Watson v Perotti

Permission to appeal should be refused where the proposed appeal has no real prospect of success. A litigant’s ability to use assets for legal representation may properly be restricted once the underlying litigation and costs disputes have concluded, particularly where using those assets would prejudice the judgment creditor. In committal proceedings, the judge must consider whether representation is necessary. If imprisonment is a possible outcome and the litigant cannot fund representation, the state may need to provide it, but that issue does not itself establish an appeal from an earlier funding decision. A party cannot choose the judge who will hear proceedings merely by alleging bias. A further affidavit concerning assets may be ordered where the original disclosure appears incomplete, subject to a procedure allowing objections based on self-incrimination.

The proceedings arose from extensive litigation concerning Mr Watson’s administration of the estate of Mr Perotti’s late uncle. After substantial costs orders and freezing and charging orders, Mr Perotti made several applications concerning access to assets, legal representation, committal proceedings, judicial allocation and enforcement in Switzerland.

Rimer J refused applications made on 21 May 2002, including an application to release assets to fund representation in committal proceedings and an application to have the committal proceedings heard by Rimer J. Other applications challenged orders made by Laddie J concerning committal, asset disclosure and enforcement. The central issue was whether any proposed appeal had a real prospect of success.

1. Applications refused. Lord Justice Aldous concluded that none of the proposed appeals had a real prospect of success. There was no order as to costs.
2. Rimer J had exercised his discretion appropriately in refusing to release further assets for Mr Perotti’s legal representation. The position differed from the earlier appeal, when charging orders obstructed his ability to challenge the judgment on which the costs orders were based. By May 2002 the substantive litigation had concluded, the costs exceeded £600,000, and justice did not require further assets to be used for representation instead of satisfying those debts.
3. The judge hearing the committal proceedings had to decide whether Mr Perotti required representation. The seriousness of possible imprisonment made representation desirable. If no solicitor would act and Mr Perotti could not pay, the state might need to provide assistance, potentially through the Official Solicitor. That prospect did not justify permission to appeal against the refusal to release assets.
4. The fact that Mr Perotti left a hearing, and that the hearing continued in his absence, gave no arguable basis for appeal. The Civil Procedure Rules 1998 expressly permitted hearings to continue in a party’s absence, and the circumstances did not require the hearing to be aborted.
5. There was no valid basis for transferring the committal proceedings from Laddie J. It was for the court, not the litigant, to determine which judge should hear the matter. Assertions of bias, without supporting material showing that the judge could not act fairly, were insufficient.
6. The order requiring an updated affidavit of assets was within the judge’s discretion because the evidence suggested that the original affidavit was incomplete. It was not barred by res judicata: the earlier judgment continued the freezing order, whereas the later order supplemented it. The safeguard allowing Mr Perotti to apply to set aside the order on self-incrimination grounds, with compliance suspended meanwhile, was sufficient.
7. The decision to treat Mr Watson’s contempt as purged and permit proceedings in Switzerland was also within the judge’s discretion. The question whether Mr Perotti held Swiss assets, or had breached orders, remained for trial.

• Court of Appeal (Civil Division): applications for permission to appeal against orders of Rimer J and Laddie J were refused. No order as to costs.
• Chancery Division: Rimer J dismissed applications on 21 May 2002 concerning release of assets for legal representation and transfer of committal proceedings. Laddie J made orders concerning committal proceedings and asset disclosure.