DC Legal Pty Ltd v Joukhador

1. [1]

   By amended notice of motion filed 15 March 2022, the first and third defendants seek the following orders:

   1. (1)

      Pursuant to Uniform Civil Procedure Rules 2005 (NSW) (‘UCPR’) r 42.21 and/or s 1335 of the Corporations Act 2001 (Cth), the plaintiff give additional security by payment to Court for the first and third defendants; costs of the proceedings in the sum of $194,670.

   2. (2)

      The proceedings be stayed until the plaintiff has provided the security pursuant to Orders 1 above.

2. [2]

   The plaintiff is DC Legal Pty Ltd (‘DC Legal’). The first defendant is Marcel Joukhador (‘Mr Joukhador). The second defendant was Brookarelli Pty Ltd (Brookarelli), which has now been released from the proceedings. The third defendant is Harrow Legal Pty Ltd (‘Harrow Legal’). The first defendant currently practises as a solicitor through the third defendant. The plaintiff is represented by B. Debuse. The defendants were represented by S. Ahmed. The parties relied upon a joint Court book (‘Ex A’).

3. [3]

   The plaintiff relies on the affidavit of Richard Watson, solicitor, sworn 20 January 2023 (‘Watson Affidavit’). The first and third defendants rely upon the affidavits of Louise Cantrill, Partner at Mills Oakley, sworn 1 July 2022 (‘Cantrill 1’) and 25 October 2022 (‘Cantrill 2’) and the affidavit of Lydia FogI, Costs Consultant, sworn 1 November 2022 (‘Fogl Affidavit’).

4. [4]

   On 15 December 2020, DC Legal and Bruce Dennis (Mr Dennis), its principal, filed a summons (‘the summons’) in the Supreme Court of New South Wales commencing these proceedings numbered 2020/00355118 against the first and second defendants seeking the following:

5. [5]

   Rules 42.21 of the UCPR reads:

6. [6]

   Similarly, section 1335 of the Corporations Act 2001 (Cth) reads:

7. [7]

   On 21 July 2021, Davies J in Dennis v Joukhador [2021] NSWSC 870 (‘Dennis v Joukhador’) ordered that DC Legal provide security for Mr Joukhador’s costs of the proceedings in the sum of $35,000 up to the conclusion of the filing and serving of the evidence in the proceedings.

8. [8]

   It is an abuse of process for parties to re-litigate interlocutory applications absent a change in circumstances which is of “substance”: JKB Holdings v de la Vega [2013] NSWSC 501 at [69] (‘JKB Holdings’). In JKB Holdings Lindsay J observed at [61]-[62] and [64] the following:

9. [9]

   In Misthold Pty Ltd v NSW Historic Sites and Railway Heritage Co Pty Ltd [2022] NSWSC 42 [17], Payne JA recently considered the principles relating to when it is appropriate to order further security where there has been a material change in circumstances and said at [17]-[18]:

10. [10]

    The security for costs in accordance with the orders of Davies J in Dennis v Joukhador was provided. Davies J in Dennis v Joukhador stated at [5]-[56]:

11. [11]

    Since the decision of his Davies J, Mr Dennis has been removed as a party,. His Honour’s findings at [51]-[56] above as to DC Legal’s financial position remain that as set by his Honour.

12. [12]

    In Dennis v Joukhador, Davies J described how he perceived the scope of the proceedings at [94]:

13. [13]

    Since Davies J delivered his judgment on 21 July 2021, the plaintiffs have filed a fulsome and prolix statement of claim and the plaintiff and defendants are at odds whether his findings still apply. The plaintiff submitted that the issues in the dispute remain much the same as stated by Davies J, while the defendants take a very different position by saying there have been two seismic shifts in the issues in dispute.

14. [14]

    The parties agree that these proceedings relate to how monies received by the defendants were distributed and the basis of distributions: (paragraph 5(i) of the Fogl Affidavit; paragraph [36] of the Watson Affidavit). The monies were received following settlement of a class action (‘the Baldock Proceedings’) in which the plaintiff and the defendants, at various times, had acted as solicitors for the plaintiffs in the Baldock Proceedings, and the monies included components for both damages and legal costs.

15. [15]

    Expanding upon my introduction of the parties in these proceedings, the first defendant, Mr Joukhador, is a solicitor who traded as Thomas Booler Lawyers, and who then became the principal of the third defendant, an incorporated legal practice after judgment was reserved by Brereton J and prior to the time the monies were received. He was the principal of the third defendant when the monies were received. He authorised the distribution of a substantial portion of the monies to a third party, Bookarelli, formerly the second defendant.

16. [16]

    The first and third defendants in these proceedings were retained by and acted on behalf of the plaintiff in recovering the costs payable to the plaintiff by the Baldock plaintiffs and HIH Liquidators, under the costs order in the Baldock proceedings.

17. [17]

    The defendants confirmed in written correspondence that it acted on behalf of the plaintiff (Ex 1 tendered before Davies J on 4 June 2021 (at Ex A 373)).

18. [18]

    The defendants were aware the plaintiff claimed a lien over the costs payable by the HIH Liquidators. With full knowledge of the lien and without regard to protection of it, the defendants caused a substantial part of the monies to be distributed to Bookarelli.

19. [19]

    The plaintiff never gave up its lien over the costs to be received from the defendants and continues to maintain it.

20. [20]

    Under the settlement deed, the plaintiff released the HIH Liquidators from its lien over the costs but did not release its lien in any other respect. The proceedings regarding the distribution of funds arose from the HIH Group liquidation. From about 2001 Mr Dennis and company was retained to advise and act for certain shareholders (‘the Original HIH Shareholders’) of HIH who had acquired shares in circumstances which, according to those shareholders, allegedly involved a market affected by misrepresentation. The Original HIH Shareholders claimed to be entitled to lode proof of debts on the liquidation of HIH and claim damages for accessorial liability against other defendants.

21. [21]

    Mr Joukhador acted for other shareholders in the Smith proceedings, the Cuong Ly proceedings and the De Bortoli proceedings. These proceedings were ordered to be heard together with the Baldock proceedings. The defendants in the Baldock proceedings are set out at [20] of the statement of claim detailed below.

22. [22]

    The statement of claim filed 22 April 2022 (beginning at p 51 of Ex A) pleads: an oral retainer agreement between DC Legal and Mr Joukhador; a partly oral partly written retainer with Harrow Legal; ratification; a breach of those retainers; estoppel arising from a 'shared assumption'; a breach of fiduciary duties owing to the plaintiff; breach of duties as a trustee; and breach of a duty of care amounting to negligence. Oral negotiations and agreements arising from 13 months of communications in June 2014 to July 2015 between Mr Dennis and Mr Joukhador, as well 15 months of communications in July 2015 and October 2016 between Mr Dennis and Mr Joukhador are alleged to have formed an oral agreement.

23. [23]

    The statement of claim of 22 April 2022, filed by the plaintiff, DC Legal, joined the third defendant (Ex A). Specifically, paragraphs [42]-[45] read:

24. [24]

    This expanded pleading needs to be considered in the light of Mr Dennis and Mr Joukhador were friends who met up regularly on a part social part work basis. Mr Joukhador is in a position to provide instructions and give evidence as to what was discussed. No doubt there were such periods of time such as that while judgment was reserved. There was little to discuss concerning costs.

25. [25]

    The chart setting out the work to be done and the costing of the first and third defendant’s solicitor costs and counsel fees, is as follows:

26. [26]

    The plaintiff agrees in the chart set out above that the agreed hourly rates to the partner, special counsel, solicitor and a paralegal are reasonable. What is in dispute is whether the work envisaged by Ms Cantrill is overly generous. At [30] of Cantrill 1 she set out the additional work and cost using the table above to get to the stage of the conclusion of the preparation of evidence. The estimate of solicitors fee costs and counsel fees ($32,500) equates to the sum of $166,845: Cantrell 2 at [20].

27. [27]

    I will summarise the parties’ submissions in detail, before succinctly doing so in my resolution.

The plaintiff’s submissions

1. [28]

   The plaintiff submitted that the case remains as it was when the application for security for costs was made to Davies J concerning a dispute about the disbursement of monies received by a solicitor pursuant to a settlement deed.

2. [29]

   The plaintiff submitted that under the settlement deed, the first defendant had an obligation to deposit into the Thomas Booler Lawyers Law Practice Trust Account the settlement sum of $2,382,000, which was paid by the HIH Liquidators by bank cheque in that amount drawn in favour of “Thomas Booler Lawyers Law Practice Trust Account” (Clause 2.2(b) of Settlement Deed at Annexure A to the affidavit of Mr Dennis dated 15 December 2020.

3. [30]

   As part of the preparation for the first application for security, and preparation of the evidence and submissions in support of the application, the former solicitors (Harrow Legal and Vaikom Legal) and counsel (Oliver Jones) turned their minds to the circumstances relating to the subject of the claim. This involved contemplation of the role played by the third defendant, even though it was not then a party. The work undertaken necessarily included receiving the summons and affidavit, obtaining instructions, conferring with the first defendant and considering and reviewing evidence relied upon by the first defendant in relation to various matters to enable counsel to conduct the case. This would also include reviewing documents held by the first defendant which are relevant to the proceeding and the first application for security for costs, including retaining each counsel to appear and prepare written submissions.

4. [31]

   The plaintiff asserted that there was no suggestion that the defendants did not understand the case they were required to meet (then pleaded by way of summons) or the work involved when they sought security. Submissions were made relevant to how the first defendant proposed to defend the claim: (pp 323-330 Ex A).

5. [32]

   This knowledge gained by the lawyer for the first defendant, including by way of counsel, is, the plaintiff submitted, critical for the conduct of these proceedings and was within the knowledge of the solicitors and counsel briefed at the time. The information obtained for the purpose of prosecuting the first application for security for costs would be retained by the defendants’ solicitors and barrister. The second application for security appears to have been prompted by a change in solicitor. The plaintiff submitted that this is not a matter which justifies the granting of further security for the work covered by the order made by Davies J.

6. [33]

   Upon receipt of the redacted version of Harrow Legal trust account statement on or about 3 August 2021 from the first defendant, the plaintiff learned that the settlement sum of $2,382,000 was deposited into the trust account of Harrow Legal Pty on or about 30 June 2020 rather than into the trust account of Thomas Booler Lawyers.

7. [34]

   The plaintiff argued that the joining of the third defendant does not change the issues of the proceeding. The plaintiff explained that the third defendant was joined in its capacity as the recipient of the settlement sum. The third defendant is the corporate vehicle of the first defendant which he controls. The first defendant is the individual who had control over the trust account of the third defendant. The plaintiff therefore submitted that the defendants’ suggestion that there is a change in circumstances such as to justify a second attempt to obtain security should be rejected by the Court.

8. [35]

   The plaintiff further submitted that the application arises at a critical forensic point in the defendants’ conduct of the claim. Neither has filed a defence or indicated what their defences are likely to be. The defendants’ insurer has assumed conduct of the claim and so their resources have significantly increased.

9. [36]

   Since the first application for security was heard by Davies J on 4 June 2021, the issues in the proceedings have been clarified.

10. [37]

    On 30 November 2022, solicitors for the plaintiff received from solicitors for the defendants a copy of directions from Bookarelli (previously the second defendant) to the third defendant ‘(Bookarelli’s 13 July 2020 Directions) (copy at Ex A 274).

11. [38]

    In light of Bookarelli’s 13 July 2020 Directions, the issues in the proceedings have been narrowed. The primary issue in the proceedings is whether the defendants were entitled to make distributions in accordance with Bookarelli’s 13 July 2020 Directions without consent from the plaintiff.

12. [39]

    At the time of making the disbursements as set out in Bookarelli’s 13 July 2020 Directions, the first defendant was obliged to comply with its duties and be satisfied as to the basis of any entitlement to make distributions in accordance with Bookarelli’s 13 July 2020 Directions.

13. [40]

    No issue of defence is raised by the evidence from the defendants which seeks to justify or explain the payment. The strength of the claim brought is only one issue the Court would consider in relation to this application. However, the absence of an explanation from the solicitor responsible for a trust account when confronted by an allegation that they did not disburse monies in accordance with their duties as fiduciaries or held and dealt with them in accordance with the requirements of the Legal Profession Uniform General Rules 2015 (NSW) is as described the plaintiff is both surprising and relevant.

14. [41]

    Any documents relied on by the defendants in satisfying themselves of the entitlement to make distributions in accordance with Bookarelli’s 13 July 2020 Directions must have been available prior to making the distributions.

15. [42]

    To date, the defendants have not provided any evidence, explanation or statement of defence which is responsive to the primary issue in these proceedings, which were set out in the Watson Affidavit.

16. [43]

    In light of the defendant’s lack of evidence, explanation or statement as to its entitlement to make distributions in accordance with Bookarelli’s 13 July 2020 Directions, the plaintiff asserts that their case against the defendant is more likely to succeed than at the time of the last motion hearing before Davies J on 4 June 2021.

17. [44]

    It is at the Court’s discretion to consider the strength of the plaintiff’s case in determining whether an order for security for costs is appropriate.

18. [45]

    On 11 January 2023, the plaintiff offered further security of $20,000. The plaintiff submitted that amount must be sufficient to cover the costs of both inquiry and preparation of an appropriately pleaded defence.

19. [46]

    The solicitors have changed, which, the plaintiff submitted is not a circumstance which would figure in the exercise of the Court’s discretion. The third defendant has been added because it was discovered that it received the proceeds of settlement, a fact which was well known to its principal, the first defendant, when he sought security the first time. The plaintiff again argues the case has not changed. Rather, the defendants seek to use the opportunity presented by the addition of the third defendant to impose, what the plaintiff describes as a very substantial burden of further security on the plaintiff, who continues to be held out of his money.

20. [47]

    The plaintiff contended that the dictates of ss 56-60 of the Civil Procedure Act 2005 (NSW) are breached by this type of application.

21. [48]

    On 7 September 2021 the first defendant served a cross claim seeking payment of $381,980.00 as an overpayment of monies paid by him to the plaintiff.

22. [49]

    The plaintiff would have had to consider the basis for any payment and why such an amount was an overpayment and calculate the alleged actual entitlement of the plaintiff. The plaintiff submitted that the court should not order security in circumstances where a cross claim is brought out of the same factual matrix, which in effect, makes the plaintiff pay for the work done by the cross claimant on its case that it seeks to bring. The plaintiff submitted it would be unjust for the plaintiff to be exposed to a stay of its claim whilst the cross-claimant is free to pursue its claim.

23. [50]

    So far as the quantum for the claim for security of costs, as set out in Cantrill 2 and the Fogl Affidavt, it appears the estimated costs are on a solicitor and its own client basis rather than on a party/party basis. The estimated costs have not taken into account any discounting that may apply in respect of a party/party costs assessment. Security for costs are not intended to meet all eventualities nor provide complete and certain indemnity to a defendant: Brundza v Robbie & Co (No 2) (1952) 88 CLR 171, 175.

24. [51]

    The plaintiff submitted that some categories of work described are questionable and others appear to take a luxurious approach to time and the tasks. An example of the former is the items described at paragraph [30] of the Cantrill 1 in relation to discovery. The plaintiff notes the following: first, it is the defendants who hold the relevant documents in this matter; secondly, the suggestion that the defendants’ solicitors will find matters relevant to their defences by trolling through discovered documents in the Baldock and related proceedings suggests an ‘extravagant and largely irrelevant approach’ to the defence of the claim on behalf of the defendants. The plaintiff submitted that examples of the second categories are 90 hours claimed for the preparation of two lay affidavits of Marcel Joukhador and Naushad Husaini, an employee of the third defendant. A further example is the claims for preparation of over 42 hours for the solicitors and 4 days for counsel.

25. [52]

    It is appropriate for a Court to initially order security for costs in stages: Green Camel Pty Ltd v Urban Ecological Systems Ltd [2017] NSWSC 362, [65]. The plaintiff therefore submitted that in this case, the Court has already ordered the appropriate amount for security of costs up to completion of the defendant’s evidence.

The first and third defendants’ submissions

1. [53]

   At the hearing of this motion, the first and third defendants filed an amended motion seeking security for costs for $193,845 (for both M Joukhador and Harrow Legal ) to the conclusion of the hearing and $166,845 up to the conclusion of the preparation of evidence to reflect the evidence they rely on as to anticipated costs arising from what they allege are the material change in circumstances set out below.

2. [54]

   At paragraph [5] of Cantrill 1, Ms Cantrill sets out her experience: 27 years of practice, 9 years as a partner, with specific experience acting for professionals and their insurers where it is necessary to provide detailed defence cost estimates. Ms Cantrill also notes her experience in preparing bills of costs.

3. [55]

   At paragraph [10] Fogl Affidavit, she annexes her CV. She further sets out her experience at [1] to [8] of the Fogl Affidavit. Her experience as a costs consultant is substantial. She was a solicitor for 19 years and subsequently has worked exclusively in costs for a further 23 years.

4. [56]

   The defendants noted that there are some key differences between the summons and the claim including the following, without limitation: the claim itself is 27 pages and the facts and circumstances pleaded relate to four separate Supreme Court proceedings in respect of class actions against the liquidators of HIH insurance commencing in 2013.

5. [57]

   Paragraphs [33]-[37] of Cantrill 1 deposes the correspondence with the plaintiff regarding its financial status. Requests were made by the defendants for financial information of the plaintiff. This was considered by Lehane J to be an important step prior to the filing of any motion: Crypta Fuels Pty Ltd v Svelta Corp Pty Ltd (1995) 14 ACLC 393.

6. [58]

   The plaintiff demanded the defendants file their defence first (as set out in the letter from the plaintiffs’ solicitors dated 14 June 2022 at p 118 of the Exhibit of Cantrill 1 and staunchly in a further letter dated 30 June 2022 at p 131 of the Exhibit of Cantrill 1). No financial information was provided, which inspired the defendants to file this motion nor has any financial information been provided subsequently.

7. [59]

   Paragraphs [38]-[40] of Cantrill deposed the defendants' searches as to the plaintiff’s financial position. The defendants submitted this is impecunious. As at July 2021, the Court found that it had no active business since June 2015: Dennis v Joukhador at [54]. No further evidence has been adduced to suggest that that position has changed.

8. [60]

   The defendant therefore submitted that there is no other reason that the Courts discretion to grant security ought not be made. It is the defendants’ view the only issue before the Court is the quantum of the security that ought to be granted.

9. [61]

   Fixing the amount to be provided by way of security is part of the exercise of the Court's discretion: Fiduciary Ltd v Morningstar Research Pty Ltd [2004] NSWSC 664 at [132]. Security for costs are not intended to provide a complete and certain indemnity for costs: Mr D v Ms P [2020] NSWCA 174 at [57]. It is submitted that the defendants do not seek a complete and certain indemnity.

10. [62]

    Security will be ordered where a plaintiff is a nominal plaintiff. As explained by the learned Dal Pont GE in Law of Costs at [29.39], "the fact that litigation is, for example, prosecuted by an insolvent company at the instance and under the control of a secured creditor substantially for the benefit of that creditor is therefore a weighty consideration in favour of granting security under s 1335(1) of the Corporations Act (citing Sent v Jet Corporation (1984) 2 FCR 46 at 53).

11. [63]

    The remaining and existing plaintiff, DC Legal Pty is a company of which Mr Dennis has, at all material times, been the sole director and sole shareholder. The defendants submitted that DC Legal is in effect a nominal plaintiff in the sense that Mr Dennis alone stands to benefit from any fruits of this litigation. He personally claimed a lien over the funds in the hands of HIH: Dennis v Joukhador at [13]. Yet without security, he is not burdened with any risk. This is a weighty consideration in favour of granting security.

12. [64]

    Since the first security order was made on 21 July 2021, the defendant argues that there has been the following material change in circumstances:

    1. (1)

       On 15 October 2021, the Court ordered that the matter proceed by way of statement of claim ([18] Cantrill 1) and DC Legal became the sole Plaintiff.

    2. (2)

       On 22 April 2022 (six months later), the plaintiff filed a 27-page statement of claim. There was a seismic shift in the number of issues in dispute in the proceedings, the time required for Hearing (estimate to be three days now instead of one day) and concomitantly, defence costs.

    3. (3)

       The claim added Harrow Legal as the third defendant.

    4. (4)

       With the benefit of a deeper understanding of the issues in dispute between the parties arising from the 27-page statement of claim, on 1 July 2021 the defendants filed a motion seeking further security, together with Cantrill 1 in support, estimating that defence costs will be $106,235 to the preparation of evidence and $194,670 until the conclusion of proceedings;

    5. (5)

       On 4 October 2022, the proceedings against Bookarelli were discontinued. This, per the defendant, caused a second seismic shift in how the defendants would need to defend these proceedings. Paragraph [9] of Cantrill 2 explains that as a result, it would now be necessary for the defendants to adduce additional evidence or arrange for oral evidence from Bookarelli (if it did not voluntarily assist the defendants) as it was no longer a party to the proceedings and had no compulsion to do anything.

13. [65]

    As a result in the change in circumstances referred to above, paragraph [19] of Cantrill 2 set outs in detail her estimate as to the costs that be incurred, together with evidence as to the reasons for any increase. For many steps in the litigation, there is no increase.

14. [66]

    This change results in Ms Cantrill estimating at paragraph [20] of Cantrill 2 that defence costs until the preparation for evidence will be $166,845 not $106,235; and until the conclusion of the hearing from $261,467 not $194,670.

15. [67]

    Accordingly, the total estimated costs of the proceedings is $261,467 + $21,000 already incurred = $282,287. Ms FogI opines that, of this amount, the likely allowance in a costs assessment of ordered costs is $228,087.

16. [68]

    The security that is sought in the amended motion is $193,000 (being $228,087 - $35,000 which security has already been provided).

17. [69]

    Although the defendants would be entitled to seek further security arising from the defensive cross claim it would be required to file which is estimated to be $27,555 to the preparation of evidence and $40,815 until the conclusion of the Hearing ([28] Cantrill 2), they are not pressing that amount.

18. [70]

    The defendants submitted that the $35,000 that has been provided so far as security is totally inadequate for the costs likely to be incurred in these proceedings. Paragraph [21] of Cantrill 2 deposes that most of this money has already been used.

19. [71]

    The defendants submitted that what they describe as seismic shifts in the proceedings from first security motion warrants the grant of further security.

Resolution

1. [72]

   On 21 July 2021 (nearly two years ago), an order was made that the plaintiff to pay the defendants’ $35,000 for security for costs. Prior to the hearing of this amended statement of claim, the plaintiff offered $20,000 as further security for costs. The first and third defendants seek $166,845 up until the conclusion and preparation of evidence and will incur another $68,870 defending the cross claim to the conclusion of the proceedings, through they are not pressing the lesser amount. That is an appropriate course to take as there will be some commonality the evidence pertaining to the statement of claim and cross claim.

2. [73]

   Counsel for the plaintiff agrees that the charge out rates for lawyers, special counsel and counsel are reasonable. There has been a material change in circumstances due to the filing of a complex statement of claim.

3. [74]

   According to the plaintiff, there is a “luxurious” approach to time and task, in particular, the defendant, who already have the relevant documents, say they need to troll through discovered Baldock and related proceedings that were largely extravagant and irrelevant. 90 hours of time were expended for the production of 3 witness statements and 42 hours of preparation time for the solicitors and 4 days for counsel.

4. [75]

   As to the filing of the statement of claim, Davies J allowed $35,000 as security for costs of the defence up until the completion of evidence. Most of that money has already been expended. The defence has not yet been filed. The authorities show that the amount of security ordered should be sufficient, but not a complete indemnity: Brundza v Robbie & Co (No 2) (1952) 88 CLR 171. The costing chart calculates costs that will be incurred on an indemnity basis.

5. [76]

   While the plaintiff seeks the amounts of security for costs to be given in tranches, the first and third defendants seek that one sum of security for costs be awarded to the completion of the proceedings. I favour the earlier approach. To award the larger sum may stifle the plaintiff’s proceedings.

6. [77]

   The main issue in dispute still remains the disbursement of moneys received by the plaintiff pursuant to a settlement deed, but the issues have been expanded to include the express and implied terms of the retainer, breach of fiduciary duty and failure to comply with Legal Profession Uniform Law 2014 (NSW). One important factor to bear in mind is that Mr Joukhador was the other party to the conversations with Mr Dennis that took place over a number of years.

7. [78]

   Party/party costs are normally allowed at around 70% of the costs claimed. I have taken into account that the parties may settle proceedings at mediation, as mediation has almost been agreed upon. The amounts claimed for discovery, preparation of witness statements and other preparations are excessive. The HIH litigation is past history. The parties came to an agreement as to costs in the Bookarelli litigation. Taking all this account, the amount I propose to allow for security for costs up until the conclusion of the preparation of evidence is 55% of the amount claimed. $166,845 x 55% equates to $91,764. I allow this amount.

Costs

1. [79]

   Costs are discretionary. Costs normally follow the event. The plaintiff is to pay the first and third defendant’s costs.

   1. (1)

      The plaintiff is to provide additional security by payment to the first and third defendants up to the conclusion of the preparation of evidence in the sum of $91,764 within 14 days.

   2. (2)

      The proceedings are to be stayed until security has been provided.

   3. (3)

      The plaintiff is to pay the first and third defendant’s costs.