England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM LUTON COUNTY COURT
(HIS HONOUR JUDGE KAY QC)

		Royal Courts of Justice Strand, London, WC2A 2LL
		24th May 2012

Lord Justice Maurice Kay:

1. This matter is listed before us today as an appeal. It is a second appeal, Sullivan LJ having granted permission after identifying an important point of principle or practice. It relates to the approach to summary assessment of costs where the potential receiving party has not served a statement of costs pursuant to the Costs Practice Direction. It raises issues as to whether the "no schedule, no costs" approach is an appropriate way of dealing with such circumstances.

2. Although the sums of money at stake in the appeal are relatively modest, the costs claimed being £3,000 plus value added tax, it seems to us that this was correctly identified as an appropriate case for a grant of permission for a second appeal for the reasons given by Sullivan LJ.

3. We had expected to hear that substantive appeal today. Two days ago the appellant, Ms Dabholkar, emailed the court seeking an adjournment. That email was shown to us for the first time late yesterday afternoon. Her reason for seeking an adjournment is that she is now the subject of a bankruptcy order which was made on 15 May 2012. In her email she states that there is a stay on that order until 29 May, that is, next Tuesday, and she continues, "I will be appealing the same". Beyond that her email left us with a paucity of information, not all of it easy to follow for those of us who are unaware of the details of the history of this litigation and the litigation which preceded it.

4. In the event Ms Dabholkar was not granted an adjournment prior to our coming into court. She was informed by email yesterday afternoon that any such application would have to be made to us orally today. We had in mind that we could perhaps develop a better understanding of what was going on if she and Mr Jones could explain the background to us. Today she has simply not attended. Mr Jones has attended and has assisted us in coming to a better understanding of that background.

5. He makes a simple submission, namely that in the circumstances the proportionate way of dealing with this case by reference to the overriding objective is simply to dismiss the appeal. He draws attention to the amount of costs in issue, as I have said, £3,000 or thereabouts, and he submits that quite enough time has been taken up hitherto and too much time would be taken up hereafter in further considering this case and devoting further resources of the court to it. In that regard he draws our attention to the judgment of Warren J in Dadourian Group International Inc v Simms and Others [2008] EWHC 723 (Ch). That case too involved the intervention of a bankruptcy order.

6. It seems to me that this case is not on all fours with Dadourian. If we ask ourselves the threshold question as to whether Ms Dabholkar's case has a reasonable prospect of success, we are driven to the conclusion that it has although we do not express any final view as to the likely outcome of the appeal if pursued.

7. More importantly she is in a difficult state of limbo in that a bankruptcy order has been made very recently and with the benefit of a stay she is seeking to challenge it. She refers to an appeal. Whether she means appeal in the strict sense or an application to annul or set aside the bankruptcy order, we do not know and it matters not. The fact is that by reason of the principles of insolvency law she is not in a position to pursue her appeal today now that the bankruptcy order has been made and is at least for the time being extant. Whilst we have a degree of sympathy with Mr Jones about the ongoing difficulties of all this litigation (that sympathy relating to its protracted nature, costs and diversions that it must generate rather than in relation to the merits about which we say no more), it seems to us that it would be inappropriate simply to dismiss an appeal when we cannot be sure that Ms Dabholkar, who, as we have said, has reasonable prospects of success, may become enabled to pursue it if she succeeds in bringing the bankruptcy order to an end. One of course has some scepticism about that but one cannot simply make a total assumption about it.

8. Accordingly what we propose to do is to accede to her application for an adjournment so that developments can take their course in relation to the bankruptcy. Mindful of Mr Jones's position, we consider that he should have liberty to restore his application that the appeal be dismissed, such an application to be made if so advised not before 1 July. We also think it would be helpful if the Official Receiver, Mr Macgregor, the name identified in Ms Dabholkar's email, were given notice of order today so that the Official Receiver can consider what his view of these proceedings should be if the bankruptcy order remains in place. Accordingly we shall direct that the Official Receiver be served with the order in relation to today's adjournment and a copy of the transcript of this judgment which will be expedited.

9. The Insolvency Service contact details are contained in an internet search of the insolvency register. It seems that the relevant office is the Northampton office, 1^st Floor, Sol House, 29 St Katherines Street, Northampton NN1 2QZ, telephone 01604 542400. Accordingly we have enough information for the Official Receiver to be put in the picture expeditiously. It is a matter for regret that things have taken this turn but, having taken into consideration the terms of the overriding objective and the submissions made by Mr Jones, it seems to us that that is the appropriate way of dealing with things.

10. Accordingly, if my colleagues agree, the matter will stand adjourned. It can be relisted either on Ms Dabholkar's application should she become free to pursue her appeal or on Mr Jones's application after 1 July pursuant to the liberty that we are granting him to make further application for dismissal.

Lord Justice Etherton:

11. I agree

Dame Janet Smith:

12. I agree.

Order: Application adjourned