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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Vedatech Corporation v Seagate Software Information Management Group Ltd [2001] EWCA Civ 1397 (27 July 2001) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2001/1397.html Cite as: [2001] EWCA Civ 1397

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IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CHANCERY DIVISION
(Mr Justice Lightman)

		Royal Courts of Justice Strand London WC2 Friday, 27th July 2001

Friday, 27th July 2001

1. LORD JUSTICE CHADWICK: This is a renewed application for permission to appeal, from part of an order made on 9 May 2001 by Lightman J in proceedings brought by Vedatech Corporation against Seagate Software Information Management Group Ltd (a company formerly known as Holistic Systems (UK) Limited),with an application for a stay of execution pending appeal if permission is granted
2. The proceedings came before Lightman J for case management directions at a time when the trial, which was estimated to last some ten days, had been fixed for 5 June 2001; that is to say, it was then some four weeks away. The judge was faced with an application to vacate the trial date, and to refix the trial for commencement on or after 1 February 2002 with a revised estimate of fifteen days' on the grounds that the claimant, a company incorporated in Japan, was no longer in a position to continue to instruct the solicitors who had been acting on its behalf. The claimant's intention was to appear at trial by an officer, Mr Mani Subramanian. Mr Subramanian required time to prepare himself for that task. The judge acceded to that application. He gave permission, upon Mr Subramanian's undertaking to comply with the requirements of Part 39 of the Civil Procedure Rules, for Mr Subramanian to represent the claimant.
3. When this application first came before me last month Mr Subramanian appeared for the applicant company. I took the view that the undertaking given to Lightman J had not been complied with. I adjourned the application before me to enable Mr Subramanian to have the opportunity to do that. I am satisfied that the necessary steps to comply with CPR Part 39 have now been taken.
4. Paragraph 13 of the order of 9 May 2001 required payment into Court of the sum of £60,000 as security for costs by no later than 31 May 2001. That payment was to be made pursuant to an order of Master Moncaster which had been made on 13 February 2001. Failing payment of that £60,000 the claimant's claim was to be dismissed. An application for a stay of that paragraph was refused by Peter Gibson LJ on paper on 30th May 2001. I am told by Mr Subramanian, and there is no reason to doubt it, that the payment of £60,000 was made as required by paragraph 13 on or about 31 May 2001.
5. Paragraph 14 of the order of 9 May 2001 required payment of a further £141,750 to be made by four monthly instalments of £30,000 on 30th June, 31st July, 31st August and 30th September 2001, with a fifth instalment of £21,750 on 31 October. Peter Gibson LJ did not find it necessary to address the question whether there should be a stay of that paragraph also. As he said, at the time when the matter was before to him on paperon 30 May 2001, there was no immediate urgency in relation to instalments due at the end of June and thereafter. Further, paragraph 14 does not include an "unless" provision that the claimants claim be dismissed if payments are not made.
6. Mr Subramanian tells me that the payment on 30 June was not made. He has made application in the Chancery Division to vary paragraph 14 of Mr Justice Lightman's order on the basis of amendments to the pleadings, and the defendants have made a cross application to strike out his claim on the grounds that the payment of £30,000, due on 30th June, has not been made. I am told that those applications are due to be heard in the Chancery Division early next week.
7. The application for permission to appeal is in relation not only to paragraphs 13 and 14 but also, and necessarily, in relation to paragraph 16, by which the judge refused to discharge the order that Master Moncaster had made on 13 February 2001, and an earlier order, made on 23rd April 1998, for the payment of costs in the sum of £58,000. The payment of £58,000 ordered in April 1998 has been made, so also (as I here said) has the payment of £60,000; together a total of £138,000. The payment of £141,750 payable by instalments, as I have indicated, has not been made and no instalments of that amount have yet been paid.
8. In my view there is a clear difference between the application for permission to appeal against the two orders for payment of £58,000 and £60,000 and the order made in paragraph 14 for the payment of £141,750. In relation to the first two orders an appeal to this court would be a second-tier appeal to which section 55 of the Access to Justice Act 1999 applied, and would be within CPR 52 rule 13.
9. Permission to appeal a decision which itself was made on appeal is not to be granted unless the appeal raises some important point of principle or practice or there is some other compelling reason why the appeal should be entertained by this court. Despite Mr Subramanian's clear exposition, I am not able to identify any point of principle or practice in relation to the first two orders - that is the orders made by Master Moncaster and confirmed by Lightman J - nor do I think that in relation to those orders, there is any compelling reason why an appeal should be entertained by this court. The position is that £138,000 has been paid into court as security for what is plainly expensive and complex litigation by a company with no assets within the jurisdiction. It seems to me that this court would not interfere with that exercise of discretion. The position in relation to the £141,750 is, however, different. In that case there is no second appeal. This would be a first appeal, to which the more general test applies, namely whether there is a realistic prospect of success on an appeal.
10. Mr Subramanian takes two main points. First, he says that the judge misunderstood the figures; secondly, that the judge failed to take proper account of the fact that some £236,000 was already the subject of a Part 36 offer made by the defendants. There is, as it seems to me, some force in both of those points. The judge, in the course of interlocutory exchanges with counsel in argument, appears to have held the view, perhaps understandably, that the total of the defendant's costs of this litigation were in the region of £900,000. In fact, the figures produced by the defendants for a trial due to start in June this year were some £577,000: a very large figure, but substantially less than the £900,000 which was, at least at one stage in the judge's mind. Although counsel for the defendants sought to correct the judge's understanding, it is not clear to me that he succeeded in doing so. The error, if there were an error, may not, in the event, have influenced the judge's mind in relation to the £141,750 which he did order; but it seems to me impossible to be confident that there may not have been some on-going effect arising from that misunderstanding.
11. The second point is whether, in the circumstances that the Part 36 offer relates to a particular element of the claim - that is to say a quantum meruit claim in damages - and the issue is whether. That offer can be taken into account, and if so to what extent, in relation to the costs of pursuing the other elements of the claim. Again, that seems to me to be a point which may be capable of some argument.
12. However, it would not be appropriate to decide, at this stage, whether those points offer any real prospect of success. The reason is that, if the Court is to make an order staying the instalment payments which are going to accrue due over the next three or four months, it must first to give the defendant the opportunity to be heard. If they are to have the opportunity to be heard on the question of stay, they can be heard on the question whether permission to appeal should be granted. Indeed they can be heard - without further expense - at the same time on the question whether, if permission were granted, the appeal should succeed.
13. What I propose to do, therefore, is to dismiss the application for permission to appeal insofar as it relates to paragraphs 16 and 13 of the judge's order; but to stand over the application for permission to appeal against paragraph 14 of that order with a direction that the application be listed on notice, together with the application for a stay of the instalment payments, with the appeal to follow if the application for permission is successful. In the meantime, however, I will stay the instalment payment which became due on 30 June, and the further payments which will become due on 31 July, 31 August and 30 September. It is unnecessary to stay the final instalment due on 31 October because I intend that the application and the appeal should be heard well before that date. The application and the appeal (if permission be granted) should be listed for a convenient hearing during October.
14. In giving those directions I take into account that the payment of £141,750 is based upon the estimated future costs of preparation for and attendance at a 10-day trial commencing on 5 June 2001. Of that sum £75,000 is wholly attributable to brief and refresher fees at trial and a substantial further sum, some £58,000, is attributable to the solicitor's costs of attending trial. The bulk of the costs, therefore, in respect of which security has been ordered will not be incurred until much closer to the trial date in February. It seems to me, therefore, that staying instalment payments over the vacation months is unlikely to produce any serious prejudice to the defendants. The effect of the stay which I order may well be that the applications before Hart J next week will have become academic. It is important that my order be communicated to the defendant and to the Chancery listing office as soon as possible so that the time of a wasted appointment should be saved.
15. I will give permission to the defendant, who is not here today to apply to this Court, on not less than 48 hours notice to Mr Subramanian on behalf of Vedatech, to vary my order; but I should indicate that I give no encouragement to such an application. It seems to me that this matter can be properly dealt with at the beginning of next term on notice to the defendant.
Order: As above.