DARREN JAMES POPELY v POPLAR ESTATES LIMITED & Ors

On an appeal concerning security for costs, the court may assess the discretion globally once one or more gateways under Rule 25.13 are established. The existence and factual circumstances of the gateways are relevant to whether it is just to order security. A judge giving a short ex tempore judgment need not address each gateway separately or identify every possible discretionary factor, provided the reasons show that the overall discretion was exercised and explain why the arguments advanced were rejected. The adequacy of reasons depends on the way the case was argued and the issues genuinely in dispute.

The appellant petitioned for relief under section 996 of the Companies Act 2006 concerning his 20% shareholding in Poplar Estates Ltd. Deputy Insolvency and Companies Court Judge Barnett ordered him to provide £30,000 security for costs under three gateways in Rule 25.13: residence outside the jurisdiction, an incorrect address in the claim, and steps making enforcement of a costs order difficult.

The appellant appealed, arguing that the judge had failed to give sufficient reasons and was required to consider the discretion separately for each gateway. The central issue was whether the judge had adequately exercised and explained the overall discretion to order security.

1. Appeal dismissed. The judge had found that three gateways under Rule 25.13 were established or admitted. Those findings were materially relevant to the discretionary question whether it was just to order security.
2. Ground (e) was not confined to the address originally given in the claim form. The rule did not say that it applied only to that address. An incorrect address supplied when updating the address during the proceedings could therefore satisfy the gateway.
3. The judge had considered the arguments actually advanced, including that security would stifle the litigation and that other assets or costs orders should be taken into account. His conclusion that the matters, taken together, justified security showed that he had exercised the overall discretion.
4. A judge giving a short ex tempore judgment is not required to consider each established gateway independently or address every possible discretionary argument. The reasons required depend on the context and the way the case was presented. Here, the findings concerning concealment, transfer and dissipation of assets, lack of full and frank disclosure, the modest amount sought, and the absence of a developed contrary case provided sufficient reasons.
5. The order for £30,000 security was therefore upheld.

• Chancery Appeals (ChD): The appeal from the order of Deputy Insolvency and Companies Court Judge Barnett dated 31 January 2020 was dismissed. Permission to appeal had been granted on 9 June 2020.