Al-Koronky & Anor v Time-Life Entertainment Group Ltd & Anor

Factual and Procedural Background

The claimants, a husband and wife, were formerly stationed in London where the husband served as a diplomat for the Sudanese government and the wife was a qualified civil engineer. Between 2000 and 2002, their London household included a domestic servant, referred to as Mende, who left the household claiming asylum on the basis that she had been kept as a slave. The Sunday Telegraph published an article describing her departure as an escape from slavery, which led to libel proceedings settled by the newspaper with an apology and damages paid to the claimants.

Subsequently, a book titled Slave, authored by the second defendant and published by the first defendants in the UK, alleged that the claimants kept Mende as a slave. The claimants brought a libel claim against the book's publication, with the defendants pleading justification based on Mende's account of abduction and servitude. The claimants countered this with documentary evidence challenging Mende's story, which the defendants alleged were forgeries.

The defendants applied for security for costs pursuant to CPR 25.13, as the claimants were resident outside the jurisdiction and not in an exempted state. Eady J initially ordered the claimants to provide security for costs of £375,000, concluding that the claimants had not demonstrated a strong likelihood of success at trial, that enforcement of costs against them in Sudan would be impractical, and that the claimants had not shown they could not afford the security. The claimants appealed this decision.

Legal Issues Presented

1. Whether the claimants had demonstrated a strong likelihood of success at trial sufficient to preclude an order for security for costs.
2. Whether the judge erred by not adequately considering the claimants' financial means in setting the security amount.
3. Whether the judge's finding regarding the difficulty of enforcing a costs order in Sudan was a breach of the principle of comity.
4. The admissibility of new evidence tendered by the claimants on appeal.
5. The proper principles governing the granting and amount of security for costs, including the relevance of conditional fee agreements and enforcement considerations.

Arguments of the Parties

Appellants' Arguments

• The claimants argued that the judge failed to properly take into account their financial means when setting the security for costs.
• They contended that the finding about the difficulty of enforcing costs orders in Sudan improperly impinged on international comity and was unsupported by sufficient evidence.
• The claimants sought to admit new evidence to demonstrate both their inability to provide the security and a strong likelihood of success at trial.
• They submitted that the judge did not correctly separate or analyze the different elements of the defendants' evidence regarding enforcement difficulties in Sudan.
• They argued that generalised assertions about the Sudanese judiciary's impartiality should not be entertained on grounds of comity.

Respondents' Arguments

• The defendants maintained that the claimants had ample opportunity to present financial evidence at first instance and that the new evidence was largely inadmissible or unpersuasive.
• They relied on evidence indicating that enforcement of any costs order in Sudan would be impractical due to lack of treaties, judicial partiality, and public policy considerations.
• The defendants argued that conditional fee agreements (CFAs) do not affect the necessity or amount of security for costs.
• They contended that the judge's exercise of discretion in setting the security amount was lawful and justified.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Ladd v. Marshall [1954] 1 WLR 1489	Conditions for admitting fresh evidence on appeal: diligence, materiality, and credibility.	The court applied these principles to refuse most of the new evidence, except one admission against interest.
Electra Private Equity Partners v. KPMG Peat Marwick [1999] EWCA Civ 1247	Relaxation of strict Ladd v. Marshall conditions in interlocutory appeals.	The court considered the interlocutory nature of the hearing but still declined to admit most fresh evidence.
Thune v. London Properties Limited [1990] 1 WLR 562	Application of discretion in interlocutory appeals and duty to present full case at first instance.	Cited to support refusal of fresh evidence and emphasis on presenting evidence at first instance.
Keary Developments Ltd v Tarmac Constructions Ltd [1995] 3 All ER 534	Claimants resident abroad likely to succeed should not be required to provide security; enforcement difficulty must be established.	The court upheld the principle and found enforcement in Sudan would be impractical, supporting security order.
Nasser v United Bank of Kuwait [2001] EWCA Civ 556	Security for costs requires established difficulty of enforcement; residence abroad alone insufficient.	Applied to reject security based solely on nationality and to assess enforcement prospects in Sudan.
Brimko Holdings v Eastman Kodak Co. [2004] EWHC 1343 (Ch)	Burden on claimant to show that security order would stifle claim; court scrutinizes evidence critically.	The court emphasized need for candid disclosure of means by claimants and critical evaluation of evidence.
Tolstoy Miloslavsky v United Kingdom (1995) 20 EHRR 442	Article 6 ECHR: Access to courts must not be restricted to the extent of impairing the essence of the right; proportionality required.	Informed the court's approach to ensure security orders are not set at unaffordable levels, preserving access to justice.
Kufaan Publishing Ltd v Al-Warrak Publishing Ltd (unreported, 2002)	Distinction between risk of stifling claim and setting unaffordable security.	Used to support discretion in setting security amount without striking out claim outright.
Campbell v MGN Ltd (No.2) [2005] UKHL 61	Compatibility of conditional fee agreements with Article 10 ECHR.	Confirmed that CFAs do not affect security for costs decisions directly.
Jeyaretnam v Mahmood (The Times, 21 May 1992)	Reluctance to evaluate allegations of foreign judiciary partiality on grounds of comity.	Discussed but court found no absolute bar to such evaluation in all contexts.
Buttes Oil and Gas Co v Hammer [1982] AC 888	Non-justiciability of certain foreign state actions.	Referenced in relation to comity and evaluation of foreign judiciary impartiality.

Court's Reasoning and Analysis

The court undertook a detailed analysis of the admissibility of new evidence, applying established principles from Ladd v. Marshall and related authorities. It concluded that most of the new evidence could have been produced at first instance and did not meet the criteria for admission on appeal, except for a limited admission by the first claimant of financial support from the Sudanese government, which corrected a prior misleading statement.

The court emphasized the importance of claimants providing a full and candid account of their financial means when seeking to resist security for costs. It held that the judge was entitled to fix a security amount based on the evidence before him and to exercise discretion where the claimants' financial disclosure was incomplete or inadequate.

Regarding enforcement and comity, the court accepted the defendants' evidence that enforcement of a costs order in Sudan would be impractical due to lack of treaties, judicial partiality, and public policy considerations. It rejected the claimants' argument that the court should not evaluate such assertions on grounds of comity, distinguishing between generalised attacks on foreign judiciaries and specific assertions about enforceability on public policy grounds.

The court further clarified that conditional fee agreements do not affect the necessity or amount of security for costs, but after-the-event insurance might, depending on its effectiveness. In this case, the insurance was likely ineffective if the claimants lost on grounds of dishonesty.

Ultimately, the court found no error in the judge’s exercise of discretion in ordering security for costs in the sum fixed, given the claimants’ failure to demonstrate a strong likelihood of success or inability to pay, and the practical difficulties of enforcement in Sudan.

Holding and Implications

The court DISMISSED the appeal, upholding the order for security for costs in the amount of £375,000 to be provided by the claimants.

The direct effect is that the claimants must provide security for the defendants' costs before continuing with their claim. No new precedent was established; the decision reinforces existing principles governing security for costs, including the requirement for claimants resident abroad to provide full disclosure of means and the necessity of demonstrating enforceability of costs orders abroad. The ruling also clarifies the limited circumstances in which fresh evidence may be admitted on interlocutory appeal and confirms the court's cautious approach to allegations affecting foreign judicial impartiality in the context of enforcement.