Michael Wilson and Partners Ltd v Sinclair & Ors

On an application for a stay and security for costs pending an appeal, the court may require sums ordered below to be paid into court as a condition of staying execution. It may also order security for the respondent’s appeal costs where the jurisdictional conditions are met and it is just to do so. The court need not decide the merits of the appeal at that stage. A party’s past payment of costs does not necessarily make security unjust, particularly where enforcement abroad may be difficult and compliance may have depended on litigation pressure.

Michael Wilson and Partners Ltd appealed, with permission from Teare J, against orders made after part of its English claim was stayed or dismissed for abuse of process. This judgment determined two interlocutory applications.

The appellant sought a stay of execution of interim costs payments totalling £150,000. The respondents sought security for £150,000 in respect of their costs of the appeal. The central issues were the appropriate condition for a stay and whether, in the circumstances, it was just to require security for costs.

1. Stay of execution. The interim costs orders of £125,000 against the appellant in favour of the first and second defendants and £25,000 in favour of the Part 20 defendant were stayed on condition that the total £150,000 was paid immediately into court. The court would not impose an automatic sanction dismissing the appeal for non-payment, but the stay would cease if immediate payment was not made. The payment was required to preserve the funds pending the outcome of the appeal and any later decision on payment out.
2. Security for costs. The appellant’s residence outside the jurisdiction and outside the European Union gave rise to prima facie jurisdiction under CPR 25.15(1), taken with CPR 25.13(2)(a)(i). The further requirement identified in Nasser v United Bank of Kuwait [2002] 1 WLR 1868 was not disputed. The question was whether it was just to make the order.
3. The court was not required to assess the ultimate merits of the appeal. It was entitled to consider the difficulty of enforcing a costs order in Kazakhstan or against uncertain assets, the appellant’s history of paying costs late and under pressure, and serious criticisms previously made of the appellant’s principal by the arbitration tribunal and by Teare J in Emmott v Michael Wilson Partners Limited (No 2) [2009] EWHC 1 (Comm.). Those matters made it just to require security, notwithstanding the appellant’s profitable business and previous payment of costs.
4. Security of £150,000 was therefore ordered, payable within 14 days, with a stay of the appeal if it was not paid. The formal order recorded: appeal allowed.

• Court of Appeal (Civil Division): The appellant appealed with permission granted by Teare J against orders made in the High Court concerning abuse of process. The Court of Appeal granted a conditional stay of execution and ordered security for the respondents’ appeal costs. [2013] EWCA Civ 131