William Sykes v Sumiki Limited

Residence outside the jurisdiction does not, by itself, justify security for costs. The applicant must establish objectively justifiable grounds for believing that enforcement will face substantial obstacles or an additional burden of cost or delay. The court should tailor the security to that burden rather than automatically require the full projected costs of the proceedings. Security may be ordered where reciprocal enforcement abroad is likely to involve further proceedings, cost and delay, even though eventual recovery is expected. Costs incurred at first instance should not ordinarily be included in security for an appeal, particularly where doing so would undermine an existing stay. The court may order security without an automatic strike-out provision, instead giving liberty to apply if payment is not made.

Sumiki Limited applied under Civil Procedure Rules 1998, rules 25.29 and 25.27, for security for the costs of William Sykes’s appeal. The appeal arose from a Central London County Court judgment dated 5 July 2024, which gave Sumiki summary judgment for repayment of a guaranteed loan and awarded costs.

Sykes was resident outside the jurisdiction, most recently in Kenya. Sumiki relied on published material concerning the procedure, cost and possible delay involved in enforcing English judgments in Kenya. Sykes did not file evidence responding to the security application and argued that any security should be modest, and should not include first-instance costs.

The issues were whether the statutory condition for security was met, whether it was just to order security, what amount was appropriate, and whether the order should include first-instance costs or an automatic strike-out provision.

1. The application for security for costs of the appeal was granted. Sykes was ordered to provide security of £15,000 within 14 days, with Sumiki given liberty to apply to strike out the appeal if the security was not provided.

2. Under Civil Procedure Rules 1998, rules 25.29 and 25.27, foreign residence is not sufficient by itself. The court must identify objectively justifiable grounds for concluding that enforcement will encounter a substantial obstacle or an additional burden, such as cost or delay. The principles in Nasser v United Bank of Kuwait were applied.

3. The material concerning enforcement in Kenya was sufficient to establish a real risk of significant additional costs, litigation delay and further applications, despite the reasonable expectation that Sumiki would ultimately recover the judgment debt. The condition in rule 25.27(b)(i) was therefore satisfied.

4. It was prima facie just to order security. The possible stifling effect of security was not established because Sykes provided no evidence of his financial standing, despite having been directed to do so.

5. The security was limited to the likely additional burden associated with enforcement in Kenya. It did not include costs already incurred at first instance. Such an order would require exceptional circumstances and would undermine the stay of enforcement. Sumiki’s proper remedies concerning the stay were to apply to set it aside or appeal against it; those matters could not appropriately be achieved indirectly through the security application.

6. No automatic unless provision was imposed. The application to strike out parts of the grounds of appeal was adjourned to the hearing of the substantive appeal.

• High Court (King's Bench Division): security for the costs of the appeal ordered in the sum of £15,000; the strike-out application was adjourned.
• Central London County Court: HHJ Saunders gave summary judgment for Sumiki on 5 July 2024 and made associated costs orders.
• High Court permission stage: Griffiths J granted permission to appeal on 7 May 2025 and maintained the stay in amended terms. Sir Stephen Stewart had previously granted a stay on 11 June 2024.