Onur Air Tasimacilik AS v Goldtrail Travel Ltd

When deciding whether a condition requiring an appellant company to pay a judgment sum into court would stifle an appeal, the question is whether the company can raise the money, not merely whether its shareholder or backer can afford it. Where third-party support is relevant, the court must decide whether the third party would provide the funds, judging the evidence against the underlying financial realities and the relationship between the company and the proposed funder. The appellant bears the burden of establishing, on the balance of probabilities, that the condition would stifle the appeal. A deadline may trigger a stay without making the order an unless order, so the issue may be assessed at the time of the later application. A late allegation of stifling, unsupported by direct evidence from the funder, may fail to discharge that burden.

Onur appealed against an order of Rose J requiring it to pay £3.64 million plus interest to Goldtrail Travel Ltd as compensation for dishonest assistance in breaches of fiduciary duty. Permission to appeal was granted subject to payment of the judgment sum into court. The Court of Appeal later refused to vary that condition, but the Supreme Court set aside that decision and remitted the applications for reconsideration after rejecting an exceptional-circumstances test and directing attention to whether the third-party funder would actually provide the money.

On remission, the issue was whether Onur had shown that its controlling shareholder and chairman, Mr Bagana, would not provide the financial support needed to make the payment and thereby continue the appeal.

1. Application of the remitted test. The court treated the question as whether Onur could make the payment with Mr Bagana’s support, and whether the condition would stifle the appeal. The inquiry was directed to the present position, because the order’s deadline had triggered a stay but had not operated as an unless order requiring relief from sanctions.
2. Third-party finance and burden of proof. The burden rested on Onur to establish on the balance of probabilities that the necessary funds would not be made available. The court had to respect Mr Bagana’s separate legal personality, but could assess the probable availability of funds by reference to the company’s financial position, his substantial investment, his control of the company and his history of supporting it. The court was not required to accept the company’s or funder’s position at face value.
3. Evidence. Mr Bagana could afford the payment. There was no direct evidence from him. The stated legal objection to payment was untenable, and Onur had continued trading with his financial support. Its late reliance on stifling, after the threat of dismissal, weakened its case. The evidence did not show that Mr Bagana would refuse the necessary funding or that retention of the condition would stifle the appeal.
4. Disposition. Onur’s application under CPR 3.1(7) to remove the condition was dismissed. It followed that the appeal against the order of Rose J was dismissed. Goldtrail’s alternative submission concerning material change of circumstances was therefore unnecessary to decide.

1. Supreme Court: set aside the Court of Appeal’s earlier order and remitted the applications for reconsideration in light of its judgment.
2. Court of Appeal (Civil Division): on remission, dismissed Onur’s application under CPR 3.1(7) and dismissed the appeal against the High Court order. The earlier High Court decision was [2014] EWHC 1587 (Ch).