Apsara Restaurants (Barbados) Ltd v Guardian General Insurance Ltd
| Jurisdiction | Barbados |
| Judge | Goodridge JA,Gibson CJ |
| Judgment Date | 18 May 2016 |
| Neutral Citation | BB 2016 CA 10 |
| Docket Number | Civil Appeal No. 15 of 2013 |
| Court | Court of Appeal (Barbados) |
| Date | 18 May 2016 |
Court of Appeal
Gibson, C.J.; Mason, J.A.; Goodridge, J.A.
Civil Appeal No. 15 of 2013
Mr. Alair P. Shepherd QC for the appellant.
Mr. C. Anthony Audain and Mr. Brian Barrow for the respondent.
Civil practice and procedure - Application by the respondent for an order for security for costs in an appeal — Whether the court should order the appellant to provide security for the respondents costs of the appeal — Whether the order should extend to the costs which were awarded by the High Court — Whether the appellant's failure to pay the high court costs as ordered would impede the course of justice.
This is an application by the respondent for an order for security for costs in an appeal.
During the month of August 2006, the appellant, a limited liability company incorporated under the Companies Act, Cap. 308 (Cap. 308), opened two restaurants known as “Apsara” and “Tamnak Thai” in rented premises at Morecambe House, Worthing in the parish of Christ Church.
On 5 April 2007, the appellant effected a policy of insurance with the respondent, a limited liability company incorporated under the laws of Trinidad and Tobago, registered as an external company under Cap. 308 and which conducts the business of insurance underwriting in Barbados. Under that policy, the respondent agreed to insure the appellant against loss or damage by fire at the appellant's place of business.
Sometime in the early hours of the morning of 27 August 2007, a fire occurred at the restaurants which destroyed the leasehold improvements, furniture, effects and other equipment and stock in trade. The appellant made a claim for loss under the policy which the respondent refused to honour.
On 6 March 2008, the appellant filed a claim against the respondent seeking to recover the sum of $6,092,696.60 in relation to the losses which resulted from the fire. The matter was heard by Crane-Scott J, who dismissed the claim on 25 October 2013 with reasons to be provided at a later date.
The appellant filed a notice of appeal against that decision on 11 November 2013.
The judge gave her reasons in a written decision on 31 December 2014, and awarded the respondent costs certified fit for two attorneys- at-law, to be assessed if not agreed.
On 6 May 2015, the respondent filed an application for security for costs. That application was supported by the affidavit of Nigel Adams, Executive Manager of the respondent.
When the matter came on for hearing on 4 June 2015, the respondent sought and obtained leave to file an amended application.
In the amended application filed on 8 June 2015, the respondent sought an order that:
“1. Pursuant to rule 62.17 of the Supreme Court ( Civil Procedure) Rules, (the CPR) that the appellant pay into Court the sum of $117,975.65 together with Value Added Tax thereon of $20,645.74 (or provide a bond from an acceptable commercial bank in Barbados in favour of the respondent to cover such security) as security for the costs of the respondent in these proceedings.
2. Pursuant to rule 65.7(1)(a) to (d) of the CPR that the appellant pay to the respondent the sum of $88,612.06 in respect of its expert costs.
3. The appellant pay to the respondent agreed costs in the amount of $176,963.48 together with Value Added Tax thereon of $30,968.61 as ordered by the High Court in the proceedings below.
4. Pursuant to Rule 24.5 of the CPR that unless the appellant pay into Court (or provide a bond from an acceptable commercial bank in Barbados in favour of the respondent to cover such security) the security for the costs of the respondent in these proceedings sought in paragraph 1 above within 14 days of the date of such Order, that these proceedings be stayed until such time as security for costs is provided.
5. Unless the appellant pays to the respondent the agreed costs as ordered by the High Court in the proceedings below together with its experts' costs, that these proceedings be stayed until such time as the appellant pays such costs.”
According to Mr. Adams' affidavit, the appellant has agreed the costs as ordered by Crane-Scott J but has failed and/or refused to pay those costs. A request for payment was made to counsel for the appellant by letter of 13 March 2015. The costs remain unpaid. Mr. Adams also deposed that, according to advice received and his belief, the appellant's appeal does not have a substantial likelihood of success.
At the hearing, counsel for the parties made oral submissions to the Court. The parties then requested and were granted leave to file written submissions relating to the issue of contempt and the matter was adjourned to 3 July 2015. Those submissions were duly filed by both counsel.
The issue which arises for the Court's determination is whether the Court should order the appellant to provide security for the respondent's costs of the appeal; and if such order is made, whether that order should extend to the costs which were awarded by the High Court (inclusive of expert costs).
At the outset, Mr. Shepherd, QC, counsel for the appellant, conceded that the respondent is entitled to security for costs of the appeal. Counsel indicated that the costs awarded in the High Court have been agreed in the sum of $176,000.00 plus VAT and he was prepared to accept a total figure of $180,000.00. Mr. Shepherd QC informed the Court that his client wished to produce a bond, and identified the bank as the Republic Bank.
In response, Mr. Audain, counsel for the respondent, informed the Court that the precise figure agreed for costs below is $176,963.48 plus VAT giving a total of $207,932.89. If the appeal is dismissed and the respondent is awarded costs, that figure could not be more than two-thirds of the amount below, according to rule 65.15 of the Supreme Court ( Civil Procedure) Rules, 2008. Therefore two- thirds of the costs exclusive of VAT is $117,975.65.
The appellant was unsuccessful in the court below and has now exercised its right to appeal against the decision of Crane-Scott J.
Section 61(1)(h) of the Supreme Court of Judicature Act, Cap. 117A (Cap. 117A) provides that for all the purposes of and incidental to the hearing or determination of an appeal, this Court may, in special circumstances, order that such security be given for the costs of an appeal as appears just.
Rule 62.17 sets out the principles to be applied by this Court when it is considering an application for security for costs.
Mr. Shepherd QC has conceded that this Court ought to exercise its discretion in favour of the respondent and order security. In all the circumstances, this Court, in the exercise of its discretion under section 61(1)(h) and rule 62.17 considers that it is just to make the order for security for the costs of the appeal.
Mr. Audain submitted that the evidence in the court below as to financial difficulties being experienced by the appellant has raised doubts about the appellant's ability to meet any costs that may be awarded against it.
He referred to the fact that the appellant has failed to satisfy the costs ordered by the High Court. This failure, he submitted, amounted to contempt which must be purged before the appeal can be heard. He cited Dino Trading and Services Pte Ltd et al v. Steven Steel Supply Civil Appeal No 3 of 2000 ( Dino Trading); Midland Bank Trust Co Ltd v. Green [1979] 2 All ER 193 (Midland); Hadkinson v. Hadkinson [1952] 2 All ER 567 (Hadkinson) and Isaacs v Robertson (1984) 43 WIR 125.
Mr. Audain submitted that the general rule is that a party in contempt cannot be heard or take part in proceedings in the same cause until he has purged his contempt; nor while he is in contempt can he be heard to appeal from any order made in the cause. This rule is, however, subject to exceptions.
Counsel also submitted that, even in cases where the rule is prima facie applicable, a court appears to retain a discretion whether or not to hear the party in contempt, and may in its discretion refuse to hear a party only on those occasions when the contempt impedes the course of justice and there is no other effective way of enforcing his obedience.
Mr. Audain submitted further, that while the Court is expressly permitted to make an order for security for costs in an appeal under section 61(1)(h) of Cap. 117A, a reading of section 61(g) and (i) leads to the view that the Court could make any order as it relates to the payment of costs relative to proceedings in the original court. He was therefore satisfied that this Court was not constrained from staying the appeal until such time as the appellant has complied with the order of the High Court.
Mr. Shepherd QC countered Mr. Audain's submissions by submitting that:
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(i) the appellant is not strictly in contempt as the disobedience is not an order for payment;
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(ii) the appellant is not seeking to make an application but to appeal;
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(iii) the respondent has open to it the process of execution and therefore the stay is not the only method of ensuring compliance and is not necessary to ensure that justice is achieved.
He acknowledged that the principle on which the respondent relies is that stated by Romer LJ in Hadkinson. However Mr. Shepherd QC noted that Denning LJ stated that principle in more qualified terms and his approach was preferred by Oliver J in Midland.
It was Mr. Shepherd QC's further submission that none of the authorities cited by Mr. Audain addresses a situation where a litigant is exercising a right of appeal.
In conclusion, Mr. Shepherd QC submitted that the cases cited by Mr. Audain involved...
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Angela Yvonne Harewood v Homesites Barbados Ltd
...is an interlocutory application. This has been firmly established in Apsara Restaurants (Barbados) Ltd v Guardian General Insurance Ltd BB 2016 CA 10. CPR 65.11. In CGI Consumer Guarantees Insurance Company Limited v Trident Insurance Company Limited BB 2016 CA 6 ( CGI v Trident), at para [......