Cody v Murray & Ors

Foreign residence alone does not justify security for costs. The court must identify an objectively justified enforcement or execution burden arising from the claimant’s particular country or circumstances. The relevant burden may include the cost and delay of obtaining a judgment capable of execution and of pursuing execution against assets. The order should be tailored to the burden established, rather than based on an inflexible assumption that enforcement abroad will be difficult. A claimant relying on after-the-event insurance or inability to fund security must provide sufficient evidence to establish the practical availability of those resources.

The claimant, resident in Texas, brought a claim concerning commission allegedly due under an agreement appointing him as an adviser to a professional tennis player. The defendants applied for security for costs under CPR r.25.13(2)(a), relying on the claimant’s overseas residence and the additional costs and delay of enforcing a costs order in Texas.

The principal issues were whether the relevant burden extended beyond obtaining recognition or domestication of an English judgment to execution against assets, whether Texas exemptions created a sufficient additional burden, and whether the claimant’s after-the-event insurance or limited means made security inappropriate.

1. Application granted. The claimant was ordered to provide security of $30,000 within 28 days, by payment into court, and the proceedings were stayed until payment.
2. The principles in Nasser v United Bank of Kuwait [2002] 1 WLR 1868 required more than proof of foreign residence. The defendants had to establish an objectively justified additional burden in enforcing a costs order abroad. The comparison was with enforcement against a domestic or Brussels/Lugano claimant.
3. The relevant burden was not confined to the stage of obtaining a foreign order rendering the English judgment capable of execution. Execution costs, delay and investigative work could also be relevant. The restricted approach in Dumrul v Standard Chartered Bank [2010] EWHC 2625 (Comm) was not followed.
4. Texas exemptions could create an additional enforcement burden because they might require investigation to identify non-exempt assets. On the evidence, however, the court was not persuaded that the burden exceeded $30,000. The order was therefore limited to that sum.
5. The authorities concerning after-the-event insurance against companies, Michael Phillips Architects Ltd v Riklin [2010] EWHC 834 (TCC) and Geophysical Service Centre Co v Dowell Schlumberger (ME) Inc [2013] EWHC 147 (TCC), did not determine the present issue. The claimant had not produced the policy or supporting documents, and its availability and enforceability could not be assessed.
6. The evidence of inability to fund security was inadequate. The claimant had not provided full details of his assets and earnings or addressed possible funding from other sources.

First-instance decision. No prior appellate decision was stated in the judgment.