Charly Acquisitions Ltd & Anor v Immediate Records Inc & Anor

An application for security for the costs of an appeal should not be determined while there is a credible possibility that the appeal will be abandoned. The appellants should first have an opportunity to confirm whether they intend to pursue it. If they do not, the security application falls away; if they do, it should be heard on notice. An order permitting solicitors to cease acting takes effect on service. Until then, the former solicitors remain the address for service. The appellants must provide a new address within the jurisdiction, although the court may direct alternative service where there is good reason. Failure to comply may justify striking out the appeal without further order.

The underlying proceedings concerned ownership of copyright in a catalogue of sound recordings released under the Immediate label. The claim by Charly Acquisitions Ltd and Charly Trademarks Ltd succeeded, while a counterclaim by Immediate Records Inc and Andrew Loog Oldham was dismissed by Pumfrey J on 7 February 2002.

Immediate Records Inc and Mr Oldham obtained permission to appeal. Sanctuary Copyrights Ltd, the third defendant to the counterclaim, applied for security for the costs of the appeal. The application was complicated by uncertainty over whether the appellants intended to pursue the appeal and by the former solicitors’ failure to serve the order declaring that they had ceased to act. The issues were whether security should be ordered immediately and how the order concerning the solicitors affected service.

Application for security. The application was premature. There was credible evidence that neither appellant intended to pursue the appeal. If the appeal was abandoned, it should be struck out or dismissed and the security application would fall away. If it was pursued, the appellants were entitled to an opportunity to be heard, personally or through solicitors on the record. The application was therefore adjourned and directed to be relisted on notice.

1. Under rule 42.3(2) of the Civil Procedure Rules, an order that a solicitor has ceased to act must be served on every party, and the solicitor must file a certificate of service if serving it.
2. Paragraph 3.3 of the Practice Direction supplemental to CPR Part 42 provides that such an order takes effect when served. Because the order of 22 November 2002 had not been served, it had not yet taken effect. The former solicitors therefore remained the address for service.
3. Paragraph 5.1 required the appellants to give a new address for service in the jurisdiction under rule 6.5(2). Until that was done, rule 6.5(6) governed service. Rule 6.5(7) preserved the court’s power under rule 6.8 to order an alternative method where there was good reason.
4. The appellants were ordered to file and serve a notice giving an address for service by 4 pm on 6 December 2002. Failure would result in the appeal being struck out without further order, with specified costs consequences. Compliance would lead to the security application being relisted before Chadwick LJ. Service of the order was directed through the former solicitors, Hamlins, and by email to Mr Oldham and Immediate Records’ attorney. Any wasted-costs application under section 51(6) of the Supreme Court Act was to be made in the Chancery Division.

• High Court of Justice, Chancery Division: Pumfrey J dismissed the counterclaim on 7 February 2002.
• Court of Appeal (Civil Division): Permission to appeal was granted on 25 July 2002. The present judgment adjourned the application for security for costs and imposed conditional service and address-for-service orders; the merits of the appeal were not determined.