The Government of Sierra Leone v Edward Davenport & Others
| Jurisdiction | England & Wales |
| Judge | DAVID DONALDSON QC |
| Judgment Date | 13 May 2003 |
| Neutral Citation | [2003] EWHC 1913 (Ch) |
| Court | Chancery Division |
| Docket Number | HC0101296 |
| Date | 13 May 2003 |
[2003] EWHC 1913 (Ch)
David Donaldson QC
HC0101296
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand
London WCA 2LL
MR J HIGHAM QC (instructed by Stephenson Harwood) appeared on behalf of the CLAIMANT.
MR C WILKINS (instructed by Layard Horsfall) appeared on behalf of the DEFENDANTS.
I have before me an application by the first to third defendants for additional security for costs, which was issued on 24 th April, returnable on 2 nd May. It was served on 28 th April, and on 2 nd May, by consent, directions were made for the service of evidence, and the application was adjourned to be heard not before 14 th May. In the event, it has been heard before me on the afternoon of 13 th May.
I need not go into the details of the action in any depth. It was begun on 22 nd March 2001 and relates, first of all, to an under lease of 1998, under which the claimant let premises at 4 and 4A Weymouth Mews, London W1 for a 23-year term at an annual rent and a premium. It also relates to an agreement of 13 th April 1999, under which the claimant assigned to the second defendant for a substantial premium the 22-year balance of its head lease of a property at 33 Portland Place, which is the Sierra Leone High Commission, and also 4 and 4A Weymouth Mews for an annual rent. The claim is for a declaration that the claimant is not bound by these two transactions.
The claim form also claims against the first to third defendants rescission, damages for conspiracy to defraud and/or equitable compensation for knowing assistance, breaches of fiduciary duty by the fourth and fifth defendants, who are, respectively, the claimant's former High Commissioner in London and legal adviser. There is also a claim against the first and second defendants for breaches of contract. Again, I need not go into the details of that.
It is accepted that there is a good arguable case and, indeed, that formed the basis of a freezing order, which was obtained in March 2001 from this court and was confirmed on an inter partes hearing on 11 th April 2001. The trial is scheduled to begin in the week beginning 16 th June 2003, estimated to last two to three weeks. Statements of witnesses of fact were exchanged on 17 th April, including witness statements from the President of Sierra Leone, though it is unlikely, as I understand it, that he will be called. And there are joint single experts, who are yet to report.
On 30 th October 2002 Master Price made a consent order for the provision of security by the claimants to the first to third defendants in the sum of £40,000 for their costs up to trial. That order was expressed to be without any admission of liability to provide "this or any further security for costs". It was also expressly agreed that no further application would be made for security in respect of the costs up to trial. What is now sought, by the application issued on 24 th April, is the provision of security in the sum of £132,500. That was originally £160,000, but has been reduced in recognition of the fact that from 25 th April 2003, because the costs of the first and third defendants are being billed and paid by the second defendant, who is out of the jurisdiction, the sums in question would be exempt from VAT.
In opposition to this application, Mr Higham QC, appearing on behalf of the claimant Government, submits that there is no jurisdiction in the court to make such an order. The relevant rule can be found at CPR 25.13:
"The court may make an order for security for costs…if it is satisfied, having regard to all the circumstances of the case, that it is just to make such an order and one or more of the conditions in paragraph (2) applies.
(2) The conditions are (a) the claimant is (i) resident outside the jurisdiction; but (ii) not resident in a Brussels Contracting State, a Lugano Contracting State or a Regulation State, as defined in section 1(3) of the Civil Jurisdiction and Judgments Act 1982."
Mr Higham accepts that if one simply applies the straight language of (2) of CPR 25.13 there would in fact be jurisdiction to make such an order against the claimant Government. It is, he accepts, on a normal reading of the language, resident out of the jurisdiction. He also accepts that under the former Rules of the Supreme Court Order 23 Rule 11(a), which gave jurisdiction to order security for costs if "the plaintiff is ordinarily resident out of the jurisdiction" there was power in the court to make such an order against a plaintiff foreign government. He accepts that the removal of the word "ordinary" as between the RSC and the CPR makes no difference.
While, however, as a matter of language, Mr Higham does not dispute that there would be jurisdiction, he contends that if the court looks at the legislative history of this matter, the picture is different The way he advances the argument is by going back to the original version of the CPR, which was brought in to replace the Rules of the Supreme Court and specifically to replace Order 23 (the rule relating to security for costs). As set out in the original version of the CPR, (2) of 25.13 read:
"The conditions are (a) the claimant is an individual (i) who was ordinarily resident outside the jurisdiction; and (ii) is not a person against whom a claim can be enforced under the Brussels Convention or the Lugano Convention, as defined by section 1(3) of the Civil Jurisdiction and Judgments Act 1982; (b) the claimant is a company or other incorporated body (i) which is ordinarily resident out of the jurisdiction and (ii) is not a body against whom a claim can be enforced under the Brussels Convention or the Lugano Convention."
What is entirely unclear is why it was necessary to have, separately, (a) and (b). It would have been sufficient to say, "The claimant is ordinarily resident out of the jurisdiction". However, it was separated out, and the two different categories of claimant were identified, in contrast with the previous RSC Order 23, which simply referred globally to "plaintiff". But, in separating it out, the new provision referred to an individual, i.e. (a), and a company or other incorporated body, i.e. (b). In pulling the chairs apart in that manner, Mr Higham says, and it would appear to be correct, the consequence was that a foreign government fell between them and was not covered, because it was neither an individual, nor a company or other incorporated body.
In April 2003 (when the changes came into force) various amendments were made to the Civil Procedure Rules. They are set out in Statutory Instrument 3219 of 2002, which is entitled " Civil Procedure (Amendment No. 2) Rules 2002", which came into force on 1 stApril 2003, and introduced the present form of the CPR, which I read out earlier. The explanatory note (which of course does not form part of the rules) states:
"The opportunity has been taken to make the following minor amendments to the rules currently in force."
It then refers to Rule 25.13 (the one with which I am concerned) and says:
"The amendment is made to comply with the judgment of the Court of Appeal in De Beer v Kanaar & Company."
That was a Court of Appeal decision which addressed the requirement that a claimant should not be a person against whom a claim can be enforced under the Brussels Convention or the Lugano Convention, and ruled on the question whether that condition was satisfied where a US citizen had assets in another Brussels Convention State. The explanatory note is saying that the minor amendment to comply with that judgment was changing the requirement that the claim should not be enforceable under the Brussels Convention or the Lugano Convention to one that the claimant should not be resident within a Brussels or Lugano Contracting State. What that does not explain is why, to return to the metaphor I used earlier, the chairs were pushed together again, i.e. no longer was the matter addressed in (a) and (b) ((a) concerning individuals and (b) concerning companies and incorporated bodies), but a simple reference was now made to a "claimant", in the same way as the earlier Rules of the Supreme Court had referred to "the plaintiff" being ordinarily resident out of the jurisdiction.
Mr Higham says that the current rule cannot properly be interpreted as extending to anything other than an individual or a company or an incorporated body, because there is no sign of any such purpose in the explanatory note.
I take the view that there is nothing that can be discerned from the legislative history. It is...
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