Red River UK Ltd v Sheikh & Anor

An extension of time for filing an appellant’s notice requires a good reason for the delay and a basis on which extension would be just. The merits of the proposed appeal remain relevant. Awaiting a transcript, assessing an order, awaiting completion of a transaction, or avoiding troubling the appellate court does not justify delay.

Appeals lie against orders rather than findings. Permission may nevertheless be granted to challenge apparently final findings made on an interim application where the findings were reached without oral evidence or relevant disclosure and may unfairly bind the parties at trial. The proper interim conclusion may then be only that there is a good arguable case.

Red River UK Ltd v Sheikh & Anor concerned three renewed applications for permission to appeal arising from High Court, Chancery Division orders made by Mann J and Briggs J in litigation concerning a settlement agreement and a proposed composite refinancing transaction.

The transaction involved a first legal charge for the Bank of Ireland, a second charge for the defendants, and a deed of priority. Disputes arose over the documents, registration applications, a winding-up petition, and alleged breach of an implied obligation to co-operate in good faith. The proposed appeals challenged orders dated 27 September, 2 October and 15 November 2007. The appellants’ notices were filed out of time. The central issues were whether time should be extended and whether permission should be granted to challenge final findings about good faith made on an interim application.

1. Order of 27 September 2007. Mann J was entitled to prevent the defendants from raising new objections to the deed of priority which could and should have been advanced before Briggs J. Finality in litigation, particularly conveyancing litigation, required the points to be dealt with at the earlier hearing. The defendants had given a voluntary undertaking and had complied with it. The costs order reflected the claimants’ success and disclosed no arguable error. The appellants’ notice was nearly two months late, without any explanation or excuse. Extension of time and permission on the merits were refused.

2. Order of 2 October 2007. The settlement agreement and consent order contemplated a composite transaction under which the defendants’ charge would rank after the Bank of Ireland’s first charge. The order requiring withdrawal of the defendants’ Land Registry application was directed to enabling that transaction to proceed and was in principle correct. The order of 5 October recorded a consensual variation of the undertaking; it did not amend the earlier order. The proposed appeal had no real prospect of success. The six-week delay was inadequately explained, and extension of time was refused.

3. Order of 15 November 2007. The four-day delay was modest and, in the circumstances, time was extended. Permission was refused on the arguments concerning the construction of the charge and the balance of convenience. Appeals lie against orders, not findings, which created a procedural difficulty because the interim order itself was correctly disposed of.

4. Nevertheless, it was arguably procedurally unfair for Briggs J to make apparently final findings that the defendants had breached an implied obligation to act in good faith, when the issue depended on disputed facts and had been determined without oral evidence or relevant disclosure. The defendants should be permitted to argue that the judge ought only to have found a good arguable case and should not have finally determined the issue before trial. Permission was granted on that ground alone.

• Court of Appeal (Civil Division). In [2008] EWCA Civ 1592, Rimer LJ refused extensions of time and permission in relation to the orders of 27 September and 2 October 2007. Time was extended and permission was granted in part in relation to the order of 15 November 2007.
• High Court, Chancery Division. Mann J made the order of 27 September 2007. Briggs J made the orders of 2 October and 15 November 2007.