Reference:  EWHC 231 (QB)
Court: Queen's Bench Division
Judge: Eady J
Date of judgment: 7 Mar 2006
Summary: Security for costs - non-Brussels Convention national - Romania - adjournment - equality of arms - effect of judgment having been entered against a claimant by the time of the appeal
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Instructing Solicitors: Carter-Ruck for the Claimant; Tarlo Lyons for the Defendants
The Defendant applied to the Master for security for costs for the additional costs that would arise from enforcing a costs order against the Claimant in Romania, where he resides. At the hearing the Claimant applied for an adjournment because he did not have time to respond to evidence served by the Defendant, including expert evidence, shortly before the hearing. The Claimant wanted time to submit evidence in response. The Master refused an adjournment and ordered that unless the Claimant paid £125,000 in security judgment would be entered against him. The Master granted permission to appeal on limited grounds but refused to grant a stay of the unless order pending appeal.
(1) Should an adjournment have been granted? (2) What security would have been ordered following an adjournment during which the Claimant could have submitted the relevant evidence? (3) Whether, because judgment had been entered against the Claimant by the time the appeal was heard, success in the substantive appeal should lead the court to set aside the judgment granted for the Defendants in the meantime.
(1) The Master had erred in refusing an adjournment in order to allow the Claimant to respond to the late evidence of the Defendant and, in consequence, the hearing had not been fair; there had not been equality of arms. (2) The appeal court would conduct a re-hearing taking into account all of the evidence which had by now been served by the parties. (3) The additional cost of enforcing in Romania (over and above enforcing in a Brussels Convention country) was £80,000 not £125,000. (4) However, this was of no meaningful consequence as, prior to the appeal, judgment had been entered against the Claimant further to the Master’s unless order for not paying the amount ordered by way of security. There was no basis on which that judgment could be set aside.
This case demonstrates that even following the introduction of the principle that a non-Brussels Convention resident need only pay the costs which would be additional to those of enforcement if he were a Brussels Convention resident (see Nasser v Bank of Kuwait  EWCA Civ 556), those costs may still be prohibitively high. The victory in securing the reduction in the amount of security was however both Pyrrhic and academic.