Security for Costs in Abuse Claims

The Supreme Court of Victoria has recently considered a security for costs application in the context of a permanent stay appeal in the case of Weiden, Alan v YZ (a pseudonym) & Beit Habonim P/L (ACN 051 827 984) as trustee of The Association Of Parents & Friends Of Zionist Youth [2023] VSCA 258.

The plaintiff, YZ, commenced proceedings for damages arising from personal injuries suffered as a result of sexual abuse that allegedly occurred when he was a member of Beit Habonim in 1974 and 1975. The abuse was allegedly perpetrated by Alan Weiden, who is the second defendant in the proceedings. Mr Weiden presently resides in Israel.

Mr Weiden applied for a permanent stay on 17 May 2022. The application was dismissed by Irving AsJ on 15 July 2022. The decision of Irving AsJ was appealed by Mr Weiden, and he was subsequently ordered to pay $15,000 security for the plaintiff’s costs in respect of the appeal of Irving AsJ’s orders.

The appeal was heard by Tsalamandris J on 21 February 2023, and was later dismissed.

Mr Weiden has appealed the orders made by Tsalamandris J.

On 6 June 2023, the plaintiff’s solicitors sent correspondence to Mr Weiden’s lawyers seeking security for his costs in the sum of $37,100 in relation to the proposed appeal to the Court of Appeal. The bases of the request for security of costs included that Mr Weiden is a resident in Israel with no assets in Victoria; the existence of untaxed costs orders made against Mr Weiden, which the plaintiff suggested Mr Weiden is averse to paying; and Mr Weiden’s lack of prospects of success of his proposed appeal. The correspondence stated that if Mr Weiden failed to agree to provide security then the plaintiff reserved his rights to apply to the Court without further notice.

In a letter dated 13 June 2023, Mr Weiden’s solicitors disputed the requirement to pay security for the plaintiff’s costs of the appeal. The letter argued that any security a Court would order would be limited to the costs incurred for seeking to enforce an order made against Mr Weiden in Israel. Mr Weiden’s solicitors indicated that their client’s proposal for dealing with the plaintiff’s request for security of costs would be provided once they had determined the costs required to enforce a foreign judgment in Israel.

The plaintiff’s solicitor responded on 14 June 2023, disputing certain propositions put by Mr Weiden’s lawyers letter dated 13 June 2023, and expressing concerns about Mr Weiden’s ability to satisfy any additional costs order that may be made against him. The plaintiff’s solicitor indicated that an application would be filed with the Court by 16 June 2023 if Mr Weiden’s agreement to pay security costs was not received.

On 9 August 2023, the parties were advised that Mr Weiden’s appeal had been accepted and would be heard on 24 November 2023.

On 8 September 2023, Mr Weiden filed his Amended Written Case and an Amended Agreed Summary.

On 21 September 2021, the plaintiff’s solicitors requested a copy of the Israeli law pertaining to enforcing a foreign judgment. Mr Weiden’s solicitor provided same on 3 October 2023.

On 5 October 2023, the plaintiff filed the application for security of his costs with the Court, 4 months after it was initially proposed. The application sought orders that Mr Weiden not only provide security for the plaintiff’s costs, but also that the application for leave to appeal be stayed until the security is provided, and the application for leave to appeal be dismissed with costs if the security is not provided.

The plaintiff’s solicitors filed an affidavit exhibiting correspondence which was exchanged by the parties regarding security for costs.

In hearing the application for security costs, the Court referred to Rule 64.38(2) of the Supreme Court (General Civil Procedure) Rules 2015 (Vic), which gives the Court a discretionary power to make an order for security of costs of an appeal or application before the Court. Beach JA and Macaulay JA confirmed the matters to be considered when deciding whether to exercise the power include: “the prospects of success of the appeal; the degree of risk that a costs order might not be satisfied; whether the making of an order would be oppressive by stifling a reasonably arguable claim; whether any impecuniosity of the applicant for leave to appeal arises out of the conduct about which complaint is made; whether there are any aspects of public interest militating against the making of an order; and whether there are any particular discretionary matters relevant to the application” [at 12].

Their Honours went on to confirm that whether a hearing was imminent was also a relevant consideration when deciding whether to exercise the discretion. Their Honours heard the application for security costs on 26 October 2023 and handed down their decision on the same date. Their Honours stated at [14] that the four-month delay in filing the application was “simply unacceptable” as the solicitors for Mr Weiden had in that time prepared and filed documents in relation to the application for leave to appeal.

Their Honours did not feel it necessary to thoroughly discuss the prospects of Mr Weiden’s application for leave to appeal and appeal but stated that they were not satisfied that his prospects were so low as to warrant making the orders the plaintiff sought.

The plaintiff’s application for security costs was thus dismissed.

The decision is a reminder for practitioners to apply for security of costs well in advance of the relevant application being heard before the Court.