Chuku v Chuku

For security for costs, a claimant should not be treated as resident out of the jurisdiction where the evidence of residence has not been tested and is not clearly incredible or lacking in substance. A claimant with a significant interest in the outcome will rarely be a “nominal claimant” under CPR 25.13(2)(f). A personal interest is not essential, but deliberate duplicity or window-dressing will typically be required. Where a claim and counterclaim raise substantially the same issues, security may be inappropriate because it could leave the claimant defending the counterclaim while being unable to pursue its own claim. The court must assess the practical effect of the order and the relationship between the rival claims.

The claimant appealed against an order made by Mr Recorder Kent QC in the County Court at Central London requiring security for costs under CPR 25.13. The underlying proceedings concerned possession of a property registered in the name of the claimant’s late father. The defendant resisted possession and counterclaimed for declarations and relief based on proprietary estoppel and constructive trust.

The Recorder found that the claimant was resident outside the jurisdiction and considered him a nominal claimant. He ordered security of £90,000, with the claim liable to be struck out if security was not provided. The appeal raised issues concerning residence, the meaning of “nominal claimant”, the significance of the counterclaim, and alleged apparent bias.

1. Residence. The appeal was allowed. The Recorder was not entitled, on the written evidence and without cross-examination, to reject the claimant’s evidence that he lived in London and conclude that he was resident out of the jurisdiction. The evidence was supported to some extent by contemporaneous documents. Its deficiencies did not make the account incredible or lacking in real substance. Family members being in Nigeria, uncertain income, and continuing professional connections there did not compel the conclusion that the claimant had returned to Nigeria (paras [16]-[18], [45]).
2. Nominal claimant. A person with a significant interest in the outcome will rarely, if ever, be a nominal claimant for CPR 25.13(2)(f). A personal interest is not essential, and a trustee, executor or personal representative is not ordinarily nominal merely because the claim is brought in a representative capacity or under CPR 19.7A. Typically, there must be an element of deliberate duplicity or window-dressing intended to protect the person truly interested from liability for costs. The claimant was not nominal: he was the administrator and registered proprietor, had functions as a family head, and could benefit under the will (paras [20]-[28], [45]).
3. Counterclaim. Even if a condition in CPR 25.13(2) had applied, security would have been inappropriate. The claim and counterclaim raised substantially the same issues. If the claim were struck out for failure to provide security, the claimant would still have to defend the proprietary estoppel and constructive trust counterclaim while being unable to pursue possession. The defendant’s costs could equally, or preferably, be regarded as costs of prosecuting the counterclaim. The court therefore applied the reasoning in B J Crabtree (Insulation) Ltd v GPT Communication Systems Ltd (1990) 59 BLR 43. There was no rule of thumb, but on these facts the rival claims were bound to be litigated and security was plainly inappropriate (paras [29]-[39], [45]).
4. Bias. The alleged professional dealings between the Recorder and the respondent’s solicitors, in an unrelated matter several years earlier, provided no sound basis for alleging bias or breach of judicial conduct. The additional grounds were refused, applying the approach in Taylor v Lawrence [2001] EWCA Civ 119 (paras [40]-[44]).

• High Court (Chancery Division): Appeal from the County Court at Central London. The order for security for costs was set aside and permission to rely on additional bias grounds was refused.