Jersey Unreported Judgments

Debt - application by the plaintiff for security for costs.

[2014]JRC189

Royal Court

(Samedi)

3 October 2014

Advocate S. M. J. Chiddicks for the Second Plaintiff.

The Defendant did not appear and was not represented.

Advocate W. A. F. Redgrave for Mr Weston.

judgment

the bailiff:

1.        This judgment relates to an application for the return of a sum provided by way of security for costs. 

Background

2.        The long running litigation between the Second Plaintiff ("Leeds") and the Defendant ("Admatch") was finally concluded in favour of Leeds on 19^th May, 2011, Leeds-v-Admatch [2011] JRC 101, when judgment in favour of Leeds was granted against Admatch in the sum of £190,400 with interest.  The matter of costs was at that time left over. 

3.        In due course, Leeds filed a summons ("the costs application") seeking an order for costs not only against Admatch but also against Mr Weston as the director and beneficial owner of Admatch. 

4.        On 27^th March, 2014, on the application of Mr Weston, I ordered that Leeds should provide security for costs in the sum of £30,000.  The Act records that this security was in respect of 'these continued proceedings'.  The only proceeding extant at that time was the costs application and the Act was made in relation to that application.  It is clear therefore that the security was ordered for the purposes of the costs application.  The order was made for the reasons set out in Leeds-v-Admatch [2014] JRC 082A and related to concerns over the financial position of Leeds and therefore its ability to meet any order for costs which might be made against it in the event of it being unsuccessful against Mr Weston in the costs application.  The sum was duly paid in. 

5.        On 5^th September, 2014, for the reasons set out in the judgment Leeds-v-Admatch [2014] JRC 167 ("the costs judgment") I ordered that, subject to certain exceptions, Mr Weston should pay personally two thirds of the costs of the litigation.  Following delivery of the judgment, I granted Mr Weston leave to appeal.  Advocate Chiddicks on behalf of Leeds then applied for the return of the £30,000 provided by way of security for costs.  That application was opposed by Advocate Redgrave on behalf of Mr Weston.  I directed that the parties should file written submissions and this decision is given following consideration of those written submissions.  

Decision

6.        Power to order security for costs in this Court is contained in RCR 4/1(4) which provides:-

"(4) Any plaintiff may be ordered to give security for costs."

7.        The power to order security for costs in respect of an appeal is contained in Rule 12(4)of the Court of Appeal (Civil) Rules 1964 ("the 1964 Rules") which provides:-

"(4) The Court may, in special circumstances, order that such security shall be given for the costs of an appeal as the Court thinks just."

8.        Advocate Redgrave concedes that, in the normal course of events, once a matter has been ruled upon and no costs have been ordered in a defendant's favour, any sum ordered to be paid by a plaintiff as security for costs will be released back to the plaintiff.  However, he submits that this is not a normal case.  He points out that Mr Weston plans to appeal and therefore the proceedings will not come to an end until any appeal has been concluded.  He emphasises that the Act ordering security for costs referred to "these continued proceedings" and they are therefore still continuing.  He further argues, on the basis of information provided by Mr Weston in a separate written submission, that there is evidence that the sum of £30,000 was not in fact provided by Leeds and that it had to obtain those funds from elsewhere.  The sum should therefore not be returned until Leeds has disclosed the identity of the person who provided the sum of £30,000.  

9.        I have to say that, even if Leeds has borrowed the sum from elsewhere, that is beside the point.  So far as this Court is concerned, it is Leeds which has provided the sum and it would be returned to Leeds.  What it does with it thereafter is a matter for it. 

10.      In my judgment, the sum of £30,000 ought to be returned.  The purpose of requiring a plaintiff to provide security for costs is that, in the event of the plaintiff losing the case and being ordered to pay costs, there will be a sum within the jurisdiction available to pay those costs to a defendant.  Where the proceedings in the Royal Court have been concluded in the plaintiff's favour, there can no longer be any good reason to retain the sum by way of security, because that was intended to cover a situation where the plaintiff lost.  The fact that an unsuccessful defendant plans to appeal should not, in my judgment, lead the Court to retain the sum as some form of security in respect of the appeal.  In the first place, under the 1964 Rules the provision of security for costs in relation to an appeal falls within the jurisdiction of the Court of Appeal not the Royal Court.  Secondly, it would be highly unusual to order a respondent to an appeal to provide security for costs, which would be the effect of retaining the £30,000 at this stage.  By analogy with the power of the Royal Court only to order a plaintiff to provide security for costs, it would normally be an appellant who provides security in respect of an appeal to the Court of Appeal. 

11.      In my judgment therefore the sum should be returned to Leeds.  In case a single judge of the Court of Appeal should take a different view to me and be of the opinion that it would be appropriate to order security for costs in respect of the appeal, I order that the sum of £30,000 be released to Leeds 14 days from today.  That will give Mr Weston an opportunity to apply to a single judge under Rule 12(4) of the 1964 Rules should he be so advised.  

12.      This application has failed and, in my judgment, was always likely to fail.  My provisional view therefore is that Mr Weston should pay the costs of Leeds incurred in connection with this particular application on the standard basis.  If Mr Weston wishes to contend otherwise, he must put in a written submission to that effect within 7 days, failing which the order will take effect.  If he does put in written submissions, I shall consider them and reach a decision thereafter. 

Authorities

Leeds-v-Admatch [2011] JRC 101.

Leeds-v-Admatch [2014] JRC 082A.

Leeds-v-Admatch [2014] JRC 167.

Royal Court Rules 2004.

Court of Appeal (Civil) Rules 1964.