THE HIGH COURT (CIRCUIT APPEAL)
THE PERFORMING RIGHT SOCIETY LIMITED
Judgment of Mr. Justice Barron delivered the 28th day of April 1989.
This is an application by the Plaintiff for security for the costs of this appeal. Notice of Appeal was served on the 18th of June 1988 against a Judgment of the Circuit Court dated the 1st June 1988 for the sum of £584.82 and costs. The Defendant was adjudicated a bankrupt on the 29th of August 1988. The appeal was listed for hearing on 12th January 1989, but adjourned to ascertain whether or not the Official Assignee wished to prosecute the appeal. The Official Assignee has indicated that he does not wish to do so, but has no objection to the bankrupt doing so provided that no recourse can be had to the funds comprising the bankrupt's estate to discharge any liability for costs incurred by the Defendant as a result. Having regard to this attitude the Plaintiff sought from the Defendant security for the costs of the appeal but has been refused. This application is now brought to obtain an Order that such security should be given.
The Plaintiff contends that security for costs of an appeal may be awarded where there are special circumstances and it is just to do so. The Defendant contends that bankruptcy is not per se sufficient reason. He relies on Tormey and the Official Assignee v. The Economic and Social Research Institute 1986 I.R. 615.
The effect of the bankruptcy is to place the affairs of the bankrupt under the control of the Official Assignee. If he does not wish to contest the liability, it seems to me that the bankrupt may have no standing to contest the matter himself. However, the existence of the liability is detrimental to the bankrupt and in any event no such objection is taken by the Plaintiff.
The authority upon which the Defendant relies relates to a cause of action arising after the bankruptcy. In such cases, the fact of the bankruptcy is not per se a reason for ordering security. The situation here is quite different. First, it is an appeal against a determination of the claim. The principles upon which security is given for the costs of an appeal differ from those applicable before the matter has been heard. Secondly, the cause of action arose before the bankruptcy.
In Re. Whatman, Hoar v. Whatman 1889 WN 213, an undischarged bankrupt was in a similar situation to the present, i.e., one where the trustee in bankruptcy had given him leave to act in his own name, and was given leave to pursue a claim. This claim was one which if successful would have enabled him to discharge his liabilities in full. He was allowed to proceed in his own name but only upon terms that if he paid into Court a sum sufficient to cover all the costs occasioned by the application. In United Telephone v. Bassano 31 Ch. D.630 an injunction had been granted to the Plaintiff against the Defendants to restrain the infringement of a patent. The Defendants appealed, but before the appeal came on for hearing had become bankrupt. It was held that they still had an interest in being relieved of the injunction sufficient to entitle them to proceed with the appeal. Nevertheless the Court held that the appeal should be dismissed unless within a fixed time the bankrupt gave security for the costs of the appeal or the trustee in bankruptcy was made a party to the proceedings. The basis of this decision is set out in the Judgment of Cotton L.J. at p. 631 as follows:
"At the trial of the action,..., judgment was given restraining the infringement of a patent, and ordering delivery up of articles made in infringement of it. The judgment was pronounced, but the learned judge postponed giving his reasons, and has not yet given them. The Defendants gave notice of appeal, and set down the appeal. After this they became bankrupt. The injunction affected both the persons and the property of the Defendants. The Official Receiver is interested in the question as affecting the trade property; the bankrupts are still interested, for the injunction restrains them from selling a particular class of machines, and if they broke that injunction they might be sent to prison. The injunction, therefore, interferes with their future power of gaining a livelihood, and they have an interest in being relieved from it. We have ascertained from Mr. Justice North that he will be prepared to give his reasons within a short time, and the question is, what is the proper order under these circumstances. The bankrupts alone could not be allowed to proceed with the appeal without giving security for costs. If the bankrupts had no interest in the appeal the proper order would be to dismiss the appeal, unless the Official Receiver, within a limited time, made himself a party. We think that the right order will be that unless, within 14 days from Mr. Justice North giving his reasons, the bankrupts give security for costs, or the Official Receiver makes himself a party to the proceedings, the appeal shall, without any further order, be dismissed without costs."
I am of the view that similar conditions should be imposed upon the Defendant in the present instance. He wishes to take a step outside the bankruptcy in respect of a matter arising before his bankruptcy and in respect of which the funds of his bankrupt estate will not in the event of the appeal being unsuccessful be available to meet such Order for costs as the Plaintiff might obtain. The proceedings however are within the District Court jurisdiction. Accordingly, security need only be furnished upon the basis of such costs as the Plaintiff would have incurred in an appeal of the same claim from the District Court to the Circuit Court.