High Court Clarifies Meaning of 'Resident' in Security for Costs Application

Citation: [2024] EWHC 8 (Ch)
Judgment on

Introduction

In the case of Dmitry Lazarichev & Ors v Tsimafei Lyndou [2024] EWHC 8 (Ch), the High Court of Justice was called upon to examine an appeal against two orders made by Master Pester relating to an application for security for costs. The central question at the appeal was whether the claimant, Tsimafei Lyndou, a Belarusian national residing in Poland, could be considered as “resident” within the context of the UK Civil Procedure Rules (CPR) Part 25.13 for the purpose of security for costs.

Key Facts

The claimant initiated proceedings alleging that after sharing a business idea in confidence with the defendants, they wrongfully excluded him from the business. The defendants applied for security for costs on the basis that the claimant was not resident in a state bound by the 2005 Hague Convention, namely Belarus, or had provided a false Polish address. Master Pester dismissed the application, finding that the claimant was indeed resident in Poland. The defendants appealed, challenging the construction of “resident” in CPR, the Master’s approach to the evidence concerning the lawfulness of the claimant’s residence in Poland, and his decision to reject supplemental expert evidence post-hearing.

The court’s analysis revolved around several key legal principles:

  1. Meaning of “Resident”: Whether “resident” in CPR r. 25.13(2)(a) means “lawfully resident”. It was determined that “resident” should be given its ordinary meaning, as denoted in Lewison J in The Commissioners for Her Majesty’s Revenue & Customs v Grace, and Lord Scarman in R. v Barnet London Borough Council, ex parte Shah.

  2. Statutory Construction: The principle that an ordinary word should have its ordinary meaning unless indicated otherwise by statute. Inferences to imply additional words like “lawfully” require strong justification in context and purpose, as discussed in Royal Sun Alliance Insurance plc v T&N Limited.

  3. Public Policy on Unlawful Acts (“Wrongdoing Principle”): Consideration of whether public policy should prevent an individual from benefitting from their own unlawful acts. The court deemed that in this instance, there was no direct benefit being obtained that would invoke this principle.

  4. Jurisdictional Threshold: It was important to determine whether the criteria for security for costs under CPR r. 25.13(2)(a) were satisfied, namely that the claimant is resident outside the jurisdiction in a non-Hague Convention state.

Outcomes

The appeal was dismissed on all grounds. The court held that:

  • The ordinary meaning of “resident” applied, and there was no basis to imply “lawfully” into the term for the purpose of CPR r. 25.13(2)(a).

  • The “wrongdoing principle” was not applicable as the claimant was not seeking a benefit from the state, and there was no evidence to suggest unlawful residence.

  • The Master’s decision not to permit additional expert evidence was within his discretion and consistent with case management principles.

  • The Master was not required to make findings on points best left to foreign immigration authorities.

  • It was rightly determined that the claimant was resident in Poland and, thus, in a Hague Convention state.

Conclusion

In conclusion, this case underscores the importance of adhering to the ordinary meaning of terms within statutory provisions unless context dictates otherwise. Additionally, it emphasizes the need for caution in engaging with questions of foreign law and upholds the discretionary nature of judicial case management decisions. The decision provides clarity on the application of CPR r. 25.13(2)(a) and reinforces the principle that factual determinations regarding residency should not be influenced by presumptions about the lawfulness of an individual’s immigration status. The appeal’s dismissal confirms that Master Pester’s orders were properly founded within the legal framework governing security for costs applications.

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