Goldtrail Travel Ltd v Aydin & Ors

Under CPR 52.9, an appellate court may make an appeal conditional on payment or security only where there is a compelling reason. That threshold does not require proof that the appellant is actively dissipating assets. The discretion must be exercised cautiously, particularly where the condition requires payment of the whole judgment sum.

A compelling reason may arise where a post-judgment change materially impairs normal enforcement, the appellant’s conduct gives reason to expect non-co-operation, and the condition will not stifle the appeal or cause material prejudice beyond the ordinary consequences of providing security.

Rose J gave judgment against six defendants, including Onur Air, a Turkish airline. She held Onur Air liable for dishonest assistance and ordered it to pay damages of £3.64 million, interim costs and part of an ATE insurance premium. Execution of the damages judgment was stayed pending an appeal, but the costs-related payments were not stayed.

After Onur Air obtained permission to appeal, Goldtrail sought conditions under CPR 52.9. It relied on Onur Air’s cessation of flights to the United Kingdom, delayed payment of the costs-related sums, and the consequent difficulty of enforcement. Lord Justice Floyd initially imposed conditions on the papers. This was Onur Air’s oral rehearing application under CPR 52.16.

1. The oral renewal application failed. Continuation of the appeal remained conditional upon payment of £600,626 into escrow, £150,000 into court as security for costs, and £3.64 million into court as security for the judgment debt. The court declined to add interest to the judgment-sum condition.

2. CPR 52.9(2) required a compelling reason. That did not mean circumstances in which the court had no alternative but to act. It was enough that the court concluded that action should be taken, subject to cautious exercise of the resulting discretion. The caution expressed in Dumford Trading AG v OAO Atlantrybflot [2004] EWCA Civ 1265 did not prevent an order in an appropriate case.

3. The factors identified in Hammond Suddard Solicitors v Agrichem International Holdings Ltd [2001] EWCA Civ 2065 were relevant but non-exhaustive. They included the availability of normal enforcement, the risk of non-recovery, the appellant’s resources and candour, compliance with orders, and whether the appeal would be stifled.

4. No active intention by Onur Air to remove assets was necessary. Its cessation of flights to the United Kingdom after the first-instance order significantly reduced Goldtrail’s ability to enforce by normal means in this jurisdiction. The court proceeded on the basis that there was a commercial explanation for that change.

5. Onur Air’s late payment of the unstayed costs-related sums, made only under pressure from this application and without a proper explanation, justified concern that it would not co-operate in payment if the appeal failed. There was no evidence that the condition would stifle the appeal or cause prejudice beyond the ordinary cost of securing the sums. Without security, the delay caused by the appeal could place Onur Air in a materially better position to resist enforcement.

• Court of Appeal (Civil Division): In [2015] EWCA Civ 926, Lord Justice Floyd dismissed Onur Air’s oral rehearing application and maintained conditions on the continuation of its appeal.
• High Court of Justice, Chancery Division: On 22 May 2014 Rose J found Onur Air liable for dishonest assistance, ordered payment of damages and costs-related sums, refused permission to appeal, and stayed execution of the judgment sum pending an appeal process.