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High Court of Fiji |
IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION
Civil Action No. HBC 302 of 2009
BETWEEN:
RAJENDRA KUMAR (f/n Bansraj) of 5 Lanai Avenue, Manukau Heights, New Zealand, Surviving Executor and Trustee of the Estate of Bansraj (f/n Ranjit)
Deceased
PLAINTIFF
AND:
NASINU LAND COMPANY LIMITED a limited liability company having its registered office at Suite 3 & 4, 53 Carnavon Street, Suva.
DEFENDANT
BEFORE: Master Deepthi Amaratunga
COUNSELS: Mr. M. Nand of NANDS LAW for the Plaintiff
Mr. Shelvin Singh of PARSHOTAM & CO. for the Defendant
Date of Hearing: 27th July, 2011
Date of Ruling: 9th September, 2011
RULING
A. INTRODUCTION
1. This summons for the Security for cost was made by the Defendant on 31st March, 2011. The acknowledgment of service of writ of summons was filed on 24th September, 2009 but so far no statement of defence was filed. The Plaintiff has instituted this action as the surviving executors and trustee of the estate of late Bansraj. The action is for specific performance seeking a transfer of a certain property, to the estate of the Deceased.
B. RELEVANT LAW AND ANALYSIS
2. Order 23 Rule 1 of the High Court Rules provides as follows:
"ORDER 23
SECURITY FOR COSTS
SECURITY FOR COSTS OF ACTION
Order 23 Rule 1 of the High Courts 1988 provides:
"1(1) Where, on the application of a defendant to an action or other proceeding in the High Court, it appears to the Court –
then if, having regard to all the circumstances of the case, the Court thinks it just to do so, it may order the plaintiff to give such security for the defendant's costs of the action or other proceeding as it thinks just." (emphasis is added)
3. Fiji's Order 23 is identical to the former Order 23 of the English Supreme High Court Rules. The English Supreme Court Rules were repealed and replaced in 2000 by the new Civil Procedure Rules ("CPR") which has not been followed in Fiji. The principles applying to security for costs are well-established in Fiji and English law.
4. The affidavit in support of this application, dated 31st March, 2011 for security for cost was made by a legal executive of the Defendant's lawyer and state that
a. The Plaintiff is not resident in Fiji
b. Plaintiff does not have any assets in Fiji.
c. The Defendant will be unable to enforce any adverse orders as to costs made against the Plaintiff after the trial as he is a resident outside Fiji.
5. The said affidavit of support under the heading 'Merits of Claim' also stated:
'I verily believe that the Plaintiff's claim is without merit. The statement of claim is without specific particularity and is made up of general pro-forma statement of fact'
6. The Defendant has not stated any reason as to why it has not filed a statement of defence, though it filed an acknowledgement of service on 24th September, 2009.
7. Although Security may be ordered against a foreign resident plaintiff, there is no inflexible or rigid rule that security must be ordered, as it is a matter of discretion.
8. Para 23/3/3 of the White Book of 1999 says in regard to foreign plaintiffs-
"In exercising its discretion under r.1(1) the Court will have regard to all the circumstances of the case. Security cannot now be ordered as of course from a foreign plaintiff, but only if the Court thinks it just to order such security in the circumstances of the case. For the circumstances which the Court might take into account whether to order security for costs, see per Lord Denning MR in Sir Lindsay Parkinson & Co Ltd v Triplan Ltd [1973] QB 609 at 626-627; [1973] 2 A;; ER.
9. In Sir Lindsay Parkinson & Co. Ltd v Triplan Ltd [1973] 2 All ER 273 at pop. 285-286, Lord Denning Mr. described the factors as follows-
"So I turn to consider the circumstances, Counsel for Triplan helpfully suggests some of the matters which the court might take into account, such as whether the company's claim is bona fide and not a sham and whether the company has a reasonably good prospect of success. Again, it will consider whether there is an admission by the defendants on the pleadings or elsewhere that money is due. If there was a payment into court of a substantial sum of money (not merely a payment into court to get rid of a nuisance claim), that too would count. The court might also consider whether the application for security was being used oppressively – so as to try and stifle a genuine claim. It would also consider whether the company's want of means has been brought about by any conduct by the defendants, such as delay in payment or delay in doing their part of the work."
10. The purpose of the discretion to order for costs against a foreign plaintiff was described in Corfu Navigation Co. V. Mobil Shipping Co. Ltd [1991] 2 Lloyd's Rep. 52 (p. 54 Lord Donaldson MR) –
"The basis principle underlying R.SC, 0.23, r.1(1)(a) is that it is prima facie unjust that a foreign plaintiff, who by virtue of his foreign residence is more or less immune to the consequences of an order for costs against him, should be allowed to proceed without making funds available within the jurisdiction against which such an order can be executed."
11. At p. 55, Lord Donaldson MR further said –
"In the context of the present appeal it has to be remembered that the purpose of O.23, r.1 is not to make it difficult for foreign plaintiffs sue, but to protect defendants."
12. Consistently with this, para 23/3/4 of the White Book of 1999 states that while security for costs is not ordered as a matter of course –
"On the other hand, as a matter of discretion, it is the usual ordinary or general rule of practice of the Court to require the foreign plaintiff to give security for costs, because it is ordinarily just to do, and this is to, even though by the contract between the parties, the foreign plaintiff is required to bring the action in England (Aeronave SP v Westland Ltd) [1971] 1 WLR 1445; [1971] 3 All ER 531, CA)."
13. The purpose of the rule and the prima facie presumption in favour of ordering security for costs has been recognized and applied in Fiji. In this Court in Furuuchi Suisan Company Ltd v Tokuhisa [2009] FJHC 194; Civil Action 95. 2009 (9 September 2009), Byrne J said –
"31. The first case I mention is Porzelack (UK) Ltd, (1987), 1 All ER 1074 where Sir Nicolas Browne Wilkinson V.C. said at p. 422-423: The purpose of ordering security for costs against a plaintiff ordinarily resident outside the jurisdiction is to ensure that a successful defendant will have a fund available within the jurisdiction of this court against which it can endorse the judgment for costs. It is not, in the ordinary case, in any sense designed to provide a defendant with security for costs against a plaintiff who lacks funds. The risk of defending a case brought by a penurious plaintiff is a s applicable to plaintiffs coming from outside the jurisdiction as it is to plaintiff's residents within the jurisdiction.
" ...............Under Order 23, r1(1)(a) it seems to me that I have an entirely general discretion either to award or refuse security, having regard to all the circumstances of the case. However, it is clear on the authorities that, if other matters are equal, it is normally just to exercise that discretion by ordering security against a non-resident plaintiff. The question is what, in all the circumstances of the case, is the just answer."
(emphasis is added)
The identical quotation of Sir Nicolas Browne Wilkinson V.C in the case of Portzelack K. G. V Porxelack (U.K.) Ltd [1987]1 WLR 420, 422-423, was again quoted in the case of Simon Lester Stock (an executor and trustee in the estate of KailashPati Stock V Rachana Mala In the High Court of Fiji at Suva HPP 25 of 2006 (Probate Jurisdiction) decided on 19th April, 2010 by Justice Anjala Wati in refusing an application for security for cost.
14. The rationale in award of security for cost was also described in Sharma v Registrar of Titles [2007] FJHC 118, HBC 351. 2001 (13 July 2007), where Master Udit elaborated further –
"[3] The aforementioned rule, vests the court with an unfettered discretion to order security for costs. All this rule entails to protect is the risks to which an applicant may be exposed to for recovering of costs in a foreign jurisdiction. The quantum of costs comparatively in Fiji is not relatively high although fairly substantive within the jurisdiction which is worth recovering. Execution of costs abroad where the litigation costs are much higher will render the exercise as wholly uneconomical. Be that as it may, ultimately the issue is not that the respondent will not have the assets or money to pay the costs or that the law of the foreign party's country not recognizing an order of our court, and/or enforcement of costs order even be it under any legislation similar to our Reciprocal Enforcement of Judgments Act, (Cap 39), but it is also the extra steps which will be needed to enforce any such judgment outside the jurisdiction. Indeed, in will not be an irrefutable presumption to infer that an extra burden in terms of costs and delay, compared with the equivalent steps that could be taken in Fiji, will be an inevitable corollary. The obvious expenditure which comes to my mind is the engagement of an attorney and the conundrum of registering an order in the foreign jurisdiction before it can be enforced."
15. The White Book (1999) further discussed the development of the law till 1999, which is applicable to Fiji .At page 429-430(23/3/3) of the White Book
"Discretionarily power to order security for costs (rr1-3) The main and most important change effected by this Order concerns the nature of the discretion of the Court on whether to order security for costs to be given. Rule 1(1) provides that the Court may order security for costs 'if, having regard to all the circumstances of the case, the Court thinks it just to do so'. These words have the effect of conferring upon the Court a real discretion, and indeed the Court is bound, by virtue thereof to consider the circumstances of each case, and in the light thereof to determine whether and to what extent or for what amount a plaintiff (or the defendant as the case may be)may be ordered to provide security for costs. It is no longer, for example, and inflexible or rigid rule that plaintiff resident abroad should provide security for costs. In particular, the former order 65 r 6B which had provided that the power to require a plaintiff resident abroad, suing on a judgment or order or on a bill of exchange or other negotiable instrument, to give security for cost was to be in the discretion of the Court, has been preserved and extended to all cases by r.1(1).
16. So, it is clear that mere fact the Plaintiff is a resident outside the jurisdiction will not qualify the award of security for cost though an application can be made to the court when the Plaintiff is not resident within the jurisdiction.
17. In the present application the Plaintiff has filed the writ of summons for specific performance to obtain a transfer of land to the estate of late Bansraj. So the Plaintiff is suing to protect the interest of an estate and states as follows in the statement of claim
"the Defendant has persistently refuse to Execute Transfer Documents while on Notice that the Deceased during his lifetime and his children were at all material time in possession and continuous occupation of the said property and there is evidence of payments towards the purchase of the property during the lifetime of the Deceased and by the Deceased's children (The receipts and balance statements of payments mad and arrears will be adduced in this honorable Court during trial."
18. The Plaintiff is alleging occupation of the property from 1969 and also approval of a dwelling granted to the deceased to build a house in the said premises and continuous occupation and payments of rates to local body for the said building.
19. The Defendant has not denied these facts by filing a statement of defence or has not refuted these facts in the affidavit in support that was filed in this summons for security for cost. Though, the merits of the case cannot be decided at this stage, it is equally important to consider the pleadings in deciding 'all the circumstances of the case'. This is in line with the finding of Justice Bryne's decision and Justice Anjala Wati's decision where their Lordships quoted with authority the decision of Sir Nicolas Browne Wilkinson V.C that 'However, it is clear on the authorities that, if other matters are equal, it is normally just to exercise that discretion by ordering security against a non-resident plaintiff.' In order to find whether the 'other matters are equal', the court has to consider all the matters that are before the court at the time of the application for security for cost.
20. In this application for security for cost the Writ was filed in 2009 and though an acknowledgement of service was filed on 24th September, 2009 no statement of defence was filed and on 31st March, 2011 the present application for the security for cost was filed.
21. In Kadavu Shipping Company Ltd v Dominion Insurance Ltd [2009] HBC 508 of 2006, Master J Udit held that in determining what circumstances the court needs to consider when exercising such discretion, regard must be given to the "strength or bona fides of the claim". In referring to Porzelack, Master J Udit said:
"Under this criterion, the respondent is to show that it has a prima facie regular claim, which discloses a reasonable cause of action. It is not the court's duty to divulge into a detailed analysis of the merits of the case unless it can be clearly demonstrated that there is a relatively high degree of success or failure. Once it is established, the Court is to proceed on the basis that the claim is bona-fide".
22. In Brzoska v Hideaway Resort Ltd[2009] HBC 347 of 2005, Justice Sosefo Inoke held that in determining what circumstances the court needs to consider when exercising such discretion, regard must be given to "the Plaintiff's chances of success".
23. In Kadavu Shipping Company, Master J Udit stated that in the exercise of the discretion consideration of whether an application for security for costs is "used oppressively to stifle a bona fide cause of action" has to be looked in to before an award of security for cost is ordered. This is another reason why a court should not award a security for cost merely because a plaintiff is a foreigner.
24. The Defendant has waited more than two years to make this application even without filing its statement of defence and what clearly prompted them to file this application after more than one and half years from the acknowledgement of writ without taking even filing a statement of defence, needs to be considered. An application should not be utilized to delay the proceedings and the inordinate delay in making this application, without taking any step would not favour its present application. It was also held in Kadavu Shipping Company Ltd v Dominion Insurance Ltd [2009] HBC 508 of 2006, Master J Udit that the security for cost should not be utilized in an oppressive manner, and considering facts of this case the present application should be refused as the court is required to consider 'other matters' as the Defendant has not filed a statement of defence for more than one and half years from the acknowledgment of service.
25. It is also noteworthy to quote the following passage of Justice Anjala Wati in the case of Kailash Pati Stock V Rachana Mala In the High Court of Fiji at Suva HPP 25 of 2006 (Probate Jurisdiction) decided on 19th April 2010
"An order for payment of security for cost would only burden the trustee to find money on his own and if the trustee is unable to do so, the proceedings would be stultified. I do not wish to create the financial hurdle on the trustee so that he foregoes the claim and the matter is determined without merits."
26. Considering the above circumstances and the allegations contained in the pleadings, which are yet to be controverted by the Defendant it is not fit and proper instance to exercise the discretion in favour of the Defendant to grant a security for cost.
D CONCLUSION
27. The Defendant has not filed a statement of defence and nothing was done by the Defendant in this action other than filing an acknowledgement in 2009, before filing this application for security for cost in 2011. Under the circumstances it is clear that the application for security for cost should not be utilized to oppress the claim of the plaintiff, who is only the executor of the deceased and under the circumstances of this case the present application should be refused and the cost of this application will be plaintiff's cost in the cause.
The Court Orders as follows
Dated at Suva this 9th day of September, 2011
Mr. Deepthi Amaratunga
Acting Master of the High Court
Suva
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