Condliffe v Hislop and Another
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE KENNEDY,LORD JUSTICE PETER GIBSON,SIR ROGER PARKER,Order |
| Judgment Date | 27 October 1995 |
| Judgment citation (vLex) | [1995] EWCA Civ J1027-9 |
| Docket Number | No QBENI 94/1133/E |
| Court | Court of Appeal (Civil Division) |
| Date | 27 October 1995 |
[1995] EWCA Civ J1027-9
On appeal from order of Sir Michael Davies (Sitting as a Deputy High Court Judge)
Before: Lord Justice Kennedy Lord Justice Peter Gibson Sir Roger Parker
No QBENI 94/1133/E
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
MR D EADY QC and MISS A PAGE (Instructed by Messrs Wright Webb Syrett of London) appeared on behalf of the Appellant.
MR SHAW QC (Instructed by Messrs Peter Carter Ruck of London) appeared on behalf of the Respondent.
(As Approved)
1. INTRODUCTION
This interlocutory appeal raises the question of whether, and if so when, a defendant in a libel action can obtain an order for security for costs against an impecunious plaintiff, who is only able to pursue the action because funds are being made available to him by a third party.
2. MATERIAL FACTS
For present purposes the material facts can be shortly stated. In 1992 the plaintiff was in practice in the West country as a chartered accountant. On 27th March 1992 an article was published in the defendants' magazine, Private Eye, which the plaintiff says was defamatory. It related to the way in which he conducted his business. On 23rd July 1993 the plaintiff commenced these proceedings in which he seeks damages for that alleged libel. On 27th August 1993 the plaintiff and his wife were adjudged bankrupt. The defendants' solicitors at once enquired as to how he proposed to finance his litigation and were told that he intended to pursue it with financial assistance from a relative who turned out to be his mother. The defendants' solicitors enquired whether she was prepared to provide security for the defendants' costs, and on 15th October 1993 the plaintiff's solicitors said that she was prepared to pay any court order in respect of the defendant's costs. A defence was then served which contained a plea of justification, and on 25th November 1993 the defendants' solicitors issued a summons seeking a stay of the action unless or until the plaintiff provided security for costs. In a supporting affidavit the defendants' solicitors suggested that the plaintiff's mother was a lady of relative modest means, and that as the plaintiff was also pursuing a similar action against West Country television his legal costs were likely to be substantial. The costs of the defendants in the present action up to and including discovery were expected to exceed £18,000.
In a letter dated 28th January 1994 the plaintiff's solicitors said, inter alia, that the plaintiff's mother had "various assets, including property in Cheshire worth £45,000". She later swore an affidavit in which she stated that property to be her principle asset.
On 12th May 1994 deputy Master Ashton ordered that the plaintiff provide security for costs up to and including the hearing of the Summons for Directions in the sum of £5,000 and in default thereof all further proceedings in the action were ordered to be stayed. The plaintiff appealed.
The plaintiff's mother then took separate legal advice and swore a second affidavit in which she withdrew her undertaking as to costs. She also revealed that attempts to sell her property had forced her to conclude that it was worth substantially less than £45,000. Having only limited means she pointed out that if she gave the security for costs she would to that extent reduce the fund available to assist her son to finance his action.
3. BEFORE THE JUDGE
The plaintiff's appeal was heard by Sir Michael Davies who, with the consent of the parties, also heard submissions made on behalf of the plaintiff's mother. He allowed the appeal, set aside the order of the deputy Master and gave leave to appeal to this court.
4. GROUNDS OF APPEAL
So the matter comes before us. Mr Eady, Q.C., for the defendants invites us to restore the order of the deputy Master. His submission, as conveniently summarised in the defendants' grounds of appeal is that the court has power to order a maintained plaintiff to give security for costs, and that the deputy Master correctly exercised his discretion to use that power when he made his order in this case.
5. THE SCOPE OF ORDER 23
So the first issue which I must address is the jurisdictional issue, and here, as Mr Eady recognises, he faces a difficulty. Order 23 of the Rules of the Supreme Court deals with security for costs, and so far is material provides:-
"1-(1) Where, on the application of a defendant to an action or other proceeding in the High Court, it appears to the Court -
(a) that the plaintiff is ordinarily resident out of the jurisdiction, or
(b) that the plaintiff (not being a plaintiff who is suing in a representative capacity) is a nominal plaintiff who is suing for the benefit of some other person and that there is reason to believe that he will be unable to pay the costs of the defendant if ordered to do so, or
(c) subject to paragraph (2) that the plaintiff's address is not stated in the writ or other originating process or is incorrectly stated therein, or
(d) that the plaintiff has changed his address during the course of the proceedings with a view to evading the consequences of the litigation,
then if, having regard to all the circumstances of the case, the Court thinks it just to do so, it may order the plaintiff to give such security for the defendant's costs of the action or other proceedings as it thinks just.
3. This Order is without prejudice to the provisions of any enactment which empowers the Court to require security to be given for the costs of any proceedings."
As Mr Eady concedes, this plaintiff does not fall within the scope of Order 23 Rule 1, which is clearly directed at plaintiffs against whom, because they are abroad or concealing their identity, or are shielding themselves behind a nominal plaintiff, it may be difficult to enforce an order for costs. Means are not relevant, except in the case of a nominal plaintiff, and, as Mr Shaw, QC for the plaintiff points out, the law is in general anxious not to shut out the individual plaintiff who is of limited means. There is no other Rule of the Supreme Court on which Mr Eady can rely, so his submission is, and has to be, that O. 23 is not exhaustive as to the circumstances in which the court may order security for costs. He seeks to rely on the inherent jurisdiction of the court, and draws support from an observation of the future Master Jacob that "the powers conferred by the Rules of Court are generally speaking additional to and not in substitution of powers arising out of the inherent jurisdiction of the court" (Current Legal Problems (1970) page 23 at p.25, and see Halsbury's Laws 4th Ed. Vol 37 para 14). Of course that observation was not directed particularly to Order 23, which on the face of it appears to be specific as to the circumstances in which security for costs can be ordered, even to the extent of providing in rule 3 for enactments which empower the court to require security to be given (in particular section 726 of the Companies Act 1985 and section 12(6)(a) of the Arbitration Act 1950). If Order 23, rule 1, is not intended to be exhaustive as to the circumstances in which the jurisdiction may be exercised, then rule 3 would seem to be surplusage, and in C.T. Bowring v Corsi (1994) 2 LL. R 567 two members of this court expressed the view that O 23,r 1, is exhaustive. In that case the plaintiff had obtained a Mareva injunction against the defendant on the usual undertaking as to damages, and the defendant having obtained discharge of the injunction was seeking damages from the plaintiff pursuant to the undertaking. The plaintiff then applied for security for costs. It was argued that even if the case fell outside the provisions of the Companies Act the court should exercise its inherent jurisdiction, but Dillon L.J. said at page 570:-
"The cases outside the Companies Acts, in which the Courts used to order security for costs in the exercise of their inherent jurisdiction, are now formulated in the Rules of the Supreme Court."
He then set out Order 23 rules 1 to 3 and continued:-
"To add a new category, not covered by any enactment, to those listed in rule 1(1) in which a plaintiff can be ordered to give security would now be a matter for the Rules Committee, and not for the discretion, as a matter of inherent jurisdiction, of the individual Judge in the individual case."
Similarly Millett L.J. said at page 577 that Order 23:-
"represents a codification of the case law dealing with the power of the court to order security for costs".
At page 580 he said:-
"In my judgment O. 23 must be regarded as a complete and exhaustive code. I agree with Lord Justice Dillon that if there should emerge a need for a new category of case in which it is desirable that the Court should have power to order security for costs, that will have to be dealt with by Parliament or the Rules Committee."
6. BUT IS A MAINTAINED PLAINTIFF DIFFERENT?
Recognising the problems which he faces arising out of the wording of Order 23 and the decision of this court in the Bowring case, Mr Eady puts his case in this way —that the court has always had power to defend itself against abuse, and to make use of orders for security for costs and orders to stay proceedings as weapons to that end. Maintenance is still an abuse, even if it is no longer a crime, or tort, and so where, as here, a plaintiff has been shown to be a maintained plaintiff, an order for security for costs enforced by means of a stay should normally be made.
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