“57 … It is, I believe, by now familiar law that, subject to limited exceptions, the court cannot and should not disbelieve the evidence of a witness given on paper in the absence of the cross-examination of that witness. The principle has traditionally been stated in relation to statements made under oath or affirmation, but it was not suggested to me that it does not apply equally to a witness statement.”
“61. The basic principle is, therefore, not an unqualified one. In particular, paper evidence which is manifestly incredible can be disregarded or disbelieved. But it will require a fairly extreme case for untested paper evidence to be rejected on that basis.”
“28. … I categorically deny that Andy or I have taken any steps in relation to our assets designed to make enforcement of costs orders difficult. [ … ] 31. Andy and I continue to hold the balance of the funds we received from the Honourable Saffron Foster in our UK bank accounts which we use to meet the costs of the litigation and of living. Those funds are not subject to any trust or scheme to protect them from enforcement. … ”
“Andy and I continue to hold the balance of the funds we received from the Honourable Saffron Foster in our UK bank accounts which we use to meet the costs of the litigation and of living. Those funds are not subject to any trust or scheme to protect them from enforcement.”
“4. I confirm that no part of the funds we received from the Honourable Saffron Foster has been subject to any trust or scheme to protect them from enforcement. That is always what I intended to mean and believed that to be perfectly clear from the wording of my fifth statement.”
“(1) The court may make an order for security for costs under rule 25.12 if – (a) it is satisfied, having regard to all the circumstances of the case, that it is just to make such an order; and (b) (i) one or more of the conditions in paragraph (2) applies, or [ … ] (2) The conditions are – [ … ] (g) the claimant has taken steps in relation to his assets that would make it difficult to enforce an order for costs against him.”
“15. Thus the making of an order for security (and therefore if any, its amount) is discretionary and for such an order here to be made: i) the condition in sub-para (g) must apply; and ii) the court must be satisfied that it is just in all the circumstances to make such an order. 16. The general principles that govern the making of an order for security and the application ofCPR 25.13 (2)(g) are well-recognised. They include the following: i) The requirement is that the claimant has taken in relation to his assets steps which, if he loses the case and a costs order is made against him, will make that order difficult to enforce. It is not sufficient that the claimant has engaged in other conduct that may be dishonest or reprehensible: Chandler v Brown [2001] CP Rep 103 at [19]-[20]; ii) The test in that regard is objective: it is not concerned with the claimant’s motivation but with the effect of steps which he has taken in relation to his assets: Aoun v Bahri[2002] EWHC 29 (Comm) , [2002] CLC 776, at [25]-[26]; iii) If it is reasonable to infer on all the evidence that a claimant has undisclosed assets, then his failure to disclose them could itself, although it might not necessarily, lead to the inference that he had put them out of reach of his creditors, including a potential creditor for costs: Dubai Islamic Bank v PSI Energy Holding Co[2011] EWCA Civ 761 at [26]; iv) There is no temporal limitation as to when the steps were taken: they may have been taken before proceedings had been commenced or were in contemplation: Harris v Wallis[2006] EWHC 630 (Ch) at [24]-[25]; v) However, motive, intention and the time when steps were taken are all relevant to the exercise of the court’s discretion: Aoun v Bahri, ibid; Harris v Wallis, ibid. vi) In the exercise of its discretion, the court may take into account whether the claimant’s want of means has been brought about by any conduct of the defendant: Sir Lindsay Parkinson & Co v Triplan[1973] QB 609 per Lord Denning MR at 626; Spy Academy Ltd v Sakar International Inc[2009] EWCA Civ 985 at [14]. vii) Impecuniosity is not a ground for ordering security; on the contrary, security should not be ordered where the court is satisfied that, in all the circumstances, this would probably have the effect of stifling a genuine claim: Keary Developments Ltd v Tarmac Construction[1995] 3 All ER 534 at 540, para 6. Thus the court must not order security in a sum which it knows the claimant cannot afford: Al-Koronky v Time-Life Entertainment [2006] CP Rep 47at [25]- [26] (where this was referred to as ‘the principle of affordability’); viii) The court can order any amount (other than a simply nominal amount) by way of security up to the full amount claimed: it is not bound to order a substantial amount: Keary at 540, para 5. ix) The burden is on the claimant to show that he is unable to provide security not only from his own resources but by way of raising the amount needed from others who could assist him in pursuing his claim, such as relatives and friends: Keary at 540, para 6. However, the court should evaluate the evidence as regards third party funders with recognition of the difficulty for the claimant in proving a negative: Brimko Holdings Ltd v Eastman Kodak Co[2004] EWHC 1343 (Ch) at [12]. x) When a party seeks to ensure that any security that may be required is within his resources, he must be full and candid as to his means: the court should scrutinise what it is told with a critical eye and may draw adverse inferences from any unexplained gaps in the evidence: Al-Koronky at [27].”
“39. The difficulty as to what the court should do in a case such as this where it considers that a claimant has access to more funds than he is prepared to reveal but cannot determine how much, was addressed by the Court of Appeal in AlKoronky as follows: ‘28. … the court, once satisfied that the case is one in which the claimant ought to put up security for the defendant's costs before continuing with his action, is going to find itself in one of two situations. Either it will be satisfied that it probably has a full account of the resources available to the claimant, in which case it can calculate with reasonable confidence how much the claimant can afford to put up; or it will not be satisfied that it has a full account, and so cannot make the calculation. Does it follow in the latter situation that the court must go straight to the amount sought by the defendant and, having pruned it of anything which appears excessive or disproportionate, fix that as the security? Or is there a middle way - for example to set an amount which represents the court's best estimate of what the claimant, despite having been insufficiently candid, can afford? ‘28. … the court, once satisfied that the case is one in which the claimant ought to put up security for the defendant's costs before continuing with his action, is going to find itself in one of two situations. Either it will be satisfied that it probably has a full account of the resources available to the claimant, in which case it can calculate with reasonable confidence how much the claimant can afford to put up; or it will not be satisfied that it has a full account, and so cannot make the calculation. Does it follow in the latter situation that the court must go straight to the amount sought by the defendant and, having pruned it of anything which appears excessive or disproportionate, fix that as the security? Or is there a middle way - for example to set an amount which represents the court's best estimate of what the claimant, despite having been insufficiently candid, can afford? 29. In our judgment there is such a power, but it resides in the court's discretion rather than in legal principle. In the second situation we have postulated, the requirements of the law have been exhausted: what remains is to set a suitable sum. This classically is where discretion fills the space left by judgment: the court has a choice of courses, none of which it can be criticised for taking provided it makes its election on a proper factual basis uninfluenced by extraneous considerations’.”
“16. The fact that, in the past, enforcement proceedings have been difficult does not assist with the issue as to whether the claimant has taken the steps in relation to his assets and whether those steps would make it difficult to enforce an order of costs against him. As the authorities establish, this is a backward looking provision. Park J in Chandler v Brown pointed out in [2001] CP Rep at 103 the word ‘would’ in the rule cannot be used as a springboard for an argument that the paragraph can be used in relation to steps which the claimant had not taken, but which, if he did take them before judgment with costs given against him, would make it difficult to enforce a costs order.”
“17. … Three requirements emerge from the wording of the paragraph: (1) the claimant must have ‘taken steps’; (2) the steps must have been taken in relation to his assets; (3) the steps must be steps which would make it difficult to enforce an order for costs against him. I have one point of construction to make. It relates to the use of the word ‘would’ in requirement (3). That word cannot be used as a springboard for an argument that the paragraph can be used in relation to steps which the claimant has not taken but which, if he did take them before judgment with costs is given against him, ‘would’ make it difficult to enforce the costs order.”
“16. … As the authorities establish, this is a backward looking provision.”
“20. … Even if Miss Allan can point to something which could be described as a step taken by Mr. Chandler in relation to an asset (and I am not convinced that any of the matters which she itemises could be so described), it was all in the past now and any effects which it had at the time are by now spent. There is no basis on which it can be said that something done by Mr. Chandler several years ago will make it difficult to enforce a costs order which might be made against him several months from now.”
“13. … I need not therefore pause to consider whether even without the bankruptcy the causal effect of the diversion would in all likelihood have been spent by this time.”
“13. … if the monies paid in late October 2009 had been received by the Claimant in an account in his own name, they would in all probability have passed to the trustee-in-bankruptcy in December 2009. In that event, they would not have been available as a possible object for execution some years later.”
“(1) In certain circumstances a court may be entitled to draw adverse inferences from the absence or silence of a witness who might be expected to have material evidence to give on an issue in an action. (2) If a court is willing to draw such inferences they may go to strengthen the evidence adduced on that issue by the other party or to weaken the evidence, if any, adduced by the party who might reasonably have been expected to call the witness. (3) There must, however, have been some evidence, however weak, adduced by the former on the matter in question before the court is entitled to draw the desired inference: in other words, there must be a case to answer on that issue. (4) If the reason for the witness’s absence or silence satisfies the court then no such adverse inference may be drawn. If, on the other hand, there is some credible explanation given, even if it is not wholly satisfactory, the potentially detrimental effect of his/her absence or silence may be reduced or nullified.”
“30. … Wisniewski is not authority for the proposition that there is an obligation to draw an adverse inference where the four principles are engaged. As the first principle adequately makes plain, there is a discretion ie ‘the court is entitled to draw adverse inferences’.” [Emphasis added]
“The matters urged before me have spread over a fairly wide field. First there have been attempts to go into the likelihood of the plaintiff winning the case or the defendant winning the case, presumably following the note in The Supreme Court Practice 1985, p. 384, under rubric 23/1-3/2, which says: ‘A major matter for consideration is the likelihood of the plaintiff succeeding.’ This is the second occasion recently on which I have had a major hearing on security for costs and in which the parties have sought to investigate in considerable detail the likelihood or otherwise of success in the action. I do not think that is a right course to adopt on an application for security for costs. The decision is necessarily made at an interlocutory stage on inadequate material and without any hearing of the evidence. A detailed examination of the possibilities of success or failure merely blows the case up into a large interlocutory hearing involving great expenditure of both money and time. Undoubtedly, if it can clearly be demonstrated that the plaintiff is likely to succeed, in the sense that there is a very high probability of success, then that is a matter that can properly be weighed in the balance. Similarly, if it can be shown that there is a very high probability that the defendant will succeed, that is a matter that can be weighed. But for myself I deplore the attempt to go into the merits of the case, unless it can clearly be demonstrated one way or another that there is a high degree of probability of success or failure.”
“35. I must remind myself at this stage that I am dealing with an interim application, and that it is inappropriate for me at this stage to make findings of fact. My interim conclusion is that the enquiries account was confidential to Mrs Brake…”
“42. In this present application, it seems to me that a similar result should follow. All the documents in the enquiries account should be returned to the Brakes’ solicitors, who should preserve them. However, Mr Sutcliffe QC then makes a submission that what is revealed in these documents in the enquiries account is an unlawful scheme and that the so-called iniquity principle applies.”
“7. Third, Mr Davies QC urged on me to say that I was deciding this case on incontrovertible facts. However, I made it very plain that the findings which I made were interim only and could not in any sense be seen as final. Mr Davies QC argues that they were based on the witness statements and documents which originated with the Guy parties. That is, in a sense, true but the whole picture is wider than that and I bear in mind that Mr Sutcliffe QC argued strongly for the fact that taken in the context of the business relationship, the password and the other factors that I took into account needs to be counterbalanced by the employer/employee relationship. I take into account in that my view must be taken as the preliminary construction which I put on the employment agreement, upon the contract, and the circumstances in which that was dealt with between the parties and that it is susceptible to evidence. Mr Sutcliffe QC properly wants to cross examine the witnesses. 8. Those three factors alone convince me that it would be dangerous to order costs on the basis of what is undoubtedly only a preliminary view of the position expressed by me and so my reaction is that the normal order for a case where there is an interim injunction should be that the costs are reserved to trial. That leaves the somewhat unusual position of the LPP application. 9. So far as part one of the LPP application is concerned, it started with the Brakes asserting the privilege existed in the 12 documents annexed to the application. As it turned out, not all of those were seen as being privileged and, indeed, for the limited purpose of the application, privilege is waived in relation to them. To that extent, the Guy parties might see themselves as being successful. 10. As to part two of the LPP application, as a provisional view, because all I was concerned with was with a prima facie view, I did not find that the Guy parties’ case on the unlawful scheme was made out. Of course, I may have been wrong about that because as Mr Sutcliffe QC points out, at the trial of the documents application, the trial judge will have to deal with that in a great deal more detail than I did and he may conclude differently from me. It would seem odd, in those circumstances, if I were to award costs in relation to that against the Guy parties in the event that the trial judge in the documents’ application reached a different conclusion.”
“58. The consequence, or effect, of the foregoing is that, while I am satisfied that Mr Stavranides has taken steps in respect of his assets which would, potentially, render the recovery of costs more difficult, he has only done so in the respects set out and dealt with in paragraph 40 of this judgment. 59. On that footing, it seems to me that, while the relevant 'gateway' to an order for security has been established, a serious question arises as to whether the extent and impact of the steps taken by Mr Stavranides, in respect of his assets, warrants, or renders it just to make, an order for security against him. 60. It seems to me that the rationale behind this particular 'gateway' provision, underCPR 25.13 (2)(g), is that a defendant should not be disadvantaged, in respect of his potential recovery of costs, by the fact that steps have been taken by a claimant which would, in the event that that defendant was awarded his costs, have the effect of rendering the recovery of those costs more difficult. Granted that rationale, it further seems to me that, if, in fact, the steps taken have had no, or minimal, adverse effect upon the defendant's ability to recover his costs, then, logically, there is no, or only a minimal basis, for the court ordering security. Put shortly, it seems to me that the order for security should reflect the adverse consequence, if any, flowing from the satisfaction of the gateway condition giving rise to an entitlement to seek security and that, if there is no such adverse consequence, or if the adverse consequence is insignificant, then that is and ought to be a good reason for refusing an order for security.”
“(1) The court has discretion as to – (a) whether costs are payable by one party to another; (b) the amount of those costs; and (c) when they are to be paid. (2) If the court decides to make an order about costs – (a) the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party; but (b) the court may make a different order. [ … ] (5) In deciding what order (if any) to make about costs, the court will have regard to all the circumstances, including – (a) the conduct of all the parties; (b) whether a party has succeeded on part of its case, even if that party has not been wholly successful; and (c) any admissible offer to settle made by a party which is drawn to the court’s attention, and which is not an offer to which costs consequences under Part 36 apply. (6) The conduct of the parties includes – (a) conduct before, as well as during, the proceedings and in particular the extent to which the parties followed the Practice Direction – Pre-Action Conduct or any relevant pre-action protocol; (b) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue; (c) the manner in which a party has pursued or defended its case or a particular allegation or issue; and (d) whether a claimant who has succeeded in the claim, in whole or in part, exaggerated its claim.” (a) whether costs are payable by one party to another; (b) the amount of those costs; and (c) when they are to be paid. (a) the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party; but (b) the court may make a different order. (a) the conduct of all the parties; (b) whether a party has succeeded on part of its case, even if that party has not been wholly successful; and (c) any admissible offer to settle made by a party which is drawn to the court’s attention, and which is not an offer to which costs consequences under Part 36 apply. (a) conduct before, as well as during, the proceedings and in particular the extent to which the parties followed the Practice Direction – Pre-Action Conduct or any relevant pre-action protocol; (b) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue; (c) the manner in which a party has pursued or defended its case or a particular allegation or issue; and (d) whether a claimant who has succeeded in the claim, in whole or in part, exaggerated its claim.”
“42. The emphasis is thus on whether the behaviour of the paying party or the circumstances of the case take it out of the norm. The merits of the case are relevant in determining the incidence of costs: but, outside the context of an entirely hopeless case, they are of much less, if any, relevance in determining the basis of assessment. 43. The cases cited show that amongst the factors which might lead to an indemnity basis of costs are: (1) the making of serious allegations which are unwarranted and calculated to tarnish commercial reputation of the defendant; (2) the making of grossly exaggerated claims; (3) the speculative pursuit of largescale and expensive litigation with a high risk of failure, particularly without documentary support, in circumstances calculated to exert commercial pressure on a defendant; (4) the courting of publicity designed to drive a party to settlement notwithstanding perceived or unaddressed weaknesses in the claims.”