Thune and Another v London Properties Ltd and Others ; Thune and Another v Dominion Properties Ltd ; Thune and Another v Reksten and Others

JurisdictionEngland & Wales
Judgment Date20 February 1990
Judgment citation (vLex)[1990] EWCA Civ J0220-1
Docket Number90/0137
CourtCourt of Appeal (Civil Division)
Date20 February 1990

[1990] EWCA Civ J0220-1







Royal Courts of Justice


Lord Justice Bingham

Lord Justice Taylor

Lord Justice Farquharson


Jens Kristian Thune


Kristian Roll (suing as trustees of the Bankrupt estate of Hilmar August Reksten deceased)
London Properties Limited & Ors

MR GEORGE NEWMAN Q.C., and MR MARK HOWARD (instructed by Messrs Love11 White Durrant) appeared on behalf of the appellants.

MR JAMES GOUDIE, Q.C., and MR ANDREW HOCHHAUSER (instructed by Messrs Sinclair, Roche & Temperley) appeared on behalf of the respondents.


This is an appeal against the decision of Leggatt J. (as he then was) on 22nd July 1988 when he refused to grant the defendants in three actions an order that the plaintiffs be required to give security for the defendants' costs in the sum of £500,000.


The actions arise out of the life and death of Mr. Hilmar August Reksten, a Norwegian shipowner who died domiciled in Norway in July 1980 having become insolvent six years earlier in 1974. Following his death his estate was declared bankrupt by the Bergen Probate Court. The plaintiffs in the three actions are Norwegian lawyers appointed as trustees by that court. The effect of the order of appointment is to vest the estate in the trustees. The assets of the estate amount to some 48 million United States Dollars. The claims against the estate are estimated at 430 million United States Dollars and accordingly there is a substantial deficit as matters stand.


The trustees claim that during his life the deceased salted away very large sums of money all over the world, and the defendants in the three actions—some of whom are personal defendants and some corporations—are all parties into whose hands the assets are said to have come. The actions were begun by issue of writs in June and July 1987 and July 1988. The claims made against the defendants are denied and the claims are strongly contested. This court is not in a position to take an informed view as to the likely outcome of the actions.


The application for security is made under order 23, rule l(l)(a), which I should read:

"(1) Where on the application of a defendant to an action or other proceeding in the High Court, it appears to the Court—

  • (a) that the plaintiff is ordinarily resident out of the jurisdiction……….

then if, having regard to all the circumstances of the case, the Court thinks it just to do so, it may order the plaintiff to give such security for the defendant's costs of the action or other proceeding as it thinks just."


It is not disputed in the present case that the condition specified in sub-rule 1(a) is satisfied, and accordingly the court has a discretion to exercise. There is no longer any dispute between the parties about quantum, which is now agreed in the sum of £500,000 (if ordered at all) to cover the three actions.


Leggatt J. gave a brief judgment of which we have an approved note. In the course of it he said this:

"The ground upon which the application is made is that the Plaintiffs are ordinarily resident in Norway, out of the jurisdiction. This gives the Court a discretion to order security if appropriate. Essentially, these actions are between Norwegians which happen to have been brought here. If the action was being brought between persons resident in this jurisdiction, there is no suggestion that there is any ground upon which an order could or would have been made. The question is, therefore, what is the materiality of the Plaintiffs' residence in Norway.

The materiality depends upon the ease or otherwise with which an Order for Costs could be enforced in Norway. It was said by Mr. Onions on behalf of the Defendants that because the two Plaintiffs are individuals who are trustees of the bankrupt estate which has hitherto gathered in US $ 48,000,000 as against claims of about US $430,000,000 his clients would not be adequately protected if they were compelled to look to the Plaintiffs for the enforcement of any Costs Order. It seems to me that this is the wrong way to look at it. One ought to ask two questions:

  • (i) Whether an order for security would be made on the basis of the impecuniosity of the Plaintiffs. The answer to this is clearly no.

  • (ii) Does it make any difference that the Plaintiffs are resident outside the jurisdiction. The answer depends on the ease of enforcement in Norway. The evidence of the Plaintiffs, which has not been contraverted, is that, by reason of the 1961 Convention between Norway and England, any Order for costs obtained in this jurisdiction will be almost as readily enforceable in Norway as it would be here. When one adds to that the fact that both parties are Norwegian, there is no prospective hardship whatever occasioned to the Defendants by reason of the fact that the Plaintiffs are resident in Norway. I therefore refuse all three applications for security for costs."


That, of course, is not a verbatim note of what the learned judge said. One bears in mind that it was an ex tempore judgment given at the conclusion of argument on a contested summons and, accordingly, cannot fairly be construed as if it were an Act of Parliament. It is, on the other hand, the best, because it is the only, record of what led the judge to his conclusion.


Mr. Newman, for the defendants, made three submissions. His first and major submission was that the learned judge had erred in principle. Put shortly, Mr. Newman's argument was in effect that where the condition in Order 23 Rule 1(1)(a) is satisfied, the court should in the ordinary way make an order for security so as to put the defendant in the same position as if sued by an English plaintiff subject to the court's process and control. The judge's decision in the present case, he submitted, was wrong:

  • (a) because the judge had failed to give effect to the ordinary practice without any reason for doing so, and

  • (b) because he had wrongly treated enforceability as decisive when it was in truth only one consideration among others.


In advancing this argument Mr. Newman acknowledged, as he was obliged to do, that defendants could not obtain security against personal plaintiffs ordinarily resident in another part of the United Kingdom. See the Judgments Extensions Act 1868 and Raeburn v. Andrews (1874) L.R. 9 Q.B. 118. But the situation was, he submitted, different where the right of enforcement falls within the Foreign Judgments Reciprocal Enforcement Act 1933, and that was the situation here since the rights of enforcement between the United Kingdom and Norway are governed by the Reciprocal Enforcement of Foreign Judgments (Norway) Order 1962 containing in its schedule a Convention made between the united Kingdom and Norway in 1961.


As to the formal position between the United Kingdom and Norway there was no challenge to Mr. Newman's assertion and the order in question was before us.


For his legal submission Mr. Newman relied, in particular on two cases. The first of those was Kohn v. Rindon & Stafford (Brod) Ltd. [1948] 1 K.B. 327, where Denning J. (as he then was) affirmed the position under the 1868 Act. and drew a distinction with the 1933 Act. At the bottom of page 330 of the report in that case Denning J. said:

"The law on the matter is plain, that it is in the discretion of the court to order security for costs but it does so as a matter of course when a plaintiff is out of the jurisdiction and there are no assets of the plaintiff which can be reached within the jurisdiction. The reason being that if a judgment is thereafter obtained by the defendant against the plaintiff for costs such an order cannot be enforced by the direct process of the English court".


And again on page 332 the learned judge again referred to the old rule under which security for costs is ordered as a matter of course.


Reference was also made to Aeronave SPA v. Westland Charters Ltd. [1971] 1 W.L.R. 1445, where Lord Denning M.R. said, at page 1449 between A and B, that the rule does give a discretion but that the usual practice of the courts is to make a foreign plaintiff give security for costs, doing so as a matter of discretion because it is just to do so.


Mr. Newman also made reference to the more recent case of Porzelack KG v. Porzelack (U.K.) Ltd. [1987] 1 W.L.R. p. 420, where Sir Nicolas Browne-Wilkinson V-C, at page 423 B-C, said:

"Under R.S.C. Ord. 23 r. l(l)(a) it seems to me that I have an entirely general discretion either to award or refuse security, having regard to all the circumstances of the case. However, it is clear on the authorities that, if other matters are equal, it is normally just to exercise that discretion by ordering security against a non-resident plaintiff. The question is what, in all the circumstances of the case, is the just answer".


By the date of the Porzelack decision, however, the international background to the enforcement of judgments had altered as a result of the Civil Jurisdiction & Judgments Act 1982, giving effect to the 1968 European Economic Community Conventions on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters. Like other European Community measures this had as its object the harmonisation of practice between member States to eliminate discriminatory barriers and, as the Vice-Chancellor described it in the course of that case at page 426 A, it was designed "to produce 'free movement of judgments within the E.E.C.'"


The Vice-Chancellor considered this aspect of the matter in the judgment he gave in Porzelack. He...

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