Security For Costs

Question 1

1. Who may apply for security of costs?
2. What must an application for security be supported by?
3. What details will the court order for security for costs address?

Answer 1

1. A DEFENDANT or someone in the place of the D
2. Written evidence
3. The amount of security and the manner and time in which it must be paid.

Question 2

When should a D make an application for security for costs?

Answer 2

May be made at any stage, but D should act promptly as soon as the facts justifying the order are known

Question 3

When MAY the court make an order for security of costs?

- Conditions that apply -

Answer 3

(1) court is satisfied that having regards to ALL THE CIRCUMSTANCES, that it is JUST to make such an order
(2) one or more of the conditions applies

(A) claimant is out of jurisdiction and NOT resident in Hague convention state ect. - OUTSIDE of EUROPE-
(B) N/A

(C) C is a company and there is reason to believe that it will be unable to pay D costs if it was ordered to do so

(D) C changed address to evade consequences of litigation

(E) C failed to give their address in claim form or gave incorrect one

(F) C acting as a nominal C

(G) C taken steps in relation to their assets that would make it difficult to enforce a costs order against them

Question 4

Can an order be made solely because one of the conditions applies?

Answer 4

NO — only if having regard to all circumstances just to make the order + 1 condition applies

Question 5

Why do the courts need to consider the respondent’s ability to comply with any order made?

What can courts do to get around this?

What if the claimant’s claim appear highly likely to succeed?

Answer 5

The ability of respondent to comply with any order made — need to avoid where C has a meritorious claim who would then be prevent from pursuing the claim is if it required to provide security for costs

Make the order for a lesser amount, but can also take into account the money that C could raise from other sources

Then C will not be required to provide security for costs

Question 6

When the D is relying on condition (C) - C is a company and there is reason to believe that it will be unable to pay D costs if ordered to do so - what circumstances might the court take into account?

Answer 6

1. If C’s claim bona fide and not a sham
2. If C has reasonably good prospect of success
3. If D has made an admission in their defence that money is due
4. Payment into court or an “open offer”
5. If application for security was being used OPPRESSIVELY, so to style a genuine claim
6. If C’s want of means has be be rough about by conduct of D (i.e C blaming D for fact they have no cash)
7. If application for security it made at a LATE STAGE in proceedings (later=less likely to be granted)

Question 7

In order to establish condition C what must the applicant show?

Applicant must adduce evidence of what to establish this?

Answer 7

That there is REASON TO BELIEVE that the Claimant company will be unable to play

Evidence = Need to adduce sufficient evidence to give court reason to believe that the Claimant company WILL be unable to pay — may be unable to pay is NOT ENOUGH

Question 8

If an order for security of costs against a claimant company might result in company being forced to abandon a claim which has reasonable prospect of success

Will court grant application for security of costs?

If this is a C’s argument do they need to show that court with certainty that they would be unable to pay security for costs?

Answer 8

Court is entitled to resume to make that order

• notwithstanding that if C is unsuccessful they may not be able to pay D costs

———-

Sufficient for C to show that there is a possibility that it will be unable to o peruse the action, need not show this with certainty

But burden lies of C to show that the company’s mean are insufficient to meet an order and that it is probable that no other funds will be available

Question 9

When an application is made under condition (g) - C taken steps in relation to assets that would make it difficult to ensure an order for costs against him —

Is the D required to show that such steps were taken with the intention of defeating enforcement? What does D need to show?

Answer 9

Does not need to show specific intention or that the steps were taken during litigation

But proof of such intention would increase the likelihood of an order being made

D needs to show that steps have been taken which will render enforcement.