M V Yorke Motors v Edwards: HL 1982

A sale of a second hand Rolls Royce had gone wrong. The plaintiff was claiming damages of 23,250 pounds. The plaintiff sought Order 14 summary judgment. That was refused, and the Master gave leave to defend without any conditions. The plaintiff appealed to the High Court which again refused summary judgment, only gave leave to defend conditional on the defendant paying pounds 12,000 into court. The defendant was receiving legal aid with a nil contribution, he was unemployed, and he was receiving supplementary benefit, and he could not meet the condition. The Court of Appeal allowed the appeal on the basis of a concession that a condition with which the defendant could not comply was equivalent to judgment for the plaintiff, and such a condition ought not to be imposed and substituted a condition that the defendant should pay pounds 3,000 into court. The evidence suggested that the defendant himself did not have pounds 3,000, but the court made the common sense assumption that he was likely to have relatives and friends who, if he was putting forward his defence in good faith, would be willing to help him to that more modest extent.
Held: Their Lordships dismissed his appeal. As to an order for security for costs, ‘If the sum ordered to be paid as a condition of granting leave to defend is one which the defendant would never be able to pay, then that would be a wrongful exercise of discretion, because it would be tantamount to giving judgment for the plaintiff notwithstanding the court’s opinion that there was an issue or question in dispute which ought to be tried.’ The court should take into account the fact that a litigant pleading impecuniosity ‘may have funds, he may have business associates, he may have relatives, all of whom can help him in his hour of need’.
Lord Diplock set out a proposition in the respondent’s case: ”(i) Where a defendant seeks to avoid or limit a financial condition by reason of his own impecuniosity the onus is upon the defendant to put sufficient and proper evidence before the court. He should make full and frank disclosure.
(ii) It is not sufficient for a legally aided defendant to rely on there being a legal aid certificate. A legally aided defendant with a nil contribution may be able to pay or raise substantial sums.
(iii) A defendant cannot complain because a financial condition is difficult for him to fulfil. He can complain only when a financial condition is imposed which it is impossible for him to fulfil and that impossibility was known or should have been known to the court by reason of the evidence placed before it.’ and continued ‘I see no reason to dissent from those submissions. They summarise conveniently the reasons why the judge and the Court of Appeal made leave to defend conditional upon the provision by Mr. Edwards of security in the sums that they respectively ordered.’
Lord Diplock
[1982] 1 WLR 444, [1982] 1 All ER 1024
RSC Ord 14
England and Wales
Cited by:
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CitedGoldtrail Travel Ltd v Onur Air Tasimacilik As SC 2-Aug-2017
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Updated: 05 March 2021; Ref: scu.183133