Gordano Building Contractors Ltd v Burgess
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE MANN,SIR DENYS BUCKLEY |
| Judgment Date | 25 March 1988 |
| Judgment citation (vLex) | [1988] EWCA Civ J0325-9 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | 88/0289 |
| Date | 25 March 1988 |
and
[1988] EWCA Civ J0325-9
Lord Justice Mann
Sir Denys Buckley
88/0289
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
BRISTOL DISTRICT REGISTRY
(JUDGE FALLON Q.C.)
Royal Courts of Justice
MR. DAVID BARNARD (instructed by Messrs. Bush & Bush, Bristol) appeared for the Appellants (Plaintiffs).
MR. DAVID FLETCHER (instructed by Messrs. Bower & Bailey, Bristol) appeared for the Respondents (Defendants).
There are before the court two appeals against decisions of His Honour Judge Fallon Q.C., sitting as an Official Referee in Bristol. The first of those decisions was dated 4th February 1987 whereby he ordered that the plaintiffs in the action give security in the sum of £20,000 for the defendants' costs. The second decision was an order of 15th April 1987 whereby the learned judge in effect refused to revoke his first order. He did, however, grant a stay.
The plaintiffs in the action are the present appellants. They are a firm of building contractors which carried out certain works at the defendants' nightclub. The parties have fallen into dispute. On 13th September 1985 the plaintiffs issued their writ. The amount claimed in the writ was £51,054.05. That amount grew by amendment to some £69,000. On 29th September 1983 the plaintiffs took out a summons under Order 14 and on 16th November 1983 secured from the District Registrar a judgment for £35,000. The Registrar gave unconditional leave to defend in regard to the balance.
The defendants appealed against the District Registrar's order. That appeal was heard on 15th March 1984 before Mr. Fox-Andrews Q.C. (as he then was), who was sitting as a deputy High Court judge. His order was that there be judgment for £17,500 and that there should be leave to defend on the balance subject to the payment in of £7,500. He gave directions as to pleadings. Pleadings flowed. On 16th December 1986 the defendants issued a summons by reference to section 726(1) of the Companies Act 1985 seeking security for their costs.
The matter came on for hearing first upon 12th January 1987 when it was adjourned to 4th February. There was then a hearing and an order which is the subject of the first appeal. There is an agreed and approved note of the judgment of His Honour and I quote:
"The Plaintiffs have to show liquidity.
They have not produced up-to-date Accounts but they rely on a letter from Messrs. Wormald & Partners. The Plaintiff Company does not look to be in a very happy position from that letter.
The turnover figure does not help me. It does not indicate the profitability of the Company.
There should be a Profit and Loss Account which is up-to-date and which shows the cash credits in, and whether the Plaintiffs are in profit. The Plaintiffs can come back and get the money out of Court if the Accounts show that the Company is viable for the costs.
I think there ought to be security for costs. £20,000 should be paid into Court. I suggest a time limit of fourteen days.
The £20,000 must be paid into Court within twenty-one days."
That was a change after a discussion with counsel.
"There be liberty to apply when the new Accounts are to hand but within the twenty-one days.
Costs will be reserved until either the further application or the trial of this action."
The order formally drawn reflects what the learned judge decided save that, perhaps not surprisingly, the liberty is expressed without any reference to the accounts. It is expressed in common form:
"And it is further ordered that both parties have liberty to apply."
On 20th February 1987 the plaintiff appellants took out a summons to restore the defendants' application for security. By the summons they sought an order that the security in the sum of £20,000 be set aside. That matter came before the learned judge on 15th April 1987 and it is his decision on that day which is the subject of the second appeal. There is again an agreed and approved note. I quote:
"The application was in form an Application to Restore the Defendants' application for security for costs which had previously been before the Official Refereee on 4th February 1987. At the outset the Official Referee said that he had not given liberty to restore but only liberty to apply for the purpose of putting into effect the order made on 9th February. He was not prepared to receive further evidence or hear further argument with a view to varying that order, commenting that this would be tantamount to hearing an appeal against his own order. He indicated that an appeal could only be heard by the Court of Appeal but that he would not himself give leave for such an appeal to be lodged."
Leave to appeal to this court was given on 6th October 1987.
Mr. Barnard for the plaintiffs appellants assaults, first, the order of 4th February. He says that the learned judge had the task of following two stages of an iteration. First, he had to be satisfied that there was impecuniosity. Upon the evidence at that time there can, it would seem, be no dispute but that there was impecuniosity. Secondly, says Mr. Barnard, the judge has to ask himself whether an order is justified in the particular circumstances of the case. That is a matter of discretion.
Our attention was drawn to some observations of Lord Denning M.R. in Sir Lindsay Parkinson & Co. Ltd. v. Triplan Ltd. (1973) 1 Q.B. 609. At page 626 the...
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