The Issues

This alert reports on a recent decision concerning a matter of procedure in the Court of Appeal.

The recent case of Spar Shipping v Grand China Logistics Holding (Group) Co Limited [2016] EWCA Civ 520 ruled on the ability of the appeal court to entertain an application made pursuant to CPR 52.9 which provides as follows:

"(1) The appeal court may –

a. strike out the whole or part of an appeal notice;

b. set aside permission to appeal in whole or in part;

c. impose or vary conditions upon which an appeal may be brought.

(2) The court will only exercise its powers under paragraph (1) where there is a compelling reason for doing so.

(3) Where a party was present at the hearing at which permission was given they may not subsequently apply for an order that the court exercise its powers under sub-paragraphs (1)(b) or (1)(c)."

The Appellant, Grand China Logistics Holding (Group) Co Ltd, had been given permission to appeal a judgment order to pay Spar Shipping AS (the Respondent) $25 million. The Respondent subsequently applied for security of costs for the appeal and for an order that the Appellant be required to pay to it (or into Court) the judgment sum, together with sums ordered to be paid on account of costs and interest on those sums, as a condition of the permission to appeal or as a condition of pursuing the appeal pursuant to 52.9 (1)(c).

Longmore LJ refused the application. The application could not be made in circumstances where the Respondent was present at the hearing at which permission was granted. 52.9 (3) provides a clear bar to the court exercising its powers in this regard.

The Respondent advanced a number of arguments to try to avoid the application of 52.9(3), including reliance on a case called Experience Hendrix LLC v PPX Entreprises Inc (Security of Costs) [2002] EWCA Civ 1960, and on which Longmore LJ himself ruled. In that case, an applicant was given permission to amend such an application, so as to apply instead for an order that the appeal would be struck out pursuant to 52.9 (1) (a) and to which the restriction in 52.9(3) does not apply. Longmore LJ granted such an amendment since it was unopposed. Consequently, the Respondents in Spar Shipping argued that the Court had an unfettered ability to exercise its powers in this regard.

Longmore LJ, however, distinguished this case from Hendrix, as being one where: (1) there was a genuine point in the appeal for which permission had already been granted; and where (2) the entirely of the judgment sum was being sought, not merely an order for costs. Crucially, he found that "it would be a very draconian order to make that an appeal for which permission had been granted should be struck out if the entirety of the judgment sum, which ex hypothesi is being argued to have been wrongly ordered, is not paid into court."

Practical Effect

  • Longmore LJ acknowledged and followed the ruling made by Vos LJ in Hearst Holdings Inc v AVELA Inc [2014] EWCA Civ 3016, in particular the oddity that 52.9(3) does not allow for a change of circumstances since the hearing at which permission was given. Although Vos LJ commented that it might "warrant the attention" of the Civil Procedure Rule Committee, it is probably unlikely that the rule will in fact be revisited. Longmore LJ himself does not appear to be an advocate of change, saying that: "the arguments are not all one way because if there is a general power to impose conditions after permission to appeal has been granted even if there is the restraint in 52.9(2) that there must be a compelling reason to do so, this court is likely to be asked to entertain frequent applications of this kind..and much money and time will be used up in doing so. There can be little doubt that 52.9(3) is there for a purpose."
  • The application of 52.9(3) therefore currently remains unchanged but the practical effect of its application, has been reinforced. As a respondent to an application for permission to appeal, make sure you carry out your due diligence, that you are clear at the time of the hearing if you are seeking the imposition of any conditions, and if there are grounds for supposing that the unsuccessful party may sort away their assets in order to defeat a judgment, then be sure to raise it before the trial judge.
  • If new information comes to light after the hearing at which permission was given, and 52.9(3) applies, its very much tough luck for the respondent, unless there is a potential "backdoor" way round 52.9(3) as there was in Hendrix. But as Longmore LJ demonstrated, it is a case which can be distinguished where there is a will to do so.