M Chiu and Co. Ltd v Khrishna Stores Ltd (Civil Cause 2184 of 1994) [1995] MWHCCiv 18 (7 April 1995)

I IN THE HIGH COURT OF MALAWI PRINCIPAL REGISTRY CIVIL CAUSE NO. 2184 OF 1994 M CHIU AND COMPANY LTD . . . . . . . . . . . . . . . . . . . . . . . . . . PLAINTIFF KHRIS HNA STORES LTD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . DEFENDANT and CORAM: RR Mzikamanda, Deputy Registrar Mr Nampota for the Plaintiff Mr Chiligo for the Defendant RULING On 13th February, the defe ndants took out summons for security for costs o n the ground that the juris diction. The application is made pursuant to Order 23 Rule I\Jamp ota who 1 Sub rule 1 of the Rules of the Supreme Court. Mr appea rs for the plaintiffs opposes the applicition. 199 5 Mr Chi l igo acting the plaintiff is ordinarily resident out for of the that the plaintiff In his submission Mr Chiligo stated that the a ppl ication i s ordinarily fact is grounded on resid ent outside the jurisdicti.on of this court. Furth er the addre ss of the plaintiff was not stated in the writ of summons. It is essential that a foreign plaintiff must state his address in the writ of summons. Mr Chi 1 igo further submitt ed that the ratio nale for seeking security for costs is that in the event t hat the defendant is successful the sum ordered for security In for costs will cover the defendant's costs for the action. this the jurisdic tion and in the event that the defendant successfully defen ds this action he may not be able to recover costs by way of exe cuti o n or otherwi.se. He estimates costs at the current rate of K168 per hour to fall within the brackets of K45, OOO and K6O,OOO . the plaintiff has no assets within instant case In his further submission he contended that the r ight to se c urity for costs is not waived by service of defence and the appl i cation may be made before service of defence. He further conten ds that although there is a default judgment and warrant of exe cution there should be an order for securit y for costs. He contends that the statement of claim was irregu lar since it was served out of time before leave was The defe nd ant is ob t aine d applyi ng ground of irregu larity. Even is the judgment were regular it is no t final Th e fact judgme nt and the defendant is entitled to set asid e . that t here is an unsatisfied judgment on the file should not to serve out of time. judgment this matter from court set aside have the to in on I - 2 - i n f luence the court. the merits or demerits of the case at this stage. shoul d appl i c ation. The court is not called upon to dec ide on The court the rely on Practice Note 23/1-3/3 in de t erm i n i n g in judgment this matter. Mr Nampota strongly opposed the application, s a y j n g that this i s not a matter where security for costs should b e o r dered . The a ward of security for costs depends on the circum st an ces of a p a r ticular case and the matter is in the discreti o n of the court . th ere is He opposed the application on the ground tha t an un satisfied The pl ai nt iff is alrea dy successful in this action and ordinarily no o rd er for costs would be made in those circumstances. One of th e f actors considered in ordering security for costs is the lik e lih ood of the de fendant succeeding jn the action. t h ere is no de fence yet to the plaintiff's statement of claim a nd there is n o indication that the plaintiff is unlikely to suc ce ed . The prospe cts of the plaintiff succeeding are very high. Mr Nampota the right course to take is for the defe n dant to argu e s that fi l e an application judgment which appli catjon shou l d satisfy t he test of disclosing a defence on th e merits. an appli ca t ion for Only a fter t he or d er for security for costs be made. th at the summon s be dimissed on the ground that there is an un s a tisfjed the plaintiffs pro s pec ts of judgme nt on succes s are very bright. judgment is set aside would the file and to set aside In this cas e He prayed that to order for security In his further submjssion Mr Nampota said that ev e n if the the court were defe n d an t is inflated. The hours that the Mr Chiligo s u ggested that would be the basis of his estimated were exagger ated. In his v iew a figure in the brackets of K6, 000 and Kl 2 , 000 wi 11 secure the defendant. figure giv e n b y the tha t Order 23 rule 1 of the Rules of the Supreme Co urt provides i f i t appears to the Court: ( a) that the plaintiff is ordinarily resident out o f the jurisdiction, or ( b) (c ) (d) in a that the plaintiff (not being a plaintiff wh o is suing is a n orminal representative capacity) plaintiff who is suing for the benefit of some other person and that there is reason to beli eve t h at he wi l l be unable to pay the costs of the defe ndant if ordered to do so, or the plaintiff's address is not stat e d that the writ or other originating process or is incorrectly stated therein, or i n that the plaintiff has changed his address durin g the course of the proceedings with a view to evadi ng the consequences of the litigation. / - 3 - t h e n if having regard to all the circumstances of th e c a se, t h e court thinks it just to do so, it may order the plain tiff to gi ve such securi.ty for the defendant's costs of th e ac t ion o r othe r proceedings as it thinks just. However, th e c o urt shall r equire security for costs if the plaintiff's f ai l ure to not state his address or mis-statement thereof was mad e i nn ocently or wit hout intention to deceive. i t to determine whether a n d is i n Both parties in the present case recognise tha t the discretion of the Court to order security for costs . In exe r c is e of such discretion the court is bound to co n sider the circumstanc e s of each case to what e x te nt or for what amount a plaintiff may be ordered t o p rovide sec urity for costs. It is no longer an inflexible or rig id rule t h at a plaintiff resident abroad should provide sec uri ty for In Sir Lindsay Parkinson & Co Ltd v Triplan Lt d (1973) cost s. t h e Court Q . B 6 09 Lord Denning M. R. gave some circumstanc es take into account whether to order security f o r costs . mi g ht Th ese are whether the plaintiffs claim is bona fid e a nd not a sham and whether the plaintiff has a resonably g o od p r ospect of succe ss, whether there is an admission by the defend a n ts on the is p l eadings or elsewhere sub st antial payment the appli.cation for into court, whether secu rity was being used oppressively so as to stifl e a genui n e clai m and others. A major matter for considerati o n h owever i s an the applic ation is not the occasion for a detailed ex a mi n ation of the merits of the case. Parties should not attemp t to go into the merits of the case unless it can be clearly d e mo n strated is a high degree of probability of s u ccess o r t h at failu re. (UK) Ltd (1 987) 1 ALL If there is a strong prima facie pre s ump t i on that E. R 1074). the defendant will fail in his defence to the acti o n, t h e Court ma y refuse him any security (see Crozat v Brogden (1894) 2 Q. B 30a t33). the plaintiff succeeding bu t (See Porzelack KG v Porzelack is due, wheth er likelihood of that money there t h ere such As Mr Chiligo rightly observed the right t o sec u rity is f o r secu r ity n ot waived by service of the defence, and an ord e r ma y be made at any stage of the proceedings Mann (1880) 14Ch. D. 419. C. A; ( 18 8 3) 23 Ch. D 358). It follows therefore that a n a pp lication fo r security may be made after judgment for the co sts of furthe r proc eedings directed by the ap plication is not a decisive factor, although it may b e treated as led t h e pla intiff to act to his detriment, or may cause him h a r dship in t h e future conduct of the action. v Lydney, etc Iron Or e Co v Bi.rd i mportant especially where it has led or may have ( Se e Mar ta n o in making judgment. Delay the I have deliberately set out i n ext ensio in order that the issues be put into persp e c tive . Th e hist ory of this matter is curious. By a generally e nd orsed writ sig ned on 22nd November, the pre sent proceedings against the defendant. Servic e o f writ was do n e by posting the writ to the defendant in the u s u a l man n er by or dinary post as evidenced by Mr Nampota's affidavi t o f 5t h the plaintiff in st i tuted the appliabl e ru les I} - 4 - the defendant s succeed in the action. On 2nd December, 1994 to be heard on 8th March 1995. December , 1994. legal practitioners filed an acknowledgment of service and indicating an inte ntion to contest the proceedings. On 10th Janu a r y, 1995 the pla intiffs legal practitioners served a statemen t cla im on the defendant's legal practitioners. The defendant s did not Instead on 13th February, 1995 they took out serve a defence. the present summons On 20th February 1995, seven days after the present summons were taken the plaintiffs signed a default judgment and also warrant out, In accordance with the rules securit y for costs of execut ion. can be ordered at any stage of the proceedings and in the exercise of its discretion in the matter the court mu st consider all the circumstance of the case. I have considered the fact that no defence has been served although there is an intention In these circumstances it is not easy to say whether to defen d. I note that the plain tiff is likely to there is a default judgment on file. This cannot be said to be a final judgment for the defendant is entitled to have it set aside if he can show a defence on the merits or a triable issue or if he can show that it is an irregular judgment. indee d the file an unsatisfi.ed Therefo re default judgment is not sufficient to stop the grant ing of an order for security of costs. One cannot rely on this judgment to argue that ones prospects of success as a plaintiff a r e high. It is vital tj o note that the summons for security for costs was signed before the judgment and after an intention to defend had I observed any admiss ion of been liability whether the The plaintiffs address in a foreign country is not defendant . disclos ed on the writ or any other process before t his court. the plaint iffs were a Apparent ly the defendants discovered that foreign country inquiries through the plaintiffs do not have assets within further showed that this jurisdiction. I am of the view that this is a proper case I must order security for costs. There is a warrant of where executio n which if allowed in in a manner which would execute d property being dealt with present extreme difficulty for the defendants to rec over should it turn out that they successfully defend the action. to be executed would result the fact that there is on Nowhere have in part or inquiries wh ic h the part of in full, on in dicated. their own the practice to order security on ful 1 There was the question of the amount of security for costs to be ordered. The parties recognise that this too is in the discreti on of the Court, which will fix such a sum as it thinks It is just, having regard to all the circumstances of the case. not al ways indemnity If security is sought at an early stage l ike in the basis. present case an estimate of future costs would assist t he Court. A skelet on bill of costs usually affords a ready guide. In this Court the defence has canvassed some figures while th e plaintiff The sum claimed in has also canvassed another set of figures. this action is K698,158.94. Having given the matt er careful consideration I am of the view that the appropriat e a mount of I order security security for costs to be awarded is K45,000. from in todays 's da t e . Costs in any event are awarded to t h e plaintiff. to be paid into Court within 30 days that amount I - 5 - MADE in Chambers this 7th day of April, 1995 a t Blantyre.