Establishing a ground under Order 14 Rule 25(1) of the National Court Rules 1983 is necessary but not sufficient.
Rule 25(1)
Where one of the four grounds 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.
“May” — the order is discretionary. “Such security as the Court thinks fit” — the amount is discretionary too. And the stay is part of the order the Court may make.
What to file
- A notice of motion, complying with Order 4 Division 5 — including a concise reference to the Court’s jurisdiction, here Order 14 Rules 25 and 26.
- An affidavit from someone with direct knowledge, establishing the ground relied on.
- Evidence of the ground — for residence abroad, where the plaintiff is ordinarily resident; for paragraph (b), that the plaintiff is suing, not for his own benefit, but for the benefit of some other person and that there is reason to believe that that plaintiff will be unable to pay; for paragraph (c), the originating process itself; for paragraph (d), the change of address and the inference of purpose.
- A reasoned estimate of the costs to be secured, related to the scale in Table 1 of Schedule 2 under Order 22 Rule 36.
- A proposed form of security — Rule 26 requires the Court to direct the manner, the time, and the terms.
- Any correspondence in which security was requested and refused.
Security protects costs not yet incurred. An application brought on the eve of trial secures little and tells against the applicant, who will be asked why it was not made earlier.
The Commercial List makes the point structurally: under Order 10A Rule 17 the first directions hearing is conducted with a view to the just, quick and cheap disposal of the proceedings, and applications of this kind belong there. See Commercial List management.
What the evidence must show
| Ground | What must be established |
|---|---|
| (a) Resident outside PNG | That the plaintiff is ordinarily resident outside the country — not merely absent, or travelling |
| (b) Suing for another’s benefit | Both limbs: that the plaintiff sues not for his own benefit, but for the benefit of some other person, and that there is reason to believe they cannot pay |
| (c) Address not stated or mis-stated | The defect in the originating process — but see Rule 25(2) |
| (d) Address changed | The change after the commencement of the proceedings and that it was with a view to avoiding the consequences of the proceedings |
Rule 25(2): the Court shall not order security by reason only of Sub-rule (1)(c) if it appears to the Court that the failure to state his address or the mis-statement of his address was made without intention to deceive.
So a defendant relying on paragraph (c) alone must be able to point to something suggesting an intention to deceive. Where the concern is really that the plaintiff cannot be found, paragraph (d) is the better ground — if the change of address can be shown.
The amount
The security is for the costs of the defendant of and incidental to the proceedings. Two points follow.
It is measured against recoverable costs, not the defendant’s actual bill. On a party and party taxation only costs necessary or proper for the attainment of justice or for enforcing or defending the rights of the party are allowed — so an estimate built on the full retainer overstates the case.
It looks forward. Costs already incurred before the application are, in practice, harder to secure.
Break the estimate down by stage — pleadings, discovery, interlocutory applications, preparation, trial — and relate each to the scale. A round figure without workings invites the Court to discount it.
For the plaintiff
- No ground is made out. The four in Rule 25(1) are exhaustive, and there is no general ground of impecuniosity.
- Rule 25(2), where paragraph (c) is relied on — the address error was without intention to deceive.
- Delay. An application made late secures little and prejudices the plaintiff.
- The order would stifle the claim. The discretion is at large, and a stay under Rule 25(1) ends a claim the plaintiff cannot fund.
- Quantum. Even if an order is made, the amount is such security as the Court thinks fit, and can be reduced or staged.
Apply to vary it rather than allowing the time to pass. Under Rule 27, 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.
Note the words on terms: even at that stage the Court retains a discretion, and a plaintiff who has engaged with the difficulty is in a better position than one who has ignored it.
Section 10 of the Claims By and Against the State Act 1996 gives a wider power, notwithstanding anything in the National Court Rules — including where another party is a company in receivership or liquidation or in any other case where it appears likely that costs awarded … in favour of the State may not be recovered. Order 14 Rule 28 preserves it. See security where the State is a party.
Sources
- National Court Rules 1983 — O 4 Div 5; O 10A r 17; O 14 rr 24–28; O 22 rr 24, 36, Sch 2 Table 1
- Claims By and Against the State Act 1996 — s 10
Before relying on anything here, read the current text of the National Court Rules 1983 and check for later amendments. If a decision matters to you, get advice — start with the Office of the Public Solicitor, or find a firm in the law firms directory.