The plaintiff had obtained a Mareva injunction, later discharged by agreement. The defendant sought an inquiry as to damages on the cross-undertaking given when the injunction was granted, alleging that it had suffered substantial loss. The hearing of that application was expected to last some 5 days and the plaintiff applied under s726 for an order for security on the grounds that the defendant would be unable to pay any costs awarded against him.
Held: Order 23 (together with s726) provided a complete and exhaustive code as regards the award of security and excluded the possibility of relying on inherent jurisdiction to award security against a defendant. It stated also that, if another category of case emerged in which it was felt that security should be available, it had to be provided for by legislation. A court might be persuaded to impose a term requiring the giving of security as an earnest of good faith if it were in real doubt as to the genuineness of the defendant’s claim, but that this possibility would only be available in an extreme case and should not be regarded as letting in by the back door a general inherent jurisdiction to order security which does not exist.
Judges:
Dillon LJ, Millett LJ
Citations:
Independent 14-Jul-1994, Gazette 07-Sep-1994, Times 28-Jun-1994, [1994] 2 Lloyds Rep 567
Statutes:
Companies Act 1985 726(1), RSC Order 23
Jurisdiction:
England and Wales
Cited by:
Cited – Abraham and Another v Thompson and Another CA 24-Jul-1997
The plaintiffs appealed an order that they should disclose who if any had funded their case. The case concerned failed business ventures in Portugal. . .
Lists of cited by and citing cases may be incomplete.
Litigation Practice
Updated: 08 April 2022; Ref: scu.79704