England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
CIVIL DIVISION
ON APPEAL FROM THE HIGH COURT
QUEEN'S BENCH DIVISION
COMMERCIAL COURT LIST
(Mr Justice Moore-Bick)

		The Royal Courts of Justice The Strand London Wednesday 6 February 2002

Wednesday 6 February 2002

1. LORD JUSTICE POTTER: This application for permission to appeal relates to an order for costs made by Mr Justice Moore-Bick at the end of Phase II of this complex piece of litigation, in which the principal issue concerns clarification of the title to oil formerly located in a floating storage facility off Fujairah as an essential step towards establishing the entitlement of the parties to the oil, now held by a court-appointed receiver. Phase I dealt with issues of applicable law and Phase II, which followed, was concerned to identify the contractual and other arrangements under which the parties traded, so as to resolve questions of principle which determined their competing proprietary claims.
2. The skeleton argument of Mr Crane sets out helpfully the issues explored and complications which emerged in the course of Phase II, at the end of which the judge came to a conclusion the practical consequence of which, according to Mr Crane, is that Metro is now likely to be established as the owner of the largest part of the oil in the receiver's hands and in that sense was and is able to contend that it won in the Phase II proceedings.
3. The judge nonetheless ordered that Metro paid 80 per cent of Glencore's costs of Phase II, as a result of applying an "issues" approach rather than an "outcome" approach under the CPR. The position is that on almost all of the issues canvassed at length before him between Glencore and Metro, Glencore's case was accepted as correct, the basis for the outcome favourable to Metro being the judge's acceptance of the case advanced by insurers, who were also parties to the action, which become known as the "third way".
4. The judge gave a full and reasoned judgment on the question of costs. In refusing permission to appeal on paper I said:

"The submissions in respect of costs were fully and carefully considered by the judge with a view to exercising his discretion at the end of a long and complicated case on the basis of the post-CPR approach. There is no reason to think that he overlooked the points made in the skeleton argument and I see no error of principle."

5. Upon reflection, and without troubling Mr Crane further on his oral application, I conclude that the appropriate course is to adjourn the hearing of this application. That is not because my initial reaction to the content of the judge's judgment on costs has altered but because, as pointed out in Mr Crane's skeleton argument:

"At the hearing on the 1st November 2001, the Judge granted Glencore permission to appeal on certain substantive findings of both the Phase I and Phase II Judgments, and also gave permission to Metro to cross-appeal.

Accordingly, the Judge's costs order of the 1st November 2001 is likely to be contingent upon the outcome of those appeals and/or cross-appeals."

6. In the circumstances it seems to me that the proper solution is not to grant permission to appeal, as requested in the application, but to adjourn the application for permission to appeal to be heard by the court which hears the substantive appeals immediately following such hearing. That will enable the decision as to the appropriateness of the judge's order as to the costs of Phase II to be taken by a court fully apprised of the background issues which underlie Mr Crane's criticisms of the judge's exercise of what was his undoubted discretion as to the proper incidence of the costs of Phase II.
7. LORD JUSTICE KAY: I agree.
ORDER: Application adjourned to be heard immediately after the substantive appeals and cross-appeals. (Order not part of approved judgment)