Patel v Manohan Aluminium Glass (Fiji) Ltd [1997] FJHC 176; Hba0019j.97s (14 November 1997)

Fiji Islands - Patel v Manohan Aluminium Glass (Fiji) Ltd - Pacific Law Materials

IN THE HIGH COURT OF FIJI

AT SUVA

APPELLATE JURISDICTION

CIVIL APPEAL NO. 0019 OF 1997

BETWEEN:

BABU BHAI PATEL
Appellant

AND:

MANOHAN ALUMINIUM GLASS (FIJI) LIMITED
Respondent

Mr. V. Kapadia for the Appellant
No appearance for the Respondent

JUDGMENT

In this appeal which counsel for the appellant correctly says '... lies within a very small compass', the appellant appeals against the order of the Magistrate Court, Suva wherein the appellant was ordered: "(to) deposit into Court the sum of $500.00 being security for costs within 14 days."

I note from the certified record of proceedings that the case is part-heard and therefore will limit myself to the bare essentials. The brief background to the order appealed against may be summarised as follows: After the evidence of the appellant was concluded, the Court record indicates that the trial magistrate, of her own initiative, observed:

"Court seeing that witness resides out of Fiji, I am minded to give an order for security for costs."

Thereafter the appellant was resworn and examined as to his real and liquid assets within the Court's jurisdiction and the case adjourned for 'ruling on security for costs'.

On 25th July 1997 the trial magistrate delivered a short 4-page Interim Ruling the material part of which reads:

"Having heard the plaintiff's evidence and taking into account also the delays in finalising this case and the nature of the proceedings I order that the plaintiff do deposit a sum of money into Court for Security for Costs."

No amount was fixed however, this detail being left to counsels to agree.

Unfortunately no agreement could be reached between counsels, and despite the '(appellant) insisting on (paying) the sum of $185.00 as security', the trial magistrate 'having considered the entire circumstances of this case and the inordinate delay in prosecuting this claim ...', fixed the sum at $500.00 on 11th August, 1997.

A fortnight later on 25th August 1997 the appellant filed a Notice of Appeal containing the following single ground:

"1. That the Learned Magistrate erred in fact and in law in awarding a security for costs in the sum of $500.00 against the Appellant/Plaintiff."

At the hearing of the appeal, despite being served with a Notice of Hearing, counsel for the respondent did not appear and the hearing proceeded in his absence. Counsel for the appellant began his submissions by conceding that under Order XXXIII rule 4 of the Magistrate Court Rules the trial magistrate was legally entitled 'on (her) own motion' to require the appellant to give security for costs.

However, in light of the appellant's undisputed testimony of his ownership of a valuable real estate asset in Fiji; his continuing financial interests and active participation in an operating wholesale business in the country and his regular visits to Fiji, counsel submits that security for costs ought not, in justice, have been required from the appellant who, although ordinarily resident in New Zealand, had a real, substantial and continuing

No authority was cited in support of the above submission but there exists early dicta of Thesiger L.J. in Redondo v. Chaytor (1879) 40 L.T. 797 which tends to support it where the learned judge said at p.799:

"... if a plaintiff who is permanently resident out of the jurisdiction, has property within the jurisdiction which can be made subject to the process of the court, in such a case, the reason of the rule being with drawn, the rule gives way, and the court will not order security to be given."

(See also: per Bowen L.J. in Ebrard v. Gassier [1884] UKLawRpCh 266; (1884) 28 Ch.D. 232 at 235 and the judgment of Greer L.J. in Kevokian v. Burney (No.2) (1937) 4 All E.R. 468 at 469C)

In the present case however the trial magistrate correctly noted that the appellant's property was not unencumbered; had not been rented out since March 1997; and indeed, the appellant 'was not even sure whether mortgage repayments were up to date or not'. Quite plainly once it had been established that the appellant was not ordinarily resident in Fiji, the 'onus' shifted to him to satisfy the trial magistrate that he came within the above-mentioned 'exception' and clearly he failed to discharge that 'onus'.

Alternatively, counsel for the appellant submits that the trial magistrate erred in fixing the quantum at $500.00 without having regard to the likely party/party costs so far incurred in the case. In counsel's words '$500 seemed like a nice pumb round figure plucked out of the air and devoid of any reality' (the 'quantum' argument).

Turning then to the 'discretion' argument, the discretion given to the trial magistrate under Order XXXIII r.4 of the Magistrate Court Rules to require a plaintiff who does not ordinarily reside in Fiji to give security for costs, is entirely unfettered and is clearly intended to guard against the possibility of a successful defendant not being able to recover his costs in the event of the plaintiff absconding before judgment.

Therefore, in the absence of any suggestion of bad faith, improper purpose or 'Wednesbury' unreasonableness, the trial magistrate's order for security for costs must be and is hereby upheld.

As for the 'quantum' argument, counsel for the appellant states that a tabulated estimate of party/party costs calculated on the lower scale, was prepared and provided for the assistance of the trial magistrate. The estimate clearly showed that costs amounting to $185.00 would have been incurred by the respondent up to the beginning of August 1997. An identical table was provided to this Court at the hearing of the appeal.

Unfortunately, the estimate appears to have been ignored in the trial magistrate's order fixing the quantum and, in doing so, counsel submits, the trial magistrate fixed a wholly disproportionate and unreasonable amount.

In T. Sloyan & Sons (Builders) Ltd. v. Brothers of Christian Instruction (1974) 3 ALL E.R. 715, at p.720 Lane J. whilst bemoaning the absence of a 'ready guide' in the case before him, referred with approval to a similarly-worded guideline in the 'White Book' which included the following additional sentence:

"It is of great convenience to the court to be informed what are the estimated costs, and for this purpose a skeleton bill of costs usually affords a ready guide."

Order XXXIII r.2 provides that:

"All questions relating to the amount of costs shall, unless specially referred for taxation, be summarily determined by the Court."

and rule (1) defines 'costs' as including:

"... the whole of the expenses necessarily incurred by either party on account of any cause or matter ... including the expenses of summoning and of the attendance of the parties and witnesses and of procuring copies of documents, the fees of court, ..."

In this latter regard it is significant that counsel's tabulated estimate does not include 'court fees' incurred by the respondent in defending the action.

Having said that however Halsbury's Laws of England Vol. 37 provides some guidance in paragraph 307 entitled Amount of Security, where it states:

"The amount of security for costs ordered to be given is in the discretion of the court, which will fix such sum as it thinks just to do so, having regard to all the circumstances of the case. It is not the practice to order security for cost on a full party and party, still less on an indemnity basis. In the case of a plaintiff resident out of the jurisdiction the more conventional approach is to fix the sum at about two-thirds of the estimated party and party costs up to the stage of the proceedings for which security is ordered, but there is no hard and fast rule."

In light of the above and considering the absence of any reference to counsel's tabulated estimate and the absence of any explanation as to how she arrived at the figure of $500 which is equivalent to one sixth of the appellant's total claim in the Magistrate Court, I uphold counsel's submissions in this regard.

Doing the best I can with the information available and mindful of counsel's offer at the hearing of the appeal the sum fixed for security for costs is reduced to $250.00 payable within 14 days from the date hereof. Subject to the above reduction the appeal is dismissed and the original file is returned to the Magistrate Court for continuation of the hearing.

D.V. Fatiaki
JUDGE

At Suva,
14th November, 1997.

Hba0019j.97s