Cie Noga d’Importation et d’Exportation SA v Australia and New Zealand Banking Group Ltd (Cie Noga d’Importation et d’Exportation SA v Government of the Russian Federation)

A respondent who seeks only to uphold the result below on alternative grounds is not appealing and ordinarily does not require permission. The appellate court’s jurisdiction is directed to the result embodied in a judgment, order or determination, rather than to reasons or findings which a successful party merely dislikes.

In a trial of preliminary issues, however, the first-instance court has a discretion to frame its determination so that it records a factual issue genuinely resolved and material to the issue tried. It must not exercise that power solely to impose a permission requirement on a defensive respondent. The procedural consequences, including the overriding objective, may nevertheless be considered where the wording fairly reflects the issues and their resolution.

In settlement litigation involving Noga, the Federal Government of Nigeria and the SJ Berwin defendants, Rix LJ tried preliminary issues concerning three alleged agreements. He found that a figure of US$100 million had been agreed between Noga and the SJ Berwin defendants, but that the agreement was conditional and did not create a binding settlement.

In settling the order, Rix LJ declared both that no binding settlement had been concluded and that the US$100 million figure had been agreed. The SJ Berwin defendants appealed against that form of declaration. They contended that, without it, they could defend Noga’s appeal on the factual issue by a respondent’s notice without permission. The central issue was whether the judge could properly frame the declaration in a way which made that factual finding part of the determination.

1. Appeal dismissed by a majority. Tuckey and Hale LJJ held that Rix LJ was entitled to include the US$100 million finding in the declaration. Waller LJ dissented on the exercise of discretion.

2. The majority accepted Waller LJ’s analysis that appellate jurisdiction concerns the result of the hearing, not the judge’s reasons. Properly understood, Lake v Lake [1955] p.336 means that there is no jurisdiction to entertain an appeal where the proposed appellant does not seek to challenge or vary the decision which would be recorded in the formal order. A respondent who merely advances another basis for affirming that result remains a defensive respondent and ordinarily needs no permission.

3. A determination of a preliminary issue may consist solely of a factual finding where that is the issue which the court was asked to determine. Conversely, a party which has succeeded on the issue actually determined cannot appeal an unwanted subsidiary finding merely because it dislikes the reasoning.

4. The majority held that a court has a real discretion when identifying the result of a trial of preliminary or separate issues. The US$100 million issue was central to the terms of the alleged settlement and remained material if the legal issue were resolved for Noga. The declaration fairly recorded the judge’s resolution of that issue, despite the original formulation of the preliminary issue being more general.

5. It would be illegitimate to make a declaration solely to force a defensive respondent to obtain permission. But Rix LJ had a legitimate additional purpose: accurately recording the determination. He could also take account of the Civil Procedure Rules overriding objective, including proportionality, the parties’ resources and the likely burden of a lengthy factual appeal. The appeal was therefore dismissed, with costs awarded to Noga.

• Court of Appeal (Civil Division) — dismissed the SJ Berwin defendants’ appeal against the form of the declaration: [2002] EWCA Civ 1142.
• Commercial Court — Rix LJ, sitting as a High Court judge, held that the alleged US$100 million agreement was conditional and not binding, but included in the declaration a finding that the figure had been agreed.