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Whytcross v Achari [2014] FJHC 729; HBC51.2013 (9 October 2014)

IN THE HIGH COURT OF FIJI
WESTERN DIVISION
AT LAUTOKA

CIVIL JURISDICTION

CIVIL ACTION NO. HBC 51 OF 2013

BETWEEN:

ADAM WHYTCROSS
of 33 Links, Denarau Island, Nadi,
Manager
Plaintiff

AND:

NAND KUMAR ACHARI
of Lot 31 Waqavuka Street, Nadi, Director
Defendant

Before : Master H. Robinson

Appearances: Ms. Tabuadua of Lowing & Associates for the Plaintiff/Respondent.
Mr. Sharma of Janend Sharma Lawyers for the Defendant/Applicant.

Date of Hearing : 3 October 2014
Date of Ruling : 9 October 2014

RULING
Introduction

[1] The Defendant by summons dated 5 June 2014 sought an order from the Court for the plaintiff, being ordinarily resident outside of this jurisdiction, to pay security for the costs of these proceedings. The applicant further sought:-

(1). That the action be stayed until the plaintiff give the required security;

(2). That the action be struck out in the event the plaintiff does not give the required security; and

(3). That the plaintiff pay the costs of this application.

[2] The application is made pursuant to Order 23 rule 1 of the High Court Rules.

The application

[3] The application was supported by an affidavit deposed by the defendant which states so far as is relevant the following:-

(i). That he is the defendant in the matter.

(ii). That the plaintiff is not a Fiji Citizen or resident.

(iii). That the pleadings are now closed, discoveries completed and the matter at the pre-trial conference stage.

(iv). That he became aware sometime in early March 2014 that the Plaintiff may have left FIJI. Upon his instructions his solicitors wrote to the Plaintiffs solicitors vide their letter dated 5th March 2014, requesting security for costs to be paid.

(v). That the plaintiffs solicitors sent an email dated 6th March, 2014 acknowledging receipt of our letter dated 5th March 2014 but to date have not responded to the request for payment of security for costs.

(vi). That on the 28 April 2014 the plaintiff's solicitors confirmed in Court that the Plaintiff had indeed left Fiji and moved to Vanuatu and that they had not been able to contact the Plaintiff and sought further time to get instructions.

(vii). That the Court adjourned the matter to 22nd May 2014 for Mention. On this date the Plaintiff's Counsel advised the Court that they still didn't have further instructions. The Court adjourned the matter to 30th May 2014 and thereafter to 16th June 2014 for Pre-Trial Conference to be finalized.

(viii). That he has already incurred legal costs including the costs of this application and that he will incur more costs if the matter is to proceed to trial.

(ix). That he therefore respectfully request that the Plaintiff be ordered to provide security for his costs of the action in the sum of $20,000.00 and that pending the provision of such security the action be stayed and if the Plaintiff does not pay the Security for Costs as ordered than the Action be struck off with the costs.

[4] The application is opposed and counsel for the plaintiff filed an affidavit deposed by one Talei Tuitoga Rakavono, a lawyer from the plaintiff's counsel's office. This affidavit was authorised by the plaintiff himself who states that he has authorised the said counsel to depose the affidavit on his behalf and further states that the contents of the affidavit are true to the best of his knowledge and belief. The affidavit deposed so far as is relevant the following:-

(i). That the plaintiff no longer resides in Fiji and is not a resident of Fiji however at the time of the filing of the writ had a valid work permit to work and reside in Fiji. That he was required to relocate to Vanuatu for employment purposes and that the change in residency was made innocently and without any intention to deceive the Court or the defendant.

(ii). That the plaintiff relocated to Vanuatu on the 31 October 2013 after receiving a promotion. That he is still employed by Westpac Banking Corporation and currently holds a position as head of business banking in Vanuatu, Port Vila Branch.

(iii). That the plaintiff's case has merits and has a reasonable good prospect of success.

(iv). That an order for security for costs would cause the plaintiff financial hardship and may prevent the plaintiff from continuing the action.

(v). That an order for security for costs for the amount claimed will be oppressive and unjust on the plaintiff and the application be struck out.

(vi). In the alternative if the court was to order security for costs then a reasonable amount which the defendant is more likely to recover on party and party basis should be ordered. That it would be unjust to order security for costs on an indemnity basis and that an amount between $1000:00 to $2000:00 having regard to the circumstances is suitable.

Determination

[5] Order 23 rule 1(1) provides the Court with the discretionary power to grant security for costs, the rule states:-

(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."

[6] It is not in issue that the plaintiff now resides outside of this jurisdiction. That being so, the onus is on him to convince the Court that having regard to all the circumstances of the case an order for security for costs should not be made. It appears from the authorities that the only way he could succeed in that regard is to have property in Fiji which could be subject to the process of the Courts. This was the position taken by Justice Fatiaki in Babu Bhai Patel –v- Moanohan Aluminium Glass (Fiji) Ltd, Civil Appeal 19/1997, in this instance when the proposition was mooted Justice Fatiaki stated:-

No authority was cited in support of the above submission but there exists early dicta of Thesiger L.J. in Redondo v. Chaytor (1879) 40 L.T. 797 which tends to support it where the learned judge said at p.799:

"... if a plaintiff who is permanently resident out of the jurisdiction, has property within the jurisdiction which can be made subject to the process of the court, in such a case, the reason of the rule being withdrawn, the rule gives way, and the court will not order security to be given."

[7] What can be seen from the Babu Bhai Patel matter is that it is not sufficient to say that you have property within the jurisdiction, what can also be taken into account is whether the property is encumbered, and whether any fund which could be realised from it will not be dissipated before it could be utilised for any cost orders.

[8] The plaintiff by his own admission states that he does not have any property within this jurisdiction and hence the submissions from his counsel centred around the fact that he could still avoid payment for security for costs if he is able to convince the Court that it would not be just to order security for costs or that it would be oppressive to do so. In order to convince the Court that it would be unjust to order security for costs the plaintiff submits that the action is a genuine claim arising from the purchase of jet-ski's from the defendant. Counsel further submits that an order for security for costs would be oppressive and may prevent him from continuing with the claim. In fairness to the plaintiff and his counsel their concluding submission was directed to the amount of $20,000:00 claimed as appropriate for security for costs as too excessive and that a figure of between $1000:00 to $2000:00 is more appropriate.

[9] I am satisfied however from the defendant's Counsel's submission and from the honest concession of the plaintiff's Counsel that security for costs should be awarded. The only valid consideration is the amount of security for costs to be ordered such that it would not appear to be too harsh or oppressive to the plaintiff. It should also not to be such as to appear to be used as a sword and therefore prevent the plaintiff from litigating the matter further.

[10] The amount to be paid as security for costs is at the discretion of the Court which will fix such sum as it thinks just. Halsbury's Law of England (4th Edition) vol. 37 para. 307 states in part:-

"It is not the practice to order security for cost on a full party and party, still less on an indemnity basis. In the case of a Plaintiff resident out of the jurisdiction the more conventional approach is to fix the sum at about two thirds of the estimated party and party costs up to the stage of the proceedings for which security is ordered, but there is no hard fast rule".

[11] These proceedings is at the pre-trial conference stage and once the pre-trial conference is completed and upon the filing and issue of the copy of pleadings the matter can be set down for hearing, so it is at the very late stage and close to finality. If the conventional approach is adopted as stated above to fix the sum at two thirds of the estimated party-party costs up to the stage of the proceedings then the Court will have to look at the costs of the pleadings filed by each party prior to the application.

[12] Party-party costs is said to be costs which one party recovers from another party in litigation. They are only payable if they are ordered by the Court. This is distinct from solicitor /client costs. Solicitor /client costs are the costs that a practitioner charges his/her client. The juridical basis for solicitor /client costs is contract subject to legislative intervention or other inherent supervisory jurisdiction.

[13] In the present case the defendant's counsel lists in paragraphs 13, 14 & 15 of the affidavit in support of the summons for security for costs the costs already incurred by the defendant and charged by the solicitors as per tax invoices annexed to the affidavit. They are in my view solicitor/client costs arising from the contractual relationship between the defendant and his solicitor. It therefore follows that the amount submitted by the Counsel for the defendant as the amount appropriate to be ordered as security for costs is based on this estimate of the contractual relationship. It could not therefore be considered as party/party costs.

[14] It has been said that party/party costs is a different creature arising from an exercise of the Court's discretion to award the costs of litigation to a party who (more often than not) succeeds in litigation. What is clear though is that the cost awarded is not on an indemnity basis to cover all costs including solicitor/client costs. It is because of the above that a wide discretion is given to the Courts to award security for costs. The pleadings so far filed in this action before the application was made consist only of what is necessary to bring the matter to the pre-trial stage. There were no interlocutory applications just a writ, a defence, (not even a reply to the defence), a summons for direction and the affidavits verifying each party's list of documents. The formulae are two thirds of the party/party costs calculated at this stage. There is no hard and fast rule to calculate this amount but what is clear though is that it is not as much as is suggested by counsel for the defendant. As circumstances differ in each case considerations also differ. The capability of the plaintiff to pay for security for costs without it being too oppressive to him could be taken into account in this matter.

CONCLUSION

[15 Given the stage of the proceedings and the formulae set out above I fix and order the Plaintiff to pay security for costs to the sum of $4,000:00. That the said sum is to be deposited in court within 28 days. That upon the payment of the said security for costs, the matter will be put before the Master for further directions and for which purpose this action is adjourned to 16 November 2014.

.......................................
Harry Robinson
Master of the High Court
At Lautoka

09/10/2014