Cornelius v Dubai Islamic Bank PJSC

An arguable contractual construction point does not alone justify permission to appeal. The court should consider whether the point was pleaded, supported by evidence and argued at trial, and whether success could affect the result. Where the existing record does not show that success would establish the absence of default, the permission application may be adjourned for further consideration. An application for funding under a freezing order may also be considered alongside compliance with existing asset-disclosure directions.

Ryan Cornelius sought oral renewal of an application for permission to appeal from an order made by Flaux J after a nine-day Commercial Court trial, reported at [2013] EWHC 3781 (Comm). Sir Stanley Burnton had dismissed the application on paper. The proposed ground concerned the construction of provisions in a restructuring agreement governing cash and Plantation Villa proceeds. The applicant also sought funding under a freezing order and remained in default of an order requiring disclosure of assets. The central question was whether the proposed construction point was sufficiently arguable and potentially material to the trial outcome, given the pleadings, evidence and submissions.

1. The permission application was adjourned. It was directed to be relisted on the first available date after 27 October 2014. The applicant was given four weeks to decide whether to fund the application and any appeal. The respondent bank was to be put on notice and invited to attend the adjourned hearing.
2. On a preliminary and unassisted review, there appeared to be an arguable construction point. The reference in clause 7.3(b) to Earmarked Plantation Proceeds being excluded from the cash referred to in clause 7.3(c) arguably suggested that Plantation Villa Proceeds fell within that cash and were not necessarily ring-fenced by clause 7.2.
3. That preliminary arguability was distinct from the question whether permission should be granted. The construction point did not appear to have been raised in the applicant’s Defence or closing written submissions. The Re-Amended Defence contained only a bare denial of breach. Although the point had apparently been mentioned at trial, the judge had no evidence or argument showing what had been done with the proceeds, or what proportion, if any, represented amounts retained for reasonable working capital. Success on the proposed construction point therefore did not presently appear capable of establishing that there had been no breach or event of default.
4. The applicant remained in continuing and unexplained default of Males J’s order requiring disclosure of worldwide assets exceeding £1,000. Compliance with that order might be a pre-requisite to provision under the freezing order for legal costs.
5. Flaux J had rejected an issue-estoppel argument based on an earlier interlocutory judgment in the same proceedings, regarding that judgment as provisional. Since Tomlinson LJ had given the earlier judgment, the adjourned application was directed to be heard by a different Lord Justice.

• Court of Appeal (Civil Division) — The oral renewal of the permission application had previously been dismissed on paper by Sir Stanley Burnton. Tomlinson LJ adjourned the renewed application for relisting after 27 October 2014.
• High Court of Justice, Queen’s Bench Division, Commercial Court — Flaux J made the order after a nine-day trial, reported at [2013] EWHC 3781 (Comm).