Hammond Suddard, Solicitors v Agrichem International Holdings Limited: CA 18 Dec 2001

The appellant sought staying the order for him to pay costs pending the results of an appeal, and the respondent sought security for costs in fighting the appeal, and a striking out in default of payment, and for security for payment of the judgement debt. The applicant company is a limited liability company registered in the Virgin Islands and without assets within the jurisdiction. The solicitors had claimed for their costs in representing the claimant, and the claimant wished to counterclaim asserting professional negligence. The appellant filed papers showing the company’s dire financial condition, but the court considered it inadequate. The appellant had been incorporated in the British Virgin Islands and was owned by trustees on discretionary trusts for an unidentified but apparently wealthy family. The appellant had, so it said, no assets. But could it raise from its beneficial owners a sum equal to the judgment debt and costs in order to enable it to make the payment into court? If so, there was ‘a compelling reason’ within the meaning of Rule 52.9(2) for imposing the condition sought by the respondents.
Held: There was no risk of the appeal being stifled by the costs being paid. An order for security for costs was appropriate in the light of the applicant’s failure to disclose detailed assets. Here, leave to appeal had been refused, then granted by a single Lord Justice, and where compelling reason existed, the court could impose conditions on the appeal going ahead. The difficulty of enforcing any award, and failure of the claimant to give full disclosure, was such a compelling reason, and the court should exercise its discretion in ordering security for the judgement debt appealed against. The decision may have been different if the court had concluded that the appeal might be stifled. When considering a stay, the court should ask i) what were the risks of the appeal being stifled if a stay was refused, and ii) if a stay was granted, but the appeal failed, would the respondent be able to enforce the judgment, and iii) if the stay were refused and the appeal succeeded, but the order enforced in the interim what prejudice would attach to the appellants.
Lord Justice Clarke, And, Mr Justice Wall
[2001] EWCA Civ 2065, [2002] CP Rep 21
Bailii
Civil Procedure Rules 25.13(2)(b), 25.15(1), 52.9(1)(c)
England and Wales
Cited by:
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At first instance the appellant had dishonestly assisted another party to defraud the respondent, and ordered payment of substantial damages. The defendant, non-resident, sought to appeal, and the respondent asked the court to order payment into . .
AppliedSociete Generale SA v Saad Trading, Contracting and Financial Services Company and Another CA 23-May-2012
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Updated: 05 March 2021; Ref: scu.167218