FEDERAL COURT OF AUSTRALIA

Hardi v Loh [2005] FCA 1840

PRACTICE AND PROCEDURE – security for costs – proceedings brought by non-resident non-citizens without assets in Australia – Indonesian residents – application formerly part of consolidated proceedings – some applicants without legal representation – legally represented applicants proceeding to trial – common ground in relation to matters going to trial – represented applicants likely to be tried first – likely implication of outcome for unrepresented applicants – limited security for costs ordered against some unrepresented applicants.

MARIATI T HARDI v SIMON THUANG CHYE LOH, ROBERT ASHMAN, STEPHEN WILLIAM MARSHALL, NEIL HENRY POLLARD and OSTRICH MEAT & MARKETING COMPANY (AUSTRALIA) LIMITED

WAD11 OF 2004

SOEDAR JANTO v SIMON THUANG CHYE LOH, ROBERT ASHMAN, STEPHEN WILLIAM MARSHALL, NEIL HENRY POLLARD and OSTRICH MEAT & MARKETING COMPANY (AUSTRALIA) LIMITED

WAD12 OF 2004

SYLVIA POERWITA v SIMON THUANG CHYE LOH, ROBERT ASHMAN, STEPHEN WILLIAM MARSHALL, NEIL HENRY POLLARD and OSTRICH MEAT & MARKETING COMPANY (AUSTRALIA) LIMITED

WAD 13 OF 2004

PANTIRATA DIBASA PANGGABEAN v SIMON THUANG CHYE LOH, ROBERT ASHMAN, STEPHEN WILLIAM MARSHALL, NEIL HENRY POLLARD and OSTRICH MEAT & MARKETING COMPANY (AUSTRALIA) LIMITED

WAD14 OF 2005

JOHNSON TOBING & SURIANI TAHIR v SIMON THUANG CHYE LOH, ROBERT ASHMAN, STEPHEN WILLIAM MARSHALL, NEIL HENRY POLLARD and OSTRICH MEAT & MARKETING COMPANY (AUSTRALIA) LIMITED

WAD15 OF 2004

LELA LAKSANA v SIMON THUANG CHYE LOH, ROBERT ASHMAN, STEPHEN WILLIAM MARSHALL, NEIL HENRY POLLARD and OSTRICH MEAT & MARKETING COMPANY (AUSTRALIA) LIMITED

WAD 16 OF 2004

OEMAR KRESNO OETOMO v SIMON THUANG CHYE LOH, ROBERT ASHMAN, STEPHEN WILLIAM MARSHALL, NEIL HENRY POLLARD and OSTRICH MEAT & MARKETING COMPANY (AUSTRALIA) LIMITED

WAD17 OF 2004

LIONG TEK LUNG v SIMON THUANG CHYE LOH, ROBERT ASHMAN, STEPHEN WILLIAM MARSHALL, NEIL HENRY POLLARD and OSTRICH MEAT & MARKETING COMPANY (AUSTRALIA) LIMITED

WAD18 OF 2004

DEWI ANGGRAENI ANGGAWIRJA v SIMON THUANG CHYE LOH, ROBERT ASHMAN, STEPHEN WILLIAM MARSHALL, NEIL HENRY POLLARD and OSTRICH MEAT & MARKETING COMPANY (AUSTRALIA) LIMITED

WAD19 OF 2004

RETNO WACHJOEWIDAJAT v SIMON THUANG CHYE LOH, ROBERT ASHMAN, STEPHEN WILLIAM MARSHALL, NEIL HENRY POLLARD and OSTRICH MEAT & MARKETING COMPANY (AUSTRALIA) LIMITED

WAD20 OF 2004

HENDRA LUGITO v SIMON THUANG CHYE LOH, ROBERT ASHMAN, STEPHEN WILLIAM MARSHALL, NEIL HENRY POLLARD and OSTRICH MEAT & MARKETING COMPANY (AUSTRALIA) LIMITED

WAD125 of 2004

FRENCH J

14 DECEMBER 2005

PERTH

THE COURT ORDERS, IN EACH OF THE ABOVE MATTERS, THAT:

1.         The applicant do on or before 1 February 2006 provide security for the second respondent’s costs of the application in the sum of $10,000.  The security to be provided by way of bank guarantee in a form acceptable to the Registrar, or otherwise by payment of $10,000 to the Registrar of the Court.

2.         In the event that payment is not made by 1 February 2006 the application be thereafter stayed as against the second respondent.

3.         The costs of the motion for security are reserved.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

THE COURT ORDERS, IN EACH OF THE ABOVE MATTERS, THAT:

1.         The applicant do on or before 1 February 2006 provide security for the third respondent’s costs of the application in the sum of $10,000.  The security to be provided by way of bank guarantee in a form acceptable to the Registrar, or otherwise by payment of $10,000 to the Registrar of the Court.

2.         In the event that payment is not made by 1 February 2006 the application be thereafter stayed as against the third respondent.

3.         The costs of the motion for security are reserved.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

ON FURTHER APPLICATIONS FOR SECURITY FOR COSTS

1                     The history of these proceedings has been set out in earlier interlocutory judgments and relevantly for present purposes in Kurniadi v Loh (No 2) [2005] FCA 976.  In that judgment, given on 15 July 2005, I made orders for the provision of security for costs in the sum of $10,000, payable by 15 August 2005, in respect of the following matters:

2                     On 22 August 2005 the second respondent filed minutes of proposed directions seeking orders for security for costs against other applicants not covered by the orders made on 15 July 2005.  On 26 August 2005 the third respondent filed a similar application by way of motion. 

3                     The second respondent sought an order for security for costs in the sum of $10,000 against the applicants in WAD11-17 of 2004 and WAD19 and WAD20 of 2004.  The third respondent sought like orders against the applicants in WAD13-WAD20 of 2004 and WAD125 of 2004. 

4                     On 30 September 2005 I made orders in each of those matters that a copy of the papers filed in support of the application for security for costs be delivered to Mr Kurniadi, the applicant in WAD8 of 2004 upon his undertaking to make them available to the applicants in the other proceedings.  Each of those applicants was to file a response to the application for security for costs by the second and third respondents by 28 October 2005, which was then extended to 30 November 2005.  A decision on the application for security for costs originally scheduled for 25 November 2005 was rescheduled to 14 December 2005 and the applications generally listed for further directions on 16 December 2005.  Responses to the applications for security for costs were received from the applicants in WAD11, 13, 14, 15, 18 and 19 of 2004. 

5                     The orders sought by the second respondent in each of the above cases are in the following terms:

1.         The applicant pay into Court the sum of $10,000 as security for the costs of the second respondent within 21 days failing which the application be struck out.

2.         The applicant pay the second respondent’s costs.

6                     The orders sought by the third respondent seeks payment of the sum of $10,000 and an order that in the event that if security is not provided within 21 days of the making of the order, the action be stayed until it is provided and that the application be struck out and judgment entered for the third respondent with costs in the event that security is not provided within 42 days of the making of the order.  The third respondent also seeks liberty to apply for further security during the course of the action.

7                     In an affidavit sworn on behalf of the second respondent and in support of his application his solicitor, Mr Forbes, set out the history of the matter which it is unnecessary to repeat in detail here.  It is not in dispute that the applicants against whom the security orders are sought are all residents of Indonesia.  Mr Forbes referred to the judgment delivered on 15 July 2005 and then said (at [23]):

‘The present position is therefore that in WAD 11, 12, 13, 14, 15, 16, 17, 19 and 20 of 2004 the Second Respondent has no security for his costs other than the amount paid into Court by all the Applicants in WAD 8 – WAD 20 of 2004 ($5,300.00) in terms of the orders made on 1 April 2003.’

8                     The affidavit in support of the application brought by the third respondent again sets out the history of proceedings.  It is unnecessary to repeat that history here.  It also seeks security substantially on the same basis as security was sought in the earlier interlocutory proceedings. 

9                     The reasons for resisting the applications, offered by those applicants who replied, may be summarised in respect of each of them as follows:

WAD11 of 2004 – Hardi

Ms Hardi’s action is currently stayed as against the third respondent because of a failure to pay $10,000 security by 15 August 2005 as ordered on 15 July 2005.  She says that she has submitted prima facie evidence to support an arguable or triable case and that any order for costs will limit her ability to pursue it.  She mentions the following as factors to be taken into account in relation to whether she should be required to pay security for costs:

.           the length of the proceedings, due in part to the transfer to and from the Federal Magistrates Court have cost her a great deal of money already;

.           the value of the Indonesian currency has dropped considerably;

.           a security order means that she would not be able to pursue her claim;

.           if every applicant has to pay $10,000 that will amount to a great deal of money;

.           the length of the proceedings have given the respondents time to move their assets out of the country;

.           the applicant’s impecuniosity is due to her investment in the fifth respondent and that an order that she pay security will mean she is unable to continue the case.

WAD13 of 2004 – Poerwita

Ms Poerwita mentioned the following factors which she said should be taken into account in determining whether she should be required to pay security for costs:

.           Indonesia is a developing country whose currency has significantly depreciated since 1997;

.           she is unable to pay any money for security for costs and as a result is not able to claim justice;

.           if every applicant had to pay $10,000 that would amount to a great deal of money;

.           the proceedings having dragged on for so long the respondents have now had time to move their assets out of Australia

WAD14 – Pantirata

The following factors were relied upon by this applicant in opposing security for costs:

.           the applicant has already spent around $11,000 in legal fees including some made available by way of security for costs but the matter is still not ready for trial;

.           the deconsolidation ordered by the Court has delayed the matters;

.           the applicant has had to pay for children’s education and has been unemployed since 1999;

.           the applicant cannot afford any more money for legal representation nor for security for costs;

WAD15 – Tobing, WAD19 – Lung and WAD20 – Anggawirja

Each of these applicants relied upon the following considerations:

.           the applicant was initially represented and solicitors’ fees were much greater than expected, the matter has gone on for much longer than expected exacerbated by the transfer to and from the Federal Magistrates Court;

.           Indonesia is a developing country and its currency has significantly depreciated;

.           the applicant is unable to pay any money for security for costs and is not able to pursue the claim;

.           if every applicant has to pay $10,000 that will amount to a great deal of money;

.           the proceedings have dragged on for so long the respondents have had time to move their assets out of Australia.

10                  The considerations advanced by the respondents relevant to the question whether security for costs should be ordered in respect of these applications are similar to those canvassed in Kurniadi (No 2).  Indeed there seems little, if any, basis for distinguishing between the circumstances in those applications for security and the applications presently before the Court.

11                  I have endeavoured as best I can to take account of the applicants’ unrepresented status in dispensing with pleadings and allowing them to file and serve statements of the contentions of fact and law upon which they rely.  But if they wish to pursue their action, being litigants outside the jurisdiction, there is, on the affidavit material already referred to, the potential for significant costs to be incurred by the respondents in defending the action.  Absent security for costs there is virtually no prospect that the respondents would recover their costs.  The sum of $10,000 which has already been ordered in respect of certain of the applicants is a small proportion of the estimated costs of the proceedings. 

12                  If the applicants wish to proceed with their claims they will have to organise themselves in such a way as to arrange witnesses and provide discovery and comply with all the normal interlocutory preparations for a trial.  It seems to me on the indications from their own statements that their chances of doing so unrepresented are small.  The outcome of the applications brought on behalf of the represented parties in WAD9 and 10 will have a material impact on the future of these other proceedings.  I am prepared to make an order for security for costs and to stay the applicants’ proceedings pending payment of the security.  However  I will not direct that the proceedings be struck out if the order is not complied with at least until there has been a reasonable opportunity for the represented matters to go to trial and yield a result one way or the other.  The practical effect is that these unrepresented applicants will not be able to take any further steps in their proceedings for the time being.  I will allow a period of up to six months to elapse before entertaining any application to strike out their proceedings and will assess the position then by reference to the progress and outcome of the represented matters.

Associate:

Dated:              14 December 2005