N10412

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO.1474 OF 2018

BETWEEN:
TIMOTHY WILKINSON
Plaintiff

AND:
K92 MINING LIMITED
Defendant

Waigani: David, J
2023:  17th & 21st July

CIVIL PRACTICE AND PROCEDURE – application for security costs – sufficiency of security – failure to give security - National Court Rules, Order 14 Rules 25(1)(a), 26 and 27. 

Cases Cited:

Papua New Guinean Cases
Driver v Swanson v [1977] PNGLR 30
Yarlett v New Guinea Motors Ltd [1984] PNGLR 155
Reynolds v Walcott [1985] PNGLR 316
Brinks Pty Ltd v Brinks Incorporated [1996] PNGLR 75
Lambu v Ipatas [1999] PNGLR 207
Nelson & Robertson Exports Pty Ltd v Richard Barrell (2004) N2893
JCA Lumber Co. (PNG) Ltd, In re (2015) N6040
Premier Corporation Ltd v Dukemaster (PNG) Ltd (2019) N8057
Amode HK Ltd v Anitua Housing Solutions Ltd [2020] N8281
Vuksich & Borich (NZ) Ltd v Pacific Energy Aviation (PNG) Ltd (2020) N8518
Tuka v Toyota Tshusho (PNG) Ltd (2021) N8774

Overseas Cases
The Dominion Brewery Limited v Foster 77 LTR 507
Foss Export Agency Pty Ltd v Trotman (1949) 67 WN (NSW) 1
Buckley v Bennell Design & Constructions Pty Ltd (1974) 1 ACLR 301
Smail v Burton (1975) VR 776
Southern Cross Exploration NL v Fire and All Risks Insurance Co. (1985) 1 NSWLR 114
Commonwealth v Cable Water Skiing (Australia) Ltd (1994) 14 ACSR 760

Counsel:
Mathew Adadikam, for the Plaintiff
Jordan Kakaraya, for the Defendant

RULING

21st July 2023

1.	DAVID, J:	INTRODUCTION: This is a ruling on an application by the defendant, K92 Mining Limited for security for costs sought in the sum of K200,000.00 or such other sum as may be determined by the Court chiefly on the basis that the plaintiff, Timothy Wilkinson is ordinarily resident outside of Papua New Guinea pursuant to Order 14 Rule 25(1)(a) and Rule 26 of the National Court Rules.   It also seeks an order in relation to failure to give security in the event it is ordered pursuant to Order 14 Rule 27 of the National Court Rules.  The defendant’s application is moved pursuant to a notice of motion filed on 31 May 2023.

EVIDENCE

2.	In support of the application, the defendant relies upon and reads the affidavit of Alu Konena sworn and filed on 31 May 2023.

3.	In contesting the Application, the plaintiff relies on and reads the following affidavits:

1.	Affidavit of Timothy Wilkinson sworn on 13 June 2023 and filed on 23 June 2023;
2.	Affidavit of Jacobus Malan sworn on 22 June 2023 and filed on 23 June 2023;
3.	Affidavit of Mathew Adadikam sworn and filed on 26 June 2023; and
4.	Affidavit of Timothy Wilkinson sworn on 23 June 2023 and filed on 26 June 2023.

PLAINTIFF’S CLAIM 

4.	The plaintiff commenced these proceedings by writ of summons endorsed with a statement of claim filed on 21 November 2018 (statement of claim).  

5.	He is a former employee of the defendant who worked at the defendant’s Kainantu Gold Mine in the Eastern Highlands Province (the Mine) pursuant to a contract of employment dated 30 March 2016.  The plaintiff was employed by the defendant as a Manager of Occupational Health & Safety, Training & Environment.  On or about 19 April 2016, the plaintiff travelled to the Mine and commenced his employment with the defendant.  The plaintiff alleges that he returned to Queensland, Australia on or about 7 May 2016 presenting with chronic lethargy, severe headaches, light sensitivity, fever and general malaise.  The plaintiff alleges that he travelled from Queensland to the Mine on or about 18 May 2016, but remained unwell after that and on or after 22 May 2016 returned to Cairns, Australia for further treatment and investigation following diagnosis at the Lae International Hospital for malaria and pneumonia and treatment.  The plaintiff alleges that on or about 7 June 2016, he travelled from Queensland to the Mine, but having been physically unwell between 8 and 11 June 2016, on or about 12 June 2016, he returned to Queensland for treatment firstly at the Proserpine Hospital and on or about 15 June 2016 he was transferred to the Mater Hospital in Townsville.  The plaintiff alleges that due to the defendant’s failure to provide a safe working environment and safe system of work at the Mine during the course of his employment and the negligence of the defendant’s representatives, servants or agents, he contracted malaria which developed into cerebral malaria and encephalitis and suffered loss and damage as a result.   The plaintiff claims; general damages; past economic loss; past loss of superannuation; future economic loss; future loss of superannuation; past care and domestic assistance; future care and domestic assistance; Medicare refunds and “out-of-pocket” medical expenses; pharmaceutical expenses; travel expenses; and future treatment and medication.

6.	In its defence filed on 20 December 2018, the defendant denies liability.

7.	In his reply filed on 21 January 2019, the plaintiff joins issue with non-admissions and denials in the defendant’s defence.

8.	I take judicial notice of the statement of claim, defence and reply.    

ISSUES

9.	The main issues for the Court to decide are:

1.	Whether the defendant has made out a case for an order for security for costs to be made?
2.	If the first issue is answered in the affirmative, what is the appropriate amount that that the plaintiff should be ordered to give? 
3.	Whether the proceedings should be dismissed in the event the plaintiff defaults in the payment of security as sought?

WHETHER THE DEFENDANT HAS MADE OUT A CASE FOR AN ORDER FOR SECURITY FOR COSTS TO BE MADE?

Law

10.	The application for security for costs is made under Order 14 Rules 25(1)(a) and 26 of the National Court Rules. 

11.	Order 14 Rule 25(1)(a) states:

“25. Cases for security. (53/2)
(1)	Where in any proceedings, it appears to the Court on the application of a defendant – 
(a)		that a plaintiff is ordinally resident outside Papua New Guinea……. 
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.”

12.	Rule 26 states:

“Manner of giving security
Where the Court orders a plaintiff to give security for costs, the security shall be given in such manner, at such time, and in such terms (if any) as the Court may by order direct.”

13.	The grant or refusal of an order for security for costs is in the discretion of the Court which is unfettered and all the circumstances of the case must be considered:  Yarlett v New Guinea Motors Ltd (1984) PNGLR 155, JCA Lumber Co. (PNG) Ltd, In re (2015) N6040, Vuksich & Borich (NZ) Ltd v Pacific Energy Aviation (PNG) Ltd (2020) N8518.

14.	The onus is on the party applying to demonstrate why the discretion should be exercised in his favour:   Lambu v Ipatas (1999) PNGLR 207.

15.	An application for security for costs should be made promptly and before considerable expense is incurred:  Buckley v Bennell Design & Constructions Pty Ltd (1974) 1 ACLR 301 at 309, Smail v Burton (1975) VR 776, Foss Export Agency Pty Ltd v Trotman (1949) 67 WN (NSW) 1, Yarlett v New Guinea Motors Ltd (1984) PNGLR 155.

16.	In Yarlett v New Guinea Motors Ltd (1984) PNGLR 155, McDermott J suggested six factors to be taken into consideration when deciding whether an order for security for costs should be made and these are:

1.	Whether the claim is bona fide;
2.	Whether there is a reasonably good prospect of success;
3.	Whether there is an admission on the pleadings or elsewhere that money is due;
4.	 Whether money has been paid into account;
5.	Whether the application for security is being used oppressively; and
6.	Whether want of means has been brought about by any conduct of the parties. 

17.	These criteria were endorsed by the Supreme Court in Lambu v Ipatas (1999) PNGLR 207, a case where an application for security for costs was made pending hearing of judicial review pursuant to s.155(2)(b) of the Constitution.  They have been adopted and applied in Nelson & Robertson Exports Pty Ltd v Richard Barrell (2004) N2893, JCA Lumber Co. (PNG) Ltd, In re (2015) N6040, Premier Corporation Ltd v Dukemaster (PNG) Ltd (2019) N8057 and Tuka v Toyota Tshusho (PNG) Ltd (2021) N8774. 

18.	In Driver v Swanson v [1977] PNGLR 30, Raine, J said the Court will order security as a matter of course where a plaintiff is resident out of the jurisdiction and the plaintiff has no assets which can be reached within the jurisdiction in the event of an order against the plaintiff.   These legal propositions were applied in Reynolds v Walcott (1985) PNGLR 316, Nelson & Robertson Exports Pty Ltd v Richard Barrell (2004) N2893.

19.	In Brinks Pty Ltd v Brinks Incorporated [1996] PNGLR 75 at 77 and 78, the Supreme Court in dealing with an application by the respondent for security for costs under s.18 of the Supreme Court Act which states that the Supreme Court or a judge may in special circumstances order that just security be given for costs of an appeal or an application for leave to appeal said in determining the nature of what these “special circumstances” were, it was relevant to have regard to the circumstances upon which the National Court may order security for costs under Order 14 Rule 25 of the National Court Rules.  The Supreme Court said the circumstances set out in the National Court Rules which may constitute “special circumstances” upon which the court may exercise its discretion to order security for costs of an appeal would include:

1.	The appellant is ordinarily resident outside Papua New Guinea;
2.	There is reason to believe that the appellant will be unable to pay the costs of the respondent if ordered to do so;
3.	The address of the appellant is not known; and
4.	The appellant has changed address after the appeal is instituted with a view to avoiding the consequences of the appeal.   

20.	The Supreme Court said this list is not exhaustive and it was within the discretion of the court to determine what these “special circumstances” are.  

21.	In Lambu v Ipatas (1999) PNGLR 207, the Supreme Court, after discussing some earlier cases involving applications for security for costs including Yarlett v New Guinea Motors Ltd (1984) PNGLR 155 and Brinks Pty Ltd v Brinks Incorporated [1996] PNGLR 75, stated that in considering the question of security for costs, the ultimate test should be whether, it is in the interest of justice to make or not to make an order for security for costs having regard to all the circumstances of the case.  At 211 and 212, the Supreme Court said:

“We bear these general principles in mind in considering the question of security for costs pending the determination of a judicial review. However, the ultimate test should be; whether, it is in the interest of justice to make or not to make an order for security for costs having regard to all the circumstances of the case (adopting the words of s155(4) of the Constitution). This Court adopted the same test in an application for stay pending the determination of a judicial review in Viviso & Electoral Commission v John Giheno (supra). The onus is on the party applying to demonstrate why the discretion should be exercised in his favour.”

Consideration

22.	It is not disputed that the plaintiff is ordinarily resident outside of Papua New Guinea.  The plaintiff is an Australian resident in Australia.  He previously resided in Victors Harbor in the State of South Australia.  His current address is 24 Endeavour Drive, McCracken, South Australia.

23.	The evidence before the Court does not demonstrate that the plaintiff has any asset in Papua New Guinea which can be reached in the event of an order against him.

24.	 The application has not been made promptly.  There has been a serious delay of over four years after proceedings were commenced in applying for security for costs.   Pleadings closed in or about February 2019.  However, delays are not an automatic bar to the making of the order for security for costs:  Commonwealth v Cable Water Skiing (Australia) Ltd (1994) 14 ACSR 760, a persuasive case authority. In that situation, the Court will be required to take into consideration, the length of the delay, the reasons for it, the nature of the acts done during the intervening period and whether security is sought both for past costs incurred and for future costs:  Southern Cross Exploration NL v Fire and All Risks Insurance Co. (1985) 1 NSWLR 114, a persuasive case authority.  In the present case, the plaintiff does not seriously contest the application for security for costs.  Rather, he proposes that the quantum for security for costs ordered ought to be reasonable.   Directions or orders consented to by the parties were made by the Court on 11 May 2023 in relation to the filing of affidavits and other matters and the matter will return for further directions or allocation of a trial date on 19 October 2023 at 9:30 am.  I take judicial notice of the directions or orders made.  This favours the grant of the application.

25.	The progress made by the parties so far through pre-trialling and actions taken by the plaintiff to file affidavits in compliance with the directions or orders of 11 May 2023 suggests that the claim is bona fide. This can also be seen from the nature of the pleadings exchanged by the parties.

26.	As to whether the plaintiff has a reasonable prospect of succeeding, I am reluctant at this stage to make any finding on that based on the available evidence before the Court.

27.	There is no admission on the pleadings or elsewhere that money is due. As I have alluded to earlier, in its defence, the defendant denies liability.

28.	No money has been paid into account.

29.	The application for security is being pursued by the defendant under Order 14 Rule 25(1)(a) of the National Court Rules.  Consequently, it is not being used oppressively.

30.	As to whether want of means has been brought about by any conduct of the parties, the impecuniosity of a litigant ought not to be used as a reason to penalise the litigant from having access to the courts:  Lambu v Ipatas [1999] PNGLR 207, Tuka v Toyota Tshusho (PNG) Ltd (2021) N8774.  In addition, as the defendant denies liability, the matter is being pre-trialled and steps are being taken to progress the matter to trial pursuant to the directions or orders of 11 May 2023.  The plaintiff should not be driven from the judgment seat, but should have his day in Court.   

31.	It is in the interest of justice and in the exercise of the Court’s discretion having regard to all the circumstances of the case, I will order security as a matter of course given it is not disputed that the plaintiff is resident out of Papua New Guinea pursuant to Order 14 Rule 25(1)(a) of the National Court Rules and am satisfied that the plaintiff has no assets which can be reached within Papua New Guinea in the event of an order against him.   

WHAT IS THE APPROPRIATE AMOUNT THAT THE PLAINTIFF SHOULD BE ORDERED TO GIVE?

Law

32.	Pursuant to Order 14 Rule 25(1)(a) of the National Court Rules, the Court may order the plaintiff to give such security as the Court thinks fit for the costs of the defendant of and incidental to the proceedings.  

33.	There is no hard and fast rule which guides the Court in determining what amount of security a party may be ordered to give.

34.	In Reynolds v Walcott (1985) PNGLR 316, Bredmeyer J said the amount of security to be awarded is in the discretion of the Court having regard to the circumstances of the case.  That legal proposition was considered and applied in Amode HK Ltd v Anitua Housing Solutions Ltd [2020] N8281.

35.	In Reynolds v Walcott (1985) PNGLR 316 at 319, His Honour held:

“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.”

36.	In The Dominion Brewery Limited v Foster 77 LTR 507 at 508, Lindley MR said:

“It is obvious that, as to a question of quantum such as this, you cannot lay down any very accurate principle or rule. The only principle which, as it appears to me, can be said to apply to a case of the kind is this, that you must have regard, in deciding upon the amount of the security to be ordered, to the probable costs which the defendant will be put to so far as this can be ascertained. It would be absurd, of course, to take the estimate of the managing clerk to the defendant's solicitors and give him just what is asked for. You must look as fairly as you can at the whole case.”

Consideration

37.	At paragraph 7 of Alu Konena’s affidavit, he deposes that on 9 and 10 May 2023, the plaintiff served on the defendant five affidavits annexing specialist medical evidence from:

1.	Dr. Don Todman, Neurologist – report dated 23 January 2019;
2.	Dr. Andrew Lingwood, Specialist Occupational and  Environmental Medicine Physician -report dated 29 April 2019;
3.	Dr. Evan Bursie, Infectious Diseases Physician – report dated 7 February 2019;
4.	Dr. Malcolm Wallace, Orthopaedic Surgeon – report dated 4 March 2019; and
5.	Dr. Scott Campbell, Specialist Neurosurgeon – report dated 21 January 2019.  

38.	At paragraphs 8 to 11 of the affidavit of Alu Konena, the defendant expects to incur a substantial amount of costs in defending the action including referring those reports to specialist medical consultants for review and report and these experts will not be found in Papua New Guinea and their fees will be paid by defendant.  A draft estimate of the defendant’s Bill of Costs inclusive of disbursements of various descriptions totalling K349,192.25 is annexed to the affidavit of Alu Konena.  In the motion, the highest amount the defendant claims is K200,000.00.

39.	Mr. Adadikam for the plaintiff submits that the Court needs to strike a balance in the present case in a litigation involving an ordinary party as the plaintiff is and the defendant who is a multinational corporation defending the plaintiff’s claim.  He asserts that the defendant has the means and the outcome of the proceedings will have no bearing on its financial status.  Counsel contends that the sum of K200,000.00 sought for security for costs is inflated and used oppressively by the defendant against the plaintiff.    The plaintiff’s evidence is that he is able to set aside AUD$15,000.00 (about K37,500.00 at current exchange rate) in a bank account for security for costs.

40.	I think the sum of K200,000.00 sought by the defendant as security for costs is used oppressively by the defendant against the plaintiff.  I think it is unreasonable.
41.	The amount of security I will order in the exercise of the Court’s discretion having regard to all the circumstances of the case and having considered the amounts ordered in Nelson & Robertson Exports Pty Ltd v Richard Barrell (2004) N2893 (K60,000.00), Amode HK Ltd v Anitua Housing Solutions Ltd [2020] N8281 (K150,000.00) and Vuksich & Borich (NZ) Ltd v Pacific Energy Aviation (PNG) Ltd (2020) N8518 (K17,000.00) is K60,000.00.
FAILURE TO GIVE SECURITY
Law
42.	Order 14 Rule 27 relevantly states:
“Where a plaintiff fails to comply with an order under this Division, the Court may, on terms, order that the proceedings on any claims by the plaintiff for relief in the proceedings be dismissed. “
43.	The power to be exercised under this rule is in the discretion of the Court.
Consideration
44.	The defendant moves for an order that security be paid into the National Court Trust Account within 14 days from the date of the order, failing which the proceedings be dismissed with costs to be taxed and paid by the plaintiff.   I think the period of 14 days is insufficient.  Having regard to all the circumstances of the case and in the exercise of the Court’s discretion, I would rather give the plaintiff up until close of business on 21 August 2023 to make the payment.   Consequently, I would follow the approach taken by Gavara-Nanu J in Nelson & Robertson Exports Pty Ltd v Richard Barrell (2004) N2893 and refuse the relief sought.  The defendant is at liberty to make an appropriate application under Order 14 Rule 27 if the need arises.  
CONCLUSION
45.	I have granted the defendant’s application for security for costs which I have fixed at K60,000.00.  The plaintiff must pay the security into the National Court Trust Account by close of business on 21 August 2023.  I will not order a stay of the proceedings until the security is given because it has not been specifically sought in the motion.  In addition, if I were to order a stay of proceedings until the security is given, it would become an impediment to compliance with the directions or orders of 11 May 2023.
COSTS
46.	Costs is a discretionary matter.  Costs shall follow the event, ie, the plaintiff shall bear the defendant’s costs of and incidental to the application which shall be taxed, if not agreed.
ORDERS
47.	In the result, the formal orders of the Court are:

1.	The plaintiff shall pay into the National Court Trust Account security in the sum of K60,0000.00.
2.	The plaintiff shall pay the security by close of business on 21 August 2023.
3.	The application under Order 14 Rule 27 of the National Court Rules is refused at this stage, but the defendant is at liberty to make an appropriate application if the need arises.  
4.	Costs shall follow the event, ie, the plaintiff shall bear the defendant’s costs of and incidental to the application which shall be taxed, if not agreed.
5.	The time for the entry of these orders is abridged to the time of settlement by the Registrar which shall take place forthwith.
_______________________________________________________________
Holingu: Lawyers for the Plaintiff
O’Briens: Lawyers for the Defendant