Dawnus Sierra Leone Ltd v Timis Mining Corporation Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Justice Hamblen,Lord Justice Patten |
| Judgment Date | 06 October 2016 |
| Neutral Citation | [2016] EWCA Civ 1066 |
| Date | 06 October 2016 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | A1/2016/2959 |
[2016] EWCA Civ 1066
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CARDIFF DISTRICT REGISTRY
(HIS HONOUR JUDGE KEYSER QC)
Royal Courts of Justice
Strand
London, WC2A 2LL
Lord Justice Patten
Lord Justice Hamblen
A1/2016/2959
Mr A Butler (instructed by DJM Solicitors) appeared on behalf of the Appellant
The Respondent was not present and was not represented
Introduction
This is an appeal against the judgment given on 6 July 2016 of His Honour Judge Keyser QC sitting as a High Court Judge in the Cardiff District Registry Technology and Construction Court whereby he ordered that the Claimant Appellant, Dawnus Sierra Leone Ltd ("Dawnus"), provide security for the costs of its claim against the Respondent Defendant, Timis Mining Corporation (SL) Ltd ("Timis"), and dismissed Dawnus' cross application for security for the costs of a counterclaim brought by Timis.
Dawnus originally contended that the judge should either have ordered Timis to provide security in the corresponding amount or have ordered that neither party be required to provide security. In the light of developments since the judgment, it now contends that the just and appropriate order is that neither party provides security.
The factual background
Dawnus is a subsidiary of a UK construction company, Dawnus Group Ltd. In December 2012 it entered into a contract with a company called London Mining Corporation to carry out certain operations at the Marampa Mine in Sierra Leone. On 16 October 2014 LMC went into administration. On 31 October 2014 Timis announced that it had acquired the shares of LMC.
Negotiations with Dawnus for the implementation of a new operations agreement began straight away, with an interim operations agreement being drawn up on 5 November 2014. In the course of those negotiations letters of intent ("LOIs") were exchanged, with Timis proposing a draft and Dawnus proposing an amended draft.
There is a dispute between the parties as to which LOI prevails. Both drafts contain a non-exclusive jurisdiction clause in the following terms:
"This Letter Agreement and the parties' respective rights and obligations including all non-contractual obligations arising under or in connection with this Letter Agreement shall be governed by, and construed in accordance with, the laws of England and Wales and the parties irrevocably submit to the non-exclusive jurisdiction of the courts of England and Wales in relation to any claim, dispute or difference which may arise out of or in connection with this Letter Agreement."
Both LOIs envisaged that Timis would make interim payments which would be reconciled at the end of the interim period, which Dawnus anticipated would be at the conclusion of the new contract.
Work continued on that basis, but on 24 February 2015 Timis gave 10 days' notice of termination. By that time it had paid Dawnus US $26,125,000. Dawnus maintained it was entitled to a higher sum. In May 2015 its solicitors, DJM, embarked on protocol correspondence asserting that case, to which Timis responded.
On 10 August 2015 Timis issued proceedings in the High Court of Sierra Leone claiming in those proceedings to be entitled to the recovery of the full sum paid less what Dawnus could demonstrate it was entitled to. Timis obtained a without notice interim injunction preventing Dawnus from moving its plant. That injunction continues in force in modified form and prevents the removal of the plant from Sierra Leone.
On 14 October 2015 Dawnus issued proceedings in the UK. Dawnus claimed to be under paid and that there is US $15,527,348.75 owed to it on the balance of account. It also claims damages for wrongful interference with its plant and equipment in Sierra Leone.
Unsucuccessful lurisdictional challenges were made by both Dawnus and Timis, the former to the proceedings in Sierra Leone and latter to the proceedings here.
Timis' application in the UK proceedings was dismissed by His Honour Judge Keyser QC on 11 February 2016: see Dawnus Sierra Leone Ltd v Timis Mining Corporation Ltd & Anor [2016] EWHC 170. As a result, both sets of proceedings continued in parallel.
On 17 March 2016 Timis filed a defence and counterclaim in which it claims to be entitled to sums on a balance of account and seeks recovery of overpayments in the sum of US $16,996,433.48.
The security for costs application
Both parties applied for security for costs under CPR Rule 25.13 which provides, so far as material:
"(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 of the parties accepted that there was reason to believe that it would be unable to pay the other's costs if ordered to do so and that the condition in rule 25.13(2)(c) is accordingly satisfied. It followed that the essential question for the judge, as he correctly identified, was whether, having regard to all the circumstances of the case, it was just to make the orders sought.
The judge concluded that it was just to order Dawnus to provide security for Timis' costs of the claim and ordered that security be provided in the total amount of £700,000 to be paid in two instalments. The judge further concluded that it would not be just to order Timis to provide security for Dawnus' costs of the counterclaim. The judge considered that the matters raised by the counterclaim were matters that simply arise from the defence to the claim and in those circumstances he concluded that it would not be just to order that security be provided in respect of the counterclaim. He further considered that the fact that Timis was pursuing its counterclaim in Sierra Leone did not affect the matter as security for costs concerns protection against the costs of proceedings within this jurisdiction.
The judge further ordered that Dawnus pay Timis the costs of Dawnus' security for costs application and 50 per cent of the costs of Timis' security for costs application.
There have been relevant developments since the judge's order of 6 July 2016 and the grant of permission to appeal on 23 August 2016. On 30 August 2016, Timis' solicitors, Herbert Smith Freehills, came off the record and Timis was unrepresented at the CMC listed for 1 and 2 September 2016 and is unrepresented...
To continue reading
Request your trial
-
Dr Craig Steven Wright v Coinbase Global, Inc.
...defence to the claim or whether it has an independent vitality of its own: see e.g. Dawnus Sierra Leone Ltd v Timis Mining Corp Ltd [2016] EWCA Civ 1066, a case which is accurately summarised in the notes to the White Book as follows: ‘Where a claim and counterclaim both have independent v......
-
Security For Costs
...for costs. Arguments in relation to the '(in) equality' of the parties: in Dawnus Sierra Leone Ltd v Timis Mining Corporation Ltd [2016] EWCA Civ 1066 the court noted that in the face of an argument that justice demands that both parties are put on an equal footing in accordance with the ov......
-
Recent Developments - Security For Costs
...provide security, or that neither party does so" (judgment of 6 October 2016, Dawnus Sierra Leone Ltd v Timis Mining Corporation Ltd [2016] EWCA Civ 1066). In the face of an argument that justice demands that both parties are put on equal footing in accordance with the overriding objective,......