A3/2001/2656, A3/2001/2657, A3/2001/2658
Neutral Citation Number: [2001] EWCA Civ 1994
IN THE SUPREME COURT OF JUDICATURE           
COURT OF APPEAL (CIVIL DIVISION)              
APPLICATIONS OF DEFENDANT FOR                     
PERMISSION TO APPEAL
 
                               Royal Courts of Justice
                               Strand
                               London WC2
 
                          Thursday, 13th December 2001
 
B e f o r e :

LORD JUSTICE PILL

-and-

MR JUSTICE CHADWICK

- - - - - - - -

ANGELO PEROTTI
Applicant

- v -

(1) KENNETH CORBETT WATSON
(2) PENROSE MARGARET HELEN FOSS
(3) CATHERINE HUDSON

Respondents
- - - - - - - -
(Computer Aided Transcript of the Stenograph
Notes of Smith Bernal Reporting Limited
180 Fleet Street, London EC4A 2HD
Telephone No: 0171-421 4040
Fax No: 0171-831 8838
Official Shorthand Writers to the Court)
- - - - - - - -

The Applicant appeared in person.

MR C SEMKEN (instructed by Barlow Lyde & Gilbert, Beaufort House, 15 St Botolph Street, London EC3A 7NJ) appeared on behalf of the Respondents.
- - - - - - - -
J U D G M E N T
1.	LORD JUSTICE PILL: On the three remaining applications, Chadwick LJ will give the first judgment. 
2.	LORD JUSTICE CHADWICK: Mr Perotti has invited us to determine three applications for permission to appeal, each the subject of a separate appellant's notice filed as recently as 4th December 2001, and each against orders made by Neuberger J within the past few weeks.
3.	The first of those applications (Court of Appeal reference 2001/2656) is for permission to appeal against an order made on 26th November 2001 in proceedings HC012374 and HC920248 between Mr Perotti and Mr Watson. The second, 2001/2657, is for permission to appeal against an order made on 30th November 2001, in the same proceedings. The third, 2001/2658, is for permission to appeal against an order also made on 26th November 2001 in proceedings HC9805104, to which the named defendants are Messrs Collyer-Bristow, a firm of solicitors, and Mr Frank Hinks, a member of the Bar.
4.	There were three applications before Neuberger J on 26th November 2001. The first was an application for permission to appeal against an order made by Master Moncaster on 25th September 2001. The judge dismissed that application, subject to Mr Perotti having permission to renew the application if his appeals against the committal order and the search and seizure order, which had been the subject of consideration in this Court over the past three days, were successful. Those appeals have not been successful. We are not concerned with that first application before Neuberger J.
5.	The second application before the judge was an application, in proceedings HC9805104, for disclosure of certain bank documents in the possession of Mr Watson and his former firm, Mackrell Turner Garrett. The judge dismissed that application. It is against that part of his order of 26th November, paragraph 2, that Mr Perotti seeks permission to appeal in the third of the applications to this Court, application 2001/2658.
6.	The third application before Neuberger J on 26th November 2001 was an application by Mr Watson for permission to continue proceedings commenced in Switzerland in relation to a sum of money, some £100,000, which, as Mr Watson and his advisers claim, represents the proceeds of the £119,000 raised on a mortgage of Mr Perotti's property at 43A Ridgmount Gardens. The judge made an interim order, adjourning that application to 30 November 2001; but gave Mr Watson permission in the meantime to continue proceedings in Switzerland and to freeze any assets of Mr Perotti found in Switzerland. That part of the order of 26 November 2001, paragraph 3, is the subject of the first of the applications to this Court, 2001/2656.
7.	On 28th November 2001 Neuberger J wrote to both the parties, indicating that he had had further thoughts about the need for a hearing on 30th November in relation to the Swiss proceedings. He wrote:
“My present view, which is, of course, only a provisional view, is that the basis upon which Mr Watson's application was adjourned should continue until after the Court of Appeal has determined Mr Perotti's appeals, assuming that those appeals are heard in December 2001. I reach that conclusion for a number of reasons. First, provided that the money is safely 'frozen', there is no particular urgency in the application. Secondly, Mr Perotti and his legal advisers need to concentrate on the appeals. Thirdly, the outcome of the appeals could affect the right course to take in relation to Mr Watson's application. Fourthly, given the admitted contempt in connection with the freezing order, it seems inappropriate to accord an early return date for Mr Watson's application to be heard. Fifthly, concern about a contempt application hanging over Mr Watson's head and/or Barlow Lyde & Gilbert's head is not really justified. If the contempt was due only to an oversight, any penalty other than a disallowance or order for payment of relevant costs would almost certainly be inappropriate (albeit that any unfair advantage obtained against Mr Perotti as a result of the contempt would almost certainly have to be forgone). If the contempt was deliberate or there was some other aggravating factor, then it would be inappropriate to be much concerned about prejudice to the contemnors caused by a contempt application hanging over their heads for a few weeks.” 
8.	That letter prompted Messrs Barlow Lyde & Gilbert, solicitors for Mr Watson, to reply on the same date, 28th November 2001. They indicated their consent to the course proposed, but went on to say this:
“We would wish, however, to remind the Court that we understand from our Swiss lawyers that:
(1) they will not receive the official confirmation from the Collection Office of the amount being held in Mr Perotti's account with Credit Suisse (believed to be CHF 243,980) until 4 or 5 December 2001; and
(2) the amount of CHF 243,980 will thereafter be transferred in or about mid-December to an account with our Swiss lawyers and the 'freeze' in respect of Mr Perotti's account with Credit Suisse will be at an end.
We shall, of course, ensure that these monies are preserved in the account with our Swiss lawyers until such time as the Court deals with Mr Watson's application.
On the footing that the Court is content that the Swiss proceedings should continue to run their course, leading to the transfer of the money to our Swiss lawyers' account, there to be held pending judgment in Mr Watson's application, we consent to the adjournment your Lordship proposes.” 
9.	Having received a copy of that letter Mr Perotti sent a message to the judge on 29th November, indicating that he wished the hearing fixed for the following day to proceed. Thus it was that - notwithstanding the suggestions in the judge's letter of 28 November 2001 - the matter adjourned by paragraph 3 of the order of 26th November came back before the judge on 30th November. On that day, upon undertakings from Barlow Lyde & Gilbert (1) to instruct named lawyers in Switzerland to hold all monies paid pursuant to the Swiss proceedings in a bank account in their name to the order of Barlow Lyde & Gilbert, and (2) not to authorise or instruct those Swiss lawyers without the prior consent in writing of Mr Perotti or further order of the English Court, the judge made an order, first, that Mr Watson's application be adjourned to be heard on the first available day after judgment on the appeals which have been before the court this week; and second, that Mr Watson have permission in the meantime to continue the Swiss proceedings until after judgment in that application or further order in the meantime. That order of 30th November 2001 is the subject of the second application in this court, 2001/2657.
10.	It is convenient to take the first and second applications to this court (that is 2656 and 2657) together. The short point is whether the judge was entitled to take the view that in all the circumstances - including the fact that Mr Watson and Barlow Lyde & Gilbert accepted that some of the steps taken in Switzerland were in breach of undertakings which they had given when the freezing order and the search and seizure orders were made in June 1999, with the consequence that they had been in contempt of court - the appropriate order was that which he had proposed in his letter of 28 November. He said this:
“I am quite satisfied that the appropriate course to take today is substantially what I indicated in the correspondence, namely not to do anything in relation to the application of Mr Watson or in relation to the alleged contempt, but simply to ensure the money is frozen for the moment.”
11.	Mr Perotti's criticism is that the judge failed to appreciate that he would or might be prejudiced if monies left the control of the Swiss court and passed to an account held by Swiss lawyers; an account which, by reason of the undertakings given by Barlow Lyde & Gilbert, would be under the control of the English court.
12.	It never became clear to me in the course of Mr Perotti's submissions what that prejudice might be or why, if there were potential prejudice, that could not be avoided by a further order of the English court. It is pertinent to have in mind the judge's comment, in his letter of 28 November 2001, that any unfair advantage obtained as a result of the contempt would almost certainly have to be forgone.
13.	The important consideration, as it seems to me and as the judge recognised, was that the monies referred to in Barlow Lyde & Gilbert's letter of 28th November would be preserved, so that they would be available to abide the result of any decision in the English court as to their ultimate destination when Mr Watson's application was finally determined. If Mr Perotti persuades the English court that the money must be returned to his account with Credit Suisse - whether unconditionally or to await some further order of the Swiss court - I can see no reason why the judge should not make an order to that effect. But that is a matter for the judge. I should not be taken to give any indication that I think that that would be an appropriate order to make.
14.	All that we are concerned with on this application is whether there is a real prospect that the Court of Appeal would be persuaded that the judge was wrong to hold the ring until the appeals in this court, on the matters which have been before it this week, were determined. In my view, it is impossible to say that his decision was one with which the Court of Appeal would think it right to interfere. Accordingly, I would dismiss the applications 2001/2656 and 2001/2657.
15.	The third application, 2001/2658, is for permission to appeal against the judge's refusal on 26th November to make an order for the production of documents in Mr Perotti's proceedings against Collyer-Bristow and Mr Hinks. Mr Watson is concerned in that application to the extent that the documents are documents belonging to his former firm, or over which they have control, and in relation to which they wish to preserve confidence.
16.	The action against Collyer-Bristow and Mr Hinks is an action for negligence (sometimes described as “the third action”) against Mr Perotti's former legal advisers in the conduct of an action (“the second action”) brought by Mr Perotti against Mr Watson and other members of his firm. The complaint against Collyer-Bristow and Mr Hinks is that they failed to plead fraud in the second action against Mr Watson and others; with the consequence, so it is said, that Mr Perotti has suffered loss; that loss being the loss of the chance of recovering exemplary damages that he might have recovered in the action against Mr Watson.
17.	The application for production of documents was first made in March 2000. That application also was heard by Neuberger J. He refused, at that stage, to order disclosure, for the reasons given at page 15 of his judgment of 16th March 2000. He said this:
“In conclusion I am satisfied:
(a) that the Documents are not necessary or even particularly helpful to Mr Perotti in relation to the third action, at any rate at this stage;
(b) that Mr Perotti seeks the Documents is at least in part (and in my view mainly) for an ulterior motive, namely in relation to the first and second actions;
(c) that in any event he is seeking the Documents as a fishing expedition and/or really as discovery or disclosure and he is not seeking evidence;
(d) that it would be unfair on Mackrells [that is Mackrell Turner Garrett] if the Documents were produced at this stage, and that therefore it would be wrong to order disclosure unless there was a strong countervailing reason for such an order;
(e) far from there being a strong countervailing reason for such an order, it seems to me that, at any rate at this stage, it would be write wrong to increase the costs and likely length of any hearing, and cause likely bother to a number of people who would, I fear, be pestered and possibly embarrassed by Mr Perotti to give effect to the summons.” 
18.	The basis upon which the judge thought it unfair in March 2000 appears at page 13 of his transcript. He said this:
“...Mackrells object strongly to these documents being produced. It will involve at the very least a risk, and I suspect more than a risk, a likelihood, of clients of Mackrells, who have nothing to do with this matter, having their identity, and, to some extent, their affairs, revealed to Mr Perotti. Any firm of solicitors would be concerned about that. Plainly in an appropriate case, that concern has to be overridden because the interests of justice may require it. In such a case the court will order disclosure, notwithstanding the concerns of the person against whom disclosure is ordered, and the court will seek to protect the person against whom disclosure was ordered with appropriate terms.” 
19.	He went on:
“Mr Perotti will not like me saying this, but I have no real confidence that he will abide by any undertakings which he has made it clear he is prepared to offer as to keeping confidentiality.” 
20.	And then he referred to the judgment of Laddie J on the committal application.
21.	The judge referred back to those reasons in the judgment which he gave on 26th November 2001. He reminded himself of the nature of the action against Collyer-Bristow and Mr Hinks; and he reminded himself that he had dealt with a similar application in March 2000 and had dismissed it. He decided, however, that there had been a change of circumstances which enabled Mr Perotti to reapply and he declined to strike out the application. The basis of his view that there had been change of circumstances was, first, that the trial of the action was now nearer; and, secondly, that the concern that Mr Perotti was trying to get documents in connection with the second action against Mr Watson had fallen away, because that action had been struck out.
22.	The judge went on, however, to say that, nonetheless, he thought he should refuse the application for production of documents which had been renewed before him in November 2001. First, he said that he did not think the change of circumstances was sufficient to require him to alter his view formed in March 2000. Secondly, that the basis for the claim was so tenuous as to be hopeless. He said this:
“Mr Perotti accepts quite rightly that the bank records would only be relevant if he could establish that, through the failings of Collyer-Bristow and/or Mr Hinks, he could have established a claim in fraud against Mr Watson. I am of the view that it would have been quite inappropriate for Collyer-Bristow or Mr Hinks to have pleaded fraud and dishonesty on the information they had for the short period they were instructed to act against Mr Watson.” 
23.	It is plain that the judge thought that the prospects of showing that Collyer-Bristow or Mr Hinks were negligent in failing to plead fraud and dishonesty against Mr Watson and his firm, on the basis of the material which they had at the relevant time, were so slight as not to justify the onerous obligations that would be imposed on others and the risks of breach of confidence that would follow from an order for production at this stage.
24.	The judge went on to consider the argument advanced by Mr Perotti that, had Collyer-Bristow and Mr Hinks not been negligent, and had they drawn to his attention matters which they should have drawn to his attention, they would have been led on a train of enquiry which would have resulted in fraud being uncovered. But he emphasised that there was no sufficient causal link to support such a contention. He said this, at the bottom of page 8 in the transcript:
“Quite apart from all of this, I come back to the balancing exercise. It seems to me that even if I put the difficulties facing Mr Perotti too high, the tenuousness and uncertainty of his case, and indeed the weakness of his case, even as pleaded in the action that was struck out against Mr Watson, means he would only have a very weak claim for disclosure, at best. The consequences, in terms of prejudice to third parties, as discussed in my previous judgment, still exist, whatever Mr Perotti says.” 
25.	In my view, it is plain that the judge took into account the matters which he should have taken into account and did not take into account matters which should have been left out of account. At the end of the day, the decision whether to order production was a decision for the judge in the exercise of his discretion. No grounds have been shown which, to my mind, would justify the Court of Appeal in interfering with that exercise of discretion. More pertinently, no grounds have been shown which indicate that there is any real prospect of persuading the Court of Appeal that it should interfere.
26.	For those reasons, I take the view that the application in 2001/2658 should be dismissed also. 
27.	LORD JUSTICE PILL: I agree that each of the three applications should be refused for the reasons given by Chadwick LJ. I refer only to the application with respect to the money in Switzerland. Neuberger J ordered on 30th November that the application of Mr Watson dated 22nd November 2001 be heard on the first available date after judgment in the appeals upon which this Court has given judgment today. The judge further ordered that:
“The First Defendant [Mr Watson] do have permission in the meantime to continue the Swiss proceedings solely for the purpose of enabling the monies to be held in the aforesaid bank account until after judgment in the said Application or further order in the meantime.” 
28.	The bank account referred to is an account of Messrs Perreard de Boccard Kohler Ador & Associes, to the order of Messrs Barlow Lyde & Gilbert.
29.	Mr Perotti's submission, as I understood it, is that he fears prejudice from that paragraph in the order. He believes that if eventually there are Swiss proceedings in relation to the money, he may be at a disadvantage in those proceedings if the English court has permitted the proceedings by the first defendant in Switzerland to continue, rather than having them stopped by way of an order to that effect. I have no reason to believe that there could be any such disadvantage. No grounds for it have been put forward by the applicant; moreover, if there is a fear of disadvantage, the point put to us can be put to Neuberger J when the application is relisted, as it will be in the near future. The point is one for Neuberger J to consider, rather than for this Court to delay matters by considering by way of a grant of permission.
30.	In my judgment, the point is not an arguable one. For that reason and those given by Chadwick LJ, I agree that that application should be refused. For the reasons Chadwick LJ has given, I also agree in relation to the other two applications.
31.	This Court will now notify the listing officer in the Chancery Division that the committal appeal has been dealt with.
Order: Applications dismissed; no order as to costs.