Aoun v Bahri [QBD (Comm)]

JurisdictionEngland & Wales
CourtQueen's Bench Division (Commercial Court)
JudgeMoore-Bick J
Judgment Date06 Feb 2002

[2002] EWHC 29 (Comm)

Queen's Bench Division (Commercial Court).

Moore-Bick J.

Aoun
and
Bahri & Anor.

Nigel Jacobs (instructed by Jeffrey Green Russell) for the claimant.

Graham Dunning QC and Stephen Houseman (instructed by Constant & Constant) for the first defendant.

Huw Davies (instructed by Barlow Lyde & Gilbert) for the second defendant.

The following cases were referred to in the judgment:

AP (UK) Ltd v West Midlands Fire and Civil Defence Authority Authority [2001] EWCA Civ 1917; [2002] CLC 766.

Chandler v Brown [2001] CP Rep 103.

De Beer v Kanaar & CoUNK [2001] EWCA Civ 1318; [2002] CLC 114.

R v Barnet London Borough Council, ex parte ShahELR [1983] 2 AC 309.

Security for costs — Whether court had jurisdiction to order claimant to give security — Whether claimant ordinarily resident outside the jurisdiction and not a person against whom a claim can be enforced under the Brussels or Lugano Conventions — Whether he had changed his address since the claim was commenced with a view to evading the consequences of the litigation — Whether he had given an incorrect address in the claim form — Whether he had taken steps in relation to his assets that would make it more difficult to enforce an order for costs against him — CPR, r. 25.13(1), (2).

This was an application for security for costs.

The claimant was a businessman who had for some years been involved in a number of commercial enterprises with the defendants, mainly related to the operation of vessels carrying liquefied petroleum gas. At some point the parties' relationship collapsed and the claimant had brought proceedings against his former business associates to recover very substantial sums by way of damages for breach of contract, breach of fiduciary duty and fraud. The claimant was born in Lebanon and was a Lebanese citizen. Following his marriage in 1987 he and his wife went to live in Australia and he acquired Australian nationality. Since then he had lived in Dubai and Greece and since December 2000 he had lived in the UK. In Greek proceedings in June 2000 he had given his address as in Beirut and his English solicitors in October 2000 said that he lived in Athens and not Beirut.

The defendants applied for security for costs on grounds that the claimant was ordinarily resident outside the jurisdiction and was not a person against whom a claim can be enforced under the Brussels or Lugano Conventions (CPR, r. 25.13(2)(a)); that he has changed his address since the claim was commenced with a view to evading the consequences of the litigation (r. 25.13(2)(d)); that he gave an incorrect address in the claim form (r. 25.13(2)(e)); and that he has taken steps in relation to his assets that would make it more difficult to enforce an order for costs against him (r. 25.13(2)(g)).

Held making an order for security:

1. On the evidence the claimant was ordinarily resident in the UK and it was unnecessary to decide whether, as the defendants submitted, he could not be regarded as ordinarily resident for the purposes of r. 25.13(a) because he was not here lawfully. That was a matter for the Home Office.

2. It was common ground that the claimant had changed his address on more than one occasion since the commencement of the action but the court was not satisfied that he had done so with a view to evading the consequences of the litigation, meaning any of the ordinary consequences of the litigation and not only an order for the payment by the claimant of the defendants' costs at the end of the proceedings.

3. Despite the fact that the evidence was not wholly satisfactory the court concluded that the Greek address given in the claim form was correct at the time it was issued.

4. The test under r. 25.13(2)(g) was objective. It was not concerned with the claimant's motivation but with the effect of steps that he had taken in relation to his assets. In the present case there was little evidence as to the extent or nature of the claimant's realisable assets other than a house in Australia. He had taken the step of selling that house for the equivalent of about £400,000 and said he intended to put about a quarter of the sale proceeds into a new house in London and use the balance for the purposes of his business. A freehold property (provided it was unencumbered) was clearly an asset against which a judgment for costs could be enforced and that remained the case even though the property was situated abroad, though the ease with which that could be done would no doubt depend on the country in which it was situated. Enforcement against property in Australia should not pose undue difficulties. On the basis that if the litigation did not reach a premature conclusion, the costs were likely to be very substantial indeed and that the claimant did not appear to have other assets readily available to satisfy any order for costs that might be made against him, any step in relation to that asset which made it difficult to enforce an order for costs against it would make it difficult to enforce an order for costs against the claimant. In the circumstances the sale of the Australian property had had a significant effect on the ease with which an eventual judgment for costs could be enforced against him. There was nothing in the evidence to suggest that the bulk of the proceeds of sale would remain available in one form or another to satisfy an order for costs. Therefore the sale of the Australian house was a step in relation to his assets that would make it difficult to enforce an order for costs against the claimant. That was sufficient to give the court jurisdiction to make an order for security for costs.

5. As a matter of discretion the court would make an order for costs in favour of both the defendants.

JUDGMENT

Moore-Bick J:

1. This is an unusual application for security for costs. The claimant, Mr Aoun, is a businessman who for some years has been involved in various commercial enterprises mainly related to the operation of vessels carrying liquefied petroleum gas. Until some time in 1999 these enterprises were carried on in conjunction with the defendants, Mr Bahri and Mr Angelou. At some point during that year, however, the parties' relationship collapsed and Mr Aoun has now brought these proceedings against his former business associates to recover very substantial sums by way of damages for breach of contract, breach of fiduciary duty and fraud. It is quite clear that the breakdown of their relationship has given rise to a considerable degree of animosity between the parties.

2. Mr Aoun was born in Lebanon and is a Lebanese citizen. However, following his marriage in 1987 he and his wife went to live in Australia. He acquired Australian nationality the same year. Until recently he owned a house in Australia, but over the past few years he has lived in various countries including Dubai, Greece and latterly the UK.

3. The present action was begun on 3 February 2000, but it is not the only litigation that has been commenced between these parties. In May 2000 Mr Angelou began proceedings in the first court of Piraeus against Mr Aoun which led to the filing by Mr Aoun on 14 June 2000 of a pleading in which he gave his address as Beirut, Lebanon. On 13 October 2000 Mr Bahri's solicitors, Constant & Constant, wrote to Mr Aoun's then solicitors, Clyde & Co, seeking their agreement in principle to provide security for costs. Clyde & Co responded by saying that Mr Aoun lived in Athens, not Beirut, but that they would take his instructions. Despite two reminders, no proposals were forthcoming and so Constant & Constant issued their application on 5 April 2001. A similar application was issued by Barlow Lyde & Gilbert on behalf of Mr Angelou on 20 April.

4. The defendants submit that the court has jurisdiction under r. 25.13(2) to order Mr Aoun to provide security for costs on the following grounds:

(a) that he is ordinarily resident outside the jurisdiction and is not a person against whom a claim can be enforced under the Brussels or Lugano Conventions (r. 25.13(2)(a));

(b) that he has changed his address since the claim was commenced with a view to evading the consequences of the litigation (r. 25.13(2)(d));

(c) that he gave an incorrect address in the claim form (r. 25.13(2)(e)); and

(d) that he has taken steps in relation to his assets that would make it more difficult to enforce an order for costs against him (r. 25.13(2)(g)).

5. The question of Mr Aoun's ordinary place of residence assumed a particular prominence in this application and the evidence relating to it developed significantly in the course of preparation for, and even during the course of, the hearing. It was principally because of the apparently unsatisfactory way in which Mr Aoun had dealt with this issue that when the matter came before me in July I took the unusual step of directing that he should attend the hearing of the application to enable him to be cross-examined. It is fair to say, however, that he did not resist the application; indeed, he seemed very willing to make himself available for that purpose.

6. Mr Aoun did attend the hearing and was cross-examined at some length. His evidence assisted me in a number of respects, both in relation to the question of his ordinary place of residence and in relation to other issues. For reasons that will...

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4 cases
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    • Jamaica
    • Supreme Court
    • 16 September 2013
    ...of Haynes J inCybervale Limited v Infochannel Limited: Claim 2011 CD 00087 . Counsel relied on the decisions of Aoun v Bahri & Anor [2002] CLC 776 and Patrick Harris v Leonard Wallis [2006] EWHC 630 (Ch) [2006] EWHC 630 (Ch) as supporting her argument that this sort of conduct by the Cl......
  • Nihal Mohammed Kamal Brake v Geoffrey William Guy
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    • Chancery Division
    • 11 June 2020
    ...the claimant's motivation but with the effect of steps which he has taken in relation to his assets: Aoun v Bahri [2002] EWHC 29 (Comm), [2002] CLC 776, at [25]–[26]; iii) If it is reasonable to infer on all the evidence that a claimant has undisclosed assets, then his failure to disclose ......
  • Edward Wojakovski v Arthur Matyas
    • United Kingdom
    • Chancery Division
    • 18 February 2020
    ...the claimant's motivation but with the effect of steps which he has taken in relation to his assets: Aoun v Bahri [2002] EWHC 29 (Comm), [2002] CLC 776, at [25]–[26]; iii) If it is reasonable to infer on all the evidence that a claimant has undisclosed assets, then his failure to disclose ......
  • Joseph Ackerman v Naomi Ackerman and Others
    • United Kingdom
    • Chancery Division
    • 12 August 2011
    ...the claimant's motivation but with the effect of steps which he has taken in relation to his assets: Aoun v Bahri [2002] EWHC 29 (Comm), [2002] CLC 776, at [25]–[26]; iii) If it is reasonable to infer on all the evidence that a claimant has undisclosed assets, then his failure to disclose t......

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