MCA Records Inc v Charly Records Ltd & Ors

On an application to extend time for payment of costs pending a possible appeal, the Court of Appeal must assess whether enforcement would create a real risk of serious injustice by stifling an arguable appeal. The court may revisit its earlier order only where circumstances have changed. A pending petition for leave does not itself justify an extension where the petition is already lodged and enforcement will not impede the application for leave. If leave is later granted, any real risk to prosecution of the appeal can be addressed by a fresh application, including directions concerning funds subject to Mareva restraints. A possible bankruptcy application should not be prejudged.

The underlying proceedings concerned alleged copyright infringement in sound recordings. Rimer J found Mr Young jointly liable with Charly Records, granted injunctions, ordered an inquiry as to damages under the Copyright, Designs and Patents Act 1988, and ordered him to pay £350,000 on account of costs. Following an appeal, the Court of Appeal on 5 October 2001 refused a further stay, ordered payment within 56 days, and refused permission to appeal to the House of Lords. Mr Young then applied for an extension because his petition for leave to appeal to the House of Lords remained pending. The central issue was whether enforcing the costs order before that petition was determined would cause serious injustice or stifle an arguable appeal.

Lord Justice Chadwick dismissed the application for an extension of time, with costs.

1. The Court of Appeal could not revisit its order of 5 October 2001 unless there had been a change of circumstances since that order. The pending petition for leave to appeal was considered as the alleged change.
2. The application for a stay of enforcement of the Court of Appeal’s order had to be made to that court, including after the House of Lords had granted leave to appeal. The court recognised that enforcement should not be allowed if it created a real risk of serious injustice by stifling an arguable appeal. The arguability of the proposed appeal was assumed, without expressing a view on whether leave would be granted.
3. Refusal of an extension would not impair Mr Young’s ability to seek leave because the petition had already been prepared and lodged, and no further expenditure was shown to be necessary for that application. If leave were granted, a stay would be required only if enforcement created a real risk that Mr Young could not prosecute the appeal.
4. On the material before the court, Mr Young had no significant capital assets against which the claimants could levy execution. Any appeal would instead have to be funded from future foreign income brought into the jurisdiction. That income was subject to Mareva restraints, but the court could be asked for directions permitting its use to fund the appeal. The relevant court would decide that application in the circumstances then existing.
5. Bankruptcy was regarded as unlikely at that stage, partly because Mr Young appeared to be non-resident. Any future bankruptcy application would have to take account of a pending appeal, but there was no need to prejudge that issue.

There was therefore no basis for extending the time limited by the earlier order. The application was dismissed with costs.

• Court of Appeal (Civil Division): On 29 November 2001, Lord Justice Chadwick dismissed Mr Young’s application to extend time for payment of £350,000 on account of costs.
• Court of Appeal (Civil Division): On 5 October 2001, the court refused a further stay, ordered payment within 56 days, and refused permission to present a petition of appeal to the House of Lords.
• Rimer J: After trial, on 22 March 2000, Mr Young was found jointly liable with Charly Records and was ordered to pay the claimants’ costs on an indemnity basis, including £350,000 on account. On 24 May 2000, time for payment was extended temporarily while permission to appeal was pursued.