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Cite as: [2003] EWCA Civ 1793

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    Neutral Citation Number: [2003] EWCA Civ 1793
    Case No: B1/2003/0679

    Mr Justice Leveson

    Royal Courts of Justice
    London, WC2
    Thursday 11 December 2003

    B e f o r e :



    MOHAMMED WARIS ALI Appellant/Respondent



    (Computer-Aided Transcript of the Stenograph Notes of
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    Mr Ross Cranston QC (instructed by the Bar Pro Bono Unit) for the Appellant/Claimant
    Mr Spike Charlwood (instructed by Barlow Lyde & Gilbert) for the Respondent/Defendant



    Crown Copyright ©

      Lord Justice Clarke:


    1. This an appeal from an order of Leveson J dated 10 March 2003. It is brought with permission which I granted on 22 May 2003 after hearing an oral application for permission to appeal by Mr Ali who was then acting in person. I also granted Mr Ali a short extension of time. I was concerned that Mr Ali needed legal assistance and suggested that he seek help from the Bar Pro Bono Unit. He did seek that help and I am very pleased to say that he has been represented before us by Mr Ross Cranston QC acting pro bono. The court is very much obliged to him, just as it is to Mr Charlwood, who has represented the respondent as he did before the judge. I would also like to thank the Citizens Advice Bureau at the Royal Courts of Justice for arranging and Clifford Chance and Freshfields for producing coherent and properly paginated bundles of relevant documents and authorities respectively, all on a pro bono basis.
    2. As I read it, in the order appealed against Leveson J ("the judge") allowed in part an appeal from an order of His Honour Judge Green QC dated 12 April 2002. The effect of the order of the judge was that an appeal from an order of District Judge Hasan dated 9 July 1998 be stayed pending payment by Mr Ali of 1,750 into court.
    3. The grounds of appeal against the order which Mr Cranston seeks to advance and to which I will return are that the judge either had no jurisdiction to make the order or, if he did, that Mr Ali's conduct did not warrant the making of such an order or, if it did, that the judge should not have made it without some further investigation of Mr Ali's means.
    4. The History

    5. I can take the history of the matter largely from my earlier judgment. The history is not, or not significantly, in dispute. It is a long history.
    6. Mr Ali instructed the respondent, Mr Hudson, who was trading as Hudson Freeman Berg, a firm of solicitors, to act for him in relation to a purported agreement dated 27 January 1990, made without the help of solicitors, to sell his restaurant business. The purchaser refused to proceed and Mr Hudson obtained legal aid for Mr Ali to seek specific performance. It appears that in April 1991 counsel advised that Mr Ali did not have a reasonable prospect of success and his legal aid was discharged. Mr Hudson's retainer was then terminated.
    7. Mr Ali nevertheless proceeded with the action and on 11 May 1994 Mr John Cherryman QC, sitting as a Deputy Judge of the Chancery Division, dismissed the claim, finding that the agreement was not binding. Permission to appeal against that order was sought but was refused on 22 January 1996.
    8. A year later, on 24 January 1997, Mr Ali issued a claim for damages against Mr Hudson for breach of contract and/or professional negligence as a solicitor for failing to enforce the agreement, which Mr Ali alleged was binding, for the sale of Mr Ali's restaurant premises. Mr Hudson filed a defence on 12 February 1997 and on 27 February the Central London County Court made an unless order requiring a fully particularised claim within 14 days. On 6 March 1997 Mr Ali produced some new particulars of claim which made a number of allegations of negligence and breach of contract against Mr Hudson, not, so far as I can understand them, limited to the point just mentioned. They are by no means easy to follow, although I recognise that they were prepared by Mr Ali in person. I will return briefly below to the true nature of Mr Ali's claim, so far as it can be discerned.
    9. On 9 July 1998 District Judge Hasan, sitting in the Central London County Court, struck the action out as disclosing no cause of action and as being frivolous and vexatious, and ordered Mr Ali to pay Mr Hudson's costs, to be taxed on scale 2. As I understand it, they were subsequently taxed in the sum of 14,592.64.
    10. Judge Hasan gave a short judgment in which she said this:
    11. "The application has a long history and this is the third occasion the parties have appeared before me. The first occasion was on 5 March when I heard the submissions of Counsel for the Defendant setting out matters in detail. I adjourned the application for the Plaintiff to obtain legal advice and for the matter to come back to me on 7 May. On that day, the Plaintiff was represented by counsel. A Legal Aid Certificate had been just issued and as a further indulgence I adjourned the application until today. Since then, the court has received from the Plaintiff's solicitor a copy of the Legal Aid Certificate showing that it was discharged by consent.
      The Defendants say a finding once made in the High Court on a document which the Plaintiff says was binding was not such a contract means that the losses now claimed cannot be attributed to the Defendants. I am bound by findings of fact the High Court made and I cannot resist those facts and make my own interpretation. The Plaintiff cannot sustain otherwise.
      The Plaintiff makes other complaints of a much wider nature. The Defendants' solicitors refused to accept instructions and the losses from the High Court can be visited upon the Defendants. He has indicated that his personal life has extreme problems and I don't doubt that but he seems to allege that those problems are the fault of the Defendants and the monetary claimed by the Plaintiff are in my view fanciful.
      I must grant the Defendants' application and strike out the Particulars of Claim on both grounds, that they disclose no cause of action and are frivolous and vexatious. I am not just striking out the Particulars of Claim but the action is struck out."

      I shall return to that reasoning below.

    12. At the time that order was made the relevant rules were the County Court Rules and it is common ground that under CCR Order 13 rule 1(10) Mr Ali had a right of appeal against District Judge Hasan's order. It is now clear that he exercised that right by lodging a notice of appeal on 15 July 1998. Moreover, it is not suggested that he did not do so in time. As appears below, one of the ironies of the case is that if the court had fixed a date for the hearing of the appeal in, say, August 1998 it would almost certainly have been heard before April 1999 when the CPR came into force. None of the subsequent problems would then have occurred. I will return to the events of 1998 below.
    13. When the matter was subsequently considered by His Honour Judge Green QC he described what then happened as follows:
    14. "For some three years, between July 1998 and 25 August 2001, the Claimant and/or other of his solicitors did nothing save for a little activity for a few weeks in June and July 1999. On 18th July 1999, the Claimant wrote to the Defendant's solicitors, saying that he had lodged an appeal. The Defendant's solicitors replied, expressing surprise that he had lodged an appeal when his case had been struck out as long ago as 8th July 1998 and they had heard nothing since. Nevertheless the Defendant agreed not to pursue the taxation pending the outcome of the appeal. The Defendant then chased the Claimant and/or his solicitors to see what was happening to the appeal. They got no satisfaction, save for the following. On 18th June 1999, the Claimant told them that he was pursuing his appeal and hoped that [his] solicitor would be contacting the court to progress it. On 6th July 1999, Johnson Sillett Bloom, solicitors acting for the Claimant, wrote to the Defendant's solicitors, saying they were taking instructions on the circumstances surrounding his lodging of the appeal and in the meantime asked the Defendant to take no steps to enforce the costs order, provided of course that they kept the Defendant's solicitors informed of the progress of the application for legal aid for the appeal. The Defendant's solicitors chased the Claimant's solicitors several times, but heard nothing until, out of the blue the court informed the parties of the date of the appeal, namely, 7th May 2002.
      To my mind, the conduct of the Claimant in failing to take any steps to deal with his appeal between July 1998 and 25th August 2001, with the exception of those letters in June and July 1999, is unreasonable."
    15. On the last occasion I said that on the basis of the facts there set out by Judge Green, his conclusion seemed unassailable. However I also observed that Mr Ali blames his solicitors, or indeed the court, for lack of activity in that period and I will return to the delay between 1998 and 2001 in the light of the submissions which have been made to this court by Mr Cranston. Mr Ali was unaware of paragraph 19(1) of the practice direction to CPR Part 51, which provides:
    16. "If any existing proceedings have not come before a judge, at a hearing or on paper, between 26 April 1999 and 25 April 2000, these proceedings shall be stayed."

      Paragraph 19(2) provides:

      "Any party to those proceedings may apply for the stay to be lifted."
      No such application was made. However, it appears that, notwithstanding that stay, the court fixed the date for the appeal as 7 May 2002.
    17. After the appeal had been resurrected, Mr Hudson applied for a stay of the appeal. That application strikes me now, as it struck me in May, as a curious application since the proceedings, including the appeal, had already been automatically stayed by paragraph 19(1) of the practice direction just quoted. It is not clear whether Mr Hudson or his solicitors were aware of paragraph 19. However, Mr Charlwood says that they were not aware that there were "existing proceedings" when the application for a stay was initially made, although he became aware of the position in the course of the hearing before Judge Green.
    18. The application came before Judge Green on 12 April 2002. It came before him, not as an application by Mr Ali to lift the stay, but as an application by Mr Hudson for a stay of the appeal, which had by then been fixed for 7 May 2002. Judge Green first decided that the CPR should be applied to the proceedings. He further observed that Mr Ali would have to lift the automatic stay before his appeal could be heard. I pause to note that it does not appear to have occurred to anyone that it might not be appropriate to order the stay of an action which was already stayed.
    19. However that may be, Judge Green held that, given the appalling delay, it would not be in conformity with the overriding objective to put Mr Hudson to the expense of the appeal unless Mr Ali paid the costs ordered by District Judge Hasan in July 1998. He added:
    20. "It seems to me that a highly relevant factor on the grant or refusal of the stay is the strength of the appeal. Quite apart from the passage of time, it seems to me that there are no reasonable prospects of successfully appealing the order of District Judge Hasan, an experienced district judge, who gave a short but clearly reasoned ruling for her decision and one which was well within the legitimate ambit of her discretion. She had given the Claimant a number of chances to put his house in order, including an adjournment, in the hope that he would get legal aid."
    21. Judge Green then referred to the decision of Field J in Reed v Oury [2002] EWHC 369 (Ch), where he said this at paragraph 34:
    22. "CPR 3.1 gives the court fairly wide case management powers, the exercise of which may well depend in significant part on how a party has conducted the proceedings to date: see particularly 3.1(2)(f) and (m). Further, CPR 3.4(2)(b) and (c) in terms respectively empower the court to strike out a statement of case if it is an abuse of the process or there has been a failure to comply with a rule, practice direction or court order. In my judgment, it is plain from these Rules and the overall scheme of the CPR that the conduct of a party relevant to the exercise of the powers conferred by CPR 3.1(2)(f) and (m) and CPR 3.4(2) (b) and (c) is not restricted to conduct involving bad faith. Instead, the conduct in question must be looked at in the round and, even if it cannot be shown that there has been bad faith, if in respect of a particular incident or having regard to a course of conduct overall, a party has acted oppressively or very unreasonably, it may still be appropriate to stay his claim conditionally or unconditionally or strike it out or order a payment into court."

      Judge Green finally concluded as follows:

      "The Defendant's counsel does not rely on the expression 'oppressively' in that passage, but relies on the phrase 'very unreasonably'. I am content to leave out the adverb 'very'. I characterise the conduct of the Claimant as unreasonable and have no hesitation in imposing the stay. If the costs are paid and an application is made to lift the automatic stay, the court will have to cross that bridge when it comes to it."
    23. The order made by Judge Green was in these terms:
    24. "1. The CPR shall apply to this action.
      2. The Claimant's appeal listed to be heard on 7th May 2002 be stayed pending payment by the Claimant of the Defendant's costs pursuant to the judgment of District Judge Hasan dated 9th July 1998 in the sum of 14,592.64 plus interest of 4,390.40 up to today's date and continuing at a daily rate of 3.20.
      3. The hearing on 7th May 2002 be vacated.
      4. The Claimant do pay the Defendant's costs of this application summarily assessed at 4,883.44.
      5. Permission to appeal be refused."
    25. The situation still seems to me to be somewhat curious since it appears that Judge Green not only stayed an action which was already automatically stayed but also said that an application to lift the stay could only be made if those substantial sums were paid. Why he did not simply refuse the application on the ground that the action was already stayed or perhaps treat the application as an application by Mr Ali to lift the automatic stay is a mystery, at any rate to me.
    26. Mr Ali sought to renew his application for permission to appeal against the decision of Judge Green. The application came before Goldring J on paper. He refused it. Mr Ali then sought permission by way of an oral hearing. That application came before Holland J on 15 October 2002. He granted it. In the course of his judgment he said that there had been "a lamentable lack of prosecution" of the appeal from the decision of District Judge Hasan. He added:
    27. "That lack of prosecution may have reflected the limitations arising from Mr Ali's status as a litigant in person. It may also have been contributed to by the incompetent, half-hearted intervention of solicitors purportedly acting for Mr Ali. Suffice it to say that over a considerable period of time the Defendant's solicitors were unaware that there was an appeal extant and again the solicitors apparently were taken by surprise when on 17th December 2001 the court fixed a date for the hearing of the appeal, that is 7th May 2002."
    28. Holland J nevertheless expressed his concerns about the order made by Judge Green in this way:
    29. "First, the practical effect of the order is to dismiss Mr Ali's appeal. He is unable by virtue of the order to pursue it unless he finds the monies that are the subject of the original order and those monies if and when found are not to be paid into court but paid over to the Defendant. In a practical sense there is no difference from Mr Ali's standpoint between having the appeal stayed upon that condition and having the appeal dismissed."
      Pausing there, it seems to me to be plain that Holland J (presumably either on the basis of the evidence and submissions put before him or because he regarded it as obvious) concluded that the effect of the order of Judge Green would be to stifle any appeal from the decision of District Judge Hasan. Holland J added:
      "I turn then to Mr Ali's further point. He is confronted with the loss of an appeal without having the merits investigated by the court. Judge Green himself made it clear that he was not looking into the merits at all of the appeal in question. Thus it is I am concerned particularly with the terms on which the stay was imposed, which terms involved the payment of costs as ordered by the District Judge direct to the Defendant rather than into court. I am also concerned about the notion of dealing with this matter by way of a stay, more particularly when the matter was due to be heard by way of an appeal within the ensuing month. The notion of a stay is arguably inherently unsatisfactory. It can be tested. Let it be supposed that Mr Ali pays the money now as is required by the order. Then presumably the appeal becomes extant and is then to be pursued. We have in effect a very unhappy halfway house. Thus it is that the order as currently made cries out for review and it does so with, as I concede (conceive?), a real prospect of success."
    30. Holland J also made it clear that he did not wish to encourage Mr Ali as to his ultimate prospects because, as he put it, "an appeal is going to be difficult to conduct and not least because of the lamentable lack of prosecution". He added that "It may further be that when the appeal is finally heard it is found to be totally bereft of merit." He concluded:
    31. "All that said, I cannot see that the matter can fairly be left as it presently is and that the matter therefore can be further ventilated on an inter partes basis when the appeal that I am permitting now is heard."
      It is plain that Holland J intended that an appeal should then be heard from Judge Green's order. Mr Hudson filed a respondent's notice on 9 January 2003 which asserted that Mr Ali's appeal would in any event have been stayed automatically by paragraph 19 of practice direction 51.
    32. The appeal came before Eady J on 24 February 2003. He granted Mr Ali a short adjournment on the grounds of ill health, although he said that his appeal had, as he put it, "virtually no merit". In the event the appeal came before Leveson J on 10 March. As I have indicated, he allowed the appeal to the extent that he ordered that the appeal against the order of District Judge Hasan be stayed pending payment by Mr Ali, not of the large sum which Judge Green had directed, but of 1,750 into court. It will be recalled that the total sum which Judge Green had directed be paid was 19,383.04 plus 3.20 per day further interest.
    33. The Appeal to Leveson J

    34. The judge set out the history of the matter in some detail. He concluded that Judge Green was entitled to hold that Mr Ali had been guilty of unreasonable delay and that Judge Green had jurisdiction to make the order which he did. I note in passing that, so far as I can see, it was not argued before the judge that Judge Green was wrong to hold that Mr Ali had been guilty of unreasonable delay, although it must be remembered that Mr Ali was acting in person. The judge further noted that an automatic stay would apply under paragraph 19 of practice direction 51.
    35. The judge held that Judge Green had fallen into error. He said this:
    36. "28. The learned judge ordered that the claimant should pay the entirety of the costs of the action, which themselves were only due from the claimant to the defendant pursuant to the very order which the claimant was seeking to appeal. In other words, the defendants sought the fruits of the judgment, which was then the subject of appeal, and argued before me that this stance was entirely legitimate on the basis that the claimant had not sought a stay of the order as to the payment of costs pending appeal.
      29. Be that as it might, in my judgment it was not appropriate for the court to stay the action pending the payment of costs which were subject to appeal. What the learned judge was entitled to do, however, was to point to the fact that, prior to commencing his appeal, Mr. Ali had to overcome the problem of the automatic stay which itself would involve a substantial expense, given that the defendants would be entitled to contend that the circumstances did not justify the removal of the stay. The automatic stay was entirely a consequence itself of the failure expeditiously to prosecute the appeal. It seems to me that the learned judge, if exercising his power as he was entitled to do, should have restricted his order to a sum which reflected the costs that would be incurred in seeking to remove the stay and in requiring those costs to be paid not direct to the defendants but rather into court as security purely for the application to remove the stay rather than the costs of the entire action.
      30. To that extent and to that extent only, I take the view that the learned judge fell into error, although I accept that he did have power, as I have said, under 3.1(6)(b) [to order] the payment into court of costs that have been incurred. I make it clear, following the decision of Field J, to which I have referred [viz Reed v Oury], that had there been other outstanding orders for costs, that would indeed have been an appropriate decision but there were not. All the costs involved were costs that had only been ordered to be paid by virtue of the order which Mr Ali, the claimant, sought to appeal."
    37. Pausing there, it seems to me to be clear that the judge was allowing the appeal against the order of Judge Green, at least to a very considerable extent. To my mind the judge was right to set aside Judge Green's order staying the appeal pending the discharge by Mr Ali of the order for costs in the order appealed against. Whether there was any power to make such an order or not, it was in my judgment wholly inappropriate. It is fair to say that in this regard Mr Hudson does not seek to challenge any part of the judge's decision allowing in part Mr Ali's appeal from the decision of Judge Green.
    38. The judge then set out the reasons for taking the course which in the event he took. He said this:
    39. "31. In my judgment, it would be reasonable and appropriate to reflect that difference by reducing substantially the amount which Mr Ali must find in order to justify the removal of this stay quite apart from going back before the judge to remove the automatic stay. In the circumstances I order that the claimant must pay into court the sum of 1,750 in order to justify the removal of the stay imposed by Judge Green. That seems to me to be sufficient security for the costs of appearing before the judge to remove the automatic stay which is the next step before Mr Ali can go on to seek to appeal the order of the district judge. In assessing the sum I have had some regard to Mr Ali's financial position.
      32. Mr Justice Holland was concerned that the effect of the order would be to dismiss Mr Ali's appeal on the basis that he would be unable to pursue it without finding money to pay into court. He observed that in a practical sense there was no difference from Mr Ali's standpoint between having the appeal stayed upon the condition, albeit in a very much larger sum being paid into court, and having the appeal dismissed.
      33. Mr Charlwood submits that the circumstances of this case justify the order, which would in any event have the same effect, if Holland J is correct, as that which Field J made in the case to which I have referred. In that regard, in my judgment, a broad view of the merits does in fact justify the view being taken. The learned judge took the view that Judge Hasan's decision was likely to be unassailable. Mr Justice Goldring observed on paper that any other decision would have been surprising. Mr Justice Holland himself observed that the appeal would be difficult to conduct, not least because of the lamentable lack of prosecution, and that it may be found to be totally bereft of merit. It is common ground that Mr Justice Eady made similar observations.
      34. Thus, it may be that the claimant requires to rethink whether his claim is worth the effort that he is undeniably putting into its present prosecution. That is not, however, for me to decide. In my judgment, doing justice between the parties, it is right for me to make the order to which I have referred, recognising that the sum is far less substantial than ordered by the learned judge and represents no more and possibly rather less than the costs which the claimant is likely to be required to meet in any event, should he seek to remove the automatic stay."
    40. As I read that reasoning, the judge did not form a view on the merits of Mr Ali's claim, saying that they were not for him to decide. Nor did he express a view on the question whether Mr Ali could afford to pay 1,750 into court. He directed the payment in as a condition of removing the stay granted by Judge Green on the basis that the sum of 1,750 was the least that Mr Ali was likely to have to meet in order to remove the automatic stay. He thus concluded, as I see it, that if Mr Ali applied for the removal of the automatic stay, he would be ordered to pay at least 1,750 towards Mr Hudson's costs of that application.
    41. I will return to that reasoning in a moment. The judge also varied Judge Green's order by reducing the amount of costs which Mr Ali was ordered to pay in respect of the application before judge Green to 3,500. He also ordered that Mr Ali pay Mr Hudson's costs of the appeal, assessed at 10,000. I am bound to say that it is not immediately obvious to me why Mr Ali should have been ordered to pay part of the Defendant's costs of the appeal in the light of the fact that he had to appeal to the judge in order to improve his position.
    42. We were told by Mr Charlwood that in the course of the argument before the judge Mr Ali said that he was on income support. We were further told that the figure of 1,750 was not mentioned to Mr Ali (or at all) before the judge referred to it in his judgment. After the judgment had been given Mr Ali said words to the effect that he would have to borrow the money. He did not however, as I understand it, say that he would be able to borrow the money. He says that he cannot pay 1,750 any more than he could have paid the very much larger figure of nearly 20,000 in Judge Green's order. It is common ground that no investigation was carried out as to whether Mr Ali could pay 1,750 as the price of being permitted to apply for the removal of the stay. I will return to this aspect of the case in a moment.
    43. This Appeal

      The Principles

    44. In this appeal Mr Cranston has sought to advance Mr Ali's case on a broader front than was put before the judge by Mr Ali in person. Before considering whether he should be permitted to do so, I should I think first identify the jurisdiction which the court was exercising. I can do that by reference to the submissions advanced by Mr Cranston, which I take in turn.
    45. First, he submits that the CPR apply or should apply to this appeal and indeed to this action. This is not in dispute and is in my judgment correct. Judge Green decided that the CPR should apply to the action and no one has challenged that conclusion. I apologise to counsel if what I said in May has given rise to too much work under this head.
    46. Secondly, Mr Cranston submits that under the CPR an impecunious individual like Mr Ali, who is resident in this (and some other specified) jurisdictions cannot be required to give security for costs, either at first instance or in this court. This too is not in dispute and follows from CPR rules 25.13(2) and 25.15. The court has no power under rule 25.13(2) to order security for costs on the ground of the claimant's inability to pay costs. Since rule 25.15(1) provides that an appeal court has power to order security for costs on the same grounds as it may order security for costs against a claimant under CPR rule 25.13(2), it follows that an appeal court (including this court) has no power to order Mr Ali to provide security for costs on the ground of inability to pay costs.
    47. This is to my mind an important factor because it recognises the fundamental importance of access to the courts. Thus in a case under the RSC, namely Abraham v Thompson [1997] EWCA Civ 2179, [1997] 4 All ER 362, Potter LJ said at page 374:
    48. "In my view the starting point in any case where a stay is sought in circumstances which are not provided for by Statute or Rules of Court should be the fundamental principle that in this country an individual (who is not under a disability, a bankrupt or a vexatious litigant) is entitled to untrammelled access to a court or first instance in respect of a bona fide claim based on a properly pleaded cause of action, subject only to the sanction or consideration that he is in peril of an adverse costs order if he is unsuccessful, in respect of which the opposing party resort to the usual remedies of execution and/or bankruptcy if such order is complied with. This principle is of course subject to the further proviso that, if the court is satisfied that the action is not properly constituted or pleaded, or is not brought bona fide in the sense of being vexatious, oppressive or otherwise an abuse of process then the court may dismiss the action or impose a stay whether under the specific provisions of the RSC or the inherent jurisdiction of the court.
      Imposition of a requirement that security for costs be provided subject to the sanction of a stay is a plain fetter upon the exercise of such right of access. That is a principle underlying and recognised by Order 23 which excludes from its regime as to the provision of security any individual who does not fall within the categories specifically provided for."
      See also page 377, where Millett LJ set out the competing policy considerations to the same effect. Those principles were approved by this court in relation to the CPR in Hamilton v Al Fayed [2002] EWCA Civ 665, [2003] QB 1175, at paragraphs 47 and 63-65.
    49. Thirdly, Mr Cranston submits that security for costs can only be ordered under the court's powers of case management on the basis of a specific finding that a party has without good reason failed to comply with a rule, a practice direction or a pre-action protocol. The court has very wide powers of case management under the CPR, notably under CPR Part 3. It is plain from the extracts from the judgment of Judge Green which I quoted earlier that he exercised or purported to exercise the powers of the court under CPR rule 3.1. He did so by reference to the principle set out by Field J in paragraph 34 of his judgment in Reed v Oury, which I have also quoted.
    50. The judge also directed himself by reference to Rule 3, which provides (so far as relevant) as follows:
    51. "3.1(1) The list of powers in this rule is in addition to any powers given to the court by any other rule or practice direction or by any other enactment or any powers it may otherwise have.
      (2) Except where these Rules provide otherwise, the court may
      (f) stay the whole or part of any proceedings either generally or until a specified date or event;
      (m) take any other step or make any further order for the purpose of managing the case and furthering the overriding objective.
      (3) When the court makes an order, it may
      (a) make it subject to conditions, including a condition to pay a sum of money into court;
      (b) specify the consequence of failure to comply with the order or a condition.
      (5) The court may order a party to pay a sum of money into court if that party has, without good reason, failed to comply with a rule, practice direction or a relevant pre-action protocol.
      (6) When exercising its power under paragraph (5) the court must have regard to
      (a) the amount in dispute; and
      (b) the costs which the parties have incurred or which they may incur.
      (6A) Where a party pays money into court following an order under paragraph (3) or (5), the money shall be security for any sum payable by that party to any other party in the proceedings
      The judge quoted extensively from rule 3. He also quoted paragraph 34 of the judgment of Field J Reed v Oury.
    52. Assuming that there was power to order the stay of a stayed action, the judge was, in my judgment, correct to hold that both Judge Green and he himself had jurisdiction to make their respective orders. In my opinion, on the natural meaning of rule 3.1(2)(f) and (m) the court had jurisdiction to grant a stay on terms that Mr Ali secure costs of future proceedings. Thus, for example, the court has power under paragraph (2)(f) to stay the whole or part of any proceedings until a specified event. I see no reason why, as a matter of jurisdiction, that should not be a payment into court by the respondent to the application. Thus, naturally construed, on an application by A for a stay, the rules give the court power to order a stay until a specified event, namely a payment into court by B. The court also has power under paragraph (2)(m) to make any further order for the purpose of furthering the overriding objective. That too would provide jurisdiction for such an order.
    53. As I see it, that power is independent of the power conferred by rule 3.1(5), which gives the court a separate and free-standing power to order a party to pay a sum of money into court if that party has, without good reason, failed to comply with a rule, practice direction or a relevant pre-action protocol. That conclusion seems to me to be supported by rule 3.1(6A), which expressly recognises that a party may pay money into court following an order either under paragraph (3) or under paragraph (5).
    54. I would not therefore accept Mr Cranston's submission in so far as it seeks to limit the jurisdiction of the court. That conclusion seems to me to be consistent with the reasoning of this court in Olatawura v Abiloye [2002] EWCA Civ 998, [2003] 1WLR 275, where the court was considering an order that a claim be dismissed under CPR rule 24.1 unless the claimants provided 5,000 security for costs. It was held that there was jurisdiction to make the order.
    55. However, Simon Brown LJ (with whom Dyson LJ agreed) gave important guidance as to the correct approach to be adopted to orders for security for costs, which to my mind applies to the instant case. He said at page 281:
    56. "21. I pass, therefore, to the more difficult second question which arises on this appeal: what should be the court's approach to the exercise of its wider new jurisdiction to order security for costs and, more narrowly, was such an order properly made in the particular circumstances of this case?
      22. The first point to be made is I think this. Before ordering security for costs in any case (ie whether or not within rule 25) the court should be alert and sensitive to the risk that by making such an order it may be denying the party concerned the right to access to the court. Whether or not the person concerned has (or can raise) the money will always be a prime consideration, not least since article 6 of ECHR became incorporated into domestic law. Paradoxically, of course, the more difficult it appears to be for the person concerned to raise the money, the more obvious becomes the need for an order for security to protect the other party against the risk of incurring irrecoverable costs. The court will have to resolve that conundrum as best it may.
      23. Assume, then, that in a given case the court concludes that an order for security would not unfairly deprive the party concerned of his ability to litigate the dispute. Should such an order then be made? In addressing this question it is right to bear in mind that under the new rules it is not just the claimant against whom an order for security for costs can be made; it can also be made against the defendant. Under the old rules, of course, it was only the defendant who could be ordered to pay money into court, principally in proceedings for summary judgment, as a condition of his being allowed to defend the claim. That payment in was not, of course, in respect of costs, but rather to provide some security for the claim. But if, as a condition of pursuing an unpromising defence, it is appropriate to secure the claim, why not also the claimant's costs of advancing the claim? And if that, why is it not at least as appropriate to require someone advancing an unpromising claim to secure the defendant's costs. He, after all, has chosen to involve the defendant in litigation and the defendant has no option but to concede the claim or incur costs in resisting it. Such no doubt was the thinking underlying the new rule 24.
      24. Now, it is clear, the court has an altogether wider discretion to ensure that justice can be done in any particular case. Obviously relevant considerations, besides the ability of the person concerned to pay, will be (a) his conduct of the proceedings (including in particular his compliance or otherwise with any applicable rule, practice direction or protocol), and (b) the apparent strength of his case (be it claim or defence). And these considerations, of course, are expressly reflected in the new rules governing the court's power to order payment into court: rule 3.1(5) dealing expressly with compliance, rule 24 with the probabilities or otherwise of success.
      25. That, however, is by no means to say that the court should ordinarily penalise breaches of the rules and the like by making orders for payment into court under rule 3.1(5). Quite the contrary. The one case drawn to our attention in which this question has been considered - Buckley J's judgment in Mealey Horgan plc v Horgan (transcript 24 May 1999, briefly reported in The Times, 6 July 1999), to which reference is made in paragraph 3.1.5 of the Annual Practice - held that it would be inappropriate to order a defendant to give security as a penalty for failure to serve witness statements in time when that had prejudiced neither the trial nor the claimant. Buckley J suggested, however, that such an order might be appropriate if "there is a history of repeated breach of timetables or of court orders or if there is something in the conduct of the party which gives rise to suspicion that they may not be bona fide and the court thinks the other side should have some financial security or protection". That seems to me to point the way admirably: a party only becomes amenable to an adverse order for security under rule 3.1(5) (or perhaps 3.1(2)(m)) once he can be seen either to be regularly flouting proper court procedures (which must inevitably inflate the costs of the proceedings) or otherwise to be demonstrating a want of good faith - good faith for this purpose consisting of a will to litigate a genuine claim or defence as economically and expeditiously as reasonably possible in according with the overriding objective.
      26. Similarly it is not to be thought that an order for security for costs will be appropriate in every case where a party appears to have a somewhat weak claim or defence. The last thing this judgment should be seen as encouraging is the making by either side of exorbitant applications for summary judgment under rule 24.2 in a misguided attempt to obtain conditional orders providing security for costs. On the contrary, the court will be reluctant to be drawn into an assessment of the merits beyond what is necessary to establish whether the person concerned has "no real prospect of succeeding" and the occasions when security for costs is order solely because the case appears weak may be expected to be few and far between."
    57. Those principles show that the power to order security for costs in a case of this kind should be exercised with great caution. The correct general approach may be summarised as follows:
    58. i) it would only be in an exceptional case (if ever) that a court would order security for costs if the order would stifle a claim or an appeal;
      ii) in any event,
      a) an order should not ordinarily be made unless the party concerned can be shown to be regularly flouting proper court procedures or otherwise to be demonstrating a want of good faith; good faith being understood to consist (as Simon Brown LJ put it) of a will to litigate a genuine claim or defence (or appeal) as economically and expeditiously as reasonably possible in accordance with the overriding objective; and
      b) an order will not be appropriate in every case where a party has a weak case. The weakness of a party's case will ordinarily be relevant only where he has no real prospect of succeeding.
    59. That approach seems to me to be consistent with that of Field J in Reed v Oury, although he was there considering, not a possible condition that security for costs be imposed, but a condition that previous orders be satisfied. In that context he said in paragraph 24 that if, having regard to a party's conduct overall, a party has acted very oppressively or very unreasonably, it may be appropriate to stay his claim conditionally or unconditionally or strike it out or order a payment into court. That is a high test.
    60. A similar approach should to my mind be adopted before imposing a condition that a party should only be permitted to proceed with a claim or an appeal by providing security for costs, unless the case falls within CPR rule 25.13, which this does not. I would accept Mr Cranstons's submission that merely to act unreasonably in a sense other than that identified above should not in general be sufficient to make an order which will have the effect of depriving the party concerned of access to the courts.
    61. These principles have been recently considered in this court by Peter Gibson LJ (with whom Mance LJ and Hale LJ agreed) in CIBC Mellon Trust Co v Mora Hotel Corp NV [2002] EWCA Civ 1688, [2003] 1 All ER 564. In paragraph 38 of his judgment Peter Gibson LJ referred both to Olatawura v Abiloye and to Reed v Oury and said that both those authorities suggest that it is only appropriate for the court to exercise its powers under CPR Part 3 to require a payment into court in limited circumstances and that the court should not do so in the absence of a want of good faith on the part of the party against whom the order is sought. Peter Gibson LJ added:
    62. "That consideration is reinforced by the greater significance, since the Human Rights Act 1998 came into force, which the court attaches to not impeding access to justice."
    63. Mr Cranston makes further submissions to the same end by reference to jurisprudence under the European Convention on Human Rights and the Human Rights Act 1998. However, that jurisprudence does not seem to me to lead to any different conclusions in this context from those set out above.
    64. I would only refer to one further point or principle relied on by Mr Cranston, namely that, before an order of this kind is made, the court should ensure by appropriate enquiry that the party concerned has the means to pay the costs concerned. There is I think some force in this point but (as appears below) it is not necessary to decide whether or to what extent it is correct on the facts of this case.
    65. The Facts

    66. The history set out above shows that a considerable period of time passed between July 1998 and December 2001, when the court fixed the hearing of the appeal from District Judge Hasan for 7 May 2002. Since the character of that delay played an important part in the exercise by both Judge Green and the judge of the discretion conferred on the court by CPR Part 3, we should to my mind have regard to the causes of that delay. Such a consideration seems to me to throw up a number of ironies and oddities. In summary they are these:
    67. i) As already indicated, under CCR Order 13 rule 1(10) Mr Ali had a right of appeal from District Judge Hasan's decision on 8 July 1998 to strike out the action.
      ii) On Mr Ali's case he timeously filed a notice of appeal against that decision. Judge Green accepted that that was the case and it is now common ground. The notice of appeal is dated 15 July 1998 and bears a Central London County Court stamp evidencing receipt on that day. It appears that the court did not initially take action on the notice of appeal but notified Mr Ali that he had omitted to give an estimate of the time for the appeal. Mr Ali says that shortly thereafter he gave the court an estimate of two days and it appears likely that he took that step by the end of July 1998. There is also a stamp on the notice of appeal, which is dated either 22 July 1998 or 22 September 1998 and which states "Fee Exempt".
      iii) The notice of appeal contains a section to be completed by the court notifying the parties that the application will be heard on a particular date and warning them that if they do not attend the court will make such order as it thinks fit. Unfortunately that section was not completed and no date for the appeal was notified to either party until December 2001.
      iv) That seems to me to be a very significant factor in considering the character of Mr Ali's conduct after, say, September 1998. The next step was one for the court to take, namely the fixing of a date, but it did not take it. In particular it did not take it in the latter part of 1998 in circumstances in which, if it had, (as indicated earlier) a date would have been fixed and the appeal heard before the CPR came into force in April 1999. At least until then, Mr Ali had a right to have his appeal heard from the decision of District Judge Hasan.
      v) Mr Hudson's solicitors, Barlow Lyde & Gilbert ("Barlows"), were not aware of Mr Ali's appeal in 1998 because on 16 July 1998 they wrote a letter (wrongly dated 21 June 1998) to him enclosing a copy of the order made by District Judge Hasan and asking him to acknowledge receipt, which he failed to do. On 2 February 1999 they wrote to Mr Ali informing him that they were instructed to proceed with taxation of Mr Hudson's costs and enclosing a bill of costs. On 9 February the court wrote to Mr Ali's previous solicitors with regard to the taxation and on 18 February Mr Hudson's solicitors sent a copy of that letter to Mr Ali because it was appreciated that he was a litigant in person. The court received no reply from Mr Ali and proceeded provisionally to tax the costs. Barlows accepted the taxation on behalf of Mr Hudson (and no doubt his insurers) and on 17 June wrote to Mr Ali enclosing service of notification of taxation in the amount of 14,592.64 plus interest.
      vi) On 18 June Mr Ali replied saying that he was concerned about the position because he had sent the bill of costs to new solicitors whom he had instructed both to oppose the taxation and to act in connection with his appeal against the order of District Judge Hasan, which he had lodged in time. On 21 June Barlows replied to Mr Ali setting out the position as summarised above and sent a copy both to Mr Ali's new solicitors, Johnson Sillett Bloom, and to the court. On 26 June Mr Ali wrote to Barlows asking them not to process the taxation further until the conclusion of the appeal and saying that his solicitors were seeking legal aid for him.
      vii) On 28 June the court replied as follows:
      "It appears that the Plaintiff did lodge an appeal in July 1998. The appeal was returned to him as he did not state a time estimate. According to our records it appears that the appeal was not returned to the Court by the Plaintiff so no hearing was listed."
      As indicated above, that statement was not accurate in so far as it stated that the appeal was not returned to the court. The statement does however confirm that, if it had appreciated the true facts, the appeal would have been listed.
      viii) On 29 June Johnson Sillett Bloom wrote to Barlows repeating Mr Ali's request to hold off pursuit of the costs pending the appeal and saying that they were applying for legal aid. They also enclosed a copy of Mr Ali's notice of appeal which showed the stamps to which I referred earlier.
      ix) On 30 June Barlows wrote to the court asking what it was proposing to do with regard to the appeal and to Johnson Sillett Bloom commenting upon the delays but saying that it would not take further steps on costs without notice, on the understanding that they would inform them as to what progress was being made with legal aid and as to whether the appeal was to be pursued.
      x) On 2 July the court wrote to Barlows, but not (so far as I can see) to Mr Ali or his solicitors saying that the court would not process the appeal because it was now out of time so that it was up to the claimant to apply for leave to appeal out of time and, until he did, the appeal would not be dealt with. I am not sure what, if any, provision of the rules the court had in mind because, as explained earlier, Mr Ali had a right of appeal and had appealed in time. On 6 July Barlows sent a copy of that letter to Johnson Sillett Bloom. On the same day Johnson Sillett Bloom replied to Barlows' letter of 30 June saying that they would contact them shortly. They did not, however, do so and, after a reminder on 19 August, Barlows wrote saying that they would take such steps as they considered appropriate without further notice.
      xi) In the event Barlows took no further action but advised their client to close the file. They and their client thus thought that the best course was to let sleeping dogs lie.
      xii) Nothing then happened until the court wrote to Barlows on 17 December 2001 out of the blue enclosing a notice of the hearing date of Mr Ali's appeal for 7 May 2002. The letter simply stated that "the appeal was lodged on 15 July 1998 but unfortunately was not processed". No further explanation was given and no reference was made to the court's previous assertion that Mr Ali needed leave to appeal.
      xiii) On 21 February 2002 Barlows wrote a lengthy letter to the court asking for an explanation but received no reply, despite reminders of 7 and 22 March 2002. They also wrote to Johnson Sillett Bloom on 21 February asking similar questions but received a reply saying that the partner dealing with the matter had left taking the file with her. On 7 March Barlows wrote to the partner's new firm but on 15 March received a letter from her (at another firm) saying that she had had no contact with Mr Ali since she left Johnson Sillett Bloom, that she did not take any of the files with her when she left and that she did not have his address. It was in those circumstances that Barlows issued the application for the stay which came before Judge Green on 12 April.


    68. As can be seen, Mr Ali's attempts to appeal from the decision of District Judge Hasan have a most unfortunate history. As I see it, the first question for consideration is whether Mr Ali's conduct between the decision of District Judge Hasan on 9 July 1998 and the hearing before Judge Green on 12 April 2002 was so unreasonable as fairly to be described as regularly flouting court orders or lacking good faith in the sense used by Simon Brown LJ in paragraph 25 of his judgment in Olatawura v Abiloye quoted above.
    69. Mr Charlwood submits that this point was not taken by Mr Ali below, that it was not the point which I had in mind in granting permission to appeal and that he should not be permitted to advance it now. For my part, I would not accept the submission that Mr Ali should not be permitted to advance the point in this appeal and would grant whatever permission is needed to permit him to do so. As explained in some detail above, Mr Ali was not represented before either Judge Green or the judge or indeed before me on the application for permission. He now has the considerable benefit of representation by Mr Cranston. We have had the advantage (which the judge did not) of detailed submissions on the principles identified in Olatawura v Abiloye and I see no prejudice to Mr Hudson in allowing Mr Ali to advance submissions which focus on the correct approach to an application for security for costs of this kind.
    70. In my judgment, an application of those principles to the facts of this case leads to the conclusion that the question posed in paragraph 47 above should be answered in the negative. Further I would reject Mr Charlwood's submission that Mr Ali's conduct amounted to an abuse of the process at any time after the decision of District Judge Hasan. Mr Ali had a right of appeal from the order striking out the action. He exercised that right in time. Although he did not initially provide an estimate of time for the hearing of the appeal, he did so fairly soon thereafter but, for reasons which have never been explained (but which are certainly not the fault of either party), the court did not fix a date for Mr Ali's appeal. If it had, it would have been heard before the CPR came into force and long before any question of an automatic stay arose.
    71. Thereafter there was a flurry of activity (or perhaps more accurately inactivity) in the summer of 1999 when the court, so far as I can see wrongly, asserted that Mr Ali needed leave to appeal and when he had solicitors who made little impact on the case and subsequently did nothing without explaining why, although it may well be that their attempts to obtain legal aid failed. It is true that Mr Ali should have appreciated that the action became automatically stayed by paragraph 19(1) of the practice direction to CPR Part 51 but, for my part, I do not think that his failure as a litigant in person to be aware of that fact, or his failure to do anything thereafter can fairly be described as regularly flouting court orders or as lacking good faith in the sense described above. There is some evidence from Mr Ali that he made enquiries at the court counter 'time and again', although my conclusion is not based on that evidence.
    72. In all the circumstances I have reached the clear conclusion that, if the approach identified above had been put before the judge and applied to the facts of this case, he would have held that it would be wrong in principle to order Mr Ali to make any payment into court as a condition of allowing him to proceed with the appeal, unless perhaps the weakness of Mr Ali's case on the merits could properly lead to that conclusion.
    73. That conclusion makes it unnecessary to consider the further point advanced by Mr Cranston, namely that the judge should not have ordered Mr Ali to pay 1,750 into court because he could not afford to do so and because such an order would stifle the appeal. I will therefore only say that there does seem to me to be some force in the point. Mr Ali had previously been on legal aid and told the judge that he was on income support. Moreover there were other indications of lack of means, although there was no detailed evidence of Mr Ali's financial position.
    74. However that may be, I do not for my part agree with the conclusion reached by the judge in paragraph 34 of his judgment (quoted above) that the figure of 1,750 represented costs which Mr Ali was "likely to be required to meet in any event". It appears that the judge took the view that, if Mr Ali applied to lift the automatic stay and his application was resisted but succeeded, he would be ordered to pay at least 1,750 towards the respondent's costs. It also seems to me to be implicit in that view that Mr Ali would be ordered to pay at least that sum as a term of being permitted to proceed with his appeal.
    75. For my part, I would not accept either of those conclusions. It is far from clear to me that, if Mr Ali made application to lift the stay which the respondent chose to resist but which succeeded, Mr Ali would be ordered to pay the respondent's costs. He would, after all, on that hypothesis be the successful party. Further, even if such an order were to be made, for the reasons already given I do not think that a correct application of the principles discussed above would lead to the conclusion that Mr Ali should only be permitted to proceed with his appeal on terms that he paid all or part of the respondent's costs of the application.
    76. It follows that, subject to the question whether the merits of Mr Ali's proposed appeal are so weak that he should not be permitted to proceed further, I would allow the appeal and set aside the order of the judge. I turn therefore to the merits, before considering what should now be done.
    77. Mr Charlwood submits that Mr Ali's appeal from District Judge Hasan's decision to strike the action out is doomed to failure and that this appeal should be dismissed on that ground. Mr Charlwood points to the statements of various judges as to the weakness of Mr Ali's case as set out above. However, with the possible exception of District Judge Hasan and to some extent Judge Green, none of the other judges who have considered the matter have considered the merits in any detail or given detailed reasons for their views.
    78. District Judge Hasan held that Mr Ali's case was doomed to failure on the basis that it involved an attack on the conclusions reached by Mr Cherryman in the Chancery Division. I entirely see the force of that conclusion. I also recognise that Mr Ali's pleading is far from satisfactory. However, I am concerned that the potential merits of Mr Ali's case have never been fully scrutinised and that the essence of the case which he wishes to advance may be not so much that alleged agreements of 31 December 1989 or 29 January 1990 or a letter of 4 March 1990 gave rise to a binding contract but that, if Mr Ali had been properly advised by the respondent, he would have entered into a contract which was binding.
    79. Although the position is far from satisfactory, I would not dismiss this appeal on the basis that Mr Ali has a case which is doomed to failure. It seems to me that, given that he had a right of appeal which he exercised and that his appeal would have been heard but for the failings of the court, and in the light of the further fact that his subsequent conduct cannot be characterised as an abuse of process or as flouting proper court procedures or otherwise as demonstrating a want of good faith, he should be permitted to appeal from the order striking his action out.
    80. Mr Cranston freely accepted that he had not considered the merits of Mr Ali's underlying case. That is unfortunate and I would urge those acting in a similar capacity in the future to focus on the underlying merits of the dispute, but I would not criticise Mr Cranston in any way here, since he has been of considerable assistance to the court. To my mind, it is a great pity that the respondent applied for a stay of an already stayed action and that Mr Ali did not apply for the removal of the automatic stay before Judge Green. It appears that no one appreciated that the action had been automatically stayed until the hearing before Judge Green.
    81. At the time of that hearing there remained less than a month before the date fixed for the appeal. It seems to me that much time and money would have been saved if the appeal had gone ahead, either in May 2002 or shortly thereafter. If Mr Ali's appeal is as hopeless as the respondent says, the appeal would have failed and that would have been an end of it. On the other hand, if there is anything in Mr Ali's case, the appeal would have succeeded and the matter could have proceeded on its merits. Instead there has been much delay and further interlocutory skirmishing.
    82. In all the circumstances I would allow Mr Ali to pursue his appeal against the order of District Judge Hasan striking out his action. For this purpose Mr Cranston applied in the course of argument for an order removing the automatic stay. Mr Charlwood submitted that we should not make such an order but that Mr Ali should be left to make an application for the stay to be removed in the future. He submitted that the respondent might wish to argue that he would be prejudiced by such an order.
    83. Despite Mr Charlwood's submission, I would grant Mr Cranston's application, lift the automatic stay and allow Mr Ali to proceed with his appeal. I note that in the statement of Joanne Sher filed by Barlows in support of the application for a stay, no mention is made of the automatic stay and that the point taken was simply that it would be unjust to allow Mr Ali to reactivate the action without paying the costs. Among the points taken was that Mr Ali needed permission to appeal but there was no suggestion that the respondent would be prejudiced if Mr Ali's appeal was permitted to proceed. That is not, to my mind, surprising because the appeal simply raised the question whether District Judge Hasan was right to hold that Mr Ali's claim was doomed to failure. In all the circumstances I cannot see that the respondent can be prejudiced if Mr Ali is permitted to argue that the district judge was wrong so to hold.
    84. I would therefore allow the appeal and grant the application lifting the stay. This does not mean that it will be open to Mr Ali to argue any point that he wishes. I note that in Ms Sher's statement she said that, if no stay was granted, (in which case she clearly assumed that the appeal would proceed), it would be appropriate for directions to be given for the appeal including the service by Mr Ali of properly formulated grounds of appeal, permission for the respondent to serve a respondent's notice (if appropriate), the lodging by both parties of skeleton arguments and the preparation of an appeal bundle.
    85. Those seem to me to be very sensible suggestions and, subject to any submissions the parties would wish to make on any specific direction, I would make an order along those lines. It seems to me that it would be of great assistance to the judge hearing the appeal if Mr Ali could again obtain assistance from the Bar Pro Bono Unit so as to ensure that his case is put in the most sensible and concise way possible. It seems likely that at the hearing of the appeal he will need to seek permission further to amend his particulars of claim, which are far from easy to follow. If he does, it will of course be for the judge to decide whether or not to grant such permission applying the relevant principles. Nothing which I have said above is intended to express any view on such an application or on the merits (if any) of Mr Ali's case.
    86. Lord Justice Potter:

    87. I agree.
    88. Lord Justice Ward:

    89. I also agree.
    90. Order: The claimant's appeal is allowed. The J dated 13th March 2003 are set aside. The Automatic stay of this action pursuant to CPR 51 PD 19(1) be lifted. There be no order as to the costs, and the following directions shall apply to the future conduct if the action.
      (Order does not form part of the approved judgment)

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