Summary

The continuation of a Turkish airline's appeal against a judgment sum awarded in a UK travel company's favour was made conditional on the airline paying the judgment sum into court alongside security for the travel company's costs. The imposition of the condition was justified by the fact that the airline had ceased operating flights to the UK and had no assets in the jurisdiction, thereby depriving the travel company of the normal means of enforcing judgment if the appeal failed.

Facts

A UK travel company that had been awarded a judgment sum against a Turkish airline applied for an order that the airline be allowed to continue its appeal only if it paid into court the judgment sum and security for the travel company's costs.

The judgment sum was for £3.64 million and had been awarded in May 2014 by a High Court judge who stayed execution of the sum pending any application for permission to appeal, and thereafter if permission was granted. The judge ordered the airline to make two interim payments totalling £600,000 but those sums went unpaid. The airline was granted permission to appeal in December 2014. The travel company applied for continuation of the appeal to be made conditional because the airline had ceased operating flights to the UK and no longer had assets in the jurisdiction, meaning that the normal mechanisms for enforcing judgment should the airline lose the appeal would not be available. A Court of Appeal judge considered the matter on the papers in April 2015 and ordered that continuation of the appeal be made conditional on the airline paying the outstanding interim payments into an escrow account, the sum of £150,000 into court as security for costs, and the judgment sum into court. He stayed the order so as to allow an oral rehearing of his decision, being the instant hearing.

The airline submitted that there was no compelling reason within CPR r.52.9 to impose the requirement to pay the judgment sum into court because it had not taken steps to defeat the judgment, it had simply stopped operating flights to the UK due to insufficient demand. It further submitted that the interim sums had since been paid and were only late due to cash flow problems.

Held

The judgment of Hammond Suddards Solicitors v Agrichem International Holdings Ltd [2001] EWCA Civ 2065, [2002] C.P. Rep. 21 had set out elements in that case which had persuaded the court that there was a compelling reason for making continued prosecution of the appeal conditional. While there was an obvious danger in making lists of relevant factors which would be taken as checklists in future cases authorising or prohibiting the finding of compelling reasons, those factors were indications that might be material in a particular case. In the instant case, there was a sufficiently compelling reason to make an order for the payment of the judgment debt. First, the travel company was not able to take advantage of the Judgments Regulations to enforce its debt. At the time of the trial the travel company could reasonably have supposed that the airline would continue to have occasion to bring assets into the jurisdiction in the form of aircraft, and it would continue to have a commercial reason to have a presence in the UK, albeit a fluctuating one. Whatever the airline's motive, its cessation of flights to the UK since the High Court judge had made her order had a significant impact on the ability of the travel company to enforce its judgment by normal means. Second, there was no expectation that the airline would be cooperative in relation to payment of the judgment debt. Its payment of the interim sums had been significantly late and it had given no proper explanation as to why, despite having had every opportunity to explain the financial difficulties it claimed to be experiencing. On that basis it could not be assumed that the airline would not be at least as uncooperative and possibly more so regarding payment of the judgment sum if the appeal failed. In another case, those factors might not amount to a compelling reason. Thus, it was noteworthy that the list of factors in Hammond Suddard included those which indicated that there would be no real prejudice to the appellant in the running of the appeal and no evidence that the appeal would be stifled. In the instant case there would be no prejudice to the airline at all beyond the losses caused by placing money in court or the provision of security, Hammond Suddard applied. Given that a compelling reason existed, it was proper to grant the order sought by the travel company. There would be real injustice if the additional delay induced by the appeal meant that the airline was in a significantly better position to resist enforcement of the judgment. Therefore, the condition was imposed immediately (see paras 17-18, 25-29 of judgment).

Application granted