Lincoln Eatmon, Jerome Lee and John Leiba v Hallmark Bank and Trust Ltd; Olint TCI Corporation Ltd and David Smith
| Jurisdiction | Turks and Caicos Islands |
| Judge | Williams, J. |
| Judgment Date | 01 May 2009 |
| Court | Supreme Court (Turks and Caicos) |
| Docket Number | CL 154/08 |
| Date | 01 May 2009 |
Supreme Court
Williams, J.
CL 154/08
For the plaintiffs: Mr. Martin Green.
For the First Defendant: Mr. Peter McKnight.
For the Second and Third Defendants: Mr. Oliver Smith.
Porzelack KG v. Porzelack (UK) Ltd. [1987] 1 All E.R. 1076
Aeronave S.P.A v. Westland Charters Ltd. [1971] 3 All E.R. 532
Crozat v. Brogden [1984] 2 Q.B. 30
Keary Developments Ltd v. Tarmac Construction Ltd. and another [1995] 3 All E.R. 273, [1971] Q.B. 609
Sir Lindsay Parkinson & Co. Ltd. v. Triplan Ltd. [1973] 2 All E.R. 273; [1973] Q.B. 609
Okotcha v. Voest Alpine Intertrading GmbH [1993] B.C.L.C. 474
Pearson v. Naydler [1971] 3 All E.R. 531— Farrer v. Lacy, Hartland & Co. [1885] 28 ChD 482
Roburn Construction Ltd. v. William Irwin (South) & Co. Ltd. [1991] BCC 726
Trident International Freight Services Ltd v. Manchester Ship Canal Co. [1990] BCLC 263
MV Yorke Motors (a firm) v. Edwards [1982] 1 All E.R. 1024
Simon Winch, Heather Winch and Charlotte Winch v. Peter McKnight and Patrick Firmenich CL 41/07
Nassar v. United Bank of Kuwait [2002] 1 All E.R. 401
Elliott v. Cayman Islands Health Service Authority [2007] C.I.L.R. 163
Somerset-Leeke v. Kay Trustees [2003] E.W.G.C. 1243; [2004] 2 All E.R. 406
Order 23, rule 1(1)(a) of the Civil Rules, 2000 of Turks & Caicos
Part 25 Rule 25.13 and 25.15 of the new English Civil Procedure Rules, 1999
Order 23, rule 1 of the Cayman Island Grand Court Rules, 1995
Part 1 of the Turks and Caicos Islands Constitution 2006
Civil Practice and Procedure - Security for costs — Whether the application for security of costs should be granted where the respondent had no assets in Turks and Caicos Islands but had assets in Jamaica and there was no evidence to prove the obstacles or difficulties of enforcement — European Convention on Human Rights extended to Turks & Caicos Islands — Modern approach to the matter of security of costs — Finding that the Court should allow counsel to examine the cases dealing with the modern approach to security for costs
I have before me the First Defendant's Summons dated February 26, 2009 applying for an order that the “plaintiffs do post security for costs of the first Defendant's legal costs of defending the claim pursuant to Order 23 of the Civil Rules, 2000 on the grounds that the plaintiffs are not resident in this jurisdiction and have no assets in this jurisdiction.” There is an affidavit in support sworn by Mr. Brian Trowbridge on 26th February 2009.
The plaintiffs oppose this application. No affidavit has been filed in opposition to the application by the plaintiffs
I also have before me the Second and Third Defendants' Summons dated February 26, 2009 similarly applying for an order that the “plaintiffs do post security for costs of the second and third Defendants' legal costs of defending the claim pursuant to Order 23 of the Civil Rules, 2000 on the grounds that the plaintiffs are not resident in this jurisdiction and have no assets in this jurisdiction.” There is an affidavit in support sworn by David Smith on 2nd March 2009.
The plaintiffs oppose this application. No affidavit has been filed in opposition to the application by the plaintiffs.
On 25th March 2009, this Court handed down a ruling in the First Defendant's successful application to set aside the default judgment which had been entered on January 19, 2009. In that ruling, the procedural history of this matter up to 10th February 2009 was fully set out and I therefore do not intend to rehearse it in the same detail herein.
Proceedings were initiated by the plaintiffs by means of a Writ of Summons and a Statement of Claim, both filed on 4th December 2008. The First and Second plaintiffs' claim against the First and Second Defendants is for $3,527,378.68 as debt or by way of damages for breach of contract in respect of foreign exchange currency trading accounts. The Third plaintiff's claim against the First and Second Defendants is for $1,420,650.95 as debt or by way of damages for breach of contract in respect of foreign exchange currency trading accounts.
The Writ of Summons stated: “this writ was issued by McCollum and Newlands of Providenciales, Attorney for the said plaintiffs whose address is in Jamaica.” The First Defendant contends that this is not a proper address for the purpose of completing a writ. The addresses were provided on the 15th April 2009, which was during the period between the hearing of the summons for security for costs and the handing down of this Ruling.
On 18th December 2008, the First Defendant wrote to McCollum Newlands stating: “We note that all of your clients are resident overseas. Kindly confirm whether they maintain assets within the jurisdiction. If they do not then we are instructed to apply for security for costs against each of your clients in which case we request you put forward offers on behalf of each of your clients regarding their proposed security.”
McCollum Newlands sent a letter in reply to Swami Trowbridge McKnight stating: “Our clients' assets within the jurisdiction were invested with your client as pleaded, therefore it is your client rather than ours who is best placed to advise you as to their present location, If you are proposing that a proportion of these funds be posted as security then we suggest you make a proposal and we will take our clients' instructions.”
On 16th January 2009, the Second and Third Defendants filed their Defence. This was served on the First Defendant on 5th February 2009. The Second Defendant contends that at all material times he was acting as agent for the First Defendant and not as principal. The Second and Third Defendants contend that any contractual obligation owed to the plaintiffs is owed to them solely by the First Defendant.
On 23rd January 2009, the matter came before the Court on the First Defendant's application to extend time for the filing of a Defence. The plaintiffs opposed the application. The Court dismissed the application as judgment in default had already been entered. The First Defendant was ordered to pay the plaintiffs' costs.
On 29th January 2009, the matter came before the Court on the First Defendant's application to stay execution of the judgment. The plaintiffs opposed the application. The Court dismissed the application and ordered that the First Defendant do pay the plaintiffs costs.
On 25th March 2009, the Court set aside the default judgment, gave leave to the First Defendant to file its Defence dated 11th February 2009 and ordered that the First Defendant do pay the plaintiff's costs. In the Defence, the First Defendant denies any liability for any alleged loss.
On 27th March 2009, the Court received the skeleton argument prepared by Mr. Martin Green on behalf of the plaintiffs. [Dated 27th February 2009] I have carefully considered the contents of the skeleton arguments and I thank counsel for providing the same.
The factual background in this matter is set out in full in this Court's recent aforementioned written ruling handed down on 27th March 2009. Therefore, although I have regard to the material set out therein, I do not intend to rehearse it in detail herein.
It is agreed by all of the parties that the plaintiffs are all resident overseas. It is agreed, save for the sums in dispute in this claim, that the plaintiffs have no or possible assets in the Turks and Caicos Islands. There are costs orders against the First Defendant made in favour of the plaintiffs on 23rd January 2009, 29th January 2009 and 25th March 2009. [Paragraphs 12, 13 and 14 above.]
The First Defendant seeks security for costs because the plaintiffs live out of the jurisdiction and have no assets remaining here. It is contended, as the plaintiffs are ordinarily resident outside of the Turks and Caicos Islands, that on a reasonable construction of Order 23, r. 1(1)(a) of the Supreme Court Rules foreign plaintiffs should usually be required to provide security for costs. The First Defendant submits that the plaintiffs have admitted this save for their argument that assets in dispute should be regarded as being within the jurisdiction. [Letter of 18th December 2009 — See paragraph 8 above] The Defendants all submit that they have a good chance of success and therefore it is important that security for costs be provided as it was reasonably likely that they would be awarded costs.
It is submitted that the First Defendant has, and will incur, significant expense in preparing and arguing the case as the plaintiffs are based outside of the Turks and Caicos Islands and have no liquid assets within the jurisdiction. Mr. McKnight is concerned that, should the First Defendant succeed, it would be unable to enforce an order for costs in its favour.
Mr. McKnight suggests, based on the details in a submitted draft bill of costs, a high figure of around $152,100 for his firm's fees and $136,300 for junior, albeit experienced, London counsel that his client has chosen to instruct. Mr. McKnight rightly concedes that these costs are at the higher end of the scale. Mr. McKnight also conceded that the amount sought as security cover hearings (which are for majority of the proceedings to date) where orders were made for his client to pay the plaintiffs' costs.
In addition, the First Defendant expresses concern that the addresses disclosed by the plaintiffs in the Writ of Summons are not proper addresses. It is contended that, as a consequence, the First Defendant has been deprived of the opportunity to investigate the plaintiffs' assets in Jamaica. It is contended that this failure to give...
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