“[D]espite the extraordinary background to this case, and the clear terms of the consent order for costs upon which the petition was based, I am satisfied that the grounds of appeal, as explained and supported in the skeleton argument on behalf of the Appellant dated14 May 2015 , are arguable and have a real prospect of success.”
“(1) It was difficult in that case for the Respondent to enforce orders against the Appellant, because although not necessarily impecunious it was resident offshore. (2) The Appellant had resources or access to resources to enable it to instruct solicitors and counsel to prosecute the appeal. (3) There was no convincing evidence that the Appellant did not have resources to pay the judgment debt and costs but it simply failed to do so, so it was in breach of court order. (4) It had given insufficient disclosure of its financial affairs and it had wealthy owners and there was no evidence that if they were minded to do so they could not pay the judgment debt including any order for costs, and (5) that there was no risk of the appeal being stifled, and finally the court found it unacceptable that the Appellant was at one and the same time prosecuting an appeal while continuing to disobey payment orders already made by the court below.”
“27. The instant case is very different from the CIBC case. First Mr Shuck [the funder] had financed the whole of the trial process or been a party to the financing. Second this is a case in which a section 51 application [for third party costs] must stand a considerable prospect of success. Third it is an appeal and that places the case management powers in a very different context. Fourth this is not a case where the respondents are simply seeking to inflate the pool against which they can later execute any judgment. Their position is that when Mr Shuck has financed the trial and is financing the appeal, there is no reason why he should be allowed to conduct that appeal on a heads he wins and a tails they lose basis. 28. It is not in our view to prejudge the question whether the individuals should be liable for the costs of the trial to make the orders that the respondents now seek. Contract [the appellant] can abandon the appeal and Mr Shuck can fight the question of personal liability for costs. But if Mr Shuck chooses to fund an appeal there is no reason why the court should not say Contract can bring the appeal but only on terms.”
“… the difficult question of principle as to whether or not this court can legitimately impose a condition that a judgment debt (or part of it) be paid into court where, effectively, this will require an “owner” or others, such as a director, or shareholder, or backer or other interested person, to fund that condition.”
“I think the answer must be that, except in exceptional circumstances, it should not do so. If a condition is imposed on an appellant that it must bring the outstanding judgment debt into court in order to pursue its appeal, that does, effectively, short circuit the enforcement process against the judgment debtor. It means that if the appellant loses his appeal, the judgment creditor has the means of enforcing the judgment debt quickly and easily and in a way that he otherwise could not when the judgment debtor has no assets within the jurisdiction. Furthermore, the right to enforce is, at least in the first place, only exercisable against the assets of the actual judgment debtor, not those of any other entity or person. So a condition which has the practical effect that a third party will provide the funding to bring the judgment debt of the corporate entity into court is, potentially, an indirect way of obtaining enforcement with the funds of another. That, generally speaking, must be contrary to the principle of respecting the existence of different legal personalities … Alternatively, if the funds brought into court are to continue to be treated as those of the third party, there is no point in the exercise at all, because it will not benefit the respondent/judgment creditor.”
“the claimant is a company or other body (whether incorporated inside or outside Great Britain) and there is reason to believe that it will be unable to pay the defendant’s costs if ordered to do so.”
“But when we have an opportunity we ought to order security to be given, for it is not just that any costs occasioned by an unsuccessful appeal from a winding-up order should be thrown upon the assets to the prejudice of the creditors when we have the means of preventing it. It is our opinion that where an order has been made for winding-up a company on the ground that it cannot pay its debts, and the company alone appeals, there as a general rule security for costs ought to be ordered.”
“… once it is established by credible evidence that there is reason to believe that the plaintiff company will be unable to pay the costs of the defendants if they are successful in their defence, the court has a discretion, and that discretion ought not to be hampered by any special rules or regulations, nor ought it to be put into a straitjacket by considerations of burden of proof. It is a discretion which the court will exercise having regard to all the circumstances of the case.”