Mekobia Ltd v Brandmovers Europe Ltd

An "unless" order takes effect according to its terms unless successfully appealed or discharged by relief from the sanction. Once non-compliance has automatically struck out a claim, a later appeal concerning interim relief cannot proceed in proceedings that no longer exist. A court cannot grant permission to pursue relief in a finally struck-out claim through an internally inconsistent order. A company in compulsory liquidation may pursue an appeal only through an authorised office-holder or other properly authorised person. On a second-appeal application, the applicant must identify a seriously arguable error in the decision below; the underlying merits of the struck-out claim do not answer the procedural consequences of non-compliance.

Mekobia brought a contractual claim in the County Court against Brandmovers concerning website-development services. After Mekobia failed to pay ordered costs, Judge Saggerson made an "unless" order requiring payment of £5,075 by 6 December 2013, failing which the claim would stand automatically struck out. Mekobia did not pay. Its application to set aside the order was declined, and Peter Smith J later refused permission to appeal against the 29 November order but granted permission concerning refusal of interim relief.

The deputy High Court judge held that the claim had been finally struck out and dismissed the resulting appeal: [2015] EWHC 969 (Ch). Mekobia renewed its application in the Court of Appeal for an extension of time, permission for a second appeal, admission of fresh evidence and a stay of insolvency proceedings. The central issues were whether the claim remained extant, whether the applicant was authorised to act after liquidation, and whether the application disclosed an arguable basis for a second appeal.

1. Application adjourned. The renewed application for an extension of time and permission for a second appeal was adjourned until the first available date after 26 May 2016, with liberty to apply to restore it earlier.
2. The effect of Judge Saggerson's 29 November 2013 "unless" order was that, because Mekobia failed to pay £5,075 by the specified time, its claim was automatically struck out at 4.01 pm on 6 December 2013. The proper routes were a successful appeal against that order or a prompt application for relief from the sanction. Mekobia pursued neither route successfully.
3. Peter Smith J's order of 16 October 2014 was internally inconsistent. His refusal of permission against the "unless" order left it effective and unappealable to the Court of Appeal under section 54(4) of the Access to Justice Act 1999. His later permission concerning the website and interim relief could not create an appeal in proceedings that had already ended.
4. The Court of Appeal agreed in substance with the deputy judge and with Kitchin LJ's refusal of permission on the papers. Mekobia had not shown a seriously arguable error suitable for a second appeal. Complaints about the original making of the unless order did not answer the conclusion that it had already taken effect; the merits of the underlying contractual claim were immaterial to that procedural question. The deputy judge was entitled to treat the matter as an appeal by way of review and there was no evidential basis for alleged bias.
5. Because Mekobia was in compulsory liquidation, Mr Williams had no authority to promote the application without authority from the official receiver or a liquidator. During the adjournment, Mekobia was given the opportunity, subject to obtaining such authority, to ask Peter Smith J to reconsider the permission applications under CPR Part 52.17, accompanied by the relevant judgments and representations. The transcript was directed to be expedited.

1. Court of Appeal (Civil Division): Kitchin LJ refused permission on the papers on 29 July 2015. On renewal, Sir Colin Rimer adjourned the application until the first available date after 26 May 2016, with liberty to restore it earlier.
2. High Court, Chancery Division: The deputy judge dismissed Mekobia's appeal against the County Court orders, holding that the claim had been automatically struck out on 6 December 2013: [2015] EWHC 969 (Ch).
3. High Court, Chancery Division: Peter Smith J refused permission to appeal against the 29 November 2013 order but granted permission concerning the refusal of interim relief on 16 December 2013.
4. Central London County Court: Judge Saggerson's 29 November 2013 unless order provided for automatic strike-out upon non-payment of £5,075; his 16 December 2013 order declined to entertain Mekobia's application.