Court orders security for costs against foreign plaintiffs with no local assets in Cyprus admiralty action.

[*1] 1981 February 28

(DEMETRIADES, J.)

IN THE SUPREME COURT OF CYPRUS

ADMIRALTY JURISDICTION

Eddy Breidi and Another,

Plaintiffs,

v.

The ship “GLORIANA” and Others,

Defendants,

(Admiralty Action No. 13/80).

Admiralty - Practice - Costs - Security for costs - Plaintiffs residing abroad and having no property in Cyprus - Claim for breach of contract - Discretion of the Court to order security for costs - Rule 185 of the Cyprus Admiralty Jurisdiction Order, 1893

- Whether security furnished for arrest of ship can be considered as payment into Court for purpose of security for costs.

Admiralty - Practice - Costs - Interlocutory proceedings - Whether costs to be paid at the end of the trial.

L. Demetriades with St. Nathanael, for the Applicants.

D. Demetriades, for the Respondents.

RULING

The following ruling was delivered by:-

DEMETRIADES, J.: The defendants in their [*2] application pray for:

“A. An Order of the Court ordering the payment by the plaintiffs to defendants’ 2 & 3 advocate the costs already adjudged in their favour and against the plaintiffs and the costs of this application to be assessed by the Registrar.

B. An Order of the Court ordering the plaintiffs to furnish security for the costs., of defendants; 2 & 3 in the sum of C£3,000.-.

C. An Order of the Court ordering the stay of the proceedings until the above orders are satisfied and if they are not satisfied within 15 days the action to stand dismissed.

D. Further or other relief.

E. Costs.”

The application is based on Rules 185 and 203 - 212 of the Cyprus Admiralty Jurisdiction Order 1893 and the inherent jurisdiction and powers of the Court.

The plaintiffs oppose the application.

The plaintiffs are residents abroad and their claim is:

“A. The equivalent amount, in Cyprus Pounds of the sum of U.S. Dollars $1,000,000.00 as damages for loss for non-delivery of cargo, and/or for breach of contract of affreightment and/or for negligence [*3] and/or for breach of contract of carriage and/or for breach of contract for the sale of goods now loaded on Defendant ship and/or otherwise on or about 14.1.1980.

B. Interest at 9% per annum as from 4.1.1980 to final payment.

C. The costs and expenses of this action and of all proceedings herein.”

The application of the defendants-applicants is relied upon facts that are, as they say in their application, apparent on the face of the record and are that the plaintiffs are not residents in Cyprus and they have no property here.

The fact that the respondents do not reside in Cyprus and have no property here is not denied by them. In fact both plaintiffs are described on the writ of summons as coming from Beirut. In the affidavit filed on their behalf in support of their opposition, the respondents claim that the defendants are not entitled, to an order for security for costs on a number of grounds, all of which - except one - have not been argued during the hearing of this application and I, therefore, consider that they have been abandoned.

As I have earlier said, the application is based on Rule 185 of the Cyprus Admiralty Jurisdiction Order 1893, which reads:

“If any Plaintiff (other than a seaman suing for his wages or for the loss of this clothes and effects in [*4] a collision) or any Defendant making a counterclaim is not resident in Cyprus, the Court or Judge may, on the application of the adverse party, order him to give such security for the costs of such adverse party as to the Court or Judge shall seem fit; and may order that all proceedings in the action be stayed until such security be given.”

Turning now to the words of the Rule, the important word is “may”. In my view, this word gives the Judge a discretion whether to order security for costs which should be exercised in all circumstances of the case. This view of mine is shared by a number of my brother Admiralty Court Judges (see (1) Farah Hassan ASHOUR v. CLAUDIA MARITIME Co. Ltd. (1980), 1 C.L.R. 64; (2) Hesham Enterprises v. Ship Rami, (1978) 1 C.L.R 195) and is supported by English authorities interpreting Order 23 Rule 1 of the Rules of the Supreme Court of England, a provision which, as Triantafyllides P. said at p. 198 in the case of Hesham (supra), though differently worded from our Rule 185, is sufficiently similar with our Rule in material respects.

The argument put forward by the plaintiffs why the order should not be made is that they have deposited in Court a bank guarantee in the sum of C£75,000.- and that if any costs are awarded against them, the defendants can recover same from that guarantee.

This bank guarantee is, in the submission of counsel for the plaintiffs, a substantial payment by them [*5] into Court and being so and in the light of the judgment in Sir Lindsay Parkinson & Co. v. Triplan Ltd., (1973) 2 All E.R. 273, the Court should not acceed to the application of the defendants.

The back guarantee, however, was furnished in compliance with an order made by the Court on an application by the plaintiffs for the arrest of the ship and her cargo and it only covers damage which may be caused to them as a result of the arrest, but it does not provide for the payment of any costs which may be awarded to the defendants in the event the plaintiffs fail in their action against them. It cannot, therefore, in my opinion, be considered as a payment into Court for the purposes of this application.

Considering now all circumstances of the case, including the nature of the claim, I have reached the conclusion that this is a proper case in which to order the plaintiffs to give security for costs.

The second point that falls for

decision is what should be the amount of the security. Defendants 2 and 3 claim that this should be £3,000.- but they have not explained why the amount of the security should be so high.

Having made a rough estimate of what the costs might eventually be, I have come to the conclusion that the security for costs which the plaintiffs-respondents should give in favour of defendants

2 and 3, must be for the sum of £1,000.-. [*6]

The last point to be. decided is whether I should make an order that costs which have already been awarded in favour of the defendants in any interlocutory or other matter, or which may be awarded in the future in these proceedings, be paid at the end of the trial. I have not been persuaded why I should make such an order.

In the result, I make an order that the respondents should give security for costs in the sum of £1,000.- and that in the meantime all proceedings in the action should be stayed until the security is given. If the security is not given within two months from today, the defendants shall be at liberty to apply to have the case dismissed unless otherwise ordered in the meantime.

Application granted.

Security for costs in

the sum of £1000.-

to be given by respondents.