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 CENTRAL LONDON COUNTY COURT
(HIS HONOUR JUDGE COOKE)

		Royal Courts of Justice Strand London, WC2
		26 October 2004

1. SIR CHRISTOPHER STAUGHTON: Mr Khalid Ali Ismail Turkey is the claimant in this action. The defendants are Aziza Turki, his daughter, and Adnan Awadh, his son-in-law. Other members of the family feature in the action but, as far as I know, they are not relevant to the immediate problem.
2. The dispute concerns a house at 141 Inverness Terrace, London W2. From judicial knowledge I know that houses are expensive in that part of the world. It must be worth a substantial sum even if it is in need of repair or because the price of houses is now falling a little.
3. The dispute on one view relates to the leasehold title rather than the freehold but, as the lease is for 999 years, there cannot be much difference. Mr Khalid claims that he had obtained the title by transfer from his daughter Aziza and his son-in-law, Adnan, and that it is now his house. That is disputed. The defence was, first, that there had been a misrepresentation leading to the transfer and, secondly, that there was undue influence. In the proposed appeal only undue influence is pursued.
4. The trial came before His Honour Judge Cooke. He tried the case at the Central London Court and, following a trial lasting 14 days, on 12 August 2004 decided it in favour of Mr Khalid. He ordered that the house be transferred to Mr Khalid within 28 days and that Aziza pay £34,000 within 28 days to Mr Khalid on account of costs. It was agreed by the trial judge that there should be permission to appeal, which is not, in my experience, a very common event. Aziza now applies for a stay of execution in respect of the house and of the sum of £34,000.
5. The parties have reached agreement on how the house shall be retained for the time being. There is before me an application for a stay of execution of the £34,000, in particular that there should be no order that the £34,000 should be required to be paid into court. It has been made quite clear that Aziza would prefer that the judgment be unstayed than that there should be an order for payment into court of the £34,000.
6. I have heard lengthy and interesting submissions from Mr Rees and Mr Hornett on that point. there is also an application by the claimant for security for costs of the appeal. The estimated sum required is £20,000. The judge also ordered detailed assessment of the costs, and it is agreed as to how that should be dealt with for the time being.
7. I turn to the first issue now alive, whether there should be a stay of the £34,000 or an order that it should be paid into court. The modern law on a stay of execution in proceedings before the Court of Appeal is to be found in Part 52.7.2. There is a reference to a judgment of Clarke LJ in Hammond Suddard Solicitors v Agrichem International Holdings Ltd [2002] EWCA Civ 2065 where he said:

"...the essential question is whether there is a risk of injustice to one or both parties if it grants or refuses a stay."

That is not too different from what I said about 10 years ago in a case called Linotype-Hell Finance Limited v Baker [1992] 4 All ER 887 (before Staughton LJ as he then, was sitting as a single Lord Justice). Is there injustice here if there is a stay, or if there is none? It is a case which is unusual in that the judge at first instance gave leave to appeal. He gave a limited stay in order that there should be a period until this court could be asked for its own decision.

8. As I see it, the grant of a stay in relation to the £34,000 will not have much effect in itself because Aziza has made it clear that she is not going to pay if she can help it, certainly not for the time being. There is a more benevolent way of putting that if I say that, in her words, it is very difficult to find the money to pay. What would make a difference would be if there was an order for payment into court, particularly if it was accompanied by a condition that the appeal could not proceed until it was paid into court. She would then either have to pay or abandon her appeal.
9. In my judgment there is more likely to be some injustice if she is deprived in that way to the right of appeal because there is an order that the money be paid into court. I am in favour of maintaining the status quo, that is that there is an order that the judgment provides for payment but there is not, as yet, an order by way of enforcement. I do not grant the application for an order for a payment into court, but I do grant a stay.
10. I turn to the Claimants' application for security for the appeal. In my view, that is a different matter. Aziza has defended the action and she has lost. She wishes to appeal. She is entitled to do that, but she is not to be allowed to do so without putting up some security for the costs of the appeal. The law on this has become, as far as I can see, extremely convoluted. There was a time when it was almost a matter of course that a defendant suffering from impecuniosity had to put up money if his opponment would receive nothing on winning the appeal. I would refer to the 1999 White Book at 59/10/33:

"It is the settled practice to require security for costs to be given by an appellant who would be unable through impecuniosity to pay the costs of the appeal, if unsuccessful, without proof of any other special circumstance."

That was the settled practice. It is now said that the impecuniosity of an individual, as opposed to a corporate body, can no longer be a ground for an order for security except on the first of the grounds in Part 25.13(1):

"The court may make an order for security for costs under rule 25.12 if-

(a) it is satisfied, having regard to all the circumstances of the case, that it is just to make such an order; and

(b) (i) one or more of the conditions in paragraph (2) applies; or

(ii) an enactment permits the court to require security for costs.

(2) The conditions are:

(a) the claimant is

(i) resident out of the jurisdiction; but

(ii) not resident in a Brussels Contracting State, a Lugano Contracting State or a Regulation State, as defined in section 1(3) of the Civil Jurisdiction and Judgment Act."

11. Whether what is said there means that impecuniosity or a deliberate intention to avoid enforcement is still in the case of an individual a ground for security, regardless of where she is resident, it seems to me that it certainly ought to be; but counsel on both sides agree that it is not. They have derived that from the judgment of Mance LJ in the case of Nasser v United Bank of Kuwait [2001] EWCA Civ 556. Counsel are agreed on that. It is not for me to disagree, surprising as I do find it.
12. I consider the effect of Mrs Aziza being a resident in Saudi Arabia with her husband. It would seem from the judgment of Mance LJ that I have to consider the additional cost of enforcing the judgment in Saudi Arabia as opposed to this country or other places in Europe. I do not doubt that it would be more expensive to enforce the judgment in Saudi Arabia than in other countries in Europe. That is perfectly obvious, and Mance LJ said that we were to use common sense.
13. This is not a case of impecuniosity. The evidence I have seen suggests to me that Mrs Aziza has assets of substance. Furthermore, she has a husband who has assets of substance. They can certainly make a contribution to provide security in this case. It is said that the substance of this appeal would cost the respondents £20,000. I was astonished it was so little, but maybe I am not in touch with all corners of the law. I do not regard that as an extravagant sum even for a full day's hearing in this court. As we have spent nearly a half a day on the present hearing, I would have thought it would be sanguine to say that the substantial case would be finished in one day.
14. I have to arrive at a figure. Mrs Aziza has said that it would be difficult for her to pay the £34,000, which is the sum she has been ordered to pay on account of the costs to date. I am not ordering that. But I would think that an appropriate sum would be £15,000 by way of security for the costs of the appeal. That would encourage her to decide whether she wants to proceed with this appeal. The judge has given her leave to appeal and she is fully entitled to appeal, but she must put up that sum of money if she is to proceed with it.
15. I have to decide how long she would require to do that, upon which I will hear counsel. She can have the luxury of the appeal but she must make the contribution if she is to proceed.

Order: Application for payment into court refused. Application for a stay granted. Sum of £15,000 to be paid into court by 4 January 2005 by way of security for costs. Respondent's skeleton to be filed by two weeks thereafter. To be heard before a three-judge court one of whom may be a High Court judge. No order for the costs of this application.