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High Court of Fiji |
IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION
Civil Action No. HBC 80 of 2015
BETWEEN:
DR DREW ALLBRITTEN of 265 Waimanu Road, Suva, Visiting Professor at FNU, Executive MBA.
PLAINTIFF
BETWEEN:
THE UNIVERSITY OF THE SOUTH PACIFIC a Staturoty body established under the University of the South Pacific Charter, Cap 266 and with its registered address at Laucala
Campus, University of South Pacific, Private Bag, Suva.
DEFENDANT
BEFORE : Master Vishwa Datt Sharma
COUNSEL : Mr. Devenesh Sharma- for the Plaintiff
Mr. John Apted- for the Defendant
Date of Hearing : 25th February, 2016
Date of Ruling : 20th April, 2016
RULING
1. (1) Where, on the application of a defendant to an action or other proceeding in the High Court, it appears to the Court-
(a) that the plaintiff is ordinarily resident out of the jurisdiction, or
(b) ..........................................................................................
(c) 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
(d) ....................................................................
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.
"Discretionarily power to order securitycosts ((rr1- 3) The mainmost important chan change effected by this Order concerns the nature of the discretion of the Con wheto ord60;
'The purpose of ordering security for c#160;agai>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 securit costs agai>against a plainthof who lacks funds. The risk of defending a case brought by a penurious is as applicable tintiffs coming from outside the jurisdiction as it is to plaintiff's resident within the juhe 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.’
Further, 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] 1W.L.R. 127. Under the R.S.C., Order 23, rule 1 (1) (a), it seems to me that I have entirely general discretion either to award or refuse security, having regard to all the circumstance 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 circumstance of the case, is the just answer.'
'If there is a reason to believe that the company cannot pay the costs, then security may be ordered, but not must be ordered. The court has a discretion which it will exercise. The court has a discretion which it will exercise considering all the circumstances of the particular case. So I turn to consider the circumstances. Counsel for Triplan helpfully suggests some of the matters which the court might take into account, such as whether the company's claim is bona fide and not a sham and whether the company has a reasonably good prospect of success. Again it will consider whether there is an admission by the defendants on the pleadings or elsewhere that money is due. If there was a payment into court of a substantial sum of money (not merely a payment into court to get rid of a nuisance claim), that too would count. The court might also consider whether the application for security was being used oppressively-so as to trey and stifle a genuine claim. It would also consider whether the company' 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.
(i) The impecuniosity of the Plaintiff
The court must first consider the threshold question of whether there is credible testimony to establish that the Plaintiff will be unable to pay the Defendant’s costs if the Defendant is ultimately successful.
However, once the Defendant has led credible evidence of impecuniosity, an evidentiary onus falls on the Plaintiff to satisfy the court that, taking into account all relevant factors, the court’s discretion should be exercised by either refusing to order security or by ordering security in a lesser amount than that sought by the Defendant. In other words, proof of the unsatisfactory financial position of the Plaintiff ‘triggers’ the court’s discretion. (Case of fiduciary Ltd v Morningstar Research Pty Ltd [2004] NSWSC 664; (2004) 208 ALR 564 refers).
On the outset, the Defendant has furnished court with itemized bill of cost for $49,825 as to the probable costs they will incur or grant 2/3rds of the proforma costs at $30,000.
Firstly, the Plaintiff has admitted and the Defendant has established that the Plaintiff is a foreign national resident in France.
Secondly, there is evidence from both parties that the Plaintiff does not have assets within Fiji Jurisdiction that may be utilized to recover costs if the Plaintiff loses the case.
Thirdly, the Plaintiff has made its stand very clear that if the court is mindful to impose a security for costs, then the costs must be reasonable and not make it too hard to prevent the Plaintiff from proceeding.
According to the Defendant, there is no evidence that the Plaintiff is impecunious and will be unable to pay any security.
In any event, the fundamental principle is the right of a litigant to pursue and enforce rights in the courts. He should not be shut out from prosecuting his case.
(ii) The bona fides of the claim
Whether the claim is bona fide or a sham is a relevant consideration, and the court will take into account the motivation of a Plaintiff in bringing the proceedings. For example, unsatisfactory pleading, or a vexatious claim, particularly where the Plaintiff is self-represented with ‘abundant time’ to pursue incessant and numerous applications. (Case of Lall v 53-55 Hall Street Pty Ltd [1978] 1 NSWLR 310 refers).
Upon the perusal of the Plaintiff’s substantive claim within the Writ of Summons and the Statement of Claim, it can be ascertained that the same was filed when the Plaintiff was still a lecturer at the University.
The Plaintiff submitted to the court that the filing of a bare Statement of Defence by the Defendant as such is not in a position to say that the Plaintiff’s claim has no prospects of success. The Plaintiff is of the contention that prima facie, based on the facts set out in the statement of claim, the Plaintiff has an arguable case with good prospects of success in that he was not treated fairly when it came to renewal of his employment contract with USP and USP breached its policies in terms of the contract for retiring academic staff.
The Defendant submitted that the Plaintiff has a negligible chance of success with regards to his claim.
The court is of the view that it should not delve itself prematurely into the merits of the case at this stage of the case, rather deal with the pending issue of the security for costs.
The Plaintiff’s cause of action as it can be ascertained from the Statement of Claim is that for Damages brought against USP by a former employee. It arises out
of USP’s refusal to re-employ the Plaintiff under internal university laws regarding retirement. Further, there is a claim
for allegedly unpaid benefits at the time his contract when it came to an end i.e. reimbursement of medical expenses and an air-fare,
accordingly.
(iii) The stultification factor
Where the effect of an order for security would be to stifle or end the Plaintiff’s claim, this is an important consideration to be weighed, particularly in light of the poverty rule. (Case of fiduciary Ltd v Morningstar Research Pty Ltd [2004] NSWSC 664; (2004) 208 ALR 564 refers).
It is appropriate to examine whether the impecunious Plaintiff is, in reality, the Defender in the proceedings, and not the attacker. It is also appropriate to look behind the actual litigant to examine the means of others who stand to benefit from the litigation.
The Plaintiff submitted that the estimated Bill of Costs for $49, 825 and or $30,000 shows that the Defendant was using the application for security for costs oppressively to stifle a genuine claim.
The general rule is that poverty is no bar to a litigant. The exercise of the power to order security for costs is a balancing process, requiring the doing of justice between the parties to the proceedings.
(iv) The prospects of success of the claim
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 cases of the parties at the early stages of proceedings. (Case of fiduciary Ltd v Morningstar Research Pty Ltd [2004] NSWSC 664; (2004) 208 ALR 564 refers).
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. (Case of KP Cable Investments Pty Ltd v Meltglow Pty Ltd [1995] FCA 76; (1995) 56 FCR 189 refers).
As I have earlier on stated herein above that the Plaintiff’s cause of action as it can be ascertained from the Statement of Claim is that for Damages arising out of USP’s refusal to re-employ the Plaintiff under internal university laws regarding retirement and further, that there is a claim for allegedly unpaid benefits at the time his contract when it came to an end i.e. reimbursement of medical expenses and an air-fare, accordingly.
However, at this stage of the proceedings, the court should proceed on the basis that the claim is bona fide and has reasonable prospects of success.
(v) The causation factor
Where the Plaintiff’s lack of funds has been caused or contributed to by the Defendant, the court will take this consideration into account. This has been the “causation” factor: (Case of fiduciary Ltd v Morningstar Research Pty Ltd [2004] NSWSC 664; (2004) 208 ALR 564 refers). It is a relevant consideration that an order would effectively shut a party out of relief in circumstances where that party’s impecuniosity is itself a matter which the litigation may help to cure.
However, a Plaintiff cannot rely on the poverty rule where he or she so organized their affairs so as to shelter assets. It was said that in determining the causation factor it is not appropriate to have some regard to the apparent strength of the case.
(vi) Foreign Plaintiffs
Where a Plaintiff is ordinarily resident overseas and has no assets in the jurisdiction, as in this case, there must be weighty reasons why an order for security for costs should not be made. A Defendant is not expected to bear the uncertainty of enforcement in a foreign country. The difficulty in enforcing an order for costs overseas against a non-resident Plaintiff will usually be sufficient to ground an order, especially where there is no reciprocal right of enforcement in the relevant foreign jurisdiction. Special notation should be taken into consideration that the Defendant will only be entitled to costs if the Plaintiff’s claim is dismissed, and not any time prior to a court’s decision.
(vii) Delay
Application for security should be brought promptly and delay by a Defendant is a relevant factor in the exercise of the discretion. However, the passage of time is but a factor to be taken into account in the balancing exercise. The delay must be weighed in terms of prejudice and factors that have led to the delay.
In this case the Plaintiff commenced proceedings on 04th February, 2015, and the Defendant filed an application seeking security for costs on 08th September, 2015, some seven (7) months after.
"31.0. The first case I mention is Porzelack (UK) Ltd, (1987), 1 All ER 1074 where Sir Nicolas Browne Wilkinson V.C. said at p. 1076: The purpose of ordering security for costs against a plaintiff ordinarily resident outside the jurisdiction is to ensure that a successful defendant will have a fund available within the jurisdiction of this court against which it can endorse the judgment for costs. It is not, in the ordinary case, in any sense designed to provide a defendant with security for costs against a plaintiff who lacks funds. The risk of defending a case brought by a penurious plaintiff is as applicable to plaintiffs coming from outside the jurisdiction as it is to plaintiff's residents within the jurisdiction.
"Under Order 23, r1 (1) (a) it seems to me that I have an entirely general discretion either to award or refuse security, having regard to all the circumstances of the case. However, it is clear on the authorities that, if other matters are equal, it is normally just to exercise that discretion by ordering security against a non-resident plaintiff. The question is what, in all the circumstances of the case, is the just answer."
"[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."
DATED at S b vcde3uva on 20th April, 2016
MR VISHWA DATT SHARMA
Master of the High Court,
Suva.
Cc. Mr. Devenesh Sharma of R. Patel Lawyers, Suva- for the Plaintiff
Mr. John Apted of Munro Leys Lawyers, Suva-- for the Defendant.
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