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Wati v Wati [2016] FJHC 189; HBC144.2014 (24 March 2016)

IN THE HIGH COURT OF FIJI
WESTERN DIVISION
AT LAUTOKA


CIVIL JURISDICTION


CIVIL ACTION NO. HBC 144 of 2014


BETWEEN :


PRABHA WATI as Administratrix of the Estate of Vijay Singh of 14 Twekesbury St chipping Norton, Sydney, Australia 2170, Insurance Broker, Deceased, Intestate.
PLAINTIFF


AND :


SATYA WATI as Administratrix of Estate of Shiv Charan of 83 Tavewa Avenue, Lautoka.
1st DEFENDANT


AND :


PETER JOHN RAM NARAYAN of 83 Tavewa Avenue, Lautoka
2nd DEFENDANT


AND :


THE DIRECTOR OF LANDS Government Buildings, Suva.
3rd DEFENDANT


AND :


ATTORNEY GENERAL, Attorney Generals Chambers, Lautoka.
4th DEFENDANT


Mr. Anil Jatinder Singh for the Plaintiff
Mr. Roopesh Prakash Singh for the First and Second Defendants
Mr. John Samson Pickering for the Third and Fourth Defendants


Date of Hearing:- 13th November 2015
Date of Ruling :- 24th March 2016


RULING


(A) INTRODUCTION

(1) The matter before me stems from the First and Second Defendants Summons dated 16th July 2015, made pursuant to Order 23, rule 1 (a) of the High Court Rules, 1988 and inherent jurisdiction of the Court seeking of security for costs against the Plaintiff on the following grounds;

AND


❖ The Plaintiff has no assets within the jurisdiction

(2) The Summons is supported by an Affidavit sworn by the First Defendant on 13th July 2015.

(3) The Summons is strongly resisted by the Plaintiff. The Plaintiff filed an "Affidavit in Opposition" sworn on 07th August 2015 opposing the Summons seeking of security for costs. Regrettably, the First and Second Defendants did not file an "Affidavit in Reply".

(4) The Plaintiff and the Defendants were heard on the Summons. They made oral submissions to Court. In addition to oral submissions, they filed a careful and comprehensive written submission for which I am most grateful.

(B) THE FACTUAL BACKGROUND

(1) What are the circumstances that give rise to the present application?

To give the whole picture of the action, I can do no better than set out hereunder the main averments/assertions of the pleadings.


(2) The Plaintiff in her Statement of Claim pleads inter alia; (as far as relevant)

PARTICUALRS OF FRAUD


➢ The Defendant did not provide any accounts to the Plaintiffs as required by her oath.

➢ The First Defendant created a mortgage on the property, with the assistance of her son the Second Defendant and the Third Defendant.

➢ The First and Second Defendants have colluded with the officers of the Third Defendant, to allow surrender of Lease no. 26244 and then issued new Lease to the prospective buyer.

➢ The First Defendant has pocketed all the funds from the sale of the property.

➢ The failure of the Director of Lands to assist the Plaintiff is evidence that officer in the department assisted the First Defendant to defeat the Plaintiff's entitlement and to deprive the Plaintiffs of shares in the estate of Shiu Charan Singh.

➢ The Lease was current and would not have expired until 2016 and its surrender was a fraudulent act without notice to the |Plaintiff by the Defendants.

➢ The Plaintiff caused an advertisement to be placed in the Fiji Sun for the purpose of obtaining letter of Administration on 13th September, 2013, in the estate of Vijay Singh, but the Defendants did not respond to the advertisement.

➢ The First Defendant after becoming the administratrix of the estate of Shiu Charan Singh, created a mortgage in favour of HFC Limited for the benefit of Second Defendant being mortgage No. 719768, registered on 5th June, 2009.

➢ The First and Second Defendants were deeply involved in the management of the property and have benefit from their actions.

➢ The Defendants knew that transfer of the Lease was not possible without consent of Plaintiff and they colluded and devised a scheme to defeat this by surrender of Lease and issue of new lease.

➢ In order to circumvent the Plaintiff's claim, the Defendants joined with intention to defeat the Plaintiff's claim.

➢ There was no need to surrender the lease and the Plaintiff was entitled to a renewal.

➢ The First Defendants action has deprived the Plaintiff of the lawful share in the estate and to the value of $375,000.00.

➢ The Defendants are jointly responsible for the fraud conducted on the Plaintiff.

➢ The First Defendant has sold his property and has not disclosed the true market value of the property.

The Plaintiff claims the following;


(i) Sum of $375,000.00 being, half share of the market value of the property or half of the updated value of the property at trial.


(ii) Half of all rentals collected by the Second Defendant since the death of the testator.


(iii) Interest on (i) and (ii) above.


(iv) A refund of all monies expanded on the Second Defendant.


(v) The Third and Fourth Defendants indemnify the Plaintiff for her loss.


(vi) Costs on indemnity basis.


(vii) Such other orders as this Honorable Court deems just and equitable.


(3) The first Defendant in her Statement of Defence pleads inter alia; (as far as relevant)
Para
1.
I, the 1st defendant, SATYA WATI NARAYAN, being administratrix of the state of Shiv Charan Singh, acknowledge selling my father's estate as I was entitled to.




2.
The last Will and testament of the deceased, Shiv Charan Singh stated that his estate be given to his wife, and then shared between the 1st defendant and her brother Vijay Singh. At no point was the plaintiff's name mentioned in the Will of Shiv Charan Singh, Challenging paragraph no.4.




3.
I, the 1st defendant challenge paragraph no. 10 regarding the plaintiff's crude and false assumptions of the value of the estate of Shiv Charan Singh. As will be provided a full valuation of the estate by a qualified and reputable valuation agency.




4.
The estate of deceased Shiv Charan Singh: Crown Lease No. 26244, Allotment 6, section 14, Lautoka Township, part (CT 6481) situated at an area of 33.7 perches hereinafter will be referred to as "the property".




5.
The property was transferred to the 1st Defendant as the lessee of the said land Crown Lease No. 743760 and as the trustee of the property by the high court of Fiji.




6.
I, the 1st defendant, have looked after the property for 25 years without any form of assistance from Vijay Singh or the Plaintiff. I have paid all land and town rates and looked after and maintained the property.




7.
As stated above, without assistance, being unemployed and a senior citizen I got overwhelmed by the accumulation of rates which I couldn't pay and the property was in the verge of being auctioned thus I had to mortgage the property to pay rates challenging paragraph 13 stating that the mortgage was created in favour for my son.




8.
I, the 1st defendant challenge paragraph 12 stating that the Plaintiff was entitled to a share after the death of her husband as this was not stated in the last will of Shiv Charan Singh.




9.
I, the 1st defendant challenge paragraph 9 regarding to provide my brother accounts about the property, as I frequently asked for assistance and advice but I never got any response or assistance from him.




10.
I refute the claim made by the plaintiff that I colluded with the 2nd, 3rd and 4th defendants (Peter John Ram Narayan, the Director of Lands and The Attorney General) in devising a scheme for surrender of lease as I have never personally made contact with the 3rd and 4th defendants.




11.
Further grounds of defence will be produced to the honourable court on demand.




(4) The Second Defendant in his Statement of Defence pleads inter alia;
  1. I, the 2nd Defendant, PETER JOHN RAM NARAYAN, of 11 Bhagwan Street, Balawa, Lautoka dispute contents of paragraph 13 of the writ of summons # HBC 144/2014. The mortgage was created by the 1st Defendant to pay off the land rates. The 1st Defendant is my mother and not employed so I helped her to get the loan which was paid from my fortnightly pay.
  2. I the 2nd Defendant PETER JOHN RAM NARAYAN request the honourable court to strike out the Plaintiff's claim against me.

(5) The Plaintiff in her Reply to Statement of Defence pleads inter alia;(as far as relevant)

Para 2. The Plaintiff refers to Paragraph 1 of the 1st Defendants

Statement of Defence and as follows, the Plaintiff agrees that the 1st Defendant is the Administratrix of the Estate of Shiv Charan Singh, and also add that the 1st Defendant was not entitled to sell the Estate of Shiv Charan Singh.


  1. In reply to Paragraph 2 of the Statement of Defence, the Plaintiff is the sole administratrix of the Esate of Vijay Singh and having vested interest in the Estate of Shiv Charan Singh.
  2. In addition to that, the Plaintiff adds that the Last Will and Testament of Shiv Charan Singh had bequeathed his properties to his wife for life, then to Vijay Singh and the First Defendant.
  3. In reply to paragraph 6 of the 1st Defendants statement of defence, the Plaintiff states that Vijay Singh made financial contributions in his lifetime.
  4. In reply to paragraph 7 of the 1st Defendant's statement of defence, the Plaintiff submits that no notice whatsoever was given to the Estate of Vijay Singh prior to the creation of this mortgage.
  5. In reply to paragraph 8 of the 1st Defendants Statement of Defence the Plaintiff is entitled to the Estate of Vijay Singh as the Plaintiff is the Administratrix of the Estate of Vijay Singh.
  6. In reply to Paragraph 9 of the 1st Defendants Statement of Defence the Plaintiff submits that Vijay Singh, her late husband held the Power of Attorney and was responsible for all his Fathers work.
  7. In reply to Paragraph 10 the Plaintiff that the 1st Defendant sold the lease by way of surrender to defraud the Plaintiffs interests.
  8. The first and second defendants have not disclosed any financial particulars and the defence lacks merits and should be struck out.
(C) THE STATUS OF THE SUBSTANTIVE MATTER

(1) The action was instituted by the Plaintiff on 27th August 2014, by way of Writ of Summons and Statement of Claim.

(2) The pleading in the action begun by way of Writ of Summons was closed on 31st of December, 2014.

(3) I note without comment that the application for security for costs was filed on 16th July 2015.

(D) THE FIRST AND SECOND DEFENDANTS SUMMONS FOR SECURITY FOR COSTS

(1) The first Defendant in her Affidavit in Support of Summons deposes as follows;
Para
1.
THAT I am the 1st named Defendant in the action herein and the 2nd Defendant is my son and I am authorised to make this affidavit on behalf of him. A copy of authority is annexed hereto and marked as Exhibit A.




2.
THAT in so far as the content of this affidavit is within my personal knowledge it is true, in so far as it is not within my personal knowledge, it is true to the best of my knowledge and information and belief.





Security for costs




3.
THAT the Plaintiff has instituted this action in her capacity of the Administratrix of the Estate of Vijay Singh.




4.
THAT Vijay Singh is my late brother.




5.
THAT the Plaintiff is permanently resident abroad and does not own any assets within the jurisdiction of this Honourable Court.





Costs to date




6.
THAT we have expended the sum of $30000 as legal costs paid as retainer and around $500.00 other costs which my son and I expended when we appeared in person.





Future Costs




7.
THAT through advise of my Counsel I understand that our Statement of defence will need to be amended and the present application contains the same and various costs will be associated with the same as well the filing of various papers in Court to get the matter ready for trial.




8.
THAT am advised by counsel and I estimate that the trial will take minimum of 3 days to a maximum of 5 days.




9.
THAT I further note that various witnesses will have to be subpoenaed for the trial from out of Jurisdiction of this Honourable Court being and not limited to a representatives of the Registrar of Titles, Suva and employees from the securities department of Westpac Banking Corporation, Suva.




10.
THAT I estimate future costs to be incurred from the date of this affidavit are approximately $28,000.00 to $36,000.00. This estimate is comprised;





  1. $15,000.00 to $18,000.00 fees from now up to the commencement of the hearing including preparation for trial (this does not include any contentious interlocutory made by us or made against us.)
  2. $6,000.00 to $8,000.00 for fees for two Counsels from the firm of Patel and Sharma for trial.
  1. $7,000.00 to $10,000.00 for Counsel fees for preparation and attendance at the 3-day hearing including disbursements.
d).These costs include Value Added Tax.




  1. THAT from enquiries with Waterfront Hotel in Lautoka by my counsel it is estimated that the costs per person for meals and accommodation per day will be about $150.00 per day confirmed on 13th day of July, 2015 for accommodation of witnesses.
  2. THAT I believe that the Plaintiff will have insufficient funds to pay any costs awarded in favour of the 1st and 2nd Defendants and seek that the Court make security for costs on the grounds contained in this affidavit.
(2) The Plaintiff in her Affidavit in Opposition deposes inter alia (As far as relevant)
Para
3.The application for security for costs is a sham and designed to delay and frustrate litigation for my late husband's beneficial interest.



  1. The application is also oppressive and filed when pleadings have closed in regards to the First and Second Defendant. It is merely an attempt to stop me from claiming my husband's entitlement pursuant to the Last Will and Testament of Shiv Charan.



  1. My late husband was an equal beneficiary of the Estate of Shiv Charan and the money value of his share is about $375,000.00.



  1. In these proceedings, I have every right to question the administration of the Estate of Shiv Charan by the First Defendant with the help of the Second Defendant.



  1. The First Defendant has without notice to me fraudulently disposed of my husband's share in the Estate of Shiv Charan and misappropriated his bequest.



  1. I verily believe that the application for security for costs in unnecessarily stopping the Plaintiff's right as beneficiaries to question the manner in which my husband's sibling, the First Defendant has administrated the said Estate.



  1. The First and Second Defendants are aware that they have misappropriated my husbands share without providing any accounts and therefore, their application for costs is a sham and an abuse of process and should be dismissed with costs of this application.



  1. The First Defendant has not settled the estate of Shiv Charan Singh within one month from the grant of Probate on 1st April 2008 or within a reasonable time.



  1. The First Defendant did not offer the property to me to buy her half share before selling it to a third party.



(E) THE LAW

(1) Against this factual background, it is necessary to turn to the applicable law and Judicial thinking in relation to the principles governing the exercise of the discretion to make the Order the Defendants now seek.

(2) Rather than refer in detail to the various authorities, I propose to set out, with only very limited citations, what I take to be the principles of the play.

(3) Provisions relating to security for costs are contained in Order 23, rule 1 of the High Court Rules, 1988.

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 unable to pay the costs of the defendant if ordered to do so; or
  1. Subject to paragraph (2), that the plaintiff's address during the course of the proceedings with a view to evading the consequences of the litigation;

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."


The use of the words "having regard to all the circumstances of the case, the Court thinks it just to do so, it may order", confers upon the Court a real discretion on whether or not to order security for costs.


It is to be noted that residence outside the jurisdiction enables, but does not require, the court to order security for costs of the action. As Sir Nicolas Browne-Wilkinson V, -C, put it in Porzelack K.G. v. Porzelack (U.K.) Ltd. [1987] 1. W.L.R. 420, 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 enforce 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 as applicable to Plaintiffs coming from outside the jurisdiction as it to Plaintiffs resident within the jurisdiction. There is only one exception to that, so far as I know, namely, in the case of limited Companies, where there are provisions under the Companies Act for security for costs. Where the Plaintiff resident outside the jurisdiction is a foreign limited Company, different factors may apply: see DSQ Property Co. Ltd. v Lotus Cars Ltd. [1987] 1 W.L.R. 127. Under the R.S.C., Order 23, r.1 (1) (a), it seems to me that I have 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."


The White Book (1999) further discussed the development of the law till 1999, which is applicable to Fiji. At page 431 (23/3/5) of the White Book;


"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 general discretion of the Court; it is not an unvarying rule. Its application is appropriate where the foreign and English co-plaintiffs rely on the same cause 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."


In Huang Tzung-Hao v A Team Corporation Ltd [2003] FJHC 288; HBC 0346r. 1988s Justice Pathik stated as follows on the issue of security for costs application and Order 23 generally;


"The defendants are entitled to make the application. The onus is on them to prove that the Plaintiff is "ordinarily resident" out of jurisdiction and this they have done. In fact there is no dispute on this aspect.


The power to make an order for security costs is entirely discretionary (vide Aeronave S.P.A v Westland Charters Ltd [1971] 1 W.L.R. 1445). It is stated in The Supreme Court Practice 1988 Vol 1 Or. 23/1-3/3:


"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 so, and this is so, even through by the contract between the parties, the foreign plaintiff is required to bring the action in England (see Aeronave 1445, supra)."


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, 023, 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."


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 why 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)."


The rationale in award of security for costs was also described in Sharma v Registrar of Titles [2007] FJHC 118, HBC 351 of 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 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."


(F) ANALYSIS

(1) Before passing to the substance of the First and Second Defendants Summons seeking of security for costs against the Plaintiff, let me record that the Counsel for the Plaintiff and the Defendants in their written submissions has done a fairly exhaustive study of the judicial decisions and other authorities which they considered to be applicable.

I interpose to mention that I have given my mind to the oral submissions made by the Counsel for both parties as well as to the written submissions and the judicial authorities referred to therein.


(2) I ask myself, what is the question in these proceedings?

The First and Second Defendants are seeking an Order for security for costs against the Plaintiff.


The primary grounds for the First and Second Defendants as to why security for costs should be ordered are;


❖ The Plaintiff is permanently a resident out of the jurisdiction of the Court.
❖ The Plaintiff has no assets within the jurisdiction of the Court.

(3) THE POWER TO ORDER SECURITY FOR COSTS

As I already mentioned, provisions relating to security for costs are contained in Order 23, rule 1 of the High Court Rules, 1988.


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 unable to pay the costs of the defendant if ordered to do so; or
  3. Subject to paragraph (2), that the plaintiff's address during the course of the proceedings with a view to evading the consequences of the litigation;

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."


The use of the words "having regard to all the circumstances of the case, the Court thinks it just to do so, it may order", confers upon the Court a real discretion on whether or not to order security for costs.


The real origin of the jurisdiction to Order security for costs is to cater for the case of a non-resident Plaintiff who is seeking to take advantage of the Jurisdiction of domestic Courts, should be required to produce security for the payment of the costs of the party within the jurisdiction who is sued, in case the action showed fail. [Per Farwell L.J. in "New Fenix Compagine Anonyme D Assurances de Madrid v General Accident, Fire and Life Assurance Corporation Ltd; [1911] UKLawRpKQB 123; (1911) 2. K.B. 619 at 630P).


The apparent concern is that a non-resident Plaintiff, particularly one without assets in the jurisdiction, could avoid liability for an adverse costs Order precisely because his or her non-residency would make it difficult if not possible for the Defendant to enforce the Order. [Per Morling J, in "Barten v Ministry of Foreign Affairs (1984) 2 FCR 463P.]


(4) As the evidence presently stands, the Plaintiff is permanently a resident out of the jurisdiction of the Court. I am satisfied on this point. Ordinarily, once it is established that the Plaintiff is not permanently a resident in Fiji, the "onus" shifts to the Plaintiff to satisfy the Court that she has property within the jurisdiction which can be made subject to the process of the Court. (See; Babu Bhai Patel v Manohan Aluminium, Glass Fiji Ltd, Suva High Court Civil Action No. HBC 0019/19).

"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 withdrawn, the rule gives way, and the Court will not order security to be given" (per "Thesiger" L.J. in "Redondo v Chaylor" (1879) 40 L.T. 797.)


See also; *
Brown L.J. in Ebrard v Gassier [1884] UKLawRpCh 266; (1884) 28 Ch. D. 232

* Greer L.J. in "Kerokian v Burney" (1937) 4 A.E.R. 468

* Reddra v Chaytor (1879) 40 L.T. 797

Returning back to the case before me, it is quite interesting that the Plaintiff in his Opposition relied on property which is subject to this litigation process.


Reference is made to paragraph (05) of the Affidavit in Opposition sworn by the Plaintiff on 07th August 2015.


"My late husband was an equal beneficiary of the Estate of Shiv Charan and the money value of his share is about $375,000.00."


I wish to emphasise, that the land which is subject to this litigation does not assist the Plaintiff because the land is not unencumbered. Having assets is insufficient for the purpose of being excused from giving security for costs. Any such assets must readily be converted to pay the costs, rather than the mere possibility of it being recovered at a future date.


In the context of the present case, I am inclined to lean in favour of the judicial thinking reflected in the decision of Master J.Udit in "Sharma v Registrar of Titles" (2007) FJHC 118. The Learned Master held;


"Substantive Assets in Fiji


Ms Kenilorea's second ground is that the Plaintiff has substantive assets in Fiji. In support, she cited a decision of His Lordship Mr Justice Fatiaki (as he then was and now the Honourable Chief Justice) in Babu Bhai Patel v Manohan Aluminium, Glass Fiji Ltd, Suva High Court Civil Action No. HBC 0019/19 (14th November, 1997). In that matter, a similar submission was unsuccessfully advanced. It was argued that the appellant had valuable real estate asset in Fiji, and had continuing "interest and active participation in an operating wholesale business in the country and his regular visits in Fiji". His Lordship after referring to the general principle that:-


"... if a Plaintiff, who is permanently residence 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 drawn, the rule given way, and the Court will not order security to be given, citing from Reddro v. Chaytor (1879) 40 L.T. 797."


held:-


"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'"


Once again this authority does not assist the plaintiff. Having assets is insufficient for the purpose of being excused from giving security for costs. Any such assets must readily be converted to pay the costs, rather than the mere possibility of it being recovered at a future date, again, at an extra expense.


Certainly, the Plaintiff has the land which is subject to this litigation. However, there is no evidence as to whether the land is unencumbered or not. Ms Kenilorea did not elaborate this further in her submissions. Additional properties offered to satisfy the costs are the shares which the Plaintiff owns in Pacific Green Fiji, Fiji TV, R.B.Patel & Co. Ltd, Communication Fiji Ltd, Fiji Sugar Corporation and Colonial First State. How does one convert the shares to satisfy an order for costs? What is the value of the shares? None of the Counsel assisted me on this. However, since this is a discretionary matter, in my view any such security is inadequate for two reasons. Firstly, there is no Order restraining the disposal of the land or shares. Nor is there any evidence of an undertaking given to the Court by the Plaintiff obliging him not to dissipate the land or shares until the action if finally determined. Secondly, any enforcement of the Order would unavoidably result in further applications to Court, such as registering a Judgment against the title etc., thus incurring additional unwarranted expenditure and frustration.


Land subject of litigation


Thirdly, and lastly, on behalf of the Plaintiff it is submitted that the land which is subject of this litigation will be subdivided and sold. Income derived from the sale of the said land as a whole or after subdivision is submitted to be sufficient security to satisfy any order for costs. Currently, the only impediment in the access. In reply Mr Veretawatini classified this as a very vague and uncertain assertion which is predicated upon future conduct, which may or may not eventuate. In any event, there is reason no for the defendants to wait for the Plaintiff to organise his life and property, before they enjoy the fruits of their success. I am in agreement with Mr Verewatini's submissions on this point, and dismiss the Plaintiff's objection based on this ground."


In my Judgment, the Plaintiff in the present case has failed to discharge the onus. The Plaintiff has failed to establish that she has substantive assets in Fiji.


Having assets is insufficient for the purpose of being excused from giving security for costs. Any such assets must readily be converted to pay the costs, rather than the mere possibility of it being recovered at a future date, again, at an extra expense.


Once impecuniosity of the Plaintiff is shown, there might be in the absence of further material a predisposition towards the protection of the Defendants from being sued by the impecunious Plaintiff. But it is also very clear that once the Court enters upon considerations relevant to the particular case the ultimate decision must depend upon the balance of justice and common sense.


(5) EXERCISE THE DISCRETION TO ORDER SECURITY FOR COSTS

That the Plaintiff is permanently a resident outside the jurisdiction and has no assets in Fiji is a circumstance of great weight favouring a security order. I am of course mindful to the fact that the making of an Order for security for costs is discretionary and the Courts no longer adopt a rigid rule. [See, M.J. Raine, -"Locals we trust – Foreigners pay cash; rethinking security for costs against Foreign Residents" (2012) 1 JCIVP 210 at 214P)


Returning to the instant case, although the grounds for security for costs have been proved by the Defendants, I do not wish to rest the matter there. I am not bound to make an Order.


As was established by the Court in 'Sir Lindsay Parkinson & Co. Ltd v Triplan Ltd" (1973) (1) Q.B. 609, the Court has a complete discretion whether to order security, and accordingly it will act in light of all the relevant circumstances. It is a venerable principle that poverty or even insolvency on the part of a Plaintiff will not itself attract a requirement for security for costs conditioning the right to institute and/or conduct legal proceedings. If there is reason to believe that the Plaintiff cannot pay costs, then security "may" be ordered. There is not however any requirement that it "must" be ordered. The Court has a discretion which it will exercise considering all the circumstances of the case. In exercising its discretions the Court needs to weigh up the competing interests of the parties having regard to all of the facts and circumstances of the case.


The answer is to be found by ascertaining where, on considerations of what is just and reasonable, the balance rests between the risk of exposing an innocent defendant to the expense of defending his position and the risk of unnecessarily shutting out from relief a Plaintiff whose case if litigated would result in his obtaining that relief.


The Court's discretion is unfettered; each case must depend on its own circumstances.See; Bell Wholesale Co. PVT Ltd v Gates Export Corporation [1984] FCA 34; (1984) 2 FCR 1.


The Court should do Justice to each of the parties attempting not to prejudice the Defendant and attempting not, if possible, to shut out the Plaintiff from litigating its complaints.


See; M A Products Pty Ltd v Austarama Television Pty Ltd; (1982) 7 ACLR 97.
In exercising the discretion the Court needs to weigh up the competing interests of the parties having regard to all of the facts and circumstances of the particular case.


See; Drumdurne Pty Ltd v Braham [1982] FCA 161; (1982) 64 FLR 227


In "Spiel v Commodity Brokers Australia Pty Ltd" (1983) 35 5 ASR 294, Bullen J reaffirmed the position adopted in "John Arnold's Surf Shop Pty Ltd v Heller Factors Pty Ltd (1979) 22 SASR 20, and said at Page 300;


"The discretion is a wide one. The Judge or Magistrate asked to order security for costs should not approach the application with any predisposition at all. I think it follows that the circumstances in which the discretion should be exercised in favour of making an Order cannot be stated exhaustively. Nor should there be any attempts to do so. The Judge or Magistrate must decide according to his view of the justice of the case. There should be no complaint at the imprecision of that statement. Beyond saying that the Judge or Magistrate must behave judicially, one cannot define or delimit or categorise the circumstances in which security should be ordered to be given. It is quite another thing to speak of some matters which are capable of assuming importance in an application for security."


In the High Court of Fiji in "Furuuchi Suisan Company Limited v Hiroshi Tokuhisa and Others" Civil Action No. 95 of 2009, Justice Byrne ordered Security for Costs against a Plaintiff company incorporated and operating in Japan as the Plaintiff was ordinarily resident out of the jurisdiction. In reaching this decision, Justice Byrne relied on what Sir Nicolas Brown Wilkinson V.C. said in Porzelack KG v Porzelack (UK) Limited 1987 1 All ER 1074 at p.1076


"That 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 the court against which it can enforce a 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 as applicable to Plaintiffs coming from outside the jurisdiction as it is to Plaintiffs resident within the jurisdiction".


His Lordship further stated


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".


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 '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 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).

(Emphasis Added)


The power to order security for costs is discretionary and the Order will not be automatic: Idoport Pty Ltd v National Australia Bank Ltd (2001) NSWSC 744. The discretion is to be exercised judicially, and not "arbitrarily, capriciously or so as to frustrate the legislative intent": Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72. Exercise of the power requires consideration of the particular facts of the case: Merribee Pastoral Industries v Australia and New Zealand Banking Group Ltd [1998] HCA 41; (1998) 193 CLR 502. Southern Cross Exploration NL v Fire and all Risks Insurance Co Ltd (1985) 1 NSWLR 114. The weight to be given to any circumstance depends upon its own intrinsic persuasiveness and its impact on other circumstances which have to be weighed. Acohs Pty Ltd v Ucorp Pty Ltd [2006] FCA 1279; (2006) 236 ALR 143.


Thus, in exercising the discretion, I consider the followings;


❖ The prospect of the claim succeeding
❖ Whether making an order for security for costs would stifle a genuine claim.
❖ Whether there has been delay in making the application for security for costs.

(6) THE PROSPECTS OF SUCCESS OR MERITS OF THE PROCEEDINGS

A consideration of the Plaintiff's prospects of success is an important element of balancing justice between the parties. However, care needs to be exercised when assessing the proportionate strength of the case of the parties at an early stage of proceedings: "Fiduciary Ltd v Morningstar Research Pty Ltd [2004] NSWSC 664; (2004) 208 ALR 564.


As a general rule, where a claim is prima facie regular on its face and discloses a cause of action, then, in the absence of evidence to the contrary, the court should proceed on the basis that the claim is bona fide and has reasonable prospects of success. KP Cable Investments Pty Ltd v Meltglow Pty Ltd, [1995] FCA 76; (1995) 56 FCR 189 at 197; Staff Development & Training Centre Pty Ltd v Commonwealth of Australia [2005] FCA 1643.


In "Kadavu Shipping Company Ltd v Dominion Insurance Ltd" 2009, HBC 508, Master J.Udit said in relation to "Strength or bona fides of a claim"


"Under this criterion, the respondent is to show that it has a prima facie regular claim, which disclosed 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".


In "Allan v Hillview Limited [2003] HBC 366, Connors J said;


"... another matter of importance for the court is exercising its discretion is the Plaintiff's prospect of success in the action and of course as in any such situation that does not require the court at this point in time to make any detailed determination of the likelihood of success but merely to do so based on the pleadings as they appear before the court".


What are the facts here? It is necessary to approach the case through its pleadings.


After an in-depth analysis of the Plaintiff's pleadings in this case, let me summaries my understanding of the salient facts as follows;


➢ By his Will he gave his wife life interest to his property and upon her death the property was to go to Vijay Singh (husband of Plaintiff) and First Defendant equally.

➢ The wife of the testator died on 17th June, 2007 without Probate being issued.

➢ On her death Vijay Singh and the First Defendant became entitled to the Crown Lease No. 26244.

➢ The First Defendant was granted Letter of Administration on 1st April, 2008.

➢ On 5th June, 2009, the First Defendant registered as administratrix on the title of "the property", as a result of transmission by death.

➢ The beneficiary Vijay Singh died on 14th November, 2008.

➢ On or about 15th July, 2010 the First Defendant requested the 3rd Defendant to surrender the Lease No. 26244 and new lease be issued in her name as administratrix of Shiv Charan Singh.
➢ On 04th November, a new lease being Crown Lease No. 743760 was issued by the 3rd Defendant in the name of the First Defendant as administratrix of the estate of the testator, Shiv Charan Singh,before the expiration of the old lease.

➢ On a subsequent day, the first Defendant applied for consent to transfer the new lease to Sigatoka Valley Spares Ltd, for a consideration of $280,000.00.

➢ The third Defendant consented to transfer the property for a consideration of $280,000.00 on 20th December, 2011.

➢ The first Defendant as the administratrix of the estate of Shiv Charan Singh transferred the lease to Sigatoka Valley Spares Ltd in consideration of the sum of $280,000.00.

➢ The first Defendant sold the property and has not accounted for the proceeds to the Plaintiff who is a beneficiary of the estate of Vijay Singh.

➢ Sigatoka Valley Spares Ltd, applied for consent to mortgage in consideration of the sum of $762,000 .

➢ The third Defendant consented to the mortgage on 21st May, 2012.

➢ On 13th December, 2013, the Plaintiff wrote to the Director of Lands by registered mail No. 60497, enquiring the circumstances of the surrender and the Director of Lands has not replied to the letter.

On the other hand, the First and Second Defendants plead;


❖ The First Defendant is the Administratrix of the estate of late "Shiu Charan Singh".

❖ The Deceased gave his trustee absolute discretion in respect of disposition.

❖ The Will created a trust where the Trustee has discretion on the distribution, investment, sale, conversion or to retention of the trust property.

❖ The lease over the property was surrendered to obtain a new lease for a period of 99 years in favour of the estate of the deceased.
❖ The First and Second Defendants have not benefitted from the estate of the deceased.

❖ The consent of the Plaintiff was never required for the transfer of the property.

❖ The Plaintiff's allegations of fraud are based on insinuations and are fabricated and the Plaintiff is not entitled to have a share in the estate of 'Shiv Charan' according to the last will.

As I understand, the Plaintiff's thrust of the argument is that the first Defendant, as administratrix of the estate of "Shiv Charan" has a duty to give the Plaintiff's deceased husband's share. In the same breath the counsel submits that the first Defendant created a mortgage in favour of her son, the second Defendant, to defeat the share of the Plaintiff's deceased husband. It is also alleged that the first Defendant's action has deprived the Plaintiff of the lawful share in the estate.


In adverso, the counsel for the first and second Defendants submits that the Plaintiff is not entitled to a share after the death of her husband as this was not stated in the last will of "Shiv Charan". (The first proposition)


That, of course, is absurd. I have to say, with the greatest respect to the counsel for the Defendants and with no pleasure that I totally disagree. The impression produced on my mind by the Defendants above proposition is that I have here the evolution of a myth, and not a gradual unfolding of real facts. Anything more shadowy, anything more unsatisfactory, anything more unlikely to produce persuasion or conviction on the mind of the Court, I can scarcely imagine.


As the evidence presently stands, the first Defendant was granted letter of Administration on 01st April 2008. A copy of the last Will and Testament of Shiv Charan Singh is annexed to the letter of Administration. Let me have a close look at the last will. Reading those words in their natural and ordinary sense, it seems to me perfectly plain that that the First Defendant is entitled to half Share, in the estate of "Shiv Charan Singh" and the other half share should go to Vijay Singh (late husband of the Plaintiff). The first Defendant as a Sole Administratrix was only a 50% beneficiary. The late "Vijay Singh" (the husband of the Plaintiff) is an equal beneficiary in the estate of "Shiv Charan". The Plaintiff is a beneficiary in the estate of "Vijay Singh ". Thus, the Plaintiff is entitled to have a share in the estate of "Shiv Charan".


It is also contended by the counsel for the first and second Defendants that the will created a trust where the trustee has discretion on the sale, conversion or to retention of the trust property. (The second proposition)


In the circumstances, I interpose the view that, true situation had not emerged and that a full hearing is required to ascertain what had occurred between the parties.


On my perusal of the Statement of Claim and the Statement of Defence, it seems to me perfectly plain that there are genuine disputes between the parties which raise serious issues for resolution with regard to sale and conversion of the property. The evidence before me does not justify drawing the conclusion that the Plaintiff has no reasonable prospect of success in her claim. The Defendant's second proposition is reasonably arguable. I am of course mindful to the fact that bona fide of the claim and its merits have to be considered in the exercise of my discretion.


It is suggested on behalf of the Defendants that the Plaintiff's claim is without merits. I must confess that I remain utterly unimpressed by the proposition advanced by the Defendants.


I am satisfied that the claim is prima facie regular and disclosing a cause of action. Moreover, the Defendants second proposition is bona fide and arguable.


There is quite clearly a substantial bon fide issues to be tried between the parties. However, at this juncture, I remind myself of the principle that in deliberating upon an application for security for costs, I am not required to delve into the meticulous details of the merits or demerits of the claim or defence.


G.E. Dal Pont, in "Law of Costs", Third Edition writes at Page 1015;


"The Chief difficulty with any attempt to take into account the Plaintiff's chances of success is the fact that applications for security for costs are usually made prior to trial, often some time prior to it. Given the need for applications for security to be made promptly, a defendant who waits until the eve of the hearing to apply for security in unlikely to succeed. Yet it is this very need to promptly apply for security – possibly even at a time when the pleadings have yet to be finalized – that renders the court's task of assessing the merits of the claim near impossible. This task is arguably little easier even where the application for security is made during the hearing of the matter, when some but not all the evidence has been heard. Again the court has incomplete information upon which to make a determination.


Several observations can be made in this respect. First, a court must be careful in deciding security on the basis that the Plaintiff's claim appears weak. As the relevant inquiry is made at an interlocutory stage on less than complete material and without any hearing of the evidence, the real merits of the case are unlikely to sufficiently emerge in the necessarily brief application for security for costs. An evaluation of the strength of the Plaintiff's case is necessarily tentative and largely 'impressionistic'. Second, if a proceeding manifestly lacks legal merit, other remedies are available to protect a defendant from needless vexation. In appeals there is the barrier of leave or special leave. Third, for a judge upon an application for security to preside over a major hearing in which the parties seek to investigate in considerable detail the likelihood of success in the action risks usurping or pre-empting the role of the trial judge or appellate court before which the proceeding is to be litigated. This would, moreover, blow up the case into a large interlocutory hearing involving great expenditure of both money and time.


For the above reasons, it has been said that courts deplore attempts to go into the merits 'unless it can clearly be demonstrated ... that there is a high degree of probability of success or failure. That the case is 'obviously hopeless' and 'doomed to fail'. If the case is 'bona fide' and raises 'real issues to be tried', the prospect of success or failure arguably function as no more than a neutral factor in the exercise of discretion to order security, especially where the issues to be litigated are difficult or complex. Expressed another way, if a claim is prima facie regular and discloses a cause of action, in the absence of evidence to the contrary the court will generally assume it to be bona fide with a reasonable prospect of success for this purpose. Cases at either extreme – those are that patently untenable, or ostensibly insuperable – are consequently much more the exception than the rule. So merely because the plaintiff 'may have slender hopes of succeeding', or that the case demonstrates 'a number of weaknesses' is not sufficient to justify departing from the rule that poverty is no bar. The bona fides and strength of the case, in any event, remains only one factor in the equation that informs the court's discretion so far as security is concerned."

(Emphasis Added)


In the case of "Appleglen PVT Ltd v Mainzeal Corporation PVT Ltd" (1988) 89 ALR 634, Pincus J. observed that at the hearing of an application for security for costs, detailed investigation into the likelihood or otherwise of the success of the claim will not be the right course to adopt.


Nevertheless, the existence of a genuine dispute cannot of itself provide cause for disentitling the Defendant to security if the circumstances otherwise are appreciated one for the making of such an Order. (See, Parsdale PVT Ltd v Concrete Constructions (1995) FCA 1471).


(7) STIFLING THE CLAIM

There is no direct sworn evidence on behalf of the Plaintiff that the making of an Order for security for costs would stifle the prosecution of the claim. To be more precise, there is no direct sworn evidence as to the likelihood that an Order for security would stultify the prosecution of the claim.


It is for the Plaintiff to satisfy the Court that she would be prevented by an Order for security from continuing the litigation.


There is not an iota of evidence that the Plaintiff is a person of no means.


"The fact that the ordering of security will frustrate the Plaintiff's right to litigate its claim because of its financial condition does not automatically lead to the refusal of an Order. Nonetheless, it will usually operate as a powerful factor in favour of exercising the Court's discretion in the Plaintiff's favour" (per Clarke J in "Yandil Holdings Pty Ltd v Insurance Co of North America (1985) 3 ACLC 542.


See also; Roger J in "Memuty Pty Ltd v Lissendin" (1983) (8) ACLR 364.)


Returning back to the case before me, nothing has been said or addressed by way of evidence to indicate that the making of the Order sought will frustrate the Plaintiff's claim.


The burden of showing impecuniosity rests upon the Plaintiff seeking to resist the Order. The Plaintiff has not discharged the onus.


There is no evidence placed before this Court as to the financial standing of the Plaintiff and those who would benefit by these proceedings if the Plaintiff is successful. I consider this factor to avoid the claim being stifled. I have no hesitation in holding that an Order for costs will not stifle the claim.


In "M.V. York Motors v Edwards" (1982) (1) All E.R. 1024, and 1028, Lord Diplock approved the remarks of "Brandon" L.J. in the Court of Appeal;


"The fact that the man has no capital of his own does not mean that he cannot raise any capital; he may have friends, he may have business associates, he may have relatives, all of whom can help him in his hour of need."


In Kloeckner & Co AG v Gatoil Overseas Inc [1990] CA Transcript 250 Bingham LJ cited with approval certain remarks of the Registrar of Civil Appeals. Mr Registrar Adams was willing to assume that the situation before him was the same as that exemplified in the "Farrer v Lacy, Harland & Co"[1885] UKLawRpCh 3; , (1885) 28 Ch. D. 482 that is to say that there was a probability that the defendant wrongly caused the Plaintiff's impecuniosity on the basis of which security for costs was being sought. The registrar said:


"In my judgment, the approach to be adopted in cases where, as here, there are good arguable grounds of appeal and it is within the Farrer principle but the appellant contends that the award of security will stifle the appeal, should be the same as the approach adopted in MV Yorke Motors (a firm) v Edwards Ord 14 cases, where conditional leave to defend is being contemplated. The approach, in my view, should be that the onus is on the appellant to satisfy the Court of Appeal that the award of security for costs would prevent the appeal from being pursued, and that it is not sufficient for an appellant to show that he does not have the assets in his own personal resources. As in the Yorke Motors case, the appellant must, in my view, show not only that he does not have the money himself, but that he is unable to raise the money from any where else."

(Emphasis Added)


(8) THE IMPACT OF THE TIMING OF APPLICATION FOR SECURITY

As earlier mentioned, although the non-residency of the Plaintiff and non-availability of assets within the jurisdiction is one of the main grounds for the exercise of the jurisdiction of the Court to Order security, I do not adopt a rigid rule. I am of course mindful to the fact that the making of an Order for security for costs is discretionary and the Courts no longer adopt a rigid rule. [See, M.J. Raine –"Locals we trust – Foreigners pay cash; rethinking security for costs against Foreign Residents" (2012) 1 JCIVP 210 at 214P)


I note that Order 23 confers a discretion in that "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 costs, as it thinks fit."


In the context of the present case, I am inclined to be guided by the rule of law enunciated in the following judicial decisions;


In Gabel PVT Ltd v Katherine Enterprises PVT Ltd (1977) 2 A.C.L.R. 400 the Court held in relation to the "effect of delay",


"Here discovery has been obtained and the case set down for trial.

Some twelve days after this the First Defendant issued a motion seeking security. In my view there is much force in the contention that the application has been made too late. From the very beginning all parties were aware at least of the fact that the First Plaintiff must be presumed unless the contrary be shown to be unable to pay costs if unsuccessful. Nevertheless no application was made until after fourteen months after the Writ was issued. No attempt has been made to explain this delay.


...In my judgment the proper time for making this application was at the beginning when the status of the First Plaintiff was known to the Defendants."

(Emphasis Added)


Einstein J considered decisions dealing with the issue of delay in the making of an application for security in Idoport Pty Ltd v National Australia Bank Ltd [2001] NSWSC 744 concluding:


"Ultimately it seems to me that in the context of the broad discretion and consistently with the approach referred to in the above authorities; delay is best regarded simply as a factor whose consequences are to be weighed in the balance in determining what is just between the parties.... The Court, in approaching delay as a discretionary factor, looks at the length of the delay and the nature of the acts done during the interval. If a Company has suffered no real relevant prejudice in the sense of expenditure of its own funds or the incurring of liabilities in relation to the litigation in the period until the application for security for costs, the significance of delay reduces or may substantially disappear."


In Crypta Fuels (PV) Ltd v Svelte Corporation (PVT) Ltd, (1994) 14 ACSR 760, the Court held;


"Without referring in any greater detail to those authorities, my conclusion from a consideration of them is that there is first and foremost a proposition accepted in every one of the cases which is that if an application for security for costs is to be made it must be made promptly."

(Emphasis Added)


It is these principles I apply. Applying those principles to the instant case, what do we find?


There are two problems that concern me. At this stage I have to ask myself two questions. The first question that I ask myself is, whether the First and Second Defendants were prompt in the application for security for costs. The answer is obviously "NO."


The second and final question that I ask myself is, was there a cogent and credible explanation for the delay in filing the application in the Affidavit in Support of the First and Second Defendants? The answer is obviously "NO."


In the instant case, the Writ of Summons was filed on 27th August 2014. The Defendants filed Acknowledgement of Service on 30th October 2014.


The Statement of Defence was filed on 20th November 2014. The reply to Defence was filed on 16th December 2014. The Pleadings was closed on 31st December 2014. The application for security for costs was filed on 16th April 2015, namely 08 months after the Writ was issued and 6 ½ months after the close of the Pleading.


From the very beginning, the First and Second Defendants were well aware that the Plaintiff (the sister in-law of the First Defendant) is permanently a resident out of the jurisdiction and without assets in the jurisdiction. To be more precise, the First and Second Defendants were in possession of material disclosing that the Plaintiff (the sister in-law of the First Defendant) is permanently a resident out of the jurisdiction and without assets in the jurisdiction from well before the time of the institution of the action.


Nevertheless, the application for security for costs was filed 6 ½ months after the close of the pleadings, whereas the proper time for doing so was at the beginning of the proceedings. No application was made until 08 months after the Writ was issued and 6 ½ months after the close of the pleadings. No attempt has been made to explain the delay in the Affidavit in Support of Summons for costs.


It is paradoxical that the onus is upon the First and Second Defendants to provide cogent and credible explanation as to why the application for security for costs was postponed until 6 ½ months after the close of the pleadings and 08 months after the Writ was issued. The First and Second Defendants have not discharged the onus. What is of concern is there is an absence of explanation in the Defendants Affidavit in Support for the delay in filing the application for security for costs. The First and Second Defendants in their Affidavit in Support do not explain why the application for security for costs was postponed until 6 ½ months after the close of the pleadings and 08 months after the Writ was issued. What were they doing themselves? The First and Second Defendants Affidavit in Support is silent on this. The delay is inordinate, to say the least. The delay could not possibly be described as "reasonable" even on the most generous minded and indulgent view. I should add that the First and Second Defendants failure to explain in their Affidavit in Support that they had a good reason for not filing an application for security for costs promptly does not leave a good impression. The unexplained delay in the affidavit in support of Summons for security operates as a powerful factor in favour of exercising the Court's discretion in the Plaintiff's favour.


I must stress here that an unrepresented Plaintiff or Defendant is not entitled to any different treatment than a Plaintiff or Defendant represented by a Counsel.


In the result, I hold that there is unreasonable and unexplained delay in making the application.


The unfairness of making an application for security for costs at a late stage is demonstrable.


G.E. Dal Pont, in "Law of Costs", third edition, writes at Page 1021;


"If security is not applied for promptly, it is more difficult to persuade the court that such an Order is not, in the circumstances, unfair or oppressive. The reason is that an applicant for security who has pre-existing knowledge of the Plaintiff's impecuniosity, but delays making the application until the last moment, may be seen as perpetrating a tactical manoeuvre designed to encourage the Plaintiff to exhaust whatever funds he or she has in preparing the litigation to then be met with a financial burden that threatens to stifle the Plaintiff's proceeding altogether."

(Emphasis Added)


In the context of the present case, I am inclined to be guided by the rule of law enunciated in the following judicial decisions;


In Gabel PVT Ltd v Katherine Enterprises PVT Ltd (1977) 2 A.C.L.R. 400 the Court held in relation to the "effect of delay",


"Here discovery has been obtained and the case set down for trial.

Some twelve days after this the First Defendant issued a motion seeking security. In my view there is much force in the contention that the application has been made too late. From the very beginning all parties were aware at least of the fact that the First Plaintiff must be presumed unless the contrary be shown to be unable to pay costs if unsuccessful. Nevertheless no application was made until after fourteen months after the Writ was issued. No attempt has been made to explain this delay.


...In my judgment the proper time for making this application was at the beginning when the status of the First Plaintiff was known to the Defendants."

(Emphasis Added)


The impact of the timing of an application for security for costs upon the court's discretion was explained by the Supreme Court of Western Australia in Ravi Nominees Pty Ltd v Phillips Fox (1992) 10 ACLC 1313 as follows:


An application for security for costs should be brought promptly and prosecuted promptly so that if it is going to delay the Plaintiff's claim, while it is finding the security, or if it is going to frustrate the Plaintiff's claim completely and stop the action, it does so early on before the Plaintiffs have incurred too many costs. An early hearing of such an application also benefits the defendant because it stops the Plaintiff's claim early before the defendant has incurred too many costs.

(Emphasis Added)


The Fiji Court of Appeal in the decision of "National Bank of Fiji v C Garden Island WOO 1L Pacific Co. Ltd as – Civil Appeal No. 011 of 1992, considered a High Court Judgment which had dismissed an application for security for costs. The Court of Appeal held;


"The basis on which the learned judge dismissed the motion for costs was two fold, as to the first..... he held there was unreasonable and unexplained delay in making the application although the appellants were aware that at least the first Plaintiff would be unable to pay costs if unsuccessful. He held that the application was made some 14 months after the Writ was issued whereas the proper time for doing so was at the beginning. He held that this delay must tell against the appellants who must have been aware that the Plaintiffs must have incurred potentially substantial costs by the time the application was made. He cited the decision in Gabbel Pty Ltd v Katherine Enterprises Pty Ltd [1977] 2 ACLR 400 in support of his views regarding the effect of delay."

(Emphasis Added)


The Court then at page 7 said:


"We are of the view that the learned judge exercised his discretion on a proper basis and would not be prepared to interfere with his decision."


It is suggested on behalf of the Defendants that an application for security for costs can be made even at a Pre Trial conference stage.


At this point I cannot resist in saying that the proposition advanced by the Defendants is a far cry from the obvious and natural limitations to the scope and application of the security for costs and it flies on the face of the rule law enunciated in Gabel PVT Ltd v Katherine Enterprises PVT Ltd (1977) 2 A.C.L.R. 400, Idoport Pty Ltd v National Australia Bank Ltd [2001] NSWSC 744, Crypta Fuels (PV) Ltd v Svelte Corporation (PVT) Ltd, (1994) 14 ACSR 760, Ravi Nominees Pty Ltd v Phillips Fox (1992) 10 ACLC 1313 and "National Bank of Fiji v C Garden Island WOO 1L Pacific Co. Ltd as – Civil Appeal No. 011 of 1992


I reiterate that, from the very beginning, the First and Second Defendants were aware that the Plaintiff (the sister in-law of the First Defendant) is permanently resident out of the jurisdiction and without assets in the jurisdiction. To be more precise, the First and Second Defendants were in possession of material disclosing that the Plaintiff is permanently resident out of the jurisdiction and without assets in the jurisdiction from well before the time of the institution of the action.


Nevertheless, the application for security for costs was filed 6 ½ months after the close of the pleadings and 08 months after the writ was issued, whereas the proper time for doing so was at the beginning of the proceedings. Expressed another way, no application was made until 08 months after the Writ was issued and 6 ½ months after the close of the pleadings. No attempt has been made to explain the delay in the Affidavit in Support of Summons for costs. The conduct of the Defendants in deliberately deciding not to explain the delay in filing the application in the Affidavit in Support is a matter to be taken into account in assessing the justice of the case. The Plaintiff is entitled to know at the earliest opportunity, before she has committed substantial resources to pursuing the litigation, whether she will be required to provide security. The later an application is made the greater the likelihood that it will cause substantial disruption or distraction in the conduct of the Plaintiff's case, and if the Plaintiff is unable to provide security, the greater the costs that will have been wasted. The Court, in approaching delay as a discretionary factor, looks at the length of the delay and the nature of the acts done during the delay. The delay must tell against the Defendants who must have been aware that the Plaintiff must have incurred potentially substantial costs by the time the application was made. In the circumstances, I cannot help feeling quite convinced that the First and Second Defendants application for security for costs is unfair and oppressive. I cannot help thinking that the application for security involves some improper purpose and ulterior motive. The reason is that the Defendants for security who have pre-existing knowledge of the Plaintiff's residence out of the jurisdiction and non-availability of assets in the jurisdiction, but delays making the application until 6 ½ months after the close of the pleadings and 08 months after the Writ was issued whereas the proper time for filing so was at the beginning, may be seen as perpetrating a tactical manoeuvre designed to encourage the Plaintiff to exhaust whatever funds she has in preparing the litigation to then be met with a financial burden that threatens to stifle the Plaintiff's proceedings altogether. This is a matter to be taken into account in assessing the justice of the case. The Court is here to administer justice. The crucial point is that the Court should arrive at a just result.


(G) CONCLUDING REMARKS

(1) In the present case, it is clear that the Defendants were in possession of material disclosing that the Plaintiff is permanently resident out of the jurisdiction of the court and without assets in the jurisdiction from well before the Writ was issued.

(2) Nevertheless, no application was made until 08 months after the Writ was issued and 6½ month after the close of the pleadings. The delay has not been explained at all in the affidavit in support of the Summons for costs. It is incumbent upon applicants in application of this nature to provide a satisfactory explanation as to delay in the affidavit in support of Summons for costs. This has not been done at all. The delay is inordinate, to say the least. A delay of 08 months in any Civil Action in the High Court constitutes both inexcusable and inordinate.

I must stress here that an unrepresented Plaintiff or Defendant is not entitled to any different treatment than a Plaintiff or Defendant represented by a Counsel.


(3) The unfairness of making an application for security for costs at such a late stage is demonstrable.

(4) It has been said that delay on the part of the defendant give rise to a waiver of the defendant's entitlement to security for costs. See;

(5) "It is, however, incumbent upon a defendant who wishes to obtain security for its costs to apply promptly for that relief once it is, or ought to reasonably be, aware that the Plaintiff would be unable to meet an order for costs. Delay is an important consideration in the determination of an application for security for costs because it is capable of causing prejudice or unfairness to the Plaintiff. A Plaintiff is entitled to know at the earliest opportunity, before it has committed substantial resources to pursuing the litigation, whether it will be required to provide security. The later an application is made the greater the likelihood that it will cause substantial disruption or distraction in the conduct of the Plaintiff's case, and if the Plaintiff is unable to provide security, the greater the costs that will have been wasted." [Per NEWNES JA, in Christou v Stanton Partners Australasia PTY Ltd [2011] WASCA 176 (10 August 2011]

In order to show prejudice it is not necessary for a Plaintiff to establish what she would have done differently if the application had been made earlier (although such evidence would be an important consideration in the exercise of the discretion); prejudice will generally be regarded as inherent in substantial delay: See; Green v CGU Insurance Ltd [2008] NSWCA 148; (2008) 67 ACSR 105 and Christou v Stanton Partners Australasia Pty Ltd [2011] WASCA 176 (10 August 2011).


In an era when the need to ensure the efficient use of judicial resources has become increasingly important, delay may also be significant in that regard. A late application which frustrates the action will mean that the judicial resources already devoted to the case will have been wasted: See; Town & Fencott & Associates Pty Ltd v Eretta Pty Ltd [1987] FCA 102; (1987) 16 FCR 497, 514, and Christou v Stanton Partners Australasia Pty Ltd [2011] WASCA 176 (10 August 2011).


(6) I remind myself that it is a fundamental principle of any civilized legal system that a court should not generally exercise its discretion in favour of an applicant for security if by his or its delay the other party has been forced to incur expense in the litigation.

(7) Having had the benefit of written and oral submissions for which I am most grateful and after having perused the pleadings and the Affidavits, doing the best that I can on the material that is available to me, I have no doubt and I am clearly of the opinion that in this case the delay has been so far too long and that no order for security should be made.

(8) I could see nothing to change my opinion even on the basis of exhaustive work contained in, G.E. Dal Pont "Law of Costs", Third Edition .

(9) Finally this should be made clear; the security for costs is not a card that a defendant can keep up its sleeve and play at its convenience.

Essentially, that is all I have to say!!!


(H) FINAL ORDERS

(1) The First and Second Defendants Summons for security for costs is dismissed.

(2) I make no Order as to costs.

I do so Order!


.......................................
Jude Nanayakkara
Master of the High Court


At Lautoka
24th March 2016

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