Infiniteland Ltd and John Stewart Aviss v Artisan Contracting Ltd and Artisan (UK) Ltd
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE PETER GIBSON,Lord Justice Sedley,LORD JUSTICE SEDLEY,LORD JUSTICE PILL,Lord Justice Chadwick,LORD JUSTICE CHADWICK |
| Judgment Date | 23 June 2005 |
| Neutral Citation | [2005] EWCA Civ 791,[2004] EWCA Civ 824 |
| Date | 23 June 2005 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | A3/2004/1257,A3/2004/1257(B) |
[2004] EWCA Civ 824
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
(MR JUSTICE PARK)
Royal Courts of Justice
Strand
London, WC2
Lord Justice Peter Gibson
Lord Justice Sedley
A3/2004/1257(B)
A3/2004/1257(C)
MR PAUL DOWNES (instructed by Messrs Bircham Dyson Bell, London SW1H 0BL) appeared on behalf of the Applicants
MR ROBIN HOLLINGTON QC and MR ROBERT LEVY (instructed by Messrs Taylor Vinters, Cambridge CB4 4DP) appeared on behalf of the Respondents
I will ask Lord Justice Sedley to give the first judgment.
On 28th May 2004 Park J dismissed the claimants' claim against the defendants for misrepresentation and breach of warranty in relation to a share sale agreement. He gave judgment in favour of the defendants on their counterclaim for over £500,000, the balance of the price, together with interest and costs. The claimants, unless they can succeed in an appeal, face a potentially ruinous debt.
The judge, however, gave the claimants permission to appeal on all issues save one. His grant of permission took the following conditional form:
"(8) The Claimants have permission to appeal save on the issue of misrepresentation dealt with in paragraphs 84 to 97 of the judgment, the said permission to be subject to the following condition ('the Appeal Condition'), namely that, without prejudice to any application that may be made by the Claimants pursuant to paragraph (9) hereinbelow, the Claimants pay into court the sum of £350,000 (or provide an alternative form of security for the said sum to the satisfaction of the Defendants) on or before 18th June 2004, on the basis that (a) in the event that the appeal does not proceed or it does proceed and is determined in a way which leaves the costs order in paragraph (6) hereinabove undisturbed, the said sum (or security as aforesaid) be paid out to the Defendants towards discharge of the said order, and (b) in the event that the appeal proceeds and is determined in a way which does not leave the said costs order undisturbed, the said sum (or security as aforesaid) shall be dealt with in accordance with the directions of the Court of Appeal.
(9) In the event that the Claimants offer to the Defendants an alternative form of security as aforesaid which is not acceptable to the Defendants, the Claimants shall have liberty to apply to the court for directions—such application reserved to the trial judge.
(10) The time for the lodging by the Claimants of any Notice of Appeal be extended to Wednesday 16th June 2004.
(11) There be a stay of execution of the orders as to costs in paragraphs (4), (5) and (6) hereinabove (including the assessment of any such costs) until 18th June 2004, such stay to be extended pending an appeal by the Claimants if the Appeal Condition is complied with or, in the event that the Claimants apply to the Court of Appeal on or before 16th June 2004 for permission to appeal without the Appeal Condition, until 30th June 2004.
(12) There be a stay of execution pending an appeal by the Claimants of the orders in paragraphs (2) and (3) above, or, in the event that the Claimants apply to the Court of Appeal on or before 16th June 2004 for permission to appeal without the Appeal Condition, until 30th June 2004."
I do not think it is appropriate or necessary to resort, as we were at one point invited to do, to the judge's prior note as an aid to the construction of these perfectly clear orders and conditions.
Although by paragraph 9 of the order the judge gave liberty to apply to him for directions permitting an alternative form of security to be given were the defendants to reject some proffered alternative, it is evident that he was not at the time attracted by the alternative now on offer. In the result the practical course has, without demur, been accepted as being to apply to this court, which is already seised of the case, to remove or vary the condition.
The first question, adumbrated but quickly resiled from, was whether permission to appeal ought to have been unconditional. The claimants' case is that this is an appeal with a very good prospect of success. Although reasons for this are spelt out in their skeleton argument, and although one can see readily enough, reading his judgment, why the judge himself gave permission to appeal on all but one issue (to which I will come), this is no longer an application which depends in any way on the relative strength of the appeal, since Mr Downes for the claimants has not pressed his application to discharge the appeal condition altogether.
To the extent that it remains on the agenda, for my part I would in any event have no hesitation in declining to make permission to appeal unconditional. The possibility of doing this was considered with care by the judge after full argument, and he was entitled to take the view that there should be a quid pro quo for permission to appeal and for the staying of execution of his judgment, so as to afford the defendants an assurance of some payment if they were to hold the judgment. I can see no ground at all upon which this exercise of his discretion could be impugned.
The question is therefore whether the alternative form of security offered by the claimants is acceptable to the court, or whether it will be acceptable only if it takes the form proposed by the defendants.
The security offered by the claimants takes the form of equitable charges over the beneficial interest of the second claimant, Mr Aviss, in two properties which he and his wife hold in joint names. Both are subject to first and second legal mortgages. One of them, a house in Lord North Street, Westminster, carries little equity but might yield a net sum of up to £250,000 of which the second claimant would be entitled to half. The principal source of security on offer is the Manor House at Tatsfield in Kent. This is said to be worth £2.6 million and to have attracted so far an offer of £2.4 million. The first mortgage secures £810,000; the second £200,000 — both incidentally debts incurred in connection with the subject matter of the litigation. Allowing for costs of sale, the second claimant anticipates that his share of the equity is worth about £750,000.
On the evidence at present before us, these are the second claimant's only appreciable assets. He does, however, on his own avowal enjoy an income of the order of £144,000 a year.
The claimants propose that they be permitted to grant the defendants equitable charges over the second claimant's beneficial interests in the two properties, on the undertaking that Mrs Aviss, the second claimant's wife, will execute a deed of priority...
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