Semler v Murphy
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE HARMAN,LORD JUSTICE SALMON |
| Judgment Date | 14 February 1967 |
| Judgment citation (vLex) | [1967] EWCA Civ J0214-3 |
| Court | Court of Appeal (Civil Division) |
| Date | 14 February 1967 |
[1967] EWCA Civ J0214-3
In The Supreme Court of Judicature
Court of Appeal
(Civil Division)
From Mr Justice Plowman
The Master of the Rolls
(Lord Denning)
Lord Justice Harman and
Lord Justice Salmon
MR ALAN CAMPBELL, Q.C. and MR P. GOODENDAY (instructed by Messrs Hamilton-Hill & Partner) appeared as Counsel for the Applicant.
MR. MICHAEL BECKMAN (instructed by Messrs Tarlo Lyons & Aukin) appeared as Counsel for the Respondent.
Order 23, rule 1 enables the Court to order security for caste where "the plaintiff is a nominal plaintiff who is suing for the benefit of some other person, and there is reason to believe that be will be unable to pay the casts of the defendants if ordered to do so". The question in this case is whether the plaintiff, Mr. Semler, is a nominal plaintiff.
In March 1963 Mr. Semler agreed to sell Mr. Murphy premises at 40 High gate High Street, Hornsey, for a sum of £5,000. Completion was to be on the 25th March, 1963. It was not completed on that day. In July 1963 a receiving order was made against Mr. Semler. He owed £8,000 to various creditors. His brother, Mr. Maurice Semler, advanced him £8,000 so as to clear off his debts. The creditors were paid. The receiving order was rescinded. The brother took a charge on all his assets to secure the repayment of the £8,000, Seeing that Mr. Murphy did not complete the purchase of the premises at High. gate, Mr. Semler resold them for some £3,000. Thus losing £2,000 An the resale. On the 30th July, 1964, Mr. Semler brought an action against Mr. Murphy claiming damages of over £2,000. The action has been going on for a long time. Each side blames the other for the delay. A day has long been fixed for hearing. It is fixed for the 16th February, 1967. the day after tomorrow.
But much has happened recently. Last year Mr. Semler was co-respondent in a divorce suit. He was ordered to pay £1,500 damages and costs. He did not pay. The petitioner served a bankruptcy notice. On the 21st December, 1966, a receiving order was made against him. On the 26th January, 1967, a meeting of creditors took place. Immediately after that meeting it was disclosed that Mr. Semler had charged the fruits of this action. It appears that when Mr. Semler started this action in July 1964, he at the same time gave an oral charge in favour of his brother over the fruits of the action. Weknow that the brother already had a charge over the house for the £8,000 he had advanced. Now he bed this additional oral equitable charge over the fruits of this action.
When the defendant found this out, he first applied for an adjournment of the case. That application was refused. Now he applies for security for costs on the ground that Mr. Semler is a nominal plaintiffs and that he is really suing for the benefit of his brother. It is admitted that Mr. Semler is insolvent. He will be unable to pay the costs of Mr. Murphy if he fails in the action.
A nominal plaintiff is a men who is a plaintiff in name but who in truth sues for the benefit of another. In an early case, Elliot v. Kendrick (1840) 12 Adolphus & Ellis, page 597, a plaintiff assigned his estate to trustees for his creditors with power to sue in his name for his debts. They did sue in his name. Chief Justice Den man said: "The trustees choose to proceed in the action in the name of a party who, for their benefit, has divested himself of all means of paying the costs. I think they should give security to the defendant". In Lloyd v. Natern Station Brick Company Ltd. Times, page 158, the plaintiff, being insolvent and having brought an action against the defendants, executed a deed of assignment to a trustee for the benefit of his creditors. It was held to be the very kind of case where security would be ordered.
I agree, of course, that a trustee in bankruptcy cannot be ordered to give security for coats, see Cowell v. Tavlor, 51 Chancery Division, page 34: nor a man who has had a receivirng order against him, see Rhodes v. Dawson. (1886) 16 Queen's Bench Division, page 548s nor a bankrupt who ages for a debt arising since his bankruptcy, see Cook v. Whellock 24 Queen's Bench Division, page 658, But those cases are quite distinguishable. Sere the plaintiff, at the very time when he started the action, charged the whole fruits of it to hisbrother. So it was only the brother who stood to gain. She plaintiff was truly a nominal plaintiff.
Mr Beckman argued that the plaintiff was still much interested because if this action should succeed he would probably not be made bankrupt, He said that Mr. Semler was employed now as a cost accountant at £2,000 a year. The affidavit of the solicitor gave that impression. But just before the adjournment we were shown the report of the Official Receiver made yesterday. It shows that the debtor himself stated that "from April 1964 December 1966 he was employed as a cost accountant and his total remuneration during that period was £3,325. He has since been unemployed". That knocks the bottom out of Mr Beckman's argument.
It comes to this. If the action succeeds, the plaintiff's brother will go off with the whole of the proceeds and let the other creditors "whistle" for their moneys whereas if the action fails, the plaintiff will not be able to pay the costs of the defendant. It is the very kind of case in which security for costs should be ordered. It ought not to be en expensive trial. I would order the sum of £150. The action ought not to be delayed. If this money is found within 24 hours by 2 o'clock tomorrow, the action can still stand...
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