Days Medical Aids Ltd v Pihsiang Machinery Manufacturing Co Ltd & Ors Rev 1

Permission to appeal may be made conditional on payment or security where there is a compelling reason. The jurisdiction requires caution and does not create a general rule that an unsatisfied judgment must be paid before an appeal proceeds.

A compelling reason may arise cumulatively where an appellant deliberately disobeys the judgment, has been refused a stay, can pay without stifling the appeal, and can exploit substantial obstacles to enforcement abroad. Differential treatment associated with overseas residence or assets is compatible with article 14 of the European Convention on Human Rights where those greater enforcement risks provide objective justification.

The High Court awarded the claimant more than £10 million in damages for breach of a distributorship agreement, together with costs, and refused the defendants permission to appeal and a stay of execution. The Court of Appeal subsequently granted permission to appeal in principle and adjourned the question of conditions.

The defendants, who were based in Taiwan and able to pay, had not satisfied the judgment or the £2 million interim costs order. The claimant sought payment of those sums and security for appellate costs as conditions of the appeal. The defendants contended that ordinary enforcement procedures were adequate and that the proposed conditions would discriminate against litigants with residence or assets abroad.

The central issues were whether compelling reasons justified the conditions and whether any resulting differential treatment was objectively justified under articles 6 and 14 of the European Convention on Human Rights.

1. Permission to appeal was made subject to conditions. Dyson LJ ordered the defendants, within six weeks, to pay the judgment sum and interest, the £2 million interim costs payment and interest, and £150,000 as security for appellate costs. They were also ordered to pay the costs of the application.

2. Under rules 52.3(7)(b), 52.9(1)(c) and 52.9(2) of the Civil Procedure Rules 1998, conditions should be imposed only for a compelling reason. The jurisdiction must be exercised cautiously. There is no general rule requiring an appellant to satisfy the judgment as a condition of appealing.

3. The cumulative circumstances supplied a compelling reason. The defendants were deliberately in breach of the monetary orders, had been refused a stay and had given no explanation for non-payment. They could meet the conditions, and the appeal would not be stifled. The three considerations identified in Bell Electric Ltd v Aweco Appliance Systems GmbH & Co KG [2003] 1 All ER 344 were therefore satisfied and were cogent, although not individually decisive.

4. The claimant faced a substantial risk of prolonged and obstructed enforcement in Taiwan. Recognition could not begin while an appeal remained pending and might itself take several years. Further appellate proceedings or a possible reference concerning article 81 of the EC Treaty could add delay. The availability of provisional seizure under article 522 of the Republic of China Code of Civil Procedure did not remove that risk. The defendants' unexplained non-compliance and conduct in the Part 71 proceedings strongly indicated that they would obstruct enforcement.

5. Assuming that article 14, read with article 6 of the European Convention on Human Rights, was engaged, any differential treatment was objectively justified. Defendants resident or holding assets abroad could create substantially greater obstacles and delay than domestic judgment debtors. Those particular risks justified conditions which would probably not have been imposed upon a litigant resident or possessing assets within the jurisdiction.

1. Court of Appeal (Civil Division): Permission to appeal had been granted in principle. The court imposed conditions requiring payment of the judgment sum, interest and interim costs, together with £150,000 security for appellate costs.

2. High Court, Commercial Court: Langley J awarded the claimant £10,235,144 plus costs, ordered an interim costs payment of £2 million, and subsequently refused permission to appeal and a stay of execution.