Compagnie Noga D'Importation Et D'Exportation SA v Australia & New Zealand Banking Group Ltd & Ors

Joinder of an equitable assignee is ordinarily desirable where the assignee has the real interest in the claim and issues concerning the assignment should bind both assignor and assignee. A court may impose a condition requiring security for additional costs caused by the joinder, but it cannot use joinder as a means of requiring an impecunious individual assignee to provide security for the defendants’ general costs where no independent jurisdiction exists. A company claimant may be ordered to provide security where the statutory or procedural condition is satisfied. The claimant must give full and frank disclosure when asserting that security would stifle the claim. Where the claimant fails to establish stifling, the court may nevertheless decline further security if existing security orders remain effective and a further order would have no realistic sanction.

The claimant, Compagnie Noga D’Importation Et D’Exportation SA, brought tracing and related claims concerning bills of exchange against ANZ and other defendants. Nessim Gaon applied to be joined as a claimant after Noga had assigned the causes of action to him. The defendants sought security for costs against Noga and, if joined, Mr Gaon. Noga sought to set aside an existing security order.

The issues were whether joinder was desirable under CPR Part 19, whether security could be required from Mr Gaon under the joinder discretion or CPR 25.13(2)(f) or (g), and whether further security should be ordered against Noga under CPR 25.13(2)(c) and section 726(1) of the Companies Act 1985.

1. Joinder. Mr Gaon was joined as a claimant. The assignment gave him a real interest in the claims, and it was desirable that questions about the assignment be resolved in proceedings binding on both assignor and assignee. The court was not required at this stage to disregard the assignment because of possible issues concerning consent, consideration or prior interests.
2. Security as a condition of joinder. Under Eurocross Sales Ltd v Cornhill Insurance [1995] 1 WLR 1517 and Norglen Ltd v Reeds Rains Prudential Ltd [1999] 2 AC 1, the court could require security for additional costs caused or wasted by joinder. It could not impose security for the defendants’ general litigation costs merely because the assignee was an impecunious individual. Mr Gaon therefore had to provide security only for additional or wasted costs caused by his joinder.
3. Mr Gaon’s independent liability. Mr Gaon was not shown to be a nominal claimant within CPR 25.13(2)(f). Nor was it established under CPR 25.13(2)(g) that he had taken steps concerning his assets which would make enforcement of a costs order difficult. Chandler v Brown (20 July 2001) was followed: a propensity to put assets beyond reach was insufficient; actual steps were required. The court’s general case-management power under CPR Part 3.1 did not supply an alternative jurisdiction: Ali v Hudson [2003] EWCA Civ 1793.
4. Noga’s security. Although jurisdiction existed to order security against Noga under CPR 25.13(2)(c) and section 726(1) of the Companies Act 1985, Noga failed to prove that security would probably stifle the claims. A claimant asserting stifling must disclose fully and frankly its own resources and the resources available from shareholders, backers or interested persons. Nevertheless, no further order was made because existing security in favour of ANZ remained in force and further security was unlikely to have a realistic sanction.
5. Disposition. Mr Gaon’s joinder application succeeded. The applications requiring him to provide general security and the applications for further security against Noga failed. Noga’s application to set aside the existing security order failed.