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Fatafehi v Slabon [2010] TongaLawRp 4; [2010] Tonga LR 28 (14 April 2010)

IN THE LAND COURT OF TONGA
Land Court, Nuku'alofa

LA 25/2008

Fatafehi anors

v

Slabon anors

Ford CJ
3 March and 9 April 2010; 14 April 2010

Practice and procedure – application for security for costs – plaintiff strong prima facie case – application dismissed

The first and second plaintiffs ("the plaintiffs"), the third named plaintiff being their son and heir, were the registered holder of a town allotment at Kolomotu'a not far along Vuna Road from the Royal Palace on which stood an upmarket restaurant and accommodation complex known as Seaview Lodge. On 2 March 1999 the plaintiff's leased the premises to the first defendant for a period of 18 years at an annual rent of $100 with an upfront lump sum payment of $50,900. The plaintiffs alleged that in May 2006 the first defendant formed and registered the third defendant company in which he was the sole shareholder and in July 2006, contrary to the provisions in the Agreement to Lease, he proceeded to assign the lease to the third defendant. The plaintiffs alleged that in so acting the first defendant breached clause 8 of the Agreement to Lease which was the provision relating to the right of the lessee to sub-lease or transfer the lease to a third-party. They sought an order cancelling the lease along with an order for possession of the allotment. Alternatively, they seek damages in the sum of $300,000. The defendants filed an application seeking two orders. First, an application for costs in respect of a mediation hearing which did not proceed and, secondly, an application for security for costs in the sum of $10,000 in relation to the substantive action. On 12 March the court ordered that the question of costs in respect of the mediation would be reserved until the substantive hearing. The grounds for the security for costs application were that the plaintiffs resided in Australia, they did not have any assets in Tonga against which an order for costs could be enforced, and the plaintiffs' claim was weak. The plaintiffs opposed the application.

Held:

1. The plaintiff established a strong prima facie case. The court cited the White Book: "It may be a denial of justice to order a plaintiff to give security for the costs of a defendant who has no defence to the claim".

2. The court concluded that it was not appropriate for an order to be made requiring the plaintiffs to provide security for costs and the application was dismissed.

Cases considered:

Adler v Upper Grosvenor Street Investment Ltd [1957] 1 All ER 229

Bocardo SA v S & M Hotels Ltd [1979] 3 All ER 737

Creer v P & O Lines of Australia Pty Ltd (1971) 125 CLR 84

Porzelack KG v Porzelack (UK) [1987] 1 All ER 1074

Rules considered: