Balmoral Group Ltd v Borealis (UK) Ltd & Ors Rev 1

THE HONOURABLE MR JUSTICE CHRISTOPHER CLARKE Approved Judgment Balmoral v Borealis Neutral Citation Number: [2006] EWHC 2228 (Comm) IN THE HIGH COURT OF JUSTICE QUEEN'S BENCH DIVISION COMMERCIAL COURT Case No: 2005 FOLIO 130 Royal Courts of Justice Strand, London, WC2A 2LL Date: 23/08/2006 Before : THE HONOURABLE MR JUSTICE CHRISTOPHER CLARKE - - - - - - - - - - - - - - - - - - - - - Between : BALMORAL GROUP LTD - and - (1) BOREALIS (UK) LTD (2) BOREALIS AS (3) BOREALIS A/S - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Claimant Defendants Mr Richard Mawrey QC & Mr Ross Fentem (instructed by Moon Beaver) for the Claimant Mr David Allen & Mr Charles Holroyd (instructed by Kennedys) for the Defendants Hearing date: 22nd August 2006 - - - - - - - - - - - - - - - - - - - - - Approved Judgment I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic. ............................. MR JUSTICE CHRISTOPHER CLARKE: 1. Balmoral seeks to appeal my judgment. In order to be able to do so it needs permission either from me, if I am still able to give it, or from the Court of Appeal, if I am not. It also needs to have filed an appellant’s notice in time; or to secure an order for an extension of time for doing so. The parties are in dispute as to whether I can, or, if I can, whether I should, THE HONOURABLE MR JUSTICE CHRISTOPHER CLARKE Approved Judgment Balmoral v Borealis grant an extension of time for applying for such permission and as to the length of the extension I should give for filing an appellant’s notice. Whether, in the events which have happened, I now have power to entertain an application for permission to appeal is a question upon which, as I was told, there appears to be no decided authority. My judgment was delivered to the parties in draft on Wednesday 19th July and was handed down on 25th July. On that date I made an order dismissing Balmoral’s claim, entering judgment for Borealis on the counterclaim and ordering Balmoral to pay Borealis’ costs. I also ordered a payment of £ 900,000 on account of those costs and gave Balmoral liberty to apply to take out the £ 7,000,000 in Court. I adjourned for consideration at a further hearing, now fixed for 6th October, the question of what should be the basis upon which the costs should be assessed and all questions relating to interest. I was not asked on 25th July to give Balmoral permission to appeal, nor to adjourn the question of whether such permission should be given. This was because Balmoral had decided, at that stage, not to seek to appeal. Balmoral has had a change of mind. On 11th August it applied for an order extending the time for applying to me for permission to appeal until 6th October or further order, and for an order extending to the same date the time for making an application for permission to the Court of Appeal. 2. 3. 4. Permission to appeal 5. In respect of permission Rule 52.3 (2) provides as follows: 6. 7. “An application for permission to appeal may be made (a) to the lower court at the hearing to which the decision to be appealed was made; or (b) to the appeal court in an appeal notice.” Mr David Allen for Borealis submits that it is now too late to apply to me, as the lower court, for permission to appeal. The decision sought to be appealed is my order of 25th July dismissing the claim and upholding the counterclaim. The hearing at which that decision was made began and ended on 25th July. Accordingly the only court to which an application for permission can now be made is the appeal court i.e. the Court of Appeal. That that is so supported, he says, by the relevant Practice Direction which provides: “4.6 An application for permission should be made orally at the hearing at which the decision to be appealed against is made. Where: THE HONOURABLE MR JUSTICE CHRISTOPHER CLARKE Approved Judgment Balmoral v Borealis (a) no application for permission to appeal is made at the hearing; or (b) the lower court refuses permission to appeal, an application for permission to appeal may be made to the appeal court in accordance with rules 52.3(2) and (3).” 8. He also draws attention to the notes to the rules – see page 1515 of the White Book: “When and where should the application for permission be made? An application for permission should be made to the lower court orally at the hearing at which the decision to be appealed against is made. If no such application is made or if the lower court refuses permission, then the application for permission may be made to the appeal court in the appeal notice: See r 52.3 (2) and paras 4.6 and 4.7 of the practice direction. The language of r 52.3 (2) (note the word “or”) and of para 4.6 of the practice direction (note the word “should”, rather than “shall” or “must”) indicates that a party who fails to apply for permission to the lower court but goes directly to the appeal court, suffers no sanction. This situation may arise where a party has a change of heart or a change of advice after the hearing at which he has been unsuccessful.” 9. So far as any extension of time is concerned, Mr Allen submits that Rule 52. 3 (2) is not a provision that simply specifies a time within which an application for permission to appeal is to be made to the trial judge but a provision as to the occasion on which the application shall be made, namely at the hearing at which the decision to be appealed is made. That occasion has now passed. I cannot, therefore, so he submits, extend time for an application for permission to myself under Rule 3 (2) which provides: “(1) The list of powers in this rule is in addition to any powers given to the court by any other rule or practice direction or by any other enactment or any powers it may otherwise have. (2) Except where these Rules provide otherwise, the court may – (a) extend or shorten the time for compliance with any rule, practice direction or court order (even if an application for extension is made after the time for compliance has expired).” 10. If, contrary to that submission, I have power to extend time, Mr Allen submits that I should not do so. THE HONOURABLE MR JUSTICE CHRISTOPHER CLARKE Approved Judgment Discussion Balmoral v Borealis 11. In Gwembe Valley Development Co Ltd v Koshy HC/1996/D/7015 Rimer J, as he then was, said this: 12. 13. 14. “I do not propose to attempt to rule definitively on the interpretation of Part 53.3 (2) (a). On the face of it, the language would appear to support the view that Mr Page’s application had to be made last Wednesday [the day on which the decision was made] and, if not made then, could not now be made to me at all but would have to be made to the Court of Appeal. I would not however, wish to exclude the possibility that the true interpretation of that rule would permit a proposing appellant to obtain an extension of time for an application to the trial judge for permission to appeal. Indeed, it would seem to me improbable that that is not the intention of the rules, since it is so much more convenient for the trial judge to be able to deal with an application for permission to appeal at an earlier point, rather than for the proposing appellant to have to trouble the Court of Appeal”. That that possibility was the true interpretation is now apparent from paragraph 4.3B of the Practice Direction, inserted by the 41st update to the CPR in April 2006 which provides: “4.3B Where no application for permission to appeal has been made in accordance with rule 52.3(2) (a) but a party requests further time to make such an application, the court may adjourn the hearing to give that party the opportunity to do so.” The good sense of that position is plain. In a large and complex case it is often appropriate that the decision be given on one day and some or all of the consequent directions be dealt with at a later date. It would be unfortunate if a decision to take that course was fatal to an application to the trial judge for permission to appeal. But the rules provide for the lower court to be able to grant permission at the hearing at which the decision to be appealed was made. On the facts of this case, the hearing at which the decision sought to be appealed was made was, as it seems to me, concluded on 25th July. Whilst it would have been open to Balmoral to apply for an adjournment of that hearing so as to enable them to make an application for permission to appeal before it ended, it did not do so. Since that hearing is over I regard myself as no longer able to grant permission. The rules provide a would be appellant with a choice. He can apply to the lower court when the decision is made. If he needs more time he can ask for an adjournment of the hearing at which the decision is made in order to apply for permission on the date to which that hearing is adjourned. His subsequent application will then, by definition, be made at the adjournment of that hearing. If he does neither he must apply to the appeal court. THE HONOURABLE MR JUSTICE CHRISTOPHER CLARKE Approved Judgment Balmoral v Borealis 15. 16. 17. This conclusion appears to me to follow from the wording of Rule 53.2. (2); and paragraphs 4.3 B, 4.6 and 4.7 of the Practice Direction. Mr Mawrey for Balmoral submitted that the wording of Rule 4.3 B (“Where no application for permission to appeal has been made in accordance with rule 52.3(2) (a) but a party requests..”) suggests that a request can be made at some time after the occasion on which the decision to be appealed is handed down since the paragraph does not provide, as it might, “Where no application for permission to appeal is made … but a party requests”. I do not accept this submission. There is to my mind no difficulty in reading the paragraph as directed to the position at the time when the request which it contemplates is made. If an application for permission is not made when the decision to be appealed is made but a request is made for further time to make such an application, then, at the time when that request is made, the position will be that no application for permission to appeal has been made. I note also that the authors of the notes in the White Book use the expression “if no such application is made” when summarising the effect of the rule, and that paragraph 4.7 of the Practice Direction uses similar language. So far as an extension of time is concerned I do not think it is now open to me to grant one since no extension of time can have the result that an application for permission made to me at any date hereafter will have been made at the hearing at which the decision to be appealed was made. I also reject the submission that, because I adjourned consideration of interest and the basis of assessment of costs to what is now 6th October, that hearing will be a continuation of the hearing at which the decision to be appealed was made. In my judgment it will not. It will be the further hearing that I ordered for the purposes of determining those two issues. It is so described in the order that I made on 25th July. Mr Richard Mawrey, Q. C., on behalf of Balmoral submits that this conclusion would be productive of manifest inconvenience. Suppose an important case in which the judge, if asked, would have granted permission to appeal. By oversight no such application is made. It would, he submits, be odd and unsatisfactory if the judge could not be asked the next day or shortly thereafter for permission to appeal. I do not find this supposed circumstance one that should prompt a different conclusion. It is unlikely to occur in practice; if it does the would-be appellant is not without remedy since he can still apply to the appeal court. In any event the wording of the rule seems to me clear. In addition, examples can be given where the conclusion for which Mr Mawrey argues could produce odd results. The determination of the form of order may, in a heavy case, be of some difficulty. On that account, or for reasons connected with the availability of the judge or counsel, the form of the order may not finally be determined until a substantial time after the initial decision. It would be unsatisfactory if it was open to a would-be appellant to seek permission from the trial judge a considerable time after the decision provided that he did so before the making of all directions consequential upon the original decision. THE HONOURABLE MR JUSTICE CHRISTOPHER CLARKE Approved Judgment Balmoral v Borealis 18. In summary, the rules allow a would-be appellant to apply to the lower court for permission to appeal at the hearing at which the decision to be appealed is made or at a later date, if, on application made at that hearing, the lower court adjourns the hearing in order to allow such an application to be made later. Otherwise the application must be made to the appeal court. Extension of time for filing an appellant’s notice 19. So far as the time limit for filing an appellant’s notice is concerned the relevant rule is Rule 52 .4. which provides: “ (1) Where the appellant seeks permission from the appeal court it must be requested in the appellant’s notice. (2) The appellant must file the appellant’s notice at the appeal court within – (a) such period as may be directed by the lower court (which may be longer or shorter than the period referred to in sub-paragraph (b)); or (b) where the court makes no such direction, 21 days after the date of the decision of the lower court that the appellant wishes to appeal.” In Aujla v Singhera [2004] EWCA Civ 121 the Court of Appeal ruled that it was open to the trial judge to extend the time for filing a notice of appeal even though he had made no such order at the time when he gave the decision appealed from. There is thus no doubt that I have power to extend time for filing the appellant’s notice and the only question is for how long any such extension should be. Balmoral’s application for an extension was made before the expiry of the 21 day time limit. In those circumstances it does not seem to me necessary to address the check list contained in rule 3.9 on the basis outlined in Sayers v Clarke Walker (a firm) [2002] EWCA Civ 645: see Robert v Momentum Services Ltd [2003] EWCA Civ 299. Borealis is content that I should grant an extension until 29th August – but solely on the basis that, had an application been made for an extension on 25th July it would have been prepared to accept an extension of time the effect of which would be that the notice was filed within 5 weeks of the 25th July, being the 21 days now laid down by the rules and an additional 14 days, being the 14 days in excess of the prescribed time contemplated by paragraph 5.19 of the Practice Direction. That paragraph provides that the time to be specified by the lower court should not normally exceed 28 days; but that direction was made when the time for appealing was 14, and not, as it is now, 21 days. So the direction contemplated a 14 day extension beyond the period prescribed. 20. 21. THE HONOURABLE MR JUSTICE CHRISTOPHER CLARKE Approved Judgment Balmoral v Borealis 22. 23. 24. But, Mr Allen submits, there is no warrant for any further extension of time. The fact that Balmoral has changed its mind is not a sufficient ground; nor does the evidence reveal with any specificity why Balmoral should be allowed more than five weeks from the date of my decision to file an appellant’s notice. The evidence appears to show that Balmoral is casting around to see whether they can find some basis for an appeal which they cannot presently specify. Whilst I see the force of that submission, I propose to allow a more generous extension of time. I shall extend the time for filing an appellants’ notice to close of business on Friday 29th September. I do so largely for case management reasons and having regard to the nature of this particular case, which is far from run of the mill. My judgment is long and detailed. That Borealis seek to appeal it is now apparent. In order to have any hope of success they need to challenge my findings of fact. That, if it is to be done at all, will require a careful analysis of my findings and the evidence that is said to confound them. The labour of composing my judgment has made me all too well aware of the time needed to deal with the complicated factual and expert evidence. It seems to me desirable to allow Balmoral a period of time sufficient to produce an appellant’s notice of appeal that is useful, fully reasoned and informative, so that the Lord Justice who will now have to determine it will be in the best position to determine whether permission should be granted. It does not seem to that Borealis will suffer such prejudice from an extension of this length as should lead me to refuse it. They have a judgment in their favour on claim and counterclaim; they have received £900,000 on account of costs. There is no suggestion that I should stay any part of the judgment. Whilst the achievement of finality is desirable that cannot be done until, at the very earliest, the matter has been determined by a Lord Justice, which, I apprehend, is not likely to be before the beginning of term. If permission is refused Balmoral could request an oral hearing, and the Court of Appeal may, of its own motion require the question of permission to be determined at an oral hearing rather than on paper in any event. In the long run it seems to me that the administration of justice and the interests of the parties will best be served by the extension that I propose. In saying that I should not be regarded as expressing any view as to whether permission should be granted. In the absence of a draft appellant’s notice it would be inappropriate to do so. If, when that notice is to hand either party wishes me to give an indication of my opinion as to whether permission should be given in accordance with paragraph 4.5 of the Practice Direction I will consider whether to do so. 25. Accordingly I decline to extend time for an application to me for permission to appeal. But I extend time for the filing of an appellant’s notice to close of business on Friday 29th September 2006.