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Neesham v Sonaisali Island Resort Ltd [2011] FJHC 642; Civil Action 262.2007 (13 October 2011)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION

Civil Action No. 262 of 2007

BETWEEN:

ALISTAIR NEESHAM
of 27 Leazes Park Hexham, Northumberland, NE463AX, Internal Verifier
as the sole executor and trustee of the
ESTATE OF GILLIAN REOBERTA NEESHAM,
of 27 Leazes Park, Hexham, Northumberland, NE463AX School Teacher, deceased, estate.
Plaintiff

AND:

SONAISALI ISLAND RESORT LIMITED
a limited liability company having its registered office at KPMG Peat Marwick, 2nd Floor, Meghji Arjun Building, 167 Vitogo Parade, Lautoka.
Defendant

Before : Master Anare Tuilevuka

Counsel : AK Lawyers for the Plaintiff
Young & Associates for the Defendant

Date of Ruling : Wednesday 12 October 2011.

RULING
BACKGROUND

[1]. The defendant seeks an order for security for costs against the plaintiff under Order 23 Rule 1 of the High Court Rules 1988. Its application was filed by Young & Associates and is supported by an affidavit of Ana Rogovakalali. The application is opposed.

[2]. The plaintiff is the lawful widower of the late Gillian Roberts Neesham ("the deceased"). He resides in England and is the executor and trustee of the deceased's estate.

[3]. On 22 August 2004, the plaintiff, the deceased, their daughter, and a friend of their daughter were guests at the defendant's resort ("Sonaisali"). They took part in a Jet Ski excursion on that day which was organized by the defendant.

[4]. Before the excursion began, all participants including the plaintiff and the deceased, were shown an instructional video on the use of Jet Skis. After the video, the participants, according to the defendant all signed a document entitled 'rules of operation'. By signing the document, the participants were acknowledging that they understood the rules having been advised of the same. The defendant however has not able to locate the particular document which the plaintiff and the deceased are alleged to have signed – although, the document which their daughter and her friend signed is with the defendant.

[5]. The participants were also given and made to wear safety gear for the Jet Ski tour before the excursion an received oral instructions from Kafoa Vilisoni, a Jet Ski operator in the employ of the defendant, on the safety regulations, rules and use of the Jet Skis.

[6]. Based on a statement of the plaintiff to the Northumbria Police[1], the defendant's case is that the deceased had operated the Jet Ski at a dangerous speed along the Sigatoka river close to the river banks when she lost control of it - resulting in injuries which caused her death. The defendant appears to rely heavily on a document[2] that the plaintiff and the deceased purportedly signed before the Jet Ski excursion to release the defendant from any liability whatsoever in the event of an accident.

[7]. In their submissions, the defendant raises a substantial issue of contributory negligence.

[8]. The plaintiff on the other hand pleads negligence and breach of statutory duty against the defendant. He alleges that the Jet Ski instructor employed by the defendant had diverted from the normal route when he took the excursion along the swollen Sigatoka river past the bridge. This area past the bridge was out of bounds at all times for Jet Skiing purposes. And the participants only came to know this after the accident. The instructional video only showed the open sea.

[9]. For the record, a default judgement was in fact entered against the defendant on 4 October 2007. That happened nearly a month after the plaintiff had amended and served his statement of claim. The reason why the defendant had defaulted in filing its defence was because it had been led to believe that its insurers would be defending the action.

[10]. Later, the insurer retracted from that position but by then, default judgement had already been entered. Some five months later, the defendant filed an application to set judgement aside on 14 March 2008. And on 11 July 2008, judgement was set aside by consent and the statement of defence was later filed on the same day.

[11]. Two days earlier, on 9 July 2008, the defendant had requested further and better particulars. According to the defendant, it responded to the request on 7 August 2008 and also sent to the defendant its own request for particulars.

[12]. A second request by the plaintiff for more particulars was sent shortly thereafter. This, the defendant responded to on 29 October 2008.

[13]. Summons for Directions was filed on 11 August 2008 and in January and March 2009, the plaintiff and the defendant, respectively, filed their affidavit of documents. The parties exchanged their lists of documents on 6 April 2009 and on 21 October, 2009, the defendant (through its solicitors) sent a letter to the plaintiff's solicitors requesting security for costs in the sum of $50,000. The plaintiff declined by letter of 23 February 2010. On 26 October, 2009 the plaintiff filed his Amended Reply to Defence. A draft pre-trial conference minutes has been in circulation for over a year now and the plaintiff at one stage has sought a court order for PTC to be dispensed with.

THE LAW

[14]. The authority of the court to grant security for costs is provided for in Order 23, Rule 1(1)(a) of the High Court Rules 1988:

(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

................

then, if having regard to all the circumstances of the case, the Court thinks it is just to do so, it may order the plaintiff to give such security for the defendant's costs of the action or proceeding as it thinks just."

[15]. In Babu Bhai Patel –v- Manohan Aluminium Glass Fiji Ltd Suva High Court Civil Action No. HBC 0019/19, Mr. Justice Fatiaki held that once it is established that the appellant was not ordinarily resident in Fiji, the 'onus' shifted to him to satisfy the court that he has property within the jurisdiction which can be made subject to the process of the court.

[16]. Where a plaintiff who is ordinarily resident out of jurisdiction has no assets in Fiji, I would say that the onus is still on him to convince the court under Order 23 that, having regard to all the circumstances of the case, it would not be just to order security for costs.

DISCUSSION OF PARTIES' POSITION

[17]. The plaintiff urges the court to exercise its discretion against ordering security for costs, citing the following passage from the White Book at paragraph 23/1-3/28:

Delay in making an application for security for costs ..... may be relevant to the exercise of the courts discretion to order security although in most cases, delay is not a decisive factor, it may be treated as important especially where it has led or may have led the plaintiff to act to his detriment or may cause him hardship in the future conduct of the action. (my emphasis)

[18]. The plaintiff submits that the defendant's delay has led him to act to his detriment in the following way(s):

• (i) having to file an application to dispense with PTC on 16 April 2010.
• (ii) the failure of the defendant's solicitors to attend a scheduled conference at the Lautoka High Court library on 26 February 2010.
• (iii) having incurred considerable litigation fees and expenses.
  

[19]. The plaintiff also submits that the facts as pleaded do raise a strong prima facie case of negligence and/or breach of statutory duty against the defendant. All that the defendant appears to be relying on is the Release and Indemnity Agreement purportedly signed by the deceased before the Jet Ski excursion which is supposed to clear the defendant from any liability in this case – and yet - the defendant admits to not being able to locate any such document[3], which, according to the plaintiff, did not ever exist.

[20]. The plaintiff maintains that the defendant is liable through the actions of the Jet Ski instructor who had taken a diversion from the usual route as discussed above.

[21]. The plaintiff submits that the application for security should be dismissed as he has a reasonably good prospect of success and further that the application was not made promptly.

[22]. The defendant argues that security for costs should be ordered because the plaintiff is ordinarily resident out of jurisdiction. Also, relying on a case theory based on the Release and Indemnity Agreement and the alleged circumstances of contributory negligence (see paragraph __ above), and the argument that the jet skis were examined prior to their use and after the accident and found to be in good working order - the defendant submits that the plaintiff has a very weak case. Mr. Young submits that this is a complicated matter involving a wide variety of issues, each of which will need to be thoroughly addressed by the defendant through its witnesses. And because an order for security for costs will not be oppressive on the plaintiff, such an order should be made by this court. Alternatively, even if there is to be evidence of oppression, which the defendant says there is not, the plaintiff could still be ordered to pay a lesser amount of security for costs.

[23]. In saying that there is no oppression in ordering security for costs, the defendant relies on the fact it had been requesting security for costs since October 2009 before the close of pleadings and also on the allegation that the plaintiff had received in April 2010 a travel insurance payout of around FJ$75,000. In contrast, the defendant's insurers are not covering the claim. Mr. Young submits that the onus of showing oppression rests with the plaintiff who has failed to discharge that burden.

ANALYSIS

[24]. Mr. Young concedes that as a general rule, the courts have been reluctant to order security for costs where the defendant's delay has forced the plaintiff to incur expenses in the litigation. Mr. Narayan relies on some oft cited case law that the further a plaintiff has proceeded in an action and the greater the costs it has been allowed to incur without steps being taken to apply for an order for security for costs, the more difficult it will be to persuade the court that such an order is not, in the circumstances, unfair or oppressive[4]. Delay is a factor in determining what is just between the parties[5] - although it does not necessarily mean that even where delay is made out, an order for security for costs should automatically be refused.

[25]. Mr. Young quotes Fina Research SA v Haliburton Energy Services Inc [2002] FCA 1331 as authority that the inquiry should be focused on whether or not there is a rational connection between the delay and the effect of any order for security for costs. In this regard, the relevant questions to ask are:

• (a) whether the plaintiff has incurred significant costs which would be thrown away if it is not in a position to pay the security?; and,
  
• (b) whether the plaintiff has been denied the opportunity of deciding not to proceed at any early stage?
  

[26]. In other words, the length of the defendant's delay must be juxtaposed against the plaintiff's mileage (so to speak) in determining whether or not an order for security for costs would be oppressive.

[27]. And delay is to be measured from the point when the defendant first became aware of the circumstances which would justify a security for costs application (see also Inoke J's decision in Brzoska v Hideaway Resort Ltd [2009] FJHC 191; HBC 347.2005 (4 September 2009) and Master Udit's ruling in Kadavu Shipping Company Limited (in liquidation) v Dominion Insurance Limited [2009] FJHC 71; HBC 508.2006 (27 February 2009)).

CONCLUSION

[28]. In this case, it has been no secret right from the start that the plaintiff is resident in England. The defendant's solicitors had written a letter to the plaintiff's solicitors in October 2009 asking for security for costs. The claim was filed in August 2007. The plaintiff has obviously incurred expenses (see paragraphs 9 to 13 above). There is no direct evidence of what costs the plaintiff has incurred. There is accumulated case law material that the further a plaintiff has proceeded in an action, the greater the costs it has been allowed to incur and the more easy it is for the court to find that ordering security for costs will be unfair or oppressive.

[29]. The strength of the plaintiff's case may eventually turn on whether or not the instructor did in fact lead the plaintiff and the deceased upriver to an area that was strictly off bounds for Jet Skiing purposes. For the defendant, their case may depend on what effect the Court will give to the Release and Indemnity Agreement – if the court was to find that the deceased did in fact sign one.

[30]. After having considered all, I am of the view that to order the amount of security for costs that the defendant seeks would be oppressive. Instead, I order that the plaintiff is to pay security for costs of the much lesser sum of FJD$20,000-00 (twenty thousand dollars) to be paid into court in 28 days. Costs in the cause.

[31]. Case adjourned to 14 November 2011 at 8.30 a.m. for mention.

...................................
Anare Tuilevuka
Master

At Lautoka
13 October 2011

^[1] In his statement to the Northumbria Police dated 3 September 2004, Mr. Neesham stated that he told Mrs. Neesham to “slow down” as they were “getting near the bankside”.

^[2] Release and Indemnity Agreement (“RIA”).

^[3] as admitted in the affidavit of Ana Rogovakalali at paragraph 33(a)(i) as follows:

the Defendant alleges that all of the participants in the jet ski tour on 22 august 2004 signed a Release and Indemnity Agreement releasing the Defendant from liability in the event of any accidents (including jet ski tours). Although copies of the Release and Indemnity Agreements signed by the Plaintiff and deceased cannot be located, copies of the release and Indemnity Agreements signed by Phillipa Neesham and Anna Kirk are exhibit “AMG 6” to the Affidavit of Aaron McGrath.

^[4] as per French JBryan F Fincott aott and Associates Pty Ltd v Eretta Pty Ltd and Ors [1987] FCA 102; (1987) 16 FCR 497 at 514.

"The further a plaintiff has proceeded in an action and the greater the costs it has been allowed to incur without steps being taken to apply for security for costs, the more difficult it will be to persuade the court that such an order is not, in the circumstances, unfair and oppressive"

^[5]as per White J in West’s Process Engineering Pty Ltd v Westralian Sands Ltd & Anor (1998) 144 FLR 340 at 352 - where there has been some delay in bringing the application for security for costs, that does not have the effect that the court should not make an order for the provision of security in a proper case.