Margem Chartering Co. Inc v. Cosena SRL and The "Bocsa"

In Admiralty Practice, Costs and Security for Costs on (Updated )

This was an application by the Defendant to have the Plaintiff’s action dismissed for failing to provide security for costs as required by a previous peremptory order. The Court considered the test to be applied when a party fails to comply with a peremptory order (also referred to as an "unless" order). The Court noted that there were two different principles of law at issue. First, a litigant ought not to be deprived of a right to have its case heard, so long as any damage to other parties is compensable. Second, a litigant who fails to comply with a peremptory order will not normally be permitted to continue the action. The Court noted that to overcome the presumption the party who failed to comply with the order must demonstrate that the failure to comply was not intentional or contumelious. In the case before it the Court found that the Plaintiff’s failure to post security was due to circumstances beyond its control and therefore refused to dismiss the action.