Home Information Cases Hamid Naghshineh & Ors v Harold Percy Chaffe & Ors (2003)

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Hamid Naghshineh & Ors v Harold Percy Chaffe & Ors (2003)

Summary

When ordering different amounts of security for costs in respect of different claimants in the same action the Master had applied the correct legal principles and had exercised his discretion correctly.

Facts

Appeal by the defendants against part of an order made on 2 June 2003 by Deputy Master Rhys in which he had required a much smaller sum to be paid by the first and third claimants in respect of security of costs than he had done for the second and fourth claimants. The second and fourth claimants had failed to provide the necessary security in time and as a result their claim had been dismissed. The claimants, who were resident in Canada, had brought an action for breach of trust against the defendants in connection with the beneficial ownership of a property located within the United Kingdom. The Master had held that: (i) the jurisdiction of the court with regard to security for costs had been triggered as the claimants were resident outside the jurisdiction (CPR 25.13(2)(a)); (ii) the Court still retained a discretion as to whether to order security for costs; (iii) the underlying principle in Nasser v United Bank of Kuwait (2001) EWCA Civ 556 relating to the difficulties of enforcement was relevant; (iv) the decision in De Beer v Kanaar & Co (2003) 1 WLR 38 had been prompted by the fact that there had been a want of probity on the claimant's part. Against that background he found that: (a) there had been no allegation of want of probity against the claimants; (b) the merits of the claim had not been so clear so as to justify taking them into account; (c) there had been no evidence that the claimant had any intention of frustrating an award of costs and the claimants were persons of reasonable means; (d) the claimants had been able to give evidence of the availability of assets and financial standing; (e) there was a reciprocal enforcement treaty with Canada and having reached the conclusion that there would be no substantial extra burden in enforcing a costs order in Canada he required only £5,000 as security for costs. The defendants contended that the master had failed to properly apply the relevant legal principles and/or that he had exercised his discretionary power incorrectly and that the figure of £5,000 for security was too low.

Held

(1) The defendants' contention that the master had failed to properly to apply the relevant legal principles was misplaced. (2) The master's exercise of discretion could not be faulted. (3) The merits of a claim could still be relevant on an application for security if the court could be satisfied that there was a very high probability of success or failure. (4) The Master's conclusion relating to the merits of the case could not be faulted and he had been correct in not taking them into account in coming to his decision. (5) The quantum of the limited security ordered by the Master had been correct. (6) The fact that the second and fourth claimants had not paid the security did not change any of the relevant legal principles.

Appeal dismissed.

Chancery Division
J Crow
Judgment date
27 November 2003
References

​LTL 28/11/2003