An appeal court may decline to order security for costs against a non-resident appellant where there is unequivocal evidence that to do so would have the effect of stifling its appeal, the Isle of Man appellate court has found. But if the appellant cannot show such evidence then security for costs may be granted.

In a recent interlocutory application before the Isle of Man Staff of Government (Appeal Division) of the High Court the Appeal Deemsters heard an application by the respondent to the appeal for an order that the appealing party should pay £11,500 into court as security for the respondent's costs of the appeal. It was accepted that the appellant was ordinarily resident out of the jurisdiction of the Isle of Man. The appellant challenged the application for security on the basis that making such a payment into court would have the effect of stifling his appeal.

Both parties filed evidence. The appellant submitted that he did not have the capacity to find the sum by way of security for costs and that it would be unjust to expect him to pay such sum into court. However the respondent party submitted evidence relating to the appellant's income and expenditure and based on such evidence the Appeal Court held that it was not satisfied the appellant had proven that the effect of ordering security for costs would be to stifle or prevent him from pursuing his appeal. The Appeal Deemsters commented: "In the recent past he has demonstrated resourcefulness in borrowing monies when the need arose and we think that, together with the realisation of some personal assets, he will be able to pay such sum into court".

The Staff of Government Division noted that previous Isle of Man case law had made it clear that where it is contended by a party that an award for security for costs would have the effect of stifling the claim the onus is on that party to adduce full, frank and clear unequivocal evidence to support such claim. In addition, the court cited previous Manx authority to the effect that the making of a security for costs order might interfere with an appellant's article 6(1) European Convention on Human Rights right of access to a court so the court should not order security for the costs of an appeal if to do so would stifle the appeal. However if grounds for security for costs appear to have been established then the appellant must satisfy the court by evidence that the effect of ordering security would be to stifle the appeal. When deciding this matter it is relevant for the court also to consider the possibility that third parties might provide financial support.

In the circumstances of this particular case the court therefore found that the appellant had not discharged his burden of proof to show that the effect of ordering security for costs would be to stifle his appeal and therefore he was ordered to pay £11,500 into court as security for the respondent's costs of the appeal. The case highlights the importance of presenting clear financial evidence to the court when either making or opposing an application for security for costs.

John T Aycock

Advocate

M&P Legal

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