Marketmaker Technology Ltd and Others v CMC Group Plc and Others
| Jurisdiction | England & Wales |
| Judge | Lord Justice Ward,Lord Justice Tuckey |
| Judgment Date | 23 May 2007 |
| Neutral Citation | [2007] EWCA Civ 639 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A2/2006/0400 |
| Date | 23 May 2007 |
[2007] EWCA Civ 639
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(MR JUSTICE STANLEY BURNTON)
Lord Justice Ward and
Lord Justice Tuckey
Case No: A2/2006/0400
MR J FERRIS (instructed by Messrs Wilson Barca LLP) appeared on behalf of the Appellant.
THE RESPONDENT DID NOT APPEAR AND WAS NOT REPRESENTED.
This is an application for permission to appeal certain of the orders made Stanley Burnton J on 13 February 2006. On that occasion he ordered that, in paragraph 1 of the order, unless the claimants paid the defendants the sum of £275,000 on account of their costs of the proceedings to date and secondly, pay £125,000 into court as security for the defendants' costs by 4.30pm on 13 March, then the proceedings be struck out without further order. In paragraph 3 he dismissed the claimant's applications for a stay of the costs order or a stay of the execution of that costs order. In paragraph 7 he struck out the claims of the second and third defendants and in paragraph 8 he ordered the defendants to pay the costs.
This matter comes before us after Sir Henry Brooke had dismissed the application, giving us his reasons on paper that he was not persuaded there was any real prospect of success and he added:
“The appellant's best point is their impecuniosity argument, that they were given every possible opportunity adduce proper evidence on this issue and they failed to do so.”
In those circumstances it is very difficult to see how it can be said the judge erred in the exercise of his discretion in making the order he did, and in paragraph 24 of his judgment he directed himself correctly in law on the approach he was entitled to take, if he considered that the justice of the case so required.
It is necessary to spell out a little bit of the history. The litigation began with an application for injunctions made without notice to Fulford J on the last day of the Easter term three years ago. The claimants were three companies then owned and controlled by the fourth claimant, Mr Naser Taher. The first company is a Chinese company perhaps now owned and controlled by Mr Taher's mother. The second and third claimants were companies incorporated in the British Virgin Islands, but they have now been wound up by order of the Eastern Caribbean Supreme Court and they take no further part in this application.
The defendants are a public company, CMC Markets UK Plc, and a wholly owned subsidiary incorporated in Australia. The third defendant is Mr Peter Cruddas, who is the main figure behind those corporate organisations. Fulford J granted injunctions, the first the so-called agency injunction which restrained the defendants from representing to anyone, and especially those in China where its business was being conducted, that they were not and had not been agents of CMC. The second injunction, so-called Chinese illegality injunction, restrained the defendants from performing any of its business in foreign currency exchange and financial derivatives in such a manner as to be in breach of Chinese law.
On 30 July 2004, on the eventual return date of these injunctions, Stanley Burnton J, after a two-day hearing, dismissed the application for those injunctions and gave his reasons on 8 October 2004. On 15 October 2004 he dealt with the costs arising out of those applications and he ordered the claimants to pay the cost to be assessed and, notably as a measure of his condemnation of the way the claimants had conducted that litigation, he ordered those costs to be assessed on an indemnity basis. Relevant for today's purposes, he ordered the claimants to pay £150,000 on account of those costs by 26 November 2004. He deferred payment because he was told that that application would be made for summary judgment in the sum of $350,000 but it is not without interest to note that no such application was ever made.
If I may say so, the judgment of 8 October was masterly and incisive. It subjected very complicated claims to a penetrating analysis and those claims were comprehensively dismissed in his concluding words, “The Claimants' application was for extravagant and unjustified relief”. In his judgment of 13 February 2006 (the judgment now under appeal) the judge made these comments about the July 2004 hearing. He said “in the course of my judgment I made detailed and negative comments [about] the claimants' case”, and also:
“I think it is apparent from my judgment that I came to the conclusion that Mr Taher, the fourth claimant, must have known when he made his witness statements and must have known when reviewing the claimants' particulars of claim that he was putting forward bad claims. There was considerable evidence of the effect and the embarrassment of the proceedings and in particular the injunctions obtained without notice would cause and did cause to the defendants, who, as companies and an individual engaged in financial services, are substantially reliant on their integrity and good reputation with regulators internationally and their clients.”
No attempt was made to appeal that order until it was belatedly put forward in August 2006 but it was dismissed by Sir Henry Brooke as being totally devoid of merit.
Since then, taking matters as shortly as I can, the matter came before Deputy Master Bard and an order was made, interestingly again to note, by consent, that the claimants' permit inspection of and provide copies of two agreements which had been referred to in the Particulars of Claim. They were ordered to pay the costs of that application of £1200 within 14 days. At a later stage, the fourth claimant in a witness statement in July undertook to pay that £1200 within 14 days of that date, July 2005, but significantly the money has not been paid and the documents agreed to be produced by consent have not been produced.
On 31 December 2004 the costs of the July application were assessed and they have been assessed at a sum just over £334,000. On 21 July 2005, at a time when the proceedings have been automatically stayed by operation of CPR 15.11 because no defence had been served and no application had been made for judgment in court of defence, the defendants applied to Master Tennant for unless orders requiring the payment of the costs of £334,000 and the £1200 ordered by the Deputy Master.
The claimants blame their previous solicitors for the inactivity and the failure to comply with instructions and to test that claim, the Master ordered that the claimants were to disclose communications between them and their solicitors, subject to any proper claim for privilege. They were also ordered to pay £10,000 on account of the costs of that application which was adjourned because of their conduct of the litigation and the costs were ordered to be assessed again on an indemnity basis. The Master stood over the remaining applications, including applications then being made by the claimants for the stay of the costs order.
Those matters came before Stanley Burnton J. He heard the matter first on 19 January when again the claim had to be adjourned, and it is pertinent to observe that in the course of that hearing the judge made perfectly plain, as appears from page 23 of the transcript of those proceedings, that security for costs was likely to be an issue. He said:
“Here we have Mr Taher who has made very serious allegations, many of which were wholly unfounded, causing enormous costs to be incurred, has failed to meet a costs order made against him, which was inevitably incurred as a result of his proceedings, and now he says, 'I can't afford to go on, to pay my own solicitors in respect of very expensive litigation which if it continues will result in additional costs being incurred'. Why should the defendants have to keep putting their hands in their pockets in circumstances in which I drew the inference when the application was originally made that the...
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