![]() |
[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback] [DONATE] | |||||||||
England and Wales Court of Appeal (Civil Division) Decisions |
||||||||||
PLEASE SUPPORT BAILII & FREE ACCESS TO LAW
To maintain its current level of service, BAILII urgently needs the support of its users.
Since you use the site, please consider making a donation to celebrate BAILII's 25 years of providing free access to law. No contribution is too small. If every visitor this month gives just £5, it will have a significant impact on BAILII's ability to continue providing this vital service.
Thank you for your support! | ||||||||||
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Al-Koronky & Anor v Time-Life Entertainment Group Ltd & Anor [2006] EWCA Civ 1123 (28 July 2006) URL: https://www.bailii.org/ew/cases/EWCA/Civ/2006/1123.html Cite as: [2007] 1 Costs LR 57, [2006] EWCA Civ 1123, [2006] CP Rep 47 |
[New search]
[Context]
[View without highlighting]
[Printable RTF version]
[Help]
A2/2005/1956(D), A2/2005/1956 (E) |
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
MR JUSTICE EADY
HQ04X02761
Strand, London, WC2A 2LL |
||
B e f o r e :
LORD JUSTICE KEENE
and
LORD JUSTICE LONGMORE
____________________
AL-KORONKY & ANOR |
Claimants/ Appellants |
|
- and - |
||
TIME-LIFE ENTERTAINMENT GROUP LIMITED & ANOR |
Defendants/ Respondents |
____________________
Ms A Page QC and Mr M Nicklin (instructed by Messrs Reynolds Porter Chamberlain) for the Respondents
Hearing dates: Wednesday 5 July – Friday 7 July 2006
____________________
Crown Copyright ©
Lord Justice Sedley :
The background
The application for security for costs
(a) that the claimants had not shown that there was a strong likelihood, on the evidence as it then stood, that they would succeed at trial;
(b) that an eventual costs order against the claimants would not in practice be enforceable in Sudan;
(c) that the claimants had not asserted or shown by adequate evidence that they could not afford to lodge a sum of the size sought; and
(d) that in the circumstances it was just and proportionate to require the claimants to put up £375,000 as security for the defendants' costs down to completion of disclosure.
The appeal
The new evidence
"Unless it orders otherwise, the appeal court will not receive –
(a) …
(b) evidence which was not before the lower court."
This leaves the court with a broad discretion.
"first, it must be shown that the evidence could not have been obtained with reasonable diligence for use at the trial; secondly, the evidence must be such that, if given, it would probably have an important influence on the result of the case, though it need not be decisive; thirdly, the evidence must be such as is presumably to be believed, or in other words, it must be apparently credible, though it need not be incontrovertible." (page 1491)
Those were regarded as strict conditions. In Electra Private Equity Partners v. KPMG Peat Marwick [1999] EWCA Civ 1247; [2001] 1 BCLC 589, it was said that in interlocutory appeals some relaxation of the strictness of those conditions might be appropriate, according to the nature of the interlocutory hearing and the individual circumstances of the case: page 620(i). That would particularly be so where the battleground or its timing were not of the appellant's choice.
"There is nonetheless a clear duty on parties to present their full case at first instance, and it is very undesirable if interlocutory disputes are argued out afresh on appeal on different materials never put before the judge whose primary discretion it is. The defendants here, in my judgment, were put on inquiry and failed to deal with this point, although ease of enforcement is now known to be a very relevant consideration."
The court rejected the application to adduce fresh evidence.
"which I paid to them before these proceedings were commenced on account of expenses of this action …" (paragraph 5)
That witness statement went on at paragraph 12 to say that he received "no payments whatsoever from the Government [of Sudan]."
"The £20,000 was paid to my solicitors by the Sudanese Embassy in London on 6 April 2004." (paragraph 3)
He then describes this as an "initial response" by the Government to his request for support. Patently the statement that £20,000 has in fact been paid by the Sudanese Government towards the expenses of the present action is an admission against the claimants' interest, since it evidences a degree of financial support, at one stage at least, from that source. Moreover, it corrects an earlier statement by Mr Al-Koronky which had the potential to mislead the court. We regard that as a piece of fresh evidence which, in those particular circumstances, it is in the interests of justice to admit, and we do so.
Security for costs: principles
"The new arrangements for funding litigation certainly appear capable of throwing up possible imbalance, in so far as they permit contingency fee arrangements with uplifts potentially recoverable from losing defendants but enable claimants to pursue litigation without insuring or securing the defendants' fees …"
" … the court should not press too far the proposition that the burden [of showing that an order in more than a certain sum will stifle the claim] rests on the claimant. It should be recalled that when the claimant has to establish that third parties do not exist from whom security can reasonably [be] expected and obtained, that is to place on the claimant the burden of proving a negative."
But this does not relieve the court of the need to scrutinise as much as it is told with a critical eye and to note unexplained gaps in the information which the claimant volunteers or in the documentary support for it. Unless the court were prepared to draw adverse inferences from such lacunae, a claimant would have only to deny that he can find the sum asked in order to avoid an order.
Conditional fee agreements
30. It has already been recognised that when considering "unfair pressure" it is relevant for the court to take into account the fact that a claimant is pursuing his or her case with the benefit of a conditional fee agreement with a substantial uplift – especially if there is no "after the event" insurance ("ATE"): see e.g. the observations of Mance LJ in Nasser at [60]. Here it has, after a considerable lapse of time, finally been acknowledged on the Claimants' behalf by their solicitor that there is no ATE insurance that is likely to be of any value whatsoever to the Defendants should they succeed. What is more, as I understand it, there is no challenge to the Defendants' assumption that in this particular case there is likely to be a 100% uplift.
60. I would interpose at this point that, even where a claimant or appellant is resident abroad, there may of course be special factors indicating that any order for costs will be satisfied in some other fashion. The interesting possibility was raised before us that a claimant or appellant who has insured against liability for the defendants' costs in the event of the action or appeal failing might be able to rely on the existence of such insurance as sufficient security in itself. I comment on this possibility only to the extent of saying that I would think that defendants would, at the least, be entitled to some assurance as to the scope of the cover, that it was not liable to be avoided for misrepresentation or non-disclosure (it may be that such policies have anti-avoidance provisions) and that its proceeds could not be diverted elsewhere. The new arrangements for the funding of litigation certainly appear capable of throwing up possible imbalance, in so far as they permit contingency fee arrangements with uplifts potentially recoverable from losing defendants, but enable claimants to pursue litigation without insuring or securing the defendants' fees. The claimant's contingency fee arrangement in the present case is, however, without uplift.
Enforcement and comity
"61. …….. The former principle was that, once the power to order security arose because of foreign residence, impecuniosity became one along with other material factors: see the Thune case [1990] 1 WLR 562 cited above. This principle cannot, in my judgment, survive in an era which no longer permits discrimination in access to justice on grounds of national origin. Impecuniosity of an individual claimant resident within the jurisdiction or in a Brussels or Lugano state is not a basis for seeking security. Insolvent or impecunious companies present a different situation, since the power under CPR r 25.13(2)(c) applies to companies wherever incorporated and resident and is not discriminatory.
62. The justification for the discretion under rules 25.13(2)(a) and (b) and 25.15(1) in relation to individuals and companies ordinarily resident abroad is that in some - it may well be many - cases there are likely to be substantial obstacles to, or a substantial extra burden (e g, of costs or delay) in, enforcing an English judgment, significantly greater than there would be as regards a party resident in England or in a Brussels or Lugano state. In so far as impecuniosity may have a continuing relevance it is not on the ground that the claimant lacks apparent means to satisfy any judgment but on the ground (where this applies) that the effect of the impecuniosity would be either (i) to preclude or hinder or add to the burden of enforcement abroad against such assets as do exist abroad or (ii) as a practical matter, to make it more likely that the claimant would take advantage of any available opportunity to avoid or hinder such enforcement abroad.
63. It also follows, I consider, that there can be no inflexible assumption that there will in every case be substantial obstacles to enforcement against a foreign resident claimant in his or her (or in the case of a company its) country of foreign residence or wherever his, her or its assets may be. If the discretion under rule 25.13(2)(a) or (b) or 25.15(1) is to be exercised, there must be a proper basis for considering that such obstacles may exist or that enforcement may be encumbered by some extra burden (such as costs or the burden of an irrecoverable contingency fee or simply delay).
64. The courts may and should, however, take notice of obvious realities without formal evidence. There are some parts of the world where the natural assumption would be without more that there would not just be substantial obstacles but complete impossibility of enforcement; and there are many cases where the natural assumption would be that enforcement would be cumbersome and involve a substantial extra burden of costs or delay. But in other cases . . . . it may be incumbent on an applicant to show some basis for concluding that enforcement would face any substantial obstacle or extra burden meriting the protection of an order for security for costs. Even then it seems to me that the court should consider tailoring the order for security to the particular circumstances. If, for example, there is likely at the end of the day to be no obstacle to or difficulty about enforcement, but simply an extra burden in the form of costs (or an irrecoverable contingency fee) or moderate delay, the appropriate course could well be to limit the amount of the security ordered by reference to that potential burden."
"37.The UK does not have any enforcement treaties with Sudan and therefore there is no straightforward route in which the Defendants could seek to have any order obtained in the UK courts enforced in the Sudan.
38. We have consulted a lawyer in Sudan. He has advised us first that the judiciary in Sudan is not independent. That is indeed a matter of record: see http://www.icj.org/IMG/pdf/sudan.pdf. He advised us second that the First Claimant's links with the Government would ensure that he and his wife would be protected by the judiciary. He has advised us third that the subject matter of this case would eliminate any possibility of a judgment against the Claimants being upheld since it would offend the Government and would be tantamount to an admission that slavery exists in the Sudan, something the Sudanese government has repeatedly denied. In summary, the Sudanese lawyer has advised us that we have no prospect of enforcing any United Kingdom judgment against the claimants in Sudan."
"35 . . . . . . There is no evidence relied upon on the claimants' behalf by way of rebuttal. Ordinarily, therefore, I would expect to proceed on the basis of that unchallenged evidence and to work on the assumption that it would be impossible to enforce any order in the Defendants' favour.
36. Mr Shaw, however, urges me not to do this for reasons of comity. He suggests that it would be inappropriate, on grounds of public policy, for an English court to assume that duly appointed judges in that jurisdiction will act improperly, unlawfully or in bad faith. So it may be. It is not necessary, on the other hand to come to any such conclusion in arriving merely at the decision that an order would be difficult or impossible to enforce. An example I cited in the course of argument was that of the attitude of the courts in the United States towards the enforcement of damages awards in favour of claimants in English libel proceedings. There are differences of policy as between the English courts and those of the United States in that context. To conclude that an English award would not be enforceable in the United States is not to criticise the judiciary or to act inconsistently with the demands of comity.
37. I prefer to take the more conventional course of proceeding on the evidence before me. Since Mr Pepper has chosen not to counter the Defendants' evidence on the subject with any legal opinion from Sudan, I regard myself as required to proceed on the basis of the only evidence I have on that topic."
Eady J's decision
71. In all the circumstances, I have come to the conclusion that this is overwhelmingly a case for an order for security. I bear in mind proportionality, but I also need to have very much in focus the evidence of the enormous expenditure which the Defendants have already had to incur in investigating the situation in Sudan because of the way the case has been framed against them. It seems to me to be right to make an order that security be provided in the sum of £375,000 down to completion of the disclosure process. Subject to any further submissions, it would appear to be reasonable to allow the Claimants until 1st October 2005 to produce the security. There will be liberty to all parties to apply and I would not wish to inhibit, in the meantime, any expert assessment of the disputed original photograph "recovered" last week (for whatever that may be worth). Subject to that, and to the preparation of Mende's witness statement, the action will be stayed forthwith until security is provided.
Conclusions