circumstance, affecting property and described in s 75 or s 76. "Property" includes "any valuable benefit": s 3. 4. Section 76 of the Act provides a description of some, but not all, of the circumstances that constitute the basis of a relevant property transaction for the purposes of s 75. One of the circumstances, described in s 76(2)(b), which is relevant in the present case, provides: "…if a person holds an interest in property as a joint tenant and the person does not sever that interest before ceasing (because of death or the occurrence of any other event) to be entitled to do so, with the result that, on the person's death, the property becomes, by operation of the right of survivorship, held by another person (whether or not as trustee) or subject to a trust…" 1. Any such circumstance is "subject to full valuable consideration not being given" (s 76(1)). 2. Section 78(2) of the Act which provides that the Court must not make an order under s 78(1)(b) for the purposes of an order that the whole or part of an Plaintiff's costs be paid from the notional estate of the deceased person unless the Court makes or has made a family provision order in favour of the applicant, to demonstrate that if the Plaintiff were unsuccessful in the substantive proceedings, and if there were only notional estate, he would not be able to obtain an order for his costs. 3. Section 80(1) provides that the Court may, on application by an applicant for a family provision order or on its own motion, make a notional estate order designating property specified in the order as notional estate of a deceased person if the Court is satisfied that the deceased person entered into a relevant property transaction before his or her death and that the transaction is a transaction to which this section applies. Sub-section (2), relevantly, provides that the section applies to a relevant property transaction that took effect on, or after, the deceased person's death. Sub-section (3) relevantly provides that property may be designated as notional estate by a notional estate order under this section if it is property that is held by a person by whom the property became held (whether or not as trustee) as the result of a relevant property transaction. 4. There does not appear to be any dispute that the non-severance, before the deceased's death, of the joint tenancy, in the Tempe property, is a matter capable of giving rise to a designation of property as notional estate: Cetojevic v Cetojevic [2006] NSWSC 431. (The precise way in which the joint bank account was held is not clear on the evidence, but it appears to have been accepted, that the deceased's interest in the jointly held bank account may also be designated as notional estate.) 5. The power to make a notional estate order is discretionary. Section 87 of the Act, contained in "Division 3 Restrictions and protections relating to notional estate orders", circumscribes the Court's power to make a notional estate order. That section provides: "The Court must not make a notional estate order unless it has considered the following: (a) the importance of not interfering with reasonable expectations in relation to property, (b) the substantial justice and merits involved in making or refusing to make the order, (c) any other matter it considers relevant in the circumstances." 1. Furthermore, in this case, s 90 of the Act is relevant, because the Plaintiff did not commence proceedings within the time prescribed by the Act. The section relevantly provides: "(1) This section applies to proceedings where: (a) an application for a family provision order is made later than 12 months after the date of the death of the deceased person, or … (2) The Court must not make a notional estate order in the proceedings unless: (a) it is satisfied that: (i) the property to be designated as notional estate is property that was the subject of a relevant property transaction or of a distribution from the estate of a deceased person or from the estate of a deceased transferee, and (ii) the person who holds the property holds it as a result of the relevant property transaction or distribution as trustee only, and (iii) the property is not vested in interest in any beneficiary under the trust, or (b) it is satisfied that there are other special circumstances that justify the making of the notional estate order." 1. At the hearing, when asked how long the duration of the hearing of the substantive proceedings was estimated to be, the legal representatives agreed that it would be of 2 days duration. 2. In the affidavit sworn on 6 May 2019, in support of the notice of motion, by Ms Suzi Gestakovska, the solicitor for the Defendant, at [6], the Defendant's costs, calculated on an indemnity basis, of the proceedings, were estimated to be $40,000 plus GST. 3. Of course, if the Defendant were successful in defending the proceedings, and if an order were made that the Plaintiff was to bear the Defendant's costs of the proceedings, the usual order would be for those costs to be calculated on the ordinary basis. The Court was informed, from the Bar table, without objection, that the estimate of the Defendant's costs, calculated on the ordinary basis, would be $36,000. The Court was also informed that there was an Offer of Compromise which might affect how the Defendant's costs of the proceedings might be calculated. 4. Following the completion of the oral submissions, I indicated to the parties that I would adjourn briefly, to formulate the orders that I proposed to make, and then, in due course, publish the reasons for those orders. The parties agreed to the course that the Court indicated. 5. These are the reasons for the orders referred to. The Law – application for security for costs 1. UCPR r 42.21(1) relevantly provides: "42.21 Security for costs (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, ... 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 sub-rule (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." 1. I do not intend what follows to be elevated into rules of law, propositions of universal application, or rigid formulae. Nor do I wish to suggest that the jurisdiction of the Court should be unduly confined, or formulated in advance, or that the discretion should be constrained by statements of principle found in dicta in other decisions, or by preconceptions and predispositions. Decisions of the past do not, and cannot, put any fetters on the discretionary power, which is left largely unfettered. 2. The general principles in relation to an application fo security for costs, in my view, may be summarised as follows: 1. An order for security for costs is interlocutory in nature. 2. The starting point, in the exercise of discretion, is, of course, the rule conferring the power: Live Board Holdings Ltd v Cody Live Pty Ltd [2017] NSWCA 302, at [98]. The relevant jurisdictional condition must, first, be satisfied, before the discretionary power to order security for costs is enlivened: FFE Minerals Australia Pty Ltd v Mining Australia Pty Ltd [2000] WASCA 69; (2000) 22 WAR 241, at [21]; Sas Global Forrestdale Pty Ltd v Samsera Pty Ltd [2010] WASC 309, at [10]. 3. Thus, there are two stages in the Court's consideration. The first stage is not discretionary, and it depends, entirely, on whether any of the facts provided for in UCPR r 42.21(1) are satisfied. Once the jurisdictional threshold has been reached, the second stage of the decision, namely, whether or not to grant security is discretionary. 4. The defendant, as applicant for security for costs, has an evidentiary burden of leading evidence to establish an entitlement to such the order, and to such an order in a particular amount. The plaintiff, then, may provide evidence of the reasons why the Court's discretion ought not to be exercised, by the Court, either submitting that the order for security should be refused, and/or, if made, to order security in a lesser amount than is sought by the defendant. 5. The discretion given to the Court is unfettered and requires the court to weigh all the circumstances of the case: PS Chellaram & Co Ltd v China Ocean Shipping Co (1991) 102 ALR 321; [1991] HCA 36, at 323. It is an absolute discretion, without any rules for its exercise prescribed. It must, of course, be exercised having regard to the scope and purpose of the legislative provision: Re Coldham; Ex Parte Brideson (1989) 166 CLR 338; [1989] HCA 2, at 347. It must also be exercised judicially, which means that, in every case, the Court must inquire how, on the whole, justice will best be served: King v Commercial Bank of Australia Limited (1920) 28 CLR 289; [1920] HCA 62, per Rich J, at 292. The discretion should not be exercised "arbitrarily, capriciously or so as to frustrate the legislative intent": (Oshlack v Richmond River Council [1998] 193 CLR 72; [1998] HCA 11, per Gaudron and Gummow JJ, at [22]). 6. As was written in Idoport Pty Ltd v National Australia Bank Ltd [2001] NSWSC 744, at [47], the Court is required: "to take into account all of the relevant facts matters and circumstances and is a judicial discretion to be exercised following the adducing of all evidence by each party to an application seeking to have such an award made. As Giles J (as His Honour then was) made plain in Rosenfield Nominees Pty Ltd v Bain and Co (1988) 14 ACLR 467 at 470, in exercising the discretion as to whether or not to make an order for costs, the Court must have a concern to achieve a balance between ensuring that adequate and fair protection is provided to the defendant, and avoiding injustice to an impecunious plaintiff by unnecessarily shutting it out or prejudicing it in the conduct of the proceedings [cf Street CJ in Buckley v Bennell (1974) 1 ACLR 301 at 304]." 1. The circumstances in which the discretion should be exercised in favour of making the order cannot, and should not, be stated exhaustively: Spiel v Commodity Brokers Australia Pty Ltd (1983) 35 SASR 294. However, UCPR r 42.21(1A) specifies some of the potentially relevant matters in considering whether it is appropriate to make an order for security. The sub-rule enumerates 14 specific matters, which may be regarded as a valuable prompt, to which the Court may have regard, for the purpose of determining whether the order for security should be made, and if so, the nature and quantum of any such order. There is no mandatory command to take into account any of the matters enumerated. In the context of the section, "may" does not mean "must". (To the matters, I would add the character of the proceedings as also being a consideration.) 2. UCPR r 42.21(1)(a), unlike sub-rules (1)(d) and (1)(e), does not include the requirement that "there is reason to believe that the other party to the litigation will be unable to pay the costs of the litigation". 3. The weight to be given to any circumstance depends upon its own intrinsic persuasiveness and its impact on other circumstances which have to be weighed: PS Chellaram and Co v China Ocean Shipping Co; Acohs Pty Ltd v Ucorp Pty Ltd (2006) 236 ALR 143, at [12]. 4. The power to order security has been described as a power which is "essentially one of risk-management between the parties having regard to their legitimate interests both as applicant and respondent": East Grace Corporation v Xing (No 1) [2005] FCA 219, at [6]. On the one hand, the Court must weigh the injustice to the plaintiff, if prevented from pursuing a proper claim by an order for security by unnecessarily shutting him out, or otherwise stultifying the conduct of litigation. Against that, the Court must weigh the injustice to the defendant, if no security is ordered, and at the trial the plaintiff's claim fails and the defendant finds herself, or himself, unable to recover the costs which have been incurred in the defence of the claim from the plaintiff. 5. The operation of the rule is dependent upon that aspect of civil litigation which, generally but not universally, provides that costs orders will follow the event, in the sense that the successful party may expect to recoup at least part of its costs from the unsuccessful party: Green (as liquidator of Arimco Mining Pty Ltd) v CGU Insurance Ltd [2008] NSWCA 148, per Basten JA, at [69]. In this regard, the purpose of a security for costs order is a protective one to ensure that the primary purposes for having costs orders themselves may be achieved. 6. A person who comes to the jurisdiction and seeks the assistance of the Court in obtaining a remedy against another "must be prepared to submit to the ordinary processes of that jurisdiction that are associated with its exercise": Mentink v Registrar of Ships [2009] FCA 871. Additionally, "it is fair for the courts to proceed on a basis which reflects the proposition that those who seek to benefit from litigation should bear the risks and burdens that the process entails": Fiduciary Ltd v Morningstar Research Pty Ltd, (2004) 208 ALR 564; [2004] NSWSC 664, at [83]. 7. Thus, the purpose of an order for security for costs is to create a fund, within the jurisdiction, against which the defendant might enforce any costs order made in her, his or its, favour, thereby providing a level of protection from the risks, uncertainties and delay of attempts to enforce that costs liability in the plaintiff's country of residence, whilst also recognising "modern authority… that the decision whether to order security for costs… remains a discretionary one": Allison v Harmsworth [2018] SASC 27, per Doyle J, at [24]-[25]. 8. The likely complexity and uncertainty associated with enforcement of a costs order of this Court in the country in which the plaintiff is "ordinarily resident" will be a relevant consideration. A defendant is not expected to bear the uncertainty of enforcement in a foreign country: Cheng Xi Shipyard v The Ship "Falcon Trident" [2006] FCA 759, at [9]; Gujarat NRE Australia Pty Ltd v Williams [2006] NSWSC 992, at [29]. This principle is not absolute and must be weighed against other discretionary considerations: Corby v Channel Seven Sydney Pty Ltd [2008] NSWSC 245. However, the difficulty in enforcing an order for costs overseas, against a plaintiff who is not ordinarily resident in New South Wales, will usually be sufficient to ground an order: Shackles & Daru Fish Supplies Pty Ltd v Broken Hill Proprietary Co Ltd [1996] 2 VR 427 (especially where there is no reciprocal right of enforcement in the relevant foreign jurisdiction or legislation which may make recovery difficult: Dense Medium Separation Powders Pty Ltd v Gondwana Chemicals Pty Ltd (in liq) [2011] NSWCA 84.) 9. In considering the plaintiff's prospects of success, the Court cannot go into the merits, in detail, unless it can clearly be demonstrated that there is a high degree of probability of success or failure: Porzelack KG v Porzelack (UK) Ltd [1987] 1 WLR 420, per Sir Nicolas Browne-Wilkinson V-C, at 423. Usually, an assessment of the prospects of success, at an interlocutory stage, will usually only enable the Court to have an impression. Clearly, if the plaintiff appears to have a strong case, the chances of it being ordered to pay costs will be slight. Then, the case for requiring security will also be slight. Correspondingly, if the plaintiff's case appears weak, the defendant will be on stronger ground in pressing for protection against a barren order for costs. When looking at the merits, it may be necessary to go further than simply concluding that the proceedings are not frivolous and that there are real issues to be tried: Live Board Holdings Ltd v Cody Live Pty Ltd [2017] NSWCA 302, at [97]-[98]. 1. An application for security for costs should be considered in the framework constituted by ss 56-60 of the Civil Procedure Act. 2. A delay in bringing the application for security for costs is a factor in the exercise of the Court's discretion: Idoport Pty Ltd v National Australia Bank Ltd [2001] NSWSC 744, at [68]. The factor of delay will be less significant if the hearing is not imminent, or if there has been some forewarning, or foreshadowing, of an application: Ollerenshaw v The Uniting Church in Australia Property Trust (NSW) [2017] NSWSC 1637, per Walton J, at [55]. Often, the longer the delay, and the greater the costs that the plaintiff has been allowed to incur, the less likely it will be that an order for security will be made: Southern Cross Exploration NL v Fire & All Risks Insurance Co Ltd (1985) 1 NSWLR 114. 3. The factor of delay may be less relevant if it cannot be seen to generate, or produce, some consequence of significance to the Plaintiff. Its relative significance, however, "as a factor in the exercise of judicial discretion to award security for costs will inevitably vary with the facts of each case, the nature, extent and cause for any delay and the overall justice of the case … along a spectrum from the slight to the extreme": PPK Willoughby Pty Ltd v Baird [2019] NSWCA 48, at [10]-[11]. 4. Setting a limit on the amount to be provided by way of security for costs is part of the exercise of the court's discretion. There should be some evidence by which the Court can estimate the defendant's probable recoverable costs: Fiduciary Ltd v Morningstar Research Pty Ltd, at [132]; Idoport Pty Ltd v National Australia Bank Ltd, at [47]. 5. Pre-estimating costs for security for costs purposes is often a difficult question. The Court takes a "broad brush" approach to the quantum of an order for security for costs, and does not attempt a detailed costs assessment: Ashington Capital Pty Ltd v Parissen Capital (Project X) Pty Ltd [2012] NSWSC 410 at [18]; In the matter of Felan's Fisheries Pty Limited [2016] NSWSC 1351, at [40]. The amount cannot be the subject of precise mathematical calculation, although, of course, the quantum should be subject of a proper assessment: Bay of Plenty Pharmacy Services Limited v Chemworks Limited [2019] NZHC 785, at [10]-[11]. The Court must still carefully examine the reasonableness of the projected costs: April Fine Macao Commercial Offshore Ltd v Moore Business Systems Australia Ltd (2009) 75 NSWLR 619; [2009] NSWSC 867. 6. In any event, an order for security for costs should not provide a complete indemnity for costs: Brundza v Robbie & Co (No 2) (1952) 88 CLR 171, at 175. In the ordinary course, an order for costs will not fully compensate the successful party. 7. The amount of security that may be ordered may extend, not only to future costs but also to costs already incurred, if an application for security for costs is made promptly: Narradine Pty Ltd v Mascot Steel and Tools Pty Ltd [2012] NSWSC 385, per Black J, at [22]. However, in the ordinary course, "where there is a delay in seeking security for costs, the security ordered should represent only the future unincurred costs and should not include those costs that have already been expended. One reason put forward for that is the unfairness of allowing the plaintiff to incur costs without being put on notice that an application for security will be made": Chocron v Onkoud [2018] NSWSC 1205, per Davies J, at [10]. 8. The Court may consider tailoring the order for security to the particular circumstances of the case. For example, there may be cases in which the Court determines that there should be a staged approach to the quantum of the security rather than a "once and for all" determination of that quantum. 9. Apart from UCPR r 42.21(1), s 67 of the Civil Procedure Act is also a source of power for the Court to order a permanent, or temporary, stay of the proceedings. Such a stay can be ordered with payment of security for costs: Phillips Electronic Australia Pty Ltd v Matthews (2002) 54 NSWLR 598; [2002] NSWCA 157, per Hodgson JA, at [47]; De Jong v Carnival PLC [2016] NSWSC 347, per Beech-Jones J, at [45]. 10. The existence of the Court's inherent jurisdiction to make an order for security for costs is well established: Rajski v Computer Manufacture & Design Pty Ltd [1982) 2 NSWLR 443 at 447-448, affirmed on appeal [1983] 2 NSWLR 122. Black J in In the matter of Elsmore Resources Ltd [2014] NSWSC 1247, at [7], described the inherent power to order security for costs "as an incident of its control over its own practice and procedure to procure proper and effective administration of justice and prevent abuse of process: Green (as liquidator of Arimco Mining Pty Ltd) v CGU Insurance Ltd [2008] NSWCA 148; (2008) 67 ACSR 105, at [34]; LRSM Enterprise Pty Ltd v Zurich Australia Insurance Ltd [2014] NSWCA 88, at [14]". However, whether it adds anything, of practical significance, to a determination of an application under the UCPR has been doubted: Re Estate Condon; Battenberg v Phillips [2017] NSWSC 1813, per Lindsay J, at [57]. Determination 1. It can be seen from what has been written above, that, on an application for security for costs, four issues usually arise: (i) whether the ground referred to in the rule relied upon is established; (ii) if the ground is established, whether, as a matter of discretion, an order should be made; and if each of the other two questions is answered affirmatively, (iii) the quantum of any order to be made and the terms on which it might be made; and (iv) should a stay be ordered until any order for security is met? 2. Counsel for the Plaintiff conceded that the threshold test in UCPR r 42.21(1)(a) had been satisfied. The Plaintiff is ordinarily resident outside New South Wales. The concession, which was appropriately made, avoids the need to discuss the meaning of "ordinarily resident": Corby v Channel Seven Sydney Pty Limited [2008] NSWSC 245. 3. Having established the jurisdiction to make an order for security, the question, then, is whether security should be refused for some reason. I shall consider the relevant factors referred to previously. 4. I do not accept the Plaintiff's submission that "the [P]laintiff … has reasonable prospects of success because he is an eligible person, there is inadequacy in provision and he has needs". Those are not the only matters he must establish. He must also establish "sufficient cause" for the making of his application out of time, and, relevantly, the source from which the order, if any, for provision, can be satisfied, namely out of property designated as notional estate. The last matter was not touched upon in the written submissions of the Plaintiff. 5. I have also mentioned that the Defendant is the deceased's widow of a very long marriage. This is not to say that there is a general rule that the competing claim of a widow is always paramount. However, as was written by Ipp JA, with whom Stein AJA agreed, in Bladwell v Davis [2004] NSWCA 170, at [2]: "…where competing factors are more or less otherwise in equilibrium, the fact that one party is the elderly widow of the testator, is permanently unable to increase her income, and is never likely to be better off financially, while the other parties are materially younger and have the capacity to earn more or otherwise improve their financial position in the future, will ordinarily result in the needs of the widow being given primacy. That is simply because, in such circumstances, the widow will have no hope of improving herself economically, whereas that would not be the position of the others. In that event, the need of the widow would be greater than that of the others." 1. I accept that the Plaintiff has brought the proceedings, genuinely, for the purpose of obtaining a family provision order. He is an eligible person and he has financial "needs". However, bearing in mind the various matters that he must establish in order to obtain a notional estate order to satisfy an order for provision, it is difficult not to conclude, at this preliminary stage of the case, in the circumstances of the competing financial, and moral, claim of the Defendant, that his prospects of success are rather weak. Very fairly, if I may say, counsel for the Plaintiff accepted that this was so. 2. I have already dealt with the impecuniosity of the Plaintiff. The fact that the Plaintiff has no assets in Australia, means that any order for costs in the Defendant's favour would not be enforceable in Australia. However, an order for provision will not be made merely on account of his impecuniosity. 3. In relation to that impecuniosity, there is no suggestion that it was caused by the deceased's conduct, or, for that matter, by the conduct of the Defendant. 4. The Defendant's counsel accepted that: "An order for security may stifle the present proceedings. This is a factor which the Court needs to weigh against the prejudice to the defendant in allowing the plaintiff to continue his claim to a hearing." 1. Yet, it is to be noted that the Plaintiff did not give evidence of any inability to borrow funds from an institution, or obtain them by way of loan from family or friends. However, in view of the submission that if an order for security for costs were made, there would be no point ordering a stay, and then, that the proceedings should be dismissed, it is likely that the Plaintiff's proceedings could not continue if an order for security were made. 2. Relevant, also, is that the Plaintiff will not have to bear the burden of his own costs in the event that his application is unsuccessful, since his solicitors have entered a conditional fee agreement with him. 3. In Bray v F Hoffman‑La Roche Ltd (2003) 130 FCR 317; [2003] FCAFC 153, Finkelstein J (with whom Branson J agreed) wrote, at 375; [252]: "It is also appropriate to bear in mind that it is commonly the case in a class action that a person will stand behind (I mean fund) the applicant. Usually this will be the applicant's solicitor, who will sometimes charge what is referred to as a 'contingency fee' for the privilege. When a proceeding is brought by a 'nominal plaintiff' that is a plaintiff who will not himself benefit from the action but is making the claim for the benefit of someone else, an order for security is usually made. A party who is being funded by his solicitor is not really a 'nominal plaintiff'. Nevertheless, the solicitor does stand to benefit from the action (especially as regards the additional fee) if the action is ultimately successful, as the solicitor will then be able to recover his costs. That is a relevant, though not a decisive, consideration when deciding whether security should be ordered." 1. (In this case, there is said to be no additional fee as there is no uplift factor in the Plaintiff's costs agreement.) 2. Barrett J in Del Bosco v Outtrim [2008] NSWSC 105 also considered evidence that the plaintiff's solicitors were acting for her on a contingency basis precluded an order for the provision of security from having the effect of stultifying the prosecution of her claim. 3. Yet, not to make an order for security would mean that the Plaintiff, effectively, is immune from satisfying a costs order if he were unsuccessful and if an order that he bear the Defendant's costs were made. Nor would he have to pay his own costs. Even if successful, without security, the Defendant would effectively have to bear her own costs. 4. There is some merit in the argument of counsel for the Defendant that in the circumstances, without an order for security, the Plaintiff would be able to proceed, encumbered only by having to satisfy the amount of disbursements payable to his own solicitors. He would not be able to satisfy any order for costs made in favour of the Defendant. As counsel put it, since the Defendant did not have a conditional costs agreement in place with her lawyers, there was an "imbalance which is unfair". 5. This is not a case in which the Plaintiff is effectively in the position of the Defendant. 6. I do not accept the Plaintiff's submission that "the proceedings involve a matter of public importance". Each case is decided upon its own facts and no precedent is created in relation to family provision matters generally if an order for security is made in this case. As stated above, the decision to order, or not to order security, cannot, and does not, put any fetters on the discretionary power, in any future case. 7. Furthermore, on the question of public importance, the Court must also remember the legal consequences of owning property jointly (particularly in this case in which the joint owner is a spouse of a long marriage). 8. The Defendant has brought the application for security reasonably promptly. I do not accept the Plaintiff's submission that the Defendant is guilty of delay in filing her application for security for costs. I accept that it was necessary for her to put on evidence that detailed, amongst other things, the nature and value of the deceased's estate and potential notional estate, so that the Plaintiff had an opportunity to consider his position. 9. In any event, there is no suggestion that any delay in bringing the application has caused, or will cause, the Plaintiff any prejudice. Nor is there any suggestion that the application for security is oppressive, in the sense that it is being used merely to deny an impecunious plaintiff a right to litigate. The Defendant, herself, in the circumstances of this case, has a right to seek some protection from a barren costs order in the event that the Plaintiff is unsuccessful in his claim and a costs order against him is made. Security where claim for family provision order 1. Whilst it is somewhat unusual to make an application for security for costs in family provision cases, it is not unheard of, particularly when the Plaintiff is not "ordinarily resident" in New South Wales. It will be remembered that in the famous case of Singer v Berghouse (1994) 181 CLR 201; [1994] HCA 40, an application was made for security: Singer v Berghouse (1993) 114 ALR 521; [1993] HCA 35, per Gaudron J. 2. In Singer v Berghouse, there was a finding that the plaintiff was not impecunious. Mrs Singer was financially able to meet any order for costs that may have been made against her. Equally, she was able to comply with any order for security that may have been made. The application was brought because her assets were all in New York and, should she fail to pay, it would be necessary to enforce an order for costs against her by bringing action on the judgment in New York. 3. What led to security not being ordered was that the claim was one brought under the Family Provision Act 1982 (NSW), and the view of Gaudron J was that it was by no means certain that, even if unsuccessful, the plaintiff would be ordered to pay the costs. Her Honour took the view that family provision cases stand apart from cases in which costs follow the event. 4. Whilst there remains the discretion to not order an unsuccessful plaintiff to pay a successful defendant's costs, the usual rule as to costs, prescribed by the Civil Procedure Act, applies the same way as it does to any proceedings brought in this Court. 5. I have written, more than once, for example in Harkness v Harkness (No 2) [2012] NSWSC 35, at [18], that: "(c) The view of some practitioners advising a potential applicant contemplating a claim for a family provision order, that there is little risk, and probably much to be gained, in making a claim, however tenuous, because even if the claim fails the applicant will, very likely, get his, or her, costs out of the estate and that he, or she, will not be significantly out of pocket, and the legal practitioner will receive his, or her, costs and disbursements in any event, has been thoroughly discredited. (d) Parties should not assume that this type of litigation can be pursued, safe in the belief that costs will be paid out of the estate: Carey v Robson (No 2) [2009] NSWSC 1199; Forsyth v Sinclair (No 2) [2010] VSCA 195. It is now much more common than it previously was for an unsuccessful applicant to be ordered to pay the defendant's costs of the proceedings (Lillis v Lillis [2010] NSWSC 359 at [23]) and be disallowed his, or her, own costs. …" 1. The passages that I have repeated were adopted, and emphasised, by Pembroke J in Sung v Malaxos (No 2) [2015] NSWSC 290, at [8]. 2. The Plaintiff did not refer to what was written in Law of Costs (3rd ed, 2013, LexisNexis Butterworths, Australia), at 931-932, by Professor GE Dal Pont, particularly at [28.4]: "[28.4] …[Courts] are reticent to accede to applications for security for costs in classes of case where, aside from any statutory directive, costs are not uncommonly met out of a fund. A typical example is the case law involving justifiable challenges to testamentary dispositions. Unsuccessful applications in family provision cases, for instance, may lead the court to make no order as to costs, particularly if it would have a detrimental effect on the applicant's financial position. As such, a court is unlikely to order security in such cases unless convinced that the claim is frivolous or otherwise unmeritorious." (Footnotes omitted) 1. Perhaps, the paragraph was not referred to because of the plethora of cases, since 2013, in which an order for costs against an unsuccessful plaintiff for a family provision order has been made. In Chapple v Wilcox (2014) 87 NSWLR 646; [2014] NSWCA 392, Basten JA, at [27], referred to the relevant principles that apply. His Honour's exposition and reference to principles, suggest that what was written by Professor Dal Pont in the paragraph above, is no longer the state of the law. 2. The Plaintiff relied upon Lo Surdo v Public Trustee [2003] NSWSC 837 in which Gzell J had to deal with an application for summary dismissal and an application, in the alternative, for security for costs in the family provision claim of an adopted child of the deceased, and in circumstances in which almost the whole of the deceased's estate had been distributed. His Honour dismissed the application for security. 3. However, the facts of that case are very different to the case with which the Court is currently dealing. His Honour wrote, in that case, at [22]: "While the plaintiff has no assets in Australia, he does have assets in Italy. Italy is listed as a country with respect to which the Governor was satisfied that its superior courts extended substantial reciprocity of treatment respecting enforcement of judgments given by the Supreme Court of this State as the Supreme Court of New South Wales extended to the enforcement of judgments of the superior courts of Italy for the purposes of the Foreign Judgments Act 1973, s 5(3)." 1. Apart from the fact that the Plaintiff has no assets in New South Wales, or in Macedonia, there is simply no evidence that Macedonia has legislation entitling an Australian judgment to be registered and enforced in that jurisdiction. Pursuant to the Foreign Judgments Act 1991 (Cth) and Sch 2 to the Foreign Judgments Regulations 1992 (Cth), Macedonia is not a jurisdiction where there is a reciprocal right of enforcement. 2. Gzell J, at [26], also wrote that: "The mere fact that the plaintiff is a resident of Italy does not entitle the second defendant to an order for security for costs. Non-residence is a pre-condition to the exercise of the court's discretion but there must be something more to justify an order". 1. I have dealt with the relevant principles above which do not support, entirely, the proposition that "there must be something more to justify an order". 2. In relation to the prospects of success of the Plaintiff's claim, as far as it is possible to say on the untested evidence before me, the legal merits appear to favour the Defendant, a widow of a 46 year marriage, in circumstances where the only asset of substantial value is the matrimonial home in which she has lived for almost all of her life in Australia. 3. The Plaintiff has not provided the Court with factual evidence to justify the conclusion that there is a real prospect that he will succeed in that claim at trial. Without a notional estate order, there is no way of satisfying an order for provision, even assuming, in his favour, that such an order will be made. 4. I considered exploring the possibility of mediation and limiting the amount of security to the conclusion of a mediation, but I do not think that would be appropriate. An offer, the terms of which were not known until after the notice of motion was determined, has already been made to the Plaintiff by the Defendant, and was rejected or has lapsed. 5. Ultimately, the Court must balance the interests of each of the parties and reach a conclusion based upon the interests of justice. It is a matter where the interests of justice will not be perfectly served whatever order the Court makes. As was written by the Supreme Court of New Zealand in Reekie v Attorney-General [2014] 1 NZLR 737; [2014] NZSC 63, at [2]-[3]: "…The jurisdiction to require security poses something of a conundrum for the courts. The poorer the plaintiff, the more exposed the defendant is as to costs and the greater the apparent justification for security. But, as well, the poorer the plaintiff, the less likely it is that security will be able to be provided and thus the greater the risk of a worthy claim being stifled. Applications for security for first instance proceedings call for careful consideration and judges are slow to make an order for security which will stifle a claim." Determination 1. Having carefully considered the matter, and after weighing the relevant considerations, the least imperfect solution is to order that the Plaintiff provide security for costs. However, the quantum of the security would not have been determined as the estimate of the Defendant's costs calculated on the indemnity basis. Rather, the estimate would be based on slightly less than the estimate of costs calculated on the ordinary basis (as disclosed from the Bar table). 2. Furthermore, this is a case where the Defendant's application for security was made reasonably promptly, and the work that has been done, whilst, of course, necessary for the substantive proceedings, is also relevant to the application. In what follows, I have considered this. 3. Doing the best I can, I am of the opinion that the total amount of the security should be $30,000. I was prepared for it to be paid in two tranches – $15,000 within 28 days of the date of the making of the orders, and $15,000 within 28 days of the matter being listed for hearing. 4. When I returned to Court, I announced that I proposed to make an order for security as set out above, unless the Plaintiff stated to the Court, having heard the form of orders proposed, that his proceedings should be dismissed. Once again, after obtaining instructions, counsel for the Plaintiff said that the Plaintiff did not, in the circumstances, oppose the dismissal of the proceedings: Tcpt, 4 June 2019, p 15(7-27). 5. In relation to the costs of the notice of motion, in Jazabas Pty Ltd v Haddad [2006] NSWSC 880, Simpson J (as her Honour then was) made an order that the unsuccessful plaintiff should pay the costs of successful defendants' security for costs applications and that the costs and that such costs be paid forthwith. Her Honour wrote, at [13]-[15]: "… The very purpose of an order for security for costs is to protect defendants against the prospect of incurring significant costs which, if the defendants are successful, the plaintiffs are likely to be unable to meet. The fact that these costs have actually been incurred, as distinct from being putative costs, suggests a further reason that it would be appropriate to make such an order; that is, the very circumstances that give rise to the order for security for costs also support an order that the costs incurred in pursuing that application should be paid before further costs are incurred. Accordingly, I will make an order of the kind proposed in favour of each of the defendants." 1. In Lex Fitness Pty Ltd ATF Lex Family Trust v Australian Fitness Management Pty Ltd [2017] NSWSC 157, Slattery J wrote, with respect to the successful defendant's application for costs following an order for security for costs (at [70]-[73]): "The defendants have succeeded in obtaining an order for security for costs. The parties debated what would be the appropriate costs order in the circumstances. Relying upon Bond J's decision in Plyable Pty Ltd v Go Gecko (Franchise) Pty Ltd & Ors (No. 2) [2016] QSC 256 ('Go Gecko'), Mr DeBuse submitted on behalf of the defendant that the appropriate order for this result should be that the plaintiff pay the defendants' costs of the motion. The plaintiff submitted that the appropriate order in these circumstances would be that the costs of the motion be the successful party's costs in the cause. Mr Moujalli argued that this was the traditional approach to the costs of such applications in this State, based upon long-standing authorities such as Mignon Cakes Pty Ltd v Hiltide Pty Ltd [2004] FCA 142 at [19]-[21] per Allsop J, Collignon Developments Pty Ltd v Wurth (1975) 1 ACLR 314 per Needham J, and Pacific Acceptance Corp. v Forsyth (No. 2) [1967] 2 NSWLR 402, per Moffitt J at 409. In reply, the defendants say that Go Gecko at [12] shows that there is no 'usual' approach to the award of costs where a defendant is successful in a security for costs application. The defendants are correct that there is no presumed approach one way or the other and there are examples of a successful defendant on security for costs applications receiving the benefit of the rule that costs follow the event under UCPR, r 42.1: MHG Plastic Industries Pty Ltd v Quality Assurance Services Pty Ltd [2002] FCA 821 and Jazabas Pty Ltd v Haddad [2006] NSWSC 880. On this application the Court will order that the costs of the motion be the defendants' costs in the cause. Although the defendants were successful on the motion, they claimed very substantial amounts of costs and were not successful in obtaining an order for security in anything like the amount of costs which they forecast for preparation of the hearing and the hearing. They were not wholly successful. The order the Court proposes represents an appropriate discretionary balance in the circumstances." 1. In the circumstances, the Plaintiff should pay the Defendant's costs of the notice of motion. Dismissal of the proceedings and the costs of the proceedings 1. Following the agreement of the Plaintiff that the proceedings should be dismissed, counsel for the Defendant handed to the Court a copy of the Offer of Compromise, which provided: "This offer is made in accordance with Part 20 Division 4 Uniform Civil Procedure Rules and is open for a period of 28 days after the date upon which it is served. The Defendant offers to compromise the whole of the proceedings on the basis of orders in the following terms of to like effect: 1. The whole of the proceedings be dismissed generally with the intention that the Plaintiff is prevented from claiming the same relief in fresh proceedings. 2. No order as to the Plaintiff's costs. 3. The Defendant's costs calculated on the indemnity basis be paid or retained from the estate of the deceased. This offer is intended to operate as a Calderbank offer if for any reason it is ineffective under the Rules." 1. UCPR r 20.26 refers to offers of compromise. There was no dispute that the offer of compromise served by the Defendant's solicitors complied with UCPR rule 20.26. There was also no dispute that the offer of compromise made by the Defendant contained a genuine compromise at the time at which the offer was made. 2. UCPR rule 42.20(1) provides that if the Court makes an order for the dismissal of proceedings, then unless the Court otherwise orders, the Plaintiff must pay the Defendant's costs of the proceedings to the extent to which the proceedings have been dismissed. 3. Part 42, Division 3 of the UCPR, relates to "proceedings in respect of which an offer of compromise (the offer) is made under rule 20.26 with respect to a plaintiff's claim (the claim)" (UCPR 42.13). 4. UCPR rule 42.15A relevantly provides: "(1) This rule applies if the offer is made by the defendant, but not accepted by the plaintiff, and the defendant obtains an order or judgment on the claim no less favourable to the defendant than the terms of the offer. (2) Unless the court orders otherwise: (a) the defendant is entitled to an order against the plaintiff for the defendant's costs in respect of the claim, to be assessed on the ordinary basis, up to the time from which the defendant becomes entitled to costs under paragraph (b), and (b) the defendant is entitled to an order against the plaintiff for the defendant's costs in respect of the claim, assessed on an indemnity basis: (i) if the offer was made before the first day of the trial, as from the beginning of the day following the day on which the offer was made, and (ii) if the offer was made on or after the first day of the trial, as from 11 am on the day following the day on which the offer was made." 1. The effect of these rules, in this case, is that the Plaintiff must bear the Defendant's costs of the proceedings for the family provision order, unless the Court otherwise orders. The Court can only order otherwise if there is a discretionary decision to depart from what the UCPR provide. 2. In Chapple v Wilcox [2014] NSWCA 392 at [27], Basten JA wrote: "Whether or not an unsuccessful applicant should be allowed to litigate without expense to the estate will depend on a variety of circumstances. There is always a discretion in the Court when making an order pursuant to s 98 of the Civil Procedure Act 2005 (NSW). The discretion conferred on the Court by that provision is subject to the rules of court (s 98(1)) and thus to r 42.1 of the Uniform Civil Procedure Rules 2005 (NSW), which provides that costs will follow the event unless it appears to the Court that some other order should be made. That rule is not disapplied in relation to family provision orders. Nor should applicants for such orders have any expectation that, as a general rule, the discretion will be applied so as to exempt them from liability for costs incurred by an estate in the case of an unsuccessful application. In some cases applicants will already be beneficiaries of the estate and may thus have some incentive to ensure that the costs of litigation are kept within tight bounds. However, that is not always the case. Where an applicant is entirely unsuccessful, an order that he or she should pay the costs of the estate may well be the appropriate order." 1. Kunc J in Bates v Cooke (No 2) [2014] NSWSC 1322 (which was cited, with approval, by White J in AB v Curry & Anor (No 2) [2015] NSWSC 1209 at [4], and by the Supreme Court of Victoria in Briggs v Mantz (No 2) [2014] VSC 487 at [33]-[35], and Smith v Whittaker [2016] VSC 287 at [36]) wrote, at [33]: "Taking into account the language of r 42.15A, a party seeking to persuade the Court to order otherwise must identify some feature or features of one or more of the proceedings, the claim, the offer (including, for example, when it was made) and the order or judgment obtained by the successful party which provide a rational basis for the Court to displace what the rule specifies is the costs order to which "the defendant is entitled". 1. (An appeal from the substantive judgment of Kunc J was dismissed in Bates v Cooke (2015) 14 ASTLR 221; [2015] NSWCA 278. Nothing was written by the Court of Appeal about the costs judgment.) 2. In Meres v Meres (No 2) [2017] NSWSC 523 at [43]-[44], I wrote: "From the authorities, it appears the question for determination regarding the effect of what is said to be an Offer of Compromise involves a two-stage process. The first stage is to enquire whether the offer made is an 'Offer of Compromise' at all, within the meaning of the UCPR. This will depend, in part, on whether it satisfies the formal requirements laid down by UCPR rule 20.26. It also depends, in part, on whether the offer made is one that can truly be called a 'compromise'. If the court concludes that the offer which is made is an 'Offer of Compromise' within the meaning of the Rules, and that the offer made is one that can truly be called a compromise, then UCPR rule 42.15A(2) operates to establish a 'default' position, relevantly that, if the defendant obtains a judgment no less favourable than that which the defendant had offered to accept, then indemnity costs would follow. It is then that the second stage of the process arises, in that the court can 'otherwise order'. The court will 'otherwise order' if it is persuaded that is appropriate, in the interests of justice, that the 'default' position ought not apply: Manly Council v Bryne (No 2) [2004] NSWCA 227, per Campbell JA, at [10]; Evans v Braddock (No 2) [2015] NSWSC 518, at [52]." 1. Counsel for the Plaintiff was unable to identify any feature, or features, which provide a rational basis for the Court to displace what the rule specifies is the costs order to which the Defendant is entitled. 2. Bearing in mind these reasons for judgment, my overall impression of the Plaintiff's evidence, and also the terms of the Defendant's Offer of Compromise, I am not satisfied that there is enough to displace the rule relating to costs. Furthermore, it is to be noted that there was no evidence of any offer made on behalf of the Plaintiff. 3. Following the commencement of the substantive proceedings, the matter had been listed on a number of occasions for directions. On 8 April 2019, it was noted that the Plaintiff had rejected an offer contained in an offer of compromise served on 27 March 2019. The offer was left open for acceptance until 26 April 2019. It was also noted that in the event that the offer was not accepted, the Defendant would give consideration to filing and serving a notice of motion for security for costs. It is clear the offer was not accepted. 4. Accordingly, I am satisfied that the overall justice of the case requires that the Defendant should receive an order against the Plaintiff for his costs in respect of the claim, assessed on the indemnity basis, in accordance with UCPR rule 42.15A. Since the offer was made before the first day of the trial, the costs, calculated on the indemnity basis, should be from the beginning of the day following the day on which the offer was made (i.e. 27 March 2019). Since the proceedings are to be dismissed, the Defendant is also entitled to an order against the Plaintiff for the Defendant's costs, to be assessed on the ordinary basis, in respect of the claim up to the time from which the Defendant becomes entitled to his costs calculated on the indemnity basis. 5. The order for indemnity costs is not to include the costs of the notice of motion in respect of which I shall make the order I announced to the parties before the Plaintiff agreed that the proceedings should be dismissed. 6. The Court: 1. Orders that the Plaintiff pay the Defendant's costs of the notice of motion filed on 6 May 2019. 2. Orders that the whole of the proceedings be dismissed. 3. Orders that the Plaintiff pay the Defendant's costs, calculated on the ordinary basis, of the proceedings, up to and including 27 March 2019, and after 27 March 2019, the Plaintiff pay the Defendant's costs, calculated on the indemnity basis, of the proceedings (other than in respect of the costs of the notice of motion. 4. To the extent that the Defendant's costs, calculated on the indemnity basis, of the proceedings, are not paid by, or recovered from, the Plaintiff, those costs are to be paid, or retained, as the case may be, out of the notional estate of the deceased. ********** 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: 13 June 2019