Bank Of Credit & Commerce International SA v Ali & Ors [2001] EWCA Civ 1438 (20 September 2001)

Neutral Citation Number: [2001] EWCA Civ 1438 A3/2001/6070 IN THE SUPREME COURT OF JUDICATURE CIVIL DIVISION ON APPEAL FROM THE HIGH COURT CHANCERY DIVISION (Mr Justice Lightman) The Royal Courts of Justice The Strand London Thursday 20 September 2001 B e f o r e : LORD JUSTICE CHADWICK ____________________ BANK OF CREDIT AND COMMERCE INTERNATIONAL SA (in Compulsory Liquidation) Claimant/Applicant and (1) MUNWAR ALI (2) SULTANA RUNI KHAN and others Defendants/Respondents ____________________ MS A HOCKADAY (instructed by Lovells, 65 Holborn Viaduct, London EC1A) appeared on behalf of the Applicant MR R ALLEN QC (instructed by Beale and Company, 27-32 King Street, Covent Garden, London WC2E) appeared on behalf of the Represented Respondents ____________________ HTML VERSION OF JUDGMENT ____________________ Crown Copyright © Thursday 20 September 2001 LORD JUSTICE CHADWICK: On 29 July 1998 Lightman J, exercising powers of case management in litigation between BCCI and certain of its former employees, ordered that issues common to the individual cases in the litigation should be tried and determined in selected test cases. In particular, the judge directed that what he described as "the stigma claims" should be determined in test cases brought by or against five named individuals, of whom two were Mr Syed Husain and Mr Iqbal Zafar. By paragraph 6 of his order the judge directed that: "Any determinations or findings made by the Court at the hearing of the trials of the issues directed by [the relevant paragraphs of an earlier order] as to a. the law; and b. acts which are common to cases not before the Court as test cases shall be binding on the parties to all the actions listed in the Schedules from time to time (being the employees, the spouses, BCCI and Overseas) and on the individuals listed in the Appellants' Schedule from time to time in relation to their appeals against rejection of their claims." The stigma claim test cases came before the judge for trial during 1999. The judge delivered judgment on 25 June 1999. He rejected the claims in the individual cases before him on the grounds that, although the employees had satisfied him that BCCI had been in breach of the implied term of trust and confidence identified by the House of Lords in Malik and Mahmud v BCCI [1998] AC 20 , they had not satisfied him that the breach of that term had caused any loss or damage. That ruling was embodied in an order which the judge made on 4 November 1999 - see paragraph 2 of the November order. The judge refused permission to appeal against that part of his order. Mr Husain and Mr Zafar sought permission to appeal from this Court. These applications were heard by Arden LJ and myself. For the reasons which we gave in judgments handed down on 4 May 2001, we granted permission to appeal; but limited to issues defined in paragraph 1 of the order which we made on that day. On handing down our judgments, we were provided with a draft of the order which BCCI, through its liquidators, invited us to make. That was a usual and convenient course in litigation of this nature and post-judgment discussion as to the form of the order to be made proceeded by reference to that draft. Paragraph 5 of that draft was in these terms: "Any determinations or findings by the Court at the hearing of the appeal of the issues identified in paragraph 1 above as to 5.1 the law; and 5.2 facts which are common to cases not before the Court on the appeal shall be binding on all former employees pursuing a stigma claim against BCCI (whether by counterclaim or by appeal against rejection of their claims)." No paragraph in those terms was included in the order which was made on 4 May 2001. In explaining why it was not to be included, I said this: "[paragraph 5 in the draft order] comes out. If there is doubt about that matter, then it needs to go back either to Lightman J, or the court hearing the appeal can deal with it. We do not feel that we have sufficient information before us to know whether [para] 5 is the right order to make on this appeal. It may be academic because the probability is that, if the court hearing the appeal does make rulings upon questions of law, in practice they are going to be binding on everybody anyway in the real world." Notwithstanding that indication of our views, BCCI has now applied for an order that the order made by Lightman J on 29 July 1998, to which I have already referred " … extends or shall extend to any determinations or findings made by the Court of Appeal on this appeal, because the appeal arises from a process of case managed litigation, in which the Appellants acted as test cases at trial." The reasons given in support of that application are set out in paragraph 8 of part C of the application notice dated 21 August 2001: "The Liquidators make this application seeking confirmation that the order of Mr Justice Lightman of 29 July 1998 … operates on appeal such that all employees within case management are bound by the Court of Appeal's determinations or findings of law and fact common to cases other than the cases of Mr Husain and Mr Zafar. It is the Liquidators' view that this is implicit in the order of Mr Justice Lightman. On 16 July 2001 Lovells [the solicitors for the liquidators] wrote to Beale and Company (the lead solicitors for the employees) seeking their agreement that all represented employees (ie those employees who instructed solicitors) should be bound by the decisions of law and common fact on the appeal. By their response of 18 July 2001, Beale and Company declined to agree. Accordingly, the Liquidators respectfully seek an order from the Court of Appeal that the order of Mr Justice Lightman extends or shall extend to this appeal." It is that application which is now before me. It has been listed to be heard promptly in the circumstances that the appeal itself is listed for hearing in, I think, November of this year. The application is opposed by the non-test case employees. In the case of those non-test case employees who are represented by Beale and Company, the opposition has been advanced by Mr Robin Allen QC on their behalf. In the case of unrepresented employees, that opposition takes the form of signatures to numerous pro forma letters which have been collected together in a ring binder and put before me. On the face of the application, the first question which I am asked to determine is whether, as a matter of construction, paragraph 6 of the order made by Lightman J on 29 July 1998 extends to findings of law and fact made on the appeal. It seems to me unsatisfactory for this Court to decide that question as a pure question of construction. If paragraph 6 of Lightman J's order is thought to be ambiguous, the first step, as I indicated on 4 May, is to ask the judge whether he intended that his order should cover matters of law and fact determined by this Court. The paragraph reflects his case-management decision; and, if it does not express his intention, he can clarify the position. If he did intend that paragraph 6 of his order should extend to findings of law and fact made on an appeal, then the proper course would be for those who object to that direction to appeal against his order. Equally, if the judge did not intend his order to have that effect, then the Court of Appeal can deal with the question in the exercise of its own discretion. I am content to deal with the present application on the basis that, in paragraph 6 of the order of 29 July 1998, Lightman J was not intending to deal with anything beyond the findings of law and fact to be made at the trials of the issues. I approach the application on that basis without deciding the point. I leave it open to be argued (if anyone thinks that a sensible exercise) that the order of 29 July 1998 has some wider effect. The question, then, is whether it is appropriate to make a comparable order in relation to the hearing in the Court of Appeal of an appeal against the order of 4 November 1999. In my view it is not appropriate, at this stage, to make an order in those general terms. There are two factors which lead me to that conclusion. First, I do not think it appropriate to make an order that determinations made by this Court as to the law shall be binding on the parties to the actions listed in the schedule and the individuals listed in the appellants' schedule. The position, in the absence of any such order, will be that the doctrine of precedent and stare decisis will apply in the usual way. Any findings of law made by the Court of Appeal will be binding on the Court of Appeal itself and on the High Court in future litigation – subject to any appeal to the House of Lords. In those circumstances, in practice, any findings of law in this Court will not be capable of challenge below the House of Lords (without exceptional grounds). In so far as the order sought reflects that position it would have no useful purpose. If and insofar as it might be capable of being construed as having any greater effect, it cannot be justified. Second, I do not regard it as likely that the Court of Appeal will make any findings of fact on the hearing of the appeal. Essentially, the questions raised on the appeal, as they appear from the revised notice of appeal, challenge the judge's approach to the task that was before him; that is to say, his approach to the question whether the claimants had established that any loss was caused by the breaches of the implied term, and of quantifying that loss. If the Court of Appeal is persuaded that the judge adopted the correct approach, then it seems to me unlikely that there will be any reason or basis to revisit the findings of fact which he made. If the Court of Appeal is satisfied that the judge's approach was wrong, then it will have to consider whether the material before it - including the findings of fact which the judge actually made - enables it to go on to make further findings of fact necessary to give effect to its decision as to the correct approach; or whether the only course open is to send the matter back to the judge (or to another trial judge) for further consideration. For those reasons, I am not persuaded that any general order at this stage that findings of fact made in this Court should be binding on all persons would serve any useful purpose. I think such an order would tend to impose a degree of inflexibility on the appeal hearing without any compensatory benefit. What, however, is likely to be of benefit is for the Court of Appeal to be in a position to direct – in the course of, or after, the hearing of the appeal - that any facts which it is prepared to infer should be binding not only on the appellants but on other interested parties if and to the extent that the Court is satisfied that it has heard full argument on those matters and that all relevant material has been put before it. For that reason it is important (as it seems to me) that the non-test case parties should be present in court through solicitors and counsel; so that, if the Court of Appeal requires further assistance before making a finding of fact which it considers ought to have binding effect, it can call for that assistance. The present position, as it appears from the order made on 4 May 2001, is that no order for the representation of non-test case employees by counsel has been made. Their application to be represented was refused; subject to any further order to be made by the Court hearing the appeal. "Representation" in that context means the right to address the Court. But it was provided that the non-test case employees should have liberty to file a written submission; and that that written submission should be before the court. A written submission has been drafted by Mr Allen QC and is in the bundle before me. I indicate at this stage, therefore, that it seems to me likely that it will assist the administration of justice if funding arrangements can be made by the Legal Services Commission which enable the non-test case employees to instruct solicitors and counsel to be present in court during the hearing of the appeal. I direct that the costs of attendance by solicitors and counsel on their behalf are to be costs within the disposition of the Court of Appeal at the outcome of the appeal itself. I make that order so that, if the appeal develops in a way such that it seems likely that the Court of Appeal will think it appropriate to disturb findings of fact made by the judge, or to draw inferences of fact which were not made below - and if the Court of Appeal is persuaded that proper case management requires that those findings ought to be binding not only on the appellants, but on other litigants in relation to stigma claims - then the Court hearing the appeal will be in a position to invite representations from the non-test case employees through counsel if it thinks it would be of assistance to do so. Whether or not that will be a course which the Court hearing the appeal wishes to take is, of course, a matter wholly for that Court. What I seek to do at this stage is to facilitate (so far as I properly can) the attendance at the hearing of the appeal of solicitors and counsel instructed on behalf on the non-test case employees; so that they are available to assist the Court if the Court requires that assistance. Accordingly, the order that I make is formally to dismiss the application made by notice of 21 August 2001; but to do so upon terms that either BCCI or any non-test case employee can invite the Court at the hearing of the appeal to make an order that any particular finding or inference of fact shall be mutually binding. The costs of today will be reserved. ORDER: Application dismissed. Costs of the application to be reserved. (Order not part of approved judgment) BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII