Standard Bank Plc v Agrinvest International Inc. and Others

JurisdictionEngland & Wales
JudgeLord Justice Etherton,Lord Justice Longmore,Mr Justice Briggs,Lord Justice Moore-Bick,Lord Justice Ward
Judgment Date08 December 2010
Neutral Citation[2009] EWCA Civ 1322,[2010] EWCA Civ 357,[2010] EWCA Civ 1400
Docket NumberCase No: A3/2009/1527,Case No: A3/2009/1527+1528
CourtCourt of Appeal (Civil Division)
Date08 December 2010
Between
Standard Bank Plc
Appellant
and
Agrinvest International Inc & Ors
Respondent

[2009] EWCA Civ 1322

Before:

Lord Justice Etherton

Case No: A3/2009/1527+1528

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE COMMERCIAL COURT

QUEEN'S BENCH DIVISION

(MR JUSTICE FIELD)

Royal Courts of Justic

Strand, London, WC2A 2LL

Mr Richard De Lacy QC, Teresa Rosen Peacocke (instructed by Messrs Bristows) appeared on behalf of the Appellant.

THE RESPONDENT DID NOT ATTEND AND WAS NOT REPRESENTED.

(As Approved)

Lord Justice Etherton

Lord Justice Etherton:

1

This is an oral renewal of an application for permission to appeal the dismissal by Field J of 1) an application by Agrinvest International Inc (“Agrinvest”) to set aside the judgment in default dated 19 February 2009 in favour of Standard Bank Plc in Claim No 2007, Folio 1180 (“the Part 7 claim”); and 2) an application by Agrinvest, to set aside a judgment of Teare J dated 9 November 2009 and an order of Steele J dated 31 August 2007 in Claim No 2007, Folio 1156 (“the Part 8 claim”). The Judgment of Field J was given on 23 June 2009 and his order was made on the same date.

2

The factual background of the applications is set out fully in Field J's judgment. There is no need for me to repeat it.

3

It is convenient to deal first with the Part 7 claim. Field J concluded that Agrinvest would have a real prospect of success in defending the claim if the judgment was set aside, but the defence was, in his words, “far from overwhelming”. CPR 13.3 governs the circumstances for setting aside the Part 7 judgment. It provides that the court may set aside a judgment in default of acknowledgment of service or defence if the defendant has a real prospect of successfully defending the claim or it appears to the court that there is some other good reason why the judgment should be set aside or varied or the defendant should be allowed to defend the claim. In considering whether to set aside or vary the judgment, the matters to which the court must have regard include whether the person seeking to set aside the judgment made an application to do so promptly.

4

Field J, having carefully considered all the evidence, was of the view that Agrinvest's application to set aside the Part 7 judgment made after a year and two weeks was not made promptly. While acknowledging that promptness may not be the controlling factor under CPR 13.3, he said that it is a very important factor because there is a strong public interest in the finality of litigation. He said that in the circumstances there was no injustice in holding that a delay of twelve-and-a-half months is far too long.

5

In my judgment, Agrinvest has a real prospect of successfully arguing that Field J was wrong in principle in failing to place sufficient weight on the fact that, if the judgment is set aside, Agrinvest would have a real prospect of successfully defending the claim, and in failing to take into account that there was no cogent evidence that the claimant has been materially disadvantaged by the delay and that it is still possible to have a fair trial of the claim. I therefore give permission to appeal Field J's dismissal of the application to set aside the judgment in default in the Part 7 claim.

6

So far as concerns the judgments in the Part 8 claim, CPR 39.3 governs the application to set aside. Before Field J, Mr Richard De Lacy QC, who appeared then and appears today for Agrinvest, conceded that, if the application to set aside the Part 7 claim failed, the other application to set aside the Part 8 judgment would also fall. Field J said that, if it had been necessary to do so, he would have found the delay of fifteen months before making the application to set aside was too long:

“…bearing in mind in particular that the defendants knew, on 9 November 2007, that the Bank was not giving credit for the value of the Lakah Bonds, knew of the wording of clause 13.2 in the MFSA, and were alive to the argument that the Bank had terminated the transactions by the letter of 20th June 2000.”

7

The judgment of Teare J of 9 November 2007 in the Part 8 claim was made after a trial, albeit in the absence of the defendants. CPR 39.9 makes it a precondition of the court granting an application to set aside judgment after a trial that the applicant acted promptly when he found out the court had made an order against him. I see no reason to interfere with the conclusion of Field J that the delay was such that the applicant did not act promptly. Furthermore, before me Mr De Lacy has only sought to set aside paragraph 6 of the order of Teare J, which concerns the claims Agrinvest, Charles Chawafaty and Cairo Phoenix Foreign Trade Centre, in the Egyptian proceedings in relation to the option contract. Paragraph 6 of Teare J's order declared that they had no cause of action against the claimants in the Part 8 claim, namely Standard Bank Plc and Standard Bank Group Limited, and for that reason neither of those claimants has any liability in respect of those claims or under the option contract.

8

The declaration in paragraph 6 of Teare J's order would not preclude any defence of the Part 7 claim. Although the Kenyan bonds, to which paragraph 6 and the option referred to there relate, are mentioned in the defence to the Part 7 claim, they do not receive any specific mention in the counterclaim and are not alleged to be property of the defendants to the Part 8 claim or Agrinvest which was wrongly retained by the bank.

9

So far as concerns the jurisdiction issues, Mr De Lacy did not advance any argument before me, and there is none in the skeleton argument in support of the application for permission to appeal, showing that there is a real prospect of successfully contending that the declarations should not have been granted. Furthermore, the application is made only by Agrinvest and not also by Charles Chawafaty or Cairo Phoenix Foreign Trade Centre. Finally, I note that Agrinvest said in the skeleton argument in support of this application for permission that Agrinvest does not wish to assert that the substance of the dispute with the bank should be decided in any other forum than England and Wales.

10

For all of those reasons, but in particular because I do not see any reason to interfere with Field J's conclusion that the delay was such that the applicant did not act promptly within CPR 39.3, I would dismiss the application for permission to appeal both the order of Teare J and the earlier interim order of Steel J.

11

In correspondence with the court, the solicitors for the claimants in the Part 7 claim and for the claimants in the Part 8 claim have raised the issue of outstanding costs. Furthermore, there is pending an application by Agrinvest for a stay of the costs order of Field J. So far as concerns the application for a stay, that is properly dealt with at a hearing attended by both sides, and accordingly, insofar as that is before me, I adjourn that for an inter partes hearing.

12

So far as concerns the outstanding order for costs, it seems to me appropriate in all the circumstances that I should make it a condition of permission to appeal the order made by Field J in relation to the Part 7 proceedings that Agrinvest pays within fourteen days £3,530 for costs under the judgment in default, together with interest at the appropriate rate from the date of that judgment.

Between
Standard Bank Plc & Another
Claimant/Respondent
and
Agrinvest International Inc & Others
Defendant/Appellant

[2010] EWCA Civ 1400

[2009] EWHC 1692 (Comm)

Mr. Justice Field

Before Lord Justice Ward

Lord Justice Moore-Bickand

and

Lord Justice Etherton

Case No: A3/2009/1527

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION (COMMERCIAL COURT)

Mr. Richard de Lacy Q.C. and Mrs. Teresa Rosen Peacocke (instructed by Bristows) for the appellant

Mr. Stephen Auld Q.C. (instructed by Stephenson Harwood) for the respondent

Hearing dates: 20 th October 2010

Lord Justice Moore-Bick

Lord Justice Moore-Bick:

1

This is an appeal against an order of Field J. dismissing an application to set aside a judgment in default entered by the respondent, Standard Bank Plc (“SB”), against the appellant, Agrinvest International Inc (“Agrinvest”).

Background

2

The claim arose out of two pairs of contracts made between SB and Agrinvest on 26 th May 2000 under which Agrinvest sold certain securities to SB for prompt delivery and agreed to repurchase the same securities from SB at a future date at a price which reflected a commercial rate of interest over the intervening period. In commercial terms these transactions amounted to a short term loan on security, but in legal terms they constituted independent, albeit related, contracts of sale. The forward contracts were subject to the terms of a Master Forward Sale Agreement (“the Agreement”) dated 12 th May 2000. The securities in question were bonds issued by the Lakah Group, an Egyptian healthcare company, with a nominal value of US$14 million and global depository receipts (“GDRs”) also issued by the Lakah Group, with a nominal value of US$1,556,000. Under the terms of the Agreement SB was entitled to require Agrinvest to make margin payments if the value of the securities fell below certain levels. Failure to do so constituted an event of default which entitled...

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