In Michael Wilson & Partners Limited (“MWP”) v Sinclair et al [2017] EWCA 55, the Court of Appeal has, in allowing MWP’s appeal from Whipple J (reported at [2015] EWHC 2847 (QB)), set out clear guidelines as to the applicable CPR rules relating to stays of execution or enforcement of Court orders. It has also provided helpful guidelines as to what may or may not count as ‘special circumstances’ within the meaning of CPR 83.7.
This appeal was described by the Court of Appeal as ‘merely one episode in a long saga of arbitration and litigation that has been proceeding in various jurisdictions for a number of years.’ This is the second time in a matter of weeks that the Court of Appeal has been involved in this litigation: see the decision reported at [2017] EWCA Civ 3 allowing MWP’s appeal to reinstate the Max shares and funds claim in the Commercial Court: see https://staging.littletonchambers.com/court-of-appeal-allows-appeal-and-reverses-2012-commercial-court-abuse-of-process-decision-1068/.
So far as this appeal is concerned, Mr Sinclair (“TIS”) had commenced proceedings in the Bahamas against MWP, seeking declarations as to the beneficial ownership of the Max shares. MWP challenged the Bahamian jurisdiction successfully and Mr Sinclair’s action was struck out. In the event, MWP was the beneficiary of several Bahamian costs orders and judgments, including in the Privy Council. It caused them to be registered as judgments and orders in this jurisdiction pursuant to the Administration of Justice Act 1920.
Thereupon TIS applied for and obtained from the Master a stay of enforcement and execution of the English registration order and of the underlying Bahamian orders and judgments. The Master exercised his jurisdiction pursuant to CPR 3.1(2)(f), rejecting MWP’s submission that that rule was inapposite and that the relevant rule was CPR 83.7 (TIS not relying on CPR 40.8A that there were matters which had occurred since the date of the judgment or order).
Whipple J dismissed MWP’s appeal. She held that the Master had applied the correct CPR rule. She rejected MWP’s submission that the correct rule was CPR 83.7 and that accordingly “special circumstances” had to be shown “which render it inexpedient to enforce the judgment”. However, the Judge also went on to say that if she was wrong, she would have found in any event that there were sufficient “special circumstances” in this case to warrant the grant of the stay sought.
Upon MWP’s application, Floyd LJ gave permission to appeal, notwithstanding MWP’s appeal was a second appeal.
The Court of Appeal (McCombe & Briggs LJJ) held that the Judge was wrong in her analysis of the CPR. They held that CPR 83.7 was the relevant rule in this case and not CPR 3.1(2)(f). Contrary to the Judge’s view, they held that for CPR 83.7 to apply, it was not necessary for there to have been any writ of control or other warrant issued, but that the rule applied from the moment of the making of the judgment or order for the payment of money. Further, that CPR 83.7 precludes the operation of rule 3.1(2)(f) in the case of money judgments. Accordingly, there had to be “special circumstances which render it inexpedient to enforce the judgment or order”. This is an important decision which clarifies the correct CPR provision and thus makes it harder for a debtor to obtain a stay (the test under CPR 3.1(2)(f) being lower).
The Court of Appeal thus had to consider whether the Judge’s alternative exercise of her discretion was liable to be set aside. They ruled that it was. The Court of Appeal rejected the Judge’s ruling as to what counted as ‘special circumstances’ (ie. the ‘complex web of litigation’, the importance of ‘holding the ring’ etc.). The Court of Appeal rather considered more material the fact that that MWP had made payments on account in the arbitration of £675,000; that the Court had allowed MWP’s appeal to reinstate the Max action; that there were significant hurdles in the way for TIS to recover on any cross undertaking as to damages in respect of the earlier setting aside of a freezing order. Accordingly, the Court of Appeal held that “a sufficient number of the bricks, from which the exercise of the judge’s discretion was constructed, have turned out to be unsound”.
The Court of Appeal went on to exercise its discretion afresh. It held that the usual rule in costs disputes, especially in lengthy and complex litigation, is “pay as you go”, and accordingly, the stay of execution should be lifted. There were no special circumstances which TIS could pray in aid to disturb that conclusion.
Here is a link to the judgment: http://www.bailii.org/ew/cases/EWCA/Civ/2017/55.html.
This is now the third time that Charles Samek QC and Adam Solomon have succeeded in the Court of Appeal for MWP in this part of the MWP / Emmott / Sinclair litigation. See also http://www.bailii.org/cgi-bin/format.cgi?doc=/ew/cases/EWCA/Civ/2015/774.html & http://www.bailii.org/cgi-bin/format.cgi?doc=/ew/cases/EWCA/Civ/2017/3.html.
The Chambers UK directory lists Charles as a leading QC in its commercial dispute resolution and fraud (civil) categories, describing him as an “outstanding advocate. He has real presence in court and you can see that the judges really listen to him. He came across really well”; “extremely bright, hard-working and responsive”; “very clear in terms of his thinking, advice and advocacy”; and “a fantastically hands-on, very user-friendly and talented advocate”.
Adam is listed in the directories in a number of categories, including being ranked as a leading junior in commercial dispute resolution in Legal 500, which says of him “He never sits on the fence, and provides clear and pragmatic advice.”. He has also been described in the directories as: “An impressive advocate; charming but devastating in cross-examination. He is user-friendly and easy to work with.”; “Masters his brief well and is highly tenacious”; “He punches holes in the other side’s position…”.
