Case No:   1HC/443/06, CH/2006/PTM0717
Neutral Citation Number: [2007] EWHC 2773 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: Thursday, 25 October 2007
BEFORE:

MR JUSTICE MORGAN

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BETWEEN:

HALTON INTERNATIONAL (HOLIDINGS) SARL AND ANOTHER		
Claimant	
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	GUERNROY LIMITED AND OTHERS	
Defendant	
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Wordwave International, a Merrill Communications Company
PO Box 1336, Kingston Upon Thames, Surrey, KT1 1QT
Tel:  020 8974 7300  Fax:  020 8974 7301
Email: tape@merrillcorp.com
(Official Shorthand Writers to the Court)
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Mr Martin Farber (Instructed by Taylor Wessing) appeared on behalf of the Claimant

Ms Catherine Addy (Instructed by Allen & Overy) appeared on behalf of the Defendant
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Judgment

MR JUSTICE MORGAN:
The Application
1.	On 13 June 2007 Halton International Incorporated Holding SARL, formerly Halton International Incorporated, (“Halton”) applied pursuant to CPR Rule 52.9(1)(c) and/or Rule 3.1(7) for an order varying the condition imposed by Mr Justice Lawrence Collins in an order he made on 9 November 2006 when he granted Halton conditional commission to appeal against the judgment of Costs Judge Campbell made on 8 September 2006.

The Procedural History
2.	In order to understand the issues which arise, it is necessary to set out the procedural history of this litigation in a little detail.  The action was brought by Halton and Mr Kaddoura against Guernroy Limited (“Guernroy”) and Ecan Management Incorporated (“Ecan”).  The action was tried before Mr Justice Patten in April, May and July 2005.  On 9 September 2005 Patten J gave judgment for the defendants and dismissed the action.  

3.	On 16 November 2005 Patten J gave an order giving effect to his judgment and making ancillary orders.  By paragraph 1 of that order the action was dismissed.  In paragraph 2 the judge ordered that:

“The claimants do jointly and severally pay the first defendant [Guernroy] its costs of the action, such costs to be subject to detailed assessment on the standard basis.”  [Quotation unchecked] 

4.	By paragraph 3 of the order the claimants were required in 14 days to pay to Guernroy, pursuant to Rule 44.3(a) the sum of £650,000 on account of their liability for costs.

5.	By paragraph 4 the claimants were required to pay within 14 days to the second defendant, Ecan, pursuant to Rule 44.3(a) the sum of £40,000 on account of their liability for Ecan’s costs.  Those costs are following a discontinuance against Ecan at an earlier time.

6.	At paragraph 5 of the order it was directed that Dr Tabbara be joined as a party to the proceedings for the purposes of costs only pursuant to Rule 48.2(1)(a) and by paragraph 6 it was directed that the question of whether Dr Tabbara should be ordered to pay any and, if so, which of Guernroy’s costs of the action be adjourned to a future date.  The order made other provisions to which I need not refer.

7.	On 24 February 2006 the defendants obtained charging orders over the claimant’s shares in British Mediterranean Limited to secure the unpaid costs.  Without going into the background of the litigation, the shareholding of British Mediterranean Limited (“BMed”), and the duty to which arose in relation to those shares, had been centre stage in the litigation tried by Patten J.

8.	There were certain difficulties about service on Dr Tabbara of the application for a non-party costs order but eventually that application was served.  On 10 April 2006 the application against Dr Tabbara was heard, again by Patten J.  Dr Tabbara did not appear on the hearing of that application.  Patten J ordered that:

“Dr Tabbara do jointly and severally with the claimants pay Guernroy its costs of the action, such costs to be subject to detailed assessment on the standard basis, if not agreed.”  [Quotation unchecked]	 

9.	He further ordered that Dr Tabbara do pay to Guernroy, pursuant to Rule 44.3(8) the sum of £650,000 within 14 days of the order on account of his liability for costs.  It was also directed that Dr Tabbara should pay Guernroy’s costs of the application under Rule 48.2.  Various other costs were dealt with.

10.	Patten J gave a short judgment setting out his reasons for making the non-party costs order against Dr Tabbara.  A copy of that judgment has been put before me.  He explained in some detail the difficulties which there had been in effecting due service on Dr Tabbara.  He reached the conclusion that service had been effected and he gave his reasons for so holding.   He then referred to the relevant legal principles which guide the court when asked to make non-party costs orders.  He referred in particular to the decision of the Privy Council in Dymocks Franchise System v Todd [2004] 1WLR 2817.  He then applied those principles to the facts of this litigation.

11.	At paragraph 25 of his judgment he said this: 

“Now, in the present case Dr Tabbara is the controlling shareholder of the Halton companies, which include the first named claimant and the evidence before me at the trial, including both oral evidence and evidence in Dr Tabbara’s witness statements, was that Halton International was the vehicle through which he made his various investments in British Mediterranean Airlines Ltd which was the subject matter of the proceedings.” 

12.	Patten J then referred to some, but by no means all, of the many references that had been put before him in a witness statement to the connection between Halton and Dr Tabbara.   That same material is before me.  Suffice it to say that the learned judge’s conclusions as to the connection between Halton and Dr Tabbara are abundantly borne out by the material which was before him and again before me.

13.	At paragraph 29 of his judgment Patten J said:

“There is, I think it is fair to say, no direct evidence of any payment by Dr Tabbara to the lawyers conducting these proceedings on behalf of Halton, but there is evidence that Halton International does not appear to have any assets other than his shareholding in BMed.  When one takes that in conjunction with the evidence I have just referred to, there is an almost irresistible inference that the proceedings were funded by Dr Tabbara on behalf of the company and I am so satisfied that that was the case.”  

14.	The learned judge then turned to the questions as to how he should exercise his discretion on an application of that kind.  He referred to the fact of funding.  He referred to the fact that Halton was a vehicle for Dr Tabbara’s investments.  He held in paragraph 32 that in a very real sense Dr Tabbara had been the effective claimant.  In paragraph 33 he stated that the funding had been carried out by Dr Tabbara for his own personal benefit and he should, therefore, be required to pay the costs of the unsuccessful proceedings.  Those were the reasons the judge gave for making the order on 10 April 2006 which I have referred to.

15.	On 27 June 2006 the Court of Appeal dismissed an appeal against an order of Patten J of 16 November 2005.  By paragraph 2 of the order of the Court of Appeal it was directed that the appellant should pay the respondent’s costs of the appeal, to be the subject of a detailed assessment if not agreed.  At paragraph 3 of the order it was directed that the appellant should make a payment on account of the respondent’s costs in the sum of £15,000 to be paid not later than 11 July 2006.

16.	The appellants there referred to were Halton and Mr Kaddoura.  They did not include Dr Tabbara who, of course, was not a party to the main dispute, although he was a party for the purposes of a non-party costs order having been sought under Rule 48.2.  Dr Tabbara did not appeal against the non-party costs order made on 10 April 2006.

17.	There followed an application by the defendants, including Guernroy, to the costs judge to carry out a detailed assessment of the costs payable by the claimants and by Dr Tabbara to the defendants.  On 8 September 2006 Costs Judge Campbell gave his decision in relation to certain preliminary issues which arose in the detailed assessment.  One such issue was as to the terms of the retainer of Allen & Overy as solicitors on behalf of Guernroy.  As I understand the issue, it was whether Guernroy was liable in the period from 6 July 2004 to 17 February 2005 to pay Allen & Overy’s fees pursuant to that retainer, or whether Guernroy was not so liable as another person taken on the sole contractual liability to pay those fees.  Costs Judge Campbell decided that issue in favour of Guernroy.  That meant that those fees were in principle eligible to be included in the bill, payable by the claimants and by Dr Tabbara, subject to detailed consideration of their amount.

18.	The order made by Costs Judge Campbell on 8 September 2006 recites that it is made upon hearing counsel for the defendants and costs draftsman for the claimants.  Dr Tabbara did not appear or was not represented.   That recital correctly shows that Dr Tabbara was a party to the detailed assessment.  An order for costs had been made against him.  It had to be assessed as against him.  This reference for detailed assessment was a proceeding to which he was a party.  Therefore the order of 8 September 2006 was an order binding upon Dr Tabbara.  The costs judge’s order recited Patten J’s orders of 16 November 2005 and 10 April 2006.  It also recited that, amongst other things, Dr Tabbara had failed to comply with the orders of Patten J.

19.	The costs judge then set out in some detail, to which I need not go, the detailed findings he made on the substantive issues that had been argued before him.  He refused permission to appeal on the question as to the retainer.  He then made orders as to the costs of the matter that had been argued before him.  In paragraph 3 of his order he ordered that the claimant should pay the defendant’s costs of the preliminary issues.  At paragraph 4 he referred to the issue of interim costs certificates.  The first was for £451,000, payable by the claimants and by Dr Tabbara to Guernroy.   The second was for £76,000 payable by the claimants but not Dr Tabbara to Ecan.  Those sums were in addition to the sums already ordered as on account payments by Patten J in the earlier orders he had made.  Paragraph 5 of the costs judge’s order was another order that the claimant should pay certain parts of the defendant’s costs.

20.	Then at paragraph 6 and 7 of the order the costs judge made orders of a different character.  In paragraph 6 he ordered that unless by 22 September 2006 either the claimants or Dr Tabbara complied with the order of 16 November 2005 and the order of 10 April 2006 by making payment to Guernroy of £650,000 then the claimants and Dr Tabbara should be debarred from participating further in the detailed assessment of Guernroy’s costs of the action.   Paragraph 7 is a similar debarring order in relation to Ecan’s costs, as distinct from Guernroy’s costs.

21.	It was stated that these debarring orders did not apply to any application made on behalf of the claimants for permission to appeal or any subsequent appeal from the order.   Permission to appeal the debarring orders was refused.   In paragraph 9 of the order it was directed that the claimants and Dr Tabbara should pay Guernroy’s costs of the application for these debarring orders.  Finally, in paragraph 11 of the order directions were given for the later hearing of the Ecan assessment of the costs that had been ordered.

22.	Costs Judge Campbell gave a short judgment giving his reasons for making these debarring orders.  He referred to the submissions in support of the application and the fact that it was opposed.   He indicated that there was no real material to support the opposition.  He referred to the fact that Dr Tabbara had made no payment and a considerable period of time had gone by.  He said:

“As things stand at the moment, the defendants had to pay for part of a day before me last week, two full days yesterday and today, half a day today.  They then have the prospect of at least a week of detailed assessment sometime in the early part of next year, and circumstances were not a penny of the sums ordered by Patten J have been paid over, so they must question whether continuing with this detailed assessment will simply be a case of throwing good money after bad.”  [Quotation unchecked]

23.	He then referred to the decision of Mr Justice Langley in the case of Days Health Care to which I will refer later in this judgment.  He correctly corrected himself that he had jurisdiction to make the order that was sought.  He said later:

“To my mind, the fact that the claimants may be having difficulties in raising the money is  not the point.  They have been on notice that the money as being required to have been paid for many months.  In my judgment it would be unreasonable to expect the defendants to be compelled to go through another five days of detailed assessment with absolutely no prospect at the end of recovering any  money.”  [Quotation unchecked] 

24.	On 6 October 2006 Halton and Mr Kaddoura filed an appellant’s notice against the orders of 8 September 2006.  Although Dr Tabbara was subject to those orders, he could not join in the appeal against them.  The appeal was against both Costs Judge Campbell’s decision on the level of retainer and as to the debarring orders.

25.	On 17 October 2006 solicitors for Guernroy wrote to the court in relation to the application in the appellant’s notice for permission to appeal the orders of 8 September 2006.  I will not try to read out the entirety of what is a long letter making many points.  I can summarise it in this way.  The letter described the background to the litigation.  It set out in detail the sums ordered to be paid to the defendants.  The calculations show that the monies which were owing to Guernroy were £1,116,000 and the monies owing to Ecan were £116,000.

26.	The solicitors’ letter also pointed out that if the appeal were to go forward there would be further costs before the defendants and a figure of £25,000 was identified as appropriate security for the costs of the defendants in responding to the appeal.  The letter went on with this paragraph:

“If the court is minded to grant permission to appeal to the claimants, we respectfully request that the permission to appeal be made conditional upon payment of the above sums to the first and second defendants…”

I interpose to say that those are the figures I have given of over £1 million for Guernroy and £116,000 for Ecan:

“…and the payment of £25,000 into court as security for the costs of the appeal.  This is clearly within the powers of the court, Rule 52.3(17) and Days Healthcare UK Limited v Hishiang Machinery Manufacturing Company Limited and we submit it would be just and reasonable in the circumstances.  Our clients have expended large sums of money to defend themselves against the claimant’s claims and in efforts to recover their costs but have not received any of the sums ordered to be paid to them.  Furthermore, the claimants are knowingly in breach of a number of court orders and seek to engage the court and our clients in another lengthy exercise.”  [Quotation unchecked]

27.	They then cited at some length from the judgment given by Costs Judge Campbell on 8 September 2006.

28.	On 20 October 2006 solicitors for Halton and Mr Kaddoura responded to the letter of 17 October 2006.  The solicitors for Halton and Mr Kaddoura said that their response to the request for conditions and security for costs was covered by what was said in paragraphs 27 to 31 of the skeleton argument asking for permission to appeal.   The letter then went on to describe the issues raised in the appeal.  It stated that the debarring orders made by Costs Judge Campbell were challenged in their entirety as a matter of principle but in the alternative the quantum should be revisited.  It was also said that they had sought a stay of the debarring order and the orders for payment on account and the interim costs certificates pending appeal.  They then stated that it would not be just for permission to appeal to be made conditional upon any sums suggested by Guernroy and Ecan’s solicitors.  In particular this sentence appears:

“Such a condition would restrict the claimant’s ECHR Article 6 rights to a fair hearing which, if meritorious and successful, would materially change the basis on quantum of the sums in dispute.”  [Quotation unchecked] 

29.	As I have indicated, that letter cross-referred to a skeleton argument that had been prepared by the appellants in support of their appeal and their application for permission to appeal.  The skeleton argument runs to some 21 pages.  The greater part of the skeleton argument is concerned with the preliminary issues about the true construction of the solicitors’ retainer.  However, the skeleton argument does set out in detail the history of the litigation.  Towards the end of the skeleton argument attention is given to the debarring order made by Costs Judge Campbell.  As was seen, the letter which I have read referred to paragraphs 27 to 31 in particular.

30.	I need not read out those paragraphs.  Detailed points were made as to the inappropriateness, it was said, of a debarring order.  In particular it was said that the debarring order had denied the claimants their right to appear at the detailed costs assessment.  Accordingly it was a breach of Article 6 of the Convention on Human Rights which appears in the schedule to the Human Rights Act 1998.  It was also contrary to the principles of natural justice.

31.	There was then a detailed submission made as to why the present case should be distinguished from the decision in Days Healthcare.  The skeleton argument continued in the relevant paragraphs by addressing the possibility of variations and stays of various orders that were made.  At paragraph 30 this was  stated:

“Furthermore, it would not be just for permission to appeal to be made conditional upon payment of the sums referred to as suggested by Allen & Overy in their letter to the court dated 17 October 2006 when payment of these sums, should permission be granted, is the very subject matter of the appeal.  The quantum of any previous interim payment order would have to be revisited in the light of the outcome of any appeal in any event.  And should permission otherwise be granted, such a condition would restrict the claimants ECHR Article 6 rights to a fair appeal hearing which, if meritorious and successful, would materially change the basis on quantum of the sums in dispute.”  [Quotation unchecked] 

32.	Attached to the skeleton argument there were various authorities principally directed at the construction of the retainer point.  Amongst the authorities was a copy of the decision of Langley J in the Days Healthcare case.  The appellant’s notice came before Lawrence Collins J to be dealt with as a paper application.  That is the normal procedure for applications to a High Court judge for permission to appeal.  The learned judge plainly thought it was appropriate to deal with all matters arising without directing that the matter be argued at an oral hearing. 

33.	On 9 November 2006 Lawrence Collins J granted permission to appeal, subject to conditions in these terms:

“I consider that the decision on the indemnity principle is correct but that there are arguable points to the contrary.”

I interpose there to say that the reference to the indemnity principle was the preliminary point as to the true construction of this solicitor’s retainer:

“But since it is plain that the claimants have made every possible effort to avoid compliance with the orders of the court to make payment to the defendants, I am satisfied that the permission to appeal should be conditional upon their payment into court by January 8, 2007 of the amounts ordered to be paid by Patten J, £690,000, and the Court of Appeal, £15,000, together with £25,000 towards the costs of the appeal, and aggregate of £730,000.  There is no arguable date as for an appeal against the debarring order on detailed assessment.”  

34.	It is plain from the material before the learned judge and the short reasons he gave for the decision he reached that he had had to consider the application for permission against the debarring orders and the case of Days Healthcare relied on by the costs judge.  He held there was no arguable ground of appeal in that respect.  He obviously had to consider the letters of 17 October and 20 October 2006 and the skeleton argument of counsel for the appellants.

35.	As can be seen, he imposed a condition on the grant of permission to appeal.  The figures he selected were not as high as the respondents asked for and the learned judge had obviously given thought to the appropriate amount of the figure which he should insert in the conditions he thought was appropriate.  I explain this because it may be material in another case to know whether the condition imposed by the judge in paper is a condition very much of its own initiative, or a condition which had been requested to the knowledge of both parties and where both parties had an opportunity to put their sides on the appropriateness of the condition.

36.	No step was taken on or shortly after 9 November 2006 to invite the court to reconsider the condition imposed by the order of that date.  The time for compliance with the condition expired on 8 January 2007.   The condition was not complied with by that date and the substance of the condition has not been complied with since.

37.	On 8 January 2007 solicitors for Halton and Mr Kaddoura wrote to solicitors for Guernroy and Ecan in these terms:

“As you are aware, under the terms of the permission to appeal granted by Lawrence Collins J, there was a condition on our clients to pay £730,000 into court.  Our clients have been unable to make the payment as they do not have sufficient funds themselves and they have not been able to raise the same of third party lenders.  As to the latter prospect, you are obviously aware that your client, Guernroy, has taken the steps in Geneva indefinitely tying up the personal assets of Dr Oussuma Tabbara.  In view of the above, our clients reserve all of their rights in connection with the matter, including the making of an application to the High Court, to vary the terms of the permission decision.”  [Quotation unchecked] 

38.	Although that letter reserved the position nothing happened, so far as I am aware, until the present application was made on 13 June 2007 some five months or so after the condition had not been complied with.

39.	It does not appear that any steps were taken to seek an order dismissing the appeal against the costs judge’s order of 8 September 2006.  The view appears to have been taken that the appeal simply fell away.  The alternative view is that some further step is necessary to record that the condition had not been complied with and that permission to appeal no longer existed so that the appeal could not proceed.   This point was not argued before me.  In the event it is not necessary to rule on what the technical position was in relation to the appeal after 8 January 2007.

40.	After 8 January 2007 a number of things happened.  The costs judge carried out a detailed assessment of the costs payable pursuant to the various orders.  He did that on paper without an oral hearing, although he did it seems obtain assistance from solicitors and costs draftsmen acting for the defendants as to points arising from the detailed assessment.

41.	On 22 March 2007 the costs judge issued a final costs certificate for Guernroy’s costs in the sum of £1,488,398.  On 2 April 2007 he issued a final costs certificate for Ecan’s costs in the sum of £141,966.25.  

42.	At this stage I should break off the recital of the procedural steps to comment on how much of these costs could potentially be effected by a successful appeal against the costs judge’s ruling of 8 September 2006 on the construction of the retainer letter.  Guernroy contends that the sum which turns on that issue is some £550,000.  Counsel for Halton in his submissions to me had earlier given a higher figure but that was based on the gross costs before detailed assessment.   It follows that the best information I have is the figure of £550,000.

43.	On the basis of that figure, if Halton were to win the appeal this would produce the result that Halton and Mr Kaddoura, and  Dr Tabbara would still be liable for some £950,000 to Guernroy.  It can be seen that that indisputable element of the costs exceeds the figure of £730,000 referred to by Lawrence Collins J in the condition he imposed on 9 November 2006.

44.	At this point I can also conveniently deal with a curiosity which exists in this case.  As I have stated, the appeal against the order of 8 September 2006 was brought by Halton and Mr Kaddoura, not by Dr Tabbara.  However, it became apparent during the course of the argument before me that the case being put forward by Halton is that if it were to be allowed to appeal and were to win its appeal, resulting in a reduction of £550,000 in the assessed bill of approximately £1.5 million, then that would not only benefit Halton, but also significantly Dr Tabbara.

45.	The present application before me has been brought by Halton alone.  It has not been brought in the name of Dr Tabbara because he, of course, is not a party to the appeal.  However, I was told by Mr Farber, who appeared on behalf of Halton, that because Halton did not have any money the present application was being funded by Dr Tabbara and if the appeal were to proceed that too would be funded by Dr Tabbara.  It seems to me that it is much more likely than not that the reason that Dr Tabbara is funding the present application and any future appeal is not for the purpose of improving Halton’s position, but in the belief he will prove his own position.

46.	I should not be taken as agreeing with the assumption made by Halton and Dr Tabbara that a successful appeal by Halton will benefit Dr Tabbara.  It could be argued that as Dr Tabbara has not appealed the various orders which relate to him and he should remain bound by the unappealed(?) orders whatever might happen in an appeal brought by other persons.  However, as the assumption made by Halton and Dr Tabbara described above is the very basis of the application made by Halton, I will consider the present application on the basis of Halton’s own expressed assumption.

47.	I will now finish the story as to the procedural history of this litigation.  On 3 May 2007 Master Bragg permitted enforcement of the charging orders over the BMed shares by way of a sale of those shares.  Halton and Mr Kaddoura were required by the terms of the order to execute the necessary documents by 17 May 2007.  The costs of the application were summarily assessed in a figure approaching £9,000.  Those costs remain unpaid.

48.	On 17 May 2007 the time for execution of the documents pursuant to Master Bragg’s order expired.  The order was not complied with by Halton or by Mr Kaddoura.  This resulted in the defendants in the litigation going back to Master Bragg to obtain a court execution of the sale documents.  I am told that the sale of the shares has not been completed but is expected to complete in November 2007.  It is also expected that the proceeds of sale of the shares will net sum of £40,000 or a little more.  Of that figure some £30,000 is attributable to those shares owned by Halton, as distinct from the shares owned by Mr Kaddoura.

49.	It is also common ground that Halton’s only asset was its interest in the shares.  Halton only had assets worth at the present time some £30,000, and after the sale would have no assets.  It would not be worth pursuing for costs in this litigation.  Further, on the face of it, it would be unconcerned in a practical sense whether the costs payable to Guernroy are £1.5 million or £950,000.  I do not say it is completely irrelevant and Halton is wholly unconcerned about the amount of its liability for those costs, but in practical terms it assets will come nowhere near discharging the lower figure, and will be even further away from discharging the higher figure.

50.	The impecuniosity of Halton is the foundation of the present application.  Mr Farber, on behalf of Halton, submits that I should look only at the financial position of Halton.  He says correctly it seems to me that Halton cannot compel Dr Tabbara to provide funds to comply with a condition in the permission to appeal and that I should ignore entirely the financial position of Dr Tabbara.  He says that what Dr Tabbara does with his money is a matter for him and is not a matter within the control of Halton.

51.	Against that background Halton, but not Mr Kaddoura and not Dr Tabbara, launched the application which is before me.  The relief sought is an order that the conditions imposed and/or the security ordered by Lawrence Collins J in granting permission to appeal the order of 8 September 2006, namely a sum total of £730,000, be varied under CPR Rule 52.9(1)(c) and/or CPR Rule 3.1(7) by revoking the said conditions and/or an order for security or adducing the sums payable to nil.

52.	The application notice went on to spell out the basis on which that application was put forward.  It was stated that the first appellant, Halton, was an impecunious party and unable to comply with the conditions.  It did not have access to resources and would not have the assistance of others to enable it to comply with the conditions, or any part of the conditions.  It was stated that a condition imposed must be one which is capable of being complied with and an impecunious party should not be ordered to pay into court a sum of money which is unlikely to raise.

53.	The application notice referred to five decisions, one in the House of Lords and four in the Court of Appeal, in support of that proposition.  I will refer to those decisions later in this judgment.  The application notice went on to submit that the conditions should be varied because, first, the conditions were contrary to the common law and practice of the courts.  Secondly, the conditions prevented Halton from pursuing an appeal for which permission had been granted and the conditions denied Halton access to justice and were a breach of Article 6 and/or contrary to natural justice.  Thirdly, it was said the condition prejudged the outcome of the appeal for which permission had been given.  The interim payments ordered assumed there was no breach of the indemnity principle.  If the appeal were to be successful these interim payments would not be paid (inaudible) or any similar sums.

54.	This application was supported by a witness statement.  It is striking, in view of the submissions made as to the distinction which it is said must be drawn between Halton and Dr Tabbara, that the witness statement comes from Dr Tabbara.  He gives an address in Lebanon.  He says that he is the sole shareholder and director of Halton and he is authorised by Halton to make the witness statement on its behalf.  He makes it in his capacity as Halton’s director.  He makes the witness statement in support of the application of 13 June 2007.  He sets out some of the procedural history and he refers to the financial condition of Halton.  He states his position in relation to its shares in BMed.  He says those shares are now the subject of an order for sale, as I have described it.

55.	At paragraph 11 he says this:

“Halton is not a trading company and has no source of income.  It is unable to borrow or otherwise raise the money from commercial organisations.  There is no prospect of financial assistance from any commercial source.”  [Quotation unchecked] 

56.	At paragraph 12, after referring to the fact that he had previously funded Halton in the litigation he says this:

“I am under no obligation to fund Halton and I have no intention of funding Halton.”  [Quotation unchecked] 

57.	He then refers to the attachment proceedings brought by Guernroy against Dr Tabbara personally in Geneva.  The last sentence reads:

“The attachment proceedings have severely strained me financially as it involved large sums of money.”  [Quotation unchecked] 

58.	At paragraph 13 he says he does not recognise that Patten J and Costs Judge Campbell have valid jurisdiction over him personally.  He does not consider he has ever been duly and validly served with any English proceedings with respect to such orders or any notice of applications and/or orders.  This is not withstanding the fact, as was pointed out to me, the exhibit to his witness statement does exhibit at least one of the orders that have been made which plainly had found its way into his hands.

59.	In paragraph 14 he states that:

“There is no prospect of anyone else, including Mr Kaddoura, providing funds for Halton, as there was no benefit or other attraction for litigation that could encourage anyone to assist.”  [Quotation unchecked] 

60.	He then states that the result of the condition imposed by the judge on 9 November 2006 prevents Halton from pursuing its right to appeal and, therefore, the relief set out in the application notice that should be sought.

61.	I ought to read paragraph 16 which addresses the topic of delay in making the application.  It is in these terms:

“The delay in making this application is as a result of disputes between Halton and its lawyers over the amount in payment of their bills,  Halton’s inability to fund the litigation and my unwillingness to advance funds to it without purpose beyond a certain level which has already been reached and surpassed.  Halton was, and still is, unable to comply with the conditions set by Lawrence Collins J.”  [Quotation unchecked] 

62.	I should make the following comments on that witness statement.  
Firstly, it shows the close connection between Halton and Dr Tabbara.  
Secondly, it shows that Dr Tabbara has been aware of the various orders that have been made.  
Thirdly, although Dr Tabbara refers to proceedings in Geneva he does not disclose how much might be recovered by Guernroy as a result.  The position is that certain potential assets, not wholly identified, have been frozen in Geneva.  Dr Tabbara is resisting the attempts to make a recovery from it pursuant to the proceedings in Geneva.  What is significant for the present purposes is that the extent of the assets potentially involved in Geneva is at present wholly unclear.  
Fourthly, it is fairly clear from Dr Tabbara’s comments about not recognising the jurisdiction of Patten J and the costs judge over him that he will not willingly pay the costs which he has personally been ordered to pay.  He will also not willingly fund Halton to pay the costs which Halton has been ordered to pay.  
Fifthly, the paragraph dealing with the topic of delay is very unrevealing as to the dispute between Halton, or whoever, and the lawyers.  Halton’s solicitors have subsequently declined to give any further information about that topic.

63.	On the subject of evidence, the evidence adduced by Guernroy is sufficient to indicate that Dr Tabbara may well have sufficient resources to meet the orders of costs that have been made.  At any rate, no submission was made to me on behalf of Halton that Dr Tabbara was impecunious and could not find the monies to satisfy the condition imposed on 9 November 2006.

64.	 Another factor which follows from the fact he is not impecunious is that if he ever were made to pay up on the orders for costs against him, it would obviously be of great importance to him whether the costs payable by him were £1.5 million or £950,000.   His position in this respect is to be starkly contrasted with the position of Halton which I have referred to above.

The relevant rules of the Civil Procedure Rules
65.	I will refer to the relevant rules in sequence with one or two exceptions.   This may be one of those rare cases where a reference to the overriding objective does affect the arguments and disposal of the case.  Rule 1.1(2)(d), in describing what is meant by the court dealing with cases justly, includes, so far as practicable, a requirement that the case is dealt with expeditiously and fairly.  

66.	By Rule 1.2, the court is to give effect to the overriding objective when it exercises any power given by the Rules or interprets any rule. 

67.	By Rule 1.3 the parties are required to help the court to further the overriding objective.  It follows that the parties are obliged to take steps to ensure that matters before the court are dealt with expeditiously.

68.	Rule 3.1 sets out various general powers of management of litigation.  By 3.1(3) when a court makes an order, it may make it subject to conditions, including a condition to pay a sum of money into court.  By Rule 3.1(7) it is stated that a power of the court to make an order includes a power to vary or revoke the order.

69.	Rule 3.3 deals with the court’s power to make an order of its own initiative.  I refer to this because some parts of this rule were regarded as being imperial to applications dealt with on paper when that topic was considered by the Court of Appeal in Collier v Williams [2006] 1WLR 1945.  At 3.3(4) it is stated that the court may make an order of its own initiative without hearing the parties or giving them an opportunity to make representations.

70.	By 3.3(5) it is stated that where a court has made an order under 3.3(4) the party affected by the order may apply to set aside, vary or stay, and the order should contain a statement of the right to make such an application.

71.	Rule 3.9 is headed “Relief from Sanctions”.  It sets out a checklist, the relevance of which will come clear later, as to the approach a court should take where there is an application to it for relief from a sanction imposed for a failure to comply with the rule, practice direction or court order.  There are some nine matters to be considered.  I will refer to them briefly in due course.

72.	Rule 3.9(2) says:  “An application for relief must be supported by evidence.” 

73.	Rule 23.8 deals with applications which may be dealt with without a hearing.  23.8, paragraph (c), includes in those cases a case where a court does not consider that a hearing would be appropriate.

74.	Under Rule 23.10 a person who is not served with a copy of an application notice before an order was made may apply to have the order set aside or varied.  The application must be made within seven days after the date on which the order was served on the person making the application.

75.	The practice direction in support of Part 23, paragraph 11.2 states that:

“Where Rule 23.8, paragraph (c), applies the court will treat the application as if it were proposing to make an order on its own initiative.”

76.	I Revert to the main part of Rule 25 that rules deals with security for costs.  Security for costs on an appeal is dealt with  Rule 25.15 says that the court may order security for costs of an appeal against an appellant on the same grounds as it may order security for costs against the claimant.  Rule 25.13 sets out the conditions to be satisfied for the making of such an order.  These provisions are very well known.  It is sufficient to say that in 25.13(2)(c), one of the conditions is that the claimant is a company and there is reason to believe that it would be unable to pay the defendant’s costs if ordered to do so.

77.	There has been considerable (inaudible) on when and when not orders for security of costs should be made as to the relevance of the impecuniosity of the party from whom security is sought, as to the relevance of that party’s ability to obtain financial support from others, and the general question as to the effect orders for security might have on access to a court and the influence of Article 6.

78.	Turning to the Rules that deal with appeals, paragraph 52.3(4) states that:

“Where the appeal court without a hearing refuses permission to appeal the party seeking permission may request the decision to be reconsidered at a hearing.”

79.	Rule 52.4 deals with the time for appealing which is 21 days after the date of the decision.  

80.	Reverting to Rule 52.3(5), it states that the request under 52.3(4) must be filed within seven days after service of notice that permission has been refused.

81.	52.3(7)(b) states that an order giving permission may be made subject to conditions.  

82.	I interpose here to say that it was that power which Lawrence Collins J exercised when he imposed a condition in his order of 9 November 2006.

83.	Rule 52.9(1) states that the appeal court may do various things, including imposing or varying conditions upon which an appeal may be brought.  By 52.9(2) it is stated that the court will only exercise its powers under paragraph 1 where there is a compelling reason for doing so.

84.	The reference to compelling reason in 52.9(2) has been the subject of comment in the decision of the Court of Appeal in Hammond Suddards v Agrichem International Holdings Limited [2001] EWCA civ 2065.  One well understands that there ought to be a compelling reason to strike out an appeal or set aside permission to appeal and consider a body of case laws to why one should not ordinarily apply to set aside a permission which ha already been given.  It is less obvious why there has to be a compelling reason to impose a condition.  It might be thought that a good reason would suffice.  Whether a good reason or a compelling reason is appropriate where the application is to vary a condition might be considered at a further date.  Happily the difference between a good reason and a compelling reason is not material to anything I have to decide in this case.

85.	The final point is to refer to the practice direction in support of Part 52.  Paragraphs 4.11 to 4.14 deal with the case of an application for permission to be considered without a hearing.  Again it repeats the seven-day time limit for asking for a reconsideration of the permission decision.  Some part of the language might suggest that the seven days applies where one not only wants a reconsideration of a refusal, but also a reconsideration of a condition or grant.  Overall it seems clear that this time limit does not apply to reconsideration application or grant and is confined to the case of reconsideration of a refusal of permission.

86.	The application in the present case is made under Rule 52.9(1)(c)  and Rule 3.1(7).  It is not made under Rule 3.3(5).  That rule was considered in detail in connection with the paper applications in Collier v Williams [2006] 1WLR 1945, see paragraphs 24 to 25 and 29 to 38.  It is not relied on in the present application.

87.	At one time I considered that an application under Rule 3.3(5) might have been a possibility.  The point was not argued before me.  My own view is that an application under Rule 52.9(1)(c) is possible in an appropriate case whether the condition is imposed at an oral hearing or in a case where the application was dealt with on  paper.  Because Rule 52.9(1)(c) is available where the condition is imposed on paper application there is nothing to be  gained by seeking to bring the case within Rule 3.3(5).

88.	After that review of the relevant rules, I will consider the application under Rule 52.9(1)(c) first and then deal more briefly with the application under 3.1(7) towards the end of my judgment.

The Application under Rule 52.9(1)(c)
89.	The first matter which I ought to consider is the passage of time from 9 November 2006 when the condition in question was imposed until 13 June 2007 when the application was made.  That is a period of some seven months.  It will also be remembered that the time for compliance with the condition expired on 8 January 2007 so that five months went by after the time had elapsed before the application was made.

90.	Rule 52.9(1)(c) does not identify any time limit from which an application under that rule is to be made.  It seems to me that there is an obvious reason for that.  The rule permits an application to vary a condition where there is a compelling reason to do so.  That compelling reason may not exist when the condition is first imposed but may come about as a result of a change of circumstances.  It would not be right to impose some time limit which would prevent a party relying upon a compelling reason which only arose after the imposed time limit.

91.	However, that does not mean that there is no limit of time within which an application under Rule 52.9(1)(c) can be made.  It cannot possibly have been the intention that an application can be made months or years after the occasion for it arises and months or years after the appellant has failed to comply with the condition.

92.	The approach of the court must be to require an application under Rule 52.9(1)(c) to be made promptly following the grounds for such an application coming into existence.  That approach is in accordance with the ethos or culture as to promptness shown by Rule 52 itself.

93.	An appellant’s notice must be filed within 21 days of the judgment being appealed against.  An application for an extension of this period of time should be considered in accordance with the principles identified in Sayers v Clarke Walker [2002] 1WLR 3095 applied in Smith v Brough [2005] EWCA civ 261.  In Sayers v Clarke Walker in a short headnote it is stated:

“An appeal court considering an application under CPR Rule 52.6 for an extension of time for appealing in the case of any complexity should, in deciding whether to exercise a general discretion to extend time under Rule 3.1(2)(a) take into account not only the overriding objective in Rule 1.1 but also the checklist in Rule 3.9(1).  The judge (inaudible) are to be avoided wherever possible.”  [Quotation unchecked] 

94.	In paragraph 36 of his judgment Brook LJ indicated that it was, subject to one point, a case in which an extension of time should be granted.  He held that it would be a disproportionate response from the court to deny the extension of time in all the circumstances in having regard to certain peculiar features of the litigation in that case.

95.	This approach was applied in Smith v Brough.  Arden LJ stressed the importance of finality in litigation.  She said at paragraph 35:

“Interest in the closure of litigation is not only in the interest of the public, successful claimants also have an interest in finality and they are entitled to expect that if they have one in trial and the time for appeal has passed, that that is the end of the matter.” 

96.	She then went on to follow the guidance in Sayers v Clarke Walker.  She applied the checklist in Rule 3.9 and found that it was not a proper case for an extension of time.  

97.	Those remarks about finality of litigation can, in my judgment, apply to the stage reached in this case on 8 January 2007 when the condition which had not been challenged before the court had not been complied with and on the face of it the appeal should be treated as being effectively at an end whether or not it is necessary to have some administrative act recording that fact.

98.	Brook LJ gave a short judgment in Smith v  Brough.  He made a few remarks of his own.  He said in paragraph 54:

“(1) It is a fundamental principle of our common law that the outcome of litigation should be final;  (2) that the law exceptionally allows appeals out of time; (3)  that this, and the other exception mentioned [in an earlier passage he had read] are the exception to a general rule of high public importance and reserved for rare and limited cases where the facts justifying the exception can be strictly proved.  

I agree that this is not a case which qualifies for the exception and I would add this:  in interpreting CPR 3.9 in any case where an extension of time for appealing in excess of say two months has been sought, the court will bear in mind the matters to which I have referred in determining where the interests of the administration of justice truly lie.” 

I would add to those remarks that the general requirement of promptness is laid down by the overriding objective with which the parties are obliged to comply (see Rules 1.1 and 1.3).
.
99.	If one looks at the checklist in Rule 3.9 and applies it to the facts of this case, the first part of the checklist refers to the interests of the administration of justice.  It can be powerfully said on behalf of Halton that Lawrence Collins J thought it was a proper case to grant permission to appeal.  As against that, the administration of justice, as explained in Smith v Brough, includes an important principle that there should be finality in litigation at an appropriate stage.   The appropriate stage in this case would appear to be 8 January 2007, five months before this application was brought.  

100.	It might be said that Guernroy was not entitled to assume matters were at an end because solicitors for Halton and Mr Kaddoura had written the letter of 8 January 2007 to which I have referred.  I do not regard it as sufficient to keep open litigation which is otherwise final.  I simply write in a letter reserving one’s position.

101.	The second paragraph in the checklist refers to whether the application was made promptly.  That question was easy to answer.  The application was not made promptly. 

102.	The third paragraph asks whether the failure to comply was intentional.   In one sense one can say that it was intentional – the money intentionally so was not paid.  That may be too crude an answer to the question.   Mr Farber says that Halton could not pay so that its failure to pay should not be regarded as some intentional non-compliance.  However,  if one is entitled to consider the position of Dr Tabbara then I do find that Dr Tabbara’s failure to give the money to Halton to comply with the condition was an intentional act in that Dr Tabbara could have acted differently and chosen not to fund Halton.

103.	The fourth requirement in the checklist is whether there is a good explanation for failure.  I have effectively dealt with that in the last comment I made.

104.	The fifth point in the checklist raises the extent to which the party in default has complied with other court orders.  Halton and Dr Tabbara, as it is relevant to refer to him, have not complied with any of the adverse court orders made against them since the order of Patten J on 16 November 2005 when he disposed of the action.

105.	Paragraph (f) in the checklist asks whether the failure is the failure of the party or the legal representative.  Sometimes it might be regarded as less severe or less serious if the failure is the solicitor’s failure rather than the party’s failure.  In this case there is no basis on which the solicitor can be blamed for what has happened here.

106.	The next paragraph in the checklist refers to the effect on the trial date.  That  is not directly relevant.  It may be material in the sense that it allows one to say that if this condition had been complied with earlier or varied earlier than the appeal would be much more forward than it will be if this application now succeeds.

107.	The last points look to the effect of the failure and the effect of the grant of relief.  So far as the previous failure to comply with the condition is concerned, I hold that it was Guernroy’s entitlement to take the view that the appeal was over.  It got on with the detailed assessment.  The costs of the detailed assessment and the work involved in it is not all wasted although there might be some element of waste insofar as there is a detailed appraisal of the costs for the period which are said to be ineligible because of the point being made about the solicitor’s retaining a letter.

108.	It is also entirely right to reflect that if the appeal were to proceed and were to succeed the amount at stake is a substantial sum and is obviously of importance to all those persons affected by it.

109.	One of the other criteria in Rule 3.9 is whether there is a good explanation for the failure.  Rule 3.9(2) states that the application for a relief must be supported by evidence.  Smith v Brough makes it clear that the evidence must be sufficiently detailed to satisfy the court of the true position as to the reason for its delay.  I would not regard the very brief unparticularised paragraph, number 16 in Dr Tabbara’s witness statement, as satisfying the requirement that there be a good explanation for the delay.

110.	Having conducted that detailed review, in my judgment this application under Rule 52.9(1)(c) is made very late without a good explanation and it ought to be rejected on that ground alone.

111.	However, I will go on to consider the substantive grounds relied upon in support of the application.  I have read the grounds as set out in the application notice itself and the relevant parts of the evidence of Dr Tabbara.  Mr Farber, on behalf of Halton, recites a number of authorities as to the principles which should be applied.  Ms Addy, on behalf of Guernroy, has referred to the Days Healthcare case which was considered by the costs judge in  September 2006 and which was referred to in the skeleton argument before Lawrence Collins J in November 2006.

112.	In deference to the sustained argument from Mr Farber, I will refer briefly to the authorities which are relied upon.  In MP York Motors v Edwards [1982] 1WLR 444 the House of Lords was concerned with the circumstances in which it was right to grant leave to defend on a summary application, but in circumstances where the defendant who was permitted to defend was required to bring part of the sum in dispute into court.  It is clear from the speech of Lord Diplock, page 449, that the court ought not to impose a condition of that kind where the defendant would never be able to comply with it.  There is an onus on the defendant to satisfy the court that he cannot comply, it is not sufficient  that he shows it is difficult to comply and it is not sufficient that he makes a mere assertion without supporting material.

113.	The next case I am asked to consider is the case of Hammond Suddards v Agrichem International Holdings Limited to which I have already referred.  This is a very well known case and frequently cited.   There were three separate topics dealt with by an appeal.  The first two are not of main importance in the present case. The first was that the judgment debtor applied for a stay of execution of the judgment debt pending appeal.  He did so on the grounds that he was impecunious.  The Court of Appeal were wholly unsatisfied with the evidence adduced of impecuniosity and rejected the application for a stay on that ground.

114.	The second part of the judgment dealt with a conventional application by the respondent under CPR Rule 25.15 and 25.13 as security for costs of the appeal.  The Court of Appeal referred again to the well known statement by Peter Gibson LJ in Kearly Developments Limited v Tarmac Construction Limited [1995] 3 AER 534 and 539 to 542 dealing with the risk of the appeal being stifled and the relevance of funding from persons other than the appellant itself.

115.	The part of the decision which is relevant is the third part.  Here the Court of Appeal considered whether it was appropriate as a condition of permitting the appeal to go forward to require the appellant to bring into court the judgment debt in a case where the liability to pay the judgment debt was being challenged in the appeal that was intended.  The court considered Rule 52.9 as to the circumstances in which it was appropriate to compose a condition.  There is a discussion about the words “compelling reason” at paragraph 39 of the judgment of Clarke LJ.  At paragraph 41 Clarke LJ sets out six reasons which he says together form a compelling reason for making this order.   He indicated at paragraph 45:

“It would not be right to make such an order if it were to stifle the appeal, but in view of their decision on the stay application as to the financial position of the appellant they did not feel that an appeal would be stifled.” 

116.	The next case on which Mr Farber places his principal reliance is the decision in Olfatawura(?) v Abbey (Inaudible) [2003] 1WLR at 275.  That was a case of a claimant being put on terms bringing money into court as a condition of being allowed to continue with his claim.  It was not a case for security for costs under Part 25.  What was new about the case was that it drew the attention of the profession to the powers of the court to make such conditional orders under Rule 3.

117.	There are important passages as to the approach a court should take to such an application in paragraph 21 to 26 of the judgment of Simon Brown LJ.  There is a summary of them in a later case to which I will refer.

118.	The next case to which my attention was drawn is CIBC Mellon Trust Company v Mora Hotel [2002] EWCA civ 1688.   In that case Mr Justice Jacob had required a party to give security, not only for costs to be incurred in the next stage of the litigation, but also substantial costs orders that have already been made against the party who was required to give security.  The judge professed himself to be unconcerned that the party could not find the money.  The money would have to come from the third party, Mr Kavatza.  The Court of Appeal upheld the judge’s orders as regards future costs of the stage yet to be gone through.  In the exercise of his discretion he reversed as to past costs.

119.	They held that there was jurisdiction to make such an order, but in the differentiation between future costs and past costs, there are detailed reasons given for the differentiation in the judgment of Peter Gibson LJ at paragraph 31. 

120.	The position of Mr Kavatza is dealt with in that paragraph.  It was suggested that it would be unjust to impose a term which, if it were to be complied with, would require Mr Kavatza to do the paying when Mr Kavatza had not been made, and probably would not be made, directly liable to pay the costs in question.  That matter is also discussed in some detail in paragraph 34 of the Peter Gibson LJ’s judgment.  Again the point is made that Mr Kavatza was not going to be made liable personally to pay the costs in question.

121.	In paragraph 45 of the judgment of Mance LJ there is a further explanation as to the difference of approach which might be appropriate when considering the exercise of a discretion as to past costs as compared with future costs.  Mr Kavatza’s position was also referred to at the end of paragraph 52 of the judgment of Mance LJ.  He was treated as a third party against whom a costs order would not be appropriate.

122.	The next case that Mr Farber asks me to consider is Ali v Hudson [2003] EWCA civ 1793.  This was a case of an impecunious appellant, Mr Ali.  The Court of Appeal set aside an order that the impecunious Mr Ali pay  money or bring it into court because they held that he could not comply with the condition.

123.	The judgment of Clarke LJ at paragraph 40 summarises the principles to be applied drawing extensively on the Olfatawura case.  I will read the relevant part:

“Those principles show that the (inaudible)  for security for costs in a case of this kind should be exercised with great caution.  The correct general approached may be summarised as follows.  (1)  It would only be in an exceptional case, if ever, that a court would order security for costs if the order would stifle a claim or an appeal.  (2)  In any event (a) an order should not ordinarily be made unless the party concerned can be shown to be (read to the words) proper court procedures or otherwise to be demonstrated on a want of good faith.  Good faith being understood to consist, as Simon Brown LJ put it, of a will to litigate a genuine claim or defence or appeal as economically and expeditiously as reasonably possible in accordance with the overriding objective and (b) an order will not be appropriate in every case where a party has a weak case.  The weakness of a party’s case would ordinarily be relevant only where he has no real prospect of succeeding.”  [Quotation unchecked] 

124.	Finally for the sake of completeness,  I ought to refer briefly to the decision of Langley J in the Days Healthcare case.  That was a case where Langley J had been the trial judge.  He had found against the defendants.  He ordered them to pay a substantial sum by way of damages and pay the costs of the action.  He ordered an interim payment on account of costs of £2 million.  The detailed assessment costs went to the costs judge.  An application was made that the defendants should comply with the order as to the payment of costs on account before they should be permitted to continue with a lengthy detailed assessment.  The costs judge declined to make the order and Langley J reversed him and made the order.

125.	At paragraph 19 he expressed the concern that the law was such that he was unable to make such an order. What struck Langley J as inappropriate about the defendant’s position was that they would put the claimant to further costly lengthy proceedings on the detailed assessment when they had not complied with the earlier order of the court as to payment on account.

126.	I tend to apply those principles in this case.  It is probably right to notice one point about the way the matter is stated in the Olfatawura case and Ali v Hudson.  Those comments about good faith might be unnecessary where one is dealing with a conventional application for security for costs of the appeal pursuant to Rule 25.15 and 25.3.  Applications of that kind do not normally require it as a precondition of success that there has been some conduct of criticism on the part of the appellant.  With that minor qualification, the principles which apply to costs from earlier stages of the litigation can conveniently be taken from Clarke LJ’s judgment of Ali v Hudson.  It might be said that the same Lord Justice’s judgment in Hammond  Suddards case is perhaps not quite so prescriptive as to the conditions.

127.	I address first the question of impecuniosity of Halton.  Halton does not have any assets to fund an appeal.  Halton does not have any assets to comply with the condition.  Halton cannot compel Dr Tabbara to fund Halton’s appeal.   As I have attempted to describe, the appeal has been brought by Halton principally to benefit Dr Tabbara.  Dr Tabbara is funding his present application.  Dr Tabbara will fund any appeal that is permitted to proceed.  Dr Tabbara has not tried to show he does not have funds to prosecute the appeal in the name of Halton and for his own benefit.

128.	The position of a third party funder was  referred to in the CIBC Mellon Trust case which I have analysed above.  The Court of Appeal there dealt with the case of Mr Kavatza who had not been the subject of a direct non-party costs order and the court thought that he could not be and proceeded on the basis that he would not be.

129.	This case is the opposite of the CIBC case.  Here Dr Tabbara has been ordered to pay the costs which were the subject of the ruling on 8 September 2006 and on the subject of the intended appeal.  Further, it appears to me to be of great significance that the appeal was brought for the principal benefit of Dr Tabbara.  It would not be right to go so far as to say that Halton is a nominal appellant, but it is the next best thing.

130.	In my judgment, for the purpose of exercising a discretion as to whether to impose a condition of the time imposed by Lawrence Collins J would be artificial in the extreme to distinguish between the financial position of Halton and the financial position of Dr Tabbara and to ignore completely the latter.  Dr Tabbara was a party to the proceedings which led to the order, dated September 2006.  He was certainly a competent appellant.  It may even be that if he wants to take the benefit of a successful appeal he would want to be an actual appellant.

131.	On the assumption made by Halton and Dr Tabbara that he will benefit from a successful appeal, even without being a party to it, I do not think that I should regard him as a disinterested third party or that I should consider the position of Halton in isolation.  If Dr Tabbara wants the appeal to proceed for his benefit then, in my judgment, the correct approach of the court to adopt is to regard him for present purposes as an effective party.  Once that is done there is no  case, save some impecuniosity, for revoking the condition imposed on 9 November 2006.

132.	As to the other matters mentioned by Clarke LJ in Ali v Hudson I ought to have regard to the fact that Halton and  Dr Tabbara have failed to comply with every adverse order made against him since, and including, 16 November 2005 and they both show every intention of persisting in that attitude.

133.	I also take into account, because it is more clear today than it would have been before Lawrence Collins J that even if the appeal were to be allowed to proceed and were to succeed, Dr Tabbara still owns Guernroy a sum of approximately £950,000 which he has not paid, which he fully intends to resist paying, and that sum exceeds the amount of the payment in required by the conditions.

134.	Further, if one were to prepare the facts of this case with the six compelling factors identified in the Hammond Suddards case and on the basis that one does not regard Halton in isolation, but one has regard to the financial position of Halton, then, in my judgment, the parallel between that case and this is very close.  The present case is much stronger because the condition imposed on 9 November 2006 and the figure of £730,000 is less than the £950,000 which has been disputed and due even if the appeal were to proceed and be successful.  In Hammond Suddards the amount which was the subject of the condition was an amount which would not be payable if the appeal were to proceed.

135.	In these circumstances, even if the application under Rule 52.9(1)(c) had been made promptly after 9 November 2006 I would not have exceeded to it.   The authorities cited by Mr Farber do not support the conclusion that the condition should be revoked.  In my judgment, they support the original imposition of that condition.  They also support the continuation of that condition.

The Application under Rule 3.1(7)
136.	I turn finally to the application under Rule 3.1(7) which I can deal with more briefly.  The scope of Rule 3.1(7) is dealt with in paragraphs 39 and 40 of the judgment of Dyson LJ in Collier v Williams.  In those paragraphs Dyson LJ approved the approach of Patten J in Lloyds Investment Limited v Christen Ager Hansen [2003] EWCA civ 1740.  It was point out that the power under Rule 3.1(7) to vary or revoke an order should really only be used where there has been a material change of circumstances from the time of the earlier order or that the judge making the earlier order was misled in some way.  It was not appropriate to try to use Rule 3.1(7) to have a reconsideration of the order on the basis of the same material that was  either available, or could have been made available, to the judge who made the original order.  It was pointed out that Rule 3.1(7) was not to be used to seek an order from a judge or coordinate jurisdiction which was, in effect, an appeal against an earlier order made by a judge.

137.	The language of Collier v Williams needs to be adapted slightly to the present case.  It is accepted by the parties that there is not a separate right of appeal against the condition imposed by Lawrence Collins J.  What there is is a right to reply under Rule 52.9 in an appropriate case.  I have already held that this is not an appropriate case.

138.	In my judgment there is no arguable basis for an application under Rule 3.1(7).  There is no question of Lawrence Collins J being misled.  There has been no material change of circumstances since 9 November 2006 which would justify this application.  Insofar as there has been any change of circumstances, what has changed is that it is now absolutely clear that Dr Tabbara and Halton are indisputably liable to pay £950,000 which I more than the sum referred to by the learned judge.  The change of circumstances is adverse to Halton’s application and is not supportive of it.

Overall Result
139.	The overall result is I dismiss the application made under Rule 52.9(1)(c) and the application made under Rule 3.1(7).