David Cody v Andrew Murray and Others
| Jurisdiction | England & Wales |
| Judge | David Donaldson |
| Judgment Date | 19 November 2013 |
| Neutral Citation | [2013] EWHC 3448 (Ch) |
| Docket Number | Claim No: HC11CO4374 |
| Court | Chancery Division |
| Date | 19 November 2013 |
[2013] EWHC 3448 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
David Donaldson Q.C.
Sitting as a Deputy High Court Judge
Claim No: HC11CO4374
The First Defendant is the well-known tennis player; the other two Defendants are his parents. They entered into a written Agreement dated 16 December 2003 with the Claimant under which the Claimant was appointed their exclusive adviser in relation to his professional tennis career. The Claimant was to receive 10% of gross payments from inter alia all commercial and sponsorship agreements entered into during or renewed after the term of the agreement, which was for an initial period of two years and thereafter determinable on six months notice by either side. On 25 April 2005 the Second Defendant gave six months notice terminating the contract. There was an issue as to whether this was effective to prevent the contract continuing after 1 December 2005, as the Defendants contended, and whether in the light of the First Defendant being a minor in 2003 the Agreement was enforceable. At that time there was in place a two year sponsorship deal with RBS which had commenced on 1 June 2004. On 3 February 2006 the First Defendant made clear in an email that in his view the entitlement to commission applied only to receipts up to the end of the contract, viz December 2005.
Against this background discussions took place in late April and May 2006 with a view to settling the dispute by a payment to the Claimant. The Defendants retained Mr Patricio Apey to act for them in these negotiations, in which they did not personally participate. They resulted in an offer to the Claimant that he should be paid £65,000 in addition to retaining all commissions and other payments which he had so far received, to be in full and final satisfaction of all present and future claims. That offer was accepted.
It is not in issue that a new agreement with RBS was concluded on 26 March 2006, due to start on 1 June 2006 on expiry of the old one. The Claimant alleges that he was told by Mr Apey during the negotiations that the 2004 RBS Agreement had not been renewed and that it was uncertain that RBS would continue to sponsor the D2. The Defendants respond that Mr Apey said no such thing and that it is clear from two emails from the Claimant, from which he himself quotes in his Particulars of Claim, where he refers to the " renewed RBS agreement" and " your successful agreement renewal with RBS", that he was well aware of the renewal and had negotiated overtly on that basis.
The Defendants now apply for an order for security for costs under CPR r.25.13(2)(a) on the basis that the Claimant is resident in Texas.
The applicable principles
Since the decision in Nasser v United Bank of Kuwait [2002] 1 WLR 1868 it is clear that the mere fact of foreign residence, even in a country not covered by the Brussels/Lugano regime, is without more insufficient to justify the exercise of the power conferred by the CPR. I set out at length substantial extracts from the judgment of Mance LJ, since it represents a new and radically revised point of departure for all subsequent courts. Having reviewed the requirements of EU law and the ECHR he said:
"58. The exercise of the discretion conferred by Part 23.13(1) and (2)(a)(i) and (b)(i) raises, in my judgment, different considerations. That discretion must itself be exercised by the courts in a manner which is not discriminatory. In this context, at least, I consider that all personal claimants … before the English courts must be regarded as the relevant class. It would be both discriminatory and unjustifiable if the mere fact of residence outside any Brussels/Lugano member state could justify the exercise of discretion to make orders for security for costs with the purpose or effect of protecting defendants … against risks, to which they would equally be subject and in relation to which they would have no protection if the claim or appeal were being brought by a resident of a Brussels or Lugano state. Potential difficulties or burdens of enforcement in states not party to the Brussels or Lugano Convention are the rationale for the existence of any discretion. The discretion should be exercised in a manner reflecting its rationale, not so as to put residents outside the Brussels/Lugano sphere at a disadvantage compared with residents within. The distinction in the rules based on considerations of enforcement cannot be used to discriminate against those whose national origin is outside any Brussels and Lugano state on grounds unrelated to enforcement …
61. … [I]f the discretion to order security is to be exercised, it should therefore be on objectively justified grounds relating to obstacles to or the burden of enforcement in the context of the particular foreign claimant or country concerned …
62. The justification for the discretion under Part 25.13(2)(a) and (b) and 25.15(1) in relation to individuals and companies ordinarily resident abroad is that in some, it may well be many, cases there are likely to be substantial obstacles to or a substantial extra burden (e.g. of costs or delay) in enforcing an English judgment, significantly greater than there would be as regards a party resident in England or in a Brussels or Lugano state …
63. … [T]here can be no inflexible assumption that there will in every case be substantial obstacles to enforcement against a foreign resident claimant in his or her (or in the case of a company its) country of foreign residence or wherever his, her or its assets may be. If the discretion under Part 25.13(2)(a) or (b) or 25.15(1) is to be exercised, there must be a proper basis for considering that such obstacles may exist, or that enforcement may be encumbered by some extra burden (such as costs or the burden of an irrecoverable contingency fee or simply delay).
64. The courts may and should, however, take notice of obvious realities without formal evidence. There are some parts of the world where the natural assumption would be without more that there would not just be substantial obstacles but complete impossibility of enforcement; and there are many cases where the natural assumption would be that enforcement would be cumbersome and involve a substantial extra burden of costs or delay. But in other cases — particularly other common law countries which introduced in relation to English judgments legislation equivalent to Part I of the Foreign Judgments (Reciprocal Enforcement) Act 1933 (or Part II of the Administration of Justice Act 1920) — it may be incumbent on an applicant to show some basis for concluding that enforcement would face any substantial obstacle or extra burden, meriting the protection of an order for security for costs. Even then, it seems to me that the court should consider tailoring the order for security to the particular circumstances. If, for example, there is likely at the end of the day to be no obstacle to or difficulty about enforcement, but simply an extra burden in the form of costs (or an irrecoverable contingency fee) or moderate delay, the appropriate course could well be to limit the amount of the security ordered by reference to that potential burden.
65. I also consider that the mere absence of reciprocal arrangements or legislation providing for enforcement of foreign judgments cannot of itself justify an inference that enforcement will not be possible. The present case illustrates this. It is a remarkable fact that no country has ever entered into any treaty providing for recognition and enforcement of judgments with the United States of America. But the reason is concern about the breadth of American jurisdiction, the corollary of which has been a willingness on the United States part to recognise and enforce foreign judgments by action on a similarly liberal and flexible basis: see e.g. Jurisdictional Salvation and the Hague Treaty, Kevin M. Clermont (1999) 85 Cornell Law Review 89, 97–98. I am not aware that anyone has ever suggested that access to justice or to the means of executing justice is an American problem. Certainly no evidence has been put before us to suggest that the defendants would, or even could, face any real obstacle or difficulty of legal principle in enforcing in the United States any English judgment for costs against this claimant.
66. There is also no express suggestion in any evidence in this case that the defendants would face any extra burden in taking any such enforcement action against the claimant for costs. But we can, I think, infer without more that it would in the case of this particular claimant resident in Milwaukee. First, the respondents would have to bring an action on any English judgment for costs, before proceeding to any enforcement steps that United States law or the law of Wisconsin permits. Second, the claimant's impecuniosity has collateral relevance, in so far as it is likely that the respondents would have to investigate whether it is as real and great as she asserts, and this is likely to be more expensive to undertake abroad than it would be if she was resident in the United Kingdom or a Brussels/Lugano state. Third, the course of the present litigation to date suggests that the claimant is a determined litigant who can be relied upon by...
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...only applicable to “ enforcement” not “ execution”; whereas Mr David Donaldson QC, sitting as a High Court Judge in Cody v Murray [2013] EWHC 3448 (Ch) thought that Hamblen J had misinterpreted Nasser. Mr Plewman QC said that Mr Donaldson QC should have followed Hamblen J as a matter of pr......