SGS 9 - Security for costs and injunctions Flashcards
Who can bring an application for security for costs?
The defendant or a party in the position of the defendant (CPR 25.12(1))
When can you bring an application for security for costs?
Any time including before proceedings are commenced (CPR 25.2(1))
On what two grounds can you bring an application for security for costs?
1) C is resident outside of the jurisdiction (and you will have difficulty obtaining payment from C for this reason)
2) Impecunious company ground (C is a company which will be unable to pay costs if ordered to do so
What does Corfu Navigation Co say about ground 1?
C being resident outside of the jurisdiction will not be sufficient on its own - you will need to show that because of this it will be difficult to enforce payment of any costs order
What did Re Unisoft say about the impecunious company ground?
It is too difficult a test to require D to show that C won’t be able to pay debts
What did Jirehouse Capital v Beller say about the impecunious company ground?
‘reason to believe’ that C won’t be able to pay it’s debts suggests below the balance of probabilities so can satisfy this even if C can adduce substantial evidence to the contrary
What does CPR 25.13(1)(a) say?
The court must be satisfied having regard to all of the circumstances that it is just to make an order for security for costs. Within this you should consider the Human rights arguments (Olatawura) and the Sir Lindsay Parkinson case.
What did Olatawura v Abiloye say?
Demanding security for costs might restrict a claimant’s ECHR article 6 right to access to justice. Court must resolve this conundrum the best it can considering the paradox that the more evidence suggesting C won’t be able to pay, the more need there is for security
When exercising it’s discretion in accordance with CPR 25.13(1)(a), what 4 factors does the Sir Lindsay Parkinson case say the court should consider?
1) whether the claim is bona fide or a sham
2) whether D is trying to stifle a genuine claim
3) Any delay in making the application (delay defeats equity)
4) Whether C’s lack of means was brought about by D’s conduct
Now the court ill also consider the overriding objective as well as the need to maintain the status quo, and the merits of the claimant’s case
What 4 different types of security might the court order?
1) payment into court
2) payment to defendant’s solicitor
3) bank guarantee
4) undertaking to pay costs
In what circumstances might an interim prohibitory injunction be obtained before a claim form has been issued?
CPR 25.2(2)(b)
- where the matter is urgent; or
- it is otherwise desirable to do so in the interests of justice
What must you have to be able to bring an interim prohibitory injunction?
A cause of action. Not a remedy in itself without an established cause of action.
What guidance does American Cyanamid v Ethicon give in relation to when the court might grant an interim prohibitory injunction?
1) Is there a serious question to be tried?
2) Would damages be an adequate remedy for a party injured by the court’s granting of, or failure to grant, an injunction?
3) where does the balance of convenience lie?
4) Any defences of the respondent
In considering whether there is a serious question to be tried what is the threshold?
Claim must not be frivolous or vexatious - isn’t a high threshold
In considering whether damages would be an adequate remedy for any person injured - what does the court consider?
1) would damages be an adequate remedy for the applicant? i.e would they be adequately compensated and would the respondent be able to pay?
2) would damages be an adequate remedy for the respondent? i.e would they be adequately compensated by the applicant’s undertaking of damages should they lose at trial, and would the applicant be able to pay such damages?
