England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT
CHANCERY DIVISION
(Master Venne)

		Royal Courts of Justice Strand London, WC2 Wednesday, 23 October 2002

1. LORD JUSTICE CARNWATH: The background of this matter is too well known to need more than a very brief summary. The first defendant was leader of the Westminster Council in the 1980s and, following an investigation by the auditor, she was held to have contributed to a certified loss of more than £30 million. There were appeals up to the House of Lords which were ultimately unsuccessful, save for the certified loss being reduced to about £26.5 million. That was the end of the road so far as this jurisdiction is concerned but there is, I understand, an outstanding application to the European Court of Human Rights.
2. The present proceedings for recovery of the sums due were commenced in January 2001. A world-wide freezing order was made against the first defendant in the sum of up to £33 million and orders were made to disclose means, which, as matters stand at present, have been disclosed as limited to £300,000. Summary judgment was given by Hart J on 31 July 2002. It was put on two bases. The first was a breach of trust claim which produced a judgment of some £22.5 million plus interest of over £14 million, giving a total of almost £37 million. The second was a statutory debt, which was the £26.5 million and interest of £1.2 million. Those orders were concurrent, not cumulative, and the principal difference was that the interest on the breach of trust claim dated back further.
3. Hart J gave permission to appeal on the trust aspect of the case but not the other aspects. He made various ancillary orders. He refused to stay the judgments pending the reference to the European Court of Human Rights. He made an interim order of £80,000 towards the claimant's costs of the action, and there were also orders in relation to particular proceedings of £1,330 and £4,118. They were stayed for a short period but became effective not later than 13 September. So there were by that stage outstanding, not only the full amount under the statutory debt claim for £28 million-odd, but also these other orders in respect of costs.
4. There was something of a muddle about whether time had been extended either for appeal on the point on which permission had been granted, or for permission to appeal on the other matters. There does seem to have been some mistake in drawing up the order (although it was supposed to be an agreed minute), but this was at the beginning of the holidays and perhaps some points were overlooked. In any event, Mr Cakebread, who appears for the first defendant, accepts, fairly, his own responsibility for not having made sure that the order was in the right form and for then not having made sure that the appropriate extensions were applied for forthwith. In any event, apparently as the result of the holiday period, the first defendant was not able to give instructions until the end of August, by when the time recorded for extending time for filing the notice of appeal had expired. She had decided to appeal solely on the ground on which permission had been granted, but there was then some delay in getting the notice of appeal in. Eventually an attempt was made to file the notice of appeal on 13 September. That was refused because it was out of time. No application for an extension of time had been included in the notice of appeal but subsequently a notice was filed which included an application for extension. On 18 September, on the basis of that notice, Master Venne granted an extension that gave liberty to the claimants to apply to vary or revoke that order.
5. A number of points are made by the Westminster Council here. They point with some force to the delay in getting the tackle in order even after it had become apparent that extensions were needed, and to the fact that the notice which was eventually put in said that all orders had been complied with, when the orders in relation to costs had not been. I have in mind the checklist of points under CPR 3.9, which is very difficult to apply in the rather unusual circumstances of this case. We have the position that there is an undisputed debt in this jurisdiction of £27 million which, on the basis of the assets disclosed, the first defendant has no hope of being able to meet. In those circumstances, it may well be said that the decision as to whether she is also liable for the extra £10 million involved in the trust claim is somewhat academic, and it is suggested that the administration of justice would not be furthered by allowing the matter to proceed. On the other hand, when one looks at the other points in the checklist, it would be a serious matter to shut out an appellant from arguing a point which is worth on its face £10 million, merely because of a muddle over the dates. So in principle it seems to me that one should not shut the matter out.
6. However, there are more serious issues, particularly the question where any funds to finance the appeal are going to come from. On 10 September the solicitors for the council wrote to the first defendant's solicitors drawing their attention to the fact that various orders had now become effective and, among other things, inviting her to indicate how the appeal was going to be funded and what she was going to do about paying the outstanding orders of £80,000 and the smaller orders which I have mentioned. There has been absolutely no response to that and, until Mr Cakebread got to his feet today, as I understand it, the council has had no indication of what the first defendant's position is on those points.
7. However, having reached that point, the discussions between the parties have produced certain proposals which seem to me sensible. I emphasise that Mr Cakebread is without instructions on these points and therefore they are matters which I include by way of order not, as I understand it, by consent. But he has most helpfully assisted the court in reaching these conclusions.
8. What is proposed, and what I shall order (subject to a detailed minute to be prepared by Mr Anderson in the course of today) is that:

(1) The identity of the funder of the appeal should be disclosed within 14 days of today;

(2) The outstanding orders in respect of costs (that is the £80,000 and the two smaller items of £1,330 and £4,118) should be paid:

(i) in so far as cash is available in bank accounts, within 14 days of today (I understand that to be of the order of £25,000) and

(ii) so far as the remainder is concerned, within 28 days (and for that purpose it is proposed that the parties should agree a valuation of certain items, such as antiques and jewellery, to be sold to fund the remainder);

(3) The defendants will pay the costs of today, to be assessed by me (and I will come to that in a moment) out of the non-frozen assets within 28 days; and

(4) There shall be security for costs of the appeal of £20,000, to be paid into court within 28 days and not to come out of the assets which have been disclosed as owned by the first defendant and are subject to the freezing order.

9. Conditional upon those four matters being performed, the extension of time for the appeal will be permitted. To that extent the order of Master Venne will be varied.
10. On the question of the costs of today, I have been shown a schedule of costs amounting to £11,000. Mr Cakebread suggests that one particular item, which relates to the costs of the solicitor and the hours spent in perusing the papers, is excessive. I see some force in what he says, considering that this is a relatively simple application; on the other hand, his clients have done very little to assist the speedy preparation of the matter. Taking all the points into account, I think the right figure towards today is £8,000 and I so order.

ORDER: Appeal allowed. The order of Master Venne to be varied as set out in the judgment and minuted by counsel.

(Order does not form part of the approved judgment)