England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE QUEEN'S BENCH DIVISION
(HIS HONOUR JUDGE YELTON sitting as a High Court judge)

		Royal Courts of Justice Strand London, WC2A 2LL
		10 March 2015

Lord Justice Treacy:

1. This is an appeal from the decision of HHJ Yelton sitting as a High Court judge on 17 May 2013 whereby he ordered the appellant to pay £50,000 to the respondent on account of costs as ordered by HHJ Seymour QC on 21 October 2011 as a precondition to the appellant making any future application to lift a stay imposed by Blair J on 11 June 2008. The appellant asserts that the judge was wrong to make that order, primarily on the grounds that it would stifle his claim. The respondent contends that in the circumstances of the case the order was properly and reasonably made.
2. The history of this case is a tangled and complex one involving many hearings and appeals. I do not propose to recite the full history but only those matters relevant to this appeal. The claim was brought as long ago as November 2006. It appears to be one in breach of contact based on an agreement alleged to have been made in 1997 asserting that the respondent agreed to compensate the appellant in England in return for the surrender of claims arising out of the alleged expropriation or closure of the appellant's Ugandan newspaper. The sum claimed for damages and interest exceeds £18 million. The respondent is the President of Uganda.
3. There are a number of significant difficulties in the way of the appellant's claim. Firstly, there is a major limitation problem; (2) there has been a lack of clarity as to whether the respondent is being sued in his public or private capacity, a matter of significant importance because of the provisions of the State Immunity Act 1978; (3) there is the failure of the claim form and Amended Particulars of Claim put forward in 2009 to show a clear cause of action; (4) there is the failure properly to serve the claim form.
4. In July 2008 Blair J stayed the proceedings having found that the claim was defective on its face. In so doing he said:

"If the claimant can, within a reasonable period, produce a credibly amended claim he can apply that the stay be lifted, otherwise this matter should go no further."

5. Notwithstanding the stay, the appellant proceeded to take steps in the action which included obtaining a default judgment in front of the Master. In October 2011 the matter came before HHJ Seymour QC. He made a number of orders including setting aside the default judgment. In the course of this he said that the appellant had misled the lower court. He reiterated that the stay imposed by Blair J remained in place. However, he made an order that the appellant pay the respondent's costs on account in the sum of £50,000 by 4 November 2011. The judge also refused an application for a stay of the payment on account.
6. The appellant sought permission to appeal. After an initial refusal on paper, a renewed oral application came before Tomlinson LJ. There was no appeal on the issue of costs, and Tomlinson LJ refused permission on all matters save the imposition of an extended civil restraint order. He commented that the stay imposed by Blair J was entirely valid. The matter came before the full court in relation the extended civil restraint order in August 2012 when the court by consent quashed the extended civil restraint order and again observed that the action remained stayed.
7. The next step was that the matter came before HHJ Yelton in May 2013. He refused an application for a stay of another payment on account ordered by Judge Seymour in relation to a third party's costs arising out of charging orders improperly obtained. He also declined to lift the stay in relation to the proceedings, noting that (a) the applicant had not taken steps previously indicated by the Court of Appeal to put before the court a properly set out Particulars of Claim showing in what capacity the respondent was being sued; (b) he had not paid the sums due in relation to costs as ordered by Judge Seymour; (c) there were serious limitation problems in the way of the appellant; (d) his primary reason for refusing to lift that stay was that the appellant had not produced a properly formulated draft Particulars of Claim within a reasonable period as required by Blair J in 2008. Having been invited by the respondent to consider striking out the claim, he declined to do so but ordered that there be no further application to lift the stay unless and until the order for costs made by Judge Seymour was complied with. He said it would be an abuse of process if the appellant were able to apply to lift the stay without paying the order for costs that Judge Seymour made in October 2011.
8. In August 2013 Tomlinson LJ granted permission to appeal solely in relation to the issue now before the court. He refused permission on the question of HHJ Yelton's refusal to lift the stay and he refused permission in respect of an order that the appellant attend court to provide information as to his means. The appellant renewed his application for permission to appeal concerning the matters which Tomlinson LJ had refused. That matter came before Sir Stanley Burnton in December 2013 and he refused those further applications.
9. The issue before us, therefore, is whether the precondition to a stay application imposed by HHJ Yelton was wrong. The appellant contends that it was an improper fetter upon his right to litigate and his access to justice. He initially relies on Rule 40.11(c) of the CPR:

"40.11 A party must comply with a judgment or order for the payment of an amount of money (including costs) within 14 days of the date of the judgment or order, unless –

[…]

(c) the court has stayed the proceedings or judgment."

10. Secondly, he submits that the order by Judge Yelton is tantamount to the extended civil restraint order made by HHJ Seymour which had previously been quashed by consent. Thirdly, he relies on the fact that the Court of Appeal in August 2012 had reserved the question of the costs of the appeal in relation to the restraint order until all issues of sovereign immunity had been resolved. The court observed that those matters could not sensibly be determined until such time as the appellant had formulated a coherent claim which clearly and unequivocally was made against the respondent in his capacity as the head of state of the Republic of Uganda. Fourthly, the appellant takes issue with the judge's reference to an abuse of process. Fifthly, he submits that the order made represented an ambush in circumstances where the respondent had not sought this order and where he had insufficient notice. Sixthly, he submitted that the judge had failed to have regard to the overriding objective of the CPR in that the balance of power was disproportionately in favour of the defendant/respondent as president of an economy commanding a lot of resources.
11. For the respondent it is submitted that the condition imposed by Judge Yelton was reasonably made. The claim it is said has no prospects of success because it is statute-barred. Further, the claim could not satisfy the required threshold under CPR Rule 6.37(1)(b) for permission to serve the claim form in Uganda. In addition, the limitation point means that any proposed amendment of the claim under Rule 17.4 or the substitution of the respondent's capacity under Rule 19.5 has no prospect of success because of the limitation point. Moreover, the proceedings should be regarded as an abuse since the appellant commenced proceedings against the respondent in his personal capacity so as to avoid the provisions of the State Immunity Act, when in fact he intended to proceed against the respondent in his public capacity, and has yet to file a pleading clarifying the position. In addition, the respondent submitted that the failure of the appellant to pay the costs order in time or at all, and his refusal to attend for an examination of means, deprives both the court and the appellant himself of evidence essential to support the appellant's assertion that the condition imposed stifles his claim. Finally, it is said that the appellant has not produced any evidence as to his means.
12. The appellant has failed to advance any matter, despite invitation at this hearing, which goes to his ability to pay or as to why he should not comply with the order of HHJ Seymour. When heavily pressed at this hearing the appellant raised the question of security grounds without going into any further detail, and suggested that they may be an explanation for his inability to comply with the order. No material has been supplied in support of that at any stage and this court is not prepared to proceed simply on the bare proffered verbal explanation in those circumstances.
13. I have considered the decision of this court in Ali v Hudson [2003] EWCA Civ 1793. It is clear to me that a litigant has a right of free access to a court in respect of a bona fide claim based on a properly pleaded cause of action. Accordingly, the power to order security for costs, which includes the imposition of a condition that previous conditions be complied with, should be exercised with great caution. Clarke LJ (as he then was) stated at paragraph 40:

"The correct general approach may be summarised as follows:

i) it would only be in an exceptional case (if ever) that a court would order security for costs if the order would stifle a claim or an appeal;

ii) in any event,

a) an order should not ordinarily be made unless the party concerned can be shown to be regularly flouting proper court procedures or otherwise to be demonstrating a want of good faith; good faith being understood to consist … of a will to litigate a genuine claim or defence (or appeal) as economically and expeditiously as reasonably possible in accordance with the overriding objective; and

b) an order will not be appropriate in every case where a party has a weak case. The weakness of a party's case will ordinarily be relevant only where he has no real prospect of succeeding."

14. I begin by assessing the strength of this appellant's case. A claim based on breach of an alleged agreement in 1997 which required immediate payment appears to be statute barred since the claim was not issued until 2006. An attempt to meet this point in the Amended Particulars of Claim by suggesting that the agreement was reaffirmed on occasions between 1998 and 2005 would seem to fall foul of the provisions of section 29(7), and section 30 of the Limitation Act 1980 which require that an acknowledgement of a debt or pecuniary claim must be made within the initial limitation period and must be in writing.
15. Next, there is material in the history to show a regular flouting of proper court procedures or a lack of good faith. In particular, the appellant proceeded after the stay order of Blair J to obtain orders in a way characterised by HHJ Seymour as misleading the court. That judge also found that the appellant deliberately brought the claim against the respondent in his personal capacity for the purpose of circumventing the State Immunity Act. The appellant finally only made clear to the Court of Appeal in August 2012 that his action was to be regarded as a claim against the respondent in his public capacity. The appellant has ignored the requirement that he attend court for an assessment to be made of his means. Indeed, according to the appellant at the outset of this hearing he has been committed to prison by reason of his refusal or failure to attend for an oral examination in relation to an order for costs made in these proceedings in favour of a third party.
16. In those circumstances, whether the matter is characterised as an abuse of the court process or as an absence of good faith in demonstrating a will to litigate as economically and expeditiously as reasonably possible, it seems to me that there are strong reasons based on the appellant's conduct for upholding the judge's order. When coupled with the inherent weakness of the appellant's case, the order made seems all the more appropriate notwithstanding the caution which a court must exercise in this area.
17. I would add to that that neither the claim form nor the Amended Particulars of Claim had satisfactorily formulated the basis upon which the case is put, as both the Court of Appeal and subsequently Judge Yelton observed. The fact that nearly seven years have elapsed since Blair J commented on the need for clarification of the basis of claim within a reasonable time speaks for itself.
18. I am not persuaded that there is anything in the particular points raised by the appellant. As regards Rule 40.11(c), the explanation by Lord Oliver in Minster of Foreign Affairs, Trade and Industry v Vehicles and Supplies Ltd [1991] 1 WLR 550 at page 556 is relevant:

"… in general, anything done prior to the lifting of the stay will be ineffective, although such an order would not, if imposed in order to enforce the performance of a condition by a plaintiff (eg. to provide security for costs), prevent a defendant from applying to dismiss the action if the condition is not fulfilled …"

19. In a proper case a court has power to require payment of costs prior to taking any further step in an action. The core question is whether this is a proper case.
20. Next, the order made is not tantamount to the quashed civil restraint order if in the circumstances and considering the principles in Ali v Hudson it was properly made. As is apparent, I consider that the order was properly made. The question of the costs reserved by this court in August 2012 has no bearing on the costs ordered by Judge Seymour. Those costs are not themselves the subject of any appeal and no setoff arises where, as this court made clear, the question of reserved costs cannot be considered until the preliminary issue of state immunity can be considered.
21. Finally, this was not a case of ambush. The appellant was represented by counsel. A judge had been invited to consider a strike out. He indicated however that he was considering the type of order which he eventually made and gave the appellant's counsel an opportunity to address him upon it before making his order. It seems to me that the judge was properly exercising his case management powers.
22. In those circumstances I consider that the order of HHJ Yelton was properly and justifiably made. I would therefore dismiss this appeal.

Lord Justice Sullivan:

23. I agree, so it follows that the appeal is to be dismissed.

Order: Appeal dismissed