Turkan & Co (a firm) & Anor v Toplum Postasi Ltd & Anor

An order for security for costs requires evidence giving the court reason to believe that the party against whom security is sought would be unable to pay the applicant’s costs if ordered to do so. Satisfaction of that condition does not make an order automatic. The court retains a discretion and must decide whether security is fair in the circumstances. The amount should reflect the costs reasonably expected to be incurred. A party seeking substantial security should support the application with detailed evidence, ordinarily including a draft bill of costs. Where an appellant company is insolvent or imminently subject to liquidation, security may be appropriate to avoid leaving the respondent exposed to an appeal without effective protection.

The claimants, a firm of solicitors and its principal, had obtained substantial libel damages and costs against a newspaper company and its chief editor after a jury trial before Morland J. The defendants obtained permission to appeal, but the judgment remained unsatisfied. The claimants applied for security for the costs of resisting the appeal, initially relying on non-payment as evidence of impecuniosity and seeking a complete indemnity.

The application was defective as against the editor and insufficiently supported as against the company. Before the hearing, the editor agreed not to pursue his appeal and the parties reached terms concerning the judgment. Further evidence showed that the company was insolvent and likely to enter liquidation. The issue was whether security should be ordered for the company’s appeal and, if so, in what amount.

1. Editor’s appeal. By consent, the editor’s appeal was dismissed, with no order for costs.
2. Company’s ability to pay. Further evidence established that the company was insolvent. There was therefore reason to believe that it would be unable to pay the claimants’ costs if ordered to do so. That satisfied the condition necessary before security could be ordered.
3. Discretion. Satisfaction of that condition did not require an order. The court retained a discretion. Fairness required protection for the claimants because they already held a substantial unsatisfied judgment and would otherwise face an appeal without security. The imminent liquidation and likely difficulty in providing security did not justify refusing an order if the appeal continued.
4. Amount and evidence. Security was limited to £5,000, the amount accepted as likely to be incurred on the appeal. A party seeking substantial security should provide detailed evidence, usually including a draft bill of costs. The claimants’ late and general estimate did not justify the larger sum sought.
5. The company was ordered to provide security for the respondents’ costs of the appeal in the sum of £5,000 within 28 days, on the usual terms. There was no order for costs.

• Court of Appeal (Civil Division): The editor’s appeal was dismissed by consent. The company was ordered to provide £5,000 security within 28 days.
• Queen’s Bench Division, before Morland J: After a libel trial with a jury, the claimants recovered damages of £10,000 and £35,000 respectively, together with costs. The defendants obtained permission to appeal.