Michaels v Harley House (Marylebone) Ltd

Security for costs may exceptionally be ordered against a legally aided or potentially legally aided appellant where impecuniosity is established, outside support appears available, and the order is not shown likely to stifle the appeal. The court may reject an adjournment sought pending determination of legal aid where the application can fairly be decided on the present evidence. Security should reflect a reasonable assessment of the respondent’s costs. A profligate or inadequately supported costs estimate may be substantially reduced.

The appellants appealed against a High Court decision concerning alleged rights under the Landlord and Tenant Act 1987. The respondent applied for security for the costs of the appeal under O.59, r.10, relying on the appellants’ impecuniosity and an outstanding unsatisfied costs order. The appellants sought an adjournment pending determination of legal aid. The issues were whether the application should be adjourned, whether security should be ordered, and the appropriate amount.

1. The application for an adjournment pending the outcome of the appellants’ legal-aid application was refused. The court proceeded on the premise that legal aid might be granted.
2. It was nevertheless an exceptional case in which security for costs should be ordered. The first appellant was bankrupt, the second had no independent assets, and there was an unsatisfied order for costs.
3. The court regarded evidence of outside interest and support as material. A solicitor’s letter indicated that support had been provided or was available to enable the appeal to proceed if legal aid was unavailable. The contrary information supplied on instructions was considered unsatisfactory.
4. The appellants had not shown that, without legal aid, they could not proceed, or that an order for security would stifle the appeal. Security was therefore ordered in the sum of £30,000.
5. The respondent’s proposed costs were considered profligate. Security was to be provided within 28 days. Pending provision, the appeal was stayed; failure to provide it within that period would result in dismissal without further order.

1. Court of Appeal (Civil Division): on the supplied judgment text, ordered security for appeal costs of £30,000 within 28 days, stayed the appeal pending provision, and directed that the appeal would stand dismissed if security was not provided.