High Court

Trinidad and Tobago

CV 258 of 2013

Global Dynamics Limited

and
Intercommercial Bank Limited
February 3, 2014

Seepersad, J.

Civil practice and procedure - Costs — Whether the application can be made at the Pre-Trial Review
stage — Whether the application made pursuant to part 67.6 of the CPR was made too late — language
of the rule 67.6(1) permissive rather than mandatory — Factors that must be considered when
stipulating the value of the claim — Overriding objective — Security for costs — Court must undertake
a balancing exercise — Part 25, 26, 39 and 67 of the Civil Procedure Rules — Costs awarded.

Appearances:

1. Mr. Douglas Mendes S.C. and Mr. Michael Quamina instructed by Ms. Gopeesingh for the claimant

2. Mrs. Lynette Maharaj S.C. and Mr. Prakash Deonarine instructed by Ms. D. Ramnanan Maharaj for the
defendant

Seepersad, J.
Before the Court for its determination are two applications filed on behalf of the defendant, namely:

i. An application for security for costs filed on the 19th November, 2013.
ii. An application filed pursuant to Part 67.6 and Part 67.12 of the Civil Proceedings Rule (1998) as
amended (the CPR) filed on the 21st January, 2014.
In the latter application, an order is sought for the costs of the instant claim to be calculated at a rate higher
than is provided for under the CPR and in the alternative an order for costs to be assessed under Part 67.12
of the CPR.

The Court proceeded to determine the latter application first as its decision in relation to the applicable
quantum of costs would be relevant when determining the security for costs application.

The first issue to be considered is whether the application filed on the 21st January, 2014 can be made at
this stage. By order dated 17th September, 2013, this Court fixed the matter for a Pre-Trial Review.

a. Part 39 of the CPR deals with the Pre Trial Review (PTR) and Part 39.3 provides that the rules
relating to a CMC applies to a PTR and in accordance with Part 39.6 the Court must give directions as
to the conduct of the trial in order to ensure that there is a fair, expeditious and economic trial of the
issues before the Court.
b. At a PTR the Court is still vested with all its CMC powers as set out at Parts 25 and 26 of the CPR.
c. Having determined that the instant matter was at a PTR stage when the application was filed on the
21st January, 2014, the Court had to determine whether the application which is made under Part 67.6
of the CPR, had been made too late.
The language used in Part 67.6 (1) creates a permissive rather than mandatory circumstance. In Denisha
Mayers v. Andy Derrick & Others CV 2011-03655, Kokaram, J. at paragraph 15 (b) stated:

The rule 67.6 application may be made at a CMC. The language of the rule 67.60)
as to when the application is made is permissive. It is not mandatory and does not
restrict the making of such an application after a CMC. Barrow, J.A. made that
observation in Noel v. First Caribbean International Bank (Barbados) Ltd.,
Grenada Civil Appeal No. 29 of 2006 …. It presumes however that this
determination of the value will take place before a trial.

Denisha Mayers was however, a case in which the judge held that the matter before him was not one in
which Part 67.5(2)(b)(iii) applies. It should be noted that Part 67.5(2)(b)(iii) was repealed by the Civil
Proceedings Amendment Rules (2011) and a new 67.5(c) was inserted which provides “if the claim is not
for a monetary sum, as if it were a claim for $50, 000.00”. The Court dealt with the situation where a sum
for the value of the claim had to be stipulated under Part 67.5(2)(b)(ii) of the CPR. The facts before
Kokaram, J. were different from those that operate in the instant matter and the learned Judge did not deal
with a situation in which a value for a claim had to be determined under Part 67.6(1)(a) of the CPR.

Attorney for the defendant directed the courts attention to the dicta of Barrow, J.A. in Noel v. First
Caribbean Grenada Civil Appeal No. 29 of 2006 and proposed that the said judgment stands as an
authority for the proposition that an application under Part 67.6 of the CPR can be made after a CMC.
Counsel for the claimant submitted that the said authority does not support the position that an application
made under Part 67.6 of the CPR can be made other than at a CMC.

The claim before Barrow, J.A. was a claim for a monetary sum and the equivalent to our Part 67.6(1)(a) of
the CPR did not apply in the circumstances of that case. The learned Justice of Appeal pointed out at
paragraph 18 that it was not necessary for him to consider whether an application under their equivalent to
our Part 67.6 of the CPR could be made other than at a CMC.

Barrow, J.A. had to decide whether for the purpose of a future determination of prescribed costs, the court
could pursuant to their equivalent of Part 67.5(2)(b)(ii) of our CPR, stipulate a sum as to the value of a
claim before a judgment and he expressed the view that the court could do so. The learned judge also noted
that there was nothing in the rule that limited the time within which the court could have made such a
stipulation. On the issue as to whether or not an application under Part 67.6 of the CPR could be made
other than at a CMC, there is in the opinion of this court, no binding authority.

This Court is of the view, that having regard to the permissive wording of Part 67.6(1) of the CPR and the
Court's powers at a PTR stage, it is open, subject to the discretion of the court and having regard to the
particular circumstances that operate in any given case, for an application under the said Part 67.6 of the
CPR to be made at any time prior to the final determination of the issues, whether at trial or by the consent
of the parties. The claimant submitted that the said rule does not fall under Parts 25 and 26 of the CPR so
as to be incorporated under the courts powers. This Court does not agree with the claimant's contention and
instead finds that the Court has far reaching powers under Parts 25 and 26 of the CPR. In our jurisdiction,
there exists a system of court controlled and directed litigation. It stands to follow, therefore, that if all
CMC powers are incorporated into the PTR, then the PTR is really no different from the CMC in terms of
the approach which the court must adopt.

The claimant further submitted that had the rules committee wished to incorporate CMC powers under Part
67.6 into the PTR hearings, then provision for the same would have been incorporated into Part 39. This
Court also does not agree with this submission by the claimant. There was no need for the powers under
Part 67.6 to be incorporated under Part 39. Part 67.6 specifically speaks to the nature of the application and
when it can be made. The making of the application under Part 67.6 cannot be controlled by the Court, but
rather is controlled by the parties. However, for the reasons outlined above the Court can exercise its
discretion and entertain the application even at a PTR stage. It must also be pointed out that the case
management procedure adopted in this matter was somewhat unusual in that the court afforded the parties
the opportunity to set timelines for the compliance with directions with the view of having an early trial of
the matter. There were in the circumstances no extensive case management hearings.

Part 67.6 of the CPR deals with two situations, one in which the claim has no monetary value and the other
where the ‘likely value’ is known, as a party wishes to have the prescribed costs calculated on a higher or
lower value provided that the Court is satisfied that costs as calculated in accordance with Part 67.5 of the
CPR are likely to be excessive or substantially inadequate under Part 67.6(2) of the CPR, taking into
account the nature and circumstances of the particular case.

The provisions of the CPR, are however silent as to the factors that ought to be considered in placing a
value on a claim that has no monetary value nor is there outlined the factors that ought to be considered in
arriving at a ‘likely value’ of the claim.

In the absence of such guidelines, the Court must be guided by the overriding objective as set out in Part 1
of the CPR and must consider the nature of the claim and counterclaim if any. In the instant matter the
claim seeks an order for specific performance of an agreement for sale, injunctive relief and an alternative
prayer for damages for Breach of Contract. In the counterclaim, declaratory reliefs are sought, as well as
an order for the payment of such sums as are found due to the defendant upon the filing of particulars and
accounts.

Counsel for the defendant submitted that because the claim for Breach of Contract is not particularized and
that on the counterclaim the prayer is for damages which are to be particularized, then it is not possible to
stipulate or determine a value for the claim and the prescribed costs regime does not apply and costs
therefore should be assessed under Part 67.12 of the CPR.

Counsel for the claimant submitted that no evidence was placed before the Court, by the claimant, as to the
value of any alternative portion of land, and that in the absence of such information, the Court will not be
able to make any award for damages for Breach of Contract. Counsel further submitted that there is no
evidence before the court upon which any assessment for damages for Breach of Contract can be made.

Counsel for the defendant directed the court to the case of Moorjani v. Kirpilani and ors CV 2007-00485
where Rajnauth-Lee, J., as she then was, formed the view that the particular case was not applicable for
prescribed costs and she ordered that costs should be assessed under Part 67.12 of the CPR. This court was
invited to hold that the instant claim is one in which no value can be properly stipulated and that the
provision of Part 67.12 of the CPR ought to be applied thereby adopting the approach taken by the court in
the Moorjani case. Counsel for the claimant submitted that in the said case, the learned judge did not
outline the reasons why prescribed costs was not deemed appropriate nor was there any explanation
advanced as to why the provisions of Part 67..3 of the CPR were not applicable. Counsel therefore
submitted that the said case ought not to be relied on in the manner as advanced by counsel for the
defendant. This Court in the circumstances of the instant case, is not prepared to follow the position that
was adopted in Moorjani.

This Court is of the view, that the instant claim is one which has no monetary value as the claim is for
specific performance. However, a value can be placed on same and this is not a case in which Part 67.12 of
the CPR is applicable.

The Court must therefore now determine the value that is to be placed on the claim. In the Denisha Mayers
decision, Kokaram, J. dealt with a different scenario under Part 67.5 (2)(b)(ii) of the CPR and at paragraph
16 outlined factors that must be considered when stipulating value of the claim. He listed the factors as:

(a) The sum is an assessment by the Court of the value of the claim.
 (b) The Court should identify the real dispute between the parties and stipulate a sum that is the value of
that claim.
(c) That assessment is made on the evidence before the Court. The Court is also entitled to examine the
pleadings, examine correspondence passing between attorneys, examine opinions on quantum filed or
exchanged between the parties any material which in the Court's view would have informed the parties
as to the value of the claim that the defendant had to defend
(d) The Court should not conduct a trial or an assessment of damages to determine this sum. To do so
would unnecessarily increase the expense of the proceedings and cause further delay.
(e) If the Court stipulates a sum as the value, the Court should proceed to exercise its discretion in the
quantification of the prescribed costs to ensure that the costs awarded is fair and reasonable. The Court
is therefore entitled to award a percentage of the costs calculated in accordance with the percentages in
Appendix B against the appropriate value or some lower percentage. In doing so the Court will take
into account the factors set out in rule 66.6 (4), (5) and (6).

This Court is of the view that the aforementioned factors can and ought to be considered when placing a
value on a claim under Part 67.6(1) of the CPR. In addition, the Court in fulfilling the overriding objective
should also be guided by the principles of proportionality and fairness.

The claim before the Court is one for specific performance of an agreement for sale and the Court of
Appeal in the interlocutory proceedings before it outlined the issues of law that arose on the pleaded case
of the parties. To resolve the issues in this case, the Court must essentially undertake a fact finding
exercise and it cannot be said that this is a matter, as heavily contested as it has been, which involves a
complexity of issues or novel areas of law. In the circumstances, in determining a value to be put on a
claim the Court must have regard to the fact that costs calculated on a prescribed cost basis on the value of
the claim placed by the Court, must be proportionate having regard to the nature of the matter to be
determined and reflective of the level of research and preparation that is required.

In the instant case, the value of the subject parcel of land must also be considered. There is no dispute
between parties, that the purchase price of the said piece of land is $16, 000, 000.00. What is disputed is
whether or not there exists an executed valid agreement for sale between the parties. If the claimant
succeeds on his claim, he will be afforded the opportunity to acquire the land for the price of $16, 000,
000.00 and if his claim is dismissed, the defendant would not be obligated to sell the land to the claimant
for the sum of $16, 000, 000.00.

In the circumstances the Court is of the view that if the value of the claim is fixed at $16, 000, 000.00, then
the cost calculated on a prescribed cost basis, which would be in the sum of $314, 000.00, would result in a
cost order that is fair and proportionate having regard to all the circumstances of the case.

Accordingly the Court places a value of $16, 000, 000.00 on this claim pursuant to the provisions of Part
67.6 (1) of the CPR.

With respect to the costs of this application, the Court has noted that the said application was filed after the
claimant's affidavit in response to the security for costs application, was filed and served. In the said
affidavit the claimant advanced that no application had been made so as to vary the general position that
where no value was placed on a claim and no budgeted costs application was made, that the claim should
be deemed as being valued at $50, 000.00 and costs should be awarded in the sum of $14, 000.00.

The Court also considered the fact that the defendant only enjoyed limited success on its application, as
costs was not assessed pursuant to Part 67.12 of the CPR and the amount fixed by this Court is
significantly less than the sum suggested by the defendant. In the circumstances and in the exercise of its
discretion, the Court orders that each party is to bear its own legal cost.

Having determined the application filed on the 21st January, 2014, the Court must now consider and
determine the application for security for costs filed on the 19th November, 2013.

SECURITY FOR COST

In support of the said application, an affidavit of Deedra Ramnanan Maharaj was filed and the claimant
filed an affidavit of Victor Jattan in opposition. At paragraph 10 of the Jattan affidavit, it was deposed that
the claimant Company is without assets and had to source funds to prosecute the instant action. At
paragraphs 9 and 11, Mr. Jattan who is a Director of the claimant Company, which said company was
formed specifically for the purpose of acquiring the land in question, pointed to the delay in the filing of
the instant application and he asserted that the application was brought with the sole intention of
attempting to frustrate the claimant's prosecution of its claim.

In Lindsay Parkinson Company Limited v. Triplan Limited [1973] Q.B. 609 at 627, Lord Denning MR
declined to make an order for security for costs primarily because there was a delay in the making the said
application.

Counsel for the claimant directed the Court's attention to Elma Lawson v. Sherba Dick & Others CV 2010-
02739, in which Kokaram, J. considered the factors to be considered when determining whether in the
exercise of its discretion, the Court ought to make an order for security for costs. This Court adopts the
position as outlined by Kokaram, J. at paragraphs a-j on pages 2, 3 and 4 of the judgment and confirms that
the factors to be considered should include inter cilia, a determination as to whether the claim has merit
which can be determined without extensive and prolonged examination and evidence, the quantum of costs
already incurred and yet to be incurred, the stage of the proceedings at the time the application for security
of costs was filed as well as any delay or lateness in the making of any such application and whether the
claimant's claim would be stifled by the grant of an order.

In the instant case, the application was made when the matter was at a PTR stage and after most of the
CMC directions had been complied with An application was filed in November 2013 for an extension of
time to file witness statements, the claimant filed its witness statements on or about 9th December 2013
and the defendant also filed some witness statements and applied for an extension of time to file further
witness statements. All the witness statements in this matter are before the Court, the matter is at an
advanced stage and is ready for trial and substantial legal costs have already been incurred by both parties.

The issue in relation to the claimant's impecuniousity was raised in the injunctive proceedings in January
2013 and is a factor that ought to have been considered by the defendant well before November 2013.

The only cost still be incurred is the costs associated with the actual conduct of the trial and a significant
portion of the overall legal costs associated with the prosecution and defence was already incurred when
the instant application was filed.

The Court also considered the matters contained in the Jattan affidavit filed in opposition to the instant
application and noted that no documentation or actual evidence in support of the assertion that the claimant
will in fact be in a position to pay the defendant's costs, if the defendant is ultimately successful, was
annexed or relied on. It was incumbent on the claimant to adduce such evidence so as to assist the Court in
its deliberation as to whether or not its discretion should be exercised and an order for security for costs
made.

If the claimant's assertion that it has been able to source funds to prosecute its claim and that it will be able
to continue to do so, is accurate, then by logical extension, it ought to be able to access funds to deposit
any sums ordered to be paid by way of security for costs.

There is no evidence before this Court which suggests that the application has been made to frustrate the
claimant from prosecuting its claim and the defendant has discharged the burden placed on it to
demonstrate that an unusual burden would be placed upon it if it is successful in the action and its costs are
not paid by the claimant.

The Court in exercising its discretion must undertake a balancing exercise and has to consider inter alia the
delay in making the application, the impecuniosity of the claimant, the bona fides of the claim, the issue as
to whether the claim has a reasonable prospect of success as well as the fact that the defendant as a
Mortgagee should be able to recover its costs if it is successful in the litigation and whether the claimant's
case would be stifled if no order is made.

Having undertaken such a balancing exercise, the Court is of the view that an order for security for costs is
appropriate and should be made. The said sum must however be reduce as substantial costs have already
been incurred and it is only the costs associated with the actual trial process that is still left to be incurred.
The Court is of the view that 2/3 of the prescribed costs should be apportioned to the process leading to the
compliance of the Court's directions up to and including the filing of the witness statements and that 1/3 of
the said prescribed costs should be apportioned to the actual conduct of the trial. Accordingly this Court is
of the view that the sum of $105, 000.00 is the sum that ought to be paid by the claimant on the security
for costs application.

Consequently the Court makes the following orders on this application:

i. The claimant do provide security for costs in the amount of TT$105, 000.00 on or before 4pm on the
24th February, 2014;
ii. Such security may be provided by way of a payment into court of TT$105, 000.00 by way of a bond
satisfactory to the Registrar;
iii. This action be stayed pending provision of the security ordered;
iv. In default of payment the claimant's claim is to be struck out.

The costs of this application to be paid by the claimant to the defendant to be assessed in default of
agreement.

FRANK SEEPERSAD

JUDGE