Court name
Supreme Court of Turks and Caicos Islands
Case number
CL 154 of 2008

Eatmon and Others v. Hallmark Bank and Trust Ltd (CL 154 of 2008) [2009] TCASC 28 (17 November 2009);

Law report citations
Media neutral citation
[2009] TCASC 28
Coram
Williams, J

IN THE SUPREME COURT OF THE                                                           Case No CL 154/08

TURKS AND CAICOS ISLANDS

BETWEEN

(1)     LINCOLN EATMON

(2)     JEROME LEE

(3)     JOHN LEIBA

Plaintiffs

-AND-

(1)    HALLMARK BANK AND TRUST LIMITED

(2)    OLINT TCI CORPRATIONLIMITED

(3)    DAVID SMITH

Defendants

Heard:                   13th November 2009

Circulated:            17th November 2009

For the Plaintiffs:                                                Mr Martin Green

For the First Defendant:                                    Mr Peter McKnight

For the Third Defendant:                                  Mr Oliver Smith

For the Second Defendant:                              No attendance

RULING

THE APPLICATION

1.             I have before me the First and Third Defendants’ part heard Summonses dated February 26, 2009 applying for an order that the plaintiffs do post security for their 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 do not have any assets in this jurisdiction. The Second Defendant is no longer pursuing an application for security for costs.

2.             On May 1, 2009 the Court circulated to all parties a detailed ruling dealing with the Applications. That Ruling should be read in conjunction with the present Ruling. Due to the potentially novel approach that the Court had highlighted in the May Ruling, Mr Oliver Smith, who at that time represented the Second and Third Defendants, requested that a further opportunity be given for additional submissions to be made. Therefore, the Court invited the parties to provide additional information, thus enabling it to conclude its Ruling in a more informed manner.

3.             The parties, but primarily the Defendants, were invited to provide details about the mode of enforcement of a costs order of this Court in Jamaica. The Court was particularly interested to know whether there would be any real obstacles or undue burden if the Defendants were to seek to enforce such an order in Jamaica. It was hoped that the Defendants would also provide details about the likely additional costs of enforcing any award of costs in Jamaica.

4.             The Plaintiffs were invited to disclose details of their assets in Jamaica or elsewhere.

5.             The Notice for the November 9, 2009 hearing was issued on August 24, 2009. The only additional information the Court has received since May 1, 2009 was the Fifth Affidavit of Brian Trowbridge sworn and belatedly filed on November 11, 2009. The affidavit exhibited an Opinion dated May 20, 2009 drafted by John R. Givans and obtained by Counsel for the Third Defendant. Despite the Court’s concern about the very late filing of this affidavit evidence, leave was given to the Plaintiffs to file the same and time for service was abridged. Mr Green indicated that he could not forcefully oppose the admission of the affidavit, as his client would suffer no prejudice from the Court having regard to it.

6.             On November 13, 2009 the Court received further oral submissions from Mr Green and Mr McKnight. Mr Oliver Smith, on behalf of the Third Defendant, told the Court that he adopted Mr Mcknight’s submissions. The Second Defendant was not represented.

PROCEDURAL BACKGROUND

7.             On March 25, 2009 and May 1, 2009 this Court circulated detailed Rulings in this matter. In those Rulings, the procedural history of this matter up to May 1, 2009 was fully set out and I therefore do not intend to rehearse the same detail herein.

FACTUAL BACKGROUND

8.             The factual background in this matter is set out in full in the May 1, Ruling. Therefore, although I have regard to the material set out therein, I do not intend to further rehearse the same detail herein.

THE FIRST DEFENDANT’S SUBMISSIONS

9.             As set out in the May Ruling, Mr McKnight submits 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 figure of around $152,100 for his firm’s fees and $136,300 for London Counsel. Mr McKnight rightly concedes that these costs are at the higher end of the scale. Mr McKnight also concedes that the amount sought as security covers hearings (which are for the majority of the proceedings to date) where orders were made for his client to pay the Plaintiffs’ costs.

10.          The First Defendant referred the Court to the written Opinion obtained from John R Givans, Givans & Company, Attorneys at Law. Mr Givans is an Attorney called to the Jamaican Bar in 1984 specialising in Civil Litigation. Mr Givans advises that there is no legislation in Jamaica providing for the enforcement of a foreign judgment from the Turks and Caicos Islands. Mr Givans confirms that “in the circumstances of this case” an order for costs made by this Court can be enforced in Jamaica at common law.

11.          Mr Givans helpfully sets out the procedure to be followed in the Opinion. The Claimants would need to file a Claim Form and a Particulars of Claim in the Jamaican Supreme Court. Following on from service on the Defendants in the Jamaican proceedings, there would be 14 days to file an Acknowledgement of Service and thereafter 42 days to file a Defence. A default judgment or a judgment after trial may be enforced in a similar manner to this jurisdiction.

12.          Mr Givans advises that “if the defendants make no response to the suit, the matter can be completed in a matter of 2-3 months with execution being ordered against them. However if the Defendants are able to file a Defence which survives any Application to have it struck out, the case may come to trial in about a year and a half to two years from the filing of this suit, after about at least two interlocutory chambers hearing in the interim.”

13.          Mr Givans advises that a Claim Form would attract stamp duty of J$2,000 (approximately US$22.75) which must be paid prior to filing in the Supreme Court. He stated that “the Legal fees for handling such a suit vary from attorney to attorney but given the circumstances of this case, these could be substantial.” It is regretful that details of the average hourly rate for an attorney in Jamaica and/or an estimate of the likely cost of enforcing a costs order in Jamaica were not provided. Additionally, it would have been useful if Mr Givans had set out the reasons why he felt that the circumstances of this case would merit substantial attorneys’ fees. It appears from Mr Givans’ Opinion that the procedure is straight forward, and I note that, on the whole, it mirrors the procedures of this Court.

14.          Mr McKnight submits that, in light of the contents of the Opinion and the circumstances of this matter, the Court should “stick with tradition” and not follow the approach taken in Nasser v United Bank of Kuwait [2002] 1 All ER 401.1 Mr McKnight submits that it would be a burden to enforce a costs order in Jamaica. Mr McKnight submits there would be undue delay as he relies upon the ‘worst case scenario’ of a year and half to two years for payment of costs after the conclusion of the proceedings in the matter before me.

1 See Paragraphs 36-50 Ruling CL 154/08 dated 1st May 2009

THE SECOND DEFENDANT’S SUBMISSIONS

15.          The Second Defendant is no longer represented by Mr Oliver Smith. Since the hearing of May 1, 2009, the Second Defendant Company has been wound up and an Official Liquidator has been appointed. Mr Green indicated to the Court that the Official Liquidator had indicated that the Second Defendant conceded liability. However, this has not been confirmed to the Court and will require later clarification. What is clear is that the Second Defendant is not pursuing its claim for security for costs which had been filed by Mr Oliver Smith when he was on the record as their attorney.

THE THIRD DEFENDANT’S SUBMISSIONS

16.          The Third Defendant similarly seeks security for costs because the Plaintiffs live out of the jurisdiction and do not have any assets which still remain here. Mr Smith, in his brief submissions, simply adopts Mr McKnight’s submissions.

17.          Mr Oliver Smith suggested, at a time when he represented both the Second and Third Defendants and based on the details in a submitted draft bill of costs, a figure of around $48,450 as security for costs up to the stage of the completion of discovery and inspection of documents and an additional $38,000 for the conduct of the trial. Mr Smith did not seek to revise these figures now that he represents only the Third Defendant.

THE PLAINTIFFS’ SUBMISSIONS

18.          Mr Green submits that the Court, when assessing the level of any security, should follow the more progressive approach taken in England and Wales and the Eastern Caribbean. It is argued that, if security is to be required, then it should be limited to the cost of enforcement of an order for costs in Jamaica.

19.          Mr Green submits that Mr Givans’ Opinion, filed by the First Plaintiff, actually confirms that it would be far from impossible to enforce a costs order in Jamaica. Mr Green suggests that the extra burden that the successful litigant would face in enforcing would be confined to the cost of filing a claim. Mr Green claims that Mr McKnight’s claims are “speculative” and “by no stretch of the imagination demonstrate a substantial burden or obstacle.” Mr Green contends that the Opinion sets out a straight forward procedure that is very similar to that found in this jurisdiction. Mr Green remarks on the cost of filing the writ in Jamaica, almost US$23, against the US$11,000 which it cost to file the current proceedings before this Court. Mr Green submits that the litigant would likely be in a better position to enforce costs in Jamaica rather than carrying out the same process in Turks and Caicos.

20.          When Mr Green was asked why he had not provided, in appropriate form, details of the Plaintiffs’ assets, he submitted that this would only have been necessary if it were established that there would be real obstacles or an undue burden to enforcing the costs order in Jamaica. Mr Green states that he had been waiting for the Defendants to file information and formally express an opinion about this. Mr Green said that on November 9, 2009 he was informed by Mr McKnight that he would “receive something” that afternoon. Mr Green states that he actually received Mr Givans’ Opinion the day before the current hearing. Mr Green said that the lack of proper notice of the information from the Defendants meant that he was unable, in the limited time available, to have affidavits sworn by the Plaintiffs save for one sworn by a Mr Lightboume, a partner of two of the Defendants. I have not had sight of this affidavit.

21.          Mr Green contends that the Plaintiffs were not required to provide details of their assets, as the Defendants, even having regard to Mr Givans’ opinion, have failed to establish that there are obstacles or that there is an undue burden in enforcing any costs order. Mr Green argues that this is a condition precedent to be established prior to the Court possibly feeling it necessary to go on and consider the status of the Plaintiffs’ assets. Mr Green appears to interpret this Court’s May Ruling as saying that, since impecuniousity should not provide a justification for the issue of an order of security for costs, evidence as to assets of the Plaintiffs is not required. I am also cognisant of Note 25.13.6 in the 2008 White Book which states that a non-resident does not always have to provide details of his assets in his place of residence to prevent an order for security being made.2

22.          During the March, 2009 hearing, Mr Green stated that the Plaintiffs had assets in Jamaica. There is no clear evidence before the Court as to what those assets may be. However, it was then conceded by Mr Green that they had sufficient assets to prevent him from arguing that a reasonable order for security for costs would stifle his clients’ claims.

23.          Mr Green submits that, even if the Court is concerned about the level of the Plaintiffs’ assets, it should have regard to the fact that all of the hearings to date had resulted in costs orders being made in his clients’ favour against the First Defendant. Mr Green contended that these untaxed costs orders should be viewed as assets of the Plaintiffs within this jurisdiction.

THE LAW

24.          The Law in relation to this application was set out in great detail in the May Ruling. I do not intend to fully rehearse the same herein. However, due to the further evidence adduced and nature of the submissions made by the parties, it is necessary to herein re-iterate some of that detail to clarify the Court’s approach.

2 Paragraph 57 (c) May 1, 2009 Ruling

25.          Both sides agree that making the order is in the unfettered discretion of the judge exercised in the interests of justice. Order 23, r.1 (1)(a) of the Supreme Court Rules 2000 gives the Court a discretion to order costs if it thinks it is necessary against any foreign plaintiff.

26.          I re-iterate what was stated in the May Ruling3, namely that “the wording of the rule “...if having regard to all the circumstances of the case, the Court thinks it just to do so” is a clear indication that the Court has a wide discretion to be exercised in the making of an order. That discretion is to be exercised on a case-by-case basis, having regard to all the circumstances of the case. There is no rule which states that an order must be made simply because a plaintiff is a foreign plaintiff; the requirement that the plaintiff is ordinarily resident outside the jurisdiction is simply a pre-condition to the making of an order under Order 23, r. 1 (1)(a).”

27.          In the May Ruling I went on to review how the Court might exercise that discretion in the light of the modem approach advocated in Nasser v United Bank of Kuwait [2002] 1 All ER 401. In Nasser, the Court of Appeal found that the primary reason for the existence of the discretion to order security is where there is a potential burden of enforcement of costs orders. The Court of Appeal held that where the non-residency ground (but no other ground) was established, “the court should not exercise its discretion to order security for costs unless it does so on grounds relating to obstacles to or the burden of enforcement of a subsequent order for costs in the context of the particular foreign claimant or country concerned.”4

28.          In the Ruling I expressed the view that Jamaica was probably not a part of the World where the natural assumption would be that enforcement would be impossible.5 I therefore concluded in the Ruling that it might be incumbent on the Defendants to show some basis for concluding that enforcement would face real obstacles or extra burden, meriting the protection of an order for security for costs. As a consequence, I invited the Applicant Defendants to provide the Court with information concerning enforcement in Jamaica.6 On receipt of that information the Court would then have to consider “tailoring” any order for security it felt to be appropriate to the particular circumstances of this case. If I were to find that it was likely that there would be no real obstacle to, or significant difficulty about, enforcement and simply an extra burden in the form of costs or moderate delay, the appropriate course would be to limit the amount of the security ordered by reference to that likely burden.

3Paragraph 35 Ruling May 1, 2009

4Paragraph 43 Ruling May 1, 2009

5Paragraph 36 Ruling May 1, 2009

29.          As set out in the May Ruling7, Rawlins J, on applying the approach in Nasser in the Eastern Caribbean Supreme Court (British Virgin Islands), stated in Leon Plaskett v Stevens Yachts Inc. DBA Sunsail Yacht Charters and Julian Mathias [2003] E.C.S.C.J No 7, Claim BVIHCV 2002/0001 that all the circumstances of the case:

“must now include the right of the Claimant to freedom from discrimination and to have access to the court to prosecute his claim. Impecuniousity cannot of itself provide justification for the issue of such an order or otherwise. The status and regime of the enforcement of a cost order that may issue in this case in the United Sates Virgin islands is critical to the decision on the application.”

Applying Rawlins J’s commendable approach to the matter before me, it is the method of enforcement of a costs order in Jamaica which is significant rather than the Plaintiffs impecunious

30.          I again refer to the Cayman Islands case of Elliott v Cayman Islands Health Service Authority [2007] CILR 163 in which the Grand Court ordered security for costs of an amount, which, in the Court’s estimation, was the maximum likely cost to the defendant of registering and enforcing a judgment for costs in the US, which provided a straightforward mechanism for enforcement of foreign judgments. I note that the Court held that this should be the practice where the plaintiff has substantial assets in another jurisdiction where a judgement for costs can be enforced at reasonable cost and speed.8

6Paragraphs 57(d) and 58 Ruling May 1, 2009

7Paragraph47 Ruling May 1, 2009

8Paragraph49 Ruling May 1, 2009

31.          At Paragraph 10 in Elliott, Sanderson Ag, J when considering the approach taken in Nasser stated:

“in my view, the fact that a plaintiff is a non-resident and without assets in the Cayman islands still remains an important factor for the court to consider. However, I also conclude that the factors considered by the recent English cases are worthy of consideration in determining the importance to be attached to the plaintiffs non-residence and the lack of assets in the jurisdiction.”

As I stated in the May Ruling, I endorse Sanderson Ag, J’s approach to Nasser.10 I am persuaded that the approach taken to the application of Nasser in the Caribbean cases of Plaskett and Elliott has merit and apply it having regard to the circumstances in and nature of the matter before me.

CONCLUSION

32.          The Plaintiffs are ordinarily resident out of the Turks and Caicos Islands and this engages the court’s jurisdiction but is not, in and of itself, a ground for making an order for security of costs. A decision to order a Plaintiff to give security for costs solely on the basis of non-residence may be considered as discriminatory.

33.          I then have to consider whether there are any real obstacles to or burden of enforcement for the First and Third Defendants of a costs order against these Plaintiffs in Jamaica. The Opinion drafted by Mr Givans does not lead one to the conclusion that there would be a real obstacle or a significant burden placed upon the Defendants. Having regard to the nature of a costs order, the proceedings to enforce the same would be straight forward and, if properly managed by a Court, unlikely to take the worse case estimate of one and half to two years set out in the Opinion. The procedure in Jamaica is very similar to our own where the cost of enforcement of a costs order would not ordinarily merit significant expenditure on legal fees.

9Paragraph 50 Ruling May 1, 2009

10Paragraph 50 Ruling May 1, 2009

34.          Although the Defendants have not established that enforcement would be impossible or would face real obstacles or significant extra burden, there will inevitably be costs involved. The Court when deciding whether to order security and/or the level of the same should not do so solely because the Plaintiff is non-resident but may do so having regard to any obstacles and burden of enforcement (including the costs of enforcement) and tailoring its approach to the circumstances of the case.

35.          There, of course, would be an additional burden and some costs when seeking to enforce any costs order in Jamaica. In cases of Elliott and Plaskett the Courts, when considering the application of the approach in Nasser, have tried to tailor any order for security to the particular circumstances of enforcement in the other jurisdiction. It is not the risk that a Plaintiff will not have the assets to pay the costs order that the Courts have sought to protect against, but the extra burden in terms of cost and delay to enforce any such costs order. This is the same approach that this Court endorsed in the May Ruling.

36.          In Elliott the Court felt that the approach in Nasser was “worthy of consideration in determining the importance to be attached to the plaintiff's non-residence and lack of assets in the jurisdiction.” In Elliott, unlike the matter before me, there was clear evidence of the Plaintiff's assets in his country of residence. In Elliott the Court felt that the defendant would most probably have “a reasonably speedy and efficient remedy available to it to pursue that award of costs in the United States.” The Court recognised that it would take some efforts to have the judgment registered in the United States. The Court went on to say that, “There may be some costs associated with that and I think that the defendant is entitled to an order for security for costs to protect against that eventuality.” The Court on awarding security for costs at $15,000 went on to say that the amount, “is primarily determined by my best estimate of what it might cost to have the judgments registered in the United States should it be necessary to do so.”

37.          In Plaskett the Court accepted that an order for security for costs should not be made simply because the Plaintiff was non-resident, as to do so would be discriminatory. In Plaskett the Plaintiff provided some evidence of the value of land he owned in the United States and the court held that this “provided sufficient basis to preclude the issue of an order for him to give security for costs.”

38.          The Court has not been provided with figures, save for the filing fee, as to the cost of enforcing a costs order in Jamaica. However, in the absence of clear assistance as to the likely costs from the Defendants, the Court is able to have regard to the similarities in the procedures between this jurisdiction and Jamaica and estimate what the reasonable costs would be. I do not accept Mr Green’s submission that that estimate should only be limited to the costs of filing. I find that the judgment for costs could be enforced at reasonable cost and speed in Jamaica. If costs orders are made in favour of the First and Third Defendants and those parties sought to enforce the same in Jamaica, expediency would suggest that the Claims may be consolidated to minimise costs. Those costs, having regard to the favourable exchange rate and on a properly pleaded Claim Form and Particulars of Claim, should not exceed US$15,000 for each respective Defendant’s claim. I have regard to the fact that there have been a number of un-taxed costs orders already made against the First Defendant in the Turks and Caicos Islands.

39.          Taking into account all of the above, I conclude that the Plaintiff should be required to provide some security. The amount to be paid is primarily determined by my best estimate of what it might cost to have the cost orders enforced in Jamaica. Even on the limited evidence before me, I am satisfied that the Plaintiffs have sufficient assets to meet the costs of an enforcement application in Jamaica. Accordingly I order that the Plaintiffs post security for costs in a manner satisfactory to the First and Third Defendants or as ordered by the Court in the following total amounts:

a)            US$7,500 in relation to the First Defendant (having regard to the costs orders already made against the First Defendant in these proceedings in the Turks and Caicos Islands)

b)            US$15,000 in relation to the Third Defendant.

40.          I also order that security should be posted within 28 days, pending which the action will be stayed. Liberty to the parties to apply.

41.          Costs of this application will be costs in cause.

___________________________

Richard Williams (J)