England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		Royal Courts of Justice
		17th February 2010

MR. JUSTICE MORGAN:

1. This is an application by Mr. Parkes for permission to appeal against the order of Master Bragge, which he made on 19^th May 2009. By that order the Master dismissed an application to him made by Mr. Parkes, and he made an order for costs, under which Mr. Parkes is to pay the claimant's costs of the application, to be the subject of assessment on the standard basis if not agreed, and to pay £5,000 as an interim payment on account of the costs order.
2. Master Bragge refused permission to appeal. Mr. Parkes then served an appellant's notice, in which he sought to appeal the order of 19^th May 2009. He did not, so far as I can see, in that appellant's notice ask for permission to adduce fresh evidence, in addition to the evidence which was before Master Bragge. Indeed, even today, there has been no application to amend the appellant's notice to ask for permission to adduce fresh evidence on this appeal.
3. The application for permission to appeal came before Peter Smith J. on paper. He refused permission to appeal, on the ground that the appeal did not have a real prospect of success. He then set out his own reasoning, which was to the effect that the Master had approached the matter correctly, his analysis was appropriate, and led to the result that Mr. Parkes' application to the Master was properly rejected.
4. To explain what this is all about, I need to go back some distance in time to an order made by Laddie J. on 16^th October 2003. The proceedings before the learned Judge were brought by Cintec International Limited against Mr. Parkes as a first defendant, and a Mr. Frost as a second defendant. The Judge tried the action. He made an order dealing with the substance of the matter. He refused permission to appeal against the orders he had made. He then turned his attention to the question of costs, which he dealt with in paras.8 and 9 of the order.
5. He ordered that the defendants were to be jointly and severally liable for the claimant's costs of the action, which were to be assessed on the standard basis and to be subject of detailed assessment forthwith. Then, in para.9 of the order, Laddie J. provided for an interim payment to be made. He directed that the defendants should be jointly and severally liable to pay, as an interim payment on account of the claimant's costs of the action, the sum of £90,000. That sum was to be paid to the claimant by Thursday, 30^th October, 2003. So far, the order is clear and free from difficulty. Paragraph 9 then added that the interim payment order was to be stayed on terms, and there followed seven numbered paragraphs, which set out relevant terms.
6. The first of these terms was expressed as follows:

Sub-paragraph (ii)

"The second defendant [that is Mr. Frost] shall undertake to lodge by Thursday, 30^th October 2003 at a security holder nominated by the claimant the painting entitled Seascape by Richard Parkes Bonington, by way of security for the defendants' liability for costs herein.

(ii) provided:

"The second defendant warrants that he is the beneficial owner of the aforesaid painting".

7. Sub-paragraphs (iii) and (iv) dealt with a different matter. They concerned the first defendant, Mr. Parkes' house in Edinburgh, and those paragraphs dealt with steps which were to be taken, which would result in a charge being placed on Mr. Parkes' title to the property, again, as security for the interim payment referred to in para.9.
8. Paragraph 9(v) deals with a different point, which I need not describe. Paragraph 9(vi) reads:

"If the defendants have not made the interim payment of £90,000 and placed a cash deposit of £60,000 into a designated client account of the claimant's solicitors to cover the estimated costs of the claimant on the standard basis by Thursday, 11^th December 2003, the claimant shall have the right to enforce the securities under paragraphs (i) and (iii) above, by way of sale, having recourse first to the painting (the said right being without prejudice to any other methods of enforcing the costs order made above available to the claimant)".

9. The history after the order of 16^th October 2003 is as follows. The claimant took the view that the terms of para.9 of the order had not been complied with. The claimant also may have taken the view that, after the date, 11^th December 2003, any stay imposed by para.9 ceased to be applicable. In any event, what the claimant did is it applied to Master Bragge for a certificate that Mr. Parkes, at any rate (and I have not seen the certificate, but I believe it does refer to Mr. Parkes and Mr. Frost) did owe £90,000 pursuant to para.9 of the order of 16^th October 2003.
10. That was the certificate sought by Cintec. They put in a witness statement of a Mr. Radford, a solicitor acting for Cintec. I have not been shown that witness statement, but it was before Master Bragge and, on the basis of that witness statement, he granted a certificate, which provided, amongst other things, that Mr. Parkes did owe £90,000 pursuant to para.9 of the order of 16^th October 2003.
11. The certificate, as I understand it, was made pursuant to Schedule 6 to the Civil Jurisdiction and Judgments Act 1982. Without going through the various requirements of that schedule, what a Master, asked to give such a certificate, has to be satisfied about is that the money is due and that any order that the money be paid is not the subject of a current stay.
12. At any rate, the Master did grant the certificate on 29^th January 2004. There were steps taken in Scotland on the basis of that certificate. I have been given some information about those steps. Cintec have put certain material before the court. Mr. Parkes is unhappy with the contents of that material, and suggests that the material gives a misleading impression. At any rate, there have been legal proceedings in Scotland leading to the bankruptcy of Mr. Parkes or, as they call it in Scotland, a sequestration of Mr. Parkes, all based upon his failure to pay the debt of £90,000, which is certified to have been a debt due from him by the certificate I have referred to.
13. At some time in 2009, Mr. Parkes, I have to say very belatedly, sought to challenge the certificate of 29^th January 2004. I have not been given a copy of the application he made to Master Bragge, but Master Bragge dealt with the matter in May 2009, and I have been shown a witness statement from Mr. Parkes which is dated 24^th April 2009. So Mr. Parkes appears to have challenged the certificate well over five years after it was granted.
14. It might have been thought that a challenge as late as that would have been dismissed without going into the underlying substance, simply on the grounds that it was made far too late for the court to find it appropriate to consider it, particularly when steps had been taken in another jurisdiction in reliance on the certificate in the intervening period. However, Mr. Parkes was fortunate enough that Master Bragge did go into the matter and did investigate the underlying facts, as they were placed before him.
15. I have not been shown all the material that was put before Master Bragge. I can see from other papers that there was evidence from Mr. Radford at the hearing before Master Bragge, as well as a witness statement, to which I have referred, from Mr. Parkes. Master Bragge considered the matter, and he gave a judgment dealing with the issues that appeared to him to arise. He referred to the certificate. He referred to para.9 of the order of 16^th October 2003. He said in para.9 of his judgment:

"It is common ground that the obligations on Mr. Frost have not been complied with in a timely manner. For example, he did not lodge by 30^th October at a security holder the Bonington painting. Alternatively, if he did so lodge it, he thereafter removed it from the security holder".

16. So the Master made a clear finding of fact that Mr. Frost had not complied with para.9(i) of Laddie's J. order. The learned Master then analysed the order. He held that, if Mr. Frost failed to comply with a part of the order, then there was no stay on the £90,000 interim payment order and, whether or not this was in any way the fault of Mr. Parkes, the fact was that there was no stay, and the £90,000 was due and owing and was not the subject of a stay, so that the certificate of 29^th January 2004 had properly been granted.
17. The Master had a further reason, quite apart from the point about the painting, which he expressed in para.15 of his judgment. He said:

"In any event, no payments were made by 11^th December 2003. So it appears to me that, from that date, Cintec did indeed have the right to enforce the costs order against the defendants".

18. The Master then dealt with the question of the title deeds. In short, he was not minded to hold against Mr. Parkes, in relation to the detail of the history in respect of the title deeds. There was a further point before the Master, in that it was apparently shown to him that the certificate was being used in the Scottish proceedings, but with amendments, I think (for example) in relation to the addresses of Mr. Parkes and Mr. Frost. Arguments were put that he should set aside his certificate in the English court, because of what was being done in the Scottish proceedings.
19. The Master took the view that that did not invalidate what he had done five years earlier, although he did indicate he was prepared to amend the certificate of 2004, so as to change the addresses of the two defendants. In the event, when the order was drawn on 19^th May 2009, it did not include a paragraph amending the earlier certificate. So the earlier certificate stands un-amended. Whether that earlier certificate will or will not be effective in the Scottish court will be exclusively a matter for the Scottish court to decide, and is not a matter for me and I say nothing about it.
20. The appellant's notice challenged the decision of the Master. Various points are taken. But, as I say, on my reading of it, there is no suggestion that an appeal court should admit fresh evidence and look at the case afresh, in the light of material that was not before the Master. I have also pointed out that Peter Smith J. has already given his conclusion, when he considered the matter on paper, that the Master's analysis was correct.
21. I will deal with the Master's reasoning. Then I will deal with what has been said to me today on the subject of fresh evidence. I go first to para.9 of the Master's judgment. This is where the Master makes a finding that Mr. Frost did not comply with para.9(i) of the order of 16^th October 2003. I understood Mr. Parkes, when presenting his case this morning, to accept that there was evidence from Mr. Radford before the Master to that effect.
22. I also have Mr. Parkes' own statement, which was before the Master. In paras.3 and 4 of Mr. Parkes' witness statement, which was the foundation of his application to set aside the certificate, he accepted that Mr. Frost had not deposited the painting by the due date, or indeed, at all. Mr. Parkes points out in those paragraphs that this was not the fault of Mr. Parkes. Mr. Parkes had done a number of things he was not strictly obliged to do to help Mr. Frost deal with the undertaking as to the deposit of the painting. At any rate, both sides, it seems, addressed the Master on the basis that Mr. Frost had not complied with that part of para.9 of the order.
23. If that was indeed the position, as the Master found, then, in my judgment, the Master's later reasoning is not to be faulted. He correctly held that, if para.9(i) were not complied with by the due date, then the stay being a stay on terms, those terms not have been complied with, the result was there was no stay. Accordingly, the certificate was rightly granted. Accordingly, if the facts were as described in para.9 of the judgment, this would not be a case which would merit permission to appeal against that judgment.
24. Before I consider the possibility of fresh evidence, I need to deal with what is a wholly separate ground for the Master's decision. That is expressed in para.15 of the judgment. The Master concluded that, from 11^th December, Cintec had the right to enforce the costs order, because the £90,000 had not been paid. I need to return to the order of 16^th October 2003 to consider whether the Master was right about that.
25. When I looked at this order first, in particular, para.9(vi), it occurred to me that what 9(vi) was dealing with was simply conferring upon the claimant, Cintec, a right to have recourse to the security. But, if one reads further, one notices the phrase in brackets:

"The said right [I interpose, the right to have recourse to the security] being without prejudice to any other methods of enforcing the costs orders made above available to the claimant".

26. It seems to me that what is being said is that, if the matter has not been satisfactorily sorted out by 11^th December 2003, first, the claimant has a right of recourse to the security, but secondly, that right is without prejudice to other methods of enforcing the costs orders; for example, execution for £90,000 or steps to make the debtor bankrupt if the money has not been paid.
27. Accordingly, what 9(vi) is, in truth, doing is it is saying that there is a final date of 11^th December 2003 and, when that date is reached, if the monies have not been paid, and indeed, a cash deposit of £60,000 has not been provided for, then there is a right to enforce the interim costs order. Therefore, by implication if not explicitly, the stay must be treated as having come to an end. That is, on my reading of the Master's judgment, an independent and second ground for his decision and, although I am a little more hesitant than he appeared to be about the point, I conclude on reflection that he is right about it, and I should not give permission to appeal on that point either.
28. If that second point is right, then it is not necessary for me to consider whether to admit fresh evidence on the first point in connection with the painting. But, as in the course of argument today there has been very considerable discussion on the question of fresh evidence about the painting, I think I will make a brief comment on that matter also.
29. The appellant, Mr. Parkes, says that he has material today, which he did not have before, which shows that non-compliance with 9(i) of the order of 16^th October 2003 was not the fault of Mr. Frost, but was, in fact, something that was forced upon Mr. Frost by the action of Cintec. Accordingly, Cintec cannot say against Mr. Frost or against Mr. Parkes that it has improved its position under para.9, by reason of what happened in relation to the painting.
30. The general approach to applications to admit fresh evidence on appeal is well established. The general approach before the Civil Procedure Rules was set out in Ladd v. Marshall in 1954. There were three requirements, which had all to be complied with. They were, first, the evidence could not have been obtained with reasonable diligence for use at the trial. Two, the evidence must be such that, if given, it would probably have an important influence on the result of the case, though it need not be decisive, and three, the evidence must be such as is presumably to be believed. It must be apparently credible, though it need not be incontrovertible.
31. The matter is not quite so strict today as those three criteria suggest. In a case under the Civil Procedure Rules, other circumstances can also be brought into account. One circumstance that seems to me to have very great weight in the present case is the amount of time that has gone by before this suggestion of fresh evidence has been put forward. Mr. Justice Laddie gave his judgment on 16^th October 2003. Master Bragge granted a certificate on 29^th January 2004.
32. The certificate lay wholly undisturbed, as I have described, for more than five years. The first attempt to disturb the certificate was in April or May 2009, and that attempt failed. Here we are in February 2010, now being told that something has been discovered, which undermines the grant of a certificate more than six years ago. I think I would require some persuasion before I thought that it was just to all the parties to enable matters long settled, or apparently long settled, to be disturbed.
33. Turning to the three criteria that I have mentioned, there is still, of course, no application to admit fresh evidence, and there is no witness statement from Mr. Frost or anyone else who really knows why Mr. Frost did not deposit the painting on 30^th October 2003. What I am asked to look at is some material, which is contained in a bundle dating from 2004, a bundle prepared by Cintec when it applied to commit Mr. Frost to prison for contempt of court for failing to comply with para.9(i) of the order. This is, if I may say so, a most unpromising source for evidence, which is now being deployed by Mr. Parkes as showing that Mr. Frost had indeed complied with the order.
34. The material I have been shown starts with an affidavit of Mr. James of Cintec, who gives his description of the relevant events, and says that Mr. Frost broke the undertaking and is in contempt of court. That plainly does not help Mr. Parkes. What Mr. Parkes wishes to rely upon is some correspondence; letters and faxes, which passed between Mr. Frost and Cintec in the days before and the days after 30^th October 2003.
35. That material is certainly open to interpretation. It might be that Mr. Frost was not able to get the painting from the bank, and found it very convenient to put forward the excuse for his non-deposit of the painting that Cintec and Sotheby's were imposing terms they were not entitled to impose. Alternatively, the other interpretation is that Mr. Frost was entirely ready, able and willing to comply with para.9(i) of the order, but he was prevented from so doing by Cintec imposing terms, which they had no right to impose, and to which he objected.
36. I am not certain that reading the documents on their own gives one the answer as to why Mr. Frost did not deposit the painting. He could, for example, have said "The painting is here ready to be deposited. Here are the terms set out in the order, and I will deposit on those terms", thereby doing what had to be done. If Cintec then said "No, do not deposit the painting", that would have exposed the fact that it was Cintec and not Mr. Frost who was preventing the order being complied with.
37. Accordingly, as regards the criteria for the admission of fresh evidence, I am not satisfied that what might emerge as the evidence of Mr. Frost, if it could be made available, would have an important influence on the outcome of this case. One simply cannot be certain, and I do not have any statement from Mr. Frost that would cause me to think that the case would go Mr. Parkes' way.
38. The other matter which is important is why is this material being produced in February 2010, why was it not available much earlier and, in particular, why was it not deployed when Mr. Parkes had his chance to deploy it in May 2009? I have been given some information as to where the material came from. As against that, it is quite clear that Mr. Parkes has known for some time of these contempt proceedings, because he refers to them in his witness statement. In para.4 of his witness statement of 24^th April 2009, he says:

"The claimant raised contempt of court proceedings against the second defendant, which action or order the first defendant understands is still extant in the Chancery Court".

39. So I think, if I had been minded to entertain an application for fresh evidence, I would have required there to be much more detail provided to me by Mr. Parkes, as to whether this material could have been made available by the use of reasonable diligence at a much earlier time.
40. My conclusions, then, really come down to this. Insofar as there is an application to admit fresh evidence on the para.9(i) point, I am not satisfied that, even today, we have the material that has been demonstrated will have an important influence on the outcome of the matter. The second point is that, even if Mr. Parkes were to be right on para.9(i), I am, albeit with a little hesitation, persuaded that the Master was right in his interpretation of the later provision in the order. Pursuant to para.9(vi), the money not having been paid by 11^th December 2003, the claimant had, first, the right of recourse to any security, but secondly, the right to enforce the costs order, necessarily meaning that there was no surviving stay.
41. For all those reasons, I will refuse permission to appeal the decision of Master Bragge, 19^th May 2009, and his order will stand.
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