R.H. Edwards Decorators and Painters Ltd v Tretol Paint Systems Ltd

• Jurisdiction: Jersey
• Court: Judicial Greffe (Jersey)
• Judge: Fauvel, Deputy Judicial Greffier:
• Judgment Date: 24 July 1984
• Date: 24 July 1984

JUDICIAL GREFFE

Fauvel, Deputy Judicial Greffier:

G.R. Boxall for the plaintiff;

P. de C. Mourant for the defendant.

Case cited:

(1) Parkinson (Sir Lindsay) & Co. Ltd. v. Triplan Ltd., [1973] 1 Q.B. 609; [1973] 2 All E.R. 273; (1973), 117 Sol. Jo. 146, dictum of Lord Denning, M.R. applied.

Legislation construed:

Royal Court Rules, 1982 (R. & O. 7026), r.4/1(4): The relevant terms of this sub-rule are set out at page 65, lines 11-12.

Civil Procedure—costs—security for costs—plaintiff residing in jurisdiction not required to give security under Royal Court Rules, 1982, r.4/1(4) unless defendant shows exceptional circumstances—payment into court by defendant, implying substance in plaintiff's case, weighs against requiring security

The defendant company applied for an order requiring the plaintiff company to give security for costs.

The defendant submitted that if it succeeded there was reason to believe that the plaintiff would be unable to meet the defendant's costs, or at least to meet a substantial claim. It tendered a balance sheet of the plaintiff in support of the submission but nevertheless also made a payment into court in respect of the plaintiff's claim. It submitted that the discretion to order security under the Royal Court Rules, 1982, r.4/1(4) should be exercised in accordance with the principles laid down in England in the Companies Act 1948, s.447 and the Rules of the Supreme Court, O.23.

The plaintiff denied that it was unlikely to be unable to meet the defendant's costs if the suit failed and produced recent balance sheets and profit and loss accounts to substantiate this denial. It further maintained that the defendant was making the application oppressively with a view to stifling the genuine and substantial claim by the plaintiff, which was a Jersey registered company controlled by Jersey residents.

Held, refusing the application:

The defendant had not made out its case, for it had not shown any exceptional circumstances which justified a departure from the well-established rule that security for costs would not be ordered against a resident plaintiff. Moreover, the payment into court by the defendant tended to show that there was substance in the plaintiff's case and the plaintiff should therefore be allowed to prosecute its claim without giving security (page 65, line 40 - page 66, line 9).

FAUVEL, DEPUTY JUDICIAL GREFFIER: This is an application for security for costs to be ordered against a...