England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE QUEEN'S BENCH DIVISION
(Mr Justice Sachs)

		The Royal Courts of Justice The Strand London WC2A
		Wednesday 31 January 2001

Wednesday 31 January 2001

1. LORD JUSTICE MAY: This is an application in an appeal by the claimant, Mr Ahmed, from an order of Sachs J dated 16 June 2000. The application is made by the successful second defendant's solicitors for security for costs of the appeal.
2. The basis of the application, which is brought under Part 25.13 and 25.15 of the Civil Procedure Rules, is that it is said that Mr Ahmed is an individual ordinarily resident out of the jurisdiction and is not a person against whom a claim can be enforced under the Brussels or Lugano Conventions. It is said that it is just in all the circumstances of the case to make such an order. It is accepted that Mr Ahmed is an individual who is ordinarily resident in Pakistan, out of the jurisdiction, and that that is not a country where the Brussels or Lugano Conventions operate. The basis upon which the application for security for costs is opposed is that in all the circumstances it is not just to make an order. That I shall have to consider in a minute.
3. But to start with I just look at the amounts that are spoken of. Put very briefly, the second defendants are one of three defendants in Mr Ahmed's action. The action has a long history. It arises out of proceedings which Mr Ahmed brought, and failed in, against the General Accident Insurers in relation to damage to premises. As I understand it, those proceedings failed because it was accepted on behalf of Mr Ahmed that the insurers, General Accident, had been materially misled in the way in which the premises were described.
4. The second defendants acted as solicitors for Mr Ahmed in those proceedings. In the present proceedings he says that the second defendants were negligent in the previous proceedings. One of the more important respects in which he says they were negligent is in relation to the third defendants, the Marsden Building Society. It is contended that Marsden Building Society should have been added as a co-defendant with General Accident in the previous proceedings, because there was a proper and strong claim against them. The second defendants, it is said, were negligent for not doing that, and they were negligent in other respects, not least in relation to obtaining discovery of material documents from, among others, Marsden Building Society; in failing to submit those and other documents to counsel; and in not asking counsel to consider whether to join Marsden Building Society as a party to the proceedings. Other failures are also alleged.
5. District Judge Talbot, sitting at Blackburn on 14 March 2000, struck out the claim against the second defendants. The claimant appealed to Sachs J, who dismissed the appeal on 16 June. He also, I believe, gave judgment for the second defendants on their counterclaim, which alleged outstanding fees for their work for Mr Ahmed in the General Accident proceedings. The amount of those fees was £19,532-odd, to which was added £900 interest.
6. The second defendants seek an order for security for costs of £30,000. The £30,000 is referrable to a sum of approximately £35,000, which is made up of a number of elements. Those include the costs of the action, including the costs before the district judge and Sachs J, and also include the £20,000, or rather more, of the judgment on the counterclaim and interest. Those amounts total £27,914-odd. The balance of the £35,000-odd consists of about £7,600, being the costs incurred on this appeal to date, and the estimated costs of the appeal in the future. In short, only £7,600 of the £35,000 are costs of the appeal.
7. Mr Wood, on behalf of the second defendants, urges me nevertheless to make an order which includes the past costs of the action and the judgment on the counterclaim. He does not invite me to treat this as an application to impose a condition on the permission to appeal which Chadwick LJ granted, and I do not do so.
8. Put very shortly, it seems to me that the jurisdiction to award security for costs extends, if other matters are properly established, to the costs of the appeal, but does not extend to including within sums for consideration costs which have been incurred on the action before it became an appeal - for which an order has of course already been made - nor to a judgment sum that has been obtained on the counterclaim. Accordingly, it seems to me that the only proper basis for this application is an application which relates to the £7,600.
9. Returning then to the opposition put forward by Mr Hussain, Mr Ahmed's brother, on behalf of Mr Ahmed, he submits that it is not just and reasonable to make any order at all. He has put forward a response to the applicant's skeleton argument and written submissions by way of what he refers to as the claimant's speech for the costs hearing, and he has also addressed me this morning. It seems to me that he makes three essential points. The first is that the claimant has a strong prospect of succeeding on this appeal. Apart from the second point, to which I shall refer in a moment, it seems to me that there is no need, nor possibility, for me to go beyond the assessment that Chadwick LJ made when he gave permission to appeal. He said this:

"In granting permission, I do not intend to give Mr Ahmed or Mr Hussain any encouragement that the appeal is likely to succeed. It is important to keep in mind that the two judges who have looked at this matter have come to the conclusion that the claim will not succeed. I am unable to take the view that there is no real prospect of success; but that is not at all the same as a view that that the claim is likely to succeed."

10. So, yes, Chadwick LJ gave permission to appeal; yes, he concluded that there was a real prospect of success; but no, he was not giving Mr Ahmed undue encouragement. It seems to me that I should proceed on the basis of that assessment.
11. The second point that Mr Hussain makes is that there is new material available to be deployed on this appeal. The new material comes from discovery against Marsden Building Society in the proceedings against them, which are continuing and which, he tells me, are going to be heard in May. Mr Hussain said that he received these papers on behalf of Mr Ahmed only about a fortnight ago. He says that there are documents, including a letter which he has shown me, which, he says, clearly show that Marsden Building Society were aware that the premises were a hot food takeaway. He says that this clearly establishes that Marsden Building Society were at fault in relation to Mr Ahmed's dealings with General Accident. He says that, if the second defendants had seen those documents, then there would have been a very cogent case for joining Marsden Building Society in the previous proceedings. What is more, he says that this clearly shows that Mr Ford, the person involved for the second defendants, was plainly negligent in not investigating joining Marsden Building Society in the case against General Accident. Yes, says Mr Hussain, Mr Ahmed may win his case against Marsden Building Society, but that will not cover the costs of the General Accident action, nor rent up to an amount of £28,000. In short, discovery against Marsden Building Society, recently acquired, shows that Mr Ahmed was not at fault and that Mr Ford was negligent. It is at the forefront of Mr Hussain's submission that those documents are likely to persuade the Court of Appeal that the case against the second defendants should not have been struck out.
12. I take all that into account. I am bound to say that Mr Hussain and Mr Ahmed should not take it for granted that the Court of Appeal will necessarily admit this new material. I do not say one way or the other whether they will or whether they will not, but it is at least a question whether that new material will be considered, because permission is always needed from the Court of Appeal to bring before it material which was not before the court against whom the appeal is made. Secondly, although I hear and understand what Mr Hussain is telling me, and although I take account of the possibility that these documents may be admitted and may strengthen Mr Ahmed's case, it does not seem to me to go further than saying that this is a case which has some real prospect of success. But, as I say, I take this into account as part of the material necessary to determine whether there should be an order for security or not.
13. The third point which Mr Hussain makes is really a plea from the heart. He says that he and his brother have been struggling with litigation and with solicitors and so forth for a very long time - he refers to 20 years. He says that they have suffered, both personally and in the way that they have been, as he would say, treated, by a variety of solicitors, including the second defendants and those who currently represent the second defendants. He tells me that in other proceedings, the solicitors took the same tactic as they have in this: they made an application for security for costs, and when the security for costs was provided and the case was about to be heard, they admitted liability and paid, in one case, £200,000. Mr Hussain says that he and his brother have been suffering this kind of thing in, I think he says, four cases over 20 years, and I understand him to submit that it is simply not just if again an order for security for costs is applied for and ordered.
14. It is most unfortunate if litigation of this kind has been going on for a very long period. One knows only too well that litigation is a great drain on the people who are involved in it. But it does seem to me that I have to decide this application on the basis of the material relevant to this appeal. The material relevant to this appeal is, in my judgment, that to which I have referred.
15. So, taking account of all the matters that Mr Hussain puts forward, and in particular his contention that the new material will make a great deal of difference to the strength of Mr Ahmed's case, it nevertheless seems to me that, in all the circumstances, it is just to make an order for security. I have already given my reasons for rejecting an order based upon cost estimates of £35,000. I propose to make an order based on the cost estimate of £7,600 and, as is usual, I propose to reduce that somewhat against contingencies and in general justice. The order that I therefore propose to make is that the claimant/appellant provide security for costs of the appeal in the sum of £6,000. Mr Hussain asks that that may be provided by a charge or something similar on a property. I am afraid to say I that I do not think that is at all appropriate in this case. It seems to me, particularly in circumstances where costs orders and a judgment on the counterclaim have not been paid, and where no application has been made for those orders to be stayed, that the security should be by means of payment of the money into court.
16. Accordingly, I order as follows: that the claimant, Mr Ahmed, provide security for the second defendant's costs of the appeal in the sum of £6,000 within 42 days by paying it into court and, if he fails to do so, the appeal shall be struck out without further order. One would normally say 28 days, but Mr Ahmed is beyond the jurisdiction and it seems that a bit more time would be appropriate.
ORDER: Application allowed. The claimant to provide security for the second defendant's costs of the appeal in the sum of £6,000 within 42 days by paying it into court and, if he fails to do so, the appeal shall be struck out without further order. Costs of this application to be paid by the claimant. (Order not part of approved judgment)