Somerset-Leeke & Anor v Kay Trustees & Anor

Security for costs is not automatic merely because a claimant satisfies one of the conditions in CPR 25.1.3(1). The court must identify the relevant ground, direct the evidence to it, and decide whether security is just having regard to all the circumstances.

For a claimant resident outside the Brussels and Lugano jurisdictions, the relevant rationale is the practical difficulty of enforcing a costs order, not residence or nationality itself. A claimant need not automatically disclose assets in the country of residence. Residence in a country where English judgments can readily be enforced does not, without more, justify security. A move of residence or assets likewise does not establish the ground concerned unless enforcement is thereby made difficult.

The claimants appealed against the refusal by Master Bowman to order security for costs. The first claimant was resident in Monaco, and the second claimant was a trustee company holding his pension fund. The defendants relied, in a confused manner, on several grounds under CPR 25.1.3, including residence outside the relevant Convention jurisdictions, inability of the company to meet a costs order, and steps allegedly taken to make enforcement difficult.

The court considered whether the statutory and procedural conditions were satisfied and, if so, whether security was justified in the circumstances.

Appeal dismissed. The application for security for costs failed against both claimants.

1. An application must identify the particular ground relied upon and provide evidence directed to that ground. The existence of a condition under CPR 25.1.3(1) is only a threshold requirement. The court must separately decide whether making an order is just having regard to all the circumstances.

2. Residence in Monaco satisfied the relevant condition under paragraph 2(a), but the discretion had to be exercised consistently with its enforcement rationale. Following the approach in Nasser v United Bank of Kuwait [2002] 1 All ER 401, it would be discriminatory to treat residence outside a Brussels or Lugano State as sufficient by itself. The evidence showed that an English judgment could be registered and enforced in Monaco, subject to a fee for which security had been offered or provided.

3. Aines Asset Management v Kazakhstan Investment Fund [2002] WL 1654967 did not establish a general rule requiring every non-Convention resident to identify assets in the place of residence. It concerned a shell place of incorporation and was not elevated into such a principle.

4. As to the company, the evidence showed that it acted for the first claimant in holding his pension fund and would have recourse to that fund for costs incurred at his request and for his benefit. There was therefore no sufficient case for security against the company.

5. Ground (g) was not established. The first claimant’s move to Monaco and removal of assets from this jurisdiction did not show that enforcement had become difficult, particularly because Monaco recognised English judgments. The court therefore did not need to decide whether a purpose of making enforcement difficult was essential to that ground.

1. High Court (Chancery Division): Mr Justice Jacob dismissed the appeal from Master Bowman’s refusal to order security for costs.