Miripar Ltd v Jennifer Reid
| Jurisdiction | Jamaica |
| Judge | M. Jackson, J |
| Judgment Date | 29 July 2022 |
| Court | Supreme Court (Jamaica) |
| Docket Number | CLAIM NO. SU2020HCV03634 |
and
[2022] JMSC Civ 142
CLAIM NO. SU2020HCV03634
IN THE SUPREME COURT OF JUDICATURE OF JAMAICA
IN THE CIVIL DIVISION
Security for costs — Part 24 of the Civil Procedure Rules — Company incorporated outside the jurisdiction — Counterclaim — Crabtree Tree Principle.
Miss Kereda Lowe instructed by JNW Taylor & Associates for the Claimant
Mrs Dian Watson for the 1 st Defendant
M. Jackson, J (Ag.)
Before me is the 1 st Defendant's application for security for costs. The application is brought by Notice of Application for Court Orders filed on June 13, 2022.
By this application, the 1 st Defendant is seeking to ensure that, if she is successful in defending the action brought against her and costs is awarded in her favour, she will have a fund available within the jurisdiction of the court against which she can recover her costs. Against this backdrop, the 1 stDefendant has asked the court to exercise its discretion in her favour and to grant the following order:
“That the Claimant, a limited liability company registered in the Cayman Islands, posts Security for Costs in the amount of Four Million, Three Hundred and Eighty-One Thousand, Three Hundred and Sixty-Six Dollars and Fifty Cents ($4,381,366.50), or any amount deemed reasonable by this Honourable Court.”
The main ground relied on to support the application is framed as follows:
“That the Claimant is a limited liability company, incorporated and registered outside the jurisdiction of this Honourable Court and the Applicant/1 st Defendant is entitled to the Order sought pursuant to Rule 24.3(b) to permit the recovery of costs awarded in the event she prevails at the trial of this matter.”
As is expected, the Claimant stood in strong opposition to the application.
After a careful assessment of the evidence and the submissions of counsel for both parties, I conclude that there is no basis to grant the application.
Before delving into the details of my findings, I consider it worthwhile that I provide context to the substantive proceedings that led to this application before me.
The details of the claim and counterclaim made in this action are captured in the pleadings that the parties have exchanged. The following summary is sufficient for the purposes of this application:
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(i) The Claimant is a limited liability company incorporated in the Cayman Islands. It has brought an action for breach of contract against the Defendants.
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(ii) The alleged breach of the contract arose from a purchase agreement between the Defendants and the Claimant's Principal, Mr Michael Parodie in relation to two properties owned by the Claimant in Cardiff Hall, Saint Ann. The purchase price was agreed at US$587,500.00.
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(iii) The Claimant contends that the Defendants have failed to honour and complete the terms of the purchase agreement and have paid only US$180,000.00 leaving a balance of US$407,500.00
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(iv) The 1 st Defendant is currently in possession of the properties and has lodged a caveat against the said properties challenging the sum said to be owed by her and the involvement of the Claimant in the contract.
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(v) The 1 st Defendant contends that the contract was with Mr Michael Parodie in his personal capacity and that she paid him approximately 70% of the purchase price or US$405,000.00. She further alleges that notwithstanding the sum paid by her, Mr Parodie has failed to complete the contract.
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(vi) The 1 st Defendant has also filed a counterclaim seeking an order that she is entitled to be repaid in full the amount paid to Mr Parodie, plus 3% interest under the agreement or, in the alternative, that she is entitled to possession and ownership of the properties and that the transfer should be effected to her having regard to the amount paid by her under the agreement.
The governing law in respect of this application falls under the consideration of two regimes: section 388 of the Companies Act and Part 24 of the Supreme Court of Jamaica Civil Procedure Rules, 2002 (“CPR”).
Section 388 of the Companies Act provides that:
“388. Where a limited company is plaintiff in any action or other legal proceeding, any judge having jurisdiction in the matter may, if it appears by credible testimony that there is reason to believe that the company will be unable to pay the costs of the defendant if successful in his defence, require sufficient security to be given for those costs, and may stay all proceedings until the security is given.”
Rule 24.2 of the CPR provides that:
“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 security; and
(b) direct –
(i) the manner in which; and
(ii) the date by which
the security is to be given.”
Rule 24.3 of the CPR establishes a two-pronged test which must be met before the court can exercise its discretion to grant an order for security for costs. At least one of the conditions identified at rule 24.3(a) to (g) must be met, and the court must be satisfied, having regard to all the circumstances of the case, that it is just to make such an order. Rule 24.3 of the CPR provides that:
“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) or 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.”
In determining the application, three primary issues arise for the resolution of this court:
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(i) whether any of the conditions specified in rule 24.3(a) to (g) of the CPR has been satisfied;
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(ii) whether, having regard to all the circumstances of the case, it would be just to make an order for security for costs; and if so
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(iii) whether the amount sought by the 1 st Defendant is appropriate so as not to stifle the claim.
The issues that arise for my determination in respect of this application require that I have regard to rule 24.2(3) of the CPR that “[a]n application for security for costs must be supported by affidavit evidence on affidavit”. The cases have interpreted this to mean that in an application for security for costs, the relevant grounds should always be identified and the relevant evidence aimed at each ground must be clearly stated (see Somerset–Leeke & Anor v Kay Trustees & Anor [2003] EWHC 1243 (Ch)).
Consistent with rule, 24.2(3), the 1 st Defendant detailed the evidence on which she relied. The relevant portions of her affidavit, will be highlighted later in this judgment.
In opposition to the application, the Claimant relied on the affidavit evidence of Miss Janet Taylor, a member of the legal team of the firm on record for the Claimant. The use of and reliance on this evidence was vigorously objected to by the 1 st Defendant. In objecting to the affidavit, Mrs Watson rested her submissions on the organic theory of company law. The main plank of her submission was that Miss Taylor, not being an authorised officer of the Claimant, is unable to provide such evidence without the written requisite authority exhibited before this court. She also submitted that in the absence of such evidence, the affidavit would not be properly before the court and would be of no evidential value. In support of her contention, Mrs Watson relied on the cases of Somerset Enterprises Limited & Anor v National Export Import Bank of Jamaica Limited [2021] JMCA Civ 12 (para. 30) and HL Bolton (Engineering) Co Ltd v TJ Graham & Sons Ltd [1957] 1 QB 159 (“ HL Bolton”) (page 172).
Being mindful of this objection, the court is required to carefully assess the evidence contained in Miss Janet Taylor's affidavit to see whether there is sound basis to reject her affidavit evidence.
A summary of relevant aspects of Miss Taylor's affidavit is as follows:
“I, Janet P. Taylor, being duly sworn make oath and say as follows:
1. That… I am an Attorney-at-Law having conduct of this matter
2. That my knowledge of this matter is by virtue of my having conduct of the file and the information contained herein is within my personal knowledge and as so far as they are not within my personal knowledge, are to the best of my information and belief to be true.
3. That I am aware that the...
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