Security for costs - Amount of security

Ackerman v Ackerman and others: Chancery Division (Mr Justice Roth): 12 August 2011

The underlying proceedings concerned a claim brought by the claimant against the defendant for breach of contract. The claimant and his brother, JA, together built up a successful business of property investment and development (the Ackerman Group). Upon the death of JA in 1989, his interests passed to his widow, NA.

By 2006, the relationship between the claimant and NA had severely deteriorated and there needed to be a parting of the ways. The parties agreed that a tax barrister, AT, should be engaged to give effect to a division of the Ackerman Group between them so as to achieve a demerger of their interests. A document containing the terms agreed by the parties in relation to the engagement of AT was entered into in June 2009 (the agreement).

The claimant subsequently commenced proceedings in April 2011, alleging a series of breaches of the agreement as regarded the scope of what AT was permitted to do, the procedure required and also a failure by AT to act fairly, impartially and in an unbiased manner. The defendant brought an application for security for costs on the basis that the condition in CPR 25.13(2)(g), namely that the claimant had taken steps in relation to his assets that would make it difficult to enforce an order for costs against him, had been satisfied.

It was acknowledged by the claimant that the condition in CPR 25.13(2)(g) for the making of an order had been satisfied. It was submitted on the claimant's behalf that there should be a charge by way of security over half of his wife's interest in the matrimonial home which would amount to around £375,000 (the charge).

The defendant submitted that £950,000 would be an appropriate figure for security. The principal issue that fell to be determined was whether it was just in all the circumstances to make an order for security for costs over and above the charge.

The court ruled: Applying settled principles, it was just in all the circumstances to make an order for security for costs over and above the charge. On the facts, a total of £600,000 by way of security was a fair and appropriate amount in all the circumstances to do justice as between the parties.

The instant case was one where the claimant's lack of means had been contributed to by the defendants in a manner that was at the heart of the claim (see [16], [39], [41] of the judgment). The claimant was ordered to provide security in the sum of £600,000, of which £375,000 might be furnished by way of the charge.

Craig Orr QC (instructed by Enyo Law LLP) for the claimant. John Wardell QC and Emer Murphy (instructed by Berwin Leighton Paisner LLP) for the first, second and fourth defendants.