Chiou v Wang [1995] FJHC 25; Hbc0466j.94s (27 January 1995)

IN THE HIGH COURT OF FIJI
(AT SUVA)
CIVIL JURISDICTION

CIVIL ACTION NO. HBC0466 OF 1994

BETWEEN:

GRACE CHIOU
of No. 7 Lane 25
Sung Teh Road, Taipei, Taiwan
Plaintiff

AND

JOHNNY WANG
of 40 Bouwalu Street,
Lautoka
First Defendant

FORTUNE TIMBER COMPANY LIMITED a
company incorporated in Fiji and
having its registered office at
40 Bouwalu Street, Lautoka
Second Defendant

FORTUNE GARMENT COMPANY LIMITED a
company having its registered
office at 40 Bouwalu Street,
Lautoka
Third Defendant

P. Sharma for the Plaintiff
C. B. Young for the Defendant

Dates of Submissions: 8th, 9th December, 1994,
17th January, 1995
Date of Supplementary Judgment: 27th January, 1995

SUPPLEMENTARY JUDGMENT
ON SECURITY FOR COSTS AND DAMAGES

On 31st October 1994 I delivered an interlocutory judgment dissolving the interim injunction I granted the Plaintiff on the 18th August 1994, this leaving the question of whether the Plaintiff should now provide any security for costs and damages. I took further submissions on this question from the parties, these having been received on the 8th and 9th of December 1994 and 17th of January 1995.

In their submission on behalf of the Plaintiff on this question the solicitors for the Plaintiff accept that the leading authority on the question is Procon (GB) Ltd v Provincial Building Co Ltd and others [1984] 2 ALL ER 368. They remark that the headnote to that case is "somewhat unclear" and say that it is important to remember that when using the word "indemnity" the Court meant it to refer only to party and party costs.

They say this is made plain by Cumming-Bruce L.J. who delivered the leading judgment of the Court in a passage at p.370 which they then quote and which is as follows:-

"It is important for a proper understanding of that passage in the judgment to bear in mind, as is clear from the preceding passage in the judgment, that when the judge used the phrase `grant an indemnity' he meant an indemnity to protect the party seeking security in respect of party and party costs only, and nothing in his judgment is to be understood as meaning that he was intending to grant an indemnity for anything else, eg solicitor and client costs, solicitor and own client costs and so on."

If the Plaintiff's solicitors mean that Procon Ltd decided that the Court could order security for costs only on a party and party basis and not for e.g. on an indemnity or solicitor-client basis I disagree.

I take Cumming-Bruce L.J. to be simply saying that the Judge in the Court below, Bingham J, awarded security for costs on a party and party basis and not on an indemnity basis on the particular facts of that case but that in an appropriate case a Court could order security to be paid on an indemnity or more generous basis.

As I said at p.30 of my earlier judgment the ratio of Procon (GB) Ltd is quite clear in my view, namely that the power of the Court to award security for costs is unrestricted and, as the headnote states, includes the power to order security if thought necessary on a full indemnity basis.

The Plaintiff's solicitors in further support of their argument quote from the beginning of the judgment of Griffiths L.J. at p.379 where he said:-

"This appeal requires the court to decide whether, on an application for security for costs under RSC Ord 23, r1(1), the court is entitled to award security for costs in the sum which the court estimates the applicant would recover on taxation on a party and party basis, or whether, at least in the Queen's Bench Division, the court is limited by a longstanding practice to awarding no more than two-thirds of that sum."

In my view it is wrong to interpret Griffiths L.J. as saying that the Court's power is limited to order security up to a sum it considers the Defendants may recover on taxation on a party and party basis only. I am satisfied that Lord Justice Griffiths meant his remarks only to refer to the judgment being appealed and did not intend to lay down a narrow rule as to the basis on which security for costs can be awarded.

In his short concurring judgment Stephen Brown L.J. the third member of the Court simply said that he agreed with the reasons given by Cumming-Bruce L.J.

The Plaintiff's solicitors then refer to my quotation from the judgment of Hirst J in "The Mito" (1987) 2 Lloyd's Law Reports 197 at p.198 which is on p.31 of my first judgment:-

"May I make it plain at the start that there is no doubt in my judgment that the Court has power at the time of either granting or extending a Mareva injunction to order security in support of the usual cross-undertaking, in other words to fortify the injunction by security in the manner which was ordered, for example, by Mr. Justice Roxburgh in the case of Baxter v. Claydon (1952) W.N. 376. In other words if the Court considers that the cross-undertaker, usually the plaintiff, might not be worth powder and shot if it be held that he is obliged to fulfil his cross-undertaking, the Court can strengthen the undertaking by requiring some sort of security."

The solicitors argue that since Hirst J. was affirming the Court's power to order security at the time of granting or extending a Mareva injunction and in this case I then dissolved the injunction, it follows that this Court cannot now seek to fortify the Plaintiff's undertaking.

This submission has an apparent simplicity which in my view is fallacious. In my judgment the Court here is entitled to test the sincerity of the Plaintiff by requiring her to make a payment into Court not only as security for damages but also for costs.

The amount thereof is always in the discretion of the Court.

In Aeronave S.P.A. and Anor v. Westland Charters Ltd (1971) 1 WLR 1445 the Court of Appeal held that Order 23 of the R.S.C equivalent to Order 23 of our High Court Rules gave the Court an undoubted discretion whether or not to order a Plaintiff ordinarily resident out of the jurisdiction to give security for costs when he brought an action within the jurisdiction because, as Lord Denning M. R. put it at p.1449:-

"It is just to do so. After all, if the defendant succeeds and gets an order for his costs, it is not right that he should have to go to a foreign country to enforce the order."

I respectfully apply Lord Denning's reasoning to the present case.

The Plaintiff resides abroad in Taiwan. If the Defendants should succeed at the trial and get an order for their costs which would one would expect would follow the event such an order would be useless to them as they could not enforce any judgment for costs in Taiwan.

In Fiji there is no provision as to the recognition of Foreign Judgments in the Foreign Judgments (Reciprocal Enforcement) Act Cap.40 or the Reciprocal Enforcement of Judgments Act Cap.39.

I also note that the Plaintiff has still not delivered any statement of claim. In my view therefore it is only reasonable that as evidence of her bona fides if she is to pursue her claim against the Defendants she must provide some security. The question is "How much?".

Each case must depend on its own facts. The Defendants submit that it would be reasonable to require the Plaintiff to pay into Court the sum of $120,000.00 in respect of any order for damages which they may obtain against the Plaintiff.

To answer this question I remind myself that although so far a statement of claim has not been delivered there is evidence, of course not yet subjected to cross-examination, that as a result of granting the Mareva injunction they have sustained some losses. These are set out in paragraphs 6-11 of the affidavit of the first named Defendant sworn on the 17th of November 1994 and I will not repeat them here. There is also the factor described by Griffiths L.J. in the Procon case at p.379 as "the unquenchable fire of human optimism".

Based on the present material and realising that should the circumstances warrant it a further application may be made for security I consider it would be appropriate at this stage to order the Plaintiff to pay into Court at the time of delivering the statement of claim which I further order to be no later than six weeks from the date of this judgment namely 10th March, 1995 the sum of $90,000.00 as security for damages.

This leaves the amount to be ordered as security for costs.

The Defendants initially submitted the amount of $50,000.00 as appropriate but did not give any details. At my request they have now provided a detailed itemised draft bill of party and party costs which I have considered. I am prepared to allow items 1-6, 11, 13-19(a) and 24(a) at this stage.

The other items which I disallow at the moment refer to instructions for interrogatories and answers, the taking of accounts, taxation of costs, instructions for execution, service fees and telephone, fax and filing fees all of which may never be required. If they are, the application may be renewed.

On this basis I order the Plaintiff in addition to pay into Court the sum of $407.00.

Despite the submission of the Defendants' counsel I do not consider that at this stage at least an order for costs on an indemnity basis is justified although, of course the situation may change and if it does a further application may be made by the Defendants.

The order of the Court is therefore that the Plaintiff pay into Court the sum of $90,000.00 as security for damages and $407.00 as security for costs within six weeks of the date of this judgment namely 10th March, 1995.

JOHN E. BYRNE
J U D G E

Cases referred to in Judgment:

Procon (GB) Ltd. v. Provincial Building Co. Ltd. and Others [1984] 2 ALL ER 368
"The Mito" [1987] 2 Lloyd's Law Reports 197 at p.198
Aeronave S.P.A. and Anor v. Westland Charters Ltd. [1971] 1 WLR 1445

Legislation referred to in Judgment:

Foreign Judgments (Reciprocal Enforcement) Act Cap. 40
Reciprocal Enforcement of Judgments Act Cap. 39

The Following Additional Cases were referred to in Argument:

EMI Records Ltd. v. Ian Cameron Walllace Ltd. and another [1982] 2 ALL ER 980
High Court Rules O.29 r.10 & r.11

HBC0466J.94S