GULF AZOV SHIPPING Company Ltd and Others and CHIEF HUMPHREY IRIKEFE IDISI and Others [CA (Civil), 15/03/2004]

JurisdictionEngland & Wales
Judgment Date15 March 2004
Neutral Citation[2004] EWCA Civ 292
Docket NumberCase No: A3/2003/1751 & (B)
CourtCourt of Appeal (Civil Division)
Date15 March 2004
Between:
Gulf Azov Shipping Co Ltd & Ors
Appellant
and
Chief Humphrey Irikefe Idisi & Ors
Respondent

[2004] EWCA Civ 292

Before:

Lord Phillips of Worth Matravers, Mr

Lord Justice Tuckey and

Lord Justice Jacob

Case No: A3/2003/1751 & (B)

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM QUEEN'S BENCH DIVISION

COMMERICAL COURT

Royal Courts of Justice

Strand,

London, WC2A 2LL

H Marten (instructed byChase Christopher Roberts) for the Appellant

S Berry QC & J Collins (instructed byStephenson Harwood) for the Respondent

1

Lord Phillips, MR:

2

This is a judgment of the Court.

3

1. This is an appeal against an award of costs against the Fourth Defendant, Mr Egbe, made pursuant to a judgment delivered on 23 July 2003 by Mr Arthur Marriot QC, sitting as a Deputy High Court Judge in the Commercial Court. Permission to appeal was given by Clarke LJ on 12 September 2003. He remarked that it is a most unusual case. Indeed it is.

4

2. Mr Egbe was not party to the substantive proceedings. He was joined as a party pursuant to CPR 48,2(1) (a) because an order for costs was sought against him. Similar relief was sought against Chief Ofotokun, who was joined as the Fifth Defendant. The Deputy Judge made separate but identical orders against each that they should pay costs in the sum of £421,847.89.

5

3. All the Defendants, bar one, whether individual or corporate, are Nigerian. The First Defendant, Chief Idisi, owns the companies that are the Second and Third Defendants. In this judgment we shall refer to the Fourth and Fifth Defendants by name and use the phrase ‘the Defendants’ to describe the First Three Defendants. Most of the events material to the substantive action took place in Nigeria. The allegations made against Chief Idisi were of disgraceful conduct. He sought to pursue defences to the claims made against him that were held to be without merit. By doing so he caused the claimants to incur substantial costs. Summary judgment was given against him and his companies on 26 November 1999 for damages, which were subsequently assessed at over 4 million. A year later an order was made against him, in his absence, committing him to prison for deliberately flouting orders of the court that had been designed to assist enforcement in respect of the claims made against him. He appealed unsuccessfully against that order. Further substantial costs were incurred in relation to the contempt proceedings. It has not yet proved possible to recover the majority of the damages awarded against the Defendants, let alone the costs ordered against them.

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4. Mr Egbe practises as a lawyer in Nigeria. The claim for costs advanced against him was founded on the allegation that he had not merely provided funding for the Defendants’ legal expenses, without which they would have been unable to persist in defending the claim, but that he had personally intervened in the conduct of their defence. Mr Egbe came to England and conducted his own defence. He gave evidence in which he sought to demonstrate that he had had no significant involvement in the conduct of the defence and that he “never paid one penny by way of legal fees on behalf of any of the Defendants”. The Deputy Judge rejected his evidence. He found that Mr Egbe had personally intervened to assist the Defendants and that he had provided, from his own resources, a substantial contribution to the substantial funding needed to comply with court orders and to meet the Defendants’ legal expenses.

7

5. On this appeal Mr Egbe sought to introduce additional evidence to demonstrate that the judge's findings in relation to the funding that he had provided were not correct. Had that evidence been admitted, it would have called for a re-assessment of the role that Mr Egbe had played in relation to the provision of funds on behalf of the Defendants. On behalf of Gulf, Mr Berry QC objected to the admission of this evidence on the ground that, had Mr Egbe sought to obtain it before the hearing of the costs proceedings, there was no reason why he should not have done so. We upheld this objection and refused to allow the fresh evidence to be introduced. In these circumstances Mr Marten, who appeared for Mr Egbe, accepted that there was no basis upon which he could challenge the findings made by the Deputy Judge in relation to the financial support provided to the Defendants by Mr Egbe. Mr Marten's submissions have been that the findings made by the judge could not support the costs order that he made.

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The claim against the Defendants

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6. It is convenient to set the scene by giving brief details of the claim that was brought and established against Chief Idisi and his companies. In 1997 the Second Defendant, ‘Lonestar’ acquired two second-hand dismantled oil rigs. In June 1997 these were shipped aboard the First Claimant, ‘Gulf's, vessel “Dubai Valour”, for carriage from India to Nigeria. On 5 th July 1997 the vessel encountered heavy weather. Parts of the rigs and their accessories, which were being carried on deck, were washed overboard and lost. The vessel put into Port Elizabeth as a port of refuge, where the remaining cargo was re-secured. On her arrival in Nigeria the vessel was arrested pursuant to an Admiralty action commenced by Lonestar for loss of their cargo. Security for the release of the vessel was demanded in the sum of US 17 million. Gulf, and their insurers, the Second Claimants, declined to provide security in this amount. 7. Chief Idisi then forcibly seized the crew of the vessel and held them in appalling conditions. Some were detained for as long as 18 months. In the end the Claimants were constrained to enter into a “settlement agreement” under which, in consideration of the payment of 3 million, the vessel and her crew were released. On 23 April 1999 the Claimants commenced proceedings in the Commercial Court claiming damages and interest totalling over 7 million for the wrongful detention of the vessel. They further claimed the return of the 3 million paid to Chief Idisi, on the ground that this had been obtained by duress. In fact this sum never reached Chief Idisi. On 29 April 1999, the Claimants obtained a world wide Freezing Order and the sums caught by this included the 3 million.8. On 3 August 1999 the Claimants obtained a default judgment against the Defendants for the return of the 3 million. The Defendants had, by no more than a few minutes, failed to file their Defence in time. On 26 November, after a hearing before Langley J that lasted 6 days, the Defendants failed in an attempt to set aside the default judgment and the Claimants recovered summary judgment on their claim for detention of the vessel, together with an award of costs. An interim payment of 2 million was ordered. Damages were subsequently assessed at over 4 million. We shall have more to say about the hearing before Langley J in due course.9. The Defendants subsequently appealed to the Court of Appeal, but their appeal was dismissed on 12 March 2001. The Court of Appeal found that Chief Idisi had become aware by August 1997 that the maximum damages that he could hope to recover were 1 million. The Court held that there was no arguable defence to the Claimants’ claim for unlawful detention of their vessel from August 1997 to May 1999.

10

Contempt of court

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10. Chief Idisi committed flagrant breaches of the Freezing Order that had been made on 29April 1999. In particular (i) he withdrew from the jurisdiction the sum of 350,000; (ii) contrary to the order of the court he directed that periodic payments that were due from a company called Expro Gulf be made to an account in Nigeria in place of the account within the jurisdiction to which they would otherwise have been made. There were other breaches of the Freezing Order and further orders ancillary to it. 11. On 12 August David Steel J ordered, among other things, that the Defendants should return the 350,000 to an account within the jurisdiction by 8 September 19999 and that they should satisfy a costs order in the sum of £13,980, that had been made against them, by 10 September 1999. On 3 November Cresswell J extended the time for making these payments until close of business on Friday 5 November. He ordered that Chief Idisi and his accountant, Mr Ahonkhai, attend for cross-examination on Monday 8 November 1999. That day was the return date for an application by the Claimants to Langley J to debar the Defendants from pursuing an application to set aside the default judgment of 3 million and from resisting Gulf's application for summary judgment on their detention claim. The grounds of this application were the serious and deliberate breaches by the Defendants of orders of the court.

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The hearing before Langley J

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12. The Defendants had been represented by D J Freeman & Co from June to 6 September 1999. From the end of September 1999 Nabarro Nathanson (‘Nabarros’) represented them. They continued to do so until 15 February 2000. For a brief period there were no solicitors. In April, Nabarros came back shortly before being replaced by Speechly Bircham. On 27 September 1999 a meeting took place at the London chambers of Mr Bitu Bhalla, a member of the English Bar. Present were representatives of the Defendants, and Miss Margaret Egbe, Mr Egbe's niece, who was Head of Chambers of his firm. A letter from Lonestar to Mr Jonathan Rosshandler, then a partner in Nabarros, dated the 28 September, referred to this meeting and stated that the Defendants had determined to retain his firm.

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13. On 4 November 1999 Mr Cohen of Nabarros wrote to Chief Idisi. He recorded receipt of £56,000 “via Fred Egbe”, which had been disbursed. He sought further funding to enable his firm...

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