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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 >> Shaker v Al-Bedrawi & Ors [2002] EWCA Civ 1900 (2 December 2002) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2002/1900.html Cite as: [2002] EWCA Civ 1900

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IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT
CHANCERY DIVISION
(Mr Justice Lawrence Collins)

		Royal Courts of Justice Strand London, WC2 Monday, 2nd December 2002

Monday, 2nd December 2002

1. LORD JUSTICE PETER GIBSON: We now have to deal with the costs consequences of our judgment of 18th October.
2. In exercising the discretion which we have we bear in mind CPR 44.3 and the various authorities which have been drawn to our attention. They show that the general rule is that costs follow the event, but the court is allowed to depart from that rule having regard to all the circumstances, including the conduct of the parties and whether a party has succeeded on part of his case, even if he has not been wholly successful. Also, because indemnity costs are sought by one party, we also bear in mind that the exact circumstances of making such an order are not defined, though it requires something out of the ordinary for indemnity costs to be ordered.
3. Mr Steinfeld QC for Mr Shaker submitted as regards the costs below that, as he had succeeded in this court in having the appeal allowed, Mr Shaker should have his costs below and the judge should have found for him. He acknowledges that Mr Shaker did fail in his argument that there was a trust of the business, but he said that the failure should be seen in its proper context as a response to a trial of a preliminary issue which should not have been ordered. The preliminary issue, he said, was encouraged by the defendants. He said that in the conduct of this issue there was fault on all sides and that it would be unjust to depart from the general rule to which we have referred.
4. We do not accept that submission. It is clear from the judge's judgment, and indeed we say so in our own judgment, that the judge dealt with the matter in the way that he did because of the debate before him which concentrated on the legal consequences of the facts, which were not greatly in dispute. There was no appeal from the order that a preliminary issue should be tried at that point at the start of the trial, nor was there any attempt to reserve a right to complain about the preliminary issue. Mr Shaker failed because of the way the case was argued. Had the points taken in this court been taken below, it may be that no preliminary issue would have been ordered. We pointed out in paragraph 58 of our judgment that there could be costs consequences for Mr Shaker if he succeeded in being allowed to pursue a new argument not advanced below. We did allow that new argument. Mr Steinfeld alternatively argued for an order that the costs of the arguments relating to the trust of the business should be costs in the case, or that there should be no order for those costs, or that Mr Shaker should pay the costs solely attributable to that argument. We do not agree.
5. So far as the costs of Steggles Palmer are concerned, Mr Shaker rightly lost on the argument based on the trust of the business. We therefore accept Mr Lyndon-Stanford's submission for Steggles Palmer that the order for costs below should stand. The judge was in the best position to determine on whom the costs should fall and whether indemnity costs should be ordered to be paid in the light of the arguments before him.
6. For Mr Bedrawi it was contended that there should be an order in his favour for costs. The judge below did not decide who, as between Mr Shaker and Mr Bedrawi, should bear Mr Bedrawi's or Mr Shaker's costs. There has been no cross-appeal from that decision. The judge ordered the matter to be dealt with at a further hearing. That has still to take place. In our judgment that must now go ahead before the same judge.
7. As for the costs of the appeal, Mr Steinfeld accepted that Mr Shaker would have to pay the costs of Steggles Palmer and Mr Bedrawi of the application to adduce new evidence. He also accepted that the costs of the proposed amendment by Mr Shaker should not be part of any costs awarded in this court to Mr Shaker. He submitted that, subject to those matters, the defendants should be ordered to pay Mr Shaker's costs of the appeal. Mr Lyndon Stanford's submission is that, in addition to the costs of the application to adduce new evidence and the costs of the amendment, Mr Shaker should pay the costs of that part of Mr Steinfeld's argument in which Mr Steinfeld had contended that the Prudential principle was a red herring.
8. For Mr Bedrawi it was contended that Mr Shaker should have to pay all of Mr Bedrawi's costs of the appeal on an indemnity basis because, if Mr Shaker had presented his case as he should have presented it below, the costs of the appeal would not have been incurred. We have no hesitation in rejecting the argument for Mr Bedrawi. Mr Shaker is having to pay Steggles Palmer's costs below for his conduct in not taking the right point. It would be unjust, in our view, to penalise him further by an adverse order for costs on this appeal when, in our view, he has been substantially successful, and there is no question of indemnity costs in this court being the appropriate order.
9. In our view, Mr Shaker having substantially succeeded, it would not be appropriate to separate out the argument relating to the Prudential principle being a red herring. Mr Shaker has not entirely lost on the Prudential principle point. That is a matter yet to be resolved which will be resolved at the trial. Accordingly, we would give to Mr Shaker the costs as against both Mr Bedrawi and Steggles Palmer in this court, except for the two matters to which I have referred: the costs of the application to adduce new evidence, which will be paid by Mr Shaker to the other parties, and the costs of the amendment.
10. We have heard applications from Mr Lyndon-Stanford and Mr Hunter seeking permission to appeal for their respective clients. We readily acknowledge that the points which are raised by this case have some general importance, but, in all the circumstances, we do not think that it is appropriate that we ourselves should grant such permission. The House of Lords has expressed its views on the Prudential point very recently. It will be for the House of Lords, if the application is renewed to them, to decide whether this is an appropriate case for a further appeal.
11. We are also asked to give further directions for the trial. There is no dispute that Lawrence Collins J will have to deal with certain interlocutory matters. The substantial point in dispute is whether he should be the judge who hears the trial. Mr Steinfeld submits that some other judge should try the case. Mr Shaker relies on his right under Article 6 of the European Convention on Human Rights to a fair trial from an impartial tribunal. He said that the judge formed an unfavourable view of Mr Shaker whom he called a "somewhat evasive witness". The judge has dismissed the action and criticised the conduct of the trial. Mr Steinfeld submits that Mr Shaker has reasonable grounds to apprehend that he may not receive a fair and impartial hearing by the judge.
12. Those submissions are resisted by Mr Lyndon-Stanford and by Mr Hunter. They say that the judge should remain as the judge because he is now very familiar with the case and will be able to deal with it more expeditiously than a different judge. We accept that there are some advantages, as Mr Lyndon Stanford and Mr Hunter contend, in the judge continuing to hear the case, though perhaps those advantages have been reduced by the passage of time since the judge gave judgment and there will be further delay, no doubt, before the trial. Further, the judge's knowledge of the facts is limited to the extent that the trial which commenced before the judge did not get very far, though he did hear Mr Shaker at some length: three quarters of a day, we are told.
13. In our view, because of the views expressed by the judge and because the judge dismissed the action, it is appropriate that we should bear in mind how the matter might appear to Mr Shaker. We do not criticise the judge in any way for his conduct of the litigation. Nor do we criticise him for his expression of views on Mr Shaker as a witness, or, indeed, on the conduct of the case by Mr Shaker as it appeared to the judge. That is no less than what he was bound to do in accordance with his judicial oath. But, having regard to the fact that if there is any real ground for doubt that doubt should be resolved in favour of recusal (see Locabail UK v Bayfield Properties [2000] QB 451 at page 48OG), on balance we reach the conclusion that it would be appropriate to order that the trial be tried by some judge other than Lawrence Collins J.
Order: As above.