Dubai Islamic Bank PJSC v PSI Energy Holding Co BSC and others  EWCA Civ 761
The Applicant bank had applied for security for costs under CPR 25.15(1) in respect of an appeal lodged by the Respondent. In particular, the Applicant relied on CPR 25.13(2)(g) asserting that the Respondent had taken steps in relation to his assets that would make it difficult to enforce an order for costs against him.
The Respondent alleged that he had no assets of any significant value, and yet was able to fund high living and legal expenses. He stated that these were funded by loans from family, affiliated companies and third parties.
The Court of Appeal granted the application for security. In doing so it said that where a party states that it is devoid of assets and yet is able to fund litigation on the basis of loans, it was incumbent on that party to provide details of the nature and terms of those loans, and to provide details of the efforts he has made to obtain further funds from the same sources. Where no such details are given, it will often be appropriate for the court to infer that that party had undisclosed assets. The failure to disclose those assets can lead to a further inference that they had been put out of reach of creditors.
On the basis of the evidence in this case, it was appropriate for an order for security for costs to be made. There was an overwhelming inference that the Respondent had available to him assets which he had dealt within in a way that would make it difficult for the Applicant to locate them for the purpose of enforcing a costs order.