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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 >> Contract Facilities Ltd. v Estate of Rees & Ors [2003] EWCA Civ 1191 (23 July 2003) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2003/1191.html Cite as: [2003] EWCA Civ 1191

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IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
(HIS HONOUR JUDGE WEEKS QC)

		Royal Courts of Justice Strand London, WC2
		23rd July 2003

1. LORD JUSTICE ALDOUS: We were today to hear an appeal by a company called Contract Facilities Ltd against a decision and order of His Honour Judge Weeks QC of 6th December 2002. However, it appeared this morning that that appeal was struck out because of a failure by Contract Facilities to comply with an unless order made on 11th July 2003 by this court. In consequence, Mr Cogley, who appears today for Contract Facilities, sought relief from sanction under CPR 3.9. To deal with that application it is necessary to explain the nature of the proceedings and what happened thereafter.
2. The proceedings brought by Contract Facilities was for damages for breach of an agreement in writing. That agreement was between Contract Facilities and the shareholders of a company called Glaslyn Retirement Homes Ltd. That company had a wholly-owned subsidiary called Manor Hotel and Leisure Ltd. The assets of those companies consisted of two nursing homes and a hotel which were run by the shareholders. The agreement the subject of the action provided for the sale of the shares of Glaslyn for £1.45 million.
3. The issue of liability came before the judge. He set out the background facts. They were in summary these. In 1996 the shareholders wanted to retire and therefore sought a buyer for the business. A Mr Shuck was interested and it was agreed between him and the shareholders, subject to contract, that he would purchase the shares in Glaslyn using a company as a vehicle. The idea was that he would obtain the necessary finance from UCB and have a listing on the AIM market.
4. It was not until August 1996 that the solicitors for the shareholders were told that Contract Facilities was to be the purchasing company. On 6th September 1996 contracts were exchanged, with Mr Shuck signing on behalf of Contract Facilities and the shareholders signing personally. The effective date of completion was to be 31st October 1996, with power for one month's deferment upon notice.
5. Unknown to the parties, Contract Facilities had on 19th December 1995 been struck off under section 652 of the Companies Act 1985. The purchase price was not paid on 31st October and the completion date was deferred to the end of October. On or about the 19th or 20th November the shareholders' solicitors made a company search against Contract Facilities which brought to light that Contract Facilities had been struck off. They wrote on 20th November to Contract Facilities' solicitors, drawing to their attention the state of that company.
6. The result was that on 20th December 1999 an application was made for Contract Facilities' restoration to the register under section 653(2) of the Act. That application was supported by an affidavit sworn by Mr Shuck. The judge said this of it:

"45. On 23 October 1996, Mr Shuck swore a supporting affidavit, saying:

'At the time of its name being struck off the register of companies, (12 December 1995) the company was carrying on business and in operation and seeking to purchase nursing homes. It is solvent and able to pay debts as they fall due.'

46. That statement was not I think true. In his witness statement in this action, Mr Shuck says:

'I should point out that initially I had been envisaging purchasing Glaslyn's shares by another of my companies, Ideal Estates Limited, but as matters turned out, I decided to use Contract Facilities Limited.'"

7. The application was successful, with the result that Contract Facilities was restored to the register on 18th March 1997. That brought into play section 653 of the Act.
8. In these proceedings Contract Facilities claims specific performance of the contract, alternatively damages. Ultimately they only pursued their claim for damages. The shareholders contended that the agreement was void, alternatively came to an end for a variety of reasons. In consequence, they had not been in breach of the terms of the agreement.
9. For the purposes of this application there were two findings of fact made by the judge which are relevant. First, he held that there was no prospect of Contract Facilities, even if it had been in existence, being able to pay £1 million or any sum in that region in November 1996. Second, at most Contract Facilities could have expected to retain some 10 per cent of the purchase price under the terms of the agreement.
10. The judge went on to conclude, first, Contract Facilities were not ready, willing and able to complete the contract at the end of the November. In consequence Contract Facilities were in anticipatory breach of contract before 28th November. Second, the completion date could be extended only once and that time was of the essence at the second date. In consequence Contract Facilities committed a fundamental breach by not completing on 28th November. Third, the contract was lawfully terminated by the shareholders by the letter dated 29th November before Contract Facilities was restored to register and that restoration did not resurrect the contract. The judge therefore dismissed the claim and made a costs order against Contract Facilities subject to detailed assessment.
11. There followed an application to join Mr Shuck and other individuals to claim a costs order against them. The individuals were joined, but the application to make them liable for the costs of the trial was stayed pending appeal. There followed on 21st February 2003 an application by the respondents to impose conditions, which included giving security for the costs order on the appeal. That was subsequently dismissed.
12. On 24th March 2003 an application was made to the Court of Appeal to stay the order for costs. The court refused an unconditional stay of the order. In his judgment Waller LJ said this:

"11. What is the evidence about the possibility that this appeal might be stifled? The answer appears from paragraph 11, and paragraph 11 alone, of Mr Shuck's affidavit. What he says there is:

'I would find it very difficult to come up with the costs of the Court below for the Company and could not readily do so. The reason I entered into funding arrangements on behalf of the Appellant in the Court below was that I could not afford to advance the monies necessary to fund the action alone. I do have an income but I cannot keep funding this case. I will provide the £20,000 Security for Costs of the Appeal and I also have to pay Counsel's brief for the hearing to which this witness statement relates as well as the brief fee for the Appeal itself -- this will amount to around a further £15,000. My personal liability for costs will be determined after the appeal, should it prove unsuccessful, following the Order of HHJ Weeks QC in Bristol. The Respondents estimate their costs at around £130,000. The Respondents had their opportunity to obtain security for costs, knowing they were in litigation against a company with no assets. As mentioned above they obtained £15,000.'

12. It seems to me that that is exceedingly weak evidence that this appeal will be stifled if a stay is not granted. The normal position is that somebody is entitled to the fruits of the judgment below. A stay will not be granted, unless there is cogent evidence that the appeal will be stifled. As it seems to me, there is no cogent evidence that there would be a stifling of this appeal if this stay is not granted."

13. The result was that this court granted a conditional stay on payment of £50,000 into court, and it made an unless order for security for costs of the appeal to be paid by 4.00pm on 7th April 2003. 7th April came and the deadline of 4.00pm passed. Payment was made by cheque at 4.12pm. The explanation given for that was that Mr Shuck stated he had not appreciated that the order of 24th March was an unless order.
14. On 9th April the respondents started proceedings to have their costs assessed. The result was that there was a case management order that the Contract Facilities should supply their points of dispute by 25th May 2003. It should be noted that it is not possible for the court to grant an interim order for costs to be paid until the points of dispute have been received by the receiving party. It follows that delay in providing the points in dispute would be to the advantage of Contract Facilities because that would put back the time when any interim order for costs could be made.
15. On 1st May, a day before the points of dispute were to be delivered, Contract Facilities applied for an extension of time for the points of dispute to be served. That was granted on 15th May.
16. On 13th May an application was made to the Court of Appeal for relief from sanction under CPR 3.9. That was relief from the sanction for the order made on 7th April. That application came before Waller LJ on 13th May. He said this about the explanation as to why the order had not been complied with:

"First of all, what is Mr Shuck's explanation for being late? That is given not in a statement of Mr Shuck personally but a statement by Mr Tasselli, who is the solicitor acting for Contract Facilities on this appeal. Mr Tasselli, having referred to the order having been made, says that:

'A representative of my firm and counsel were at the hearing on 24 May 2003 and we had informed Mr Shuck of the Claimant that the £20,000 had to be paid into court by 7 April.'

The statement then goes on:

'Immediately upon receiving the Order at about 11.15am on 7 April 2003 I telephoned Mr Shuck to see where the funds were. He replied that he had not appreciated that there was an unless order in place. Mr Shuck was in a meeting in Birmingham and it became apparent that the fastest way to pay the funds into Court would be for a trainee from our firm to travel to Birmingham to collect the cheque from Mr Shuck. The trainee's train back was not due in until 3.57pm so it became apparent that the funds would not be paid into Court on time. As such I drafted the present application in haste and this was issued before 4 pm on the 7 April 2003. I had not appreciated that the application should be framed as a relief from sanction.

As can be seen from the court funds office's receipt the funds were actually paid into court on the 7 April at 4.12pm ie 12 minutes late.'

In correspondence following the service of that statement on the respondents, Mr Shuck and his solicitors were given the opportunity to expand on the explanation but they declined to do so on the ground that advice from solicitors to clients was privileged.

5. But the explanation is somewhat strange. It seems as though Mr Shuck did appreciate that he had to put up security by 4.00 pm on 7 April as early as about the 24th or thereabouts of March. It seems that he did not make any attempt to do so or to make the funds available because he did not appreciate that the order was an unless order. When notified of the order and that it was an unless order at 11.15 am on 7 April, his reaction was not to arrange for someone to come down to London with the cheque for the appropriate sum. The arrangement became that a trainee should go up from London to Birmingham to collect the cheque. Mr Heyt, who has appeared for the respondents, suggests that the only inference to be drawn from that explanation is that it was a deliberate act on the part of Mr Shuck not to comply with this order.

6. As it seems to me, this comes as close to being a deliberate breach of an order as can be. Mr Shuck does not explain why he had taken no steps in the time from 24 March to make arrangements to have this money in place and he has not himself explained why it was that even on 7 April he did not make arrangements to pay the money into court on time. In those circumstances Mr Tasselli's statement that the failure to comply with the order was not intentional is difficult to accept at its face value.

17. Waller LJ went on to consider whether an extension of time should be granted. He said this in paragraph 11:

"11. I have to say that I am somewhat concerned about the application and the basis on which it was made, and it seems to me right to take that factor into account when considering what I should do in relation to an extension of time. It seems to me that there is force in what Mr Heyt says, that the attitude of Mr Shuck to putting up this security and in endeavouring to postpone the assessment of costs is all one of a piece; that he is not happy to put up money in order to support the appeal he is making but that he wishes, so far as he may, to use the company as a sword but not to put his money where his mouth is. ...

13. I have given anxious consideration as to whether it is not time for Mr Shuck to appreciate that his word must be kept and that orders of the court should be kept, particularly unless orders and particularly where the breach comes as close to being intentional as it is possible to devise without it being actually intentional. Even Mr Kynoch accepted that it was reckless. But by a fine margin I have concluded that to dismiss the appeal would be disproportionate to the sin committed. ..."

18. I pause in the history to note that Waller LJ considered that the time had nearly come when relief from sanction should not be granted.
19. I return to the background facts. On 15th May 2003 Master Wright granted the appellant an extension of time for putting in their points of dispute, subject to an unless order. The points of dispute were served on 27th May and on 2nd June the respondents applied for an interim costs certificate. On 4th June Contract Facilities applied to His Honour Judge Weeks to vary the original costs order. That application appears to have been a step intended to delay an order for an interim payment, as its existence was deployed at the hearing before the Master which took place on 6th June. Master Wright did not accept that as an excuse and made an order for an interim certificate for payment of £37,000 to be paid into court within 14 days. The appellant was ordered to pay the respondent's costs assessed at £2,000.
20. The application to His Honour Judge Weeks to vary his order was dismissed on 24th June. There followed an application by the respondents to this court for security for costs. It came before the court (consisting of Waller and Hale LJJ) on 11th July, the appeal having been set down for hearing on 23rd July. The order made by the court was that unless the appellants paid the sum of £37,000 into court and the outstanding costs orders amounting to over £11,000 to the respondents by 4.00pm on 18th July, the appeal was to be struck out. In the judgment of the court, which is due to be handed down tomorrow, it said:

"8. The solicitors for Contract appear to have been put in funds to make such applications as they have deemed necessary to support the stalling tactics or to resist the respondents' attempt to get the order they need. That seems to indicate that funds are available through Mr Shuck. He is content to fund his solicitors but determined the respondents do not get any money from him. Mr Shuck's aim is clearly to try and win the appeal in which event the costs order will be reversed. Contract will survive and he will benefit from that survival. We assume that he through Contract would have every intention of seeking an order for costs against the respondents which he would have no compunction in enforcing. But if the appeal is lost Contract will have no assets and go into liquidation. Mr Shuck will then fight tooth and nail to prevent any individuals who backed the original action and who backed the appeal being liable for costs.

9. The order to supply security for costs for the appeal was not in fact complied with. The sum was provided ten minutes late. As Waller LJ indicated in relieving Contract from sanctions that conduct by Mr Shuck was very close to being deliberate. Indeed his conduct was such that it was a close run thing as to whether Contract should be relieved from sanctions and have their appeal dismissed.

10. The attempts however to prevent the respondents obtaining an enforceable order have continued. ..."

21. The result of that order of 11th July was that £37,000 had to be paid into court and a further amount of £11,000 had to be paid to the respondents' solicitors by 4.00pm on Friday 18th July, otherwise this appeal was struck out.
22. According to the evidence, cheques were sent on 17th July drawn on the account of a company called Worcester Property Company Ltd for £37,000 and the £11,000-odd to Mr Shuck's solicitors. They were then forwarded on. The cheque for £37,000 was paid into court and the £11,000 was given to the solicitors acting for the respondents.
23. The respondents requested special clearance from their bank of the cheque, but it bounced. As of today the cheque for £37,000 has not been cleared.
24. Mr Shuck has not come to court today. Nor has he supplied a witness statement as to the circumstances surrounding those events. That again has been done in a witness statement of Mr John Tasselli, who is a partner in the firm of solicitors who have the conduct of this matter on behalf of Contract Facilities. Mr Tasselli said this:

"4. The Claimant is an impecunious company and funding has had to be provided by Mr Shuck. On Thursday 17 July 2003 we received at these offices 2 cheques drawn on Mr Shuck's company, Worcester Property Company Limited, one for £37,000 which we paid into court that day and another cheque for £11,791.81 made out in favour of Gartsides which we sent to them by special delivery to arrive the next day i.e. on Friday 18 July.

5. By fax received at approximately 5.05pm yesterday Gartsides notified me that the cheque drawn in their favour had been returned marked return to drawer. I immediately contacted Mr Shuck and despite the lateness of the hour he was able to ascertain from his bank that the reason for the difficulty was that the cheque required two signatures. In error and haste Mr Shuck had only applied his own. ...

8. Mr Shuck has advised me that there are and were more than sufficient funds in the account for both cheques to clear.

9. Mr Shuck assures me that this difficulty will not apply to the cheque for £37,000 made out in favour of the Accountant General of the Supreme Court because as a result of it having been cleared in the normal manner the bank were able to discuss the matter with him and has confirmed it will clear later today.

10. Mr Shuck cannot be at Court today as he is attending a Planning Appeal. He has given me instructions to provide his undertaking to the court that if the cheque is re-presented it will clear. I would make clear that this is Mr Shuck's own undertaking and that I have explained to him the sanctions the court can impose if he were to breach that undertaking.

11. The fact that two signatories were not appended to the two cheques was an administrative error on Mr Shuck's part for which he apologises. Mr Shuck would also ask the court to take into account the fact that he has not cancelled the cheque for £37,000 but is arranging for it to be cleared today knowing the fact that the court does not have to grant the relief he seeks.

12. I would also ask the court to bear in mind that Mr Shuck has arranged for very considerable funds indeed (excluding today) to be paid over recent months on behalf of the Appellant."

25. The CPR enables the court to grant relief from sanction. It sets out a list of the circumstances that will be specifically taken into account, but states that the court will consider all the circumstances of the case.
26. Mr Cogley reminded us that when deciding whether to grant relief it was necessary to exercise the discretion given by CPR 3.9 afresh and that the purpose of the rule was to enable this court to do justice, despite the failure of a party to abide by a court order. He submitted that the interests of justice were in favour of the appeal being heard as all the costs had been expended. Upon the evidence the failure to comply was not intentional. He described the failure as late compliance and not non-compliance. He also submitted that the failure had not affected the trial date. He went on to submit, I think, that the grant of relief was in the respondents' favour, as not only would they have the benefit of the cheques, but also have the personal undertaking of Mr Shuck.
27. I consider that Mr Cogley's submissions do not reflect the facts nor the justice of the situation. First, the history which I have reviewed shows attempts by the appellants to manipulate the judicial process so as to avoid payment of costs. Second, Mr Shuck has attempted to portray his position in a way that suits his case. In my view that must throw doubt upon his veracity. When he was seeking to argue against an order for security being made, he contended that he did not have the funds and therefore the order would stifle the appeal. He now seeks to persuade us that his undertaking that nearly £50,000 will be paid is good reason to grant the relief from sanctions. Third, there is no explanation why what is described as his company, Worcester Property Company Ltd, provided the cheque and no explanation is given as to why the cheques were only supplied on the last day, when he must have known that the money would not have been transferred for some days after the cheques were presented. Fourth he gave no explanation why the cheques did not bear two signatures, save that Mr Tasselli says that:

"In error and haste Mr Shuck had only applied his own."

There was no reason why there was haste. The order was made on 11th, the cheques could have been written on the 12th. To delay that until probably 17th July indicates an intention to take the matter to the last minute. Fifth, the history of the matter, when looked at as a whole, casts doubt upon whether there was in fact an error.

28. Sixth I consider whether Worcester Property Company Ltd are good for the money. No explanation is given. Seventh, it must have been clear to those advising the appellant and to the appellant that the order of 11th July was a last chance. Waller LJ in his first judgment made it clear that it was nearly the last chance at that stage, and it must have been clear to everybody that to disobey another unless order was likely to lead to a refusal to grant relief from sanction. Despite that, the payment was left so as to be too late. It was faulty and nothing has been done since then to provide for immediate transfer of funds.
29. In my view the interests of justice are not served by allowing Contract Facilities, a company with no funds, to continue with this appeal when they have failed to comply with two unless orders and sought to manipulate the court's process to avoid payment. I am not prepared, in the absence of a statement from Mr Shuck or his attendance in court, to find that the failure to comply was unintentional. If he had intended to comply I would have expected him to have sent the cheque on the 12th not the 17th to his solicitors. In any case the explanation given, as I have pointed out, was not satisfactory. He had been warned by Waller LJ that the explanation given by his solicitor might not be accepted.
30. Mr Cogley did not suggest that the appellant's history of compliance with court orders was satisfactory, and it is clear that the court could not be sure that its orders would be complied with without an adjournment.
31. I have no doubt that this is a case where the court should not exercise its discretion to grant relief from sanction. Therefore I would refuse this application.
32. LORD JUSTICE BUXTON: I agree. Mr Cogley took us through the various heads set out in CPR 3.9(1) and reminded us that we should take into account all of those before reaching a conclusion on this application. That is indeed the case, but the signal feature of this application is that the requirement under CPR 3.9(1)(e) overrides any other consideration that might apply. CPR 3.9(1)(e) requires the court to have regard to:

"the extent to which the party in default has complied with other rules, practice directions, court orders ..."

33. My Lord has set out the lamentable history. The history is relevant in two ways. First, as demonstrating the attitude of Contract Facilities Ltd -- or more particularly its moving force, Mr Shuck -- to orders of the court; and secondly, in throwing light upon what was claimed to be a merely administrative error that caused the failure to comply with the order of this court made on Friday 11th July.
34. So far as the attitude to orders of the court and to the court process is concerned, I would cite but three points. First of all, there is the failure to comply with the order of 24th March 2003. The explanation for that failure, that was apparently given to Waller LJ by counsel on instructions, was that Mr Shuck had failed to appreciate that that order was an unless order. I find that explanation extraordinary. The only implication that can be drawn from it is that if the order was thought by Mr Shuck not to be an unless order, he considered himself at liberty not to obey it because the ultimate sanction was not attached to it.
35. Secondly, the application that was made to Judge Weeks to vary his original costs order. It should have been obvious that Judge Weeks could not vary that order because he was functus, and as we have been told from the Bar, he indicated that on a previous occasion. That application, to put it at its lowest, needed to be looked at with a great deal more critical scrutiny than it received, to ensure that it was not being made with the purpose, or alternatively would have the effect, of simply further extending a very long period of delay.
36. Thirdly, the observations already quoted by my Lord made by Waller LJ on 13th May 2003, in paragraph 13 of his judgment, when he made it absolutely clear that no further indulgence whatsoever would be granted.
37. In the light of all those warnings and those events, it was extraordinary that the orders made for interim payment and the payment of costs by Master Wright on 6th June were not complied with. The respondents were obliged to revert to this court in order to achieve compliance with those orders. It was all part of a pattern. The orders that were made on 11th July must have been apparent to Mr Shuck and to his advisers to be the very last chance that he could possibly have to comply with his obligations to this court. Mr Shuck chose to interpret the order for payment in his own favour by assuming that delivery of an uncleared cheque by the last due date would be sufficient. I make no further comment on whether he was right to think that: I am still not persuaded that he was. But right or wrong, if he had had any serious interest in acting upon the many warnings already given he would, as my Lord has said, not have left the matter until the 11th hour, but would have immediately set about ensuring that there could be no administrative, practical, financial or other reason why the orders were not fully complied with. I cannot but think that he must have been so advised by his advisers.
38. Instead of that, it was not until 17th July, six days after the order had been made and less than 24 hours before it expired, that Mr Shuck produced the two cheques. Like my Lord I am, to put it its lowest, deeply sceptical of the explanation that he proffered that the cheques had only one signatory because of haste and oversight. If, as we are invited to assume, Worcester Property Company Ltd is a functioning company with substantial assets and Mr Shuck is responsible for running it, he could hardly have been unfamiliar with the signatory requirements on the company's cheques. It is simply extraordinary that in those circumstances he would have provided a cheque that, if he had thought for a moment, he would have known would not be acceptable. Of course those who received the cheque would not have known that because they would have known from the face of the cheque that it required two signatories.
39. Assuming in Mr Shuck's favour -- and I do not necessarily say that I make that assumption -- but assuming in his favour that this was indeed all caused by oversight and rush, that assumption in itself demonstrates that he did not give to this matter and to his requirements under the order the clear attention that he should have done in the light of the history and in the light of the order made by this court on 11th July.
40. In those circumstances, there is no ground at all for this court to grant further indulgence. For the reasons that I have indicated, in addition to those given by my Lord with which I agree, I would not grant the relief sought.
41. LORD JUSTICE MAY: I agree with my Lord, Lord Justice Aldous, for the reasons which he has given that the appellant should not be relieved from the consequences of their failure to comply with the unless order made by this court on 11th July 2003. I gratefully adopt his account of the facts and circumstances.
42. This is the fourth occasion in as many months on which this court has had to address the conduct on behalf of the appellants of matters relevant to their appeal. Waller LJ took the view, on 13th May 2003, that the evidence of Mr Shuck then before the court to the effect that any appeal would be stifled by orders requiring payment was exceedingly weak.
43. Rule 3.9 of the CPR obliges the court to consider all the circumstances, including such of the factors set out in the nine sub-paragraphs of Rule 3.9(1) as are capable of bearing on the decision in the particular case.
44. The witness statement of Mr Tasselli contains what he is told are the reasons why the two cheques drawn on the account of a hitherto unknown company for £37,000 and £11,791.81 have not been cleared. In my view the respondents are entitled to be sceptical as to those explanations. As my Lord has said, Mr Shuck has not himself come to court today being engaged, we are told, on a planning appeal in Liverpool. He has not himself provided a witness statement. Mr Tasselli also on instructions offers Mr Shuck's personal undertaking to see that the cheques will clear on representation. The fact however is that the terms of the unless orders were not complied with, nor had they been complied with at the time this morning when the appeal was listed for hearing.
45. Mr Cogley has made a valiant attempt, by reference to those factors in Rule 3.9(1) capable, on his submission, of supporting the application for relief to submit that relief should be granted. In my judgment, the considerations which indicate overwhelmingly that the court should not grant relief are to be found embedded in the judgment of the court follow the hearing on 11th July to be given by Waller LJ tomorrow. My Lord has referred to these in some length, but it seems to me that those in paragraphs 7, 8, 9 and 10 of that judgment contain the essence of the background.
46. In short, Waller LJ will say:

"Indeed what has happened is that those acting for Contract have done all they can to postpone the assessment of costs so that if possible the appeal would come on before the respondents have a sum in relation to which they can execute against Contract.

The solicitors for Contract appear to have been put in funds to make such applications as they have deemed necessary to support the stalling tactics or to resist the respondents' attempt to get the order they need. That seems to indicate that funds are available through Mr Shuck."

Then a little later:

"But if the appeal is lost Contract will have no assets and go into liquidation."

Then crucially, in my judgment, this:

"The order to supply security for costs for the appeal was not in fact complied with. The sum was provided ten minutes late. As Waller LJ indicated in relieving Contract from sanctions that conduct by Mr Shuck was very close to being deliberate. Indeed his conduct was such that it was a close run thing as to whether Contract should be relieved from sanctions and have their appeal dismissed."

In short, the applicants only obtained relief from sanctions on their failure to comply with the order for security for costs as a close run thing, yet here we are again in the circumstances which my Lord, Lord Justice Aldous, has described. As Waller LJ will say tomorrow:

"The attempts however to prevent the respondents obtaining an enforceable order have continued."

47. In my judgment this is the last straw and relief from sanction should not be granted.
ORDER: Application for relief from sanction refused; appeal dismissed with costs to be paid on the standard basis to be subject of a detailed assessment if not agreed; any sums of money in court to be paid out to the respondents' solicitors; the costs of the application today to be paid by appellants to be subject of a detailed assessment if not agreed. (Order not part of approved judgment)