In Simms v Carr – Butterworths Law Direct 7.2.08 an initial claim against the eighth Defendant's firm (the appellant) was dismissed and that decision was upheld on appeal, but concerns over the conduct of the appellant were aired by the courts. The respondent issued these proceedings to seek to have the dismissal of his original claim set aside on the basis that it had been procured by fraud and, in particular, fraudulent evidence by the appellant. Orders for security for costs were sought and obtained by the appellant against the respondent. The respondent’s initial application to revoke that order failed and he then made a second application based upon evidence relating to the conduct of the appellant in obtaining and subsequently discharging a freezing order. He maintained that that evidence had not been disclosed to him until ten minutes before the original security for costs order. The Master revoked his earlier security for costs order in relation to the appellant, holding that had the freezing order evidence been before him on the original hearing, it might have led to him exercising his discretion differently. The appellant challenged that decision.
The principal question that fell to be answered was in what circumstances was it open to a Master to revoke an earlier order in an exercise of the power in CPR 3.1(7). The Chancery court held that the power to revoke an order under CPR 3.1(7) was only to be used in circumstances where there had been a material change in circumstances since the order was made or where the judge making the original order had been misled as to the correct factual position existing at that time.
This case fell within the second category. However, the evidence in relation to the conduct of the obtaining and discharge of the freezing order was immaterial to the issue of whether an order for security of costs should have been made against the respondent. In those circumstances, no facts had been withheld which might have affected the Master's exercise of his discretion and he had been wrong to revoke his earlier order.
Accordingly, the order for security of costs in favour of the appellant would be reinstated.