Goldtrail Travel Ltd v Aydin & Ors

A condition requiring an appellant to pay a judgment debt into court before pursuing an appeal is not itself a strike-out order. Non-compliance gives the appellate court a discretion which may include dismissal of the appeal and removal of a stay. In deciding whether payment would stifle an appeal, the court may consider the appellant company's access to third-party funding. Separate legal personality creates no jurisdictional bar, but such funding will ordinarily be considered only in exceptional circumstances assessed case by case. A controlling shareholder and chairman who is also the company's largest secured creditor and controls its finances may fall within that category. The appellant must provide evidence of inability to comply and show that available means of security have been explored.

Goldtrail Travel Ltd obtained judgment from Rose J in the Chancery Division, in claim HC12D02320, requiring Onur Air to pay £3.64m with interest as equitable compensation for dishonest assistance. Execution was stayed pending appeal. A later order made continuation of Onur's appeal conditional on payment of the judgment sum into court or provision of security. Onur failed to comply, withdrew its application to pay by instalments, and sought variation under CPR 3.1(7) on the ground that payment would stifle the appeal. It alternatively sought a stay pending Black Pearl's separate appeal. The issues were whether third-party funding could be considered when assessing alleged stifling, whether the condition should be varied, and whether Onur's appeal should be dismissed with the stay removed.

1. Disposition. Lord Justice Patten dismissed Onur's application under CPR 3.1(7), dismissed the appeal for non-compliance with the payment condition, and removed the stay on Rose J's order.
2. Stifling and third-party funding. The absence of a demonstrated risk that a condition would stifle an appeal is a significant consideration when imposing or maintaining such a condition, as recognised in Hammond Suddards v Agrichem International Holdings Ltd [2001] EWCA Civ 2065. The court may consider the company's access to funding from persons close to it. Separate legal personality creates no jurisdictional bar to that assessment. Société Générale SA v Saad Trading, Contracting and Financial Services Company & Anor [2012] EWCA Civ 695 established the relevant distinction: third-party resources should not ordinarily be treated as available to satisfy a corporate judgment debt, but exceptional circumstances may justify doing so.
3. Application of the exception. Onur's controlling shareholder and chairman was its largest secured creditor and effectively controlled its financial affairs. His relationship with the company was unusually close. The court found no material difference from the exceptional circumstances identified in Société Générale. Onur could have obtained the funds with his support, and the evidence did not establish that compliance would stifle the appeal. A shareholder's refusal to provide funds did not demonstrate the company's inability to comply.
4. Effect of the condition. The order under CPR 52.9 was a condition on continuation of the appeal, not a strike-out order. Failure to comply led at least to a stay, while the court retained discretion to decide whether to dismiss the appeal and remove the stay. Having imposed the condition, the court was entitled to protect its process and give effect to its previous order when Onur chose not to comply.
5. Finality. The court noted the principle that finality in litigation ordinarily weighs against variation under CPR 3.1(7), as discussed in Tibbles v SIG plc [2012] EWCA Civ 517. It did not decide the application on that basis because the stifling argument failed on its merits.

1. Court of Appeal (Civil Division): Onur was granted permission to appeal. The court dismissed its variation application and appeal, and removed the stay. [2016] EWCA Civ 20.
2. High Court of Justice, Chancery Division: Rose J ordered Onur to pay £3.64m with interest as equitable compensation and stayed execution pending appeal.