England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION, COMMERCIAL COURT
Mr Justice Flaux
[2013] EWHC 3781 (Comm)

		Royal Courts of Justice Strand, London, WC2A 2LL
		07/10/2014

Lord Justice Tomlinson :

1. The oral renewal by the Applicant, Mr Cornelius, of his application for permission to appeal the Order made by Flaux J on 6 December 2013 after a nine day trial in the Commercial Court, dismissed on paper by Sir Stanley Burnton on 19 March 2014, was listed to be heard by me at 10.30 today, 29 September 2014. No-one appeared to move or argue the application.
2. On 3 September 2014 Beatson LJ refused an application dated 31 July 2014 pursuant to which Mr Cornelius sought provision to be made under the provisions of the Freezing Order to permit him to remove funds to pay for representation at the oral hearing of the application for permission to appeal and, if appropriate, at the appeal itself.
3. I note that Mr Cornelius is in continuing and unexplained default of an Order made by Males J on 3 April 2014 directing him by 15 April 2014 to make an affidavit setting out details of "all his assets worldwide exceeding £1000 in value".
4. I also note that on 16 April 2014 a property owned by Mr Cornelius was sold, with consent of the Respondent bank, with £30,000 of the proceeds apparently being applied in respect of counsel's fees in relation to the application for permission to appeal.
5. I also note that in a letter of 29 August 2014 Messrs Freeman Fisher, who appear to be representing the Applicant for the purpose only of seeking provision for funding under the Freezing Order, and an adjournment of the current application, indicate that that firm had until then or shortly before then been assisted by Leading Counsel willing to assist Mr Cornelius on a pro bono basis. This counsel was unavailable during the first two weeks of September, and thus for the 3 September hearing, having committed himself to public duties. What remains unexplained is whether this same counsel remains willing to assist Mr Cornelius – he/she did not appear today.
6. The position so far as concerns the substantive application is that, on a preliminary and wholly uninstructed and unassisted perusal of the papers, I can see the makings of an argument that the cash referred to in clause 7.3(c) of the Restructuring Agreement includes Plantation Villa Proceeds so that the latter are not necessarily ring-fenced by clause 7.2. The argument would rely upon the circumstance that "Earmarked Plantation Proceeds", which by the Definition section are excluded from Plantation Villa Proceeds, are nonetheless referred to in clause 7.3(b) as being excluded from the cash referred to in clause 7.3(c), hence arguably giving rise to the implication that Plantation Villa Proceeds are "cash" as is referred to in clause 7.3(c).
7. However whether it would be appropriate to give permission to appeal on this point, which is identified in paragraph 4 of the Grounds of Appeal, the sole paragraph of the Grounds of Appeal now relied upon (see skeleton argument dated 28 February 2014 prepared by Dakis Hagen and Jonathan McDonagh) is an entirely different matter. Sir Stanley Burnton observed that he had not detected that the question of construction identified in paragraph 5 of that skeleton argument had been raised either in the Applicant's Defence or in his closing written submissions at trial. I too can detect in the Applicant's Re-Amended Defence only a bare denial that Plantation was in breach of the Restructuring Agreement. The construction point must have been mentioned at some stage at trial by Mr Mills as Flaux J refers to it at paragraphs 114 and 148 of his judgment. However paragraph 114 seems also to indicate that the judge had before him neither evidence nor argument as to what had in fact been done with the Plantation Villa Proceeds, as he was able to observe only that "Plantation . . . had spent them elsewhere, probably on wages and other running costs". In those circumstances, I do not as at present advised understand how the Applicant Mr Cornelius / Plantation intended at trial to justify Plantation's conduct in failing to pay over the Plantation Villa Proceeds forthwith by characterising some (and how much?) or all of them as being "amounts retained for the reasonable working capital requirements of the respective projects". As it is that point did not ultimately arise because of the judge's decision at paragraph 114 of his judgment as to the proper construction of clause 7.2 of the Restructuring Agreement. At the moment therefore, and I stress that this is only a preliminary view, I cannot see how success on the point of construction identified at paragraph 4 of the Grounds of Appeal would have enabled the Applicant Mr Cornelius / Plantation, to have demonstrated at trial that there had been no event of default.
8. I propose therefore to adjourn the application for permission to appeal, to be relisted on the first available date after 27 October 2014. That gives the Applicant four weeks in which to decide whether he wishes to fund the prosecution of this application and, if appropriate, an appeal. A pre-requisite to any "provision under the Freezing Order" might well be compliance with the Order of Males J. The adjourned hearing will be on notice to the Respondent bank, which I would invite to attend to assist the court with the considerations which I have identified in this judgment, and in particular with the shape of the pleadings, evidence and arguments at trial.
9. I note that Flaux J at paragraph 149 of his judgment rejected an argument that the Applicant was precluded from contending that there was not a breach of clause 7.2(d) and an event of default by virtue of an issue estoppel arising from an interlocutory judgment of mine given in the Commercial Court in these proceedings on 14 July 2008. I do not think that a copy of that judgment is included in the papers although there is reference to it also in the decision of the Court of Appeal [2013] EWCA Civ 1229. Flaux J regarded my judgment as having been "provisional" in nature, as would I. There is no Respondent's Notice seeking to challenge the view expressed by Flaux J at paragraph 149 of his judgment, but in the circumstances, and not without some misgivings given the time I have already invested in the case, I consider that it would be inappropriate for me to hear the adjourned application which will therefore be listed before a different Lord / Lady Justice.