Contract Facilities Ltd and The Estate of Rees (Deceased) and Ors

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeLord Justice Waller
Judgment Date24 July 2003
Neutral Citation[2003] EWCA Civ 1105
Docket NumberCase No: A3/2002/2734E

[2003] EWCA Civ 1105




His Honour Judge Weeks QC

Royal Courts of Justice


London, WC2A 2LL


Lord Justice Waller and

Lady Justice Hale

Case No: A3/2002/2734E

Contract Facilities Limited
The Estate of Rees (deceased) and Ors

Mr Matthew Reeve (instructed by Tasselli & Company) for the Appellant

Mr Neil Hext (instructed by Gartsides solicitors) for the Respondent

Lord Justice Waller

This is the judgment of the court.


On 6 th December 2002 His Honour Judge Weeks QC dismissed a claim by the appellant company (Contract). Contract were claiming specific performance or damages by reference to a contract for the purchase of shares. Contract had however been struck off the register. It had by the time it commenced proceedings been restored to the register with retrospective effect. The issues that the judge had to resolve related to the effect of that retrospective restoration he holding that that restoration did not prevent the company being in repudiation of the contract during the period when it was struck off the register. Contract's claim was thus dismissed with costs. The judge refused an application to assess costs on an issue basis taking the view that that question was essentially an academic one having regard to the fact that the company had no assets. He thus ordered an interim payment of £15,000 being the sum which Contract had been ordered to put up as security for costs.


Contract put in a notice of appeal on 20 th December 200By that notice an application was made for a stay of execution in relation to the order for costs made in favour of the defendants.


As already indicated Contract has no assets. The action had been funded by certain individuals including a Mr Shuck. The defendants have at all times been concerned to see whether they can make the individuals who funded the action responsible for the costs.


It was in that context that the defendants made an application to the judge that he should reconsider the permission to appeal in the light of new evidence and make permission to appeal conditional on the payment of the defendants'costs in the sum of £100,000. The argument of the defendants involved submitting to the judge that when the matter got to the court of appeal the court of appeal would not have the power to impose such a condition and thus that it was a matter for the judge. The judge refused to impose any conditions. In addition the defendants made an application that the individuals who funded the application should be liable for the costs under section 51 of the Supreme Court Act 1981. The judge has refused to hear that application pending the appeal.


So far as the court of appeal is concerned an application for a stay in relation to the order for costs was made and dealt with by Waller LJ on 24 th March 2003. He refused that application. At the same time there was an application by the respondents for security for costs for the appeal and an agreed order for that security in the sum of £20,000 was made. That security was to be supplied by 4.00pm on 7 th April 2003.


In considering whether to grant a stay the main issue was whether unless a stay were granted the appeal would be stifled. Waller LJ took the view that there was no cogent evidence of the appeal being stifled on the basis that Mr Shuck who had financed the action below and was financing the appeal had not demonstrated that he could not pay such liability for costs as there might be. However Waller LJ was concerned to relieve Contract or those funding Contract from incurring the costs of a detailed assessment and made an order that if the sum of £50,000 was paid into the court there would be a stay of execution. That sum has however never been paid into court.


Indeed what has happened is that those acting for Contract have done all they can to postpone the assessment of costs so that if possible the appeal would come on before the respondents have a sum in relation to which they can execute against Contract.


The solicitors for Contract appear to have been put in funds to make such applications as they have deemed necessary to support the stalling tactics or to resist the respondents' attempt to get the order they need. That seems to indicate that funds are available through Mr Shuck. He is content to fund his solicitors but determined the respondents do not get any money from him. Mr Shuck's aim is clearly to try and win the appeal in which event the costs order will be reversed, Contract will survive and he will benefit from that survival. We assume that he through Contract would have every intention of seeking an order for costs against the respondents which he would have no compunction in enforcing. But if the appeal is lost Contract will have no assets and go into liquidation. Mr Shuck will then fight tooth and nail to prevent any individuals who backed the original action and who backed the appeal being liable for costs.


The order to supply security for costs for the appeal was not in fact complied with. The sum was provided ten minutes late. As Waller LJ indicated in relieving Contract from sanctions that conduct by Mr Shuck was very close to being deliberate. Indeed his conduct was such that it was a close run thing as to whether Contract should be relieved from sanctions and have their appeal dismissed.


The attempts however to prevent the respondents obtaining an enforceable order have continued. The details appear in Mr Davies' seventh statement. Despite the efforts of those representing Contract the respondents have now obtained an interim costs certificate for £37,000 although the money is to be paid into court and not to the respondents personally. But the effect of the delaying tactics of those representing Contract is that that order was not obtained until 6 th June 2003.


On 4 th June 2003 the appellants had issued an application returnable before His Honour Judge Weeks QC asking him to vary the order made on 6 December 2002 to make the costs order issue based. This application appears to have been made to support an argument before Master Wright at the hearing on 6 th June 2003 that an interim costs certificate was premature since the matter was going back in front of the trial judge. Master Wright as already indicated did issue a certificate of £37,000 payable within 14 days. However he ordered that the money be paid into court rather than to the respondents.


The application before His Honour Judge Weeks QC was heard on 24 th June 2003. It was dismissed on the grounds that the judge had no jurisdiction to vary his previous order and on the further basis that Contract had already informally made the same application at the hearing before His Honour Judge Weeks QC on 21 February 2003.


In addition to the interim costs order of £37,000, the respondents now also have an order for the payment of costs in relation to the hearing before Master Wright in the sum of £2,000. They have a further order from His Honour Judge Weeks QC in relation to the hearing before him in the sum of £4,791. Although those costs should have been paid within 14 days they have not been paid. Furthermore the sum of £37,000 has not been paid into court. It is obviously the aim of Contract to have the appeal heard before they actually pay those sums so that if the appeal is lost execution against Contract will achieve nothing.


When Waller LJ dealt with Contract's application for a stay on 24 th March 2003 he held that the evidence that any appeal would be stifled was exceedingly weak. It is now clear both from a statement put before His Honour Judge Weeks QC by Mr Tasselli and from the concession made by Mr Reeve on behalf of Contract before us that there is no question of there being any stifling of the appeal if the above sums were ordered to be paid. Mr Shuck would find it inconvenient to pay those monies but he would be able to do so if it was made a condition of Contract being entitled to pursue their appeal that those orders should be met.


The application made by the respondents was to obtain either a dismissal of the appeal by reference to Contract's conduct or [more realistically] an order that those costs be paid within a short time or the appeal be dismissed or in the further alternative that the appeal be taken out of the list and adjourned until the costs were paid.


At the conclusion of the hearing before us we made the order that unless by 4.00pm on Friday 18 th July 2003 Contract paid the sum of £37,000 into court and the sums of £2,000 and £4,792 to the respondents the appeal be struck out. We further ordered Contract to pay the respondents' costs of this application and ordered that sum also to be paid by 4.00pm 18 th July 2003 and that the appeal would be struck out if the costs were not paid. We are now giving our reasons for making that order.



Mr Reeve submitted that there was no jurisdiction in the court of appeal to make the order sought. His submission was that CPR 52 laid down the powers of the court of appeal. In particular he submitted that CPR 52.9 identified the situations in which the court was empowered to impose conditions upon which an appeal might be brought. CPR 52.9 provides as follows:

"(1) The appeal court may-

(a) strike out the whole or part of an appeal notice;

(b) set aside permission to appeal in whole or in part;

(c) impose or vary conditions upon which an appeal may be brought.

(2) The court will only exercise its powers under paragraph (1) where there is a compelling reason for doing so.

(3) Where a party...

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11 cases
  • (1) Progas Energy Ltd v The Islamic Republic of Pakistan
    • United Kingdom
    • Queen's Bench Division (Commercial Court)
    • 9 February 2018
    ...including a condition that prior costs orders be complied with. He gave as an example Contract Facilities Ltd v The Estate of Rees [2003] EWCA Civ 1105, in which such a condition was imposed in circumstances in which a third party, a Mr Shuck, had funded the action and was funding the appe......
  • Dumford Trading AG v OAO Atlantrybflot
    • United Kingdom
    • Court of Appeal (Civil Division)
    • 26 January 2005
    ...v Aweco Appliance Systems GmBH & Co KG [2002] EWCA Civ 1501, [2003] 1 All ER 344; and Contract Facilities Ltd v The Estate of Rees [2003] EWCA Civ 1105. is also common ground that in the light of CPR 52.9 this court should only impose such conditions if persuaded by Dumford that there a......
  • Mr John Aidiniantz (Applicant/Respondent to appeal) v The Sherlock Holmes International Society Ltd (Respondent/Appellant)
    • United Kingdom
    • Chancery Division
    • 14 October 2015
    ...not to provide the necessary security. 53 Mr Brockman also relies on another decision of the Court of Appeal, in Contract Facilities Ltd v Rees (deceased) and Others [2003] EWCA Civ 1105, [2003] All ER (D) 415 (Jul). In that case, the appellant was an impecunious company which had obtained ......
  • Morris v The Highland Group International
    • United Kingdom
    • Court of Appeal (Civil Division)
    • 1 November 2016
    ...facts of the particular case. 23 I think it is of some assistance to note that Waller LJ in the case of Contract Facilities v Rees [2003] EWCA (Civ) 1105 considered that the Court of Appeal had always the power to manage its own cases when confronted with a problem of this sort. The quotati......
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