Mbasogo & Anor v Logo Ltd & Ors

Factual and Procedural Background

The case involves cross-applications for security for costs arising from cross-appeals between the appellants, namely the President of the Republic of Equatorial Guinea and the Republic itself, and three of the six respondents. The underlying claim relates to an alleged unsuccessful attempted coup d'etat by the respondents against the appellants in approximately March 2004. The claim includes damages, exemplary damages, and injunctive relief, based on three putative causes of action: conspiracy by unlawful means, tort of intentional infliction of harm by unlawful means (allegedly for emotional distress short of physical or psychiatric harm), and assault on the first appellant.

On 21 September 2005, the claims were struck out by the High Court as disclosing no cause of action. Both parties have appealed and cross-appealed, with permission granted for further grounds of appeal. The legal issues on appeal include the nature of the unlawful means conspiracy and the existence and scope of the tort of intentional infliction of harm by unlawful means.

The damages claimed are substantial, estimated at several million dollars, with significant injunctive relief sought. Both sides emphasize the public importance of the legal issues, which touch on alleged international terrorism and inter-state cooperation.

Security for costs is sought by the respondents in the amount of £107,500, citing the appellants’ non-residence and concerns about ability or willingness to pay. Conversely, the appellants seek security for costs of £25,000 against the respondents for the cross-appeal.

There is related litigation in the Royal Court of Guernsey and the Privy Council concerning similar claims and costs orders. The Privy Council has allowed the appellants’ appeal with costs against some respondents but has stayed enforcement of the costs order pending this court’s resolution. The respondents have unsuccessfully sought to vary the Privy Council’s costs order or its stay.

The appellants have offered security for the main appeal in the form of an undertaking to hold £105,000 to the respondents’ account, to be set off against any costs payable by the respondents pursuant to the Privy Council’s order once the current proceedings conclude. The respondents initially accepted this in principle but demanded immediate payment of the security, which the appellants rejected.

Neither party is resident in the United Kingdom. The appellants are considered to have substantial means, but the respondents have not provided financial information, raising concerns about their ability to pay costs if ordered.

Legal Issues Presented

1. Whether the claims pleaded disclose a cause of action, particularly regarding the tort of conspiracy by unlawful means and the tort of intentional infliction of harm by unlawful means.
2. Whether security for costs should be ordered against the appellants given their non-residence and the risk they may be unable or unwilling to pay costs.
3. Whether security for costs should be ordered against the respondents in respect of their cross-appeal, considering their non-residence and lack of financial disclosure.
4. The appropriate form and amount of security for costs, including whether a conditional undertaking linked to the Privy Council costs order is sufficient.

Arguments of the Parties

Appellants' Arguments

• The appellants maintain that the respondents are not at risk in the interim because the estimated costs recoverable by the appellants in the Privy Council proceedings exceed the respondents’ estimated costs, providing a financial buffer.
• The appellants argue that their offer of security by way of an undertaking to hold funds to the respondents’ account is adequate and protective.
• They emphasize the importance of the cross-appeal and the reasonableness of the £25,000 security sought, which aligns with respondents’ own estimated costs for the cross-appeal.
• They contend that the respondents have failed to provide any financial information to rebut the presumption of inability to pay.

Respondents' Arguments

• The respondents seek security for costs of £107,500, citing the appellants’ non-residence and concerns about their ability or willingness to pay.
• They initially accepted the appellants’ offer of security in principle but insisted on immediate payment rather than a conditional undertaking.
• The respondents argue that without immediate security, they face risk in their costs of the appeal before this court.
• Their solicitor submitted that the appellants’ conditional undertaking amounts only to a personal promise to pay future sums, which may be subject to delay.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Marine Blast Limited v Targe Towing Limited [2003] EWCA Civ 1940	Approach to whether there is reason to believe a party will be unable to pay costs, requiring less than balance of probabilities.	The court applied Mance LJ’s observations to conclude that absence of satisfactory financial information supports reason to believe respondents may be unable to pay costs.
Phillips v Eversheds [2002] EWCA Civ 486	Recognition of significant danger that a party may be unable to meet costs orders where no financial disclosure is provided.	The court relied on Buxton LJ’s judgment to reinforce the risk that respondents pose in not being able to pay costs, justifying security for costs.

Court's Reasoning and Analysis

The court recognized the complexity and importance of the legal issues, including the viability of the pleaded torts and the public interest implications. It acknowledged the substantial damages and costs involved, as well as the non-residence of all parties.

In assessing the applications for security for costs, the court considered the relevant CPR rules, particularly CPR 25(13)(2)(a) and (c), which address non-residence and the risk of inability to pay costs. The court emphasized that the threshold for finding "reason to believe" a party may be unable to pay is lower than the balance of probabilities.

The respondents had not provided any financial information, leading the court to infer a significant risk that they might not be able to pay costs if ordered. Conversely, although the appellants have substantial means, enforcement of costs orders against them may be difficult due to their non-residence. However, the court found that the existing Privy Council costs order in favor of the appellants against the respondents provided a form of security.

The court found the appellants' offer to provide security by way of an undertaking to hold £105,000 to the respondents’ account, to be set off against any costs payable under the Privy Council order, to be just and sufficient. The court accepted the appellants’ submission that this undertaking protects the respondents’ interests immediately and that there was no basis to question the durability of the Privy Council order.

Regarding the appellants’ request for security for costs of the cross-appeal, the court accepted the necessity and reasonableness of the £25,000 sum, noting its similarity to the respondents’ own estimates and the lack of financial disclosure from the respondents.

Ultimately, the court balanced the risks and protections afforded by the Privy Council order and the parties’ financial positions, concluding that the proposed undertakings and orders for security for costs were appropriate.

Holding and Implications

The court allowed the applications for security for costs as follows:

• The appellants are to provide security for the costs of the main appeal by way of an undertaking to hold £105,000 to the respondents’ account, to be set off against any costs payable under the existing Privy Council order.
• The appellants’ application for security for costs of £25,000 in respect of the cross-appeal is granted, reflecting the respondents’ non-residence and lack of financial disclosure.

The decision ensures that both parties have adequate protection against the risk of non-payment of costs, relying on the Privy Council’s existing order and the court’s undertakings. No new precedent was established beyond the application of existing principles governing security for costs in cross-border litigation.