clr/1987/1987_1_163.pdf

(1)- Practicein England and m Cyprus The plaintiffs who are a foreign company resident in Saudi Arabia, from where they carryontheirbusiness,claim U S $5 761 20asdamagesforshort delivery of goods The defendants applied forsecunty forcosts The plaintiffs opposed the application 15 20 25 Held,grantingtheapplication

(1)The questionis governed by rule 185 of the Cyprus Admiralty Junsdiction Order 1893 A similar provision existed in theoldEnglishKuiesinrorcenii9w0iGiu C5,rJ.cz£zrd 6AJ "Ρ1? nnnrinlp* underlying such rules are analysed in the Annual Practice 1960 at pp 1884, 1885 Under the new English Rules (Ord 23

(1)) the rule became more flexible bytheintroducbonofthewords "thattheCourt mayordersecuntyfor costsifhaving regardtoallthecircumstancesofthecasetheCourtthinksitjust to do so" However, even under the new Rules, it is the usual practice in Enoland to make a foreignplaintiff give secunty forcosts"

(2)From what emanates from the EnglishAuthonhes and froma line of decisions of this Court in the exercise of its Admiralty Jurisdiction it has becomethe usual,ordinary orgeneralruleandpracticeto requiretheforeign plaintiff to give secunty for costs because it is ordmanty just to do so The plaintiffs in this case did not raise a valid reason why an order forsecunty of costsshould notbe made

(3)The amountofthesecuntyshouldbesuchastocoverthecoststhatare likely to be incurredby the party applying for the order In the present case and at this stage of the proceedings an amount of £1,000 is sufficient The defendants are notprecludedfromapplying atany laterstageforan increase 163 Al Thullah v. Falview

(1987)of thesecunty,ifthe saidamount proves tobe manifestly insufficient Application granted £1,000 to begiven as secunty (orthe defendants'costs Casesreferred to AeronaveSPA 5 andAnotherv WestlandCharterLtd andOthers[1971]3 A11ER 531, HeshamEnterpnsesν Ship Rami

(1978)1 C L R 195, World Shipping ν Vassiliko Cement Works

(1979)1 C L R 242, Ashourv ClaudiaMantimeCo Ltd ( 1 9 8 0 J 1 C L R 64 }Q Application. Application by defendants for secunty for costs inan admiralty action whereby theplaintiffs claim U.S. $5,761.20 asdamages for short delivery of goods. C Saveriades, for applicants- defendants. 15 No appearance for respondent- plaintiff. Cur.adv.vult. SAWIDES J. read the following decisions. This is an application for security for costs in an Admiralty Action whereby the plaintiffs claimasum of U.S. Dollars5,761.20,as damages for 20 short delivery of goods. Itisadmittedinthepetitionfiled, thatthe plaintiffs are a foreign company resident in Saudi Arabia from where they carry on their business. The action was filed on the 21st July, 1986 On the 18th September, 1986 directions were given that theplaintiffs should 25 file and deliver theirpetitionwithin six weeks and the defendants should file and deliver their reply within one month from the delivery tothemofthepetition.Theplaintiffs filed theirpetitionon 13th November, 1986, and on 27th November, 1986 the defendants filed the present application asking for security for 30 costs withouthaving, inthemeantime,filedtheir answer. 164 1C.L.H. 5 ΑΙ Thullah v. Falview SawldesJ. Theplaintiffs opposed theapplicationsbothinitssubstance and also the amount claimed as security by the defendants. By an affidavit in support of their opposition and without prejudice to their contention that the application was unjustified they suggested that an amount of £400.- was more than sufficient to -over thedefendants' costs incase they succeed ontheirclaim. At the hearing of the application, counsel for respondents plaintiffs failed toattend,though duly aware of thedateof hearing and I heard argument on the part of counsel for applicants in 10 support of his application. The application is based on the Civil Procedure Kules, Order 48,rules 1,2,3 and9(t),Order60,rule 1andtheCyprus Admiralty Jurisdiction Order 1893, rule 185. Irrespective of the fact thatrule 185 is comparable to rule 1 of Order 60 of the Civil Procedure 15 Rules, once there is express provision under rule 185 of the Admiralty Rules on the matter,I find itunnecessary to refer tothe provisions of Order60, rule 1, or any otherprovision of the Civil Procedure Rules which areapplicable toCivil proceedings butnot to Admiralty proceedings. In case no provision exists in the 20 Admiralty Rules then under the provisions of rule 237 of the Admiralty Rules of this Court, reference should be made to the practice of the Admiralty Division of the High Courtof Justice in England totheextent same should appear tobe applicable. Rule 185 reads as follows: 25 30 "If any Plaintiff (otherthan aseamansuing for hiswagesor for the lossof his clothes and effects in^a collision) or any Defendant making a counterclaim is not resident in Cyprus, the Court or Judge may, on the application of the adverse party, order him to give such security for the costs of such adverse party as totheCourtorJudge shall seem fit; and may order that all proceedings in the action be stayed until such security be given." The provision for security for costs is a provision intended to safeguard a defendant in recovering any costs awarded in his 35 favour in cases where the plaintiff is resident abroad and has no property in Cyprus on which execution may levy. Under the English Rules and Practice applicable to Admiralty 165 SawtdesJ. ΑΙ Thullah v. Falview

(1987)proceedings in force in 1960, the old Rules, (which according to theCourtsofJustice Law 14of 1960, totheextenttheyrefer tothe Admiralty practice in England are the only ones which can be invoked) a similar provision for security for costs existsinthe case of Plaintiffs resident abroad under Order 65, rule 6 and 6A of the 5 R.S.C. (see Annual Practice 1960). Concerning the principles underlying such rule we read the following in the explanation notes totheAnnual Practice 1960 atpp. 1884 and 1885. "The ordinary ground on which security is ordered is residence abroad, see Re Percy and Kelly,etc., Co. [1876] 2 10 Ch.D.531; and, subject to the exceptions hereinafter mentioned the Rule isinflexible (Crozatv.Brogden [1894] 2 Q.B. 30) even when heissuing as executor Thus, where thesole plaintiff oralltheplaintiffs areresidentabroad security will be ordered Republic of Costa Rica v. Erlanger [1876] 15 3Ch.D. 62) and there is no rule that the Courtwill not grant more than two applications for security (Merton v. The Times Publishing Co. [1931]48T.L.R.34).No orderwillbe madeif there are co-plaintiffs resident in England but they must be genuine co-plaintiffs and not merely the English attorney 20 joined to avoid giving security So, where the plaintiff goes toreside permanently abroad after institutionof thesuit, security may be ordered Temporary residence within the jurisdiction is not now sufficient to avoid giving security (see r. 6A infra) Security will 25 notbe required from aperson permanentlyresiding outofthe jurisdiction, if he has substantial property, whether real or personal, within it (Redondo v. Chaytor [1879] 4 Q.B.D.,p. 457; and the same rule applies to a foreign company (Re Apollinans Co. '$Trade Marks.[1891] 1 Ch.D.l); but simple, 30 the property must be of afixed and permanentnature, which can certainly be available for costs (Edwardv.Gassier[1884], 28Ch.232)." Underthenew English rulesandinparticularOrder23

(1)the rule became more flexible by the introductionof the words "that 35 the Court may order security for costs if having regard to all the circumstances of the case the Court thinksitjust to do so." As to the principles which will guide the Court in the exercise of its discretion underthenew rule we read inthenotesof the Supreme Court Practice 1976 at p.385 the following: 166 1C R 5 \Q 15 20 25 AIThuIlahv.Faiview Savvldes J. «Inexercisingitsdiscretion underRule 1

(1).supra,theCourt will have regard toallthe circumstances of the case. Security cannot now be ordered as of course from a foreign plaintiff, but onlyifthe Court thinksitjust,toordersuch security inthe circumstances of the case. For the circumstances which the Court might take into account whether to order security for costs, see per Lord Denning M.R. inSirLindsay Parkinson& Co. Ltd., v. TriplanLtd. [1973] Q.B.609; [1973] 2 W.L.R. 632, 646-47; [1973] 2 All E.R 273, 285-86 A major matter for consideration is the likelihood of the plaintiff succeeding. Ifthere isa strong prima facie presumption that the defendant will fail in hisdefence to the action, the Court may refuse him any security for costs (see per Collins J., Crozatv. Brogden [1894]2Q.B.30 atp.33(thejudgmentof the C.A. inthat case wasinsubstance reversed bythe former 0.65 r.6B, made in 1920, which in substance isrepeated in Rule 1

(1), supra). It may be a denial of justice to order a plaintiff to give security for the costs of a defendant who has no defence totheclaim.Again,ifadefendant admitssomuch of the claim as would be equal to the amount for which security would have been ordered, theCourt mayrefuse him security, for he can secure himself by paying the admitted amount intoCourt{Hoganv.Hogan (No. 2)

(1924)2Ir.R.14). Further, where defendant admits hisliability, plaintiff willnot be ordered to give security (De St. Martin v. Davis & Co.

(1884)W.N.86) even where he counterclaims (Winterfieldv. Bradnum [1878],3 Q.B.D 324)." And,also,undertheheading,"Plaintiff ResidentAbroad"atthe same page: 30 35 There is no longer any inflexible rule or practice that a plaintiff resident abroad will be ordered to give security for costs; the power to make such order isentirely discretionary under rule 1

(1), supra (see Aeronave S.P.A. v. Westland ChartersLtd. [1971] 1W.L.R. 1445; [1971] 3 All E.R.531, C.A. and reversing Crozat v.Brogden [1894] 2 Q.B. 30); Re Pretoria Petersburg Ry. (No.2) [1904] 2 Ch. 359). On the otherhand, asamatterofdiscretion, itistheusualordinaryor 167 S a w l d e s J. AIThullahv.Faiview

(1987)general rule of practice of the Court to require the foreign plaintiff togivesecurityforcosts,because itisordinarilyjustto do, and this is so, even though by the contract between the parties, the foreign plaintiff isrequired to bring the action in England (Aeronave S.P.A. v. Westland Charters Ltd.. (supra)).There is,moreover, noruleorpracticethata plaintiff resident abroad suing on a dishonoured bill of exchange should notbeordered togivesecurity(Banque duRhone S.A v.FuerstDayLawsonUd, [1968]2Lloyd'sRep. 153,C.A.)" 5 Though the inflexibility of the rule was relaxed under the new 10 English rules nevertheless from what appears from the decided cases after the amendment of the old rules itisthe usual practice evenunderthenewrulestoorderso.ThusinAeronave S.P.A. and Anotherv. Westland CharterLtd.and ofhers [1971]3AllE.R.531 Lord Denning M.R.said the following atp. 533: 15 "In 1894inCrozatv. Brodgen Lopes LJsaidthatthere was an inflexible rule that if a foreigner sued he should give security for costs. But thatisputting ittoo high.Itisthe usual practice of the Courtstomake a foreign plaintiff give security forcosts.Butitdoesso,asamatterofdiscretion, because itis 20 just to do so. After all, ifthe defendant succeeds and gets an orderforhiscosts,itisnotrightthatheshouldhavetogotoa foreign country toenforce the order. Itistobenoted thatItaly is not within the provisions as to the recognition of foreign judgments under the Foreign Judgments (Reciprocal 25 Enforcement) Act1933.Buteven ifitwere,Kohn v.Rinson & Stafford (Brod)Ltd., shows that isnot a ground for refusing security. The ordinary rule still remains, that it isa matter of discretion. Icertainlydidnotmean tosayanythingdifferent in Banque du Rhone SAv. FuerstDayLawson Ltd." 30 Notwithstanding thefactthattheinflexibility ofrules6and6Aof the 1960 R.S.C. in England (the rules which are more in line withourRule 185andtheonlyonesthatcanbeinvoked)hasbeen 168 1C.L.R. ΑΙThullah v. Faiview Savvides J. relaxed by Order23

(1)of thenewrules,nevertheless from what emanates from theEnglish Authorities andfrom alineof decisions of this Court in the exercise of its Admiralty Jurisdiction it has become theusual, ordinary orgeneral rule andpracticeto require 5 theforeign plaintiff togivesecurity for costs because itis ordinarily just to doso. (See Aeronave S.P.A. v. Westland CharterLtd. and others (supra) the dicta inwhich have been adopted in a number of cases in this Court. As to the practice of this Court useful reference may be made to Hesham Enterprises v. Ship Rami 10

(1978)1 C.L.R. 195, WorldShipping v. Vassiliko Cement Works

(1979)1 C.L.R. 242 and Ashour v. Claudia Maritime Co. Ltd

(1980)1 C.L.R.

1. Bearing in mind all the above authorities I find that in the circumstances of the present case the defendants have not raised 15 any valid reason why in the circumstances of the present case an order for security for costs should notbe made. Inany case Ifind that inthe circumstances itisjusttomake such order. On the question of the amountwhich the Court may order for security for costs, theamountshould be such as tocover the costs 20 thata r e likelytobe incurredby the party applying for such order. According iu whai counsel for applicants stated in hu address in support of theapplication,witnesses willbe coming from abroad atconsiderable costs andanamountof atleast £1,
2. -should be given as security for costs. 25 Ifindthatanamountof£1,
3. -for security willbe sufficient at this stage of the proceedings. This, of course, does not preclude defendants at any later stage to apply for an increase of such security, if the above amount proves manifestly insufficient to cover thedefendants' costs incase theyare successful. 30 Inthe result I grant theapplication andίmake an orderthatthe plaintiffs-respondents do give security for costs in the sum of £1,000.- by either cash deposit with this Court or by bank guarantee to the satisfaction of theRegistrar of this Court. Such security to be given within three months from today. In the 35 meantime all proceedings in this action should be stayed until 169 SawidesJ. AIThullahv.Faiview

(1987)secuntyisgiven Costsofthisapplicationshouldbecostsinfavour of the applicants-defendants Applicantion granted with costsin favour of applicants 170