Michael Wilson & Partners Ltd v Sinclair

For a money judgment, the power to stay execution arises under rule 83.7 of the Civil Procedure Rules 1998. That specific rule precludes reliance on the general case-management power in rule 3.1(2)(f). Rule 83.7 applies from the making of the judgment or order. No writ of control or warrant need first have been issued, and the court may grant a general stay affecting different methods of enforcement.

A stay under rule 83.7(4)(a) requires special circumstances making enforcement inexpedient. The usual approach to costs liabilities in lengthy and complex litigation is that parties should pay as they go. Uncertain future recoveries, further litigation and cross-claims will not ordinarily justify disapplying that principle.

Foreign costs judgments arising from proceedings in the Bahamas were registered against the respondent under the Administration of Justice Act 1920. Master Yoxall stayed execution because the judgments formed part of wider litigation and arbitration concerning the beneficial ownership of shares, with potential liabilities and cross-claims against the appellant.

Whipple J dismissed the appellant’s first appeal in [2015] EWHC 2847 (QB). She held that the stay could be granted under rule 3.1(2)(f) of the Civil Procedure Rules 1998. Alternatively, she found special circumstances under rule 83.7(4)(a). The issues on the second appeal were which rule governed a stay of a money judgment and whether the stay should remain in force.

1. The appeal was allowed and the stay lifted. Rule 83.7 of the Civil Procedure Rules 1998, rather than rule 3.1(2)(f), governed the application to stay execution of the money judgments. Rule 83.7 specifically provided for that situation and therefore “provided otherwise” for the purposes of the qualification to the general power in rule 3.1(2) (McCombe LJ, Briggs LJ agreeing) (paras [13], [16], [18], [43]–[45]).

2. Rule 83.7 applies from the moment when a judgment or order for payment is made. Its operation does not depend upon the prior issue of a writ of control or warrant. The words identifying the debtor or other person liable to execution describe those entitled to apply; they do not postpone the availability of the jurisdiction. A debtor may seek a general stay covering enforcement by means other than a writ or warrant (paras [13]–[15]).

3. The applicable ground was therefore rule 83.7(4)(a). The court had to find special circumstances rendering enforcement inexpedient. An appellate court should interfere with the exercise of such a discretion only for an error of principle, disregard or improper consideration of a material feature, an unfair balancing of the factors, or a decision outside the generous ambit of reasonable disagreement (paras [18], [27]–[28]).

4. The factual basis of Whipple J’s alternative exercise of discretion had materially changed or proved unsound. Payments on account of arbitration costs had been made. The order striking out the appellant’s beneficial-ownership claim had been reversed. There were significant obstacles to recovery under the cross-undertaking in damages, and the freezing order obtained by another person did not properly support the stay. The New Zealand decision concerning enforcement of the same foreign judgments was also a relevant feature (paras [38]–[42]).

5. The usual rule in costs disputes arising from lengthy and complex litigation is “pay as you go”. The evidence disclosed no good reason to disapply that principle and no other special circumstances justifying a stay. The stay ordered by Master Yoxall was accordingly lifted (paras [42]–[45]).

1. Court of Appeal (Civil Division): In [2017] EWCA Civ 55, allowed the second appeal and lifted the stay of execution.
2. Queen’s Bench Division: Whipple J dismissed the first appeal in [2015] EWHC 2847 (QB). She upheld the stay under rule 3.1(2)(f) of the Civil Procedure Rules 1998 and, alternatively, under rule 83.7(4)(a).
3. Master Yoxall: Granted a stay of execution of Master Eyre’s order registering the Bahamian costs judgments.
4. Master Eyre: Registered the Bahamian judgments under the Administration of Justice Act 1920.