IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

Civil Action No. HBC 91 of 2010

BETWEEN:

PUN SAMI of Lot 26 Mandir Street,
Nakasi, Nasinu in the Republic of Fiji Islands, Retired.
PLAINTIFF

AND:

LATCHMI DEVI of Nakasi, Nasinu
 in the Republic of Fiji Islands, Domestic Duties.
FIRST DEFENDANT

AND:

REGISTRAR OF TITLES OFFICE
SECOND DEFENDANT

BEFORE : Master Deepthi Amaratunga

COUNSEL : Ms. Radhika Naidu for the Plaintiff
Ms. Prem Narayan for the Defendant

Date of Hearing : 13th February, 2012
Date of Ruling : 8th March, 2012

Decision
(Security for cost)

A.	INTRODUCTION

1.	The Defendant has filed the summons seeking security for cost. The Plaintiff admits that he is not ordinarily resident in Fiji, but states that he has two properties in Fiji. One property is the property in issue of this action, where he alleges forgery against the 1st Defendant, of the transfer of his share. So, at the moment the Plaintiff does not hold any share in the said property and clearly if his claim is not successful this property cannot be considered as a security. The other property which the affidavit in opposition referred is a Housing Authority Sub lease where the Plaintiff and another party is holding rights, where there is a charge on the property and said rights to property including the Plaintiff's rights have been mortgaged. So, the property which has such encumbrances is not a suitable property to be considered as sufficient for refusal of security for cost in the exercise of the discretion of the court in considering all the circumstances of this case. The alleged fraudulent transaction occurred in 2006 and though the Plaintiff is claiming forgery/fraud there is no claim to regain his share and or to rescind the transaction though there is already a caveat filed by the Plaintiff.

B.	LAW AND ANALYSIS

2.	Order 23 Rule 1 of the High Court Rules provides as follows:

ORDER 23
SECURITY FOR COSTS
SECURITY FOR COSTS OF ACTION

Order 23 Rule 1 of the High Court Rules of 1988 provides:

"1(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
b)	That the plaintiff (not being a plaintiff who is suing in a representative capacity) is a nominal plaintiff who is suing for the benefit of some other person and that there is reason to believe that he will be unable to pay the costs of the defendant if ordered to do so; or
c)	Subject to paragraph (2), that the plaintiff's address is not stated in the writ or other originating process or is incorrectly stated therein, or
d)	That the plaintiff has changed his address during the course of the proceedings with a view to evading the consequences of the litigation;

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

As the rule itself states, the ordering of security is a matter of discretion. The discretion is an unfettered one. However, security should only be ordered if the Court is satisfied that it is just to do so having regard to all the circumstances of the case.

3.	Although Security may be ordered against a foreign resident plaintiff, there is no inflexible or rigid rule that security must be ordered, as it is a matter of discretion depending on the circumstances of the case if the court thinks it is justified in ordering so.

4.	Para 23/3/3 of the White Book says in regard to foreign plaintiffs-

"In exercising its discretion under r.1 (1) the Court will have regard to all the circumstances of the case. Security cannot now be ordered as of course from a foreign plaintiff, but only if the Court thinks it just to order such security in the circumstances of the case. For the circumstances which the Court might take into account whether to order security for costs, see per Lord Denning MR in Sir Lindsay Parkinson & Co Ltd v Triplan Ltd [1973] QB 609 at 626-627; [1973] 2 A;; ER.

5.	In Sir Lindsay Parkinson & Co. Ltd v Triplan Ltd [1973] 2 All ER 273 at pop. 285-286, Lord Denning MR described the factors as follows-

"So I turn to consider the circumstances, Counsel for Triplan helpfully suggests some of the matters which the court might take into account, such as whether the company's claim is bona fide and not a sham and whether the company has a reasonably good prospect of success. Again, it will consider whether there is an admission by the defendants on the pleadings or elsewhere that money is due. If there was a payment into court of a substantial sum of money (not merely a payment into court to get rid of a nuisance claim), that too would count. The court might also consider whether the application for security was being used oppressively – so as to try and stifle a genuine claim. It would also consider whether the company's want of means has been brought about by any conduct by the defendants, such as delay in payment or delay in doing their part of the work."

6.	Para 23/3/3 of the White Book states in regard to prospects of success –

"A major matter for consideration is the likelihood of the plaintiff succeeding. This is not to say that every application for security for costs should be made the occasion for a detailed examination of the merits of the case. Parties should not attempt to go into the merits of the case unless it can be clearly demonstrated one way or another that there is a high degree of probability of success or failure (Porzelack KG v Porzelack (UK) Ltd [1987] 1All ER 1074). In the cases which follow, investigation of the merits was justified only because of the plaintiffs demonstrated a very high probability of success. If there is a strong prima facie presumption that the defendant will fail in his defence to the action, the Court may refuse him any security will fail in his defence to the action, the Court may refuse him any security for costs (seeper Collins J in Crozat v Brogden [1894] 2 QB 30 at 33."

It further states –

"In considering an application for security for costs the Court must take account of the plaintiff's prospects of success, admissions by the defendant, open offers and payments into Court, but a defendant should not be adversely affected in seeking security merely because he has attempted to reach a settlement. Evidence of negotiations conducted "without prejudice" should not be admitted without his consent (Simaan Contracting Co. V Pilkington Glass Ltd [1987] 1 WLR 516; [1987] 1 All ER 345."

7.	The Plaintiff has filed this action seeking damages for loss of peaceful enjoyment of the property. The said property was co-owned by the Plaintiff and the husband of the 1st Defendant. The Plaintiff's share was transferred to the 1st Defendant in 2006 and now the Plaintiff is alleging forgery against the 1st Defendant for the said transfer in 2006. The 1st Defendant in the statement of defence stated that though the transfer was executed after payment of $15,000 to the Plaintiff, he remained in occupation of the property because he is the brother of her husband and has also alleged that in 2009 the Plaintiff has tried to obtain $30,000 for the building on the property after the said transfer, that is 3 years after the transfer of his shares to the 1st Defendant and after that unsuccessful attempt to obtain money form the 1st Defendant, this action was filed. I cannot on affidavit evidence evaluate the strength of the said allegations. The Plaintiff is alleging forgery but does not seek annulment of the said transfer which he alleged to have been done fraudulently. Any act done fraudulently will be of no force in law and has to be rescinded ipso facto, but the Plaintiff is seeking only compensation in the statement of claim. This is a strange phenomenon and the Plaintiff is seeking in the statement of claim to restrain the 1st Defendant from dealing with the said property and also damages for the alleged fraud. This is unusual as the Plaintiff has already lodged a caveat over the property, but does not wish to obtain his share which he alleges transferred fraudulently.

8.	The Plaintiff has already filed a caveat over the property and the claims in this action except the claim for damages are of the similar nature to restrain the 1st Defendant from dealing with the property. So, this action seems to be superfluous, but considering there is a claim for damages without seeking annulment of the alleged transfer is not only strange but also creates some suspicion of the bona fide of the claim for forgery. The alleged forgery has occurred in 2006 but the date of lodgment of the caveat has not been divulged to the court. If this action is only seeking damages there is clearly a misnomer as anything done fraudulently is void in law. This creates serious issues as to the bona fide of the claim and genuineness of the allegation of forgery. In the circumstances on the available materials before me 

9.	The purpose of the discretion to order for costs against a foreign plaintiff was described in Corfu Navigation Co. V. Mobil Shipping Co. Ltd [1991] 2 Lloyd's Rep. 52 (p. 54 Lord Donaldson MR) –

"The basic principle underlying R.SC, 0.23, r.1 (1) (a) is that it is prima facie unjust that a foreign plaintiff, who by virtue of his foreign residence is more or less immune to the consequences of an order for costs against him, should be allowed to proceed without making funds available within the jurisdiction against which such an order can be executed."

At p. 55, Lord Donaldson MR further said – 

"In the context of the present appeal it has to be remembered that the purpose of O.23, r.1 is not to make it difficult for foreign plaintiffs sue, but to protect defendants."

10.	So, the security for cost is not granted merely on the issue of the residence of the Plaintiff alone. The rationale is that Defendants should not be unnecessarily encumbered to defend a foreign Plaintiff. When there is a doubt as to the claim of the Plaintiff and or its conduct, where there is likelihood of cost being ordered against the Plaintiff, which would be difficult to recover. It was held that even if the choice of law provision in the contract confers the jurisdiction that it would not preclude the court from ordering security for cost.

11.	Consistently with this, 23/3/4 of the White Book (1999) states that while security for costs is not ordered as a matter of course – 

"On the other hand, as a matter of discretion, it is the usual ordinary or general rule of practice of the Court to require the foreign plaintiff to give security for costs, because it is ordinarily just to do, and this is to, even though by the contract between the parties, the foreign plaintiff is required to bring the action in England (Aeronave SP v Westland Ltd) [1971] 1 WLR 1445; [1971] 3 All ER 531, CA)."

12.		The purpose of the rule and the prima facie presumption in favour of ordering security for costs has been recognized and applied in Fiji. In this Court in Furuuchi Suisan Company Ltd v Tokuhisa [2009] FJHC 194; Civil Action 95. 2009 (9 September 2009), Byrne J said –

"31.0. The first case I mention is Porzelack (UK) Ltd, (1987), 1 All ER 1074 where Sir Nicolas Browne Wilkinson V.C. said at p. 1076: The purpose of ordering security for costs against a plaintiff ordinarily resident outside the jurisdiction is to ensure that a successful defendant will have a fund available within the jurisdiction of this court against which it can endorse the judgment for costs. It is not, in the ordinary case, in any sense designed to provide a defendant with security for costs against a plaintiff who lacks funds. The risk of defending a case brought by a penurious plaintiff is as applicable to plaintiffs coming from outside the jurisdiction as it is to plaintiff's residents within the jurisdiction.

"Under Order 23, r1 (1) (a) it seems to me that I have an entirely general discretion either to award or refuse security, having regard to all the circumstances of the case. However, it is clear on the authorities that, if other matters are equal, it is normally just to exercise that discretion by ordering security against a non-resident plaintiff. The question is what, in all the circumstances of the case, is the just answer."

13.	The rationale was also described in Sharma v Registrar of Titles [2007] FJHC 118, HBC 351. 2001 (13 July 2007), where Master Udit elaborated further –

"[3] The aforementioned rule, vests the court with an unfettered discretion to order security for costs. All this rule entails to protect is the risks to which an applicant may be exposed to for recovering of costs in a foreign jurisdiction. The quantum of costs comparatively in Fiji is not relatively high although fairly substantive within the jurisdiction which is worth recovering. Execution of costs abroad where the litigation costs are much higher will render the exercise as wholly uneconomical. Be that as it may, ultimately the issue is not that the respondent will not have the assets or money to pay the costs or that the law of the foreign party's country not recognizing an order of our court, and/or enforcement of costs order even be it under any legislation similar to our Reciprocal Enforcement of Judgments Act, (Cap 39), but it is also the extra steps which will be needed to enforce any such judgment outside the jurisdiction. Indeed, in will not be an irrefutable presumption to infer that an extra burden in terms of costs and delay, compared with the equivalent steps that could be taken in Fiji, will be an inevitable corollary. The obvious expenditure which comes to my mind is the engagement of an attorney and the conundrum of registering an order in the foreign jurisdiction before it can be enforced."

14.	The Plaintiff state that this summons for security for cost delayed and should be dismissed on that ground. Para 23/3/38 of the White book makes clear that applications for security may be made at any time –

"Time for making application for security (rr.1-3) – the right to security is not waived by service of the defence, and an order for security may be made at any stage of the proceedings (Re Smith (1896) 75 LT 46, CA: and see Arkwright v Newbold [1880] WN 59; Nartano v Mann [1880] 14 CH D 419, Ca; Lydney, etc Iron Ore Co. v Bird (1883) 23 CH D. 358).

An application for security may be made after judgment for the costs of further proceedings directed by the judgment as, e.g. The taking of an account before an Official Referee (Brown v Haig [1905] 2CH 379).

Delay in making an application for security for costs, however, may be relevant to the exercise of the Court's discretion to order security. Although in most cases delay is not a decisive factor; it may be treated as important, especially where is has lead, or may have led the plaintiff to act his detriment, or may cause him hardship in the future conduct of the action (Jenred Properties Ltd v EnteNazionaleItaliano per ilTurismo (1985) Financial Times, October 29, CA)." (Emphasis is added)

15.	The statement of Defence was filed on 1st April, 2011 and the summons for security for cost was filed on 8th November, 2011. The Plaintiff has not filed summons for directions. There is no evidence before me that the delay in this application for security for cost has caused hardship for the future conduct of this action. This action will mainly rely on the oral testimonies and specially the Plaintiff's evidence will be crucial, but the Plaintiff has not taken due diligence in the prosecution of this action though the statement of Defence was filed almost a year ago and any delay in making this application for security for cost has failed to show that where it 'has lead, or may have led the plaintiff to act his detriment, or may cause him hardship in the future conduct of the action' as held in Jenred Properties Ltd v EnteNazionaleItaliano per ilTurismo (1985) Financial Times, October 29, CA).

16.	Para 23/3/7 of the White Book (1999) states –

"Foreign plaintiff with property in England (rr.1-3) – Security will not be required from a person permanently residing out of the jurisdiction, if he has substantial property, whether real or personal, within it (Redondo v Chaytor (1879) 4 QBD 453 at 457; Hamburgher v Poetting (1882) 47 LT 249; Clarke v Barber (1890) 6 TLR 256; Redfern v Redfern (1890) 63 LT 780); and the same rule applies to a foreign company (Re Apollinaris Co.'s Trade Marks (1891) 1 Ch1); but semble, the property must be of a fixed and permanent nature, which can certainly be available for costs (Ebrard v Gassier (1884) 28 CH D 232); or at any rate such as common sense would consider to be so (Re Apollinaris Co.'s Trade Marks (1891); and such person must show that it is so available (Sacker v Bessler & Co (1887) 4 TLR 17)."

17.	The Plaintiff alleges that he has two properties in Fiji and one such property is the property in issue of this action where he alleges that his share was allegedly transferred to the 1st Defendant fraudulently. So, if the Plaintiff fails this action obviously the Plaintiff has no interest in the property and the fallacy of the Plaintiff's contention is clear. The security for cost is ordered to secure the Defendant in an event of Plaintiff's claim being not successful at the conclusion and he cannot rely on the same property where he does not have any interest at the moment and it is evident, that the purpose and intent of the security for cost has not been understood properly.

18.	The only other property that the Plaintiff has mentioned in his affidavit in opposition is a housing authority sub lease where the Plaintiff and another person by the name of Arvind Kumar had obtained the transfer of leasehold rights in 1999 and this property is subject to a mortgage and also to a charge that is registered in year 2000. So, again if the Plaintiff is not successful and cost is ordered the recovery of that cost from this property is doubtful as it is not free from encumbrances. Under the circumstances I do not think that it is just to refuse an order for security for cost, because the Plaintiff is having some rights over the said property which is encumbered in more than one way if the court tries to obtain a sale to secure any cost ordered against the Plaintiff.

19.	The Defendant has submitted an estimated cost and it indicates a cost over $14,000 and this has not been refuted by the Plaintiff. The action is based on forgery / fraud and the oral testimony of the Plaintiff and the evaluation of the evidence on credibility and spontaneity will be assessed and the length of the trial cannot be ascertained at this moment as the Plaintiff is yet to file summons for directions. I cannot assume that there will not be any interim applications considering that the Defendant has already made an application seeking particulars before the filing of the statement of defence and the estimated cost has not considered this aspect of the action. The security for cost should only be sufficient to meet the cost if the Plaintiff's claim is dismissed. The court can order a security for cost till a particular stage of the case, but that would require further application for security after passing that stage of the trial. I would not take that path, considering the cost and the time factor, though it is possible to do so. Considering the nature of the action and the stage of it and the delay in prosecution where already more than one interim application has already been made, I will order a security for cost in the sum of $7,000 as the security till the conclusion of trial. 

C.	CONCLUSION

20.	Considering all the circumstances of this case it is just to order security for cost. The strength of the Plaintiff's case will mainly rely on the evidence of the Plaintiff, but the behaviour and the nature of the claim creates doubts as to the bona fide of the claim. Though, there is a delay in making this application, in the analysis I have held that that itself is not sufficient to reject this application for security. The Defendant has sought a security of $12,000 but considering the circumstance of the case I will order a cost of $7,000 to be deposited in High Court in an interest bearing account as security for cost of this action. The Plaintiff is directed to submit the said sum within 21 days from today. If the money is not deposited within 21 days the action will be struck off.

21.	The Plaintiff is also directed to file summons for directions within 21 days from today. The Plaintiff is granted 7 days from today to file a reply to the statement of defence.

D.	FINAL ORDERS

a.	The Plaintiff is directed to deposit in the High Court of Suva a security in an interest bearing account for cost in the sum of $7,000 as security for cost till the conclusion of hearing of the action within 21 days from today.

b.	The action will be struck off if the abovementioned direction is not complied with in the time period stipulated.

c.	The Plaintiff is further directed to file summons for directions within 21 days from today.

d.	The cost of this application is assessed summarily at $500 and the cost should be paid to the Defendant within 21 days.

Dated at Suva this 8th day of March, 2012.

………………………………………….
Mr. Deepthi Amaratunga
Master of the High Court
Suva