Contract Facilities Ltd. v Estate of Rees & Ors

The Court of Appeal may use its general case-management powers to stay an appeal or make its continuation conditional on payment of outstanding costs. Those powers exist independently of the specific appeal provisions in Civil Procedure Rules 1998.

A conditional order is justified where the appellant is in default of costs orders, the appeal will not be stifled by compliance, and a person funding the litigation can meet the payments. Such an order need not determine whether that funder is personally liable for costs under section 51 of the Supreme Court Act 1981.

Contract Facilities Ltd appealed against His Honour Judge Weeks QC's dismissal of its claim for specific performance or damages under a share-purchase contract. The judge had held that the company's retrospective restoration to the register did not prevent it from having repudiated the contract while struck off the register. He ordered costs against the company.

While the substantive appeal remained pending, Contract did not pay an interim costs certificate of £37,000 or further costs orders. The respondents sought an order that the appeal be dismissed or stayed unless those sums were paid. The central issue was whether the Court of Appeal had jurisdiction to impose such conditions and, if so, whether it should do so.

1. Conditional order made. The Court ordered that the appeal be struck out unless, by 4.00 pm on 18 July 2003, Contract paid £37,000 into court, paid £2,000 and £4,792 to the respondents, and paid the respondents' costs of the application. The court gave reasons for the order after it had been made.

2. The court held that it had case-management jurisdiction under Civil Procedure Rules 1998, rules 2.1 and 3.1, to stay an appeal, impose payment conditions, and specify striking out as the consequence of default. That jurisdiction was additional to any power under CPR Part 52. The court did not finally determine the scope of CPR r 52.9(3), although it saw force in the view expressed in Societe Eran Shipping that the rule concerned applications for permission before the Court of Appeal.

3. The application concerned conduct during the pending appeal, rather than an attempt to revisit the trial judge's earlier decision on permission to appeal. It was therefore materially different from the respondents' unsuccessful application before the judge to impose conditions on permission.

4. There was no prejudice in requiring the £37,000 to be paid into court. If the underlying costs order were later varied and the sum proved excessive, the surplus could be repaid. Nor did the order prejudge a future application under section 51 of the Supreme Court Act 1981 against those who funded the litigation.

5. The circumstances justified conditions. There was no evidence that payment would stifle the appeal; Mr Shuck, who had financed the trial and appeal, could pay, albeit inconveniently. The company had delayed enforcement of costs orders while seeking to continue an appeal from which its funder would benefit if successful. It was proper to require compliance rather than permit an appeal to proceed on a heads-I-win, tails-you-lose basis. Hammond Suddard supported that approach, while CIBC Mellon Trust was distinguished because its third-party funder had not financed the earlier litigation and a section 51 order had little apparent prospect of success.

1. Court of Appeal (Civil Division) — In the pending substantive appeal, the court made a conditional order for payment of outstanding costs, failing which the appeal would be struck out: [2003] EWCA Civ 1105.

2. Queen's Bench Division — On 6 December 2002, His Honour Judge Weeks QC dismissed the company's claim for specific performance or damages under a share-purchase contract and ordered it to pay costs. Permission to appeal was granted.