Security of costs against a plaintiff - where a plaintiff is effectively a 'defendant'

Oswal v Carson (No 4) [2011] VSC 434 involved a novel claim against receivers and managers of a company to prevent them from accessing 'private' emails on the company's server said to belong to the wife of the managing director of the company.

The defendants sought an order against the plaintiff for security of costs pursuant to a provision of the VIctorian rules of court that state that security for costs may be ordered where the plaintiff, as is the case with Ms Oswal, is ordinarily resident out of Victoria.

The court dismissed the application, finding that Ms Oswal was not the 'attacker' in the proceedings and that it would be unfair to require her to provide security for costs, even though the claims she brought are novel and in an emerging area of law. In reaching this decision, the court said:

• There is significant authority which suggests that security for costs will not be ordered against a person out of the jurisdiction if that person is protecting their property and they are only within the jurisdiction defending themselves against attack. At the very least, the fact that the proceedings may be characterised as 'defensive', is a matter to be taken into account in the exercise of the discretion to order security for costs.
• In determining which party is, in a practical sense, 'the plaintiff' in the proceeding, the real test is whether there was little practical alternative to the plaintiff taking action through court proceedings. If that is the position, then the plaintiff is properly characterised as the party attacked.