Societe Eram Shipping Company Ltd v Compagnie Internationale De Navigation and Others
| Jurisdiction | England & Wales |
| Judge | Lord Justice Rix |
| Judgment Date | 06 April 2001 |
| Neutral Citation | [2001] EWCA Civ 568 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | NO: A3/01/0284 |
| Date | 06 April 2001 |
[2001] EWCA Civ 568
IN THE SUPREME COURT OF JUDICATURE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM HIGH COURT OF JUSTICE
(HON MR JUSTICE TOMLINSON
Royal Courts of JusticeStrandLondon WC2
Lord Justice Rix
NO: A3/01/0284
MR HUGO PAGE (instructed by Penningtons, 83 Cannon St, London EC4N 8PE) appeared on behalf of the Applicant
MR CHRISTOPHER HARRISON (instructed by Stephenson Harwood, 64 Chancery Lane, London EC41) appeared on behalf of the-Respondent
There are a number of applications before me in respect of an appeal which is pending to the Court of Appeal from the judgment of Tomlinson J in this case. The judge discharged the garnishee order nisi which had been made in favour of the judgment creditor Societe Eram Shipping Company Limited against the Hong Kong and Shanghai Banking Corporation Limited (“the Bank”). The judge gave permission to appeal to the judgment creditor at the time of handing down his judgment. He also made an immediate cost order summarily assessed against the judgment creditor for payment of some £14,000 costs. That was to be paid in the normal way of such orders within 14 days, that is to say by 6 February of this year.
On 16 February there were requests directed to the judgment creditor's solicitors regarding the company's county of incorporation and address, and they went unanswered for a while but were ultimately answered. In the meantime, however, on 26 February the Bank issued two applications, one for security for costs on the appeal and the other for a stay of the appeal pending payment of the costs ordered by the judge. In response to those applications no explanation at all has come for the continuing non-payment by the judgment creditor of costs ordered against it, but instead it issued an application for disclosure of all the Bank's documents in correspondence with or concerning its customer, the judgment debtor, in case it should emerge from such documents that the Bank was entitled to an indemnity for its costs from its customer.
I deal first of all with the application for security for costs. Under CPR 25.15 the Court of Appeal may order security for costs of an appeal against an appellant on the same grounds as security for costs may be ordered against a claimant. The relevant provisions are contained in CPR 25.13. The conditions which have to be satisfied are (1) that the Court is satisfied having regard to all the circumstances of the case that it is just to make such an order, and (2) that one or more of the conditions set out in 25.13 (2) apply.
The primary such condition relied on by Mr Harrison on behalf of the Bank is that within subparagraph (c), namely that the claimant, here the appellant, is a company or other body whether incorporated inside or outside of Great Britain, and there is reason to believe that it would be unable to pay the respondent's costs if ordered to do so.
The appellant in this case is incorporated in Romania. Counsel submits that there is reason to believe that it will be unable to pay the costs on appeal if ordered to do so because it has failed, without any explanation, to pay the costs already ordered against it by the judge. He refers to cases arising out of the insolvency jurisdiction, where it has been said that even “Rich men and rich companies who did not pay their debts have only themselves to blame if it were thought that they could not pay them”: see In Re a Company [1950] 94 SJ 369, an approach adopted and applied by Harman J in Cornhill Insurance Plc v Improvement Services Ltd [1986] 1 WLR 114. 6. In the present case, however, it would not be right to talk of rich men or rich companies. Nothing whatsoever is known about the appellant. It has not sought, despite the application made against it, to give any evidence or explanation about its means or about why it is that it is continuing to remain in breach of the Court's order in respect of the payment of costs.
At an earlier date it had made a proposal that, despite the order for costs, payment could appropriately, as I think it was put, be deferred until after the appeal had been determined. But that proposal was turned down and the appellant knew that that was the position. I am therefore in the position of having to infer with respect to a company about which I know nothing, certainly not one that could be described as a rich company such as Cornhill Insurance was in the case that I just cited, whether the reason why it has failed to discharge the order of costs made against it is because it cannot pay or will not pay. It seems to me that I have to make one or other inference.
In such circumstances I decline to infer that it simply refuses to pay, although able to pay, since it seems to me that it is a matter of commercial good sense, and preferable and kinder and more likely, that it will not pay because it cannot pay. If it cannot pay the £14,000 odd, which has been ordered against it, and that order has now been outstanding against it for some two months, then there is certainly reason to believe, which is the test under the code, that it would be unable to pay the appellant's costs if ordered to do so in the appeal later this year.
It also seems to me that in all the circumstances of the case it would be just to make an order for security for costs against the appellant. The appellant has come to this jurisdiction in order to obtain garnishment of...
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