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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Gordon v Gordon & Ors [2002] EWCA Civ 1558 (21 October 2002) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2002/1558.html Cite as: [2002] EWCA Civ 1558

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IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT
FAMILY DIVISION
(MICHAEL HOROWITZ QC, Sitting as a Deputy High Court Judge)

		Royal Courts of Justice Strand London, WC2 Monday, 21 October 2002

Monday, 21 October 2002

1. LORD JUSTICE CLARKE: This is application for security of costs which was made very late in the day. The order against which the substantive appeal is made was dated 4 February 2002. The judge initially refused permission to appeal but permission was subsequently granted by Lord Justice Thorpe in March. On 12 April 2002 the solicitors for the respondent ("Caversham"), wrote to the solicitors for the appellant ("Oakham") asking for security for costs in the sum of £35,000, £10,000 of which related to the costs of the appeal. On 16 April Oakham's solicitors replied saying that the application was misconceived, at any rate insofar as it sought to include the costs of the trial. No response was forthcoming to the letter of 16 April. As I understand it on 14 May the appeal was fixed for 31 October 2002. I further understand that it is now fixed to be heard on Thursday or Friday of next week.
2. In my judgment it is of great importance that applications for security of costs should be made in good time. This case is a good example of that. There has been considerable debate in the course of this application as to whether Okham will be able to meet a costs order if one is made against it, as is likely if the appeal fails.
3. It is common ground that the test is that the appellant "will be unable" to meet an order for costs; that means will be unable to meet an order for costs when such an order is made. It appears to me that Caversham does meet that test since it is clear to me that if Oakham is to find the money to meet any such order for costs some arrangements will have to be made.
4. Mr Hunter further submits that it will probably not be possible for them to make such arrangements. That is much less clear to me. One of the problems about these applications being made late in the day is that it gives rise to difficulty in resolving issues of this kind. It also gives rise to a further difficulty. Mr Hunter submits with some force that it is likely that Oakham will never be able to meet the costs, but he submits that it is just to order them to put up security because those who are funding the appeal for Oakham ought, as a matter of justice, to be ordered to do so. As Sir Donald Nicholls V-C put it in Re Unisoft Group Ltd (No 2) [1993] BCLC 532:

"Behind the company are those who own or control it. Depending on the circumstances it may be just that an order should be made having the effect of requiring them to put the company in funds, if they wish their company to go ahead with the litigation on which it has embarked. They have willed the end, and they must provide their company with the means."

5. There is undoubted force in that observation. Indeed in my limited experience this is a situation which commonly arises where those standing behind the company are willing to fund their own costs of the appeal but are disinclined to put up security to fund any liability to the respondents if the appeal should be unsuccessful. I have little doubt that if this application had been made timeously I would have made a full order for security of costs on that basis.
6. The question is whether I should make any order for costs, having regard to the very late date at which this application is made. One of those behind the company is Mr Keal. It frankly says in his statement that he and Mr Bewley are shareholders of Oakham, but: "Neither of us wish to make such a loan to the company." That is a loan to enable the costs to be paid.
7. Equally, it appears that there is another entity which has an interest in funding this appeal. It is a company which holds the goods in dispute as agent for Oakham. I have been told that it has provided £8,000 to the solicitors for Oakham, who are holding that money, although £4,000 of the £8,000 have as I understand it already been incurred by Oakham's solicitors.
8. I have reached the conclusion that although this is late in the day I should make a modest order for security for costs because I am confident that, if that company and/or the shareholders really wish to pursue this appeal, they will be able to provide security in a modest sum within seven days. I have decided it should, however, be a very modest sum, having regard to all the circumstances, and I have reached the conclusion that a sum of £2,500 would be appropriate. I will therefore order Oakham to provide security in the sum of £2,500 by 16.30 on Friday of this week in a form to the reasonable satisfaction of the applicant's solicitors or as ordered by the court, subject to one further point. The reasonable costs of providing this security will be treated as part of the costs of the appeal. If the security is not provided by 16.30 on Friday the appeal will be stayed.
(Application allowed; costs to be costs in the appeal)