England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
APPLICATION FOR PERMISSION TO APPEAL AN EXTENSION OF TIME AND A STAY OF EXECUTION

		Royal Courts of Justice Strand London WC2 Friday, 15th June 2001

1. LORD JUSTICE CHADWICK: This is an application for permission to appeal and an application for an extension of time if permission is granted against part of an order made by Mr Justice Neuberger on 2nd October 2000 in litigation brought by CIBC Mellon Trust Company as trustee of a number of DaimlerChrysler benefit funds and DaimlerChrysler Canada Inc against a large number of defendants of whom the present applicant Mr Karsten von Wersebe is one. He is named as the third defendant.
2. The claim arises out of investments made by the claimants in a Canada-based investment banking and finance corporation, Castor Holdings Ltd. It is said that the applicant was, at least until 1987, chairman and a director of Castor Holdings and that thereafter he continued to have an interest in that corporation through companies owned and controlled by him. The claim against the applicant is very substantial, in excess of £100 million, and the statement of claim contains the allegations of fraud, deception and misuse of trust monies which are familiar in a case of this nature. It is right to say at the outset that all those allegations are denied by the applicant.
3. On 26th February 1997 the claimants obtained an injunction restraining the applicant from dealings with assets under his control. The order made by Mr Justice Rimer on that day followed the pattern, again familiar in cases of this nature, of requiring the applicant to make extensive discovery relating to transactions with Castor Holdings and other companies - including dealings between Castor companies and companies known collectively as York Hannover. The applicant failed to comply with that order.
4. An application for discovery against him was renewed before Mr Justice Rattee on 25th November 1997. Mr Justice Rattee made a fresh order for discovery which covered, but went beyond, the categories of documents which had been the subject of the order made on 25th February 1997 by Mr Justice Rimer. There was no compliance by the applicant with that order of 25th November 1997. The matter came back before Mr Justice Rattee on 1st April 1998. He then made a 28-day unless order; that is to say, an order that, unless the applicant complied with the requirements as to discovery, his defence should be struck out. There was no compliance with that order of 1st April 1998. It appears that the claimant may have taken the view at that stage that the applicant was impecunious and so not worth pursuing. Whatever the reason, they did not seek to strike out the defence and enter a default judgment.
5. If it were the claimant's view in 1998 that the applicant was not worth pursuing, that view appears to have changed earlier last year. The claimants made a further application, seeking an order that the applicant, Mr von Wersebe, be debarred from defending by reason of his failure to comply with the orders made by Mr Justice Rimer and Mr Justice Rattee; orders which were by then two or three years old. That application came before Mr Justice Neuberger on 14th July 2000. He declined to make an order striking out the defence on the grounds of non-compliance with the earlier orders for discovery for the reasons which he gave in a full judgment delivered on that day. But he did make a further 56 day unless order requiring the documents to be produced by 8th September 2000. He ordered, also, that the applicant, Mr von Wersebe, pay the claimants their costs of the application of 14th July 2000 which he assessed on the standard basis at the sum of £8,500. He ordered that those costs be paid by 4.30 on 28th July 2000.
6. It is clear from the transcript of his judgment which has been made available why the judge took the view it was not appropriate to strike out the defence, at that stage, for failure to comply with the order for discovery. But there is not before the court any transcript of the discussion which is likely to have taken place after the delivery of formal judgment and which would throw light on why the judge made a summary order for the payment of costs within 14 days. The probability, as it seems to me, is that the judge took the view that, if Mr von Wersebe were to have a yet further chance to comply with his obligations as to disclosure, then he should do so on terms that he pay the costs that had been occasioned by his failure to comply earlier.
7. The applicant did not make discovery of documents in response to the order of 14th July 2000 nor did he pay the costs in the sum of £8,500 which he had been ordered to pay on that day. But some progress does seem to have been made, in that counsel and solicitors who were then representing him (and who had represented him on 14th July) attended at the Bankruptcy Office in Lucerne and inspected some documents in that office. That. at least, produced the information that there were a very large number of documents in the Bankruptcy Office in Lucerne covered by the orders - a number whicg exceeded 100,000 or thereabouts.
8. The claimants then re-applied to the judge for an order debarring the applicant from defending the claim, on grounds he was still in breach of all the orders for discovery which had been made against him; including the 56-day unless order which Mr Justice Neuberger had made on 14th July. That application came before Mr Justice Neuberger on 2nd October 2000. It is with the order which the judge made on that occasion that I am now concerned.
9. Paragraph 1 of the order of 2nd October 2000 dismissed the claimants' application for judgment in default. Paragraph 2 required Mr von Wersebe to serve, by 4.30 pm on 27th November 2000, a list of all the documents held at the Bankruptcy Office in Lucerne concerning the insolvency of any of the companies forming the York Hannover Group. Unless he did that he was to be debarred from participating further in the proceedings. Paragraph 3 required that the applicant should pay, by 4.30 on 30th October, the £8,500 in respect of costs which he had been ordered to pay by the order of 14th July 2000; and provided that, unless he did so, his defence should be struck out and he should be debarred from defending. That was a 28-day unless order in relation to the payment of those costs - not (it should be noted) the costs of 2nd October but costs which had already been ordered to be paid under the order of 14th July. Paragraph 4 of the order of 2nd October 2000 gave the applicant permission to apply to discharge or vary paragraph 3; such application to be supported by further written evidence. Paragraph 5 gave the parties permission to agree extension of times for compliance with paragraphs 2 or 3.
10. It is plain from the judgment which the judge gave on 2nd October 2000 that he envisaged that, if Mr von Wersebe was making a real effort to comply with the obligations as to discovery, then the judge would be likely to be synpathetic to an application for an extension of time to enable that process to be completed.
11. Paragraphs 8 and 9 of the order of 2nd October 2000 are in these terms:

"8 The third defendant's application for permission to appeal in respect of the order set out in paragraphs 2 and 3 above be refused.

9 Time be extended for any application by the third defendant to the Court of Appeal for permission to appeal against the orders set out in paragraphs 2 and 3 above until 4.30 pm on 30 October or until after the determination of any application made under the provisions of paragraph 4 above which is made prior to the said date, whichever shall be the later."

12. The scheme of the order of 2nd October may be summarised as follows. First, the applicant was to pay the £8,500 of costs, which he had been ordered to pay on 14th July, by 30th October 2000 - that was within 28 days - otherwise his defence would be struck out. But he could apply to the judge to vary or discharge that order on evidence which, as the judge must have envisaged, would show why he had been unable to find the money within the time limited. Second, if the applicant did comply with the order for payment of the outstanding costs - or if he obtained a variation or discharge of that order - he had a further 28 days in which to comply with the order for discovery; and if he failed to comply with that order his defence would be struck out. Third, the time for seeking permission to appeal both those directions was extended to 30th October 2000 (the last day for compliance with the order to pay the £8,500) or, if the applicant had made application to the judge within that time for variation or discharge of the order to pay, then until after the application for variation or discharge had been heard or determined.
13. It is plain that the judge saw the payment of £8,500 in respect of the costs incurred on the earlier application on 14th July as the price which the applicant was to pay as a condition of being allowed a yet further opportunity to comply with orders for discovery which had been made on no fewer than four occasions over the preceding three years. The judge said as much in a passage which appears in the transcript of his judgment at pages 20D-21B:

"What I am going to do, therefore, is to dismiss the application to debar the defendant from defending on terms that the defendant is required, within the sort of timescale I will discuss with counsel, to provide a list of documents. If there are meaningful discussions between the parties, I would expect the claimants, if the defendant is acting bona fide, to extend time if necessary by agreement with the defendant. I shall make provision for that in the order. I would expect the claimants and their advisers to be reasonable but again I cannot identify what that means precisely in the present context, albeit at the moment I think it would involve arranging to inspect with the defendant and a representative of the claimant. I would require, as a condition of this, the defendant pay the £8,000 he has been ordered to pay by way of costs, within 28 days because, in his case, he is looking to a third party for the money. I would be prepared to give liberty to apply for an extension of time, albeit that I think that is implicit in any order to pay. I am not saying I would extend time, but I would be prepared to consider it."

14. Although the judge refers to £8,000, it is plain that the payment he had in mind is the £8,500 which he had been ordered to pay on 14th July.
15. In those circumstances the applicant was faced with a choice; either (i) he paid the £8,500 in 28 days, or (ii) he applied to the judge for further time, or (iii) he sought permission from this court to appeal against the order requiring him to pay and to serve the list of documents within the extended period of 28 days which the judge had allowed. It is clear he did not choose to adopt the first or third of those courses. Nor, strictly, did he adopt the second course.
16. What he did was to write to the judge personally in a letter which is dated 26th October 2000 - but which, from its fax endorsement, appears to have been sent at 17.40 on 30th October 2000 - asking for an extension of time of three months for payment of the costs. He said in the letter that he was unable to fund a formal application to the court through his lawyers and had no choice but to write directly with copies to solicitors for the plaintiff. He affirmed that he was prepared to provide the list of documents as required by the order of 27th November.
17. There seems to have been no reply to that letter. It may be that the letter never reached the judge. Whatever the reason, the applicant did not follow the matter up. What he did was to file an appellant's notice in this Court on 17th November 2000. There is some doubt about the date upon which he first took steps to file that notice, because he has written a letter dated 6th November to the Court of Appeal Office stating that he had filed his application with the Court on 30th October 2000. There is no record on the court file, so far as it has been possible to ascertain, of any application filed with this Court on 30th October 2000. The cheque for the amount of fees payable on filing such an application is dated 6th November 2000. The letter of 6th November 2000 appears from the fax endorsement at its the head to have been sent at 4.20 on 15th November, some ten days after the date which the letter bears. The court acknowledged the appellant's notice and informed the applicant that it would be treated as filed on 17th November; and that is the date of the court seal on the notice.
18. The position, therefore, is that this application for permission to appeal is some three weeks or so out of time. No explanation is offered for that delay. It seems to me that, in the light of the history that is here set out, this applicant was obliged to explain why he is seeking relief from this Court out of time. On the one hand he had written to the judge, stating that he was prepared to comply with paragraph 2 of the order of 2nd October and that he required three months in order to raise the sum of £8,500; on the other hand he has served an appellant's notice in this Court which, on its face, seeks permission to appeal against paragraph 2 of Mr Justice Neuberger's order - but which, as the applicant explained, was intended to extend to paragraph 3 - either in addition to or in substitution for paragraph 2. The judge put in place a perfectly sensible regime for the working out of his order. He envisaged that, if the applicant wanted further time to comply with the order to pay, he should have the opportunity to ask for it; and, if there was a difficulty in providing the list of documents in time, again the judge would be sympathetic to an extension of time for that purpose.
19. Having informed the judge that he was going to comply with the order to provide documents and that he would comply with the order for payment if only he could be given a further three months to raise the money, it is an abuse for the applicant to seek to come to this court, out of time, to appeal against the judge's orders. The right time to appeal against the judge's orders (if at all) will be after the judge has heard and determined any further application along the lines of that made in the letter of 26th October. If that application is refused, this Court will then know why the judge has thought it inappropriate to extend time for the payment of the £8,500 in the light of the evidence which the judge plainly required as to the applicant's means; and whether any, and, if so, what, progress has been made towards the provision of the list of documents which has now been outstanding for some years. In particular, it will know why the judge thinks that whatever progress has been made is, or is not, sufficient to justify a debarring order.
20. In those circumstances I propose to refuse the application for an extension of time and to dismiss this application for permission to appeal.
Order: Application dismissed