Tonstate Group Ltd & Ors v Edward Wojakovski & Ors

A disclosure application must identify a proper legal basis and the parameters of the applicant’s entitlement. Where security for costs is ordered, the claimant or applicant should have a genuine opportunity to provide the security before an unless sanction is imposed. The court may therefore require payment by a specified date while reserving liberty to apply for strike-out upon default. The court may also apportion costs to reflect the relative success of the parties at an earlier hearing.

The judgment concerned several procedural matters in ongoing proceedings involving Mr Wojakovski. He sought disclosure of documents relating to the business of THHL, relying on his alleged rights as a director and possible ultimate shareholder. He also sought additional time to provide agreed security for the costs of respondents to a petition, while resisting an automatic strike-out sanction for failure to provide it. The court further determined the proportion and summary assessment of costs arising from an earlier case management conference.

1. Disclosure. The application for disclosure was not determined. Although Mr Wojakovski might possess rights as a director or ultimate shareholder to obtain company information, the application had not been advanced on a litigation basis and the court had received no assistance on the legal parameters of any valid request. No order was therefore made, without preventing a properly grounded future application.
2. Security for costs. Security was ordered in the agreed sum of £135,244.90, payable into court by 31 March 2020 once the solicitors had confirmed that the funds were not subject to proprietary claims. The additional time was justified because the petition was effectively stayed and the respondents would suffer no significant further costs during the period.
3. The court declined to impose an automatic unless order at that stage. The purpose of security is to give the party obtaining it a real choice whether to continue imposing the burden of the proceedings. Applying the approach noted by Waller LJ in Radu v Houston [2006] EWCA Civ 1575 at paragraph 18, the applicant should first have a genuine opportunity to raise the money. The respondents were instead given liberty to apply to strike out the claim if there was default, when the reasons for default could be considered.
4. Costs. The claimants were awarded 85 per cent of the costs of the first case management conference, with the balance and the costs of the present hearing being costs in the case. The claimants’ costs were summarily assessed at 75 per cent of the sum claimed.