QB-2022-000681 - [2025] EWHC 2744 (KB)

Discussion and decision

The starting point is whether there is a basis for the Stacey J Order to be revoked or varied under CPR 3.1.7.

It is not in issue that there has been, to some degree, a material change of circumstances since the Stacey J Order. The material change of circumstances arises from the withdrawal of the non-admission in relation to the validity of the extension of the PdV. The parties are now agreed that there is no longer a need for expert evidence in relation to Cameroonian law following the Defendants’ withdrawal of its non-admission in paragraph 44.3(i) of its Defence. To that extent, but to that extent alone, the 16 August 2025 application succeeds in that the amount of the security for costs should be varied. As noted at the outset of the judgment in the course of the hearing it was agreed that it should be reduced by £74,000.

However, I do not accept the Claimant’s argument that there has been a change of circumstances because it can now establish a high degree of probability of success such that the Stacey J Order should be revoked. My reasons are as follows.

First, Stacey J made it clear in her judgment that she was not considering the merits of the claim when determining whether to make an order for security for costs: see the Stacey J judgment at [39]-[40]. The Judge noted that the investigation of the merits of the case on an application for security for costs is strongly discouraged. As Stacey J held, the merits of the claim will require detailed investigation of evidence and law. That is precisely why the investigation of the merits is deprecated “except in the clearest of cases.” That has been the long-established position – see for example Chernukhin v Danilina [2018] EWCA Civ 1802 at [69] and Porzelack KG v Porzelack (UK) Ltd [1987] 1 W.L.R. 420 (per Sir Nicholas Browe-Wilkinson VC). It is also open to question whether it would ever be appropriate to focus on a selected aspect of a case in the way the Claimant has sought to do by reference to the extension of the PdV (see [42] of In the matter of AUGER INVESTMENTS PLC Concept Elite Inc v Thames Enterprises Ltd & ors (2012] EWHC 94 (Ch); per Warren J).

As noted by Stacey J, paragraph 4 of Appendix 10 to the Commercial Court Guide states:

“Investigation of the merits of the case on an application for security is strongly discouraged. It is usually only in those cases where it can be shown without detailed investigation of evidence or law that the claim is certain or almost certain to succeed or fail that the merits will be taken into consideration.”

The position in relation to merits remains the same as it was before Stacey J. The Claimant has not been able to show a “high degree of probability” that it will succeed. In spite of Mr Maguire’s efforts, I am wholly unpersuaded that because the Defendants are now no longer pleading a non-admission of validity in respect of the extension of the PdV that there is a high degree of probability that it will succeed at trial. Such a submission would require detailed consideration of evidence and law that would propel the hearing before me into a mini-trial. Mr Maguire’s submission that there were now a number of further potential claims (as yet unparticularised) open to the Claimant served only to underline the fact a detailed investigation would be required before the court could come in any way close to concluding a high degree of probability of success.

The validity of the extension of the PdV was clearly of some significance as the parties agreed that it required expert evidence as to Cameroonian law. It seems to me however on the pleaded cases far from being a decisive aspect of the case, shown most clearly by dint of the fact that the Defendants were not advancing a positive case as to whether or not it had been validly extended. Their position had been a non-admission as to its validity. The decisive aspect of the defence seems to me to be paragraph 32 of the Defence.

Secondly, the alleged failure of the Defendants to alert the Claimant to the letter from the notary is irrelevant to the question of whether the Claimant can now establish a high degree of probability of success. Even if it was arguably relevant, then the argument seems to me to be mis-conceived. There is no duty on a party in private law to alert the other party to relevant material (c.f. the position in public law proceedings: see Tweed v Parades Commission for Northern Ireland [2006] UKHL 53; [2007] 1 AC 650). Moreover, the Defendants pleading a non-admission of the validity was properly open to the Defendants for the reasons explained at the hearing (see paragraph 46 above). The Claimant’s allegations of “turpitude” are misplaced. It cannot reasonably be argued that the Defendants had “mis-stated” the facts to Stacey J.

Thirdly, the notarised letter accompanying the extension to the PdV was available to the Claimant by the time of the hearing before Stacey J. It was disclosed on 1 May 2025. If, contrary to the foregoing, it could establish that the Claimant had a high probability of success then it was “knowable” (to use the language of Tibbles at [39(v)]). It could have been deployed at that hearing.

Should the costs order made by Morris J be varied pursuant to CPR 3.1.7?

The parties’ submissions

The Claimant argued that the costs order made by Morris J should be varied so that there should be detailed assessment of the Claimant’s costs. As noted above, Morris J had ordered a payment on account of costs on a conservative basis of what would be received on detailed assessment. Mr Maguire argued that at detailed assessment the costs judge would allow an hourly rate of at least £400 per hour and arguably nearer to £700 per hour.

After the hearing had concluded, the Claimant filed a witness statement from Dr Nasah in which it was stated that Master McCloud had allowed £400 per hour in respect of the Claimant’s costs. The Defendants did not object to the admission of the statement but argued that it was factually incorrect as the Master had in fact been assessing the Defendants’ costs rather than the costs of the Claimant.

I asked Mr Maguire how long it might take for detailed assessment to take place and what its effect might be on the trial timetable. He stated that it might necessitate losing the trial date. Later he argued that it might still be possible to keep the trial window if the trial took place at the end of the trial window.

Mr Maguire relied on the Court of Appeal’s judgment in Koza Ltd and Hamdi Akin Ipek v Koza Altin Islet Meleri AS [2020] EWCA Civ 1263, (“Koza”). In Koza Popplewell LJ said at [14] of his judgment:

“The appellants argue that there is no basis for departing from the general rule articulated in CPR 47.1 that detailed assessment is to take place after conclusion of the proceedings; and that the principles behind that general rule apply in this case, namely avoiding time and cost being spent whilst the proceedings are progressing, avoiding multiple detailed assessments, and having an assessment which can take account of set-offs of different costs orders. I agree. The only justification for immediate assessment would be if there were an imperative for an immediate payment of the excess (if any) over the payment on account of costs. There is no such imperative in this case.”

Mr Maguire submitted that there was an “imperative” in this case because of the need to meet the security for costs. However, Mr Maguire properly drew my attention to the judgment of David Richards LJ (as he then was) in Shergill and others v Khaira (No 2) [2017] EWCA Civ 1687; [2017] 1 WLR 175 where reference was made at [17] of the judgment to the fact that “Paragraph 1.4 of 47PD provides that a costs judge may make an order allowing detailed assessment proceedings to be continued where there is no realistic prospect of the claim proceeding.”

The Defendants argued that the order should not be varied. Stacey J had expressly taken into account the costs liability arising from the hearing before Morris J when she had set the amount of the security for costs. Nothing had changed since then. There was no basis under CPR 3.1.7 to vary the order that had been made by Morris J. Ms O’Sullivan KC also pointed to the fact that it would lead to the loss of the trial date. In any event, it was not accepted that detailed assessment would lead to the Claimant recovering sufficient funds to meet the security for costs.