Barings Bank Plc & Anor v Coopers & Lybrand (A Firm) & Ors

The power under rule 52.9 of the Civil Procedure Rules to set aside permission to appeal is reserved for rare cases involving something in the nature of an irregularity in the grant. A compelling reason may arise where the judge granting permission was misled, or overlooked an authority or statutory provision that was plainly and unarguably decisive.

The power does not permit the court to reconsider the merits of the original permission decision or to encourage satellite litigation. A subsequent development which reduces an appeal to a dispute about costs does not itself supply a compelling reason. That development may instead be considered by the court hearing the substantive appeal.

The claimants obtained permission to appeal against an order of Evans-Lombe J striking out negligence claims brought against former partners of Deloitte & Touche (Singapore). The underlying claims arose from the collapse of Barings Bank and alleged failures in the audit of a Singapore subsidiary.

After permission was granted, the determination of a preliminary issue in related proceedings meant that most of the proposed appeal was stayed. The appeal remained relevant only to costs. The defendants applied under rule 52.9 of the Civil Procedure Rules to set aside permission, arguing that circumstances had changed, the remaining ground lacked merit, and the permission judge had not been given a sufficiently clear account of a proposed pleading amendment.

The central issue was whether those matters provided the compelling reason required to set aside permission to appeal.

1. Application refused unanimously. Jonathan Parker LJ, with whom Laws LJ agreed, held that there was no compelling reason to set aside permission to appeal. The assertion that the permission judge had been misled was without substance. The written material had made clear that the formal application to amend the pleading was made when consequential matters were considered after judgment.

2. Rule 52.9(1) of the Civil Procedure Rules confers power to set aside permission to appeal, but rule 52.9(2) restricts its exercise to cases where there is a compelling reason. In this context, a compelling reason means something sufficiently serious to be in the nature of an irregularity in the grant of permission. The ordinary examples are that the permission judge was misled or overlooked a decisive authority or statutory provision. Nathan v Smilovitch [2002] EWCA Civ 759 approved.

3. The power is not a means of appealing against, or second-guessing, the grant of permission. Its use for that purpose would generate satellite litigation. It exists to enable justice in the rare case where the process by which permission was granted was affected by an irregularity.

4. The fact that later events had left the appeal relevant only to costs did not amount to a compelling reason. That circumstance could be placed before the court hearing the substantive appeal, which could give it appropriate weight. Nor could the court use the application to reconsider whether the remaining bonuses issue had sufficient merit to justify permission.

5. Laws LJ added that any authority or statutory provision said to have been overlooked must be plainly and unarguably decisive. If its effect is open to argument, an application to set aside permission is misconceived. Applications under rule 52.9 should not be used as a vehicle for satellite litigation.

6. The application was refused with costs assessed at £27,817.48. The substantive appeal was stayed pending the outcome of the related action brought by the audited subsidiary.

1. Court of Appeal (Civil Division): By [2002] EWCA Civ 1155, unanimously refused the application to set aside permission to appeal and stayed the substantive appeal pending the outcome of the related action.

2. High Court, Chancery Division: Evans-Lombe J struck out the claim against the applicants by an order dated 5 December 2001 and refused permission to appeal. The citation of that decision is not stated in the judgment.

3. Single Lord Justice: Robert Walker LJ granted permission to appeal on the papers on 5 February 2002.