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
AND AN EXTENSION OF TIME

		Royal Courts of Justice Strand London WC2 Thursday, 11th July 2002

1. LORD JUSTICE SEDLEY: This is an application for permission to appeal against Mr Justice Colman's order that the defendant company, Popco Naval and Energy Co Ltd, should by 19th April 2002 put up £8,000 security for the costs of its counterclaim by way of a bank guarantee, failing which the counterclaim should be stayed.
2. The claimant company Sopetra is suing the defendant company for some $50,000 demurrage and interest. The defendant company has pleaded in defence that the claimant undertook the risks on demurrage, and by way of counterclaim seeks compensation for overpayment on partly undelivered goods and unpaid commission to a total which is not entirely clear but appears from a re-typing of the counterclaim before me to amount to something over US$30,000 - elsewhere to some £9,000. The amount is not strictly important.
3. On the case management conference the judge was satisfied that on the evidence before him there was a real risk that if the defendant failed in its counterclaim the claimant would go empty handed on costs. Mr Cobblah, a director who appeared then and has appeared today on the company's behalf, pointed out that he could say exactly the same about the claimant company. The judge pointed out that if that were right Mr Cobblah could apply for security for costs in reverse.
4. The claimant company's grounds for asking for security of costs were that if the counterclaim failed there was a real risk either that the defendant company would not be good for the costs or that it would try to evade payment. The judge accepted this. Mr Cobblah's grounds of appeal are that the judge's order is unfair because, first, it prejudges the counterclaim against the defendants when in fact the counterclaim is, Mr Cobblah contends, unanswerable on the documents and, in any event, partly admitted. He has shown me the fax of 27th September 2000 by which there is indeed what appears to be an admission of overpayment of almost US$5,000 on the defendant's part. Secondly, Mr Cobblah wishes to submit to the full court that Mr Justice Colman dealt with the application with undue haste and did not appreciate the strength of the defendant's position. Thirdly, he argues that the judge gave too much weight to the suggestion that Popco was impecunious or, in the alternative, that he gave it too little weight since the order was, in practice, going to stifle the counterclaim. The latter limb however Mr Cobblah has not advanced to me today. He does not say that £8,000 is an impossible target that will either stifle the counterclaim or put the company out of business. He simply says it is the wrong thing to order.
5. Mr Cobblah has also said to me, as he has said in the papers, something with which I have some sympathy that on the face of it this litigation is a negotiable argument about figures. However before the judge - and I have read the transcript of the management meeting - alternative dispute resolution was mooted but rapidly abandoned simply because the claimant's counsel would not play ball. Having read the transcript - although, I say at once, not having heard counsel for the claimant today - I nevertheless express my concern that the judge may have been deflected by what, at least on the face of the transcript, looks to me to be just the kind of confrontational lawyers' reasons that alternative dispute resolution is designed to avoid. The case is now in the Central London County Court, to which Mr Justice Colman sent it, and it may still not be too late to think there about alternative dispute resolution, especially in the light of the fax to which I have referred.
6. As to the judge's order for security of costs of the counterclaim however, I see no legal basis on which Mr Cobblah could realistically hope to challenge it on a full (and riskily expensive) hearing before this court. There was material before the judge on which he could legitimately order it notwithstanding the partial admission. The sum of £8,000 is not an excessive sum. In essence, the defendant company is English registered but, on Mr Cobblah's own evidence, Nigeria based. The evidence before the judge was that Mr Cobblah, a director and secretary of the company, had told the claimant's representative that the company, which was registered only in 2000 and has filed no accounts as yet, had ceased trading. It was accordingly suggested that the company was simply an alter ego of Mr Cobblah, against whom it was said at least one County Court judgment was outstanding and unsatisfied. It is not my task today to re-evaluate this material. This was what was put before the judge and accepted by him and was sufficient ground for the making of the order which he elected to make.
7. As far as the mode of the hearing is concerned, Mr Cobblah has explained to me today why he felt that Mr Justice Colman rushed the application without an adequate appreciation of the facts and documents. I can understand why a litigant in person, who is not accustomed to the ways of the courts, might feel that a very experienced judge who has pre-read the papers is not going through the case in open court with the attention that the litigant expects. But that is precisely because it is an experienced judge who has read the papers. There are things he needs to hear, and to which Mr Justice Colman listened on both sides, but there is nothing in the material before me - and certainly nothing in the transcript - which gives support to the suggestion that this was a hearing so rushed or truncated that it failed to do justice.
8. For these reasons I am not going to give the defendant company permission to appeal. I would - if I did so - be sending it into a hearing which it was, on my view of the matter, almost certain to lose at very considerable expense as to costs, and Mr Cobblah would not ultimately thank me for doing so. If Mr Cobblah does decide on the defendant company's behalf to make an application for security of costs against the claimant company, or when the matter is next considered in any event by the County Court on case management issues, it may be that at the same time, and in the light of what I said earlier in this judgment, the Central London County Court will have another look at the possibility of alternative dispute resolution. I hope that may prove fruitful.
9. All I would do in refusing permission to appeal and in the knowledge that meanwhile a stay has been agreed to by the claimant in the Central London County Court upon the operation of the order giving security of costs of the counterclaim, is to enlarge for a short time the period for giving that security so that there is something definite in place of the now superseded time order.
Order: Application refused with a period of 28 days to put up security for costs with permission to apply to the Central London County Court for more time if needed. Transcript of judgment to be supplied at public expense to Mr Cobblah.