Donohue v Armco Inc. and Others
| Jurisdiction | England & Wales |
| Judge | Stuart-Smith,Brooke,Sedley L JJ |
| Judgment Date | 29 March 2000 |
| Judgment citation (vLex) | [2000] EWCA Civ J0329-4 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | NO: QBCMI 99/0819/A3 |
| Date | 29 March 2000 |
[2000] EWCA Civ J0329-4
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
(AITKENS J)
(ON APPEAL FROM QUEEN'S BENCH DIVISION)
Royal Courts of Justice
Strand
London WC2
Lord Justice Stuart Smith
Lord Justice Brooke and
Lord Justice Sedley
NO: QBCMI 99/0819/A3
MR P LEAVER QC, MR R HOWE & MS C BINGHAM (instructed by Messrs Simmons & Simmons) appeared on behalf of the Appellant
LORD A GRABINER QC, MR D TOLEDANO (instructed by Messrs Freshfields) appeared on behalf of the Respondent
PROCEEDINGS AFTER JUDGMENT
: For the reasons given in the majority of the judgments handed down, this appeal will be allowed.
My Lord, so far as the order is concerned, your Lordships will have seen a witness statement from Mr Passmore, I believe—
: Yes.
—which deals with what I should describe as an embarrassing matter which has come to light.
: We have all seen that. Perhaps the answer to that is not to draw up the order for a fortnight?
My Lord, that is what I would have suggested to your Lordships.
: And give either side liberty to apply.
My Lord, what we were going to suggest was the order in relation to those two companies be not drawn up until 12th April or until after Friday; and if it has not been resolved by 12th April then there should be liberty to apply.
: Can we draw up the order for bits and not for others?
My Lord, I am happy that the order should not be drawn up at all.
: I should have thought it would be better not to draw it up at all. Is that all right, Lord Grabiner?
My Lord, yes, absolutely. First of all, I would respectfully agree that it should not be done in parts.
: No.
Secondly, it obviously cannot be made in respect of nonexistent persons.
: No.
But presumably it will be resolved in Jersey.
: Right.
So far as the terms of any order are concerned, we have given to my learned friends a draft of a proposed order; but they have only just had that and plainly there is to be discussion about it.
: Yes.
All I would say in relation to that order is that if the broad shape of the order is acceptable to your Lordships, then the tweaking can be done by Mr Howe and Mr Toledano, and an agreed minute of order brought in in due course.
: We have not looked at it yet.
My Lord, so far as the order of this Court itself is concerned, taking that first, I do not whether there is any difficulty with any part of it up to paragraph 5, to which I will come in a moment: the proposed co-claimants be joined. Then an order for an injunction in the form annexed to paragraph 2. Paragraph 3 deals with the position of Wingfield and Chisel; paragraph 4 with our appeal against the setting aside of service on the fourth and fifth defendants.
: Yes.
So, I think that is broadly unlikely to be contentious. Perhaps of more debate will be over the form of the injunction, which is the other document that was prepared.
: Yes.
What we have tried to do there is to take the terms which were used in the majority judgments —and your Lordships will see we have used the term 'management buy-out' —
: Yes.
—in paragraph 1, which is a defined term —defined in the Interpretation Section of the order on page 4.
As I say, my Lords, my learned friends' comments have not had time to make any comments on this proposed draft.
: Can we deal with it by way of getting the two juniors to try to agree this?
That is what I would suggest. Again, if there is any difficulty then if there is liberty to apply, that can be coupled with liberty to apply in relation to the drawing of the order.
: Is there any point of principle, Lord Grabiner, that strikes you immediately that we could deal with now?
My Lord, yes. I think there are just probably one or two brief points. In relation to the costs which are currently specified in paragraph 5.1 of the draft of the first document —
: We will deal with the costs in a moment.
My Lord, yes. But, I mean, subject to that, obviously the matter can be dealt with between the juniors, I am sure.
: Yes.
I think that the point we will discuss about costs will resolve that point as well.
: Very well.
My Lord, can I then turn to the question of costs? The order that was made by Aitkens J was that the claimants should pay the defendant's costs, save for any costs of, and caused by, the claimant's claim for damages, which will be in the cause, and the costs of and caused by the allegations of material non-disclosure which were to be paid by the defendants (by Armco) to Mr Donohue. What we would invite your Lordships to do is to order that the costs both of the hearing in this Court and below, in so far as we did not recover them below, should be the appellant's costs in this matter.
: Yes. That is quite straightforward.
My Lord, I hope it is straightforward.
: But Lord Grabiner possibly does not agree with that.
In principle it is straightforward, and for the most part there is nothing I could say or would want to say, but we would certainly object to paying the costs of the two companies who do not exist; and in my submission they are not properly recoverable. There is a discrete issue in relation to defendants numbered 4 and 5. We won on that point below and we won on that point in this Court. That is the point about the service, your Lordship will recall.
: Yes.
So our submission is that we ought to have our costs of that part of the appeal in relation to —
: If we are going to do anything on that, it would be simpler just to deduct a portion, would it not?
Yes.
: That did not actually take very much time, did it?
No, I am sure it did not. We had a little debate, you remember, about the involvement of the solicitors, and the correspondence and all that. I cannot remember how much time it took. There were three witness statements on the issue as well.
: Right. (Pause.) Yes.
My Lord, so far as the companies are concerned —if I can just respond very briefly —when they are restored to the Registry it would be as if they had never not been on the Register, so I would respectfully submit that their costs in relation to these proceedings should be paid.
: Are there any?
In so far as there are any over and above, they have been parties to the proceedings all the way through, so they —
: But if they did not exist —I mean, there must be some kind of penalty for a solicitor who acts for companies that do not exist, must there not?
My Lord, they will be treated as if they had always existed.
: After a good deal of expenditure. Why should we give orders in favour of companies where, without any disclosure to us, the case was argued on the basis that they did exist and the solicitors were acting for a company that did not exist?
My Lord, all we would say on that is once they are restored… I have made that submission already.
: Yes, that is your best point, Mr Leaver.
My Lord, so far as the fourth and fifth defendants are concerned, the argument on that issue took next to no time. I was encouraged by Sedley LJ not to linger over my submissions on that point. I accepted that encouragement and I think I then sat down. My learned friend then addressed your Lordships for about fifteen or twenty minutes at the end of the second day of the hearing. That was it so far as the fourth and fifth defendants were concerned. So I would submit that on ordinary Elgindata principles no deduction should be made.
: They have gone.
No, my Lord, with respect —I do not know whether your Lordship would take any notice of Neuberger J, who said that they were still principles that could or should be applied in a case. That was in New Law Publishing a few weeks ago.
: They are totally contrary to what the rules say. If a Chancery judge (inaudible) Nelsonian lie.
No, my Lord, he considered them in detail in this case. It was not Nelsonian and it was not a lie.
: Many of the same considerations apply as they do in the Elgindata, but the Elgindata has clearly gone.
My Lord, it was not improper, in our respectful submission, or unreasonable and it took a tiny amount of time. If any deduction is to be made at all, my Lord, I would respectfully submit it would be a very, very small percentage indeed.
: You would really rather I paid the costs of this, Mr Leaver?
MR LEAVER:My Lord, that of course would be ultimately our application —
: That is not under the new rules.
—but I do not think I could press for that. But it did take a very, very —
: I am very sorry if I misled you.
No, my Lord, you did not mislead me. You encouraged me to sit down, and I did. And I did not take long over that: it...
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