RAYMOND CLEWER v HIGGS & SONS (A FIRM)

Under Civil Procedure Rules 1998, r 52.18, non-payment of a judgment or costs order does not, by itself, provide a compelling reason to make payment a condition of pursuing an appeal. The court must assess the particular facts and exercise the power cautiously.

The principal consideration is whether enforcement would be materially difficult if the appeal failed, including risks that assets may be dissipated or placed beyond ordinary enforcement processes. Practical enforcement difficulties may suffice, but ordinary enforcement risk and unfairness caused by continued non-payment will not ordinarily do so.

The claimant appealed against orders made in a professional negligence action concerning compliance with an unless order and the alleged striking out of his claim. The appeal had been permitted but was not yet determined.

The defendants applied for permission to appeal to be made conditional on payment of £45,000 representing outstanding costs orders. No stay had been sought or obtained. The claimant provided no evidence about his financial position, although submissions referred to equity in jointly owned property and a secured loan. The central issue was whether those circumstances constituted a compelling reason under Civil Procedure Rules 1998, r 52.18.

1. The application was not finally determined. It was adjourned generally with liberty to restore. The claimant was directed to file, within 14 days, a witness statement verifying the factual matters relied upon, identifying the unencumbered equity in the property, accumulated loan interest and its estimated value. He was also required to notify the defendants of any application for a further loan advance secured on the property.

2. Under Civil Procedure Rules 1998, r 52.18(2), the power to impose or vary conditions on an appeal may be exercised only where there is a compelling reason. Applying the principles summarised in Merchant International Company Ltd v Natsionalna Aktsionerna Kompaniia Naftogaz Ukrainy (Rev 1) [2016] EWCA Civ 710 and the guidance in Macleod & Ors v Gold Harp Properties Ltd [2014] EWCA Civ 532, the existence of an unpaid judgment or costs order, and the absence of a stay, do not automatically justify such a condition.

3. The claimant’s deliberate decision not to pay at least one costs order was unsatisfactory, but it did not itself amount to a compelling reason. The relevant focus was the defendants’ ability to enforce if the appeal failed. Substantial unencumbered equity appeared available, and the defendants had not shown the unusual or considerable practical enforcement difficulties contemplated by the authorities.

4. The alleged unfairness of requiring the defendants to incur further costs while existing orders remained unpaid, and the claimant’s application for fee exemption while seeking litigation funding, likewise did not establish a compelling reason. The absence of evidence and the possibility of further secured borrowing were matters of concern requiring further evidence, but did not presently justify the requested payment condition.

5. The defendants were awarded the costs of the hearing, assessed summarily at £5,277.50. The claimant’s failure to provide timely evidence and his late clarification of his position had caused avoidable costs and practical difficulty.

The judgment concerned an application arising during an appeal for which permission had already been granted. The appeal itself had not yet been determined.