Quarter Enterprises Pty Ltd v Allardyce Lumber Company Ltd [2008] SBHC 38; HCSI-CC 208 of 2000 (11 August 2008)

HIGH COURT OF SOLOMON ISLANDS

Civil Case Number 208 of 2000

QUARTER ENTERPRISES PTY LIMITED
APPLICANT

-V-

ALLARDYCE LUMBER COMPANY LIMITED
FIRST DEFENDANT

AND

JOHN HENRY HOWDEN BEVERLEY
SECOND DEFENDANT

High Court of Solomon Islands
(Palmer CJ.)

Civil Case Number 208 of 2000

Date of Hearing: 7th August 2008
Date of Judgment: 11th August 2008

A. Radclyffe for the Applicant.
J. Sullivan Q.C. and R. Kingmele for the First and Second Defendants.

Palmer CJ.

This is an application for security for costs by the first and second defendants and for further directions. The court clearly has discretion under Rules 24.50, 24. 52, and 24.53 of the Solomon Islands Courts (Civil Procedure) Rules 2007 ("the Rules").

There is no dispute about the question whether security should be ordered or not in this case. Mr. Radclyffe for the Applicant concedes that security for costs should be ordered but takes issue with the quantum. He submits the amount should be limited to $663,317.31, being the amount estimated on standard scale costs for the new trial estimated to run for five weeks. If the court however declines to accept his argument, then he submits the court should return the sum of $300,000.00 previously paid as security for costs in the first trial.

Mr. Sullivan for the first and second defendants however argue that the costs of the first trial which would abide the outcome of the second trial needed to be taken into account and should be included in the security for costs.

Having heard Counsels on the matter, I am satisfied security for costs must include the estimated costs for the first trial which the Court of Appeal had ruled shall abide the outcome of the new trial. In the first trial a security of $300,000.00 had been ordered. In the decision of the Court of Appeal[1], it dismissed the plaintiff’s claim in the action against Devon George Minchin with costs. In his submissions before this court, Mr. Sullivan points out that the bulk of the $300,000.00 will be easily taken up by Mr. Minchin’s costs.

In his calculations of the estimates of the standard costs of the first trial these came to a total of SBD852,720.00. The amount outstanding therefore if present security of $300,000.00 is deducted is SBD552,720.00. Mr. Sullivan submits this should be added to the estimated costs for the new trial.

A number of grounds on which the court will consider imposing an order for security for costs is where the applicant is ordinarily resident outside of Solomon Islands and where there is prospects of success of the proceedings. In this instant, the applicant is an incorporated company from Australia and therefore based in Australia with limited assets in the country, if any.

On the issue of prospects of success, whilst the matter has been sent to this Court for re-trial, the findings of the Court of Appeal in its judgement had narrowed the outstanding issues considerably and it cannot be said that the defendants do not have fair prospects of success.

The amount of the claim of the applicant in this case is substantial, in the vicinity of some USD2.7 million. That is a lot of money and a lot is at stake.

In the circumstances, I am more than satisfied the amount sought as security for costs in the sum of SBD1,216,037.31 is justifiable. The supporting affidavit of Rodney Kingmele sets out in clear terms the basis and justification for the quantum of costs sought. I grant the orders sought for security of costs in the sum of SBD1,216,037.31 payable in twenty one days failing which the application is to be stayed. I also direct that the security for costs can be in the form of a bank guarantee. The costs of this application to be borne by the applicant.

I also direct that any further sworn statements to be filed and served by 31st October at close of business and the matter to be fixed for trial commencing on 10th November 2008 at 9.30 am for five weeks.

Orders of the Court.:

1. Grant order for security for costs to be paid in the sum of SBD1,216,037.31 payable within twenty one days in default thereof the matter to be stayed.
   
2. Any further sworn statements to be filed by close of business on 31st October 2008.
   
3. The matter to be fixed for trial for 10th November 2008 at 9.30 am.
   

The Court.

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^[1] Allardyce Lumber Company Limited and Others v. Quarter Enterprises Pty Ltd, 12^th March 2008 CASI-CAC 15 of 2007