Gwembe Valley Development Company Ltd v Koshy and Another
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE SCHIEMANN,Lord Justice Chadwick,LORD JUSTICE CHADWICK,Lord Justice Schiemann,Lord Justice Mummery |
| Judgment Date | 28 July 2003 |
| Neutral Citation | [2001] EWCA Civ 1306,[2003] EWCA Civ 1048,[2002] EWCA Civ 1805 |
| Docket Number | 1998/0704,A3/1998/0794,Case No: A3/2001/2661, A3/2002/0091, A3/2001/2661, A3/2002/0090,A3/2002/0095,A3/2002/0094, |
| Court | Court of Appeal (Civil Division) |
| Date | 28 July 2003 |
[2001] EWCA Civ 1306
Lord Justice Schiemann
Lord Justice Chadwick
1998/0704
IN THE SUPREME COURT OF JUDICATURE IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CHANCERY DIVISION
(MR JUSTICE HARMAN)
Royal Courts of Justice
Strand
London WC2
MR A THOMPSON (Instructed by Messrs Cameron McKenna, London, EC1A 4DD) appeared on behalf of the Appellant
MR H PAGE (Instructed by Messrs Landau Scanlan, London, W1Y 2LS) appeared on behalf of the Respondent
Lord Justice Chadwick will deliver the first judgment.
This is an application made under CPR 40 rule 12 to amend an order made by this court ( Lord Justice Schiemann, Sir Christopher Staughton and myself) on 28 March 2001. The rule provides that:
"The court may at any time correct an accidental slip or omission in a judgment or order."
The proceedings before this court on 28 March 2001 were by way of appeal from an order made on 20 March 1998 by Harman J in proceedings brought by Gwembe Valley Development Company Limited ("GVDC") against Mr Thomas Koshy and Lummus Agricultural Services Limited, ("LASCO"). The claim in those proceedings was for an account of profits made by Mr Koshy as a result of dealings which it is said he procured between GVDC and Lasco in the years 1987 to 1989, for a declaration that Lasco hold the moneys received from GVDC in the course of those dealings as a constructive trustee, and for an account of those monies in Lasco's hands. GVDC applied for summary judgment against Mr Koshy and Lasco and Harman J made the declaration and ordered the accounts sought.
Both Lasco and Mr Koshy appealed from that order. GVDC applied to this Court for an order that Lasco provide security for the costs of the appeal.
In the meantime Mr Koshy had applied, in the Chancery Division, for an order setting aside the order of Harman J and setting aside the proceedings on the basis that the proceedings had been brought without authority. In short, the point was that, although it was common ground that GVDC was in receivership in Zambia, there was an issue as to who was entitled as receiver to give instructions on its behalf. The issue turned on which of three accountants in Zambia had been validly appointed under various debentures granted by the company.
The application for security for costs came before me, sitting as a single judge of this court, on 21 June 1999. It was coupled with application that the proceedings in the two appeals be stayed until after the judgment in the Chancery Division on Mr Koshy's application to set aside the proceedings in which the order of 20 March 1998 had been made.
I heard submissions from counsel for GVDC and for Mr Koshy. Lasco did not appear. It was by that time in liquidation. I stayed the proceedings on both Mr Koshy's appeal and Lasco's appeal until after judgment in the Chancery Division on Mr Koshy's application to set aside the proceedings. I directed that the liquidator of Lasco was to give notice within 28 days after that judgment indicating whether or not he intended to pursue Lasco's appeal against Harman J's of order 20 March 1998. I directed, further, that, if the liquidator did give notice of his intention to pursue his appeal, he was to provide security for the costs of that appeal in the amount of £50,000 within 28 days; and that, in default of providing that sum by way of security, Lasco's appeal be dismissed. I gave Lasco liberty to apply to vary that order within 28 days of judgment on Mr Koshy's a application to set aside the proceedings.
Mr Koshy's application to set aside the proceedings was dismissed by Rimer J on 2 February 2000. That event triggered the provisions in paragraphs 2, 3 and 4 of my order of 21 June 1999. Lasco was required under those paragraphs, through its liquidator, either (i) to give notice that it did not intend to pursue its appeal; or (ii) to give notice that it did intend to pursue its appeal and, if so, to provide £50,000 as security for the costs of that appeal within 28 days; of (iii) to apply within 28 days to vary my Order of 21 June 1999. In the event the liquidator did none of those things. There is no doubt that GVDC and the Civil Appeals Office treated Lasco's appeal against Harman J's order as spent.
Mr Koshy appealed against Rimer J's order of 2 February 2000. That appeal was heard by this Court, (Pill LJ, Wright J and myself), in December 2000. We allowed the appeal; but he did not go on to set aside the GVDC proceedings. We appointed a Receiver under the Supreme Court Act 1981 with power to pursue the GVDC action against Mr Koshy and Lasco if, after advice, he thought it in the interests of GVDC to do so. At that stage GVDC had the benefit of the judgments it had obtained on 20 March 1998. In the event, the Receiver appointed by this Court decided to pursue GVDC's claims in those proceedings and a trial of this action and a related action, involving the same defendants, was fixed to commence in May 2001. But that, of course, was subject to disposal of Mr Koshy's appeal against the order for summary judgment which had been made in March 1998. There could be no trial of GVDC's claims against him while that order stood, because the issues were determined by that order.
GVDC, for reasons which it is unnecessary to rehearse, took the view that its interests would best be served if the summary judgment which it had obtained against Mr Koshy was set aside and the action proceeded to trial against him. Accordingly it made application to this Court on 2 February 2001. The application sought an order that, for the reasons set out in the letter to the Civil Appeals Office dated 2 February 2001, the appeal by the first defendant (Mr Koshi) be allowed by consent or otherwise; and that paragraph 4 of the order of Harman J and the judgment in favour of GVDC contained therein be set aside. It was that application which came before the court on 28 March 2001. It was listed for hearing with Mr Koshy's appeal against the order of 20 March 1998; so that, if the application did not succeed, the appeal could be heard and disposed of. There was no application or appeal by Lasco before this court for hearing on that day. As I have said, GVDC and the Civil Appeals office regarded that appeal as spent in the light of my order of 21 June 1999. To this day there has been no indication that Mr Koshy and Lasco did not take the same view.
This Court, without expressing any view on the correctness or otherwise of the judgment of Harman J of 20 March 1998 but in order to give effect to the common desire of GVDC and Mr Koshy that the claims of GVDC against Mr Koshy should be litigated at the trial fixed for hearing in May 2001 set aside the order of 20 March 1998. The question which has now arisen is whether the Court intended to set aside that order against Lasco as well as against Mr Koshy.
That question has arisen in these circumstances. When the trial against Mr Koshy commenced in May 2001, counsel for GVDC, Mr Browne-Wilkinson QC, told the judge that he was proceeding on the basis that the position in relation to Lasco was that Harman J's order of 20 March 1998 had not been disturbed. Mr Hugo Page, counsel for Mr Koshy, while making it clear that he did not appear for and had no instructions from Lasco, submitted that the effect of this Court's order of 28 March 2001 was to set aside the whole of that order of 20 March 1998, not only as against Mr Koshy but also against Lasco. The point appears to have remained unresolved throughout the trial in which Lasco played no part. It surfaced again in Mr Browne-Wilkinson's final submissions made on 15 June 2001, when he said:
"My Lord, there is an unfortunate wrinkle here to do with the order of the Court of Appeal and this was something that Mr Page raised some weeks ago. Harman J ordered that an account be taken of the sums received by Lasco, and he also made a declaration that such sums are held by Lasco on constructive trust. But, as my learned friend rightly pointed out, if one looks at the wording of the Court of Appeal, even though there was no appeal before Lasco in front of it, on one reading at least, in fact not easy to see another reading, the effect of that is an inadvertent setting aside of the judgment against Lasco.
My Lord, I apologise that there is this untidiness, but what we contemplate at the moment is that what we should do is to apply to the Court of Appeal under the slip rule so as to get the judgment clarified, and, my Lord, we will after the hearing has come to an end."
Rimer J has reserved judgment. We are told that his judgment delivered this term, but that he has indicated an intention to hand it down during September or October. It is the application to amend the order made under the slip rule of which notice was given, by Mr Browne-Wilkinson in that passage which is now before us. The application is opposed, not by Lasco which continues to take no part in this litigation, but by Mr Koshy who has instructed counsel to appear on his behalf. It is, perhaps, pertinent to note that Mr Koshy claims to be beneficially interested in Lasco through a chain of off-shore companies and discretionary trusts.
The only question for the court on this application, as it seems to me, is whether there is an accidental slip or omission in the order of 28 March 2001. I have no doubt that it was not the intention of this Court on the 28 March 2001 to make an order which affected anyone other than the...
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