Dr Morteza Rajabieslami v Sam Tariverdi & Ors

On an application for security for costs, the applicant must first establish a CPR 25.13 gateway as a matter of fact, ordinarily on the balance of probabilities. For the residence gateway, the court must apply the rule compatibly with Articles 6 and 14 ECHR. The relevant question is whether objectively justified grounds show a real risk of substantial obstacles to enforcement or an additional burden of cost or delay. Where assets are held in another jurisdiction, the court must assess not only the ease of enforcement there but also whether the assets will remain available and sufficient when enforcement is needed. Merits are considered only exceptionally, where success or failure can be demonstrated clearly and shortly, without detailed investigation. Security was ordered where enforcement in Qatar presented a real risk of serious obstacles.

The defendants applied for security for costs under gateways (a), (e) and (g) in CPR 25.13(2). The claimant accepted gateway (a), but disputed the other gateways and argued that security would be unjust because the claim had very strong merits and because of the defendants’ conduct.

The claim concerned alleged breaches of trust and the alleged unauthorised sale of a vessel. The defence alleged that the trust documentation was forged and that the relevant shares had been transferred in a domestic transaction involving Persian carpets. The central issues were whether the gateways were established, whether it was just to order security, and the appropriate amount and duration of any order.

1. Gateways. Under CPR 25.12 and CPR 25.13(2), the defendants had to prove a gateway before the court could consider whether security was just. The gateways were factual matters, not discretionary questions. Gateway (e) failed because the evidence did not establish on the balance of probabilities that the address in the claim form was incorrect. Gateway (g) also failed: ownership of shares in trading companies, without evidence of specific steps placing them beyond enforcement, was insufficient.
2. Gateway (a). The claimant was resident outside the jurisdiction and outside a state bound by the 2005 Hague Convention. The court therefore applied the gateway in a non-discriminatory manner under Articles 6 and 14 ECHR. The applicable threshold was a real risk, supported by solid evidence, of serious obstacles to enforcement. The evidence concerning enforcement of English costs orders in Qatar, including the reciprocity requirement under Articles 379 and 380 of the Qatari Code, established that risk.
3. The court considered assets held in the UAE as part of the assessment of enforcement against this particular claimant. It was insufficient to rely on an historic valuation of shares in a private trading company. Relevant considerations included the nature and value of the assets, their volatility, ease of transfer or disposal, and the likelihood that they would remain available and sufficient when enforcement arose. On the evidence, enforcement would probably need to take place in Qatar.
4. Discretion and merits. Establishing gateway (a) was a substantial factor favouring security. The court declined to investigate alleged forged signatures, the trust documentation, or the underlying commercial evidence in detail. The merits exception applies only where success or failure can be demonstrated with a high degree of probability by a clear and short examination. No sufficiently reliable conclusion could be reached on the limited evidence. There was also no adequate evidence that security would stifle the claim.
5. Order. Security was ordered for the defendants’ costs in the sum of £203,298, limited initially to the period up to and including the expert evidence stage, payable by 4pm on 31 March 2023 by payment into court or another reasonably acceptable method. The defendants’ application costs were summarily assessed at £60,000, also payable by that date. Permission to apply was granted in relation to further security for later stages.