Success Charters Development Ltd v Metropolis Development Ltd [2022] SBHC 120; HCSI-CC 202 of 2022 (24 November 2022)

HIGH COURT OF SOLOMON ISLANDS

Case name:	Success Charters Development Ltd v Metropolis Development Ltd
Citation:
Date of decision:	24 November 2022
Parties:	Success Charters Development Limited v Metropolis Development Limited
Date of hearing:	21 November 2022
Court file number(s):	202 of 2022
Jurisdiction:	Civil
Place of delivery:
Judge(s):	Kouhota; PJ
On appeal from:
Order:	I therefore consider the amount of $800,000.00 is excessive and seem oppressive. I had considered the scales under rule 24.34 and consider a fair amount would be $500,000.00. I order that the Claimant deposit into Court the amount as security for cost within 21 days. Failing which the claim maybe strike out.
Representation:	Mr Radclyffe A for the Claimant/Applicant Mr Mathew T KC & Mr Hii R for the Defendants/ Respondent
Catchwords:
Words and phrases:
Legislation cited:
Cases cited:	Procon Ltd v Provincial Building Ltd CA WLR

IN THE HIGH COURT OF SOLOMON ISLANDS
CIVIL JURISDICTION

Civil Case No. 202 of 2022

BETWEEN

SUCCESS CHARTERS DEVELOPMENT LIMITED
Claimant

AND:

METROPOLIS DEVELOPMENT LIMITED
Defendant

Date of Hearing: 21 November 2022
Date of Ruling: 24 November 2022

Mr Radclyffe A for the Claimant/Applicant
Mr Mathew T KC & Mr Hii R for the Defendants/Respondent

RULING ON APPLICATION TO PAY DEPOSIT AS SECURITY FOR COST

Kouhota PJ;
Background

The Claimant is a limited company incorporated in Hong Kong. The Claimant sues the Defendant for over US $9,996,000 for alleged breach of contract. The Claimant has no assets within Solomon Islands to meet any cost that may be ordered against it if its claim is unsuccessful. Its sole director a Hong Kong resident Mr Lau Yuk Lewis left the Solomon Islands in March 2022 and has not returned since. It is not known whether he will return to Solomon Islands as his work permit was cancelled in July 2022. He now resides outside of Solomon Islands.

The Defendant is a limited company incorporated in Solomon Islands. It is currently working on the Mamara Housing project on Guadalcanal, Solomon Islands. The Defendant raises concern about the validity of the alleged contract in that if the alleged contract was entered into it would be in breach of the Company’s Act and therefore void.

The brief facts as stated herein are sufficient for the purposes of this application. The Defendant on the 10/11/2022 filed an application under rules 24.50, 24.56, 24.57 of the Solomon Islands Civil Procedure Rules 2007, seeking that the Court order the Claimant to give security for cost. In support of its application the Defendant/Applicant relied on the sworn statement of Mr Marahare filed on 10/11/2022. The sworn statement of Mr Marahare sets out the estimated costs the Defendant is likely to incur in this proceeding.

Rule 24.52 and 24.53 provides issues the Court should consider in making orders for a Claimant to give security for cost.

In the present case there is no dispute that Claimant is a company incorporated in Hong Kong and that there is no evidence that it has assets in Solomon Islands.

Issues for consideration in applications for security for cost are clearly regulated under Rule 24 of the CPR, Rule 24.52 states “The court may order a claimant or applicant to give security for cost only if the court is satisfied that;

(a) the claimant is a body incorporated and there is reason to believe it will not be able to pay the cost if ordered to pay cost.
(b)....the claimant’s address is not stated in the claim, or not stated correctly, unless there is reason to believe this was done without intention to deceive. or
(c...
(d)...
(e) the claimant is ordinarily resident outside of Solomon Islands.”
(f)...
(g) the justice of the case requires the making of the order.
(f) the claimant is about to depart Solomon Islands and there is reason to believe the claimant has insufficient fixed property in Solomon Islands available for enforcement to pay the defendant’s cost if ordered to pay them.

The grounds for making the orders for security for is really not an issue of contention. The contested issue is the quantum of security the Court should order the Claimant to pay. In his sworn statement in support of the application Mr. Marahare made a detail calculation of the estimate cost the defendant is likely to incur in defending this claim. The cost according to Mr. Marahare is about SBD$800,000. Counsel Radcliff for Claimants submit that the amount of $800,000 is way over the amount allowed under the scale in rule 24.34. He submit the Court may refuse certification for overseas counsel. Mr Radcliff submits, cost does not depend on the amount claim. He submit that this application was designed to put pressure on the claimant. He also submit the amount must be scrutinised to be reasonable under the rules. Counsel for the Defendant/Applicant T Mathews KC submit that Court should rely on the principle in Procon Ltd v Provincial Building Ltd CA WLR in which Lord Lindley MR said “the principle to be applied is that security ought not to be illusory nor oppressive-not too little nor too much”. His Lordship further at page 508 ‘said “The only principle which, as it appears to me, can be said to apply to a case of this kind is that you must have regard, in deciding upon the amount of security to be ordered, to be probable cost which the defendant will be put to so far as this can be ascertained”. His Lordship went on to say “it would be absurd, of course, to take the estimate of a managing clerk to the defendants’ solicitors and give just what is asked for. You must look fairly at the whole case.”

In the present case the estimate given by Mr Marahare is SBD$800,000.00. While the Claimant adduced no evidence to contradict the estimated amount, after considering the facts of this case and the submission of Mr Radcliff that the amount of $800,000 is only an estimate and that all the events stated including engaging overseas counsels will not all happen, I therefore consider the amount of $800,000.00 is excessive and seem oppressive. I had considered the scales under rule 24.34 and consider a fair amount would be $500,000.00. I order that the Claimant deposit into Court the amount as security for cost within 21 days. Failing which the claim maybe strike out.

THE COURT
JUSTICE EMMANUEL KOUHOTA
PUISNE JUDGE