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    Home » Judgments » High Court Judgments » Grenada Citizen Development Limited v Levera Resort Development Limited et al

    IN THE SUPREME COURT OF GRENADA

    AND THE WEST INDIES ASSOCIATED STATES

    IN THE HIGH COURT OF JUSTICE

    (CIVIL)

    CLAIM NO. GDAHCV 2019/0386

     

    BETWEEN:

     

    GRENADA CITIZEN DEVELOPMENT LIMITED

    Claimant/Respondent

    AND

    LEVERA RESORT DEVELOPMENT LIMITED

    DICKON MITCHELL

     

    Defendants/Applicants

     

    Appearances:

    Ms. Marion Suite and Mr. Keith Scotland for the claimant/respondent

    Mr. Alban John and Ms. Verne Ashby for the first defendant/applicant

    Ms. Skeeta Chitan for the second defendant/applicant

    On written submissions

    2020: July 13

    November 4.

    JUDGMENT

    [1] GLASGOW, J.: The defendants (the applicants)
    applied to this court on 20• January 2020 for an order that the
    claimants (GCDL) pay security for their costs in defending this claim
    brought against them by GCDL and as security for the costs of this
    application. The applicants ask the court to order GCDL to provide
    security for their costs in the sum of USD 276,391.65. They request
    that GCDL pay this sum within 30 days of any order granting their
    application. The applicants request that the court stays this claim
    until the security is paid or failing payment, that the claim is struck
    out forthwith with costs to the applicants.

     

    [2] The applicants have invoked the court’s jurisdiction to grant such
    orders pursuant to the Civil Procedure Rules (CPR) 24.2 and section 548
    of the Companies Act, Cap. 58A of the Revised Laws of Grenada (the
    Act). The grounds for the application are that:

    (1) GCDL is a limited liability company formed pursuant to the Act;

    (2) The applicants have reason to believe that GCDL will be unable to
    pay the applicants’ costs if the applicants successfully defend this
    claim. The grounds explain that credible evidence exists that GCDL is
    insolvent because –

    (a) GCDL is unable to pay its debts as and when they fall due and/or;

    (b) GCDL’s liabilities exceed its net assets; and

    (c) GCDL has little or no assets at all to satisfy any order for costs
    that the court may make in the applicants’ favour in the event that
    GCDL fails on its claim against them.

    [3] The applicants further explain the basis for their application
    through an affidavit filed on even date by the 2″” applicant, Dickon
    Mitchell on their behalf (the Mitchell affidavit). In that affidavit,
    Mr. Mitchell gives a background to the present application that
    assisted me with the relevant facts.

    [4] On 20″ August 2019, GCDL instituted a claim seeking the sum of
    USD19,510,831.00 as damages against the 1″ applicant (Levera) and
    unspecified damages against the 2” applicant (Mr. Mitchell). GCDL
    amended its claim form on 23″ October 2019 wherein GCDL reduced the sum
    claimed against Levera to USD 11,378,331.00. The applicants filed a
    defence on 14″ October 2019;

    [5] GCDL applied before me and I granted a freezing order on 21”
    August 2019. The applicants applied on 2nd September 2019 for the
    freezing injunction to be discharged (the discharge application). I
    discharged the injunction via a written decision handed down on 19″
    September 2019. Costs of $1500.00 were awarded to the applicants on the
    discharge application;

     

    [6] GCDL sought to appeal the order discharging the freezing order. The
    company filed a notice of interlocutory appeal on 15• October
    2019. The notice of appeal was filed along with a record of appeal and
    written submissions;

    [7] The applicants filed written submissions and authorities in
    response to the notice of appeal on 31″ October 2019. However, GCDL did
    not prosecute the appeal. Rather, it withdrew the notice of appeal on
    5• November 2019. The applicants state that to date they have
    incurred substantial costs to prosecute the above recited matters. They
    say that, as at the date of filing this security for costs application,
    GCDL has not paid them the costs of $1500.00 awarded to them on the
    discharge application;

    [8] The Mitchell affidavit goes on to outline that it has come to the
    applicants’ attention that a request for enforcement of judgment by way
    of writ of execution has been filed on 19• November 2019 in Claim
    No. GDAHCV 2017/0053. GCDL is one of 3 entities against whom the writ
    has been issued. The Mitchell affidavit states that the judgment in
    GDAHCV 2017/0053 against GCDL remains unpaid as at 20• January
    2020, the date of the swearing of the affidavit.

    [9] Mr. Mitchell further deposes that the applicants are aware of the
    presentation of a winding up petition filed against GCDL in claim No.
    GDAHCV 2019/0512. The judgment creditor in that claim asserts that GCDL
    owes a judgment debt of USD 628,900 and that GCDL is unable to pay the
    same within the meaning of section 378 of the Companies Act. Mr.
    Mitchell explains that this information came to his knowledge via the
    court’s notice of hearings published for 30• January 2019. I
    observe that the court list attached to the Mitchell affidavit as “OM
    2″ is in respect of 30′” January 2020 as opposed to 30• January
    2019. I observe also that the winding up petition against GCDL is
    listed as GDAHCV2019/0521. I will assume that the reference to the date
    and claim numbers are typographical errors since in all other respects
    the information at this paragraph on the affidavit in respect of the
    court’s listing of GDAHCV 2019/0521 is correctly recited. Additionally,
    the appropriate claim number is later recited at paragraph 17 of the
    Mitchell affidavit;

     

    [10] The Mitchell affidavit also exhibits a copy of the winding up
    petition in claim No.

    GDAHCV 2019/0521. The court’s attention is directed to the affidavit of
    Stephen Randall Oveson sworn on 28′” November 2018 and attached to the
    request for winding up (the Oveson affidavit). Mr. Oveson is a director
    of GCDL. Mr. Oveson signed the certificates of truth in respect of the
    claim and amendment thereto filed in this claim. He was also the
    deponent to the application for a freezing order filed in this claim on
    behalf ofGCDL;

    [11] The court’s attention is further drawn to paragraphs 6,7 and 16 of
    the Oveson affidavit where Mr. Oveson deposes that:

    “6. At present, the assets owned by the Third Named Defendants are:

    i. Six (6) storage containers each estimated to be worth Two Thousand
    United States Dollars (US$2,000.00);

    ii. Building materials at an estimated value of Five Thousand United

    States Dollars (US$5,000.00);

    iii. One (1) container which is used as an office space and which
    together with the furnishings have an estimated value of Three Thousand
    United States Dollars (US$3,000.00)

    iv. Construction tools and equipment at an estimated value of less than

    Ten Thousand United States dollars (US$10,000.00).

    7. There are no other assets owned by the Third Named Defendant apart
    from the items listed in the preceding paragraph. No assets have been
    sold by the Third Named Defendant within the last twelve (12) months.
    No assets of the Third Named Defendant have been transferred to me or
    to any other officer or personnel of the Third Named Defendant
    personally.

    16. In the circumstances, the Third Named Defendant is unable to pay to
    the claimant in full the total amount now outstanding under the
    Mediation Agreement and has no assets which it can sell to obtain the
    amount.”

     

    [12] The applicants conclude that the material recited above and the
    failure to pay the costs of $1500.00 indicate that GCDL would be unable
    to pay any costs awarded to them in this claim. They ask that the court
    grant them the orders for security for costs that they seek.

    GCDL’s answer

    [13] GCDL opposes the request for security for costs. It filed a
    response on 1o• July 2020 via an affidavit sworn by its company
    secretary, Otis Wade (the Wade affidavit). Mr.

    Wade says that GCDL’s opposition is grounded in the fact:

    (1) GCDL has a claim with good prospects of success;

    (2) GCDL’s claim seeks to recover the investments that it made on its
    own behalf and behalf of investors. The assets created by those
    investments have been seized by Levera and sold to 3” parties;

    (3) An order for security for costs will stifie its prospects of
    pursuing its claim; and

    (4) That the request for security for costs is oppressive since GCDL’s
    current financial circumstances have been brought about by the very
    conduct of which complaint is made on its claim.

    [14] Mr. Wade explains that while the court cannot comment on the
    merits of GCDL’s claim, it is clear that the substantive claims are
    meritorious.

    [15] In respect of the amount of USD $276,391.65 claimed by the
    applicants as security for costs, Mr. Wade complains that the
    applicants provide “no basis for these costs instead relying on the filings in a different claim by another person in an unrelated matter.”
    Mr. Wade explains that CPR 24.2 states that the amount and nature of
    the security shall be

    such as the court thinks fit.

    ‘Paragraph 7 of the Wade affidavit filed on 10′”July 2020

     

    [16] As to the late payment of the costs on the discharge application
    in the sum of $1500.00, Mr. Wade expresses GCDL’s regret for the late
    payment and informs the court that GCDL has made payment to the
    applicants. I observe that the copy of the receipt exhibited with the
    Wade affidavit evidences payment to the office of counsel for the
    applicants on 15′” June 2020 in respect of an order for costs made in
    September 2019.

    [17] The Wade affidavit goes on to deprecate the applicants’ reliance
    on Claims Nos GDAHCV 2017/0053 and 2019/0521. As to GDAHCV 2017/0053,
    Mr. Wade explains that it involves 3 entities of which GCDL is the 3″
    defendant. GCDL explains that the judgment debt is in dispute and that
    it has already paid the principal amount of that claim in the sum of
    US$1million within the time ordered by the court. In respect of GDAHCV
    2019/0521, Mr. Wade claims that this is a live matter wherein the court
    has reserved judgment. Mr. Wade opines that the applicants’ reliance on
    these 2 matters does not

    “determine or establish the financial standing of the Claimant
    herein whose substantial physical assets have been seized by the
    First Defendant.”‘

    GCDL describes the applicants’ conduct as being oppressive.

    [18] Mr. Wade further deposes that the parties’ relationship commenced
    when GCDL was introduced to Mr. Mitchell by Levera’s principal. He
    explains that the applicants urged

    ·GCDL that

    “it would be more expedient and convenient for the same law firm to
    act for

    both parties.'”

    [19] The Wade affidavit goes on to remind the court that the CPR
    provides that costs are generally awarded to the unsuccessful party
    although there is a discretion to do otherwise. Mr. Wade deposes that
    there has been no final determination as to which of the parties has
    succeeded on this claim. As such, it is incorrect for the applicants to
    state that they have incurred substantial costs.

    2
    Supra, note 1 at paragraph 12

    ‘Ibid at paragraph 12

     

    [20] Mr. Wade then returns to GDAHCV 2017/0053 and makes the charge
    that the nature and substance of that claim could only have come to Mr.
    Mitchell’s attention during the period that he served as legal advisor
    to both parties. These matters were of a confidential nature to Mr.
    Mitchell.

    [21] Mr. Wade concludes that the applicants have not demonstrated that
    GCDL is or will be unable to satisfy costs orders made against it. They
    depose that the matters pleaded by the applicants are without merit as
    they touch and concern claims being litigated in other courts that are
    yet to be determined. Mr. Wade pleads that the applicants are using
    confidential matters covered by client/attorney privilege to approach
    this court for relief. This, GCDL says, amounts to material
    non-disclosure.

    [22] Mr. Wade reminds the court that an order for security for costs
    can only be made having regard to all the circumstances of the claim.
    The court, he says, must weigh up in the balance any risk of injustice
    to GCDL if it does not permit GCDL to pursue its claim until it
    provides security for costs as against the risk of injustice to the
    applicants if they succeed. Mr. Wade deposes that there are valid
    issues of facts in dispute to be tried by this court. He states that
    the applicants are attempting to use this court to stifle GCDL’s claim
    which has a good prospect of success. This, he says, is particularly
    glaring when Levera has seized GCDL’s assets and that of its investors
    and sold them to a third party. The applicants are therefore seeking to
    engage, via this security for costs application, in an unveiled attempt
    to deny GCDL’s right to have this matter litigated. Mr. Wade prays that
    the court dismisses the application for security for costs and permits
    the claim to proceed in the interests of justice.

    The applicants’ reply to the Wade affidavit

    [23] Mr. Mitchell filed a response to the Wade affidavit on 27•
    July 2020. In his response, Mr. Mitchell explains on behalf of the
    applicants that the figure of USD $276,391.65 sought as security for
    costs was derived from a “simple mathematical calculation of the

    value of the respondent/claimant’s claim and is based on the
    prescribed costs formula

     

    set by the Civil Procedure Rules.”‘
    Mr. Mitchell repeats his previous charge that the applicants have
    incurred substantial costs so far in the defence of this claim.

    [24] In response to Mr. Wade’s charge regarding claim no. GDAHCV
    2017/0053, Mr.

    Mitchell answers that the evidence filed by GCDL in that claim shows
    conclusively that it lacks assets beyond those set out in the Oveson
    affidavit. Accordingly, Mr. Mitchell replies, even if GCDL disputes the
    judgment debt in that action, its own evidence filed therein
    demonstrates that it has little or no assets. There is therefore a real
    risk that GCDL will be unable to pay the applicants’ costs if it does
    not succeed in the claim against the applicants. Mr. Mitchell
    reiterates the point that there is an unsatisfied judgment in GDAHCV
    2017/0053 that GCDL has stated that it is unable to pay.

    [25] In respect of the winding up petition in GDAHCV 2019/0521, Mr.
    Mitchell deposes that GCDL filed an application to strike out the same.
    Actie, J dismissed the application in a judgment delivered on 17•
    July 2020. Mr. Mitchell concludes that the 2 claims remain outstanding
    against GCDL.

    [26] Mr. Mitchell flatly rejects the assertion that he obtained the
    information in respect of GDAHCV 2017/0053 and GDAHCV 2019/0521 further
    to a breach of attorney/client privilege. He insists that these
    pleadings are patently false. He states that he has never met GCDL’s
    principals or its officers including Mr. Oveson or Mr. Wade. He pleads
    that he does not know these individuals. He explains that he served as
    partner at the law firm of Grant, Joseph and Co (the firm) and during
    that time GCDL was a client of the firm until the relationship ended by
    1” September 2016 when he left the firm. He says that he never acted
    for or represented GCDL.

    [27] Mr. Mitchell repeats his previous pleading that GDAHCV2017/0053
    and GDAHCV 2019/0521 are public records. He repeats that the winding up
    petition was listed for hearing on the court’s website and the striking
    out application was heard in open court. He deposes that the decision
    refusing the strike out application is published on the

    4

    Paragraph 3 of the applicants’ affidavit in reply to the Wade
    affidavit.

     

    court’s website. He explains that these claims were filed long after
    the firm stopped acting for GCDL and long after he left the partnership
    there.

    [28] Mr. Mitchell ends his response by pointing out that GCDL has not
    made any statement in the Wade affidavit

    “that it is solvent, has the means or that it will be able to
    satisfy


    any costs order that may be made against it in the event that may
    be unsuccessful in its

    claim …”‘

    Submissions

    Applicants’ submissions

    [29] The applicants’ submissions repeat many of the points that they
    raised on their factual matrix. They opine that the facts demonstrate
    that by the time that Mr. Oveson swore his affidavit, GCDL was already
    pleading that it was unable to pay its debt then due. The applicants
    ask the court to note that the Oveson affidavit predates the present
    claim.

    [30] The applicants then present legal arguments in response to the
    grounds on which GCDL opposes this application for security for costs.
    The first submission is with respect to GCDL’s statement that it has a
    claim with good prospects of success. The applicants remind the court
    that it must weigh this factor along with others when it is exercising
    its discretion. Linde Antigua Limited v Tom and Theresa Matthews’ is
    presented as authority for this view. In this regard, the applicants
    point out that GCDL’s claim is

    “demonstrably weak arising from the Claimant’s chronic breach of
    its contractual obligation to the First Defendant and the eventual
    termination of the

    contract …This, the First defendant was entitled to do’.”
    The applicants submit that the court should not conduct a mini trial.
    However, if the court is to consider the strength or weakness of a
    party’s case then this factor ought to weigh in the applicants’ favour.

    This, they claim, is due to the admission made in the Oveson affidavit
    that GCDL did

    ‘Supra, note 4 at paragraph 7

    ‘ANUHCV 2011/0124

    ‘The applicants submissions filed on 27′” July 2020 at para.ll

     

    not own the land that forms the subject of the present dispute. Rather,
    the land belonged to Levera.

    [31] In terms of whether an order for security for costs would stifie
    GCDL’s claim, the applicants’ rejoinder states that GCDL’s argument
    that the claim would be stified is not made out since –

    (1) The assertion of stifiing is a mere bald one unsupported by any
    evidence. The applicants submit that the law places the burden on GCDL
    to prove that an order for security for costs would stifie its claim.Calltel Telecom Ltd &Another v HM Revenue & Customs’ andUltramarine (Antigua)Ltd v Sunsail (Antigua) Ltd’ are presented as authority for
    the view that GCDL bears the burden of proving on clear and unequivocal
    evidence that an order for costs would stifie its claim. The applicants
    submit that GCDL has presented no such evidence;

    (2) The court must consider whether GCDL has other backers and
    financiers with the resources and motivation to provide security. This
    information, they claim, would be in GCDL’s knowledge. The applicants
    complain that GCDL has not presented any of this material while it
    continues to demonstrate its ability to retain counsel to prosecute
    this claim and to defend other claims; See Ultramarine (Antigua)Ltd; and

    (3) The entire purpose of section 548 of the Companies Act is to
    protect against the instances where an insolvent claimant company loses
    a claim and in incapable of paying the costs associated with that loss.Pierson and another v Naydler and others” instructs that:

    ‘[2008]EWHC 2107 ‘ANUHCVAP 2016/0004

    ” [1977] 1WLR 899 at p.906

     


    It is inherent in the whole concept of the section that the Court
    is to have power to order the Company to do what it is likely to
    find difficulty in doing, namely, to


    provide security for the costs which ex-hypothesi it is likely to
    be unable to pay.

    [32] Where GCDL complains of oppression, the applicants’ riposte is
    that this ground of opposition to the application is patently false.
    The applicants repeat their responses regarding the admissibility of
    the documents regarding claims nos. GDAHCV 2017/0053 and 2019/0521. The
    applicants continue to deny that its actions on the contract brought
    about GCDL’s present impecuniosity. However, they posit that even if
    this was the case, GCDL would still have to show that not only would an
    order for security for costs present a difficulty but that it would
    indeed stifle their claim. They quote Briggs J’s statement inCallie! to the effect that “the Court must be persuaded that the Appellants

    would not only be able to pay those costs rather than merely that
    they

    may not pay those costs.'”‘

    [33] The applicants rely on the following material as evidence that
    what is referred to as ” the parameters for security for costs” have
    been made out:

    (1) Claim no. GDAHCV 2017/0053 is clear evidence that GCDL has little
    or no assets to pay the judgment debt in that suit;

    (2) The winding up petition in claim no. GDAHCV 201910521 is still
    pending;

    (3) GCDL has not presented any statement or evidence in the Wade
    affidavit that it has means to satisfy a costs order if it is
    unsuccessful in this claim;

    (4) GCDL previously retained and presently retains a suite of high
    profile lawyers

    including counsel from outside the jurisdiction to defend it in this
    claim, on this application and in claims nos. GDAHCV 2017/0053 and
    GDAHCV 201910521. The applicants reiterate that GCDL has even filed and
    prosecuted an application to strike out the winding up petition in
    GDAHCV 2019/0521;

    (5) The evidence shows that GCDL is not stifled by this application.
    GCDL has shown that it is capable of prosecuting several different
    claims.

    ” [2008] STC 3246 at 3250

     

    [34] In respect of GCDL’s opposition on the quantum of the security for
    costs, the applicants repeat their pleading that they have quantified
    their request for security on the amount of GCDL’s claim. The
    applicants say that they are entitled to prescribed costs (CPR 65.5) if
    they are successful on their defence. They argue that the prescribed
    costs are the precise sum requested for security for costs.

    GCDL’s submissions in opposition

    [35] GCDL submits that:

    (1) it has “a genuine claim with a high public interest componenf'”. The
    public interest, it claims, lies in the fact that investors have
    already paid to acquire Grenadian citizenship by investing in the
    development of the Levera Project. GCDL claims that these persons have
    not received any compensation for their investment even though these
    investments have increased the value of Levera’s property. GCDL urges
    the court to follow the guidelines recited inSir Lindsay Parkinson & Co Ltd v Triplan Ltd” to conclude that GCDL has an
    arguable claim as it is far more than a mere sham or nuisance;

    (2) The court should not regard the applicants’ reference to claim nos
    GDAHCV 201710053 and GDAHCV 201910521 since they relate to different
    claims that have not been determined. GCDL charges that Mr. Mitchell is
    attempting to use these matters that came to his knowledge while he
    acted as legal counsel for the company. In this regard, GCDL claims
    that while the claims in those suits are public records, CPR 3.14
    precludes Mr. Mitchell’s use of and access to the affidavits and
    records of oral examination. It is said that the applicants’ reliance
    on those claims to

    “repress the Claimant’s claim in this matter now borders on
    oppressive behaviour””.

    “GCDL’s submissions filed on 17″August 2020 at paragraph 11 ” [1973] QB
    609

    1
    4
    Supra, note 12 at paragraph 14

     

    (3) The applicants have failed to disclose that the issue of GCDL’s
    solvency is before the court for determination. In the circumstances,
    the applicants cannot affirm with cogent evidence that GCDL is
    incapable of satisfying its debts. This is especially since in this
    case, Levera has had the full benefit of GCDL’s development of the
    subject property which Levera has utilised to its benefit by selling to
    a 3’• party;

    (4) An order for security for costs would leave GCDL in“an undesirable position where it would be not be able to pursue this litigation.”” GCDL
    recites Sir Nicholas Browne-Wilkinson’s admonition inPorzelack KG v Porzelack (UK) Ltd “to the effect that:

    It
    is always a

    matter to take into account that any plaintiff should not be driven

    from the judgment
    seat unless the justice of the case makesit imperative. I amalways reluctant to allow applications for security for costs to be used as a measure to stifle proceedings.

    (5) GCDL presentDeleclass Shipping Company Limited and another v lngosstrakh Insurance Company Limited” and Newman v Wenden Properties Ltd” as authority for the
    view that the court has a discretion in this case. That discretion,
    they argue, should be used not to grant the order sought by the
    applicants since it would lead to stifling and oppression. See also Pearson v Naydler for the view that the court should
    not allow section 548 of the Companies Act to be used as an instrument
    of oppression so as to shut out small companies from making genuine
    claims against larger companies. GCDL argues that any order would
    likely result in its failure to pursue its claim against the applicants
    who have “unjustly enriched themselves at the expense of the Claimant which has contributed considerable value added to the property

    15 Supra, note 12 at paragraph 23

    ” [1987]1 WLR 420

    “[2018] EWHC1149(Comm)

    “[2007]EWHC 336 (TCC)

     


    of the First defendant an (sic) for which value the Claimant has
    received no compensation.””

    (6) Lastly, GCDL relies on the court’s overriding objective of
    disposing of cases justly to plead that the court should not make an
    order for security for costs in this case.

    Useful background

    [36] I believe it may be useful to recite some of the facts surrounding
    the present dispute between the parties before I discuss whether I will
    grant or refuse the request for an order for security for costs.

    [37] GCDL and Levera are parties to a Sale and Purchase Agreement (SPA)
    which agreement had the sole purpose of facilitating GCDL’s purchase of
    lands owned by Levera(the lands).

    [38] Prior to the conclusion of the SPA, Levera applied to the
    Government of Grenada (GOG) and obtained Citizenship by Investment
    (CBI) approval for a tourism project involving the lands subject to the
    SPA (the Levera Project). Levera was also successful in obtaining
    planning permission and certain tax concessions for the Levera project.
    GCDL agreed to buy the lands subject to the CBI approval and to pay
    Levera the sum of USD35 million for the same. Of particular
    significance to this discourse are the following terms:

    (1)

    1.3- The Vendor, pursuant to an agreement dated 21″ December 2015
    with


    the Government of Grenada has negotiated certain concessions for

    a real estate development including a hotel and resort to be located on the Property

    and agrees to assign, with the consent of the Government of
    Grenada, the said


    agreement to the Purchaser on the Closing. In the event the Vendor
    does not

    19
    Supra note 7 at para 31

     


    get the permission of the Government of Grenada to assign the
    concession to


    the Purchaser by the Closing, the Purchaser shall grant the Vendor
    an


    extension of thirty (3)) days within which to obtain the consent of
    the

    Government of Grenada;

    (2)

    1.4- The Vendor shall obtain renewed outline physical planning
    permission for


    the real estate development including a hotel and resort and agrees
    to assign,


    with the consent of the Government of Grenada, the said planning
    permission


    to the Purchaser on the Closing. In the event the Vendor does not
    get the


    permission of the Government of Grenada to assign the planning
    permission to


    the Purchaser by the Closing, the Purchaser shall grant the Vendor
    an


    extension of thirty (30) days within which to obtain the consent of
    the

    Government of Grenada;

    (3) 1.5 –

    The Vendor shall permit the Purchaser the use of the Citizenship by


    Investment approved status of the Vendor’s Levera Resort
    Project(CBI


    Program) for the purpose of permitting the Purchaser to undertake
    marketing


    investment opportunities through the CBI program. The Vendor agrees
    that the Purchaser shall be permitted to do so from the Execution
    Date provided that the Purchaser shall indemnify the Vendor from
    all claims, demands, losees,


    expenses, costs and fees including legal and other professional
    fees arising


    from the Vendor’s agreement to permit the Purchaser the use of its
    CBI

    Program;

    (4) 2.1 –

    The Purchaser agrees to pay the Purchase Price for the Property in

    accordance with the following schedule:


    First Instalment Payment USD 500,000.00 18″ March 2016 Second
    Instalment Payment USD 500,000.00 18″ Apri/2016

    Balance of Purchase Price USD 34,000,000.00 18″ May 2016


    comprised of USD 2,500,000.00 cash payment and Vendor loan of USD
    31’500,000.00

     

    (5)

    2.2- Any amounts not paid within thirty (30) days of the payment
    date set out in the schedule in paragraph 2.1 above shall accrue
    interest at the rate of 1% per

    month;

    (6) 2.3 -In the event that the Purchaser does not make a

    or any payment which constitute the Deposit” the Purchaser shall be
    in default and the Vendor may


    immediately terminate this Agreement upon written notice and the
    Deposit, if


    any, already paid by the Purchaser shall be forfeited to the
    Vendor, which the Purchaser agrees represents liquidated damages
    for the Purchaser’s default. In the event that the Purchaser does
    not pay the Balance of the Purchase Price


    on or before the Closing, the Vendor shall grant the Purchaser an
    extension of


    thirty (30) days within which to pay the Balance of the Purchase
    Price. Should


    the Purchaser not pay the Balance of the Purchase Price by the
    extended date


    for Closing, The Vendor may immediately terminate this Agreement
    upon written notice and the Vendor shall be under no further
    obligation to the Purchaser with respect to this Agreement. Time
    shall be of the essence with

    respect to this clause.”

    [39] GCDL admits, and the applicants accept, that GCDL only met the
    obligations to pay the first and second instalments. GCDL did not pay
    the third instalment as scheduled. Levera granted GCDL a number of
    extensions over a number of months to make the agreed payments. On its
    application for the freezing order, Mr Oveson’s exhibit number “R06″
    outlines GCDL’s inability to make the USD 2.5 million payment due by
    May 2016. GCDL requested an extension of 30 days to make the required
    payment. Levera gave written approval on 19” May 2016 to GCDL’s
    requested extension. I note that Levera expressly stated that GCDL was
    not to treat the extension as a waiver of Levera’s rights in respect of
    GCDL’s breach of the SPA. Levera reserved its rights in that regard.

    [40] Notwithstanding Levera’s forbearance as outlined in the 19″ May
    2016 extension, GCDL sought a further extension. Levera granted the
    same via letter dated 17″ June

    20

    The SPA defines the Deposit as the first and second installments.

     

    2016. See “RO 8” exhibited with the freezing order application. In that
    letter, the parties agreed to a revised payment schedule. The parties
    refer to the same as the “first supplemental agreement.” Pursuant to
    the first supplemental agreement, the parties extended the time limit
    for payment of the USD 2.5 million tranche of the purchase price to
    31” August 2016. Levera again reversed all its rights under the SPA.
    GCDL did not meet this time limit. Rather, Levera contends that GCDL
    paid the sum on 30″ August 2018.

    [41] The parties also entered what is termed the “second supplemental
    agreement”. Under the second supplemental agreement, Levera undertook
    to transfer 2 acres of land to GCDL in order that it meet obligations
    to persons who had already paid monies to GCDL and had received
    CBIIicences. Levera asserts in its defence and on its answer to the
    freezing order application that it never transferred the lands to GCDL.
    Levera says that it did do so because this second supplemental
    arrangement was contingent on GCDL making timely payments under the SPA
    and the extended periods set out in the first supplemental agreement.
    Levera says that GCDL never met those payments as agreed
    notwithstanding much forbearance and as such there was no basis for the
    transfer of the land.

    [42] On 11″ June 2019 Levera gave notice of termination to GCDL.
    Thereafter much toing and froing occurred about the notice of
    termination. It would appear that at some point thereafter Levera sold
    the lands to a third party. GCDL then filed a claim before the courts
    seeking relief for losses incurred as a result of misrepresentation,
    wrongful repudiation etc. GCDL also filed the application for the
    freezing order.

    GCDL’s claim form

    [43] On its claim, GCDL complains that Levera misrepresented
    (fraudulently) that it could lawfully permit GCDL to use its CBI
    approval to market the Project to investors. It claims that it relied
    on this representation to market the Project to its investors for a
    number of years until it received a letter dated 17″ April 2019 from
    the Citizenship By

     

    Investment Committee (“the committee”). The letter stated that Levera’s
    could not transfer its CBI approval to GCDL and that GCDL was required
    to seek its own CBI Approval. This misrepresentation, GCDL explains,
    caused it to suffer loss and damages in the sum of USD 11,378,331.00
    since it was stymied in its efforts to market the Project and/or meet
    its obligations to persons who had already invested in the Project.
    GCDL claims that the claim for loss includes the sum of USD
    8,252,500.00 owed to 3″‘ Party investors.

    [44] GCDL also complained that Levera wrongly repudiated the SPA. GCDL
    says that based on the above outlined course of dealings,
    accommodations and extensions of time periods for payment, the
    conditions precedent to paying the sums due had not arisen. GCDL also
    claims that Levera never satisfied the obligation to obtain the GOG’s
    consent to the assignment of its tax concession to GCDL. Levera equally
    failed to obtain the GOG’s consent to assign Levera’s planning
    permission to GCDL. Additionally, Levera failed and/or refused to
    transfer the lands agreed to be transferred under the second
    supplemental agreement. GCDL also outlined Mr. Mitchell’s liability as
    attorney for the company.

    The applicants’ defence

    [45] A summarised version of Levera’s defence is that there was no
    fraudulent misrepresentation, proprietary estoppel or other breach as
    claimed by GCDL because, among other things:

    (1) The assignment of the tax concessions and planning permission
    contemplated by clauses 1.3 and 1.4 of the SPA were conditional on-

    (a) GCDL meetings its obligations to pay the purchase price by 18th May
    2016 (see the definition of “Closing”);

    (b) GOG giving its consent to the assignments;

     

    (2) Levera contends that in any event, GCDL was able to utilise
    Levera’s tax concessions and planning permissions as admitted in letter
    dated 5th May 2017;

    (3) In respect of clause 1.5, there was no requirement that Levera
    transfer or assign its CBI approval to GCDL but rather the clause
    expressly stated that Levera was to “permit” the use of its CBI
    Approval. The facts reveal that GCDL utilised Levera’s CBI approval
    status for a number of years in order to “secure” investments from
    third parties to the tune of USD 8,132,500.00;

    (4) Levera did not wrongly repudiate the SPA. The SPA was a contract
    for sale of land with specific payment periods. The evidence
    demonstrates that GCDL did not meet any of the payment deadlines even
    when extended nor did it make the stipulated payments. Levera was
    therefore well within its rights to terminate the SPA and sell the
    lands to a third party. With respect to the claim against Mr. Mitchell,
    the applicants’ defence pleads much of the material set out above about
    his lack of any relationship with GCDL.

    Discussion

    [46] The applicants ground their request for security for costs in CPR
    24.2 and section 548 of the Companies Act. CPR 24.2 states:


    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)

    The amount and nature of the security shall be such as the court
    thinks fit.”

    [47] CPR 24.3 sets outs the criteria to be satisfied if the court is to
    make an order for security for costs:

     


    “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)

    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;

    (b) 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;

    (c) the claimant has taken steps with a view to placing the claimant’s assets

    beyond the

    jurisdiction of the court;

    (d) the claimant is acting as anominal 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
    aview to avoiding the possibility of a costs order against the assignor;

    mthe claimant is an external company; or


    (g)the claimant is ordinarily resident out of the jurisdiction.

    [48] The court is also empowered to make an order for security
    for the costs where the claimant is a company. Section 548 of the
    Companies Act reads:

    ‘Where a 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 or her
    defence, require sufficient security to

     

    be given for those costs and may stay all proceedings until the
    security is given.”

    [49] The point is now well settled that the court has a discretionary
    power to grant an order for security for costs. Lord Denning elucidated
    the principle succinctly in Sir Lindsay Parkinson” when he observed that:

    “Turning now to the words of the statute, the important word is “may”.
    That

    gives the judge a discretion whether to order security or not. There is
    no burden one way or the other. It is a discretion to be exercised in
    all the circumstances of the case.”

    [50] GCDL’s principle concerns are that:

    (1) An order may stifle its chances of bringing its claim. In this
    regard, GCDL asserts that its claim has good prospects of success;

    (2) An order in this application would be oppressive.

    [51] GCDL grounds these concerns in the fact that (1) the applicants
    have sought to rely on material filed in other claims to support their
    contention that GCDL may be unable to pay their costs if the applicants
    succeed on this claim; and (2) the applicants were the architect of any
    impecuniosity inflicted on GCDL. GCDL says that this issue forms the
    crux of the present litigation between the parties.


    The applicant’s reliance on documents filed in other proceedings

    [52] GCDL objects to the applicants’ use of a number of documents filed
    in GDAHCV 2017/0053 and 2019/0521. GCDL argues that CPR 3.14 restricts
    the applicants’ access to these documents. They surmise that Mr.
    Mitchell obtained access to and/or knowledge of these documents whilst
    he acted previously as GCDL’s legal counsel. They say that the
    applicants’ use of these documents is oppressive. CPR 3.14 reads:

    ” j1973l QB 609 at p. 626

     

    “3.14 (1) On payment of the prescribed fee, any person is entitled,
    during office hours, to search for, inspect and take a copy of any of
    the following documents filed in the court office, namely:

    (a) a claim form;

    {b) a notice of appeal;

    (c) a judgment or order given or made in court; and

    (d) with the leave of the court, which may be granted on an application
    made without notice, any other document.

    (2) Nothing in paragraph (1) prevents a party in any proceedings from

    searching for, inspecting and taking a copy of any affidavit or other
    document filed in the court office in those proceedings or filed before
    the commencement of those proceedings but with a view to its
    commencement.

    (3) Any document filed in or in the custody of a court office must not
    be taken out of the court office without the leave of the court unless
    the document is to be sent to another court office or to a magistrate’s
    court.”

    [53] The provisions of the rule are not obscure. The applicants can
    obtain copies of the documents recited at CPR 3.14 (1)(a) to (c)
    without the leave of the court. They require the leave of the court to
    obtain copies of any other document. The applicants rely on copies of a
    request for the issue of a writ of execution, a winding up petition,
    the Oveson affidavit and other documents attached to the winding up
    petition. The applicants submit that they are allowed to rely on these
    documents because these are matters of “public record.” They argue that
    the winding up petition was listed on the court’s list of matters for
    hearing and GCDL’s application to strike out the winding up petition
    was heard in open court. They continue that the decision refusing the
    winding up petition is published on the court’s website. Mr. Mitchell
    also denies that these matters came into his knowledge and possession
    as legal counsel for GCDL since he asserts that he never served in that
    capacity.

    [54] I do not believe that the applicants are entirely correct in their
    arguments about the documents. As I have indicated above, CPR 3.14 is
    clear. The rule seeks to delineate

     

    the manner in which persons obtain copies of documents filed in the
    court office. A cursory reading of the rule suggests that the
    applicants could not obtain copies of the request for writ of execution
    filed in GDAHCV 2017/0053, the winding up petition and other documents
    filed therewith in GDAHCV 2019/0521 including the Oveson affidavit
    except with the permission of the court. They could rely on the
    mediation order made in GDAHCV 2017/0053 without obtaining the leave of
    the court. The parties have not presented me with a copy of Justice
    Actie’s ruling on the strike out application in the winding up petition
    but I am certain that CPR 3.14 allows the applicants to inspect and
    take copies of it without obtaining the leave of the court.

    [55] What then is the impact of all this? I must ignore the copies of
    the Oveson affidavit, the winding up petition and the documents
    attached to the same” because the applicants have not satisfied me that
    they obtained the copies of those documents in the manner prescribed by
    CPR 3.14. Further, they have not presented any basis on which they are
    otherwise entitled to obtain copies of those documents and rely on them
    in these proceedings.

    [56] Notwithstanding this finding, I observe that GCDL has acknowledged
    that a judgment subsists against it and 3 other entities in GDAHCV
    2017/0053.GCDL claims that the judgment in that case arose from a
    breach of a mediation order. See the Wade affidavit at paragraph 9.
    GCDL pleads that it paid part of the sums owed pursuant to the
    mediation order. It explains that the non-payment that led to the
    judgment arose because of the default of the claimant in GDAHCV
    2017/0053. The fact remains though that GCDL has accepted that a
    judgment subsists against it in GDAHCV 2017/0053 for substantial sums.
    It has accepted that, for whatever reason, it has not paid the sums due
    and owing under that judgment.

    [57] In respect of GDAHCV 2019/0521, GCDL does not deny the existence
    of a winding up petition filed against in respect of an unsatisfied
    judgment. It contends, however, that

    “Except the mediation order made in GDAHCV2017/0053

     

    the matter is a live one awaiting the court’s determination. See the
    Wade affidavit at paragraph 10.

    The discretion to grant the order

    [58] In Keary Developments Ltd v Tearmac Construction Ltd”
    Lord Justice Peter Gibson outlined the relevant principles underlying
    the exercise of the court’s discretion to grant of an order for
    security for costs:

    “1. As was established by this court inSir Lindsay Parkinson & Co Ltd v Triplan Ltd [1973]2 All ER 273, [1973] QB
    609, the court has a complete discretion whether to order security, and
    accordingly it will act in the light of all the relevant circumstances.

    2. The possibility or probability that the plaintiff company will be
    deterred from

    pursuing its claim by an order for security is not without more a
    sufficient reason for not ordering security (see Okotcha v Voest Alpine ln-tertrading Gmbh [1993] BCLC
    474 at 479 per Bingham LJ, with whom Steyn LJ agreed). By making the
    exercise of discretion under s 726(1) conditional on it being shown
    that the company is one likely to be unable to pay costs awarded
    against it, Parliament must have envisaged that the order might be made
    in respect of a plaintiff company that would find difficulty in
    providing security (see Pearson v Naydler [1977]3 All
    ER 531 at 536-537, [1977]1 WLR 899 at 906 per Megarry V-C).

    3. The court must carry out a balancing exercise. On the one hand it
    must weigh

    the injustice to the plaintiff if prevented from pursuing a proper
    claim by an order for security. Against that, it must weigh the
    injustice to the defendant if no security is ordered and at the trial
    the plaintiffs claim fails and the defendant finds himself unable to
    recover from the plaintiff the costs which have been incurred by him in
    his defence of the claim. The court will properly be concerned not to
    allow the power to order security to be used as an instrument of
    oppression, such as by stifling a genuine claim by an indigent company

    ” [1995) 2 BCLC 395 at 400

     

    against a more prosperous company, particularly when the failure to
    meet that claim might in itself have been a material cause of the
    plaintiffs impecuniosity (see Farrer v Lacy, Hartland & Co (1885) 28 Ch D 482 at
    485 per Bowen LJ). But it will also be concerned not to be so reluctant
    to order security that it becomes a weapon whereby the impecunious
    company can use its inability to pay costs as a means of putting unfair
    pressure on the more prosperous company (see Pearson v Naydler [1977]3 AllER 531 at 537, [1977]1
    WLR

    899 at 906).

    4. In considering all the circumstances, the court will have regard to
    the plaintiff company’s prospects of success. But it should not go into
    the merits in detail unless it can clearly be demonstrated that there
    is a high degree of probability of success or failure (see Porzelack KG v Porzelack (UK) Ltd [1987]1 All ER 1074
    at 1077, [1987]1 WLR 420 at 423 per Browne-Wilkinson V-C). In this
    context it is relevant to take account of the conduct of the litigation
    thus far, including any open offer or payment into court, indicative as
    it may be of the plaintiffs prospects of success. But the court will
    also be aware of the possibility that an offer or payment may be made
    in acknowledgment not so much of the prospects of success but of the
    nuisance value of a claim.

    5. The court in considering the amount of security that might be
    ordered will bear in mind that it can order any amount up to the full
    amount claimed by way of security, provided that it is more than a
    simply nominal amount; it is not bound to make an order of a
    substantial amount (see Raburn Construction Ltd v William Irwin (South) & Co Ltd
    [1991] BCC 726).

    6. Before the court refuses to order security on the ground that it
    would unfairly

    stifle a valid claim, the court must be satisfied that, in all the
    circumstances, it is probable that the claim would be stifled.”

    [59] I have formed the view that GCDL may not be in a position to
    satisfy an order for costs made against it in this claim and that an
    order for security for costs is appropriate in all the circumstances.
    Equally, I have found and so rule that GCDL is incorrect in its
    position that an order would stifle its claim and that it would be
    oppressive. GCDL

     

    grounds these positions on stifling and oppression on the assertion
    that, as stated above, it has a claim with good prospects of
    success. It also posits that the applicants’ alleged breach of the
    agreements has led to its purported impecuniosity. These are 2 sides of
    the same argument as far as I see it. They also make complaint about
    the applicants’ use of previously filed documents.

    [60] In terms of good prospects of success, this argument is
    inextricably tied up with GCDL’s contention that its present financial
    circumstances were brought on by the applicants’ breach of the
    agreements. The parties are correct that, at this stage, the court is
    not required to consider the matter in detail. In Porzelack KG v Porzelack (UK) Ltd”, Lord Browne
    -Wilkinson puts the matter thusly:

    “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.”

    [61] His Lordship’s guidance is salutary. Without delving too much in
    the details of the claim, as I have previously said on the discharge
    application, GCDL may be hard pressed to prove that Levera breached its
    obligation to assign the tax concessions and planning permission in the
    face of evidence that GCDL utilised the very planning
    permission and tax concessions for quite some time. In respect of the
    obligation to assign the CBI licence, I have previously opined on the
    discharge application, and I maintain the view, that Clause 1.5 of the
    SPA did not obligate Levera to assign the CBI approval to GCDL. Rather
    the clause obligated Levera to permit GCDL’s use of the CBI approval.
    It would appear that this is precisely what Levera did. Levera appears
    to have permitted GCDL to use its CBI approval until the CBI committee
    “plugged the plug” so to speak from GCDL’s use of the approval after a
    number of years. The facts

    ” [1987] 1WLR 420 at 423

     

    so far suggest that the committee’s action was a matter over which
    Levera may have had no control. On this latter score, there is no
    evidence thus far that Levera or GCDL knew or ought to have known that
    GCDL could not utilise the CBI approval. There is also no pleading or
    evidence thus far that Levera instigated or caused the withdrawal of
    the use of the CBI approval.

    [62] Equally I fear that, in terms of breach of the agreement to make
    the loan, transfer the lands and Levera’s consequent forfeiture of the
    lands for non-payment of the agreed sums, GCDL would have to surmount
    the numerous disclaimers made by Levera when it granted extensions of
    time to pay the sums due. But, as Sir Nicholas Browne­ Wilkinson
    remarked in Prozelack KG, these are all matters better
    reserved for trial. However, my view is that on the material thus far,
    GCDL has not presented the strongest case that Levera was not well
    placed to rely on its contractual remedies for GCDL’s apparent failure
    to meet its obligations to make the agreed payments under the SPA and
    the adjustments or extensions thereto. I stated on the discharge
    application, GCDL’s case is not very strong but it may succeed.

    [63] All in all, it seems that the charge that the applicants’ conduct
    and in particular, Levera’s conduct, has led to GCDL’s alleged
    impecuniosity is not very strong. In addition to these seemingly
    evident challenges facing GCDL’s claim, what also concerns me on this
    application is the lack of any proof of GCDL’s means to satisfy any
    judgment that the court may make against it. GCDL laments the fact that
    an order may stifle its chances of presenting its case. InUltramarine (Antigua} Ltd v Sunsail (Antigua} Ltd, Gonsalves JA commented on the
    burden in cases where a claimant claims that a security for costs order
    may stifle its claim against a defendant. In those cases, the court
    ruled, the burden remains on the claimant and the claimant must“discharge this burden by providing clear and unequivocal evidence.” ” His
    Lordship quoted the following

    from AI-Koronky and another v Time-Life Entertainment Group and

    another”

    “ANUHCVAP 2016/0004 at paragraph 25 “[2005] EWCA 1668

     

    “…it is necessary for the Claimants to demonstrate the probability
    that their claim would be stified. It is not something that can be
    assumed in their favour. It must turn upon the evidence. I approach the
    matter on the footing that there needs to be full, frank, clear and
    unequivocal evidence before I should draw any conclusion that a
    particular order will have the effect of stifiing. The test is

    whether it is more likely than not.”

    [64] Gonsalves JA also referred to Brimko Holdings Ltd v Eastman Kodak Company”

    where Park J elucidated that:

    “First, the burden of establishing that a claim would be stified by an
    order for security rests on the claimant. He or it must put evidence
    before the court of his or its means and must satisfY the court, not to
    a standard of certainty but at least to a standard of probability, that
    the claim would be stified if security was ordered. Second, the court
    should not restrict its evaluation of the ability of a claimant to
    provide security to the means of the claimant itself. If the claimant
    cannot provide the security from its own resources, the court will be
    likely to consider whether it can reasonably be expected to provide it
    from third parties such as, in the case of a corporate claimant,
    shareholders or associated companies or, in the case of an individual
    claimant, friends and relatives. If the case moves to the stage of
    considering whether security should be regarded as being available from
    third parties, the burden still rests on the claimant. He or it has to
    show that, realistically, there do not exist third parties who can
    reasonably be expected to put up security for the defendant’s costs.”

    [65] The dearth of the kind of material highlighted by Park J is stark
    on this application.

    GCDL has not presented any information that it would in fact be in a
    position to meet any orders for costs that the court may make against
    it or that its principals or third parties would be in a position to do
    so. This, the learning suggests, it was enjoined to do. Rather, GCDL
    has presented this court with a claim that, while not bound to fail,
    must overcome a number of challenges if it is to succeed. Equally,
    while Ihave ignored

    ” [2004] EWHC 1343

    28

     

    the Oveson affidavit and the winding up petitions and supporting
    documents, GCDL’s own evidence on this application concedes that there
    are outstanding judgments against it that remain unfulfilled. In fact,
    I have commented above on the fact that it took nearly 10 months for
    GCDL to pay a costs order made by this court on the discharge
    application in the somewhat paltry sum of $1500.00. This state of
    affairs does not leave this court with the impression that GCDL is in a
    liquid financial state to meet a costs order made against it.

    [66] The burden is quite clear in these sorts of cases. GCDL must not
    only show that there were reasonable grounds to believe that its
    alleged impecuniosity was brought on by the applicants but that an
    order would probably stifle its claim. I fear that GCDL has failed to
    meet this burden on this application. I must add that GCDL’s claim that
    the application is oppressive is without merit. In exercising its
    discretion, a court should not allow a small company to be shut out
    from making a genuine claim. However, this is but one of the relevant
    factors. On the other hand, the court should not permit an impecunious
    company to use its impecuniosity as a means to pressure a more
    prosperous company. In this case, based on all the material before this
    court, the balance appears to fall in favour of the grant of the order
    for security for costs.

    Quantification of the award

    [67] GCDL makes the further point that the sum claimed by the
    applicants is without basis.

    CPR 24.2(4) gives the court the discretion to make an order for
    security for costs in an amount and nature that it sees fit. Indeed the
    discretion stated at CPR 24.2(4) is

    replicated in the s• proposition of Lord Justice Peter Gibson’s
    guidelines recited above.

    His Lordship concluded that the discretion permits the court to award
    any sum up to the full amount claimed by way of security so long as it
    is more than a nominal sum. The proposition that the court can award
    any sum up to the sum sought by the applicant is somewhat more nuanced
    in our court’s approach to quantification. In Ultramarine, Gonsalves JA declared that:”

    29

     

    “As a general principle, the amount of security ordered on an
    application for security for costs is fixed by reference to the
    probable costs of the action. A calculation of the probable costs of
    the action is dependent on the applicable costs regime. In awarding
    security for costs a judge must exercise his or her discretion within
    the parameters of the applicable costs regime. The applicable costs
    regime must mean the specific regime that applies to the case at the
    date of the application- not any of the alternative regimes that might
    have otherwise applied had an application been made to apply any one of
    them. In this case, at the tirne of the security for costs application,
    the applicable costs regime (at least for the substantive claim) was
    undoubtedly the prescribed costs regime as stipulated by CPR 65.5(1).”

    [68] It would therefore appear that as a first step the court is
    required to determine the applicable sum based on the costs regime set
    out in CPR65. Indeed this was the instruction of our Court of Appeal as
    far back as the case ofNext Level Engineering Services Ltd. v the Attorney General et al”. The applicants
    acknowledge in Mr. Mitchell’s reply to the Wade affidavit that the
    court is required to approach the matter in the manner directed by the
    Court of Appeal in Ultramarine and Next Level Engineering Services Ltd. At paragraph 3 of
    the Mitchell reply to the Wade affidavit he states that the sum
    requested as security was “derived from a simple mathematical calculation of the value
    of the Respondentls claimant’s claim and is based on the

    prescribed costs formula set out in the Civil Procedure Rules.'”‘

    This is no doubt a correct assertion. However, as Lord Peter Gibson
    observed in his fifth proposition inKeary Developments and as accepted by Gonsalves JA in Ultramarine, the court is not constrained to give the
    sum requested by the applicants. CPR 24.2(4) itself prescribes that the
    court can give an amount that it sees fit. In Ultramarine Gonsalves JA found it proper in all the
    circumstances to exercise the discretion to award 50% of

    ” ANUHCVAP 2016/0004 at paragraph 49. See also Next Level Engineering
    Services Ltd. vThe Attorney General et al ANUHCVAP2007/0017

    “ANUHCVAP2007/0017

    30 Supra, note 4

    30

     

    the prescribed costs as security . I think that 50% is an appropriate
    figure to adopt on this application.

    Conclusion

    [69] I therefore award the applicants the sum of USD138,195.82 as security
    for costs. I award the applicants the sum of $3000.00 as costs on this
    application. GCDL has 60 days from today’s date to pay both of these
    awards. The claim is stayed until both awards are paid. If GCDL fails to
    pay both awards as ordered, the claim will stand as struck out with costs
    to the applicants, if not agreed, to be assessed.

    Raulston LA Glasgow

    By the Court

    31

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