Dawnus Sierra Leone Ltd v Timis Mining Corporation Ltd and Another
| Jurisdiction | England & Wales |
| Judge | H.H. Judge Keyser |
| Judgment Date | 06 July 2016 |
| Neutral Citation | [2016] EWHC B19 TCC |
| Docket Number | Case No. B50CF015 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 06 July 2016 |
[2016] EWHC B19 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
CARDIFF DISTRICT REGISTRY
TECHNOLOGY AND CONSTRUCTION COURT
Cardiff Civil Justice Centre
2 Park Street
Cardiff,
CF10 1ET
His Honour Judge Keyser Q.C.
sitting as a Judge of the High Court
Case No. B50CF015
Counsel for the Claimant: Mr Andrew Butler
Counsel for the Defendant: Mr Brian Dye
Judgment Approved By the Court
H.H. Judge Keyser Q.C.
Disclosure of identity of third party funder
By application notice dated 29 June 2016, the claimant seeks, among other things, an order that the defendant disclose the identity of the third party funder that is funding its litigation both here and in Sierra Leone and confirm in respect of each such funder whether he, she or it comes within the conditions set out in CPR r. 25.14(2)(b).
Rule 25.14(2)(b) immediately follows the two rules that deal with an order for security for costs against a party. Rule 25.14 reads, so far as material:
"(1) The defendant may seek an order against someone other than the claimant, and the court may make an order for security for costs against that person if –
(a) it is satisfied, having regard to all the circumstances of the case, that it is just to make such an order; and
(b) one or more of the conditions in paragraph (2) applies.
(2) The conditions are that the person …
(b) has contributed or agreed to contribute to the claimant's costs in return for a share of any money or property which the claimant may recover in the proceedings; and
is a person against whom a costs order may be made."
It is convenient to deal with this part of the application out of turn. The claimant's reliance on r. 25.14 is really in the alternative to the application for security for costs against the defendant, on which I have not yet ruled. It also follows from that fact, and from the wording of paragraph (1) of the rule, that the claimant makes this particular application as being in the position of defendant to the counterclaim brought by Timis. For the purposes of considering the application under r. 25.14, I shall assume that the claimant is such a defendant.
The court is able to give efficacy to its power under r. 25.14 by making an order for disclosure such as the claimant seeks. However, in the present case the evidence that has been put in by the defendant and has not been contradicted is to the effect that its funding comes from two sources: first, its own resources; second, a third party who has received no agreement for a share of proceeds of the litigation, who has taken no security and who has received no fee for the lending. In those circumstances, it seems to me that there is simply no evidential basis on which I could properly order disclosure in furtherance of the court's power under r. 25.14.
The alternative way in which the matter is put on behalf of the claimant is that the court has power under section 51 of the Senior Courts Act 1981 and Part 46 of the Civil Procedure Rules 1998 to make an order for costs against a third party, which may include in a given case a third party funder, and that for the purpose of giving efficacy to that power the court has an ancillary power to order disclosure of the identity of the third party funder and, where appropriate, the basis of the funding agreement.
In my judgment, the exercise of such an ancillary power at this stage would be clearly inappropriate. If hereafter the claimant were intending to seek an order for costs against a third party funder and there appeared to be grounds on which such an order might be made, of course the court would not be prevented from making a third party costs order because it lacked knowledge of the identity of the third party funder; it would, if it considered appropriate, make an order for disclosure of the identity of the funder and the basis on which the funding had been provided. However, I see no proper basis at all for making that kind of an order in advance of circumstances in which an application could be countenanced. To do so would be inappropriately intrusive and in the nature of a fishing expedition. So that part of the application in the application notice dated 29 June 2016 will be refused.
[Hearing continues]
The substantive security for costs applications
Each party has applied for security for costs against the other party under CPR r. 25.13.
The background to the proceedings is familiar to the parties and I may therefore set it out in short summary. The parties were in a contract of some form—there is a dispute as to what form and what terms—concerning works to be done by the claimant for the defendant at the Marampa mine in Sierra Leone. When the relationship between the parties came to an end by virtue of the termination of the contract by the election of the defendant, there was, as both parties accept, an account to be struck as to what moneys were due and owing and to whom. On the one side of the account stand moneys payable to the claimant for (broadly speaking) work that had been done, and on the other side of the account stand payments made by the defendant to the claimant. The defendant says that it has already paid far more than the claimant was entitled to receive in respect of its work. The claimant says that far more is owed to it in respect of its work than has been paid to it by the defendant, In essence, that is what the case is about. There are disputes concerning the applicable contractual terms and also disputes concerning quantification and valuation. When the dispute initially arose, the defendant commenced proceedings in Sierra Leone, seeking repayment of the alleged overpayments. It also obtained an injunction, initially ex parte and thereafter continued after an inter partes hearing, to restrain the removal by the claimant of its items of plant and equipment from whatever might have been their then current location. The injunction was sought on two grounds: first, that the claimant was seeking to put the items beyond the reach of enforcement of any future judgment; second, that the defendant had a lien on the equipment to secure its entitlement to repayment. Whatever may have been its precise terms in other material respects, the contract between the parties contained a non-exclusive jurisdiction clause specifying England and Wales as the non-exclusive jurisdiction. In reliance on that clause, the claimant has done two relevant things. First, it has commenced proceedings in this court, seeking payment due to it on the account and damages in respect of what it alleges to be the wrongful restraint of its plant, equipment and machinery. Second, it has sought to restrain in Sierra Leone the proceedings going on there, on the basis that the proceedings ought to be taken here if anywhere.
At an earlier stage of these proceedings, I refused an injunction to restrain the defendant from carrying on the proceedings in Sierra Leone, instead leaving it to the court of Sierra Leone to decide what should happen to those proceedings, and I permitted the claimant to continue with these proceedings on the basis, put shortly, that it had a contractual right to do so, even though there were a consequent risk of two parallel lots of proceedings going on at the same time.
The amount sought by each party on the account is somewhere around US$17 million; the amounts, though not identical, are quite similar. The claimant also seeks quite substantial ongoing damages which take the claim, as it is formulated, above US$40 million in respect of what is alleged to be the unlawful restraint of its machinery, plant and equipment.
In these circumstances, each party applies for security for costs against the other under r. 25.12 (1): "A defendant to any claim may apply under this Section of this Part for security for his costs of the proceedings." Importantly, in this context "defendant" refers to the role that one has in respect of a claim brought in proceedings so that a claimant may be a defendant to a counterclaim.
Rule 25.13 provides, so far as material for present purposes:
"(1) The court may make an order for security for costs under rule 25.12 if–
(a) it is satisfied, having regard to all the circumstances of the case, that it is just to make such an order; and
(b) (i) one or more of the conditions in paragraph (2) applies…
(2) The conditions are…
(c) the claimant is a company… (whether incorporated inside or outside Great Britain) and there is reason to believe that it will be unable to pay the defendant's costs if ordered to do so…"
Each party is a company; the claimant is registered in England and Wales, and the defendant is registered outside Great Britain. Each party accepts, for the purposes of these applications, that there is reason to believe that it will be unable to pay the other parties' costs if ordered to do so. Therefore, as regards the defendant's application for security for costs, the question is whether, having regard to all the circumstances of the case, it is just to make such an order. As regards the claimant's application for security for costs, there is the further question whether the claimant properly falls to be considered as a defendant in respect of the counterclaim for the purposes of the rule.
In considering the justice of the case under r. 25.13(1)(a), the court has to have regard to all of the circumstances. Many cases provide further guidance, among them Sir Lindsay Parkinson & Co v Triplan Ltd [1973] Q.B. 609. For the most part that...
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Security For Costs Recent Developments
...& Case Management Ltd [2017] EWHC 1238 (QB)). However, in Dawnus Sierra Leone Ltd v Timis Mining Corporation Ltd and another [2016] EWHC B19 (TCC), the court held that, when a claim and a counterclaim are independent and both parties are seeking security for costs from the other, "the a......
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Litigation
...as a third party who is funding the claimant’s litigation – see in this regard Dawnus Sierra Leone Ltd v Timis Mining Corporation Ltd [2016] EWHC B19 (TCC) at [1]–[6], per HHJ Keyser QC. 642 L/M International Construction Inc v he Circle Ltd Partnership (1992) 37 Con LR 72 at 82, per Beldam......