Baram v Cohen and Others
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE DILLON,LORD JUSTICE HIRST,LORD JUSTICE MANN |
| Judgment Date | 24 November 1993 |
| Judgment citation (vLex) | [1993] EWCA Civ J1124-6 |
| Docket Number | No. QBENI 93/0415/E |
| Date | 24 November 1993 |
| Court | Court of Appeal (Civil Division) |
[1993] EWCA Civ J1124-6
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
(ON APPEAL FROM THE HIGH COURT OF JUSTICE)
(QUEEN'S BENCH DIVISION)
(Mr. G. Hamilton Qc sitting as a Deputy High Court Judge)
Before: Lord Justice Dillon Lord Justice Mann and Lord Justice Hirst
No. QBENI 93/0415/E
MR. J. DENBIN (instructed by Messrs. Davenport Lyons, London) appeared on behalf of the Appellant.
MR. S. SHAW (instructed by Messrs. Franks Charlesly & Co., London) appeared on behalf of the Respondents.
Wednesday 24th November 1993.
I will ask Lord Justice Hirst to deliver the first judgment in this case.
This is an appeal from the order of
Mr. Graham Hamilton QC, sitting as a Deputy Judge of the High Court in the Queen's Bench Division, made on 1st March 1993, dismissing with costs the appeal of the defendant Mr. David Baram from an order of Master Prebble dated 26th January 1993, by which the learned Master refused to give the defendant leave to defend in this action, brought by the plaintiffs,
Mr. Arnold Cohen and four others, who are the Trustees of the Federation of Synagogues.
The appeal centres entirely on an order for costs made by the Beth Din of Federation of Synagogues, London, in an arbitration between the two claimants (Mr. Landau and
Mr. Adler) and the present appellant, who was the respondent in the arbitration.
The factual background and history of the course of proceedings is as follows. The respondents in this appeal are, as I have already mentioned, the Trustees of the Federation of Synagogues, which is one of the two main orthodox synagogual institutions in this country. The Institution has its own religious court, called a "Beth Din", to which parties who so desire can refer disputes. The Court sits as a court of arbitration.
In February 1991, the appellant submitted to the jurisdiction of the Beth Din by a written agreement for submission, dated 21st February 1991, in respect of a dispute involving himself, in this case as respondent, and Mr. Landau and Mr. Adler as claimants.
The submission was in the following terms:—
"In the matter of the Arbitration Acts 1950 and 1979 and in the matter of an Arbitration between Mr. Landau and Mr. Adler (claimants) and Mr. Baram (respondent).
Whereas a dispute or difference has arisen and still exists between the claimants and the respondents, and the parties have failed to come to terms;
And whereas it is the desire of the parties to refer such dispute or difference by way of Din Torah to the arbitration and final decision of the Beth Din of the Federation of Synagogues, London;
Now therefore the parties agree as follows:-
1. The parties hereby agree to refer to the arbitration and final decision of the Beth Din of the Federation of Synagogues, London, all disputes or difference between them, and all claims which either party alleges that he has against the other party, for determination by way of Din Torah according to the rules of procedure customarily employed in arbitrations before the Beth Din, and according to principles of Halachah and/or general principles of equity customarily employed in arbitrations before the Beth Din.
2. The parties hereby agree each on their part to accept and perform the award of the said Beth Din touching all disputes, differences and claims between the parties, which award shall be final and binding…", (the critical words) "… and to pay such costs as the Beth Din may determine within the period specified in the award.
3. The parties hereby agree that should either party, after the preliminary hearing has been heard inter partes, subsequently fail without good cause to attend any subsequent hearing, the Beth Din may proceed to determine the matter ex parte".
Then the document is signed by the two claimants and the present appellant. It is dated 21st February 1991.
It should be noted that it is common ground between the parties that so far as the parties' own legal costs are concerned in a Beth Din arbitration, it is an established principle of Jewish law that each should bear their own costs. It is therefore also common ground that the reference which I highlighted, that is the agreement to pay such costs as the Beth Din may determine, refers to the Arbitrator's own costs and/or fees and not to the parties' legal costs. (That document is at 47 of the correspondence).
At page 47(a) there is a parallel submission to arbitration, dated the same date, of another dispute, with a reference in identical terms, although the roles of claimant and respondent are reversed. That second dispute (in what I will call the second arbitration) has not yet been adjudicated upon.
The Beth Din sat on four occasions, with three Arbitrators, during the course of 1991, and published its award on the merits in March 1992 in favour of the present appellant, the respondent in the arbitration. In addition, the Beth Din ordered that the costs, that is their costs, should be divided equally between the two sides, with the present appellant being ordered to pay the sum of £2,000 by way of costs within 30 days, and Messrs. Landau and Adler being ordered to pay the same amount within the same period. No reason was given by the Arbitrators for the order which they made in that form, nor were the costs particularised, nor were they broken down between fees and expenses.
The award was sent to the appellant under cover of a letter dated 12th March 1992. However, despite subsequent demands for payment, he declined to pay. In consequence this action, seeking recovery of the £2,000 costs awarded against him, has been brought.
The plaintiffs issued Order 14 proceedings on 17th August 1992, which resulted in a summary judgment in the plaintiffs' favour by the Master, to which I have already referred, which was upheld by the learned Judge.
The appellant raised with the Master and the Judge, and repeated in this Court, a number of grounds which he contends entitle him to unconditional leave to defend, all of which were rejected by the learned Judge.
They fall conveniently under three headings, which I shall outline before considering them separately.
The first heading is "The respondents' status". The appellant challenged the eligibility of the present respondents, as Trustees of the Federation, to bring these proceedings, contending that the Arbitrators themselves were the proper plaintiffs. There was also a question as to the locus standi of the respondents to sue as plaintiffs for recovery of their fees and expenses. Both points are disputed by the respondents.
The second heading is "The proprietary of the award of costs and Order 73". The appellant contends that the award was flawed on a number of separate grounds. First, he contends that, as a matter of law, the Arbitrators' decision on costs was not a judicial exercise of their discretion, because they failed to apply the general rule that costs follow the event a fortiori since they failed to give any reasons for their decision to depart from that general rule.
Secondly, he contends that the Arbitrators' award of costs, and the procedure adopted in relation to it, conflicted in a number of respects with Jewish law and the principles of Halachah. I do not need to detail the various contentions under this head.
The respondents contend that it is not open to the appellant to raise these matters by way of defence in the action on the ground that, by virtue of Order 73 Rule 2 of the Rules of the Supreme Court, the only available challenge on these grounds is via an application for leave to appeal under section 1(2) of the Arbitration Act 1979, or by an application for an order for remission under section 22 of the Arbitration Act 1950 or section 1(5) of the Arbitration Act 1979 for reconsideration and/or the furnishing of reasons, and that in default of such application the arbitration award is final, valid and unassailable.
The appellant contends that he cannot be prevented from raising these matters by way of defence, irrespective of the requirements of Order 73, and that, in any event, he is precluded on religious grounds from making any application of this type to the Court.
This is the major issue in the case, and is one of significant importance.
The third heading is "The counterclaim". The appellant contends that he has a valid counterclaim which on ordinary principles should be treated as a set-off and should entitle him to unconditional leave to defend. This is rebutted by the respondents.
I shall deal with these three issues under the same headings in the same order.
The Respondents' Status.
I am completely satisfied that the present respondents, as Trustees of the Federation, are the correct plaintiffs. The Arbitration took place under their aegis and the expenses which were incurred were incurred by them. The Arbitrators themselves are employees of the Federation and would not in any event, in my judgment, have been appropriate plaintiffs. The submission as to the locus standi of the respondents to sue as plaintiffs for their fees and/or expenses was not eventually pursued by the appellant before us, rightly in my judgment, since it is necessary, in order to give business efficacy to the arrangements between the Arbitrators and the respective parties, to imply a contract that the parties respectively will honour the Arbitrators' award of costs in consideration of the Arbitrators on their part proceeding with the Arbitration. (Mustill and Boyd, Commercial Arbitration 2nd Edition, page 233....
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