Kellapan v Karan [2012] FJHC 899; HPP Action 37.2011 (28 February 2012)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

HPP Action No. 37 of 2011

IN THE ESTATE of SHANKAR KELLAPAN of 535 Ratu Mara Road, Samabula, Suva.

BETWEEN:

RAKESH CHAND KELLAPAN, RITA ANGELA DEVI, ASHA LATA all children of Shankar Kellapan of Nasinu, New Zealand and Canada respectively and SURESH CHANDRA of Transville Street, Namaka, Nadi, Solicitor as the sole executor, trustee an beneficiary for the Estate of Usha Kiran Chandra of Transville Street, Namaka, Nadi, Businesswoman, deceased, testate.
PLAINTIFFS

AND:

YOGESH KARAN of 535 Ratu Mara Road, Samabula, Suva, Businessman.
DEFENDANT

BEFORE: Master Deepthi Amaratunga

COUNSEL: Ms Swami A for the Plaintiff
Ms. Archana Sharan for the Defendant

Date of Hearing: 14th February, 2012
Date of Ruling: 28th February, 2012

RULING

1. INTRODUCITON
   

1. The Plaintiffs are seeking an order for the removal of the Defendant as the trustee of the estate of late Shankar Kellapan where the Defendant is also a beneficiary as to minority share of the property. The Plaintiff's are the beneficiaries for the balance majority share of the property. The property consists of a house and property at Ratu Mara Road, Samabula. Plaintiffs are seeking the removal of Defendant as trustee as he was unable to administer in the best interest of the beneficiaries, by providing accounts and finalization of the distribution of the property among the beneficiaries, instead the Defendant is allegedly enjoying to fruits of the property in detriment to the other beneficiaries. 2nd and 3rd Plaintiffs are residing outside jurisdiction, but they are also beneficiaries of the said property where they allege that they have been deprived of the benefits derived from it for years and they allege this application is made to delay the proceedings by the Defendant who is enjoying the property and would benefit from further delay. The 2nd and 3rd Plaintiffs as beneficiaries of the property in issue in this action have property in Fiji and also considering the merits of the case would not be justified in granting security for cost.
   

2. LAW AND ANALYSIS
   

2. The Defendant applies by Summons dated 4th November 2011 for the following orders:
   
   1. That the Plaintiff do within seven (7) days of the hearing of this summons and orders being made in terms, do within seven days to give security for costs to the Defendant in the sum of $25,000.00 or any such deem just and fit by the Court or "a bank bond";
      
   2. That if any such security is fixed all further proceeding be stayed pending its compliance;
      
   100. Any other orders that this Court may deem just and expedient in the circumstances.
        
3. The Application is made pursuant to Order 23 of the High Court Rules and is supported by one affidavits filed on behalf of the Defendant sworn on 4th November 2011 and an Affidavit in Response by the Plaintiff himself sworn on 6th December 2011.
   
4. Order 23 Rule 1 of the High Court Rules provides as follows:
   

SECURITY FOR COSTS

Security for costs of action

"1 (1) Where, on the application of a defendant to an action or other proceeding in the High Court, it appears to the Court –

1. That the Plaintiff is ordinarily resident out of the jurisdiction; or
   
2. That the Plaintiff (not being a Plaintiff who is suing in a representative capacity) is a nominal Plaintiff who is suing for the benefit of some other person and that there is reason to believe that he will be unable to pay the costs of the Defendant if ordered to do so; or
   

100. Subject to paragraph (2), that the plaintiff's address is not stated in the writ or other originating process or is incorrectly stated therein, or
     

4. That the Plaintiff has changed his address during the course of the proceedings with a view to evading the consequences of the litigation;
   

Then if, having regard to all the circumstance 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)

So, mere fact of residence alone is not sufficient for the award of security for cost. The court has to consider all the circumstances.

5. The White Book (1999) Volume 1 at page 431 (23/3/5) which states as follow;
   

"The ordinary rule of practice is that no order for security for costs will be made if there is a co-plaintiff resident within the jurisdiction (Winthorp v. Royal Exchange Assurance Co. (1755) 1 Dick. 282; D' Hormusgeev Gray (18820 [1882] UKLawRpKQB 157; 10 Q.B.D. 13). The ordinary rule, however, is subject to the genereal discretion of the Court; it is not an unvarying rule. Its application is appropriate where the foreign and English co-Plaintiffs rely on the samecause of action, where each of the Plaintiff is bound to be held liable for all of such costs as may be ordered to be paid by any of the Plaintiffs to the Defendant at the conclusion of the trial, and where one or more of the Plaintiffs has funds within the jurisdiction to meet such liability." (emphasis is added)

6. The Defendant has cited the case of York Properties Ltd v Fiji Development Bank [2009] FJHC 373 (13th October, 2009) where the court has awarded security for cost to for two plaintiffs where the third plaintiff was residing in Fiji. This decision can be clearly distinguishable on the following grounds
   
   1. The Plaintiffs in that case did not file a statement of claim, but an endorcement of claim seeking an injunctive relief against the Bank and the court did not have the opportunity of statement of claim and the statement of defence to consider the merits of the case. In that case at paragraph 24 it was stated 'Further, the Plaintiff has yet not filed its statement of claim. Once that is filed the basis of the reliefs sought would be apparent.' So the court was unable to ascertain the strength of the claim and the merits of the claim was not considered.
      
   2. In the said case the security for cost was sought against two companies that were not registered in Fiji and not having any assets in Fiji, whereas only one company (3rd plaintiff) was residing in Fiji and its financial status was not available to court. The court held in that case at paragraph 40 as follows
      

'40. I am of the judgment tht the first two plaintiff's who are incorporated outside the jurisdiction of Fiji can point to no assets within the jurisdiction which are clearly its own and not the subject of dispute they depend on the third plaintiff's assets which are also not free and available in the event of the verdict adverse ot it. In the event it is just to order security for costs in favour of a mortgagee whose rights are hardly interferes with by the courts but yet to be determined in this case against the plaintiff's rights under the Deed of Loan.' So it is clear that this case cannot be applied to the present case at all. The Defendant is only a beneficiary to minority share of the property where as the Plaintiffs are beneficiary to remaining majority of the property and the property is free an available and in any event the share of the Plaintiffs would be available for satisfaction of any order of the court.

So the court was not satisfied as to the cost where the Plaintiffs sought injunctive relief against the Defendant.

3. The subject matter of the action itself is an estate and the property is involved have sufficient interests in Fiji and if the costs are ordered against the 2nd and 3rd Plaintiffs that can be easily recoverable from their share of the property, for which they will be entitled. No dispute as to the entitlements of the beneficiaries are reaised. The Plaintiffs are entitled for their share in the property and the Defendant cannot deny that as he is only a trustee of the property who has enjoyed it for years without any distribution in terms of the Will of the deceased. No issue of trustee and beneficiary was dealt in the said case, as oppose to the matter before me.
   
4. In the said judgment has not considered the Winthorp v. Royal Exchange Assurance Co. (1755) 1 Dick. 282; D' Hormusgeev Gray (18820 [1882] UKLawRpKQB 157; 10 Q.B.D. 13) and the general principle stated in the White Book. The position in the said case and the circumstances cannot be equated to the case before me. The security for costs was ordered on the verge of an impending injunctive relief by Plaintiffs resident outside – jurisdiction where the assets of the remaining Plaintiff who was resident in Fiji was not available to the court, at the time of the determination.
   
5. In the case before me the Defendant is enjoying the property in issue as the trustee of the estate, and there is no evidence of the benefits derived from that being distributed to the other beneficiaries and or distribution of its rights to the beneficiaries and finalization of the accounts of the estate upon distribution. While enjoying the all the benefits of the property for years, when the beneficiaries sought relief from court, the Defendant is trying to obtain further security when there is already property in the hands of the Defendant where Plaintiff have majority share, as the trustee who has not made any effort either to distribute it or submit the accounts of it for years, while enjoying the benefits deriving from it.
   

For the above reasons I can clearly distinguish the above mention case from the case before me on facts as well as on law and would not inclined to follow that case as it should be confined to the special circumstances of that case where injunctive relief was sought on an endorsement of claim and the court did not have the benefit of the financial status of the other Plaintiff company that was resident in Fiji.

7. The White Book (1999) further at page 429 – 430 (23/3/3) of the White Book provides that;
   

"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 68 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).

8. So, it is clear that mere fact the Plaintiffs are resident outside the jurisdiction will not itsef qualify the award of secuirty for cost though an application can be made to the court when a Plaintiff is not resident within the jurisdiction. The above rules clearly provide the court with discretion to either to award or not to award security for costs considering the circumstances of the case.
   
9. The Affidavit of the Defendant alleges that the 2nd and 3rd Plaintiff resides overseas and the 1st Plaintiff does not seek to cooperate on the most issues concerning the estate of Shankar Kellapan and the 4th Plaintiff's claim is secondary to other Plaintiffs but in the analysis of the materials before me it is clear that they all are beneficiaries of the estate. In the he Affidavit in Opposition of the Plaintiffs' allege that the allegatons raised by the Defendant is denied by the Plaintiff and that the 4th Plaintiff claim is not secondary to other Plaintiff's and further states that the Plaintiff's has the substantial claim both equitable and beneficial and there is a genuine grievance against the Defendant and there is very possibilty for the Plaintiff's to succeed in their claims. I cannot decide on the success of the matter at this stage, but the claim for the Plaintiffs cannot be dismissed as without merit.
   
10. There is no denial that the Plaintiffs are beneficiaries of the Estate, the Defendant has not denied the same, as Trustee of the Estate the Defendant is required to keep accounts and also provide the same to the beneficiaries and also act in the best interest of the beneficiaries and since he was appointed as an executor, he has to distribute the property in accordance with the Will of the deceased. The Defendant cannot be the trustee of the property indefinitely and his appointment was also done in accordance with the Will and the trustee cannot enjoy the property without distributing the rights over the estate to the beneficiaries.
    
11. That the 1st and the 4th Plaintiff reside with in the jurisdiction and all the Plaintiff's are the beneficiaries of the Estate of the Shankar Kellapan thus the claim is as per their interest in the said Estate for removal of Defendant as trustee for the failure to perform the duties. The Plaintiffs' application is made in pursuant to the Section 73 of Trustee's Act and also in terms of Section 35 of the Succession, Probate and Administration Act.
    
12. In the case of Kumar v Nasinu Land Company Ltd [2011] FJHC 519 where the security for cost issue was delat by the court in which an application was filed by the Defendant for security for costs on the basis that the Plaintiff resided out of jurisdiction of Court. The court struck out the said application relying that the award for security was a discretionarily power. The court stated at page 3 as follows;
    

"Fiji's Order 23 is identical to te former Order 23 ofthe 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.

And further referred to:

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 have regard to all the circumstances of the case. Security cannot now be ordered as of course from a foreign Plaintiff, but only of 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 Triplan Ltd [1973] QB 609 at 626 – 627; [1973] 2 A; ER.

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 succcess. 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 cnsider 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."

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 gainst him, should be allowed to proceed without making funds available within the jurisdiction against which such an order can be executed."

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 make it difficult for foreign plaintiffs sue, but to protect defendants."

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 requires 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)."

The rationale in award of security for cost was also described in Sharma v Registrar of Title [2007] FJHC 118, HBC 351. 2001 913 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."

100. CONCLUSION
     

13. The Court has a discretion in awarding the security for costs. The purpose and the rationale for the award it to have sufficient funds in the local jurisdiction to recover from a Plaintiff who is residing outsided the jurisdiction. In this case out of the four Plaintiffs only two of them are residing outside. The calim against the Defendant is regarding an estate of a deceased where the Plaintiffs are beneficiaries for the majority share whereas the Defendant is only beneficiary to a minority share. Though the 2nd and 3rd Plaintiffs are residing outside the jurisdiction they are beneficiaries of the estate for which the subject matter deals in this case and that subject matter is in Fiji. So, clearly there is property in Fiji, to recover the costs if needed from the 2nd and 3rd Plaintiffs. The claim is for the removal of the Defendant as the trustee from the estate and for him to provide the accounts and for appointment of a new trustee for the administration. The Plaintiff's have jointly sued the Defendants and all of them are seeking the same relief. In the circumstances this application for security for cost should not be ordered against 2nd and 3rd Plaintiff's only on the basis of their residence. There is property situated in the jurisdiction to recover costs and the 2nd and 3rd Plaintiffs are seeking the same relief as other Plaintiffs. In the circumstances this application for security for cost should be struck off and the 2nd and 3rd Plaintiffs are also granted a cost for this application in the sum of $1000 assessed summarily, to be paid by the Defendant within 14 days.
    

4. FINAL ORDERS
   

1. The summons for security for cost is struck off.
   
2. The 2nd and 3rd Plaintiffs are awarded a cost of $1,000 assessed summarily to be paid by the Defendant within 14 days.
   

100. The registry is directed to list this matter before a judge for hearing without delay.
     

Dated at Suva this 28th day of February, 2012.

Mr. Deepthi Amaratunga
Master of the High Court
Suva