Popely v Popely

On a proposed second appeal, the Court of Appeal should use its resources sparingly. Permission should be granted only where the case raises an important point of principle or practice, or there is another compelling reason to hear it. A party should not use a second appeal to pursue points of detail or introduce evidence which could have been provided below. In an application for security for costs under the Civil Procedure Rules, once the relevant condition is satisfied, the court must decide whether security is just in all the circumstances. Relevant considerations include asset arrangements affecting enforcement, unexplained funding, possible outside financial support and the different positions of claimant and defendant.

The claimant brought proceedings against his brother concerning a dispute involving company funds. The defendant challenged service and jurisdiction, including whether England was the proper forum. The Chief Master declined to order security for costs. On 22 May 2002, Mr Peter Leaver QC, sitting as a Deputy High Court Judge, reversed that decision and ordered substantial security.

The claimant sought permission for a proposed second appeal. He also sought to adduce further evidence explaining his financial circumstances and the funding of his litigation. The central issues were whether the second-appeal threshold was met, whether further evidence should be admitted, and whether the Deputy Judge had properly exercised the discretion to order security.

Application refused. Lord Justice Brooke refused permission for the proposed second appeal.

1. The Access to Justice Act 1999 and the policy of the Civil Procedure Rules require the Court of Appeal to use its resources sparingly on second appeals. Permission should be granted only where there is an important point of principle or practice, or another compelling reason to entertain the appeal. The claimant’s proposed arguments concerned points of detail and did not satisfy that threshold.

2. The Court of Appeal should not generally admit evidence which was not before the courts below, save in exceptional circumstances. The additional evidence sought to explain matters which could readily have been addressed before the Chief Master or the Deputy Judge. It was therefore inappropriate to admit it.

3. The Chief Master had found the condition in rule 25.13(2)(g) satisfied because the claimant had taken steps concerning his assets which would make enforcement of a costs order difficult. The remaining question under rule 25.13(1)(a) was whether it was just in all the circumstances to order security.

4. In all but the most unusual cases, the burden lies on the person from whom security is sought to show that there is no prospect of funds being available from any outside source. That approach applies to individuals as well as companies. The Deputy Judge was entitled to consider the claimant’s unexplained funding of litigation in several jurisdictions, possible support from his sons, and the possibility of securing a charge over property.

5. The claimant’s transfer of assets into discretionary trusts was a relevant consideration where it made enforcement difficult. The claimant and defendant were in materially different positions: the claimant had chosen to litigate, while the defendant might have to defend the proceedings without a realistic prospect of recovering costs. The Deputy Judge was entitled to take that distinction into account and to exercise his discretion as he did.

6. No important point of principle or practice, or other compelling reason, justified a further appeal. Sympathy for the claimant’s allegations against his brother could not displace the statutory and procedural limits on a second appeal.

• Court of Appeal (Civil Division): Permission for a proposed second appeal refused.
• High Court of Justice, Chancery Division: On 22 May 2002, Mr Peter Leaver QC, sitting as a Deputy High Court Judge, reversed the Chief Master’s decision and ordered substantial security for costs.
• Chancery Division: On 14 January 2002, Chief Master Winegarten declined to order security for costs.