FEDERAL COURT OF AUSTRALIA

Stapleton v Fairfax Media Publications Pty Ltd [2019] FCA 1418

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to s 56 of the Federal Court of Australia Act 1976 (Cth) and/or r 19.01 of the Federal Court Rules 2011 (Cth), the Applicant is to give security for the Respondents’ costs up to the hearing in the amount of $100,000.

2.    The security ordered pursuant to Order 1 is to be paid by the Applicant into Court pursuant to r 2.42 of the Federal Court Rules 2011 (Cth) by 4.00pm on 12 September 2019.

3.    Subject to Order 4, pursuant to r 19.01(1)(b) of the Federal Court Rules 2011 (Cth), the proceedings be stayed until security is given pursuant to Order 1.

4.    If the Applicant has failed to comply with Orders 1 and 2 above by 1 October 2019, an application may be made, returnable at 9.30am on 9 October 2019, for an order that the proceeding be dismissed pursuant to s 56(4) of the Federal Court of Australia Act 1976 (Cth) and/or r 19.01(1)(c) of the Federal Court Rules 2011 (Cth).

5.    In the event the Applicant gives the security as required by Orders 1 and 2 above, the Respondents have liberty to apply for further security for costs in relation to the costs of the hearing.

6.    The Applicant is to pay the Respondents’ costs of and incidental to this Application for security.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

FLICK J:

1    On 13 September 2019, Mr Mark Stapleton commenced a proceeding in this Court by filing an Originating Application and a Statement of Claim.

2    Mr Stapleton sought relief in respect to a series of publications on 30 August 2018. He claimed that the publications were defamatory. A Defence has been filed admitting the publications but contending (inter alia) that the publications did not convey the imputations pleaded and relying on the defences of “contextual truth”, “qualified privilege” and “justification”.

3    Attempts to mediate the dispute have proved unsuccessful.

4    Now before the Court is an Application by the Respondents seeking security for costs. The Application was listed for hearing on 21 August 2019 but was then adjourned, on the application of Mr Stapleton, to 29 August 2019. On 29 August 2019, both Mr Stapleton and the Respondents appeared by Counsel. Outlines of Submissions had also been filed by the parties.

5    This Court may make an order for security pursuant to s 56 of the Federal Court of Australia Act 1976 (Cth) and r 19.01 of the Federal Court Rules 2011 (Cth). Section 56 provides, in part, as follows:

Security

(1)    The Court or a Judge may order an applicant in a proceeding in the Court, or an appellant in an appeal under Division 2 of Part III, to give security for the payment of costs that may be awarded against him or her.

(2)    The security shall be of such amount, and given at such time and in such manner and form, as the Court or Judge directs.

…

Rule 19.01 provides, in part, as follows:

Application for an order for security for costs

(1)    A respondent may apply to the Court for an order:

(a)    that an applicant give security for costs and for the manner, time and terms for the giving of the security; and

(b)    that the applicant's proceeding be stayed until security is given; and

(c)    that if the applicant fails to comply with the order to provide security within the time specified in the order, the proceeding be stayed or dismissed.

(2)    An application under subrule (1) must be accompanied by an affidavit stating the facts on which the order for security for costs is sought.

6    As the terms of s 56(1) make apparent, the making of an order for security is discretionary. The power to order security has been described as a “broad power”: James v Australian and New Zealand Banking Group Ltd (No. 1) (1985) 9 FCR 442 at 444 per Toohey J. In Madgwick v Kelly [2013] FCAFC 61 at [6], (2013) 212 FCR 1 at 4 Allsop CJ and Middleton J endorsed the following observations of the primary Judge:

…It is established that the discretion conferred by s 56 is broad and unfettered. Many attempts to set limitations upon the discretion have been rejected by the Courts, and the only limitation is that it must be exercised judicially: … It is a discretion to be exercised according to the merits of each case and without any particular predisposition: … The discretion is to be exercised by reference to the particular circumstances arising in each case: …

(citations omitted)

The issue to be resolved in making or refusing an order is essentially one of risk management: East Grace Corporation v Xing (No 1) [2005] FCA 219 at [6] per French J. As also recognised by both this Court and other Courts, the “broad discretion” to order security “is to be exercised in light of the facts and circumstances of the particular case”: Botsman v Bolitho [2018] VSCA 111 at [36] per Whelan and Niall JJA.

7    On the facts of the present case it is concluded that security should be ordered primarily because Mr Stapleton:

    is not ordinarily resident in Australia but may be resident in Dubai, with his wife and children “living in another country closer to her family”;

    has no assets within the jurisdiction; and

    has not satisfied orders for costs made by the Supreme Court of New South Wales in other proceedings, albeit not costs orders in favour of the Respondent to the present proceeding.

Although all the facts and circumstances of a particular proceeding must be taken into account, in PS Chellaram & Co Ltd v China Ocean Shipping Co (1991) 65 ALJR 642 at 643 McHugh J observed that “for over 200 years, the fact that a party, bringing proceedings, is resident out of the jurisdiction and has no assets within the jurisdiction has been seen as a circumstance of great weight in determining whether an order for security for costs should be made”.

8    Rejected is a submission advanced on behalf of Mr Stapleton that the Respondents have failed to establish that Mr Stapleton is not resident in Australia. Such evidence as there is as to his residence are statements in his affidavit that he:

     has “been a resident in Australia since” moving here from Ireland in 2007;

    “intend[s] to reside in Australia for the foreseeable future”; and

    has “been a resident of Australia for taxation purposes since 2007…”

Also annexed to his affidavit is a Polish certification stating that:

    as at 27 August 2019 he is “residing in Clontarf NSW 2093 at Personne Ave 54.”

But nowhere in his affidavit does Mr Stapleton depose to where he currently resides.

9    Notwithstanding these statements, it is concluded that the Respondent has established that Mr Stapleton is not presently resident in Australia because:

    he was given notice to attend for cross-examination and failed to attend – an offer apparently made to make himself available for cross-examination by way of telephone was frustrated by his failure to provide a telephone number at which he could be contacted;

    having prepared an affidavit in circumstances where it was manifestly clear to him that an issue to be resolved on the application for security for costs was his current residence, Mr Stapleton has failed in his affidavit to unequivocally state where he is currently residing and has left blank that part of his affidavit which sets forth his current address; and

    any reliance upon the assertion in the Polish certification that he presently resides at an address in Clontarf is undermined by a failure to produce, pursuant to a Notice to Produce, any documents supporting any such claim. And Mr Stapleton’s affidavit states that prior to the publications complained of in August 2018 he “paddle boarded from Clontarf to Balmoral” – but the affidavit stops short of stating (for example) that he has continued thereafter to rent the same premises. And any such rental payments would not sit comfortably with an assertion as to impecuniosity.

Although the Notice to Produce was served only immediately before the present hearing, the issue arose out of his affidavit which was itself filed late. Compounded by his not making himself available for cross-examination, little reliance can be placed upon the assertions made in his affidavit. An Outline of Evidence in Chief prepared by Mr Stapleton in May 2017 also states that he:

    “left Australia and came to Dubai, where I remain…”.

And little reliance can be placed upon such statements as are made in the Outline of Evidence in Chief in circumstances where Mr Stapleton in his affidavit does not state that his Outline is true and correct. Mr Stapleton, it may be noted, apparently holds dual citizenship – both Australian and Irish.

10    Also of relevance in ordering security is the fact that:

    the proceedings in this Court have not progressed smoothly, with the Applicant not complying with (for example) orders for the filing of evidence – indeed, the hearing of the present Application for security having to be adjourned on Mr Stapleton’s application made at the outset of the hearing on 21 August 2019. The reason for this adjournment being a further failure to comply with an order made on 7 August 2019 for the filing of his evidence in opposition to the present Application by 14 August 2019. On 21 August 2019 further directions were made requiring Mr Stapleton to file any further evidence upon which he wished to rely by 27 August 2019. The affidavit now relied upon was ultimately filed on 28 August 2019.

11    In addition to:

    an account as to the impact of the publication of the material claimed to be defamatory; and

    his assertions in respect to residence.

Mr Stapleton, in his affidavit, further maintains (inter alia) that:

    he is “presently impecunious”.

Missing from that affidavit, however, is any exposition on the part of Mr Stapleton as to:

    his assets and liabilities – the statement of “present” impecuniosity being, with respect, no more than a mere assertion and unsupported.

Such evidence as there is that has been filed by Mr Stapleton:

    does not identify any assets within the jurisdiction.

12    And any assertion as to “present impecuniosity” does not sit comfortably with the fact that:

    the Court has been informed that on 20 August 2019 Mr Stapleton was then in Morocco and on his way to Germany; and

    by reason of the Polish certificate, the Court knows that Mr Stapleton as of a couple of days ago was apparently in Warsaw in Poland.

Such an unexplained travel itinerary is not that of an impecunious litigant, or a person who does not have access to resources.

13    Although Mr Stapleton’s Outline of Submissions refers (inter alia) to considerations such as an order for security having the potential to stifle litigation:

    such evidence as there is falls short of establishing that an order for security would stifle the present litigation.

14    An affidavit filed on behalf of the Respondents estimated that as at 8 August 2019 costs had been incurred by the Respondents of approximately $165,000. Submissions filed on behalf of the Respondents seek an order for security of no less than $100,000.

15    There is no satisfactory factual foundation for any finding to be made in favour of the Applicant and in opposition to the Respondents’ present application. Mr Stapleton’s affidavit and Outline of Evidence in Chief are, with respect, unsatisfactory.

16    An order for the payment of security in the sum of $100,000 should be made. No order should now be made, as sought by the Respondent, that the proceeding should be dismissed in the event of a failure to provide security. The order that should be made in lieu is that an application for such an order may be made, returnable on 9 October 2019, in the event that security is not provided. It remains a matter for Mr Stapleton as to whether he provides the security now ordered and the manner in which he may seek to oppose any application that may be made for an order dismissing the proceeding in the event that security is not provided.

THE COURT ORDERS THAT:

1.    Pursuant to s 56 of the Federal Court of Australia Act 1976 (Cth) and/or r 19.01 of the Federal Court Rules 2011 (Cth), the Applicant is to give security for the Respondents’ costs up to the hearing in the amount of $100,000.

2.    The security ordered pursuant to Order 1 is to be paid by the Applicant into Court pursuant to r 2.42 of the Federal Court Rules 2011 (Cth) by 4.00pm on 12 September 2019.

3.    Subject to Order 4, pursuant to r 19.01(1)(b) of the Federal Court Rules 2011 (Cth), the proceedings be stayed until security is given pursuant to Order 1.

4.    If the Applicant has failed to comply with Orders 1 and 2 above by 1 October 2019, an application may be made, returnable at 9.30am on 9 October 2019, for an order that the proceeding be dismissed pursuant to s 56(4) of the Federal Court of Australia Act 1976 (Cth) and/or r 19.01(1)(c) of the Federal Court Rules 2011 (Cth).

5.    In the event the Applicant gives the security as required by Orders 1 and 2 above, the Respondents have liberty to apply for further security for costs in relation to the costs of the hearing.

6.    The Applicant is to pay the Respondents’ costs of and incidental to this Application for security.

Associate:    

Dated:    30 August 2019