Paul Gregory Allen acting as trustee in the estate of Adrian Jacobs (Deceased) (Appellant/ Claimant) v (1) Bloomsbury Publishing Ltd (Respondent/Defendant) (2) Joanne Kathleen Murray (Pka Jk Rowling)
| Jurisdiction | England & Wales |
| Judge | Lord Justice Lloyd,Lord Justice Sullivan,Lord Justice Rix |
| Judgment Date | 14 July 2011 |
| Neutral Citation | [2011] EWCA Civ 943 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A3/2011/0944 |
| Date | 14 July 2011 |
[2011] EWCA Civ 943
Lord Justice Rix
Lord Justice Lloyd
and
Lord Justice Sullivan
Case No: A3/2011/0944
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
(CHANCERY DIVISION)
(MR JUSTICE KITCHIN)
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr M Hicks (instructed by James Love Legal) appeared on behalf of the Appellants
Mr W Edwards (instructed by Reynolds Porter Chamberlain) appeared on behalf of the 1 st Respondent
Mr J Baldwin QC (instructed by Schillings Solicitors) appeared on behalf of the 2 nd Respondent.
This appeal is brought by the claimant against an order of Kitchin J made on 18 March 2011. The order required the claimant to pay into court substantial sums in respect of the costs of each defendant by three dates between April and November this year, with the sanction that if any of the sums was not paid into court by the specified date the action is to be struck out. The order was made on applications by the first and second defendants, which were for summary judgment or, in the case of the first defendant, alternatively for security for costs. The judge's order also provided that the costs of the applications which led to his order were to be costs in the case.
The claimant complains of three things: firstly, the amount of the sums ordered to be paid into court; secondly, the fact that it was made as an unless order rather than an order staying the proceedings if the sums were not paid on time; and thirdly, the order for costs. Permission to appeal does not seem to have been sought from the judge but was granted by Rimer LJ, who also stayed the order for payment and the unless order, and by a later order also stayed the judge's directions given by way of trial preparation and case management. The trial is due to take place in February next year. Rimer LJ imposed a condition on granting permission to appeal of payment in of the sum of £50,000 which was done.
Before the judge at the first hearing the claimant was represented by Mr Robert Howe QC and Mr Mark Engelman, the first defendant by Mr Andrew Sutcliffe QC and Mr W Edwards, and the second defendant by Mr John Baldwin QC and Mr Adrian Speck. At the second hearing before the judge each party was represented only by the respective junior counsel. On the appeal Mr Howe signed the skeleton and presumably settled the grounds of appeal for the claimant, but at a late stage the claimant changed his solicitors and counsel so that he was represented at the hearing of the appeal by Mr Michael Hicks. The defendants confined their representation on the appeal to Mr Baldwin for the second defendant and Mr Edwards for the first defendant, submitting a joint skeleton. Mr Hicks elaborated his submissions in ways that were not altogether foreseeable from Mr Howe's skeleton argument and grounds; only one specific point was entirely new, with which I will deal in due course.
The claim is for damages for breach of copyright, the claimant asserting that in the book Harry Potter and the Goblet of Fire substantial parts of a publication, Willy the Wizard, written by the late Mr Adrian Jacobs, were copied in breach of copyright. The first defendant is the publisher of The Goblet of Fire and the second defendant is the author. The claimant, Mr Paul Allen, asserts title to sue on the following basis. The late Mr Adrian Jacobs was declared bankrupt in 1989. Willy the Wizard had been written and published in 1987. The copyright therefore vested in the Official Receiver on the making of the bankruptcy order. In 2004 the Official Receiver assigned the copyright and any causes of action related to it to Mr Jonathan Jacobs, the only son of Mr Adrian Jacobs. In 2008 Mr Jonathan Jacobs assigned the copyright and the causes of action to Mr Paul Allen and appointed him as the trustee of the estate of the late Mr Adrian Jacobs. The judge held that Mr Paul Allen was a nominal claimant for the purposes of CPR 25 and subject to one point this conclusion is not challenged. Mr Jonathan Jacobs lives in California and is said to have substantial means. He has been joined to the proceedings as a party for the purposes of costs, that is to say with a view to the possibility of an order being sought for costs to be paid by him under section 51 of the Senior Courts Act 1981.
The first defendant applied for summary judgment on the grounds that the claimant had no real prospect of success, with an alternative order sought that the claimant should be required to provide security for the costs as a condition of being allowed to pursue the claim or under CPR 25. The second defendant applied for summary judgment with no express fallback by way of alternative. The judge heard the application from 28 to 30 July 2010 and gave judgment on 14 October. He considered the case as to copying and also as to whether Goblet of Fire incorporates a substantial part of Willy the Wizard in some detail. He concluded that the claim might succeed but that it is improbable that it would. He indicated at the end of his judgment that he was minded to make an order imposing a requirement of payment into court as a condition of allowing the claimant to pursue the claim. He adjourned to a later hearing the question of whether he should do so and, if so, what requirement he should impose, because the claimant made the point that he had not yet put in evidence directed to that point.
The adjourned hearing came before the judge on 15 March this year, on which he gave judgment on 18 March. He made the order complained of after some debate following the delivery of his judgment on 18 March. We were shown, as he had been, the provisions relevant to an order requiring a payment of money into court by way of security for costs. The judge set them out in his judgment. Part 25 deals specifically with such orders. Part 24 provides for the possibility of a conditional order as a possible outcome of a summary judgment application whether by the claimant or the defendant. Part 3 allows for an order to be subjected to conditions, including payment into court (see rule 3.1(3) to which rule 24.6 makes an express cross-reference). It also allows for an order for payment in case of failure without good reason to comply with a rule, a practice direction or a pre-action protocol (see rule 3.1(5)) to which costs incurred or likely to be incurred are relevant (see rule 3.1(6)).
The judge considered in his second judgment the rules and authorities on these several different provisions. The principal authorities on the several rules and their inter-relationship are Olatawura v Abiloye [2003] 1 WLR 275 and Huscroft v P&O Ferries [2010] EWCA Civ 1483. The judge summarised the position in his paragraph 32 as follows:
"(i) the court has jurisdiction under rule 24.6 to make an order which is tantamount to an order for security for costs;
(ii) that jurisdiction extends to requiring someone advancing an unpromising claim to secure the defendant's costs;
(iii) before ordering security for costs in any case, the court should be alert and sensitive to the risk that by making such an order it may be denying the party concerned a right of access to the court; whether or not the person concerned has raised or can raise the money will always be a prime consideration;
(iv) the court has a wide discretion to ensure that justice is done in any particular case;
(v) relevant considerations, besides the ability of the person to pay, include his conduct of the proceedings and the apparent strength of his case;
(vi) a party only becomes amenable to an adverse order for security under rule 3 once he can be seen either regularly to be flouting proper court procedures or orders or otherwise has demonstrated a want of good faith, that is to say a will to litigate a genuine claim or defence as economically as reasonably possible in accordance with the overriding objective;
(vii) likewise, an order for security for costs would not be appropriate in every case where a party appears to have a somewhat weak claim or defence;
(viii) exorbitant applications for summary judgment in misguided attempts to obtain conditional orders providing security for costs are not to be encouraged;
(ix) the occasions when security for costs is ordered solely because the case appears weak may be expected to be few and far between;
(x) it would be wrong to encourage litigants to regard rule 3.1 as providing a convenient means of circumventing the requirements of Part 25 and thereby providing a less demanding route to obtaining security for costs. When the court is asked to consider making an order under rule 3.1( 3) or 3.1(5) which is or amounts to an order for security for costs or when it considers doing so of its own motion it should bear in mind the principles underlying rules 25.12 and 25.13. In my judgment the court should also bear this principle in mind when considering whether to make a conditional order under rule 24.6."
That summary is not challenged before us.
The judge then referred to the principal material factors. He considered that the case would probably fail and the summary judgment claim had only just not succeeded. Mr Allen is a nominal claimant who has made no disclosure of assets in response to evidence casting doubt on whether he would be able to satisfy any significant costs orders against him, although he does have an indemnity under contract from Mr Jonathan Jacobs. Mr Allen and those behind him in relation...
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