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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Compagnie Noga D'importation Et D'exportation SA v Australia & New Zealand Banking Group Ltd. & Ors [2002] EWCA Civ 1142 (31 July 2002)
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Cite as: [2002] EWCA Civ 1142, [2003] 1 WLR 307, [2003] CP Rep 5, [2003] WLR 307

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Neutral Citation Number: [2002] EWCA Civ 1142
Case No: A3/2001/2482/A; A3/2001/2482

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Lord Justice Rix (sitting as a High Court Judge)

Royal Courts of Justice
Strand,
London, WC2A 2LL
31 July 2002

B e f o r e :

LORD JUSTICE WALLER
LORD JUSTICE TUCKEY
and
LADY JUSTICE HALE

____________________

Between:
Compagnie Noga D'Importation Et D'Exportation SA
Appellant/
Claimant
- and -


Australia & New Zealand Banking Group Ltd & ors

Respondent/Defendant

____________________

(Transcript of the Handed Down Judgment of
Smith Bernal Reporting Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)

____________________

Steven Gee QC and Vasanti Selvaratnam QC (instructed by Messrs Stephenson Harwood) for the Appellant
Gordon Pollock QC and Mr Paul Stanley (instructed by Messrs Dechert) for the Respondents
Mr Andrew Mitchell (instructed by Messrs D J Freeman) for the Federal Government of Nigeria

____________________

HTML VERSION OF JUDGMENT
____________________

Crown Copyright ©

    Lord Justice Waller:

    Introduction

  1. This appeal raises an important point in relation to the position of a respondent to an appeal and in particular as to the circumstances where a respondent needs permission to raise points in a respondent's notice. In particular it raises the question whether a judge should grant a declaration in relation to a conclusion to which he had come on the facts (the trial of which had taken up most of the time of the court), albeit he had found despite that conclusion that the respondent should succeed at first instance. In this case Noga (for whom Mr Gee QC appeared both here and below) had sought a declaration that an action had been compromised in return for payment of the sum of $100 million by the SJ Berwin Defendants (for whom Mr Pollock QC appeared both here and below). Noga also sought a judgment for $100 million. In considering whether a valid compromise had been reached, a key issue was whether $100 million had either been agreed or even mentioned, and a further issue was whether if it had, the agreement was only conditional. After a lengthy trial the judge concluded that the $100 million had both been mentioned and indeed agreed, but also held that the agreement was only conditional, and thus that no valid compromise had been reached. Noga sought to get him to change his mind about the conditional nature of the agreement which the judge refused. He did however give Noga permission to appeal on the conditional aspect. The position of the SJ Berwin defendants was that as respondents they would seek to uphold the judge's conclusion that there was no settlement agreement on the basis that his findings of fact in relation to the $100 million were wrong, and that no permission to appeal was needed for them to be entitled to confirm his judgment on those grounds in the Court of Appeal. Both parties accepted before the judge that if the form of declaration made by the judge was limited to declaring that "no settlement had been concluded", the SJ Berwin defendants were right. The judge (who it is right to say even at this stage was resistant to the notion the SJ Berwin defendants were right), following a suggestion of Mr Gee inserted as part of the declaration "no settlement", a declaration that he found that the $100 million had been agreed. On that basis the SJ Berwin defendants accepted that they would now need permission to appeal, and albeit protesting the form of declaration, applied for permission. That permission was refused by the judge, but the judge gave permission to appeal his ruling as to the form of the declaration. This is the appeal from the ruling on the form of order, the reasons for which the judge gave in a written judgment of 23 October 2001 known as Noga 3.
  2. The facts

  3. The above introduction sets out the point in issue, but it is right to expand a little on the background. That background is set out at the commencement of Noga 3, and since the position is undisputed it is convenient simply to incorporate paragraphs 1 to 11 in this judgment. Before doing so however I should explain, so as to dispose of a point at the outset, that in addition to the point argued as between Noga and the SJ Berwin defendants, a similar point arises as between FGN and the SJ Berwin defendants on another declaration. Mr Mitchell at the outset of this appeal, explained on behalf of FGN that his clients were neutral in the stance they took on the declaration affecting them, and were simply prepared to abide the result of the decision as between Noga and the SJ Berwin defendants. That was acceptable to all parties and Mr Mitchell withdrew.
  4. Paragraphs 1 to 11 of the judgment of Rix LJ:
  5. "1. This trial has concerned the settlement of three actions brought in London but arising out of events in Nigeria. It has been conducted entirely by reference to English law, but the issues have been very largely ones of fact. Three settlement agreements are in issue. Are any of them binding, and if so which? In particular, was an oral agreement made for the payment of $100 million.
    2. The trial has been complicated by the fact that there are three actions involved, and three parties interested in the disputed settlements, as well as by the circumstance that the principal documents are themselves the subject of controversy. With one exception, all the witnesses heard by the court have had their credit impugned by one or other of the opposing parties. Disclosure has continued during the trial. In the event, a trial which was fixed at short notice on the basis that it would be finished within some six to eight days has consumed, with some interruptions, a total of six months.
    3. The three parties are: Compagnie Noga d'Importation at d'Exportation SA ("Noga"), a Geneva based trading company, which is claimant in two actions 1999 Folio No 404 and 1999 Folio No 405; the Federal Government of Nigeria ("FGN"), which is the claimant in the third action 1999 Folio No 831; and certain of the defendants in all three actions who have been known by the name of their original solicitors as the "SJ Berwin defendants". These are the personal representatives of the estate of a former ruler of Nigeria, General Sani Abacha, his second son, Mr Mohammed Sani Abacha, as well as the latter's business partner Mr Abubakar Bagudu and two of their companies, Mecosta Securities Inc ("Mecosta") and Standard Alliance Corporation. Noga is also a defendant to the FGN's action.
    4. General Abacha presided over a military government as Head of State of the Federal Republic of Nigeria from November 1993 until his death on 8 June 1998. Following his death, successive military and democratic governments of Nigeria investigated allegations that during his regime he had pillaged Nigeria of billions of dollars. Members of his family were implicated in those allegations, foremost among them being Mohammed Abacha. Mohammed succeeded his elder brother, Ibrahim, as head of the family's business, following Ibrahim's death in a plane crash on 17 January 1996. Ibrahim and Mr Bagudu had begun to work together in late 1994. Mr Bagudu became a trusted business associate first of Ibrahim and then of Mohammed. He was treated as one of the family, and lived in a house which belonged to Mohammed Abacha and was next door to the latter's house.
    5. Foremost among the matters investigated after General Abacha's death was the so called security funds scandal. It is alleged that more than $2 billion was taken from the Central Bank of Nigeria ("CBN") in cash (dollar, sterling and Nigerian naira banknotes), travellers' cheques and bank transfers under the guise of votes of money for security purposes. Mohammed Abacha and Mr Bagudu have accepted that they were personally involved in the receipt of some $700 million or so of such funds. This cash was delivered by the CBN to General Abacha, handed on by the General to his son Mohammed, and by Mohammed to Mr Bagudu. Mr Bagudu banked these monies with Nigerian banks and ultimately arranged for them to be exported abroad, through the CBN, where they were deposited in the bank accounts of various companies. Following the death of General Abacha and the setting up of a special investigatory panel ("SIP"), these sums were returned to the CBN. To what extent either of Mohammed Abacha or Mr Bagudu were involved beyond the sums returned is in dispute.
    6. Among the matters conducted by General Abacha's government with his personal authority but which became subject to criticism and investigation following his death was the Ajaokuta bills of exchange buy-back transaction. These bills of exchange had been drawn by organs of the USSR, which had built and financed the construction of a steel plant at Ajaokuta in Nigeria for the Nigerian Steel Development Authority, to secure payment for the plant pursuant to a contract dated 13 July 1979. The bills were guaranteed by the FGN. Some of them had been paid over the years, but others, viz nos 8-15 and 20, remained outstanding, together with unpaid interest upon them. In 1996, after the succession of the Russian Federation to the former USSR's interests, the outstanding bills were sold by their Russian holders to a company called Parnar Shipping Corporation ("Parnar"), which sold them on to another company called Mecosta, one of the SJ Berwin defendants. Mecosta is a BVI company jointly owned by Mohammed Abacha and Mr Bagudu. It may be that Parnar is also in their ownership, but that is disputed. At any rate Mecosta resold the bills to the FGN for twice what it paid Parnar for them. Mecosta paid some 26% of the fact value of the notes, and the FGN paid 53% to Mecosta. The sums in question were of the order of DM 486 million by way of purchase and DM 972 million by way of resale. The gross profit was distributed into various accounts under the control of Mohammed Abacha and Mr Bagudu. The Nigerian buyer was the Federal Ministry of Finance, on whose behalf the CBN paid the first tranche of DM 486 million in May 1996 and the second tranche of the same amount in April 1997. The second tranche would have been paid in October 1996, had not the receiving bank, Merrill Lynch, refused to accept it, out of concern that Mecosta was involved in money-laundering. Mecosta'' accounts at Merrill Lynch were closed and transferred to another bank.
    7. However, Noga claims to be entitled to the beneficial interest in these bills. Noga is a transliteration of the name of the Gaon family which founded it. The head of the family is Mr Nessim Gaon. Mr Gaon and Noga had long been involved in trading with both Nigeria and the USSR. On 22 July 1992 Noga and the Russian Federation had entered into a Swiss law contract for the purchase by Noga of the Ajaokuta bills, together with rights of accrued but unpaid interest on them. The purchase price was expressed to be 75% of the face value of the overdue bills and 62% of the face value of the non matured bills. The purchase was subject to a number of conditions precedent, inter alia the consent of the FGN. There is a dispute as to whether those conditions precedent failed, and with them Noga's contractual rights as a whole, or whether they must be deemed to have been fulfilled because, as Noga alleges, the Russian Federation prevented their performance in bad faith. If the contract has survived, then Noga claims that the bills are to be held for it in trust under a special clause of the contract. In any event the July 1992 contract was not consummated.
    8. The following years were difficult ones for Noga. Its affairs in Nigeria did not prosper under General Abacha's regime, indeed Mr Gaon became persona non grata in Nigeria. Its large scale barter operations with Russia also ended in dispute, and heavy arbitration ensued. In the course of this period, Noga obtained information about the Ajaokuta buy-back transaction.
    9. For some time Noga was preoccupied with its own financial difficulties, which caused it to enter a period of court controlled administration. In December 1998, however, it emerged from administration and turned to devote its energies to pursuing its claim to the beneficial interest in the Ajaokuta bills. In March 1999 it commenced two actions, Folios 404 and 405, which expressed different aspects of its claims. In Folio 404 it claimed to be entitled to trace its interest in the bills into the proceeds of the Ajaokuta buy-back. In Folio 405 it claimed to be entitled to a freezing order over the Ajaokuta buy-back proceeds in execution of an arbitration award in its favour against the Russian Federation as well as in anticipation of further claims against Russia still subject to arbitration.
    10. On 18 March 1999 Noga obtained an ex parte Mareva injunction from Colman J against a number of defendants in the two actions who included the SJ Berwin defendants. The first named defendant in Folio 404 is Australia and New Zealand Banking Group Limited ("ANZ"), the bank through which the buy-back transaction had been broked. It would be more appropriate, however, to use the name of the second defendant, the estate of General Abacha deceased, in order to name this judgment, and that is what I have done. Similarly, the first named defendant in Folio 405 is the Government of the Russian Federation, but that has never put in an appearance, so that I have again named this second action after its second defendant, the estate of General Abacha.
    11. On 25 June 1999 the FGN commenced its own action, Folio 831, against (inter alios) the SJ Berwin defendants. The basis of this third action is that the Ajaokuta buy-back transaction was a corrupt transaction obtained with the help and influence of General Abacha, whose profits were corruptly obtained by the SJ Berwin defendants. On 20 July 1999, freezing and disclosure orders very similar if not identical to those obtained by Noga in its two actions were made in favour of the FGN. It has subsequently emerged that Noga had taken pains to involve the FGN in its strategy and to encourage it to bring its own claims in respect of the Ajaokuta buy-back transaction."
  6. I should I think add to the above the following points. The first judgment, Noga 1, excluding appendices was 209 pages long, and the most substantial part of that judgment was concerned with the factual issue as to whether $100 million had been agreed or even mentioned. Credibility was key. Long before any argument on permission to appeal the judge in Noga 1, in the course of a synopsis of the dispute at paragraph 61, identified the issues in this way:
  7. "[61] Those features highlight what have become the three central issues in the trial. (1) Was $100 million ever agreed between Noga and the SJ Berwin defendants? Indeed, was $100 million even discussed between them? (2) Even if $100 million had been agreed between Noga and the SJ Berwin defendants, was the tripartite agreement in any event a binding contract or was it merely an agreement to agree? If it was a binding contract, how is the 16 August agreement to be explained? If it was not a binding contract, what was the FGN doing in agreeing, even in a non-binding way, to give up its Ajaokuta claims without compensation? Did it ever really intend to do so, or was the FGN's signature to the tripartite agreement some kind of mistake? (3) Did the FGN really agree to grant the Abacha interests a global waiver, or was it tricked by Mr Bagudu into the signature of the 13 August agreement? If the 13 August agreement is effective, is it superseded by the 16 August agreement, or is that void for want of consideration?"
  8. Furthermore, again before any issue arose as to the form of order, he put his conclusions in that judgment in this way at paragraphs 652 to 655:
  9. "[652] In conclusion, the only binding settlement is that between the FGN and the SJ Berwin defendants in Folio 831. That action has been settled under the terms of the 16 August agreement.
    [653] Apart from that, there is no settlement. The tripartite agreement is not an effective agreement, and the agreement of 13 August has been superseded by the agreement of 16 August.
    [654] Although I find that Noga and the SJ Berwin defendants did agree on a settlement sum of $100 million, I have not been satisfied that that agreement was unconditional. On the contrary, I find that it was a conditional agreement, and that it, and the tripartite agreement of which it was a necessary and vital part, therefore never became effective as a final and binding and legal contract.
    [655] It follows that the FGN's action, at any rate against the SJ Berwin defendants, is at an end, subject to its obsequies, but that Noga's two actions continue. What the consequences of this disposition of the preliminary issues are, must be a matter for further submissions."

    Form of order judgment

  10. A form of draft declaration was produced by both FGN and the SJ Berwin defendants which did not contain any reference to $100 million having been factually agreed. Those representing Noga did not suggest any variation until it became clear that the SJ Berwin defendants were contending that if Noga were appealing, they did not need to obtain permission to seek to uphold the decision "no settlement" by challenging the judge's findings of fact on the $100 million issue.
  11. There cannot be any doubt that in considering the form of declaration he would make the judge had his eye very firmly on the effect that would have on whether the SJ Berwin defendants would need permission to appeal if he made the declaration in a certain form. Thus the judge did not start from the premise what should the declaration be in this case absent any consideration of whether the result would affect the appeal procedure. His first heading in this judgment was "Permission to appeal and a respondent's notice". He quoted immediately Civil Procedure Rules (CPR) Part 52.5, headed "Respondent's notice", which provides:
  12. "(1) A respondent may file and serve a respondent's notice.
    (2) A respondent who –
    (a) is seeking permission to appeal from the appeal court; or
    (b) wishes to ask the appeal court to uphold the order of the lower court for reasons different from or additional to those given by the lower court,
    must file a respondent's notice."
  13. He then quoted the Practice Direction PD 52 paragraph 7 which provides as follows:
  14. "7.1 A respondent who wishes to ask the appeal court to vary the order of the lower court in any way must appeal and permission will be required on the same basis as for an appellant.
    7.2 A respondent who wishes only to request that the appeal court upholds the judgment or order of the lower court whether for the reasons given in the lower court or otherwise does not make an appeal and does not therefore require permission to appeal in accordance with rule 52.3(1)."
  15. The judge then referred to Mr Cohen QC's submission (he represented the SJ Berwin defendants on this aspect before the judge), which drew attention to the fact that the form of declaration proposed by both SJ Berwin defendants and FGN and in relation to which Noga had made no protest until the permission to appeal aspect raised its head simply declared "no settlement" and made no reference to "a figure of $100 million being agreed". He referred to Mr Cohen's reliance on Lake v Lake [1955] p.336, where the Court of Appeal held that a party's statutory right to appeal was governed by section 27 of the Judicature Act 1925 allowing for an appeal from "the whole or any part of any judgment or order", and that those words meant the "formal judgment or order." He referred to Mr Cohen's argument that it was a device to incorporate a finding of fact in the formal order where that would not have been the natural thing to do.
  16. The judge then referred to the fact that Mr Gee was "disposed to accept that the issue of whether the SJ Berwin defendants needed permission to appeal on the $100 million point or whether they were entitled to raise it by respondent's notice did depend on the form of the court's order".
  17. The judge then referred to how preliminary issues were ordered in this case and to the fact that after pleadings the issues could have been more analytical. That led the judge to say that questions of form which may indeed be in larger or smaller degree a matter of accident should play a subsidiary role to matters of substance. He then said that the question whether Noga and the SJ Berwin defendants had agreed the $100 million as he had pointed out in his main judgment was "the largest of the issues". But again it is by reference to the appeal procedure that he suggests this point is important when in paragraph 30 he says:
  18. "In these circumstances, an objective view of this issue in the light of the new regime for permission to appeal to the court of appeal would suggest that it is the very paradigm case where a court of first instance should consider carefully whether it was a fit matter for appeal. In my judgment it would turn that regime on its head if the SJ Berwin defendants should be entitled as of right to bring that complex issue of fact into an existing appeal on a comparatively short point of law. Noga's appeal, estimated to last two days, would be overwhelmed by the SJ Berwin defendants' respondent's notice. No doubt, the court of appeal would seek to use its case management powers to make the appeal hearing manageable and efficient. Of course, if it is a matter of right, so be it. But it does not fit with the new regime. If, therefore, it is legitimately a matter for the court's discretion as to how it moulds its own order, then I do not see why the questions of whether this issue should be within the regime which requires permission to appeal and whether it is ultimately fit for appeal should not figure among the court's concern."
  19. The judge then dealt with Mr Cohen's submission that the court has no jurisdiction to make a declaration as to fact, and his reason for rejecting that submission. In this context he referred to the passage in Lord Diplock's speech in Gouriet v H.M. Attorney-General [1978] AC 435 at 501, but relied on a passage from Zamir & Woolf, The Declaratory Judgment, 2nd ed. in support of his view.
  20. The judge thus concluded that there was jurisdiction to make a declaration and the question was one of discretion. He then turned to Mr Cohen's submission that it was to use the discretion for an improper purpose, to make it for the purpose of requiring the SJ Berwin defendants to require permission to appeal. In that context he referred to Russian Commercial and Industrial Bank v British Bank for Foreign Trade Limited [1921] AC 438, and in particular the speech of Lord Dunedin at 447/8 [much pressed on us by Mr Gee in this court]. He referred further to the CPR and the overriding objective, and then said:
  21. "34. . . . .It seems to me that all these considerations bear on the relevance of reflecting in my order an issue of fact which was fundamental and by far the major issue at trial, both on account of its own merits and because of the bearing that a declaration about such an issue may have, depending on the question of permission to appeal, on any appeal. For instance I am entitled to have in mind that the financial resources available to the SJ Berwin defendants for the purpose of spending on their legal representation are for all practical purposes limitless, and that those resources have, on the information which has been put before me relating to the withdrawals from the frozen accounts for expenditure on these (among other) proceedings, been most liberally employed; whereas the resources available to Noga, while clearly adequate to sustain this litigation to date, are comparatively finite.
    35. As for Mr Cohen's argument from custom, it seems to me that that is of limited assistance in the context of the new procedural code and of the new regime requiring permission to appeal. While it is true that the rules as to a respondent's notice may not have changed, and I accept for the purposes of the present argument that without a declaration as to the agreement of $100 million the SJ Berwin defendants would be entitled simply to raise the $100 million issue by way of respondent's notice on Noga's appeal, nevertheless that right ultimately depends on the form of my order, which has not yet been settled.
    36. Mr Cohen also had arguments of practicality relating to the problems of identifying from a judgment of the complexity of my main judgment just what are the facts which are found. Those arguments were really addressed to Noga's alternative draft declarations (eg "On the facts found in the judgment. . ."). I do not have anything like that in mind. The only declaration I have in mind relating to the issue of whether $100 million was agreed is something along those lines:
    "The SJ Berwin defendants have not entered into a binding settlement agreement with Noga and are not indebted to Noga in the sum of $100 million, although a figure of $100 million was agreed".
    Only the words in italics are in dispute.
    37. Such a declaration, it seems to me, fairly and accurately reflects my resolution of the dispute between Noga and the SJ Berwin defendants: see para 654 of my main judgment.
    38. In the end, I am satisfied that I have the power to make such a declaration, and that I ought in my discretion to do so. I do so, in my judgment, not as a mere device to bring the SJ Berwin defendants within the permission to appeal regime in this respect, but because, and perhaps even primarily because, I believe that such a declaration best reflects the issues before me, both as pleaded and as presented in evidence and as argued, and the effect of my resolution of those issues; the purposes and role of a declaratory judgment; the overriding objective and the demands of justice; and the new regime requiring permission to appeal and the rationale behind that regime."

    Submissions

  22. The submissions in this court were wide ranging, and I hope I shall be forgiven for not summarising them all. In essence Mr Pollock's submission was that up until the introduction of the new rules it had been well recognised that a respondent could either be someone who was cross-appealing because he was seeking to vary the judgment or order of the first instance judge, or a defensive respondent simply saying that he would seek to uphold the decision of the judge at first instance but on grounds different from those of the judge. He submitted that Lake v Lake was still good law as to what was an "order" or "judgment" since the statutory provision under consideration in that case relating to the jurisdiction of the Court of Appeal, was in the same terms so far as material today [see section 16(1) of the Supreme Court Act 1981]. It was thus the formal order that the court drew up after the decision in the case which had to be looked at. Thus, without the declaration in the form ultimately made by the judge, the "decision" on the factual issue of $100 million would not have formed part of the formal judgment or order, and could not be appealed on its own, would not be the subject of a cross-appeal by a respondent, and could simply be challenged by a respondent seeking to defend the formal order of the judge on different grounds.
  23. In the light of the decision In re B [2000] 1 WLR 790 to which my lady drew the court's attention, Mr Pollock modified his submission as to the degree of formality required. The case under consideration by the Court of Appeal In re B, was a County Court case and thus the question was whether certain facts decided on a preliminary basis without being recorded in any formal order were a "determination" within section 77(1) of the County Courts Act 1984. No-one before us suggested that the word "determination" should have a different meaning from "judgment" or "order". The court held that the findings were a "determination", and thus that they had jurisdiction to grant permission to appeal and consider whether the judge had reached a correct conclusion. Mr Pollock submitted that even if formality was not required the court's jurisdiction was confined to appeals against what had actually been determined by the court, and did not stretch to having jurisdiction to consider findings of fact however major where the judgment or determination of the court was not itself being challenged.
  24. Mr Pollock further submitted that unless the challenge by a respondent to findings or reasons of the judge would have been capable of being appealed independently of any appeal by the appellant, it was not an appeal and thus not one for which permission to appeal could be necessary.
  25. He cited certain authorities in the Arbitration context: The Kostas K [1985] 1 Lloyd's Rep. 231 a decision of Hobhouse J (as he then was) who held that a respondent whose role was defensive did not need leave to appeal under the Arbitration Act 1979; and Vitol S.A v Norelf [1996] AC 800 where at 814 Lord Steyn held that Hirst LJ (with whom other members of the court had agreed [1996] QB 108) was wrong in his approach to a respondent simply defending himself in the context of the certification of a point of law. I shall return to those authorities.
  26. Mr Pollock submitted that the CPR had in fact recognised the distinction between the two types of respondent, and that where in CPR part 52.3, the rules dealt with the question of permission both for appellants and respondents, the respondents referred to were of the cross-appeal kind i.e. were persons who could have appealed independently. Part 52.3 which was in fact not quoted by the judge, provides as follows:
  27. "Permission
    52.3 (1) An appellant or respondent requires permission to appeal –
    (a) where the appeal is from a decision of a judge in a county court of the High Court, except where the appeal is against
    (i) a committal order
    (ii) a refusal to grant habeas corpus; or
    (iii) a secure accommodation order made under section 25 of the Children Act 1989; or
    (b) as provided by the relevant practice direction.
    (other enactments may provide that permission is required for particular appeals.)
    (2) An application for permission to appeal may be made –
    (a) to the lower court at the hearing at which the decision to be appealed was made; or
    (b) to the appeal court in an appeal notice
    (Rule 52.4 sets out the time limits for filing an appellant's notice at the appeal court. Rule 52.5 sets out the time limits for filing a respondent's notice at the appeal court. Any application for permission to appeal to the appeal court must be made in the appeal notice (see rules 52.4(2) and 52.5(3).)
    (Rule 52.13(1) provides that permission is required from the Court of Appeal for all appeals to that court from a decision of a county court or the High Court which was itself made on appeal.)
    (3) Where the lower court refuses an application for permission to appeal, a further application for permission to appeal may be made to the appeal court.
    (4) Where the appeal court, without a hearing, refuses permission to appeal, the person seeking permission may request the decision to be reconsidered at a hearing.
    (5) A request under paragraph (4) must be filed within 7 days after service of the notice that permission has been refused.
    (6) Permission to appeal will only be given where –
    (a) the court considers that the appeal would have a real prospect of success; or
    (b) there is some other compelling reason why the appeal should be heard.
    (7) An order giving permission may –
    (a) limit the issues to be heard; and
    (b) be made subject to conditions.
    (Rule 3.1(3) also provides that the court may make an order subject to conditions.)
    (Rule 25.15 provides for the court to order security for costs of an appeal.)"
  28. So Mr Pollock submits the distinction is maintained in part 52.5, and the practice direction as quoted by the judge. Mr Pollock was also inclined to submit that indeed if regard was paid to the statutory position, there was not in fact power to make rules which required a respondent to obtain permission to put in a "defensive" respondent's notice. [I will return to the statutory framework below]. Mr Pollock accepted that the court could in certain circumstances "pregnant with legal consequences" as he put it, grant a declaration of fact. He would thus accept that if a direction had been given to try as a preliminary issue in this case the pure question of fact as to whether $100 million was ever mentioned or "agreed", it would have been open to the court to "declare" or "order", that it had or had not, and that if that had happened the order or declaration would have been an order or determination which could have been brought to the Court of Appeal by the losing party, but under the new rules only with permission. He was inclined, it should be said, to accept that this would have been so even if other points had been spelt out as points to be decided at that stage e.g. whether the settlement was conditional. He accepted thus that if a direction had required it to be part of the "order" or "judgment" or "determination", that factually the $100 million had been agreed and part of the same order judgment or determination that it was only conditionally agreed, the factual finding would have been an order or judgment from which either side could have appealed, and which could only have been challenged with permission whether by an appellant or a respondent. It would in that case be at the permission stage that the court might rule that the challenge was moot, if the SJ Berwin defendants sought to appeal the factual finding, having a finding in their favour on the conditional aspect. But Mr Pollock also accepted that if Noga sought to appeal the conditional aspect, the SJ Berwin defendants would still need permission to challenge the $100 million factual aspect. Mr Pollock submitted however that no court would actually divide up the issues in that way. The issue to be tried was whether there was a binding settlement or not. In any event he submitted the court clearly did not divide up the issues in that way in this case. The issue to be determined in this case was settlement or no, and thus he submitted the finding of fact in relation to the $100 million was not the "judgment" or "order" or "decision", and would not naturally form part of the formal recording of the same. It could not thus be challenged by his side provided no appeal was launched by Noga, but should be challengeable by his clients where they wished simply to defend the finding of no settlement, on another ground.
  29. He submitted that to make a declaration which would require his clients to obtain permission to defend themselves in the Court of Appeal where they otherwise would not, was an abuse or wrongful exercise of the discretion.
  30. Mr Gee at first sought to persuade us that even without the declaration containing the factual finding as to agreement on the $100million, the SJ Berwin defendants would require permission to challenge by respondent's notice the judge's finding of fact as to the agreement over the $100 million. He suggested that the factual finding was a "decision" within Part 52.3, that permission to challenge it was thus required. This was not his position in the court below, and was ultimately not his preferred stance in this court. Recognising the difficulty, he sought to defend the judge by reference to the very wide discretion that he submitted a court had to grant declarations. He referred us to the main and well known authorities which emphasise the wide discretion that the court has to grant declarations e.g. Gouriet v Union of Post Office Workers [1978] AC 435; Russian Commercial and Industrial Bank v British Bank for Foreign Trade Limited [1921] AC 438, particularly the speech of Lord Dunedin at 446; Meadows Indemnity Co Ltd v The Insurance Corporation of Ireland plc [1989] 2 Lloyd's Rep 298; and In re S (Hospital Patient; Court's Jurisdiction) [1996] Fam 1 particularly Sir Thomas Bingham MR at 21D-22C. He referred to the new language of the CPR so far as granting declarations is concerned pointing out that Part 40.20 now provides as follows:
  31. "Binding declarations
    40.20 The court may make binding declarations whether or not any other remedy is claimed."
  32. This is different from the former order 15 rule 16 which provided:
  33. "Declaratory judgment
    No action or other proceeding shall be open to objection on the ground that a merely declaratory judgment or order is sought thereby, and the Court may make binding declarations of right whether or not any consequential relief is or could be claimed."

    The fact that the words "of right" has disappeared is referred to in the introduction of Zamir & Woolf 3rd edition where it says:

    "We regard the changes made by the Civil Procedure Rules which affect declarations as being important. In the long run, the smallest change may prove to be the most significant. The Rules of the Supreme Court referred to a "declaration of right". The Civil Procedure Rules now refer to a "declaration". The words "of right" have been dispensed with. The change indicates that declarations are not restricted to declaring rights. They can be used when it would be inappropriate to talk of "rights"."
  34. He emphasised the overriding objective of the CPR and referred us to Part 1.2 which provides:
  35. "The court must seek to give effect to the overriding objective when it –
    (a) exercises any power given to it by the Rules; or
    (b) interprets any rule."
  36. His basic submission was not that it would have been natural in the context of the issue ordered to be tried, to include a reference to the finding of fact relating to the agreement over $100 million in a declaration. His basic point was that having regard to the fact that without a declaration in the words chosen by the judge, and on the basis that the SJ Berwin defendants would not be granted permission if they needed it, his clients would be quite unfairly faced with an appeal on the facts that would swamp in terms of time the appeal for which his clients had permission. He further submitted that the judge was entitled to grant the declaration he did because it best reflected the issues before the judge both as pleaded and presented in evidence and as argued, and the effect of the judge's resolution of those issues.
  37. Discussion

  38. Although it was common ground in the court below, and was not pressed hard by Mr Gee ultimately, it is important to start with the position as if the words of the declaration had not been inserted by the judge. It is important in this context to keep in mind the distinction between the jurisdiction of the Court of Appeal to hear an appeal, the jurisdiction of the Court of Appeal to make it a requirement that permission be obtained to bring an appeal, and in that context the jurisdiction of the court to make a challenge by a respondent subject to permission. It is in the context of the court's jurisdiction that one should then examine the rules.
  39. The jurisdiction of the Court of Appeal is statutory and its jurisdiction is to "hear and determine appeals from any judgment or order of the High Court" or "any determination of the County Court".
  40. Lake v Lake can at first sight be read as an authority about the importance of a "judgment" or "order" being contained in a formal document. But that I think may be by virtue of the way it was argued, and in any event is too restrictive an interpretation. A formal order was made in the then usual form in favour of the wife in matrimonial proceedings, but the Commissioner in his reasoned judgment, and by virtue of questions asked of him at the conclusion of the proceedings, had found that the wife had committed adultery. In the Court of Appeal, counsel sought to get an amendment to the formal order; that was rejected. Counsel then sought to argue that even without something in the formal order he should be allowed to appeal the finding of adultery. The appeal was rejected by the Master of the Rolls, at least as the first ground, on the basis that the formal order "records accurately the conclusion which, in the end of all, the commissioner reached" [342] and on the ground that even if successful there was nothing in the formal order that would be varied [343]. Hodson LJ's initial reasoning appears to me to be the same. It is true that in the Master of the Rolls' judgment and in Hodson LJ's judgment some reliance is placed by them on the order or judgment being the "formal order" but that is as compared (I suggest) with the "reasons for it". It is difficult to think that there simply could be no appeal without a formal order. Many appeals are brought on the basis of an order made by a judge prior to the formal document being drawn up, and In re B demonstrates that the correct reading of Lake v Lake is not that some formal document recording the order must exist. Lake v Lake properly understood means that if the decision when properly analysed and if it were to be recorded in a formal order would be one that the would be appellant would not be seeking to challenge or vary, then there is no jurisdiction to entertain an appeal. That is in my view consistent with In re B. That this is so is not simply by virtue of interpretation of the words "judgment" or "order", but as much to do with the fact that the court only has jurisdiction to entertain "an appeal". A loser in relation to a "judgment" or "order" or "determination" has to be appealing if the court is to have any jurisdiction at all. Thus if the decision of the court on the issue it has to try (or the judgment or order of the court in relation to the issue it has to try) is one which a party does not wish to challenge in the result, it is not open to that party to challenge a finding of fact simply because it is not one he or she does not like.
  41. The decision on a preliminary issue will be a judgment or order even if it is limited to a finding of fact. There is no difficulty where the only issue to be decided at a preliminary stage is one of fact. It is that issue on which the court has been asked to pronounce a judgment and, even if the court exercises its power to give judgment against a party on the whole of the case, since that was the issue the court was asked to determine, and since it is that issue on which the whole case ultimately turns, it will be the determination of that issue which will be the relevant judgment or determination so far as jurisdiction is concerned. In Re B is a good example of a decision on preliminary issues of fact. Furthermore the case having been adjourned, and the facts making a difference as to what might flow from the adjournment, the facts in Mr Pollock's words were pregnant with legal consequences. If however in that case the court had gone on to make a decision in relation to the legal consequences which one party would not seek to challenge, in my view that party would not be entitled simply to appeal the findings because it did not like the reasons for the decision in his or her favour. It is in that context that it might be appropriate for the court at first instance to consider whether some declaration should be granted to provide a "judgment" or "order" or "determination" which could be the subject of an appeal. If for example the findings of fact might be relevant to some other proceedings, (and Mr Pollock accepted this), it might be appropriate to make a declaration so as to enable a party to challenge those findings and not find him or herself prejudiced by them. The findings would still be pregnant with legal consequences. It is to go beyond the scope of this judgment to consider precisely what circumstances might allow for the granting of a declaration where findings of fact might affect other proceedings. If an issue estoppel might arise that I suppose might provide a basis. Even in Lake v Lake it might at least through the modern eyes relating to declarations have been appropriate to grant a declaration even though issue estoppel did not apply in that context [see the judgments of the Master of the Rolls and Hodson LJ at 345 and 347]. The fact that there may be circumstances shows the breadth of the discretion that the court has in relation to granting declarations, but the circumstances envisaged are not the circumstances that are suggested as allowing the court to make the form of declaration that Rix LJ did in this case.
  42. I return to the position in this case. There is no doubt that if what the judge had been asked to determine as a preliminary issue was whether the parties met and orally agreed a figure, and if that was all he was asked to determine, his determination or judgment would have been a judgment or determination which the Court of Appeal had jurisdiction to consider. There is also no doubt of course that whichever side wished to challenge that finding, they would have needed permission to appeal. There is also no doubt that if in making that determination, he had made various findings in his reasoned judgment, about where persons were, whether they lied, and what they said at different times, even if set out as the critical issues by reference to which he would ultimately determine the issue, those findings would not be judgments or determinations and the Court of Appeal would have no jurisdiction to consider them if sought to be attacked by the party successful on the issue he had been asked to decide.
  43. If a court had spelt out the issues to be determined as the $100 million fact issue and separately whether the agreement was conditional, and orders or declarations had been made in relation to each, the first in favour of Noga and the second in favour of the SJ Berwin defendants, strictly (as it seems to me) the order made on the factual issue would have been a judgment or order on which the SJ Berwin defendants could have appealed (but only with permission) even if Noga did not appeal. But it would not have been a natural form for preliminary issues unless possibly that factual issue was relevant in some other part of the proceedings or in some other proceedings, and it was not the format of the issues ordered to be tried. Indeed the question whether it would have been permissible to order that format of preliminary issue if it had been done with an eye on whether in certain eventualities permission to appeal might be required by a respondent might have raised the same arguments as have been raised on this appeal.
  44. I do not think there is any doubt that what the judge was asked to try and determine in this case was (so far as material to this appeal), the issue whether so far as Noga was concerned there was a binding compromise. Furthermore it would I think be a misdescription of what he decided (prior in any event to any insertion of words in the declaration), to say he decided the factual issue about $100 million in the sense that was a "decision" or "judgment" or "order" or "determination" (whichever word one uses) in the jurisdictional sense. If Noga was not appealing, the Court of Appeal (if there were no declaration) would not have any jurisdiction to entertain an appeal simply on the factual issue.
  45. On the other hand, certainly in the pre-CPR context, if Noga were to appeal the SJ Berwin defendants would have been in a position to put in a defensive respondent's notice challenging the factual finding as a basis of upholding the judge's finding that there was no settlement agreement.
  46. The jurisdiction of the Court of Appeal is statutory, and its jurisdiction is to hear and determine appeals from any judgment or order of the High Court, and it is statute that has provided the limitation on that general jurisdiction. Thus by section 18 of the Supreme Court Act 1981 certain restrictions were provided for, including the requirement for leave "from the court or tribunal in question or the Court of Appeal from any interlocutory order or interlocutory judgment made or given by the High Court or any other court or tribunal, except in [certain cases]." Section 18 was amended by the Civil Procedure Act 1997 Schedule 2. The previous leave restrictions were replaced by subsection 1A which provided:
  47. "In any such class of case as may be prescribed by Rules of Court, an appeal shall lie to the Court of Appeal only with the leave of the Court of Appeal or such court or tribunal as may be specified by the Rules in relation to that class."

    Now section 54(1) of the Access to Justice Act provides as follows:

    "54 Permission to appeal
    (1) Rules of court may provide that any right of appeal to –
    (a) a county court
    (b) the High Court, or
    (c) the Court of Appeal
    may be exercised only with permission."
  48. None of those sections touched the ability of a respondent who was not cross-appealing to put in a defensive respondent's notice seeking to uphold the "judgment" on reasons other than those relied on by the judge. Procedurally the position of a respondent was formally dealt with under Order 59 rule 6(1):
  49. "Respondent's notice
    6. – (1) A respondent who, having been served with a notice of appeal, desires –
    (a) to contend on the appeal that the decision of the court below should be varied, either in any event or in the event of the appeal being allowed in whole or in part, or
    (b) to contend that the decision of the court below should be affirmed on grounds other than those relied upon by that court, or
    (c) to contend by way of cross-appeal that the decision of the court below was wrong in whole or in part
    must give notice to that effect, specifying the grounds of his contention and, in a case to which paragraph (a) or (c) relates, the precise form of the order which he proposes to ask the Court to make."
  50. That rule recognised the difference between a full cross-appeal where the appellant relies on one cause of action and the respondent seeks to uphold the judge on another but different cause of action (1)(c); a situation in which the respondent seeks to vary the decision in the court below (1)(a); and the defensive respondent's notice seeking to affirm on grounds other than those relied upon by the court below (1)(b). It is of passing interest that the distinction between the different types of notice had significance in relation to the court's approach to an extension of time for filing such notice, the practice normally being to extend time unless significant prejudice could be shown where the notice was the defensive (1)(b), but to be stricter on the 1(a) and 1(c) [see notes 59/6/5 Annual Practice 1999]. This is some recognition of the special position of a respondent simply defending the decision in his or her favour.
  51. I should add that there was never a suggestion that the grounds under a (1)(b) notice could not include suggesting that the judge's findings of fact were wrong.
  52. The importance of the position of a respondent who is simply defending is further illustrated by the arbitration authorities to which Mr Pollock directed our attention. Hobhouse J in The Kostas K supra at page 237 emphasised how in the Arbitration context a respondent who is simply acting defensively is not an appellant and thus does not need leave to seek to uphold an arbitrator's decision on other grounds. In Vitol S.A. v Norelf (supra) Hirst LJ in a judgment with which the other members agreed, had held that the requirement for a certification of a point of law as between the court of first instance and the Court of Appeal applied as much to a respondent as to an appellant. In the House of Lords Lord Steyn strongly disagreed saying at 813:
  53. "Section 1(7) provides:
    "No appeal shall lie to the Court of Appeal from a decision of the High Court on an appeal under this section unless – (a) the High Court of the Court of Appeal gives leave; and (b) it is certified by the High Court that the question of law to which its decision relates either is one of general public importance or is one which for some other special reason should be considered by the Court of Appeal."
    It will be observed that the granting of a certificate is within the sole jurisdiction of the first instance judge. There is no appeal from his decision, nor may an alternative application be made to the Court of Appeal.
    The question whether section 1(7) applies to a respondent must be considered on the basis that the respondent requires no leave to appeal in order to argue that the award ought to be upheld on a ground different from the ground on which the arbitrator made his award. Given that the respondent requires no leave to appeal, it seems wholly implausible that the legislation would seek to impose on him a procedural barrier of a section 1(7) certificate by way of a subsection introduced by the words "No appeal shall lie . . .". The contextual scene of section 1(7) further shows that no such procedural barrier was intended in the case of a respondent. Under the stated case procedure, which existed before the Act of 1979, a respondent who wished to argue that the award should be sustained for reasons not expressed or fully expressed in the award or not considered or upheld at first instance did not have to obtain a certificate of the type envisaged by section 1(7). The idea that in 1979 the legislature intended to make the position of a respondent, who had won an arbitration, more difficult by requiring him to obtain a certificate under section 1(7) before he would be permitted on appeal to the Court of Appeal to defend the award on other grounds is convincingly refuted by the history and policy of the Act of 1979. The primary purpose of the Act of 1979 was to reduce the extent of the court's supervisory jurisdiction over arbitration awards. It did so by substituting for the special case procedure a limited system of filtered appeals on questions of law. The change was intended to tilt the balance toward greater emphasis on the finality of arbitration awards. Now postulate a respondent in the Court of Appeal who at first instance won on the main point but lost on a sound alternative argument. He loses on the main point on appeal. If he requires a certificate to argue the alternative case there is a risk that he may not obtain a certificate. A perfectly good award may then be set aside. In a very relevant sense such a risk would imperil the finality of arbitration awards. It would also be a manifestly unfair consequence in cases when the respondent has a good alternative argument which does not pass the test of being a question of general public importance, e.g. the construction of a "one off" exception clause. And it is no answer to say that in some cases a judge may grant a certificate for some other special reasons. Recognising the force of these arguments counsel for the buyers said that the policy of section 1(7) was the improvement of English commercial law and that any injustice to a respondent was the price of the policy. I am reminded of irreverent observations of Lord Devlin about a similar argument. He said:
    "So there must be an annual tribute of disputants to feed the minotaur. The next step would, I suppose, be a prohibition placed on the settlement of cases containing interesting points of law:" see Devlin, The Judge, (1979), p. 106.
    The interpretation of the buyers is indefensible. It militates against the finality of arbitration awards, it would cause injustice and, if adopted, would be perceived to be a serious flaw in our arbitration system. On this point too the ruling of the Court of Appeal was wrong.
    For the avoidance of doubt I would, however, emphasise that nothing I have said about a respondent's position on appeal is intended in any way to derogate from the importance of respondents, and their legal representative, complying at all stages with the provisions of the relevant practice direction and rules of court: see Practice Direction (Arbitration Award: Appeal) [1985] 1 W.L.R. 959; R.S.C., Ord. 59. R. 6(1)(b) and R.S.C., Ord. 73, r. 5(9)."
  54. Mr Gee quite rightly says that Lord Steyn and Hobhouse J were dealing with a different area and a different statute, but what they said has relevance to the position of a respondent seeking to defend himself. They also draw attention to how where new procedures are brought into play it is important to look critically at the question whether those new procedures have taken away rights of "defense", and indeed support the view that in so far as they have not expressly done so, they ought not to be construed as having done so.
  55. There is thus no doubt in my mind that the position of a respondent wishing to defend his judgment by reference to grounds different from those of the judge was deliberately, and for good reason, maintained under the CPR. Although thus I have no doubt that the judge had the jurisdiction to make a declaration in the form he did in the literal sense of that term, the question is whether, having regard to the fact that, as it seems to me, his purpose was to affect the question whether the SJ Berwin defendants should have to obtain permission to appeal if he made the declaration in that form but would not if he did not, whether it was a proper exercise of his discretion to put the declaration in that form.
  56. The Court of Appeal has always had, and still has, the power to consider whether a respondent's notice is frivolous or vexatious, and in one sense this case could be said to about where the onus should lie for dismissing the factual aspect of the factual appeal summarily. On the one side it is said that the right of a respondent to defend should not be abrogated by putting that respondent in the position of having to demonstrate that he has a real prospect of success. It should be for the appellant, if he can do it, to establish that the points taken in the respondent's notice are bound to fail.
  57. In my view if the only purpose of a declaration is to put a respondent in the position where he must persuade the Court of Appeal to grant him permission to pursue his "defensive" respondent's notice, or risk being put on terms in relation to doing so, that is not a legitimate basis for the grant. Statute has not provided the court with the power to place that requirement on a defensive respondent; the rules do not provide the court with that power, and in my view it is not a proper exercise of discretion to in effect create that power.
  58. This case poses the problem in a stark way because of the time taken to try the factual issues, and because of the time it may take to consider those factual issues. There is a temptation to limit the court's workload where it would seem possible that if a reasonable prospect of success were the test, the SJ Berwin defendants might not be allowed to pursue their respondent's notice. But the size of the case cannot be the determining factor. In principle, if it was a proper exercise of the discretion in this case, it will be the proper exercise of discretion in others.
  59. Thus, whereas fully understanding the reasons for the judge exercising his discretion in the way he did, I cannot agree that he should have done so and would allow the appeal.
  60. Lord Justice Tuckey:

  61. The preliminary issue ordered to be tried in this case was:
  62. Whether any claims had been settled and if so which of the claims had been settled and on what terms.

    There were three agreements and various claims, one of which was Noga's claim against the SJ Berwin defendants which it said had been settled for $100 million. The SJ Berwin defendants denied that any such sum had been agreed (an issue of fact) and, even if it had, that the agreement was not binding (an issue of law). The issue of fact was complex and occupied the major part of the 6 month trial; Mr. Pollock was unable to estimate accurately how long an appeal on this issue would take beyond saying 12 to 28 days. The issue of law was relatively simple and the appeal on this issue is estimated to last 2 days.

  63. The preliminary issue was formulated in general terms because it was made before the issues in respect of each of the three agreements had been crystallised. At paragraph 61 of his first judgment the judge identified the central issues which he had to try as:
  64. (i) Was $100 million ever agreed between Noga and the SJ Berwin defendants? and
    (ii) Even if $100 million had been agreed ... was the agreement in any event a binding contract?

    If the preliminary issues to be tried had been formulated in this way and answered by the judge by the declaration which he actually made which was:

    The SJ Berwin defendants have not entered into a binding settlement agreement with Noga ... although a figure of $100 million was agreed,

    I do not think his order could possibly be criticised. It would be the natural answer to the preliminary issues which he was trying. I do not believe that it matters that the issues were not formulated with this precision from the outset. Judges trying preliminary issues often vary or refine their terms in the course of the trial.

  65. So, I am afraid I disagree with Waller L.J. that it would not have been natural to formulate preliminary issues in this way (para. 30). In the event the finding that $100 million had been agreed did not carry the day because the judge found that the agreement was not binding, but it was still very much an issue which had to be determined in the event that the issue of law was (or is on appeal) decided in favour of Noga, so this was (and still is) a relevant issue, and to declare it can I think properly be characterised as a "decision", "judgment" "order" or "determination". After all the original preliminary issue refers specifically to "what terms" and a finding that $100 million had been agreed was essential to answer this question. So I disagree with what Waller L.J. says about this in paragraph 31.
  66. I agree with what the judge said at paragraphs 37 and 38 of his third judgment:
  67. Such a declaration fairly and accurately reflects my resolution of the dispute between Noga and the SJ Berwin defendants. In the end I am satisfied that I have the power to make such a declaration and that I ought in my discretion to do so. I do so ... not as a mere device to bring the SJ Berwin defendants within the permission to appeal regime in this respect, but because and perhaps even primarily because, I believe that such a declaration best reflects the issues before me, both as pleaded and as presented in evidence and as argued, and the effect of my resolution of those issues; [and] the purposes and role of the declaratory judgment; ....
  68. I agree with Waller L.J. (para 41) that it would not be a legitimate exercise of the discretion to make a declaration if the only purpose of doing so was to put the respondent into a position where permission to appeal had to be obtained for what would otherwise only be a defensive appeal. But that was not the judge's only purpose for making the declaration in this case, as the passage from his judgment which I have quoted makes clear.
  69. The first instance judge has an important role in the appellate process. He may grant permission to appeal on some or all of the proposed grounds of appeal or cross appeal and may do so on terms. In deciding whether or not to exercise his wide discretion to grant a declaration I can see nothing wrong with the judge taking account of the resources available to the parties and as the judge said in this case at the end of paragraph 38:
  70. the overriding objective and the demands of justice; and the new regime requiring permission to appeal and the rationale behind that regime.
  71. For these reasons I think the judge was entitled to make the declaration which he did and I would dismiss this appeal.
  72. I should add that although I disagree with Waller L.J. about the result of this appeal I do not see that we disagree on any matter of principle. Thus, I agree entirely with what he says about preliminary issues, declarations and the jurisdiction of this court in paras. 25 – 28 and 33 – 41 of his judgment.
  73. Lady Justice Hale:PRIVATE 

  74. I agree with Tuckey L.J. that this appeal should be dismissed for the reasons he gives. Like him, however, I agree with Waller L.J. in his analysis of the law. We differ only on whether it was a proper exercise of discretion for Rix L.J. to frame his order as he did.
  75. It is clear that the statutory jurisdiction of the Court of Appeal is to hear appeals from a 'judgment or order' of the High Court or a 'determination' of a county court. It has long been axiomatic that these words refer to the result of the hearing rather than to the reasons given by the judge for reaching that result. Hence I agree with Waller L.J. (para 27, above) that 'Lake v Lake properly understood means that if the decision when properly analysed and if it were to be recorded in a formal order would be one that the would-be appellant would not be seeking to challenge or vary, then there is no jurisdiction to entertain an appeal.' This ties in neatly with the distinction drawn in the CPR between a cross appeal, in which the respondent is seeking a different or varied result, for which he needs permission, and upholding the decision on other grounds, for which he does not.
  76. But there must be scope for the exercise of some discretion in identifying the result of the case for the purpose of embodying it in the court's judgment or order. This is particularly so in the case of a trial of preliminary or separate issues in which many permutations of result are possible. It is instructive to consult the Forms prescribed under CPR Part 4 and the Tables annexed to 4PD.1. CPR rule 4(2) provides that a form may be varied by the court if the variation is required by the circumstances of a particular case. Table 2 lists the Practice Forms which may be used under the Practice Direction. These include the forms previously contained in Appendix A to the Rules of the Supreme Court. Form 48 is the familiar form of order after the trial of an issue directed to be tried separately under the court's general powers of case management in CPR rule 3.1(2)(i). The order itself begins with a paragraph stating that 'the above issue is determined as follows'. This obviously permits considerable flexibility in determining exactly how the determination should be worded. It is conceded that permission to appeal would have been required if the direction for the trial of a preliminary issue in this case had set out the questions in the way they were eventually set out by Rix L.J. in paragraph 61 of his first judgment and he had answered them seriatim in his order. It is also obvious that if he had reached the conclusion that there had been a binding settlement of the Noga claim he would have had to include in his order the figure which he had found to have been agreed. It made complete sense, therefore, for him to cover the point in his determination of the preliminary issue.
  77. I agree that matters might be different if his sole purpose in doing so were to impose a permission requirement upon the respondents to the Noga appeal. But I see no reason not to accept the assurance from him in paragraphs 37 and 38 of his third judgment that this was not his sole reason. Nor, however, do I think that it was impermissible for him to take this consideration into account in deciding how to frame his determination. The overriding objective under CPR rule 1.1(1) is to enable the court to deal with cases justly. CPR rule 1.1(2) expressly provides that dealing with a case justly includes, so far as is practicable, ensuring that the parties are on an equal footing, saving expense, dealing with the case in ways which are proportionate, among other things, to the financial position of each party, ensuring that it is dealt with expeditiously and fairly, and allotting to it an appropriate share of the court's resources. The SJ Berwin defendants have not challenged the representations made by Noga as to the differences between the resources available to them to pursue this litigation. The trial of the main issue of fact determined by Rix L.J. occupied many, many days, far more than such a comparatively simple issue would have occupied in many other trials. If the reality is that an appeal against that finding would have no real prospect of success (as to which I currently have no view), then it is scarcely in accordance with the overriding objective for the SJ Berwin defendants to be entitled as of right to occupy many similarly expansive and expensive days in the Court of Appeal. If they have a real prospect of success then permission will be granted. Either way, no injustice will be done.
  78. Hence, I would dismiss this appeal.
  79. Order:

  80. The SJ Berwin Defendants' appeal is hereby dismissed.
  81. Noga's costs of and occasioned by the form of order appeal are to be paid by the SJ Berwin Defendants and referred to a detailed assessment if not agreed.
  82. The SJ Berwin Defendants shall pay to Noga the sum of £40,000 on account of Noga's costs, such sum to be paid within 14 days.
  83. All outstanding applications for permission to appeal to be dealt with on paper, and the result notified to all affected parties (i.e. Noga, the SJ Berwin Defendants and the FGN) at least 2 weeks before the date fixed for the directions hearing referred to in paragraph 5 below.
  84. A directions hearing shall be fixed through the usual channels, with an estimate of ½day, for the purpose of considering timetabling and other case management issues in relation to the remaining appeals. Not before November but as soon as possible thereafter.
  85. Permission for leave to appeal to the House of Lords refused.
  86. (Order does not form part of the approved judgment)


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URL: http://www.bailii.org/ew/cases/EWCA/Civ/2002/1142.html