Olympic Airlines SA v ACG Acquisition XX Llc [2014] EWCA Civ 821

[2014] EWCA Civ 821Case No A3/2012/1559
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN’S BENCH DIVISION
COMMERCIAL COURT
The Honourable Mr Justice Teare
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate Tuesday 17 th June 2014
Before
LORD JUSTICE MOORE-BICKLORD JUSTICE RIMER
Between
OLYMPIC AIRLINES SA (in special liquidation)AppellantACG ACQUISITION XX LLCRespondent
(Transcript of the Handed Down Judgment ofWordWave International LimitedA Merrill Communications Company165 Fleet Street, London EC4A 2DYTel No: 020 7404 1400, Fax No: 020 7831 8838Official Shorthand Writers to the Court)
Mr Philip Shepherd QC (instructed by Olympic Airlines SA legal department) for AppellantMr Michael McLaren QC (instructed by Simmons & Simmons LLP) for Respondent
Hearing Hearing date: 12 February 2014JudgmentLord Justice Rimer :Introduction
[1]The matter before the court is a sequel to two previous orders that the court has made in relation to an appeal by Olympic Airlines SA (‘Olympic’) against Teare J’s order made in the Commercial Court on 1 June 2012. The respondent is ACG Acquisition XX LLC (‘ACG’). The first order was made by Rix LJ and me on 17 December 2012. That order dismissed Olympic’s application for a stay of part of Teare J’s order; and, more relevantly, made Olympic’s permission to appeal conditional upon its paying into court:(i) by 28 December 2012, £82,500 as security for ACG’s costs of the appeal; and(ii) by 2 January 2013, the £500,000 which Teare J had ordered Olympic to pay ACG on account of its costs of the proceedings. The order provided that, in default of the payment of both sums, Olympic’s permission to appeal would be revoked. Olympic paid both sums into court in time and so its permission was not revoked.[2]Olympic’s appeal was heard on 15 and 16 January 2013 by a court comprising Rix, Tomlinson and Kitchin LJJ. By an order made on 17 April 2013, that court dismissed the appeal with costs, such costs including ACG’s costs of the applications the subject of the prior order of December 2012. The order also gave Olympic liberty to apply by 17 May 2013 for the release to it of the two sums of £500,000 and £82,500 paid into court pursuant to the December order. Olympic made such an application. What is now before the court is a preliminary issue in that application.[3]Why should Olympic be entitled to ask the court to decide whether to order the repayment of money it paid into court in compliance with the terms of an order imposed upon it as a condition of being permitted to pursue its ultimately dismissed appeal? To answer that, I must return to the court’s judgments and order delivered and made on 17 December 2012.

The judgments and order of 17 December 2012

[4]I shall set the scene by quoting the opening paragraphs of my judgment, one with which Rix LJ agreed ([2012] EWCA Civ 1659):
‘1. Earlier this year, Teare J, in the Commercial Court, presided over the trial of a claim and counterclaim in consolidated proceedings in which the claimant is [ACG], a Delaware company, and the defendant is [Olympic], a Greek company in special liquidation. 2. Olympic, a state-owned enterprise, was placed into such liquidation under the provisions of Greek insolvency law by an order of the Court of Appeal in Athens on 2 October 2009. The liquidator is Ethniki Kefaleou SA. The order was made on a petition dated 24 September 2009 presented by the Greek State (‘the State’), Olympic’s largest, and majority, creditor, with a debt exceeding €303 million. The State’s claim followed a decision of the European Commission dated 17 September 2008 that Olympic had for many years been the recipient of illegal State aid. With few exceptions (for example, claims by employees), the State’s debt enjoys preferential status in the liquidation. Olympic is also indebted to the National Insurance Institution of Greece for more than €1.2 million. The special liquidation order projected a net deficiency as regards creditors of over €411 million. 3. The outcome of the trial before Teare J was that, by his order of 1 June 2012, he: (i) entered judgment, plus interest, for ACG against Olympic for over US$10m; (ii) made further orders for the payment of interest until the principal judgment sums had been paid; (iii) ordered Olympic to pay two thirds of ACG’s costs; (iv) ordered it to pay £500,000 on account of such costs to ACG’s solicitors, Simmons & Simmons LLP, by 4 pm on 31 July 2012; and (v) dismissed Olympic’s counterclaim (which had overtopped ACG’s claim). The £500,000 was to be held by the solicitors in their client account unless one or other of the following events occurred: (i) Olympic did not file an appellant’s notice by 22 June 2012; or (ii) any application for permission to appeal was finally dismissed. Upon either event, the £500,000 was to be released to ACG. The judge refused Olympic permission to appeal. 4. Olympic filed an appellant’s notice seeking permission to appeal to the Court of Appeal, and did so before 22 June 2012. On 30 July 2012, Moore-Bick LJ, on the papers, granted Olympic permission to appeal save in relation to grounds 13-20, in respect of which no renewed oral application was made. The appeal is due to be heard on 14 January 2013. A day and a half is to be allowed for it. 5. Olympic did not pay the £500,000 by 31 July 2012, nor has it since paid it. By an application notice issued in this court on 14 August 2012, Olympic sought a stay of Teare J’s order. That is one of the two applications before the court. The basis for it is that Greek law is the applicable law of the liquidation, as ACG agrees; and it is said that, under that law, Olympic’s liquidator may not “at this time” lawfully make any of the payments required by Teare J’s order but that ACG must in due course prove in the liquidation for them. ACG agrees that it must prove in the liquidation for the principal judgment sum and interest the subject of the order, although given the preferential status of the State as the majority creditor, the size of its debt and Olympic’s estimated deficiency as regards creditors generally, it does not expect to achieve any material return in the liquidation. Mr McLaren QC explained to us that once – at an early stage in the liquidation – ACG had recovered from Olympic an aeroplane that it had leased to it, ACG had no further commercial incentive in pursuing its claim for damages, but regarded itself as locked into the litigation because Olympic was counterclaiming for sums that exceeded its own claim. 6. ACG disagrees with the liquidator, however, that it is not entitled to the immediate payment in full of the £500,000 ordered by Teare J’s interim payment order (‘the IPO’). Its position is that Olympic’s liability under the IPO is part of the “costs of execution” of the Greek liquidation – or what in an English law liquidation would be regarded as an expense incurred by the liquidator for the benefit of the liquidation. Olympic made no submission to Teare J that it would be unlawful for Olympic to comply with the IPO, nor did it seek a stay from him of its enforcement. ACG’s riposte to Olympic’s stay application of 14 August 2012 was, on 22 August 2012, to issue an application notice pursuant to CPR Part 52.9.1(c) asking the court to make Olympic’s permission to appeal conditional upon: (i) its compliance with the IPO, and (ii) providing security for ACG’s costs of the appeal in the sum of £95,000, alternatively £82,500. That is the other application before the court.’
[5]I proceeded in my judgment to explain that the parties had filed rival expert evidence as to Greek law. Olympic’s evidence was to the effect that it would be unlawful under Greek law for its liquidator to comply either with the IPO or with any condition as to the giving of security for ACG’s costs of the appeal that the court might impose; and it asserted that the consequence of requiring such compliance or the imposing of any such condition would be to stifle Olympic’s appeal. ACG’s Greek law evidence was to the contrary effect, namely that the IPO was part of the costs of execution of the liquidation and so an expense that Olympic was bound to pay.[6]I explained in paragraph 9 that the court could not, without oral evidence, decide between the rival assertions as to Greek law; and recorded simply that I regarded Olympic as having an arguable case that under Greek law ACG may only be entitled to prove in the liquidation for the costs ordered by Teare J as also for any costs that the court might order Olympic to pay following the hearing of its appeal.[7]I continued by explaining that it was not, however, Olympic’s case that there was insufficient money in the liquidator’s hands with which to satisfy any condition the court might impose as to compliance with the IPO or to meet any order for security that it might make. I also explained that at an earlier stage of the litigation Olympic was faced with an application for the strike out of its defence and counterclaim unless it complied with an order for the payment of costs of some £18,000 that Teare J had made against it, and that:(i) Olympic advanced the same argument to Steel J that it would be unlawful under Greek law for it to pay the costs so ordered;(ii) Steel J rejected the argument, accepted the evidence filed by ACG to the contrary effect and made the ‘unless’ order sought by ACG; and(iii) in compliance with that order, Olympic then paid the costs.[8]Olympic’s response to that order showed, therefore, that its liquidator’s claimed concern as to the limits of what it may lawfully do under Greek law is not consistent; and ACG argued that Steel J’s decision raised an issue estoppel against Olympic preventing it from advancing the same ‘unlawfulness’ case before this court. In paragraph 13, I expressed my view that there was force in the point but said that, because the hearing before us was an interim application whose limited available hearing time did not permit full argument on the point:
‘… I express no final view on whether Steel J’s decision finally precludes Olympic from making the “unlawfulness” case that it now seeks to make. That said, I still regard it as relevant to the disposal of Olympic’s arguments on the present application that (a) its like argument was rejected by Steel J in 2011, and (b) Olympic then did precisely that which it asserted then, and repeats now, it cannot lawfully do.’
[9]I need not explain further the reasoning in my judgment. Whilst specifically not deciding either the issue estoppel point or the Greek law point, I concluded that there were, for reasons given, compelling reasons requiring Olympic to give security for ACG’s costs of the appeal by paying £82,500 into court and, as a condition of the pursuit of its appeal, also to pay in the £500,000. The terms on which the court made such orders were, however, as follows:
‘3. Any sums paid into Court pursuant to paragraph 2.1 of this Order [which related to both the £82,500 and the £500,000 payments] shall be held on deposit only and shall not be paid out of court to either party otherwise than by an order of the court if necessary after full enquiry as to [ACG’s] claim to it, or pursuant to the written agreement of the parties or their respective solicitors. The parties do have liberty to apply.’
As I have said, Olympic complied with the conditions imposed by that order and paid both sums into court in time. It then proceeded with its appeal, which the court dismissed by its order of 17 April 2013. The citation number of the court’s judgment on the appeal is [2013] EWCA Civ 369.

The order of the Court of Appeal dated 17 April 2013

[10]By paragraph 2 of its order, the court upheld Teare J’s order, including the £500,000 IPO as varied by paragraph 3 of the prior order of 17 December 2012. By paragraph 3, the court ordered Olympic to pay ACG’s costs of the appeal and of the applications the subject of the order of 17 December 2012. Paragraph 4 provided:
‘As regards the amount payable under paragraph 3 of this Order, and the amounts paid into court pursuant to the Order herein dated 17 December 2012: (A) [Olympic] has liberty to apply for an Order that such sums be released to [it], provided that [it] files and serves such application not later than 4pm on 17 May 2013; …’
The opening words of paragraph 4 applied not just to the two payments into court of the £82,500 and the £500,000, but also to the costs of the appeal that Olympic was ordered to pay, but the essence of paragraph 4 was directed at the two payments. Paragraph 4 continued by providing that if Olympic made no such application as it prescribed, the payments would be released to ACG without further order. Olympic did, however, make an application within the prescribed time.

Olympic’s application under paragraph 4(A) of the order of 17 April 2013

(A) of the order of 17 April 2013

[11]By an application notice issued on 17 May 2013, Olympic applied for the release to it of the £82,500 and £500,000 on the grounds that under Greek law its liquidator could not lawfully cause or permit such sums to be paid to ACG. Olympic’s application referred to the evidence as to the Greek law upon which it would be relying and was supported by a witness statement of Maria Giannouzi made on 16 May 2013.[12]There followed correspondence between the parties’ solicitors and the court. The nub of the point raised by ACG’s solicitors was that, before determining the disputed issue of Greek law, the court should first decide whether Olympic was issue estopped from raising its Greek law point: if it was, there would be no need to engage in the potentially extended inquiry into the Greek law issue. The nub of Olympic’s contrary position was that the two issues should not be split up in this way, as each was said to overlap the other. Tomlinson LJ was unimpressed by Olympic’s arguments and gave directions on the application by his order of 26 July 2013. After reciting the reading of Ms Giannouzi’s witness statement and the correspondence, that order provided materially that:
‘1. There be a preliminary hearing, not to determine any issues of Greek law, but instead limited to the following issues: 1.1 Whether for the purposes of this application, [Olympic] is issue estopped from contending that it would be unlawful under Greek law for [Olympic’s] liquidator to satisfy an order of the English Court to make a payment in respect of [ACG’s] costs; and 1.2 Whether, if there is no such issue estoppel, and on the assumption that it would be unlawful under Greek law for [Olympic’s] liquidator to satisfy an order of the English Court to make a payment in respect of [ACG’s] costs, the application should be dismissed; ….’
The order authorised the making of consequential orders if either of the issues in paragraphs 1.1 and 1.2 should be answered in the affirmative, gave directions as to what should happen if both were decided in the negative, and gave procedural directions for the hearing. The only issues now before the court for decision are those described in paragraphs 1.1 and 1.2.

Issue estoppel

(a) Is ACG entitled to raise the issue estoppel argument?

[13]Whilst the burden of establishing an issue estoppel lay on ACG, Mr Shepherd QC, for Olympic, opened the argument on the preliminary issues. His case was the negative one that Steel J’s decision gave rise to no issue estoppel. But rather than try to make that good, he instead devoted almost the whole of his oral argument to a submission that it was now too late for ACG to advance its estoppel argument at all. To understand the submission, I must summarise the relevant chronology.[14]On 6 August 2010, Teare J ordered Olympic to deliver up the aircraft to ACG (see the reference in paragraph 5 of my December 2012 judgment, quoted in paragraph 4 above) and to pay half the costs of the delivery up application; and on 3 November 2010 he assessed the costs at £18,750, which then fell due for payment by 17 November 2010. Olympic did not pay them and on 3 June 2011 ACG applied for an order for the striking out of Olympic’s defence and counterclaim unless it did. That application was heard by Steel J on 22 July 2011, a hearing at which Olympic raised its Greek law ‘unlawfulness’ point. Steel J rejected the argument and made an order that unless Olympic paid the costs and interest by 19 August 2011, its case would be struck out. Olympic complied with the order and paid the costs. The claim and counterclaim then came on for trial before Teare J, whose order was made on 1 June 2012.[15]The parties learnt on 6 August 2012 of the grant by Moore-Bick LJ to Olympic of permission to appeal against Teare J’s order on limited grounds. On 14 August 2012, Olympic applied for a stay of the £500,000 IPO and supported its application by expert evidence from Ms Giannouzi, together with an extensive exhibit to the effect that Greek law made it unlawful for the liquidator to make the payment. On 22 August 2012, ACG issued its application notice asking the court to make Olympic’s permission to appeal conditional upon compliance with the IPO and the giving of security for ACG’s costs of the appeal.[16]On 30 August 2012, and again on 18 September 2012, ACG notified the court that it wished to obtain evidence on Greek law. On 26 September 2012, ACG notified Olympic that it would be obtaining such expert evidence. On 4 October 2012, ACG asked the court to give directions for the service by the parties of expert evidence on Greek law. Olympic filed further Greek law evidence on 8 October 2012. ACG filed its evidence as to Greek law on 9 October 2012. Olympic filed supplemental Greek law evidence on 5 November 2012. ACG filed evidence in response on 9 November 2012.[17]Skeleton arguments for the hearing of the two applications were exchanged on 22 November 2012. ACG, in its skeleton argument, raised the point that Olympic was issue estopped by Steel J’s order from running the same Greek law case that it had advanced without success before Steel J. Olympic’s skeleton argument included no reference to any issue estoppel, none having previously been advertised. The hearing of the applications came before Rix LJ and me on 27 November and 4 December 2012 (the whole hearing occupying less than a day), following which the court reserved its judgments and delivered them on 17 December 2012.[18]Returning to Mr Shepherd’s submissions, his primary argument was that ACG had so conducted itself as to bar itself from advancing its issue estoppel argument. He reminded us that the doctrine of issue estoppel is a particular application of the general rule of public policy that there should be finality in litigation. The chronology of activity between 30 August and 9 November 2012 showed, however, that ACG had engaged with the issue of Greek law that Olympic had raised. By doing so, and by remaining silent about issue estoppel until the service of its skeleton argument on 22 November 2012, Mr Shepherd argued that ACG had debarred itself from asserting the claimed estoppel.[19]Mr Shepherd referred us to the decision of the House of Lords in Arnold and Others v. National Westminster Bank Plc [1991] 2 AC 93, in particular to Lord Keith of Kinkel’s statement, at 110G, that ‘Estoppel per rem judicatam, whether cause of action estoppel or issue estoppel, is essentially concerned with preventing abuse of process.’ He also referred us to Lord Lowry’s statements:(i) that whilst issue estoppel will ordinarily constitute a complete bar to relitigating a decided point, ‘the court can, and in exceptional circumstances should, relax that rule.’ (see 112G); and(ii) that the doctrine of issue estoppel was not inflexible and that the ‘special and indeed exceptional circumstances of this case’ justified a departure from it.[20]That approach in Arnold was, said Mr Shepherd, reflected in the decision of the Supreme Court of Canada in Penner v. Regional Municipality of Niagara Regional Police Authority Service Board and Others [2013] SCJ No 19, in which Cromwell and Karakatsanis JJ, delivering the majority judgment of the court, said at paragraph 29:
‘The one [doctrine] relevant on this appeal is the doctrine of issue estoppel. It balances judicial finality and economy and other considerations of fairness to the parties. It holds that a party may not relitigate an issue that was finally decided in prior judicial proceedings between the same parties or those who stand in their place. However, even if these elements are present, the court retains discretion to not apply issue estoppel when its application would work an injustice.’
[21]Mr Shepherd, ranging more widely, invoked Johnson v. Gore Wood & Co (a firm) [2002] 2 AC 1, at 31, where Lord Bingham of Cornhill explained the modern approach to so-called Henderson v. Henderson abuse of process (bringing or raising a claim or defence in later proceedings which could have been brought or raised in earlier proceedings but was not: see (1843) 3 Hare 100, at 114, 115, per Sir James Wigram V-C). Lord Bingham explained that whilst such abuse of process was different from cause of action estoppel and issue estoppel, it had much in common with them, namely that there should be finality in litigation and a party should not be vexed twice in the same matter. He explained that the court’s approach to the bringing or raising of such a claim or defence should not be to assume that it necessarily is an abuse, but that it should instead determine its legitimacy by the adoption of a ‘broad, merits-based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case …’. Mr Shepherd said that these observations supported his submission that a similar ‘broad, merits-based’ approach should be applied to whether a party should be entitled to assert an issue estoppel.[22]Ranging even more widely, Mr Shepherd enlisted the statement of Robert Walker LJ, as he then was, in Gillett v. Holt [2001] Ch 210, at 225D, that ‘the fundamental principle that equity is concerned to prevent unconscionable conduct permeates all the elements of the doctrine’ of estoppel. I note, however, that that statement was not made in the context of a either a cause of action or issue estoppel; and when in Fisher v. Brooker and Another [2009] 1 WLR 1764, at 1780, Lord Neuberger of Abbotsbury referred to it with approval, he did so in a section of his judgment headed ‘Laches, estoppel, and acquiescence’ that was again not concerned with such a context.[23]Focusing on the present facts, Mr Shepherd submitted that where, as he put it, re-litigation of the point said to be the subject of the issue estoppel has actually happened, there is nothing to which the claimed estoppel can attach. In this case, such re-litigation had happened in the run up to the hearings of November and December 2012, when the parties had engaged with each other by exchanging evidence on the merits of the Greek law point. There thus came a point when a broad, merits-based approach dictated that it was too late for ACG to assert its issue estoppel argument. The position was, said Mr Shepherd, analogous to the case of a party who objects to the jurisdiction of the court after first engaging in the dispute on the merits. Alternatively, applying the approach in Arnold, it was a case in which ‘exceptional circumstances’ prevented ACG from being allowed to raise the estoppel.[24]Mr Shepherd said that he had similarly submitted to Rix LJ and me at the November/December 2012 hearing that it was too late for the estoppel to be argued. It is correct that at the hearing on 28 November 2012 he submitted that the issue estoppel point ‘simply is not open on this application’, because the point had never been raised until ACG’s recent skeleton argument. His development of the submission did not, however, base it on any suggestion that the course of the prior events had served to bar ACG from raising it at all; rather, the essence of his point was that it was ‘a last minute bright idea’ that, as a matter of case management, the court should not entertain. That was underlined by his submission that the court did ‘not have enough material to decide the issue estoppel point’, which he explained by saying that the court did not have a full transcript of the proceedings before Steel J. Mr Shepherd continued by saying:
‘It would not be fair to this side to deal with the matter on the basis of issue estoppel in circumstances where notice could have been given to us, at least before the skeleton argument went in, so the point could be properly researched.’
[25]Mr Shepherd was not, therefore, then making the point that he made to us on this hearing, namely that ACG’s conduct in engaging with the issue as to Greek law operated as an estoppel preventing it from raising the issue estoppel point at all: he was saying no more than that it would be unfair on Olympic to allow ACG to ambush Olympic with a point it had raised so late.[26]Returning to his submissions on this hearing, he also said that ACG’s conduct in relation to the late raising of the issue estoppel amounted to laches and acquiescence. He said that what underlies equity’s approach in these respects is the prevention of unconscionable conduct, which is what ACG’s conduct had amounted to. He said it was no answer that, if the issue estoppel point were allowed to be taken and proved good, Olympic could be compensated in costs for any wasted expenditure on obtaining expert evidence on Greek law. Olympic’s loss is that it had engaged in the substantive issue as to what Greek law has to say on the point and the consequential equity that arose in its favour cannot be bought off by a payment of costs: moreover, said Mr Shepherd, Olympic had not merely so engaged with the Greek law issue: it had also paid the £582,500 into court on the basis that it would be entitled to a ‘full enquiry’ as to its right to have it returned, one at which it would be entitled to argue the Greek law point.[27]In summary, the thrust of Mr Shepherd’s oral and written submissions as to ACG’s conduct in the run up to the November/December 2012 hearings of the August 2012 applications was as follows:(i) ACG was estopped from taking the issue estoppel point;(ii) it was unconscionable for ACG to take it;(iii) ACG acquiesced in an acceptance that the applications would be decided exclusively by reference to Greek law considerations;(iv) its delay in raising the issue estoppel amounted to laches;(v) it had impliedly waived any reliance on an issue estoppel;(vi) it had made an election against any such reliance;(vii) it followed that there were special or exceptional circumstances that prevented the raising of the point;(viii) a broad, merits-based approach to ACG’s bid to raise it required a decision preventing it from doing so; and(ix) as the Greek law issue had been substantially litigated between the parties (by their engagement in the exchange of Greek law evidence), there was no longer anything to which the issue estoppel could attach.[28]With due respect to Mr Shepherd’s sustained submissions, I regard them as misdirected. What was happening between 6 August and 22 November 2012 (a period of about 15 weeks) was that the parties were preparing for a hearing at which the court would determine:(i) on ACG’s application, whether Olympic should give security for ACG’s costs of its proposed appeal and, as a condition of being permitted to appeal, should also satisfy the £500,000 IPO that it had refused to honour; and(ii) on Olympic’s application, whether compliance with the £500,000 IPO should be stayed. Olympic’s stance on both applications was that for it to be required to pay so much as a penny into court as a condition of pursuing its appeal would be unlawful under Greek law and it sought to make that good by the expert evidence it had adduced between 14 August and 5 November 2012.[29]ACG’s evidence of 22 August 2012 included an account of the costs saga resulting in Steel J’s order and exhibited a copy of his judgment of 22 July 2011, but it did not also assert that ACG would raise in answer to Olympic’s stance that Olympic was issue estopped against arguing that it could not lawfully comply with the court’s costs orders. Nor did its subsequent evidence advance that assertion, that evidence being expert Greek law evidence directed at answering Olympic’s case. ACG only raised the issue estoppel point in its skeleton argument for the hearing, one served six days in advance of it. I can, however, see no ground on which ACG can be said to have debarred itself by conduct from raising and relying on the point it then raised.[30]First, to the extent that Olympic asserts that ACG became and is estopped from running the issue estoppel point, Mr Shepherd did not identify the nature of the estoppel he was asserting. Ordinarily, the key ingredients of an estoppel are:(i) the making of a representation of fact or a promise;(ii) an intention that the representee or promisee is to, and does, rely upon it; and(iii) his consequential suffering of detriment. In some circumstances, there may also be a basis for the arising of a so-called estoppel by convention.[31]What representation of fact is ACG said to have made, and when? What promise is it said to have made, and when? Mr Shepherd’s generalised submissions did not answer those questions. Nor could they, because at no point in the run up to the exchange of skeleton arguments did ACG make any representation or promise to Olympic that it would not raise an issue estoppel defence. Nor was there any factual basis for asserting an estoppel by convention. Olympic cannot, therefore, claim that it relied on any representation or promise made, or understanding created, by ACG that an issue estoppel argument that might be raised would not be raised.[32]Moreover, that Olympic did not so rely was made clear by Mr Shepherd’s stated position at the November 2012 hearing. That was not that ACG had barred itself from raising the point by conveying to Olympic that it would not do so. It was simply that it was unfair to allow ACG to raise the point so late because, it was said, Olympic had not had time to prepare for it. That was a legitimate submission and the court might perhaps have ruled against the raising of the issue estoppel point on case management grounds. In the event, it did not. I have explained why, however, the court declined to decide the point at that stage but to leave its determination for another day.[33]Second, nor, as follows, can Olympic claim that it changed its position or otherwise suffered any detriment in any relevant sense. In any event, the likelihood is that, if following its 22 August 2012 application, ACG had promptly indicated to Olympic that it did propose to rely on an issue estoppel, the parties would still have adduced all the evidence they did in order to make good their respective Greek law positions: ACG, because it might not succeed on the issue estoppel point and would have wished to answer Olympic’s Greek law evidence in order to provide an alternative basis for success on the applications; Olympic, because its Greek law point was all it had in its armoury. I would discount any suggestion (if such there was) that if issue estoppel had been put squarely on the agenda in August 2012, Olympic would meekly have agreed to that issue being argued and decided first and that the adducing of further Greek law evidence could in the meantime be put on the back burner. As will be seen when I come to the application before Steel J on 22 July 2011, Olympic has a disposition towards arguing all available points, however unpromising: and I have no doubt that it would still have wanted all its expert evidence in play before the court when dealing with the issue estoppel case, perhaps with a view to arguing that, on the very modest evidence before him, Steel J got the Greek legal position wrong and that there were therefore ‘special circumstances’ why the issue estoppel argument should not succeed. Moreover, the proof of this particular pudding is shown by Olympic’s attitude in response to ACG’s proposals for the disposition of Olympic’s application of 17 May 2013: namely, that the issue estoppel point could only be decided against an evidential backdrop that included its Greek law evidence.[34]In addition, it needs to be borne in mind that the timing for the hearing of the two August 2012 applications was tight. The appeal itself was fixed for mid-January 2013, and so it would probably have been impracticable for the applications to have been heard and decided before then on a split basis, that is(a) issue estoppel first; and(b) subject to that, the Greek law issue.[35]Mr Shepherd said that Olympic had also changed its position by paying the £582,500 into court on the basis that it would be entitled to a full inquiry as to whether it could recover it, being an inquiry that would include a Greek law investigation. For reasons given, no question of relevant detriment arises, but Mr Shepherd’s point is anyway incomplete. Olympic made the payments into court because it wanted to pursue its appeal, which it could only do if it made the payments. Olympic knew when it made them that ACG was running the issue estoppel point; that the ‘full inquiry’ referred to in the order of 17 December 2012 (see paragraph 9 above) wouldinclude an inquiry into that point (see paragraph 19 of my judgment of 17 December 2012); and that if it lost that argument, the Greek law issue would not need to be decided, with the likely consequence that Olympic would not recover any of the £582,500. The payments in thus represented no detriment incurred in reliance on a representation or promise that was never made. Olympic obviously regarded the making of the payments as in its commercial interests, and it made them voluntarily. In doing so, it was adopting a high risk strategy, with its eyes wide open.[36]To the extent, therefore, that Olympic asserts that ACG became barred by some unspecified estoppel from raising its issue estoppel defence, I regard the argument as failing on every necessary ingredient.[37]Third, nor did ACG make any relevant election. ‘Election’ in this context requires the making of a choice between alternative and inconsistent rights. ACG was never faced with such an election, nor did it make one. Nor did it waive any right to raise the issue estoppel defence: how it is said to have done so, Mr Shepherd did not explain. The point is as fanciful as would be the suggestion that, because Mr Shepherd did not assert Olympic’s estoppel argument at the hearing in November 2012, he waived its right to take it later. Nor did ACG acquiesce in any alleged understanding by Olympic that issue estoppel could and would not be on the agenda at the hearing of the applications. How is ACG supposed to have discerned that Olympic had this understanding? For all that is known, Olympic knew that the issue estoppel point was available to ACG and was anxiously holding its breath that it would not be taken. Nor is there any question of ACG having been barred by laches from raising its issue estoppel defence. A stale claim for an equitable remedy may be barred by long delay, known as laches. ACG was not claiming an equitable remedy and laches has nothing to do with what it was asserting. Nor is there any question of ACG having acted in an ‘unconscionable’ way: the charge is groundless. Nor is this a case in which the ‘broad, merits based’ approach referred to in Johnson v. Gore Wood requires the court to debar ACG from raising the issue estoppel point. Lord Bingham’s statement was not, I consider, directed to the raising of an issue estoppel defence; but even if it is to be regarded as so directed, I cannot identify any cogent reason why ACG should not have been allowed to have raised the point. As to whether there are ‘special circumstances’ why ACG should not raise the issue estoppel argument, Mr Shepherd’s scattergun approach may have overlooked that the ‘special circumstances’ exception considered in Arnold goes not to whether an issue estoppel may be argued at all, but whether the argument should succeed. The point only arises, if at all, in considering the substance of the argument.[38]Finally, whilst Mr Shepherd sought to make much of it, I consider that there is also no substance in his point that the Greek law issue had been substantially litigated between the parties between August and November 2012 (by their obtaining of Greek law evidence), with the consequence that there remained nothing to which the issue estoppel could attach.[39]There are two things wrong with that submission. First, Mr Shepherd is wrong to say that, because of the August/November 2012 activity in relation to the obtaining of Greek law evidence, there remains nothing to which ACG’s issue estoppel defence could attach. On the contrary, there is potentially a great deal to which it can attach. In particular, if ACG is right on the issue estoppel, it will save itself the potentially considerable costs of an inquiry into the Greek law point. That inquiry is one which Olympic estimated in its application notice of 17 May 2013 would require 10 hours of court time, or more than two days; and which ACG estimated would require three days. The avoidance of a three-day trial would represent a real saving. There is still plenty to which the issue estoppel can attach.[40]Second, an issue estoppel is a matter of defence that is available against the resurrection of an issue that has already been decided. Normally it will be in the interests of the party asserting the estoppel to raise it at an early stage, often with a view to obtaining a strike out of the claim or at least the offending part. He does not, however, have to take this course. He can simply plead the issue estoppel and leave the matter to be dealt with at the trial: Carl Zeiss Stiftung v. Rayner & Keeler Ltd and Others (No 3) [1970] 1 Ch 506, per Buckley J, at 537D to 538C. If he does, it is likely in many cases that the trial preparation required of both sides will involve at least some activity directed to the investigation of the merits of the matter said to be the subject of the issue estoppel.[41]The logic of Mr Shepherd’s approach is perhaps, or may be, that if the original defence does not plead the estoppel, but instead pleads to the merits of the point later said to be the subject of the estoppel, the defendant cannot later obtain permission to amend to plead the estoppel. But why, when the scales fall from his eyes, should he not ask for permission to plead it? By delaying its pleading, he may have done himself a disservice; but I cannot see why the court should not allow the amendment if it were to regard it as just to do so. It will always be open to it, if it thinks fit, to make an order for the compensation of the other party in costs. The history of civil litigation must be filled with cases in which the real penny only drops at a late stage, whereupon a late application is made for permission to plead a killer point. If, for example, two parties, ignorant of the provisions of the Law of Property (Miscellaneous Provisions) Act 1989, toil away for a year in preparation for a trial directed at deciding the factual question of whether the defendant committed himself to an oral contract for the sale of land, is the defendant forever barred from asking for permission to plead the lack of a written agreement satisfying section 2 of the 1989 Act, an amendment that, if allowed, will likely kill the claim stone dead? I cannot see why he should be. Spencer Bower and Handley, Res Judicata, 4th Edition explains that the ordinary principles relating to the amendment of pleadings apply to amendments to plead an issue estoppel: see paragraphs 18.08 and 18.09.[42]Ultimately, all that Mr Shepherd’s various arguments were really about was the raising by ACG at a late stage of a line of defence that Olympic did not welcome, probably because it was acutely sensitive to its force. The delay, if any, in raising the point was modest. ACG might perhaps have raised the point earlier, by referring to it in its evidence. But it is not in fact the sort of point that ought to be made in a witness statement, which should be confined to matters of fact, although it is a regrettable feature of modern practice that often they are not. There were no pleadings in which ACG might have raised it. Raising legal arguments in solicitors’ correspondence is rarely constructive: it often results in little more than unconstructive and expensive bickering. ACG did, however, raise it in its skeleton argument, which was the right place to do so, and which it served six days before the hearing. It neither needed nor sought to put additional evidence before the court to support the point: its evidence already provided the factual basis for the argument. The timing of the service of its skeleton argument gave Olympic a proper opportunity in which to digest the point and prepare its answer to it, if any there was. The substance of Olympic’s complaint really comes down to one that ACG did not advise it of its legal arguments earlier than it did. In applications of the nature here in question, the place for deploying such arguments was the skeleton argument. That is what happened here, and Olympic had plenty of time to consider the point.[43]In my judgment, it is not open to Olympic to say that the issue estoppel argument could not and cannot be raised. I would reject Mr Shepherd’s submissions. I turn to the substance of the issue estoppel argument. (b). Is there an issue estoppel?[44]I must first refer more fully to the facts leading up to, and to the basis of, Steel J’s decision and order. Teare J, on 6 August 2010, made an order for the delivery up by Olympic of the aircraft; and by paragraph 6 ordered Olympic to pay 50% of ACG’s costs incurred on and since 6 July 2010, such costs to be summarily assessed on paper if not agreed. In default of agreement as to costs, the order contained directions for the exchange of written submissions by the parties for the purposes of the assessment. Olympic did not argue before Teare J that Greek law prevented it from paying ACG’s costs. There was no agreement as to costs and the parties exchanged written submissions. Olympic’s submissions were silent as to any suggestion that Greek law prevented it from paying the costs. On 3 November 2011, Teare J, on paper, summarily assessed the costs payable by Olympic at £18,750. The costs were due for payment by 17 November 2010.[45]Olympic did not pay them. When pressed to do so in correspondence, it advanced for the first time the argument that Greek law prevented it from doing so: the essence of the argument advanced was that it would involve giving an unlawful preference to one unsecured creditor over others. On 3 June 2011, ACG issued its application for an order that unless Olympic paid the costs within seven days, its statement of case should be struck out and it should be debarred from participating further in the proceedings. In response to that application, John Evans, Olympic’s solicitor, made his fourth witness statement on 20 July 2011 exhibiting the inter-party correspondence and advancing the assertion that Greek insolvency law precluded the payment of the costs. He referred to a letter from Ms Giannouzi, Olympic’s in-house legal counsel, that advanced that assertion as to Greek law and that the position of Olympic’s liquidator was that it could not pay the costs until all Olympic’s debts had been ascertained. ACG went to rather more trouble as to the Greek law point. It obtained and exhibited an expert opinion from Ms Smyrniou, a member of the Athens Bar, to the effect that Olympic’s liquidator was entitled to pay the £18,750 costs in full.[46]The application was due to be heard by Steel J on 22 July 2011, together with an application by Olympic for specific disclosure. The parties exchanged skeleton arguments. A material part of ACG’s skeleton argument referred to what it said were Olympic’s unsupported assertions that Greek insolvency law prevented it from paying the costs, including in Mr Evans’s witness statement, and to the contrary view of Greek law advanced by Ms Smyrniou. Olympic’s skeleton argument was largely devoted to the disclosure application (on which it apparently regarded itself as on stronger ground) and dealt more lightly with the Greek law point, but did raise it in sub-paragraphs 41(l) to (o). The time available before Steel J did not permit both applications to be heard and he adjourned the disclosure application. The hearing thus became confined to the ‘unless’ order application.[47]We have a somewhat unsatisfactory transcript of the proceedings before Steel J, with many passages omitted as apparently inaudible. Mr McLaren, in his oral argument to Steel J, said that Olympic had adduced no, or no admissible, expert evidence as to Greek law from Olympic: what it had adduced amounted to no more than the inclusion in Mr Evans’s witness statement of 20 July 2011 of the hearsay opinion of Olympic’s non-independent in-house lawyer, Ms Giannouzi. Mr McLaren referred the judge to paragraph 20 of Mr Evans’s witness statement, which recorded a less than readily comprehensible view from Ms Giannouzi as to the legal position, which Mr Evans explained as being that the liquidator ‘could not pay the costs order until all of the debts had been ascertained’. In case, however, Olympic were to argue that it had adduced admissible evidence as to Greek law, Mr McLaren said that it was anyway answered by the expert evidence of Ms Smyrniou which, unlike Olympic’s evidence, addressed the right question, rejected the suggestion that Greek law prohibited Olympic from paying the costs and explained that expenses arising during the liquidation (which included the costs liability) must be paid before the list of creditors is drawn up.[48]Mr Shepherd, in his oral submissions to Steel J, referred only briefly to the evidence on the Greek law topic, explaining that that was because the judge had been shown Mr Evans’s witness statement which dealt with it; but the transcript, albeit inadequate, shows, with what I would regard as sufficient clarity, that he was advancing the Greek law point as at least a reason why Olympic had not paid and could not pay the costs. He said:
‘My Lord, one must take into account the fact that facing this application, if Olympic could have paid what is a relatively small sum it would have, but it hasn’t. And for that there must be good reason.’
In the context, the suggested ‘good reason’ either was, or included, that the liquidator regarded himself as unable to pay by reason of the provisions of Greek law.[49]Steel J’s extempore judgment explained his reasons for making the ‘unless’ order sought. He first rejected a suggestion that Olympic had no money with which to meet the costs. He noted that it was unsupported by evidence and was to be considered against the liquidator’s apparent ability to incur substantial costs in meeting the claim. He turned to the Greek law point:
‘3. The suggestion which emerged relatively recently that it would be undesirable to enforce this order for costs because it would deplete the sum available to the balance for the creditors, [sic] of course is a truism. It was for some time suggested that it was not open to the liquidator to meet the bill for costs, because that was, as a matter of Greek law, not permissible. But the evidence that has been put before me, seems to me to demonstrate quite the opposite. The claimants have adduced evidence from a Greek lawyer, on this topic, which is clear and in my judgment clearly to be preferred to the hearsay in-house legal advice which was referred to in the defendants’ statements (the content of which, I confess, I have some difficulty in understanding in any event). 4. Of course, the sum involved is a relatively modest one, but in one sense that, it seems to me, heightens the absurdity that it has been outstanding for so long. It may be that the sum concerned is of relative modest significance to [Olympic] and perhaps total insignificance to [ACG]. What is significant from my perspective is that here the court has made an order for the payment of a sum, within a period of time and [Olympic] has simply disregarded it. Those are circumstances in which, in my judgment, the court ought to take steps to enforce the order, unless there are exceptional circumstances which justify a different approach. I do not believe that there are exceptional features in regard to the particular dispute that arose in August of last year to justify such a change from what would be the normal approach.’
[50]Steel J continued by noting that at the forefront of Mr Shepherd’s argument was the existence of the adjourned application for specific disclosure, one in which Olympic was said to be likely to receive a favourable costs order against ACG; and the submission was that therefore no order should be made on Olympic’s application but that the question it raised should be deferred to the hearing of the disclosure application. Steel J regarded that as without substance. He made the order sought; and Olympic paid the costs and interest.[51]Did Steel J’s decision give rise to an issue estoppel as to the Greek law point? In Carl Zeiss Stiftung v. Rayner & Keeler Ltd & Others (No 3) [1970] 1 Ch 506, Buckley J said, at 538G:
‘To make good a claim of estoppel per rem judicatam the party asserting the estoppel must establish: (1) that there has already been a judicial decision by a competent court or tribunal, (2) of a final character, (3) of the same question as that sought to be put in issue by the plea in respect of which the estoppel is claimed, (4) between the same parties, or their privies, as the parties between whom the question is sought to be put in issue.’
[52]In my judgment, all four conditions are satisfied here. Steel J’s decision was by a competent court for the purposes of condition (1). I consider also that his decision was a ‘final’ one for the purposes of condition (2), Buckley J also saying, at 539A:
‘Finality for this purpose means that the decision (a) is not one which does not ex facie, as in the case of an order for an account or inquiry, leave something to be judicially determined or ascertained before the decision can become effective or enforceable, and (b) is not subject to subsequent discharge, rescission, modification or any other form of review by the court or tribunal making the decision.’
As for condition (3), paragraph 3 of Steel J’s judgment reflects that the Greek law issue was in dispute before him and he decided it against Olympic. As for condition (4), the same point is now in issue before the same parties, namely, whether, under the Greek law applying to Olympic’s liquidation, Olympic can lawfully pay costs ordered against it by the English court.[53]There is, however, also a further question, as Mr McLaren acknowledged. That is that an express judicial determination of a particular issue will not create an issue estoppel unless it was necessary and fundamental to the court’s overall decision: see Spencer Bower and Handley, Res Judicata, 4th Edition, paragraph 8.23. Mr McLaren said that in this case Steel J’s determination of the Greek law issue was necessary and fundamental to his overall decision on the ‘unless order’ application.[54]Mr Shepherd disagreed. In his written argument he said that it must be completely clear what the previous judgment decided in respect of which the issue estoppel is said to be created and that, for that purpose, it is important to focus on the court’s formal[55]In his oral argument, Mr Shepherd barely addressed the primary question of whether there was an issue estoppel: as I have said, he devoted almost all his efforts to whether ACG was entitled to raise the point at all. Mr Shepherd did, however, include in his oral submissions that the Greek law point was only one of several arguments he had advanced to Steel J, of which another was that it was disproportionate to subject to Olympic to an ‘unless’ order in respect of the payment of a mere £18,750 when the consequence of doing so, and of Olympic’s non-compliance with it, would be that, as Mr Shepherd put it, Olympic would lose the prospect of pursuing a £10m claim. I understand, therefore, the submission to have been a self-contained one to the effect that it was unreasonable to expect Olympic to pay the ordered costs at all or, therefore, to make the requested ‘unless’ order. If that was the submission, I regard it as no surprise that Steel J would have none of it. I presume it is to this submission that Steel J was referring in paragraph 4 of his judgment (see paragraph 49 above).[56]As to whether Steel J’s decision on the Greek law point was necessary and fundamental to Steel J’s decision, I consider it was. The fact that his order did not mention it is irrelevant: there will be many determinations made by a judge in the course of his decision-making exercise that will constitute an issue estoppel between the parties but which will find no express reflection in his order. The question is whether the determination was necessary and fundamental to the decision that resulted in the making of the order.[57]Paragraph 4 of Steel J’s judgment shows that his approach was that, the court having ordered Olympic to pay a sum of money within a prescribed time and Olympic having refused to pay it, the court ‘ought to take steps to enforce its order unless there are exceptional features which justify a different approach.’ In his judgment, Steel J considered submissions as to the factors that might, if well founded, amount to such ‘exceptional features’. The first was that Olympic had not got the money with which to pay the £18,750. Unsurprisingly, the judge regarded that as groundless and rejected it. But in a case in which the evidence makes good such a ‘can’t pay’ submission, that might perhaps be a feature that some judges would, in the particular circumstances, regard as justifying the refusal of an ‘unless’ order.[58]The second submission was the Greek law point. The judge recorded Olympic’s point that the payment of the costs was unlawful under Greek law, but held that ACG’s evidence adduced before him showed that there was nothing in the point. The Greek law point – found to be a non-point – did not, therefore, amount to an ‘exceptional feature’ justifying the withholding of the ‘unless’ order. If, however, Steel J hadaccepted Olympic’s Greek law point, it seems to me that he would have regarded it as such an ‘exceptional feature’. If this were not so, his discussion of the point would have been unnecessary and he would likely have said that it anyway made no difference to his decision what the Greek law position was. The third submission concerned the modesty of the sum involved, which Steel J regarded as another non-point. The fourth submission was that Olympic expected to obtain a favourable costs order on the adjourned specific disclosure application, and therefore no order should be made on the instant application until the outcome of that was known. Again, Steel J rejected that.[59]The net result is that of the four submissions, three were obviously without substance or merit. The fourth, the Greek law point, raised an issue which, if decided the other way, would have represented an ‘exceptional feature’ which it is likely the judge would have regarded as justifying a refusal of the order. In my judgment, it follows that his determination of that point was necessary and fundamental to his decision to make the order. It was, therefore, a determination constituting an issue estoppel against Olympic from later resurrecting and re-arguing the same point.[60]The next question is whether, despite such estoppel, Olympic should be entitled to a second bite at the same Greek law cherry. For that, I return to Arnold’s case. The question there was whether an unappealable decision by Walton J in 1985 as to the correct approach to a 1983 rent review under a 1976 lease operated as an issue estoppel between the parties to the lease that, for the purposes of the next review in 1988, prevented the tenants from arguing that the 1985 decision was wrong. The answer was that it did not. The decision of the House of Lords shows that there are circumstances when a party will be entitled to re-open an issue the subject of an issue estoppel. Lord Keith of Kinkel, with whom all their Lordships agreed (with only Lord Lowry adding a substantive concurring judgment) said, at [1991] 2 AC 93, at 109:
‘In my opinion your Lordships should affirm it to be the law that there may be an exception to issue estoppel in the special circumstance that there has become available to a party further material relevant to the correct determination of a point involved in the earlier proceedings, whether or not that point was specifically raised and decided, being material which could not by reasonable diligence have been adduced in those proceedings.’
The House also decided that such further material need not be confined to matters of fact but can include subsequent changes in the law: in Arnold the critical changes were of the latter nature, being decisions of the Court of Appeal in other cases involving similar lease provisions that showed that Walton J’s determination in relation to the earlier rent review was wrong.[61]Lord Lowry said, at 112G:
‘It appears from this review [of the authorities] that there are significant arguments in favour of the proposition that issue estoppel constitutes a complete bar to relitigating a point once it has been decided but I am now of the opinion that the court can, and in exceptional circumstances should, relax that rule.’
And, at 113E:
‘Once the possibility of relying on special circumstances is established as a legal proposition, I have no hesitation in agreeing that the circumstances of this case are special and indeed exceptional.’
[62]The speeches therefore refer to the need for either ‘special’ or ‘exceptional’ circumstances before an issue estoppel may be held not to continue to bind the parties. The circumstances which, in Arnold, the House identified as justifying an exception to an issue estoppel reflect, if I may respectfully say so, a manifestly principled approach to the matter; and the justice of allowing an exception in the type of circumstances identified by Lord Keith appears to me to be unquestionable.[63]I do not regard the present case as one which can be brought within the category of circumstances that Lord Keith explained. First, Olympic could, had it wanted to, have adduced before Steel J the independent evidence of an expert on Greek law. The reason it did not do so was explained by Mr Evans in his witness statement of 20 July 2011 (his fourth, made two days before the Steel J hearing). He there said, in paragraph 27:
‘I would like to make clear that I did not “refuse” to supply authority to support non-payment of the costs order, as asserted by Stephen Moses at paragraph 28 of his Fifth Witness Statement. Rather, other than the explanations that I gave to Simmons, I was not qualified in Greek law, or in insolvency law, to provide authority. For this to be possible, I would have been required to instruct Greek insolvency counsel to provide an expert opinion on the matter, with perhaps an expert opinion on Conflict of Laws. To my mind, this was (and continues to be) disproportionate to the amount sought by the Claimant of £18,750 in the context of a multi-million pound litigation. I was, and continue to be, willing to take instructions from the Liquidator as to its legal rights and obligations under Greek law, being the jurisdiction in which the Liquidator operates, and to regard the information given to me as accurate and true.’
[64]The result of Mr Evans’s proportionality considerations, with which Olympic presumably agreed, was that Olympic’s assertions before Steel J were, as a matter of deliberate choice, unsupported by any independent expert evidence on the applicable Greek law. Mr Evans made the like point in his witness statement 8 October 2012, where he said in paragraph 61:
‘At the hearing before Mr Justice Steel on 22 July 2011, Olympic tried to explain that it was not able to comply with the order for costs at that time. However, it did not have the benefit of the expert opinion of Dr Tsikrikas – not least because the costs of its production was not proportionate in the context of that application, but also because the parties were simultaneously involved in a very expensive dispute as to the specific disclosure of the aircraft documents (see paragraphs 23 and 27 of my Fourth Witness Statement where I stated that I was not qualified in Greek law, or in insolvency law, and could not therefore provide authority for Olympic’s position, explaining that [and he quoted the third and fourth sentences of paragraph 27, quoted above].’
[65]Ms Giannouzi made the like point in paragraph 67 of her witness statement of 16 May 2013, when explaining why Olympic did not seek to appeal Steel J’s[66]The picture is, however, clear. ACG’s application before Steel J was not just directed at obtaining a payment of £18,750 costs: it was directed to obtaining a strike out of Olympic’s case if it did not pay the costs. The downside of non-compliance with the ‘unless’ order sought was, therefore, potentially of massive significance, which Olympic must have grasped. Since Olympic’s stance was that it could not lawfully pay the £18,750, one might have thought that it would regard it as essential to invest some costs in obtaining expert evidence that would make good its point that it could not do so. It rejected that idea, however, as involving disproportionate expense. The inference is, therefore, that its intentions in response to the application for the ‘unless’ order were simply:(i) to make what bricks it could before Steel J without, however, incurring the expense of acquiring any requisite straw; and(ii) if the hearing went against it, to make the payment anyway even though its stance to the court was one it could not lawfully do so. On its own case, the payment was unlawful and so amounted to a misapplication of the assets in the liquidation’s estate. But I further infer that the liquidator purported to justify its decision on the basis that such misapplication was committed in the interests of all the creditors. It is also a necessary inference that Olympic decided well in advance of the Steel J hearing what it would do if the hearing went against it.[67]Olympic’s deliberate choice not to obtain independent expert evidence for the Steel J hearing, when plainly it could have done, precludes it, in my view, from bringing itself within the exception described by Lord Keith in Arnold. Nor were we referred to any legal decisions subsequent to Steel J’s decision that showed his decision on Greek law to have been wrong. Olympic devoted itself in December 2013 towards a somewhat desperate last minute bid to obtain some sort of ex parte order from the Athens First Instance Court said to be directed at demonstrating the correctness of Olympic’s position as a matter of Greek law. The evidence before us relating to the weight to be attached to that and any future orders in the Athens court was in conflict, and we were also anyway not referred during the argument to any decision or judgment of the Athens court. In any event, this attempt to drum up Greek judicial support for the correctness of Olympic’s position is a course that Olympic could also have resorted to in early 2011 in answer to the claim that it should pay the costs ordered by Teare J. Olympic’s delayed appeal to the Athens court cannot, therefore, bring it within the circumstances of theexception described by Lord Keith.[68]Although Olympic cannot, therefore, invoke what might be called the Arnold exception, I do not, however, read Arnold as deciding that the special circumstances found to exist in that case are the only type of circumstances that can qualify as justifying an exception to an issue estoppel. It may perhaps at least be arguable that a little closer to home is the inspiration to be derived from the obiter thoughts, cited by Lord Keith in Arnold, of Lord Reid in Carl Zeiss Stiftung v. Rayner & Keeler Ltd and Others [1967] AC 853, at 917:
‘The difficulty which I see about issue estoppel is a practical one. Suppose the first case is one of trifling importance but it involves for one party proof of facts which would be expensive and troublesome; and that party can see the possibility that the same point may arise if his opponent later raises a much more important claim. What is he to do? The second case may never be brought. Must he go to great trouble and expense to forestall a possible plea of issue estoppel if the second case is brought? This does not arise in cause of action estoppel: if the cause of action is important, he will incur the expense: if it is not, he will take the chance of winning on some other point. It seems to me that there is room for a good deal more thought before we settle the limits of issue estoppel. But I have no doubt that issue estoppel does exist in the law of England. And, if it does, it would apply in the present case, if the earlier judgment had been a final judgment of the English court.’
[69]Mr Shepherd did not in fact submit that that passage provides the key to the opening of an exception to the estoppel created by Steel J’s judgment, and whether it founds the basis of an exception that survives the decision in Arnold may be debatable. There are, however, in my view anyway difficulties in its application to this case.[70]First, the first case – the ‘unless’ order application – was not of ‘trifling importance’. It was of very considerable importance, since non-compliance with any order made on it presented Olympic with the prospect of having its case struck out. I have, however, explained how Olympic was able to reduce its significance to vanishing point by its liquidator’s readiness and willingness to make the very payment that (perhaps a little disingenuously) it asserted to Steel J that Greek law barred it from making.[71]Second, to the extent that Olympic foresaw similar applications arising in the future, in consequence of its non-compliance with interim costs orders, it presumably foresaw that it could and would deal with them in the same way. Third, to the extent that it foresaw that it might lose the litigation and be faced with a heavy costs liability, it would probably not be faced with the same dilemma. ACG would not ordinarily be able to obtain an ‘unless’ order for the payment of such costs, but would have to try and enforce the order in Greece, by applying in the liquidation – if, that is, it had the determination and stamina that such an exercise would be likely to demand.[72]Fourth, the situation that has in fact arisen in this case is very different from the ‘much more important claim’ that Lord Reid had in mind. The court of course recognises that, as compared with £18,750, the £582,500 now at stake is substantially more significant. I would also accept that, if that sum had been at stake on the ‘unless’ order application, it is likely that Olympic would have been willing to invest costs in enlisting the best Greek law expertise available.[73]The circumstances in which the parties are now contesting the destiny of the £582,500 are, however, these. Olympic was not ordered to pay that money into court. It did not have to pay in a penny of it, and it would not have been in breach of this court’s order if it had not. All that would then have happened is that its permission to appeal would have been revoked and its appeal dismissed. It brought the money into court of its own choice, and it did so because(a) it wanted to pursue its appeal, and(b) the condition of its doing so was the payment in of the money. It had the choice of abandoning its appeal, but it declined that choice. The £82,500 paid in was by way of security for ACG’s costs if it were to win the appeal; and the £500,000, Teare J’s unsatisfied IPO, represented a sum that this court, in December 2012, considered ought also to be paid in, for the reasons summarised in paragraph 25 of my earlier judgment.[74]If Olympic had won the appeal, the likelihood is that Teare J’s order would in material respects, including as to costs, have been reversed, Olympic would have obtained its costs of the appeal and the money paid into court would have been returned to Olympic. It is also plain that the point of requiring the money to be paid in was, in case Olympic were to lose the appeal, to provide security for ACG of total costs in the sum of £582,500, subject only to this: namely, that it was to be open to Olympic in that event to argue that nothing should be paid out to ACG and all should be returned to Olympic. But to achieve that, Olympic would first have to see off the issue estoppel argument and then win on the Greek law issue.[75]Set against this background, the basis on which Olympic paid the money in becomes clear. It wanted to appeal, but had to make the payment in as the price of being allowed to do so. It could foresee that if it lost the appeal, there would be a real risk that the £582,500 would be ordered to be paid out to ACG – Olympic cannot have regarded any claim for its return as gilt-edged. What, in these circumstances, was the basis on which Olympic considered that (on its own case) it could lawfully pay the £582,500 into court is obscure, since one foreseeable outcome would be that the money would be applied in the payment of an unsecured creditor’s costs. If, which I do not know, the liquidator regarded the payment as an unlawful one, I presume it nevertheless again regarded it as in some manner justifiable: presumably it had high hopes that the appeal would succeed.[76]These are the circumstances in which it has come about that the court is now considering the issue estoppel argument. Do they amount to special or exceptional circumstances requiring an exception to the estoppel? They are certainly unusual. But I do not understand why the making by the liquidator of a voluntary payment of £582,500 in the circumstances described, a choice made so as to entitle him to pursue an appeal, is an event justifying the making of an exception to the estoppel. Returning to Lord Reid’s observations, the liquidator is not seeking an escape from the issue estoppel so as to meet a much larger claim by ACG than that which it had to meet before Steel J, being a claim that it had no choice but to meet. It is seeking to escape from the issue estoppel so as to be relieved from the maturing of the risk that it deliberately incurred when, as the price of achieving what it hoped would be a much greater financial return, it voluntarily paid the £582,500 into court. The allegedly special circumstances are, therefore, circumstances of Olympic’s own creation, created by it with its eyes wide open. I do not regard them as justifying the application of any exception to the issue estoppel that has arisen against Olympic.[77]In my judgment, there are, therefore, no circumstances justifying the applying of an exception to the issue estoppel. I would hold that Olympic is barred by that estoppel from denying ACG’s entitlement to the £582,500. I would order that the money be paid out to ACG.[78]We also had arguments from Mr McLaren to the effect that, if he were wrong on the issue estoppel point, and assuming the Greek law point against ACG, there would still be a proper basis for ordering a payment out to ACG. I find it unnecessary to extend this judgment by considering those arguments.

Lord Justice Moore-Bick :

[79]I agree. There is nothing I can usefully add.

order

and, he said, Steel J’s order makes no reference to Greek law. order: ‘While Olympic could have challenged the Order of Steele J at the time on the basis of the grounds set out above, the Liquidator, on advice, determined that such a challenge would have cost a much higher amount than the amount in dispute, which would also not have been in the interests of the body of creditors. The Liquidator did not agree to make this payment [the £18,750] voluntarily, or in any way accepting that [ACG’s] costs could be paid in priority to other creditors as a matter of course. The payment was made only because of the reasons set out above.’ I comment that Ms Giannouzi’s assumption that Olympic could have appealed Steel J’s decision appears to me to reflect probably unjustified optimism: the likelihood that it would have obtained permission to appeal was probably nil.

Cited in 1 later judgment