Nitikin & Ors v Novoship (UK) Ltd & Ors

On a renewed application for permission to appeal, permission should be granted where proposed grounds are fairly arguable and have a real prospect of success. Grounds intimately connected with grounds already permitted should be admitted where excluding them would artificially constrain or unfairly fragment appellate consideration. The Court of Appeal may be almost as well placed as the first-instance judge to assess issues where the lower court’s conclusions did not depend materially on oral evidence. The permission threshold may therefore be satisfied where the proposed appeal challenges the evidential and legal basis of findings without the appellate court yet determining the merits.

The appellants sought permission to appeal from the judgment of Mr Justice Clarke in the Commercial Court, identified as 2006 Folio 1267. Permission had already been granted on Grounds 9–12 by the judge, with Ground 8 permitted by Gloster LJ on the paper application. Lord Justice Tomlinson considered the appellants’ renewed application for permission on Grounds 1–7.

The proposed grounds concerned, among other matters, whether there was an actual or realistic possibility of a conflict between Mr Mikhaylyuk’s interest and duty when negotiating the Henriot charters, and the significance of the Ruperti Payments. The central question was whether Grounds 1–7 were sufficiently arguable to be included in the appeal, particularly in light of their relationship with the already-permitted grounds.

Lord Justice Tomlinson granted the renewed application for permission to appeal on Grounds 1–7.

1. Permission threshold. Grounds 1–7 were fairly arguable and enjoyed a real prospect of success. The court applied that assessment to Grounds 5–7 and Grounds 1–4 separately.
2. Interrelated grounds. Grounds 5–7 were intimately bound up with Grounds 8–12 and raised the same or related issues. It would be artificial and unfair to prevent the appellants from arguing those issues in the appeal. Excluding them might artificially constrain the court’s consideration of the grounds already permitted.
3. Appellate assessment of the evidence. The Court of Appeal was almost as well placed as the judge to evaluate Grounds 1–4 because the judge had heard no relevant oral evidence apart from the short cross-examination of Mr Nikitin. Grounds 5–7 likewise concerned conclusions not based on an appraisal of substantial oral evidence.
4. Specific issues. It was not immediately obvious that there had been an actual or realistic possibility of a conflict of interest and duty when Mr Mikhaylyuk negotiated the Henriot charters. The judge had considered that the explanation for the Ruperti Payments was probably either the first or third of the alternatives discussed in his judgment, and those alternatives were arguably inconsistent so far as attribution of motive to Mr Nikitin was concerned.
5. The appeal hearing had already been fixed with a time estimate accommodating the additional grounds. No further direction was necessary.

• Court of Appeal (Civil Division): [2013] EWCA Civ 1274. Lord Justice Tomlinson granted permission to appeal on Grounds 1–7.
• High Court of Justice, Queen’s Bench Division, Commercial Court: Mr Justice Clarke granted permission on Grounds 9–12, with the grounds then differently numbered.
• Court of Appeal (Civil Division): Gloster LJ granted permission on Ground 8 on the paper application.