GREENOV8 GLOBAL PLATFORMS LIMITED v JONATHAN GREEN

Where a claimant company satisfies a gateway under Civil Procedure Rules 1998 Part 25.13(2), the court must decide whether security for costs is just in all the circumstances. The merits should not be examined in detail unless there is a high degree of probability of success or failure. A claimant resisting security on the ground of stifling bears the burden of proving, on the balance of probabilities, that it cannot provide security or obtain appropriate assistance. The evidence must be full, frank, clear and unequivocal. Once the claimant is impecunious, a gateway exists, and stifling is not established, it is normally appropriate to order security. The court may reserve the questions of quantum and timing.

Greenov8 Global Platforms Ltd, a Nigerian IT company, brought a claim against Jonathan Green for approximately US$1 million arising from a foreign currency exchange transaction involving JFNX, an English company of which Mr Green was a director and 1% shareholder. Greenov8 alleged fraudulent misrepresentation. Mr Green applied under Civil Procedure Rules 1998 Part 25.12 for security for his costs up to exchange of witness statements in the sum of £180,000.

The court considered whether the relevant gateways were established, whether the merits made security inappropriate, whether an order would stifle the claim, and whether Greenov8’s impecuniosity was allegedly caused by Mr Green’s conduct.

1. The application for security for costs was granted in principle. Greenov8 was outside the jurisdiction and was a company in respect of which there was reason to believe that it would be unable to pay Mr Green’s costs if ordered to do so. Both gateways under Civil Procedure Rules 1998 Part 25.13(2) were established.
2. The merits were not to be examined in detail. The court declined to determine whether the alleged representation or reliance was likely to be established. The claim was not highly likely to succeed, and there had been no summary judgment application. The merits therefore supplied no reason to refuse security.
3. Greenov8 bore the burden of showing, on the balance of probabilities, that security would stifle the claim. It had to provide full, frank, clear and unequivocal evidence that it could not provide security and could not obtain appropriate assistance. Unsupported assertions from its chief executive, without evidence concerning investors, creditors, possible funding by officers, or available personal resources, did not satisfy that burden.
4. The alleged causal connection between Mr Green’s conduct and Greenov8’s impecuniosity could not justify refusing security where the facts and merits remained disputed. To proceed on that basis would assume success at trial. The available bank statements also made the financial position less clear.
5. The court considered the foreign-jurisdiction gateway separately. Had it been the only gateway, the appropriate security might have been limited to the additional costs of enforcing an English judgment in Nigeria. Quantum and timing were reserved for further consideration.