Summary

It was permissible for the Court of Appeal to make the prosecution of an appeal conditional on the payment of the judgment debt against which the appeal was being brought, even if the appellant might have to obtain the necessary funds from a third party.

Facts

Cross-applications by: (i) the defendant ('D') for a stay, pending the hearing of its substantive appeal, of orders made by the trial judge for the payment of the judgment debt and costs; and (ii) by the claimant ('C') for security for its costs of the appeal and an order that the appeal be struck out unless, by a given date, C paid or secured the full amount of the judgment debt and costs. The unsatisfied judgment related to C's claim for unpaid fees incurred whilst acting for D, a company registered in the British Virgin Islands, in unsuccessful proceedings in England. In June and July 2001 orders were made requiring D to pay a sum in respect of C's claim and £300,000 on account of costs. Neither of those amounts had been paid. D's application for a stay was based upon its alleged impecuniosity. C opposed the application for a stay, and sought orders for security for its costs of the appeal and that the full amount of the judgment debt and costs be paid or secured as a condition of the further prosecution of the appeal.

Held

(1) As to D's application for a stay, the financial information provided by it was wholly inadequate. A foreign corporate entity without assets in the UK and without readily identifiable assets elsewhere, which was not subject to any international conventions to facilitate enforcement, and which sought to stay orders obtained after a lengthy and fair hearing, had to produce cogent evidence that there was a real risk of injustice if enforcement was allowed to take place pending appeal. (2) Since the principle of an order for security was not disputed by D, the only issues were "how much" and "when". As to the former, there was no particular science as to the basis on which the court's discretion was to be exercised. In all the circumstances, the appropriate order was for security in the sum of £85,000 to be paid by 1 March 2002. (3) Pursuant to CPR 52.9 a "compelling reason" was required for making the further prosecution of the appeal conditional on the judgment debt and costs being paid or secured. Such a reason was to be found in the following: the difficulties of enforcement against D overseas; the fact that D could clearly afford to pay its solicitors and counsel in respect of these applications whilst professing impecuniosity; the absence of any convincing evidence that D could not pay the judgment debt and costs; the grave doubts that the court entertained as to the accuracy of the financial information provided by D; the absence of any convincing evidence that the appeal would be stifled by the order sought; and the unacceptability of D continuing to prosecute the appeal whilst continuing to disobey orders of the court to pay the judgment debt and costs.

Order accordingly.