Cyprus court dismisses security for costs application against foreign crew creditors in bankruptcy appeal.

[*294] 1982 June 18

(ARTEMIS, S.D.J.)

IN THE DISTRICT COURT OP LIMASSOL

In the matter of the Companies Law, Cap. 113,

and

In the matter of Jacaranda Shipping Company Ltd.,

(Petition No. 75/78).

Costs - Security for costs - Bankruptcy proceedings - Alleged Creditors' appeal against the decision of the Official Receiver and Registrar to reject their proof in bankruptcy - Discretion of the Court to order security of costs - Principles applicable.

A. Serghides for Messrs. P.L. Cacoyiannis & Co., for the Applicants.

M. Michaelidou, (Mrs.), for the Respondents.

RULING

The following ruling was delivered by:-

ARTEMIS, S.D.J.:- This is an application [*295] by the Official Receiver and Registrar for security for costsin an appeal by the alleged creditors against his decision toto reject their proof in bankruptcy.

The Application is based on Order 60, Rules I and5 of the Civil Procedure Rules as no special provision forsecurity for costs is made in the Bankruptcy Rules and theCivil Procedure Rules apply where no special provision ismade in the aforesaid Rules.

Order 60, rule I gives discretion to the Court toorder security for costs in cases of plaintiffs who are notordinarily resident in Cyprus. That the power of the Courtis discretionary is not the subject of dispute and, whilstCounsel for the Applicants argued that the Application shouldbe granted as the Applicants are foreign residents, that is,the captain and the members of the crew of a ship, Counselfor the Respondents addressed the Court at length showingwhy the discretion of the Court should not be exercised infavour of the Applicants, citing a number of authorities inthe process.

Before dealing with this, which is the gist of thematter, I first consider it necessary to dispose of theargument for the Applicants that the proofs were rightlyrejected by the Registrar as only the captain swore to themand none of the remaining crew. On this point I would haveto say that I have no evidence before me in this Applicationand, on the other hand, this is a matter going to the meritsof the main Application, something that should not be goneinto at this stage. In the circumstances, I find this argument untenable. [*296]

By the English Bankruptcy Act, 1883, power was given to the Court to order security for costs but there was special provision as to proceedings of this kind. The discretion pursuant to the Rules made thereunder was not exercised in favour of granting security for costs. (See the decision in re Vanderhaege, Ex parte Izard 20 K.B.D. 146)·The rules prevailing now in England are those made pursuant to the Bankruptcy Act, 1869 in which there is no provision with respect to giving security for costs. But, even so, as it was held in Re Semenza, Ex parte Paget (1894) I K.B, 15:

“……..there can be no doubt that there is ample jurisdiction in the Court to order security to be given."

The Court in this case refused to grant security for costs in similar proceedings and the following was said at p. 22:-

"the course taken by the legislature in inserting those special provisions in the rules made under the Act of 1883 is a good guide to us in exercising our discretion under the Act of 1869, and warrants us in saying that security ought not to be ordered where the circumstances are such as exist here."

The gist of the decision in this case is that security ought not to be ordered in these circumstances except in cases of a peculiar nature.

Although the legal provisions are not the same in Cyprus, the state of affairs in England as regards the [*297] exercise of the Court's discretion forms a weighty guidance upon which this Court should base itself in deciding the matter. In addition, it appears from the affidavit of the Respondents that three of the members of the crew who seek to prove their debt are ordinarily resident in Cyprus. In the case of D’Hormusgee & Co. and Isaacs & Co. v. Grey (1882) IO Q.B. 13, an action was brought against the defendant asa common carrier by two plaintiffs, one residing abroad. The Statement of Claim alleged a contract by the defendant with the plaintiffs jointly and, in the alternative, with each of the plaintiffs separately, and it was held that the plaintiff residing abroad could not be ordered to give security for costs. The Court held that the right to costs which is given to the defendant is evidently confined to a joint claim properly so called, and does not extend to a case where though there is only one Statement of Claim, each plaintiff is really suing separately. As it was further said at p. 16 :

"Now here the 'persons joining' are the persons who bring the action, who act by one solicitor, and who speak of themselves as 'the plaintiffs', though they allege that each of them has a separate right. This is not a case in which a separate action is brought by either of them independently of the other, so as to warrant us in departing from the ordinary rule as to security for costs in the case of joint plaintiffs, one of whom resides abroad".

(See also Winthorp v. Royal Exchange Assurance Company (1755) I. Dick.282; Jones v. Gurney (1918) W.N. 72). [*298]

In the circumstances, bearing in mind the English authorities on the matter regarding the exercise of the discretion of the Court in similar circumstances and the principles regarding joint plaintiffs, in my judgment my discretion should not be exercised in favour of the Applicants. Therefore, the Application for security for costs is dismissed. The question of costs of the Application is reserved.

Application dismissed.