Koshy v DEG-Deutsche Investitions- und Entwicklungsgesselschaft mbH
| Jurisdiction | England & Wales |
| Judge | Lady Justice Arden,Sir Peter Gibson,Lady Justice Smith,Lord Justice Ward |
| Judgment Date | 05 February 2008 |
| Neutral Citation | [2007] EWCA Civ 338,[2008] EWCA Civ 27 |
| Docket Number | Case No: A3/2006/0209 |
| Court | Court of Appeal (Civil Division) |
| Date | 05 February 2008 |
[2007] EWCA Civ 338
Lady Justice Arden and
Sir Peter Gibson
Case No: A3/2006/0209
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
(MR JUSTICE RIMER)
Royal Courts of Justice
Strand, London, WC2A 2LL
MR H PAGE QC, MR J MCDONNELL QC and MR A CHICHESTER CLARK (instructed by Messrs De Cruz) appeared on behalf of the Appellant.
MR A THOMPSON (instructed by Messrs CMS Cameron McKenna LLP) appeared on behalf of the Respondent.
This is an adjourned application for permission to appeal from the order of Rimer J dated 20 February 2006 striking out Mr Koshy's claim in this action. This application is concerned only with Mr Koshy's claim against DEG, as his application for permission to appeal against the second defendant was dismissed by Chadwick LJ and Lloyd J on 24 May 2006. They did not then deal with the written application for permission to appeal with respect to the striking out of the claim against DEG. They held that the court considering the question of permission to appeal that part of the order of Rimer J should have before it both the judgment of Chadwick LJ giving permission to appeal in an earlier action against DEG as well as a transcript of what had been said to Chadwick LJ on the occasion of that application.
The background to this case is complicated and it is clearly set out in the judge's judgment so I will not repeat it. The essential point is that, pursuant to limited permission to appeal granted by Chadwick LJ and Charles J by order dated 11 March 2002, Mr Koshy appealed to the Court of Appeal against an order as to costs of Harman J dated 20 March 1998, on an interim application in the action to discharge a freezing order which he contended had been obtained by the non-disclosure by DEG of material facts, as shown by two paragraphs of the judgment of Rimer J given after the trial of the same action. The costs totalled some £359,415. We are not concerned with the grounds upon which it is said that the order of Harman J should be set aside; suffice it to say that the judge held that had he not concluded that the claim should be struck out in consequence of an election by Mr Koshy or as an abuse of process by him. However, he would not have struck out the claim against DEG on the grounds that there was no substance in it. That appears from paragraph 72 of the judge's judgment.
The action before the judge was also an action to set aside the order of Harman J because, at the hearing of the appeal for which Chadwick LJ and Charles J gave permission, the Court of Appeal dismissed Mr Koshy's appeal. However, the judge was persuaded that the claim against DEG should be struck out because essentially—and here I summarise—Mr Koshy had chosen at the hearing of the appeal not to have an issue remitted to the Chancery Division, and that he had accepted as the price of pursuing his appeal that he should abandon all alternative procedural routes in the event of the appeal being dismissed, and that, while this was not strictly an election, this meant that it was an abuse of the process of the court for him to advance a subsequent claim.
It is said that this court should grant permission to appeal against that judgment. I should make it clear that the practice of the court is to grant permission if there is a real prospect of success; that is, that the prospect of success cannot be said to be fanciful or if there is some other reason for which there ought to be the hearing of an appeal. This court is not concerned with the question whether any appeal would ultimately succeed.
Mr McDonnell for Mr Koshy submits that the judge was in error because he interpreted the exchanges between counsel and the Court of Appeal as the making by counsel of the choice to give up any claim to have the order of Harman J set aside, called an argument the “wide” election, whereas he should have held that all but counsel agreed to forego on Mr Koshy's behalf was the prospect in the appeal of having an issue remitted for trial in the Chancery Division, with a view to be sent back to the Court of Appeal for final decision, called in argument the “narrow” election.
The members of this court hearing that appeal were Mummery, Hale and Carnwath LJJ. Mr McDonnell also submits that the Court of Appeal would have had no jurisdiction to exact the wide election from Mr Koshy. He further submits that Rimer J came to the conclusion that there was an abuse of process by adopting the reasoning of Hart J on an application in the action in which Harman J's order was made. Mr McDonnell submits that the judge failed to conduct a proper review of the circumstances in which the present new action had come to be brought.
Mr Thompson for DEG submits that the judge made no error. He submits that the effect of the exchanges was the wide election. I should say that this was also the view of Jonathan Parker LJ, who refused permission on paper. He further submits that the Court of Appeal dismissed Mr Koshy's appeal against the order of Harman J not merely on a procedural ground but having in substance considered whether the two paragraphs on which Mr Koshy relied could support his appeal. He therefore submits that the judge was clearly right that the commencement of the new action was an abuse of process.
Counsel have argued this case with skill and I do not propose to deal with their arguments in full. I have come to the conclusion that this court should grant permission to appeal and I will explain briefly my reasons.
First, in reaching his decision Rimer J had to consider the effect of the exchanges between counsel for Mr Koshy, who was not Mr McDonnell, and the court. At the very end of the exchanges Mummery LJ said to counsel:
“I put it to you that if you pursued this appeal, having turned down that offer or indication, you were putting all your eggs into this basket.”
The basket is not defined. When Mummery LJ gave judgment he described the indication by counsel as an indication:
“… he would not agree to [the application to set aside the Harman order being remitted to Rimer J]. He wished to pursue the appeal. It was made clear that he would rather take the risk that the appeal might be dismissed than have the matter of costs in the Harman Order referred back to the judge at first instance.” (paragraph 17)
It is arguable that this statement of the choice made by counsel records that the choice made was simply to give up the prospect of asking the Court of Appeal to remit an issue to the Chancery Division and it follows that the proper explanation of the expression “all your eggs in one basket” is to the same effect. In addition it is arguable that the premise on which counsel for Mr Koshy persisted with the appeal was that Mr Koshy wanted the Court of Appeal to rule on the merits of his case for saying that the order of Harman J on costs should be set aside heard by the Court of Appeal, and that he was prepared as the price of continuing with his appeal to give up the possibility of any further application in the appeal to have the matter remitted to the Chancery Division.
Our attention has been drawn to the fact that in paragraph 23 of his judgment Mummery LJ does not indicate that the proper course would, but for the choice made by Mr Koshy, have been an application made at first instance. I should say that Hale and Carnwath LJJ agreed with the judgment of Mummery LJ.
Secondly, there is an issue now raised but not raised below as to whether the Court of Appeal dealt with the argument that the order of Harman J on costs should be set aside on the basis of the two paragraphs in the judgment of Rimer J in substance, or whether the Court of Appeal was simply deciding as a matter of procedure that the Court of Appeal could not simply look at those two grounds in themselves and they would have to be the subject of a full hearing in the usual way. Mr Thompson argued for the first interpretation but as against that we were taken to the exchanges before the Court of Appeal in which Mummery LJ expressly refers to the possibility that the Court of Appeal might:
“… decide that Mr Koshy failed on procedural grounds [but that he had elected against any other procedure]”.
In my judgment this is an arguable point. If Mr Thompson is right, it may mean that there is no possibility of any fresh action because the previous decision of the Court of Appeal constitutes res judicata.
Thirdly, the effect of the decision of the judge is that the claim that the order of Harman J should be set aside for non-disclosure is never heard by a court. Mummery LJ in his judgment considered that the appeal before him had to be dismissed was not “entirely fair or satisfactory” and it may be that it was this point which caused him to make that comment.
I asked Mr Thompson in argument whether he could provide any explanation for the court depriving Mr Koshy of the possibility of starting a fresh action if his appeal had been dismissed on purely procedural grounds, and his response was essentially that the court had dealt with the matter on substantive grounds. That of course depends on whether that in fact occurred, and I do not feel in a position on this application to form a clear view on that. Mr McDonnell submitted that it was not open to the Court of Appeal to require a wide election. He relied in particular on a dictum of Lord Maugham in Lissenden v Bosch [1940] AC 412 at 420:
“His right of appeal is his by statute and rule, and does not depend on...
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