Reynolds v Walcott, Dogoatao Pty Ltd and Maladina [1985] PNGLR 316 (22 November 1985)

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[1985] PNGLR 316 - Robert James Reynolds v Kevin Walcott, Dogoatao Pty Ltd and Bernard Maladina

PRACTICE - Costs - Security for costs - Plaintiff resident abroad - Practice of requiring security still appropriate - Amount of security within Court’s discretion - National Court Rules, O 14, r 25.

COSTS - Security for costs - Plaintiff resident abroad - Practice of requiring security still appropriate - Amount of security within Court’s discretion - National Court Rules, O 14, r 25.

The National Court Rules, O 14, r 25, provides that where it appears to the Court on the application of a defendant that a plaintiff is ordinarily resident outside Papua New Guinea, the Court may order the plaintiff to give such security for costs as the Court thinks fit.

(1) Despite the fact that there is reciprocal enforcement (by statute) of judgments of the Papua New Guinea courts in Queensland the process is not automatic, and the practice of ordering security for costs against a plaintiff resident abroad should be continued.

(2) The amount of security to be awarded is in the discretion of the Court having regard to the circumstances of the case.

This was an application for security for costs, against a non-resident plaintiff, pursuant to the National Court Rules, O 14, r 25.

BREDMEYER J: This is an application for security for costs on the basis that the plaintiff is ordinarily resident outside of Papua New Guinea. The plaintiff has sued the defendants for libel published in The Times newspaper. The plaintiff who was formerly resident in Port Moresby has been resident in Queensland since 26 November 1982. In his affidavit he said that he owns a home in Queensland and has given an address there and that he is employed there by the Queensland Electricity Commission.

(1) Where in any proceedings, it appears to the court on the application of a defendant:

the Court may order that plaintiff to give such security as the Court thinks fit for the costs of the defendant of and incidental to the proceedings and that the proceedings be stayed until the security is given.”

That rule is in identical terms to the English Rules of the Supreme Court 1965, O 23, r 1, and to the New South Wales Supreme Court Rules 1970, Pt 53, r 2. It has been the practice of this Court to award security of costs against a plaintiff who is ordinarily resident in Australia or anywhere else. Mr Diacos, counsel for the plaintiff, concedes that practice but has raised a novel point. He says that we should follow a new development in New South Wales as expressed in Connop v Varena Pty Ltd [1984] 1 NSWLR 71. In that case Rath J in the Equity Division of the New South Wales Supreme Court was faced with a similar case to this one. The plaintiff was normally resident in New Zealand although he had meagre assets amounting to $1,238 in New South Wales. The judge granted security but said that because New Zealand had a reciprocal enforcement of judgments Act with Australia, which provided a procedure whereby Australian judgments including New South Wales judgments could be registered and enforced there, the amount of security should be limited to the amount of costs necessary to have a New South Wales judgment registered and enforced in New Zealand. He said (at 74) that there may be some delay, inconvenience and expenses arising from registration and execution of judgments in New Zealand; but apart from this he saw no difference in regard to the costs of the defendants between the circumstances of the case and those of a similar case where a plaintiff is resident within New South Wales. He thought that, with only minor reservations, a judgment for costs would be as effective against the plaintiff in New Zealand as it would be in the case of a plaintiff who was ordinarily resident within the State. The headnote expresses the decision on this point thus:

“Where a judgment for costs against the plaintiff can be enforced against him in the place of his ordinary residence outside the State, an appropriate order on an application by defendant for security for costs may be that the plaintiff give security limited to the additional costs likely to be incurred by the defendant in having to enforce his judgment in the place in which the plaintiff is ordinarily resident rather than in the State.”

In that case Rath J considered that the additional costs of registering and enforcing the judgment in New Zealand would be $750 and he ordered security to be given for that sum.

This case appears to be a new development in New South Wales and I find the reasoning attractive. But as our common law derives from England I have tried to check it against the English practice found in the notes in the Supreme Court Practice to O 23, r 1. It is clear that in England where a plaintiff is resident in Scotland or Northern Ireland security for costs will not be required from him. But where he is resident in other countries even though Reciprocal Enforcement Statutes apply to those countries, security for costs is normally required. There is some discussion in cases which are not available to me in our library that the law may be developing towards giving some kind of preference to plaintiffs resident in EEC countries. That is because, pursuant to a 1960 Convention, Britain passed the Civil Jurisdiction and Judgments Act 1982 (UK) to facilitate the enforcement of judgments across the national frontiers of EEC States. The present practice in England seems to depend on a distinction between a plaintiff resident in Scotland or Ireland and one resident in other countries which allow for the reciprocal enforcement of English judgments. In the two former countries, Scotland and Northern Ireland, security is not normally ordered; but in the latter countries it is normally ordered. This distinction was made by Denning J, as he then was, in Kohn v Rinson and Stafford (Brod) Ltd [1947] 2 All ER 839. In that case the plaintiff asked for security for costs because the defendant was ordinarily resident in Palestine and had no assets in the UK. It was argued for the defendant that an English judgment could be enforced in Palestine by reason of the Administration of Justice Act 1920 (UK), s 9, and the Foreign Judgments (Reciprocal Enforcement) Act 1933 (UK). Under that latter Act an order in council had been made applying the Act to Palestine and procedure was set up whereby an English judgment could be registered and then enforced in Palestine. Denning J (as he then was) drew a distinction between the simple procedure available for the enforcement of a judgment in Scotland and Ireland compared to the more complicated procedure for enforcing a judgment in Palestine. He said (at 840) that the Judgments Extension Act 1868 (UK) enabled the judgment obtained in England to be automatically registered in Scotland and Ireland and immediately enforced as if it were a judgment of a Scottish or Irish court. The connection between the countries was so close and the mode of enforcement so rapid and simple that the Court held in Raeburn v Andrews (1874) LR 9 QB 118 that, in effect, there was no further reason to order security for costs in the case of a plaintiff in Scotland or Ireland. The rule applies to the present day. By contrast, he said that the process which was introduced by the Acts of 1920 and 1933 is very different from that of the Judgments Extension Act 1868. It is a process which involves a judicial officer being put in motion and which may be subject to dispute and even of trial in some cases between the parties. It is not automatic in any sense whereas the process under the Judgments Extension Act 1868 was automatic. Acknowledging that the matter is ultimately one of discretion Denning J was satisfied that the process in regard to countries other than Scotland and Ireland was so different that security for costs should normally be given there.

I have read the Administration of Justice Act 1920 (UK) and the Foreign Judgments (Reciprocal Enforcement) Act 1933 (UK) and can say that they are in almost identical terms to our own Judgments Enforcement (Reciprocal Arrangements) Act 1976. I propose to follow the reasoning of Denning J, as he then was, and consider that despite the fact that there is reciprocal enforcement of our judgments in Queensland the process is not automatic. There is opportunity given to a defendant to challenge the Papua New Guinea judgment for example on the basis that the Papua New Guinea court did not have jurisdiction, that the judgment was obtained by fraud, that it would be contrary to public policy to enforce the judgment, or that the defendant did not receive proper notice of the proceedings and sufficient time to enable him to defend etc. For these reasons, I propose to follow the existing practice although I can see the force and the logic of the plaintiff’s argument to the contrary based on the decision of Rath J.

The amount of security to be ordered is in the discretion of the Court having regard to the circumstances of the case. It is not always the practice of the Court to order security on a full indemnity basis. The English conventional approach is to fix the sum of about two thirds of the estimated party and party costs up to the stage of the proceedings for which security is ordered but there is no hard and fast rule. The skeleton bill of costs which has been supplied by the defendants is a useful guide. I order the plaintiff to give security in a form satisfactory to the defendant, or in the event of a dispute to the satisfaction of the Registrar, in the sum of K3,000. The action will be stayed until that security has been provided.

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Papua New Guinea Law Reports

Reynolds v Walcott, Dogoatao Pty Ltd and Maladina [1985] PNGLR 316 (22 November 1985)

Papua New Guinea Law Reports - 1985