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Khairati v Ibrahim [2012] FJHC 1284; HBC74.2010 (16 August 2012)

RULIN G

[1]. Before me is the 1st Defendant’s application for Security for Costs against the plaintiffs. The first Defendant asks for the sum of $32,000 (thirty two thousand dollars). This sum represents his estimated costs for both his witnesses and his counsel in the defence of this action. The application is premised on the fact that the 1st plaintiff is a US citizen but now living and working in Canada and the 2nd plaintiff is a Canadian citizen and resident. No affidavit is filed in opposition to the application.

[2]. 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."

[3]. 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.

[4]. However, even if a plaintiff who is ordinarily resident out of jurisdiction has no assets in Fiji, he or she may still avoid having to pay security for costs if able 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.

[5]. As stated above, neither of the plaintiffs has filed any opposition to the application and there is no evidence before me as to whether or not they own any assets in Fiji.

[6]. Delay is a factor in determining what is just between the parties - although it does not necessarily mean that even where delay is made out, an order for security for costs should automatically be refused. The White Book at paragraph 23/1-3/28 states as follows:

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)

[7]. French J in Bryan F Fincott 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.

[8]. In Fina Research SA v Haliburton Energy Services Inc [2002] FCA 1331 is authority that delay per se should not necessarily be conclusive. Rather, where delay is made out, the inquiry should then be directed towards whether or not there is a rational connection between the delay and the effect of any order for security for costs. The relevant questions then would be:

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

[9]. In other words, whether or not an order for security for costs would be oppressive, the length of the defendant's delay must be juxtaposed against the mileage that the plaintiff has covered in the proceedings. 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)).

[10]. In this case, I do not consider there to be any delay on the part of the 1st defendant in filing the application. The pleadings had barely just closed when the application was filed. In any event, as stated above, the plaintiffs have filed no opposition.

[11]. A major factor to be considered also is the plaintiff's prospect of success (see discussion on this point in Raju v Amalgamated Telecom Holdings [2011] FJHC 753; HBC268.2010 (18 November 2011) as per Master Amaratunga). The 1st defendant is the brother of the plaintiff's deceased father. The 1st plaintiff is the sole executor/trustee of their late father's estate and the 2nd plaintiff is a beneficiary thereof. Their late father was a beneficiary in the estate of their late grandfather, over which estate the 1st defendant is the sole executor/trustee. The plaintiffs' are aggrieved by what they claim is a lack of accounting on the part of the 1st Defendant in his handling of the estate matters.

[12]. I am inclined to order security for costs. I note however that the costs estimate of the 1st defendant includes losses that his witnesses will suffer as a result of having to attend court as a witness (e.g. expenses that his children will suffer in having to hire someone to look after their service station as they attend to court case in Fiji). There is also doubt as to whether or not one of his witnesses, Dr. Sahu Khan, who has since left Fiji, will ever attend as a witness even if subpoenaed. His practice in Fiji was wound up for disciplinary reasons and he has since left Fiji. He has failed to turn up in some cases against him in Fiji. Accordingly, I reduce the amount of security to $15,000 (fifteen thousand dollars). Also, because the law firm of Haroon Ali Shah Esquire which used to represent the plaintiffs is now wound up and its principal disbarred, I order that the security for costs be settled within 28 days of the date when the perfected order is served on the plaintiffs by the 1st defendant. The case is adjourned to 09 September 2012 for mention at 8.30 a.m. Costs in the cause.

Anare Tuilevuka
Master

Lautoka High Court
16 August 2012