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Cite as: [2011] EWCA Civ 943

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Neutral Citation Number: [2011] EWCA Civ 943
Case No: A3/2011/0944

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
(CHANCERY DIVISION)
(MR JUSTICE KITCHIN)

Royal Courts of Justice
Strand, London, WC2A 2LL
14 July 2011

B e f o r e :

LORD JUSTICE RIX
LORD JUSTICE LLOYD
and
LORD JUSTICE SULLIVAN

____________________

Between:
PAUL GREGORY ALLEN
acting
as trustee in the estate of Adrian Jacobs (deceased)


Appellant/
Claimant
- and -


BLOOMSBURY PUBLISHING LIMITED
JOANNE KATHLEEN MURRAY (PKA JK ROWLING)



Respondent/Defendant

____________________

(DAR Transcript of
WordWave International Limited
A Merrill Communications Company
165 Fleet Street, London EC4A 2DY
Tel No: 020 7404 1400 Fax No: 020 7831 8838
Official Shorthand Writers to the Court)

____________________

Mr M Hicks (instructed by James Love Legal) appeared on behalf of the Appellants
Mr W Edwards (instructed by Reynolds Porter Chamberlain) appeared on behalf of the 1st Respondent
Mr J Baldwin QC (instructed by Schillings Solicitors) appeared on behalf of the 2nd Respondent.

____________________

HTML VERSION OF JUDGMENT
____________________

Crown Copyright ©

    Lord Justice Lloyd:

  1. This appeal is brought by the claimant against an order of Kitchin J made on 18 March 2011. The order required the claimant to pay into court substantial sums in respect of the costs of each defendant by three dates between April and November this year, with the sanction that if any of the sums was not paid into court by the specified date the action is to be struck out. The order was made on applications by the first and second defendants, which were for summary judgment or, in the case of the first defendant, alternatively for security for costs. The judge's order also provided that the costs of the applications which led to his order were to be costs in the case.
  2. The claimant complains of three things: firstly, the amount of the sums ordered to be paid into court; secondly, the fact that it was made as an unless order rather than an order staying the proceedings if the sums were not paid on time; and thirdly, the order for costs. Permission to appeal does not seem to have been sought from the judge but was granted by Rimer LJ, who also stayed the order for payment and the unless order, and by a later order also stayed the judge's directions given by way of trial preparation and case management. The trial is due to take place in February next year. Rimer LJ imposed a condition on granting permission to appeal of payment in of the sum of 50,000 which was done.
  3. Before the judge at the first hearing the claimant was represented by Mr Robert Howe QC and Mr Mark Engelman, the first defendant by Mr Andrew Sutcliffe QC and Mr W Edwards, and the second defendant by Mr John Baldwin QC and Mr Adrian Speck. At the second hearing before the judge each party was represented only by the respective junior counsel. On the appeal Mr Howe signed the skeleton and presumably settled the grounds of appeal for the claimant, but at a late stage the claimant changed his solicitors and counsel so that he was represented at the hearing of the appeal by Mr Michael Hicks. The defendants confined their representation on the appeal to Mr Baldwin for the second defendant and Mr Edwards for the first defendant, submitting a joint skeleton. Mr Hicks elaborated his submissions in ways that were not altogether foreseeable from Mr Howe's skeleton argument and grounds; only one specific point was entirely new, with which I will deal in due course.
  4. The claim is for damages for breach of copyright, the claimant asserting that in the book Harry Potter and the Goblet of Fire substantial parts of a publication, Willy the Wizard, written by the late Mr Adrian Jacobs, were copied in breach of copyright. The first defendant is the publisher of The Goblet of Fire and the second defendant is the author. The claimant, Mr Paul Allen, asserts title to sue on the following basis. The late Mr Adrian Jacobs was declared bankrupt in 1989. Willy the Wizard had been written and published in 1987. The copyright therefore vested in the Official Receiver on the making of the bankruptcy order. In 2004 the Official Receiver assigned the copyright and any causes of action related to it to Mr Jonathan Jacobs, the only son of Mr Adrian Jacobs. In 2008 Mr Jonathan Jacobs assigned the copyright and the causes of action to Mr Paul Allen and appointed him as the trustee of the estate of the late Mr Adrian Jacobs. The judge held that Mr Paul Allen was a nominal claimant for the purposes of CPR 25 and subject to one point this conclusion is not challenged. Mr Jonathan Jacobs lives in California and is said to have substantial means. He has been joined to the proceedings as a party for the purposes of costs, that is to say with a view to the possibility of an order being sought for costs to be paid by him under section 51 of the Senior Courts Act 1981.
  5. The first defendant applied for summary judgment on the grounds that the claimant had no real prospect of success, with an alternative order sought that the claimant should be required to provide security for the costs as a condition of being allowed to pursue the claim or under CPR 25. The second defendant applied for summary judgment with no express fallback by way of alternative. The judge heard the application from 28 to 30 July 2010 and gave judgment on 14 October. He considered the case as to copying and also as to whether Goblet of Fire incorporates a substantial part of Willy the Wizard in some detail. He concluded that the claim might succeed but that it is improbable that it would. He indicated at the end of his judgment that he was minded to make an order imposing a requirement of payment into court as a condition of allowing the claimant to pursue the claim. He adjourned to a later hearing the question of whether he should do so and, if so, what requirement he should impose, because the claimant made the point that he had not yet put in evidence directed to that point.
  6. The adjourned hearing came before the judge on 15 March this year, on which he gave judgment on 18 March. He made the order complained of after some debate following the delivery of his judgment on 18 March. We were shown, as he had been, the provisions relevant to an order requiring a payment of money into court by way of security for costs. The judge set them out in his judgment. Part 25 deals specifically with such orders. Part 24 provides for the possibility of a conditional order as a possible outcome of a summary judgment application whether by the claimant or the defendant. Part 3 allows for an order to be subjected to conditions, including payment into court (see rule 3.1(3) to which rule 24.6 makes an express cross-reference). It also allows for an order for payment in case of failure without good reason to comply with a rule, a practice direction or a pre-action protocol (see rule 3.1(5)) to which costs incurred or likely to be incurred are relevant (see rule 3.1(6)).
  7. The judge considered in his second judgment the rules and authorities on these several different provisions. The principal authorities on the several rules and their inter-relationship are Olatawura v Abiloye [2003] 1 WLR 275 and Huscroft v P&O Ferries [2010] EWCA Civ 1483. The judge summarised the position in his paragraph 32 as follows:
  8. "(i) the court has jurisdiction under rule 24.6 to make an order which is tantamount to an order for security for costs;
    (ii) that jurisdiction extends to requiring someone advancing an unpromising claim to secure the defendant's costs;
    (iii) before ordering security for costs in any case, the court should be alert and sensitive to the risk that by making such an order it may be denying the party concerned a right of access to the court; whether or not the person concerned has raised or can raise the money will always be a prime consideration;
    (iv) the court has a wide discretion to ensure that justice is done in any particular case;
    (v) relevant considerations, besides the ability of the person to pay, include his conduct of the proceedings and the apparent strength of his case;
    (vi) a party only becomes amenable to an adverse order for security under rule 3 once he can be seen either regularly to be flouting proper court procedures or orders or otherwise has demonstrated a want of good faith, that is to say a will to litigate a genuine claim or defence as economically as reasonably possible in accordance with the overriding objective;
    (vii) likewise, an order for security for costs would not be appropriate in every case where a party appears to have a somewhat weak claim or defence;
    (viii) exorbitant applications for summary judgment in misguided attempts to obtain conditional orders providing security for costs are not to be encouraged;
    (ix) the occasions when security for costs is ordered solely because the case appears weak may be expected to be few and far between;
    (x) it would be wrong to encourage litigants to regard rule 3.1 as providing a convenient means of circumventing the requirements of Part 25 and thereby providing a less demanding route to obtaining security for costs. When the court is asked to consider making an order under rule 3.1(3) or 3.1(5) which is or amounts to an order for security for costs or when it considers doing so of its own motion it should bear in mind the principles underlying rules 25.12 and 25.13. In my judgment the court should also bear this principle in mind when considering whether to make a conditional order under rule 24.6."

    That summary is not challenged before us.

  9. The judge then referred to the principal material factors. He considered that the case would probably fail and the summary judgment claim had only just not succeeded. Mr Allen is a nominal claimant who has made no disclosure of assets in response to evidence casting doubt on whether he would be able to satisfy any significant costs orders against him, although he does have an indemnity under contract from Mr Jonathan Jacobs. Mr Allen and those behind him in relation to the proceedings have shown a want of good faith ("good faith" in this context having the meaning that I have quoted from paragraph 32 of the judgment). That is based on factors which the judge discussed in paragraphs 43 through to 63 of the judgment. Next, he asked himself whether the order would stifle the claim. On this score he referred to the need for the claimant and those behind him to be forthcoming about the available resources. There was no evidence from Mr Jonathan Jacobs of his means. He said that he had entered into no agreement with Mr Allen as regards Mr Allen's legal costs, that he had no contractual right to any recovery in the action and no control over the proceedings. However, as sole beneficiary of the estate he would apparently be an obvious person to fund an order for security for costs if there was to be one.
  10. The explanation in the evidence as to how the proceedings have been funded to date was entirely inadequate and the same was true as regards some parallel proceedings brought in the state of New York. The judge was told that the claimant's estimated costs to date were of the order of 800,000. The judge had indicated in paragraph 89 of his first judgment that the ability of the person concerned to pay would be relevant and the second defendant's solicitors had made the point at some length in a letter written very shortly after the delivery of that judgment on 28 October 2010. The judge concluded at paragraph 71 on this point:
  11. "It follows, in my judgment, that the evidence is far from full or candid in setting out the means available to Mr Allen and I am wholly unsatisfied that Mr Allen will be prevented by an order for security from continuing the litigation."

  12. Then the judge considered aspects of the conduct of the defendants. The claimant mounted two main criticisms to this. The first was alleged harassment in effect by, among other things, the use of private investigators in relation to Mr Allen and in relation to another person involved on the claimant's side. The second point was the refusal by the second defendant to disclose her manuscript of The Goblet of Fire. The judge considered that there was no real substance in the first group of criticisms on the evidence. As regards disclosure, he clearly regarded it as by no means unreasonable for the defendants not yet to have started on the disclosure process pending the outcome of the application.
  13. Taking all those factors together, the judge concluded that it would be right to require a payment in. In summary this was because, first, the case was unlikely to succeed, the summary judgment application having nearly succeeded. Secondly, the claimant is a nominal claimant who, because of the absence of evidence as to his means, could not be relied on to be able to pay any significant costs order. Thirdly, those involved in asserting and pursuing the claim had shown a willingness to litigate otherwise than in good faith, that is to say pursuing a genuine claim as economically as reasonably possible in accordance with the overriding objective. Fourthly, the evidence, including the very limited evidence as to Mr Jonathan Jacobs and others who may have been funding or supporting the proceedings so far and the parallel New York proceedings, did not show that the making of such an order would stifle the claim. None of this, subject to one point about the status of Mr Allen as a nominal claimant, is criticised as such on the appeal.
  14. Then the judge dealt with the costs of the application before deciding the amount of the security, recognising that there might be a consequential effect depending on what order for costs he decided to make. The judge ordered costs in the case for several reasons, the primary one being that each side had had a degree of success and that the two aspects of the case overlapped substantially. Lastly, he considered the amount of the payment to be required. Between them the defendants had provided cost estimates up to trial of some 2.3 million as against an estimate on the part of the claimant of around 1.3 million. He bore in mind the need not to deny the claimant access to justice but did not attach great weight to that, given the lack of candour as to the means available to the claimant. He did consider that the defendants' estimates were over the top and reduced them to 65 per cent of the nominal amount. His order requiring payment in of that amount is challenged as being far too high.
  15. The draft order sought by the first defendant had, from the first, expressly been formulated as having a striking out sanction for non-compliance. That was not questioned at the hearing. It seems that the issue of whether it should be a striking out order or merely a stay was raised after the hearing at the stage when counsel for the defendants proposed the terms of the minute of order. There was a disagreement between counsel on that, which was put to the judge to be resolved, and he decided in favour of the striking out option. He had already heard argument as to the dates by which payment should be made. The defendants, who had originally claimed payment all in one go, proposed that the payments should be required to be made in three tranches. The three tranches would correspond broadly speaking to the costs to date, the costs to be incurred in the next few months and then the costs up to trial, which were to be paid by the November date. When the judge decided in principle in favour of 65 per cent of the cost estimates, the defendants' counsel asked that he should order payment of 65 per cent of each of the proposed tranches. The judge asked counsel for the claimant whether he had any objection to the substantive terms of the draft order. The parties then took a short time to discuss the staging of the payments.
  16. The judge accepted the defendants' proposal in principle as regards the staging, but said that he would consider any reasonable request as regards further time to raise the sum needed for the first tranche. The claimant's counsel first said that he would need two months as against the defendants' proposal, which had originally been three weeks and which was moderated to five weeks. In the end, after the short adjournment that day, on behalf of the claimant counsel agreed to five weeks and did not at that stage query the terms of the order providing for striking out on non-payment.
  17. A noteworthy feature of this appeal is that each of the first two grounds relies on a point not argued below. As regards quantum, it is said the judge was wrong not to ask himself whether it was appropriate to order a full indemnity in respect of reasonable costs or whether a lesser amount should be covered. In particular reliance is placed on Nasser v United Bank of Kuwait [2001] EWCA Civ 556, [2002] 1 WLR 1868. That case was not cited to the judge and the skeletons below and the transcripts show that no reference was made to it or indeed to quantum except (a) as to the reasonableness of the defendants' cost estimates and (b) the general point of not hindering access to the court or stifling the proceedings. The argument therefore is that the judge misdirected himself in the exercise of his discretion even though he was not addressed on the point, which he is said to have got wrong by overlooking it.
  18. Insofar as the new point is one to which evidence could be relevant, the fact that it has not been taken below, so that the evidence is not before the court, could be a fatal objection to the point being taken for the first time on appeal. To an extent that is true of this point, since Nasser focuses on the additional costs of enforcement abroad. Leaving that aspect aside as being something on which, if necessary, the court could make an estimate, perhaps on a basis generous to the defendants, the argument might be capable of overcoming the reluctance of an appellate court to allow a new point to be taken on appeal.
  19. However, there is a related difficulty in that the judge's order was undoubtedly made in the exercise of his discretion and, as a matter of principle, an appellate court will not interfere in such a case unless it is clear that the judge has misdirected himself either because it is clear from the judgment that he has made an error of law -- including taking irrelevant matters into account or leaving relevant matters out of account -- or because his order is plainly wrong so that it must be the result of a misdirection. In our adversarial system of litigation, in a case where each party was professionally represented with plenty of opportunity to formulate and put to the court all points considered to be relevant on a particular point, it seems to me questionable for a judge to be criticised for having failed to take into account a factor which, if relevant, was known or available to all parties and which no party invited him to consider as part of the process of exercising his discretion. It would be one thing if, through inadvertence, the judge overlooked a point of law which should affect his reasoning and Mr Hicks sought to elaborate his case so as to bring it into that category but otherwise what is said here is that there was a relevant consideration which the judge failed to take into account. It does not seem to me to be fair either to the judge or to the opposing party or parties for an unsuccessful litigant to be able to challenge the exercise of the court's discretion for failure to take account of a factor which was not in any way hidden and which, if it really is relevant, the exercise of reasonable professional diligence could have brought to light but which was not suggested to the judge as being relevant. This strikes me as being wrong in principle. I am not aware of any authority on the point. I can understand that a court might be reluctant to be dogmatic on the point because, in the context of interlocutory orders which very often involve the exercise of discretion, the relevant circumstances are infinitely variable and there may often be cases in which one side was not represented below or in which the circumstances of the hearing did not allow full preparation or consideration of all potentially relevant factors.
  20. For that reason I do not intend to adopt any hard and fast rule as the basis for my decision on this appeal. However, I do view with considerable scepticism in the present case the attempt to criticise the judge for not taking a point into account which was not submitted to him as being relevant. That said, it may be that the reason why it was not the subject of submissions to the judge is the same as the reason why, on its merits, it is not a good ground of appeal, namely that it is not in fact relevant to the case.
  21. Nasser v United Bank of Kuwait concerned an application for security for costs of an appeal by a United States resident claimant, the appeal being against an order striking out her claim for want of prosecution. A single Lord Justice had ordered the payment of 17,500 security. Under the procedure then applicable the claimant applied to have the question reconsidered by the full court. It came before Simon Brown and Mance LJJ, as they then were. The judgment of Mance LJ identifies a number of relevant points, including the fact that the appeal had had to pass through the permission to appeal filter and that impecuniosity is not a ground for security for costs of an appeal. He held that the mere fact of residence outside the United Kingdom or the European Economic Area was not an adequate ground for security or at any rate not for full security. The court's conclusion was that security should be ordered but only so far as enforcement against the claimant in the United States of America would be likely to be more difficult and expensive than it would have been in the United Kingdom or in the area covered by the Brussels and Lugano Conventions. He also concluded that the requirement of such a payment in would not stifle the appeal. A significant difference between this case and that one is that the requirement of payment in here is not based on the foreign residence of the claimant but on, first, the lack of probability of the claim succeeding so that part 24 is relevant, and secondly, the status of Mr Allen as a nominal claimant.
  22. It seems to me that, if the claimant's submissions to the judge had included reference to Nasser and to the point about non-discrimination which lies behind Mance LJ's reasoning, the judge would have come to the same conclusion as he in fact did on the basis that the reasons for ordering payment in here are different from those applying in Nasser. There is no equivalent comparable to permission to appeal for claims generally, so the case does not need to be treated as having reasonable prospects. It does have some prospects, as it survived the part 24 applications as regards summary judgment itself, but those have been assessed by the judgment as distinctly poor, hence the question of a conditional order. Moreover, no issue of discrimination arises as the factor under part 25 which is relevant in the fact that Mr Allen is a nominal claimant, not apparently good for any costs order.
  23. A different point is also made for the claimant, namely that Mr Jonathan Jacobs is now a party to the proceedings for the purposes of costs under an order made by the Master on 15 July 2010 against opposition from Mr Jacobs. This is relevant to a possible third party costs order under section 51 (see CPR rule 48.2) and it could be relevant to an order for security (see rule 25.14). However, no application for security has been made against Mr Jacobs.
  24. On the basis of the existence of this order it is said that the defendants would be able to obtain an order for costs against Mr Jonathan Jacobs in any event and therefore do not need security against the claimant. It cannot be assumed that a section 51 order would be made against Mr Jacobs. Whether such an order would or should be made against him would depend on the position as it emerged on such an application as regards his backing or funding for the litigation, something from which he has been keen to distance himself. Although that may not be an entirely fair and objective view of the position, it cannot be assumed that he would be liable. For that reason, I do not accept that his presence in the proceedings means that the defendants do not need and should not have security from the claimant.
  25. Mr Hicks, coming fresh to the case, elaborated his arguments on the appeal somewhat differently. He invited the court to examine the different powers of the court to make an order which, in effect, requires security for a party's costs, namely part 25, part 3.1(3), with which he aligned part 24.6, and part 3.1(5). He submitted that the different situations in which these respective powers arise and their different terms show that the order which can appropriately be made under each may well be different in each case. He instanced Nasser as an example under part 25 in the case of a non-resident claimant where the order is proportionate to the mischief with which the order is intended to guard. He said that this was an example of the general proposition that an order for security would by no means necessarily be for the whole of the relevant party's costs and that it should be governed by the purpose of the particular rule. He pointed to the fact that, whereas the first defendant's application was in the alternative under part 24 and part 25, the judge's conclusion at the end of his first judgment was to favour a conditional order under part 24 and that was reflected in the order that was drawn up at the conclusion of that hearing. He also showed us that the issue of Mr Allen's status as a nominal claimant did not feature in the skeleton arguments before the judge at the second stage, although it did feature in the course of oral argument. Mr Hicks also showed us that a significant factor in the case, in the judge's first judgment, would be disclosure of the second defendant's manuscript, a stage provided for under the judge's case management directions in the second order. He criticised the judge's requiring a payment of the sum of 1.1 million into court as a condition of getting to the stage of such a disclosure. He showed us that the defendants' estimates of costs relating to disclosure itself come to some 60,000 or so. He argued that it was startling to require the claimant to pay 1.1 million into court in order to "buy" the right to see the defendants' disclosure, which would cost the defendants at most the sum of some 60,000 to give. He put this forward not as a ground of appeal as such but as an appropriate guide to the order that should be made if the court held that the judge had been wrong and it came to exercise the discretion for itself.
  26. He also advanced a new point to show that, even if the application had been under part 25 as such, the claimant would not have been susceptible to an order for security under rule 25.13(2)(f). That is the argument that the claimant is within the excepted category of a representative claimant under part 19. I would reject that argument. A claimant may be a representative claimant under rule 19.6 or rule 19.7. Neither of those rules applies to the present case. Mr Hicks relied instead on rule 19.7A, which provides that trustees or personal representatives can bring a claim as such without joining the beneficiaries and the judgment is binding on the beneficiaries. Mr Allen is of course a trustee. The proceedings can be brought without joining the beneficiaries and the judgment would be binding on them. However, this rule does not constitute the claimant as a representative claimant. There is nothing in the rule to that effect, unlike the terms of rules 19.6 and 19.7. Accordingly this point seems to me to be wrong and irrelevant.
  27. Looking at Mr Hicks' argument on this ground more generally, it seems to me that his approach is over-analytical and compartmentalises a process of reasoning on the part of the court which should instead be viewed as a whole. The proposition set out in the judge's paragraph 32 (which I have quoted) shows that the court has a wide discretion to ensure that justice is done and that, in a case in which an order is considered under part 24 or, if it is distinct, part 3, the court should bear in mind the principles underlying part 25.12 and 25.13. Thus while it is proper for the court to consider what the position would be under part 25 if that were the basis of the application, it is mainly relevant to avoid circumventing the provisions of part 25. It was therefore proper for the judge to consider the possible case of security under rule 25.13(2)(f) against a nominal claimant, but perhaps mainly as a cross-check to show that what was under consideration as an exercise of the discretion under rule 24.6 was not incompatible with the analogous provisions of part 25.
  28. Mr Hicks' more general proposition was that part 25 is relevant not only as a cross-check but because the court is limited in such a case to making the order that would be made under part 25 itself. Apart from the Nasser point he argued that, even if want of good faith is established as a ground, the order for security should be for the amount by which the bad conduct would increase the costs incurred, which the court should endeavour to estimate. He sought to distinguish between rule 3.1(3) as being relevant to future costs and rule 3.1(5) as being relevant to costs already incurred as a result of bad conduct. Since rule 3.1(6) refers expressly to costs likely to be incurred, it seems to me that that proposition falls at the first hurdle. In any event, I would reject that attempt at classification and rigid segregation. In each case the jurisdiction is conferred at large and the power can be exercised to do justice in the given case. I do not question the Nasser proposition in a case of that kind, but this is not of that kind. This is a very different case on the facts. Mr Allen is a nominal claimant, set up as such for the purposes of the litigation. His residence is not relevant, but his lack of apparent assets is highly relevant. The position behind him as to who truly would benefit from the litigation is obscure and no doubt deliberately so. The want of good faith in the sense already described is manifest from well before the commencement of this particular litigation.
  29. Although he did not put it in quite this way, the effect of the judge's order could be described as requiring the claimant to demonstrate his commitment to the proceedings in a proper fashion by putting up security for the defendant's reasonable costs as a pre-condition of being allowed to proceed. This is justified by the judge's view of the very limited prospects of success that the claim has, the lack of good faith in the conduct of the claim (in the sense that I have already mentioned), the status of the claimant as a nominal claimant and the lack of significance of Mr Jonathan Jacobs being joined as a party for costs purposes, the inadequate evidence as to the claimant's assets and as to the true position as regards who would benefit from litigation coupled with the judge's conclusion that the order would not stifle the litigation. Despite Mr Howe's skeleton and Mr Hicks' oral submissions, I regard the judge's treatment of the issues that were before him in March as an entirely proper exercise of his discretion. He was satisfied that it was open to him to consider making a conditional order under rule 24.6 because of the very weak prospects of success of the claim. He directed himself correctly as to the legal principles applicable. He considered fully all the relevant factors that were put to him, and came to conclusions on each which he was entitled to reach. He did not, as I see it, ignore any materially relevant factors. He balanced all the various points in a proper way and came to an appropriate conclusion. It was not an error of law to overlook the Nasser case, which is not relevant to a case of this type. It was not an error of law to treat rule 25.13(2)(f) as a relevant analogy. It was not wrong to fail to address in terms the possibility of an order requiring only part of the reasonable costs to be paid in. To the contrary, there was every reason to require the claimant to make the staged payments in full, which the judge provided for in his order.
  30. By the second ground of appeal, the claimant complains that the order took the form of an unless order with the sanction of striking out, rather than what is said to be the more normal stay of proceedings on non-payment. Reference was made in the skeleton argument to Radu v Houston [2006] EWCA Civ 1575, [2007] 5 Costs LR 671. This is another case that was not cited to the judge. I have described the procedural history as regards how this point arose. If the point had been taken on 18 March as it should have been if it was going to be we would have had the transcript of the judge's ruling on the point. Radu v Houston was a libel action in which an unless form of security order had been made. Permission to appeal had been granted but the order had not been stayed. The appellant did not directly or expressly challenge the use of the unless form of order, but Waller LJ expressed serious doubts as to whether it was appropriate in those circumstances, permission to appeal having been granted. He said at paragraph 18 of his judgment that, if an unless order is made on a first call for security, the period for compliance should, on any view, be generous. As to that, counsel for the defendants point out that, whereas their original proposal was three weeks for the first tranche, the claimant asked in the first place for two months. The judge indicated a willingness to consider that, but the defendants then proposed five weeks, and after consideration over the short adjournment, the claimant agreed to five weeks. That being so, it seems to me that the claimant cannot complain of the dates specified, and that aspect of Waller LJ's reasoning does not assist the claimant. Moreover, the use of an unless order has to be seen in the context of the history, not just of the proceedings but of the claims asserted by Mr Jonathan Jacobs or those associated with him going back to 2004, and in a situation in which the trial was due in February 2012. There was ample reason for adopting an unless order rather than a stay which would either be indefinite, leaving all parties in suspense, or for a specific period, giving the claimant a possibility of a second chance for the final striking out sanction. I see no reason why the judge should have allowed the claimant a second chance in those circumstances, especially on the basis of an agreed timetable. Moreover, the practice direction to part 24, paragraph 5.2 provides for the model of a striking out sanction as the terms of a conditional order. Accordingly, it seems to me wrong to say that in this context an order for stay on non-payment is the normal form of order. Mr Hicks recognised that little, if anything, turns on this point and realistically he barely pressed it in his submissions.
  31. The third ground of appeal is as to the judge's order for costs on the part 24 applications, which, as I say, was that the costs should be in the case. The judge said that, first, each side had enjoyed a measure of success on what was a single application for part 24 judgment or a conditional order. Secondly, there was a considerable overlap between the two aspects of the application so that it would be very difficult to disentangle the costs one from the other. Thirdly, he said that a significant proportion of the costs were incurred on matters relevant and necessary for the action so that they would not be wasted. Fourthly, he said that although the defendants failed to get summary judgment it was an entirely reasonable application which only just failed. Mr Hicks made to us the forensic point which is perfectly fair that, taken with the conditional order that the judge went on to make, this has the effect that the claimant has to provide security for the defendants' costs of the hearing in July last year, which in effect the claimant won. He submits that on that basis an order for costs to be in the case simply does not properly address the general proposition that the loser pays. He challenges the accuracy or the relevance of each of the points on which the judge relied. He says that in fact the two parts of the application have very little overlap and that it would not by any means be difficult to disentangle the costs, even if some allowance were made for an overlap or for the fact that some of the costs would not be wasted. That could be achieved in a much more proportionate way than by leaving the costs of all aspects of the applications to abide the outcome of the litigation. He criticised not altogether unfairly the proposition that because the defendants had only just failed to get summary judgment they should be put in a different category of loser. However, it seems to me that, on the one hand, that factor was not a significant factor for the judge but, on the other hand, it was not altogether irrelevant, because it was the fact that the summary judgment application had only just failed that brought in the question of a conditional order and therefore led on to the second hearing. The two aspects of the application clearly were linked, albeit that more evidence was needed for the second hearing, and I can see some force in Mr Hicks' proposition that to an extent the issues of each hearing were discrete.
  32. This is a case in which, as so often, there was undoubtedly a range of orders that a judge could legitimately have made in the exercise of the discretion in accordance with the rules. However, it seems to me that the judge was in a far better position than we can be to assess the significance and relevance of the various factors. It does not seem to me that he brought into account any irrelevant matter nor that it would be open and proper for us to question his assessment of the significance of the various factors to which he did refer. Accordingly it seems to me that the judge's order was well within the range of orders that a judge could come to. He might have made a different order, but this was the one that he considered to be appropriate and it does not seem to me that it is open to us to interfere with that exercise of his discretion.
  33. For those reasons, I would dismiss the claimant's appeal on that ground as on the other grounds for the reasons that I have given earlier in this judgment.
  34. Lord Justice Sullivan:

  35. I agree.
  36. Lord Justice Rix:

  37. I also agree.
  38. Order: Appeal dismissed


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