Morris v Hanley & Ors

These Proceedings were again listed for final hearing before Justice Hamilton in the Supreme Court for 10 days between 31 July 2000 and 11 August 2000.

However, on 9 July 2000, Justice Hamilton again vacated this hearing date as a consequence of the Plaintiff being given leave to file its Fourth Further Amended Statement of Claim."

21 The defendants also submitted that the case was not ready for trial, because discovery and affidavit evidence dealing with the further causes of action brought in by leave on 23 May 2000 was not complete. These submissions were repeated to the court orally this morning. The defendants did advance in more detail a submission to the effect that the role of delay in relation to the application for security for costs could not have been large, because there was in truth very little delay, since the events properly triggering the applications were events which took place in 2000. These were events associated with the cancellation of two fixtures and the substantial amendments brought in by reason of the grant of leave by Hamilton J on 23 May 2000. It was submitted that it was not open to the defendants to make an application for security for costs at the start of the proceedings, when all that was known at that stage was that the plaintiff was probably impecunious. Alternatively, it was submitted that any such application would have failed, and that the appropriate time for bringing the application was when it was brought. 22 The duty of judges to give reasons for the directions and orders they make must be lower where interlocutory orders affecting matters of practice and procedure are involved than they are where orders are made after a trial. That must be so if for no other reason than that litigation would clog up to the point of stagnation if full reasons had to be given for the tens or hundreds of interlocutory orders which many primary judges make in a week in busy trial courts. However, though applications for security for costs are matters of practice and procedure, they can have a significant impact on the substantive rights of plaintiffs, because if the order is made, the plaintiff may not be able to provide security for costs where one of the grounds for the application is that plaintiff's lack of funds. If so, that will prevent the plaintiff being able to have a judicial examination of the complaints made on the merits. Accordingly it would not be right to hold that there is no duty, or only a very exiguous duty, on a primary judge to give reasons for making an order as to security for costs. 23 The primary judge in giving his reasons for the orders under appeal in many respects went well beyond what was called for by the duty to give reasons. The reasons for judgment he provided, particularly given that they were ex tempore, set out in considerable detail his approach. However, there is force in the argument of the plaintiff that insufficient reasons were given in relation to the question of the defendants' delay. There is no doubt that the plaintiff advanced in writing arguments essentially to the effect of those advanced on appeal, that the defendants attempted to deal with them, and that the significance of the defendants' delay was squarely in issue. 24 The primary judge certainly said that the question of delay was a relevant factor, but it would not be possible for the plaintiff to ascertain from the reasons for judgment how the primary judge took into account in arriving at his discretionary judgment the delay by the defendants and the circumstances relating to it. It would certainly be possible to reach the same conclusion as the primary judge did notwithstanding the delay of the defendants, because, for example, it might well have been thought by the defendants inappropriate to apply for security for costs soon after 30 May 1997, but appropriate to do so in 2000 when it became apparent that the plaintiff was having difficulty in formulating or adhering to any particular form of the case she wished to advance, and was incurring liability for costs orders which she was unlikely ever to be able to satisfy. An argument of that kind appears to have been advanced to the primary judge, or alternatively considerations were put to the primary judge which would have enabled him to embrace reasoning of that kind. Sometimes what might otherwise be said to be a deficiency in the reasons of a primary judge can be compensated for by a clear explanation in the course of argument by the primary judge for the outcome. However, that cure cannot be resorted to here. This Court does not have before it any transcript of the oral argument before the primary judge, and it has before it no affidavit indicating anything he may have said in the course of argument which would explain how he took the defendants' delay into account. 25 In those circumstances there is an error of principle in the primary judge's approach. 26 Should the matter be remitted to the Equity Division so that the discretion can be exercised afresh by it, or should this Court do so? In view of the disgraceful delays which one or other or both of the parties have brought about in these proceedings, it is desirable for this Court to exercise the discretion for itself. Since questions of credit do not arise - there was no cross-examination of the deponents of the affidavits before the primary judge - it is open to this Court to do so. 27 There is no doubt that the plaintiff is a person of limited means. There is also no reason to doubt that she has spent a significant sum of money in readying the matter for hearing. She swore that on 19 June 2000. She was not cross-examined about that. The defendants before this Court referred to evidence which the plaintiff wished to rely on before this Court but which was not before the primary judge. The evidence in question was part of an affidavit of Mr John Morris, the plaintiff's husband, to the effect that up until shortly prior to the commencement of the proceedings, he was aware that she had paid approximately $45,000 to her legal representatives in respect of these proceedings. However, the defendants did not read that evidence. Accordingly it must be left out of account. 28 The defendants also referred to some evidence of Mr Geoffrey Donald Reid in an affidavit of 26 May 2000, which was relied on before the primary judge. That evidence referred to a conversation between himself and Mr John Morris in which Mr John Morris was alleged to have said that he had solicitors and barristers working for him on a "success basis" and that he had nothing to lose and everything to gain. If there is any conflict between what Mr Reid said and what the plaintiff said in the affidavit material before the primary judge, it was not resolved in cross-examination. In all the circumstances it seems appropriate to act on the sworn evidence of the plaintiff. 29 The plaintiff says she is ready for hearing. The defendants say they are not. In this respect what the defendants say is not implausible in view of the breadth of the further allegations made in the pleadings as amended by leave on 23 May 2000. The case may not be ready for hearing, but the plaintiff has evidently suffered a substantial diminution in financial resources with a view to readying it for hearing. It is never easy for defendants to succeed in an application for security for costs against a natural person where that application is in part based on the ground of that natural person's lack of funds. It becomes significantly harder for defendants to succeed where they permit the plaintiff to throw money away on the litigation which will never be recoverable in a costs order against the defendants by reason of the successful application for security. As the primary judge rightly said, the decision whether or not to order security in this case "is a difficult decision". 30 In my judgment it is appropriate for this Court to exercise the discretion against the defendants because they have not explicitly explained why they delayed until 2000 before making the application, though there are circumstances which might indicate why they delayed, and because of the hardship suffered by the plaintiff in having expended significant sums on costs during the period of that delay. There can be little doubt that at least some of the matters on which the defendants relied in their application were known to them well before it was made. The affidavits on which the defendants relied referred to incidents in the years 1996, 1997 and 1998. Further, the searches which the defendants procured their solicitors to make, and consequential inquiries, which were made in 2000 could have been made in earlier years. There can never have been any reason for supposing that the plaintiff was anything other than a person of very limited assets. Other alleged errors 31 It is not necessary to consider the remainder of the plaintiff's criticisms of the primary judge's reasoning. Orders 32 The orders proposed are as follows. 1. The appeal is allowed.