Gold Harp Properties Ltd v McLeod & Ors

Under Part 52.9(1) of the Civil Procedure Rules 1998, the court may impose a condition on pursuing an appeal only where there is a compelling reason. An unpaid judgment and the absence of a stay do not, without more, provide such a reason.

The court may consider whether the appellant can obtain funds from persons standing behind it and whether the condition would stifle the appeal. It must also assess the respondent’s practical ability to enforce the outstanding judgment if the appeal fails. A condition will not ordinarily be justified where conventional enforcement remains realistically available.

The respondents had obtained County Court orders reinstating two registered long leases, giving them priority over the appellant’s lease and requiring several defendants to pay costs. An interim payment of £30,000 remained unpaid. The appellant obtained permission to appeal against the order of 24 May 2013.

The respondents applied under Part 52.9(1)(c) of the Civil Procedure Rules 1998 for payment of the £30,000 to be made a condition of pursuing the appeal. Although charging orders had been obtained against another defendant, the respondents had not pursued available enforcement measures against the appellant or the other persons liable. The central issue was whether those circumstances supplied a compelling reason for imposing the requested condition.

1. The application was dismissed. Rimer LJ held that Part 52.9(1) of the Civil Procedure Rules 1998 permitted a condition on pursuing an appeal only where a compelling reason had been established. McFarlane LJ agreed that the respondents had failed to establish one.

2. The court would not ordinarily require satisfaction of an enforceable judgment merely because the appellant had obtained no stay. An unpaid judgment and the absence of immediate consequences for non-compliance did not make payment a condition of appeal as a matter of course. Although such a general rule might be thought desirable, it did not represent the law.

3. In deciding whether to impose a condition, the court could consider the financial ability of both the corporate appellant and those standing behind or associated with it. The findings below justified the inference that the person controlling the appellant could meet the costs liability. The appellant could and would therefore satisfy the proposed condition, if imposed, and its appeal would not be stifled.

4. Hammond Suddard Solicitors v Agrichem International Holdings Limited [2001] EWCA Civ 2065 identified a combination of circumstances capable of constituting a compelling reason. Those circumstances included a real risk that ordinary enforcement would be ineffective if the appeal failed, access to resources, continued non-compliance and the absence of stifling.

5. The present case was materially different. There was no comparable reason to anticipate difficulty enforcing the costs order against the persons already liable if the appeal failed. The respondents had chosen not to pursue enforcement because of perceived expense, delay or disproportionality. That choice did not convert an ordinary appeal involving an unpaid judgment into a case presenting a compelling reason for a condition.

• Court of Appeal (Civil Division): The respondents’ application to make payment of £30,000 a condition of pursuing the permitted appeal was dismissed: [2014] EWCA Civ 532. The substantive appeal against the order of 24 May 2013 remained pending.

• Central London County Court: By an order dated 24 May 2013, HHJ Gerald reinstated the respondents’ long leases, accorded them priority over the appellant’s lease and made costs orders against the defendants.

• Central London County Court: By an earlier order dated 2 March 2013, HHJ Gerald recorded that the leases had not been forfeited and that their registered titles should not have been closed. The consequential rectification claim was adjourned, further defendants were joined and an interim costs payment of £30,000 was ordered.