Jamaica Money Market Brokers Ltd and Another v Pradeep Vaswani and Another [Circuit Court]

• Jurisdiction: Jamaica
• Judge: Mangatal J
• Judgment Date: 27 April 2012
• Neutral Citation: [2012] JMCC Comm 5
• Docket Number: CLAIM NO. 2011CD00076
• Court: Supreme Court (Jamaica)
• Date: 27 April 2012

[2012] JMCC Comm. 5 (1)

IN THE SUPREME COURT OF JUDICATURE OF JAMAICA

COMMERCIAL DIVISION

IN CHAMBERS

CLAIM NO. 2011CD00076

Between

Jamaica Money Market Brokers Limited

1st Claimant

and

Jmmb International Limited

2nd Claimant

and

Pradeep Vaswani

1st Defendant

and

Santoshi Limited

2nd Defendant

Security for costs application — Part 24 of CPR — Company incorporated outside jurisdiction — Co-claimant within jurisdiction — Court may make order for security only if satisfied having regard to all circumstances that just to do so

Mangatal J

1 The First Claimant Jamaica Money Market Brokers Limited ‘JMMB’ is a limited liability company with registered offices at 6 Haughton Terrace, Kingston10, in the Parish Of Saint Andrew. In the Amended Particulars of Claim, JMMB avers that it was at all material times the agent/security trustee of the Second Claimant.

2 The Second Claimant JMMB International Limited ‘JMMBI’ is an international business company incorporated under the laws of Saint Lucia and has its registered office at 20 Micoud Street, Castries, St. Lucia.

3 The First Defendant is Pradeep Vaswani ‘Mr. Vaswani’.

4 The Second Defendant Santoshi Limited ‘Santoshi’ is an international business company incorporated under the laws of St. Lucia and has its registered office at 7 Monigraud Street, Castries, St. Lucia.

5 The application before me is an application filed July 29, 2011 on behalf of Mr. Vaswani seeking that JMMBI provides security for the costs of the claim against Mr. Vaswani in the sum of J$12, 275,618.70 within fourteen (14) days. Further, that if the Claimant fails to provide this security, the claim by JMMBI against Mr. Vaswani be struck out.

6 The stated grounds of the application are as follows:

• 1. Pursuant to the provisions of Rule 24.3 of the Civil Procedure Rules, it is just to order the payment of security for costs and the 2nd Claimant is a company incorporated outside of Jamaica and is ordinarily resident out of the jurisdiction.

• 2. Consequent on the addition of the 2nd Claimant to these proceedings, the 1st Claimant has amended its Statement of Case so that an entirely different Statement of Case has been presented making it necessary for the first defendant to incur additional costs and expense including the preparation and filing of an extensively amended Defence.

• 3. The Amendments made by the 1st Claimant create new causes of action and a new Statement of Case not previously claimed.

7 Part 24 of the Civil Procedure Rules 2002 ‘the CPR’ govern applications for security for costs. Rules 24. 2 and 24.3 state as follows:

Application for order for security for costs

24.2 (1) A defendant in any proceedings may apply for an order requiring the claimant to give security for the defendant's costs of the proceedings.

(2) Where practicable such an application must be made at a case management conference or pre-trial review.

(3) An application for security for costs must be supported by evidence on affidavit.

(4) Where the court makes an order for security for costs, it will—

• (a) determine the amount of the security; and

• (b) direct—

  • (i) the manner in which; and

  • (ii) the date by which

  the security is to be given.

Conditions to be satisfied

24.3 The court may make an order for security for costs under rule 24.2 against a claimant only if it is satisfied, having regard to all the circumstances of the case, that it is just to make such an order; and that—

• (a) the claimant is ordinarily resident out of the jurisdiction;

• (b) the claimant is a company incorporated outside the jurisdiction;

• (c) the claimant –

  • (i) failed to give his or her address in the claim form;

  • (ii) gave an incorrect address in the claim form; or

  • (iii) has changed his or her address since the claim was commenced,

  with a view to evading the consequences of the litigation;

• (d) the claimant is acting as a nominal claimant, other than as a representative claimant under Part 21, and there is reason to believe that the claimant will be unable to pay the defendant's costs if ordered to do so;

• (e) the claimant is an assignee of the right to claim and the assignment has been made with a view to avoiding the possibility of a costs order against the assignor;

• (f) some person other than the claimant has contributed or agreed to contribute to the claimant's costs in return for a share of any money or property which the claimant may recover ; or

• (g) the claimant has taken steps with a view to placing the claimant's assets beyond the jurisdiction of the court.

8 The order for security for costs is made only if the court is satisfied that it is just to make such an order and if satisfied of any one of the conditions or circumstances set out in Rule 24.3. In the instant case, the applicant Mr. Vaswani relies upon Rule 24.3(b), i.e. that JMMBI is a company incorporated outside of the jurisdiction. There is no issue on this point as between the parties to the application.

9 This application is being made at the pre-trial review as is permitted by Rule 24.2(2) and the parties some time ago consented to it being heard on this day. The trial date is in fact not far away, i.e. May14–17 2012. It is now quite close to the trial date, yet Rule 24.2(2) states that when practical, the application must be made at a case management conference or a pre-trial review. (My emphasis). It seems to me that the pre-trial review is not in fact a desirable stage at which such applications should be required since the pre-trial review is scheduled to be close to the trial date in order to place the matter in the final stages of readiness for trial. Our Rules Committee may want to take another look at whether it is ideal for security applications to be made so close to the scheduled trial date. If the Rule continues in its present form then it would appear that the court may not without more, ordinarily refuse an application for security for costs on the ground that it is being made late in the day.

The Applicant Mr. Vaswani's Submissions

10 Mr. Gordon Robinson, Counsel for Mr. Vaswani, submitted that it is just to make such an order against JMMBI because, the uncontested evidence is thatJMMBI owns no assets within the jurisdiction. Even if it did, the onus would be on that Claimant to establish that there are substantial assets which would be available after trial to satisfy Mr. Vaswani's costs were he to be successful. Mr. Robinson referred to and relies upon the decision of my brother Sykes J. in Claim No. A0002/2011 Matcam Marine Limited v. Michael Matalon ( The Registered Owner of the Orion Warrior (Formerly Matcam 1), judgment delivered October 6, 2011.

11 InMatcam Justice Sykes found that Matcam's presence in Jamaica was not far from being transient. In that case there was no evidence that Matcam had any buildings or ‘has really put down deep business roots in Jamaica’-paragraph [37]. The shipping vessel which was under arrest was said by the applicant to be its only asset. Justice Sykes found that merely to have an Attorney-at-Law state on advice and belief that the defendant had US$32,000 in an account in a financial institution in Jamaica, without any supporting documentation was insufficient proof. In particular, Sykes J. pointed out that there was no evidence or documentation from the financial institution verifying that at the time of the hearing, or in close proximity thereto, it indeed had the sum held by it and that it belonged to Matcam. Sykes J. also reasoned that ‘It would have further helped if it were known whether that sum is subject to any actual or potential claims by third parties’ -paragraph [34].

12 Mr. Robinson points out, that whilst there is Affidavit evidence from Mr. Vaswani speaking to the fact that he believes that JMMBI owns no tangible assets within the jurisdiction, there is no evidence from JMMBI seeking not to have the order for security made, and none speaking to any assets within the jurisdiction. In fact, no Affidavit evidence whatsoever has been forthcoming from JMMBI, even though the application was filed from last year.

13 It was submitted on behalf of Mr. Vaswani that this is a hotly contested matter in which he has taken several legal and factual issues with the Claimants and, in all likelihood, will not be resolved without appeal by either party. Accordingly, that the order sought should be made in the quantum requested since there is no contrary evidence from the Claimants in writing.

The Respondent JMMBI's submissions

14 Mrs. Mayhew, who appeared on behalf of JMMBI opposed the application, and submits that importantly, Rule 24.3 of the CPR provides that the court may make an order for security for costs only if it is satisfied, having regard to all the circumstances of the case, that it is just to make such an order. Thus, Counsel submits that whilst Rule 24.3(b) is admittedly satisfied in that JMMBI is a company incorporated outside of the jurisdiction, it would not be just in all the circumstances for an order for security for costs to be made against JMMBI. Mrs. Mayhew also represents JMMB.

15 Mrs. Mayhew's submission is made on the basis that:

• (i) The Claimants would be jointly and severally liable for any order as to costs that may be made in favour of Mr. Vaswani ; and

• (ii) JMMB is incorporated and carries on business in Jamaica and there is no suggestion that it...