Law reports

BANKING

Letter of credit - beneficiary drawing down funds - autonomy principle not applying and conditions for draw down satisfiedSirius International Insurance Co (Publ) v FAI General Insurance Ltd: ChD (Mr Justice Jacob): 23 July 2002

The applicant was a fronting company for the respondent in its reinsurance of A, a Lloyd's syndicated account.

The applicant wrote the policy and retroceded it to the respondent on terms that the respondent provided it with a letter of credit for $5 million.

In the underlying agreement to the letter of credit there was an express negative covenant that the applicant would not draw down the money unless it had obtained agreement in writing from the respondent before paying a claim by A.

A made a claim against the applicant and the matter went to arbitration.

During the arbitration, provisional liquidators were appointed over the respondent and an automatic stay came into effect.

The applicant applied for the stay to be lifted and the proceedings were resolved by a Tomlin order.

By that order the respondent agreed that it was indebted to the applicant in the sum of $22.5 million in respect of the retrocessions.

The applicant brought proceedings against the respondent and its provisional liquidators claiming to be entitled to the proceeds of the letter of credit which it had drawn down.

Preliminary issues were ordered as to whether the conditions on which the applicant could draw down the letter of credit had been satisfied.

Geoffrey Vos QC and Peter Arden (instructed by Reynolds Porter Chamberlain) for the applicant; Michael Briggs QC and Philip Marshall (instructed by Freshfields Bruckhaus Deringer) for the respondent.

Held, finding for the applicant, that while the principle of autonomy which applied to letters of credit was of vital importance, the principle did not apply as between the party and counter-party and was not undermined in the very special case where a party expressly agreed not to draw down unless certain conditions were met; that, since the respondent had acknowledged an indebtedness to the applicant in the sum of $22.5 million in the Tomlin order and since all parties knew that there was a back-to- back arrangement in place whereby the $22.5 million would insure for A's benefit, the respondent had in substance agreed to payment by the applicant of A's claim, the conditions of the letter of credit had effectively been satisfied and the letter of credit had been properly drawn down.

CHILDREN

Contested private law proceedings concerning child - children and family reporter uncovering evidence of possible child abuse - passing information to local authority social services department not publication in contempt of courtIn re M (A Child) (Disclosure: Children and Family Reporter): CA (Lord Justice Thorpe and Mr Justice Wall): 31 July 2002

The children and family reporter (CFR) uncovered evidence of inappropriate sexual behaviour by the father of a child who was the subject of contested private law proceedings under the Children Act 1989.

The trial judge refused permission to report the material to the local authority social services department, on the grounds that to do so would constitute publication in contempt of court contrary to section 97 of the 1989 Act.

The judge's decision was upheld in the High Court.

The Children and Family Court Advisory and Support Service (CAFCASS) and the mother appealed.

Andrew McFarlane QC and Jessica Habel (instructed by Bindman & Partners) for the mother; Robin Spon-Smith (instructed by CAFCASS Legal Services) for CAFCASS; Mark Everall QC and Douglas Taylor (instructed by Lamport Bassitt, Southampton) for the father.

Held, allowing the appeal, that an exchange of information between the CFR and local authority social services professionals in the course of their respective functions, each acting in furtherance of the protection of children, did not constitute a publication breaching the privacy of contemporaneous Children Act proceedings; that judge and CFR were united in the ultimate objective of child protection and welfare, and each had to be free to operate independently as well as collaboratively; that independent operation included the exercise of an independent discretion and the CFR had to consider taking his concerns to the judge in the case rather than to the local authority; that where one party to litigation alleged misconduct by the other, particularly in cases about residence or contact orders, there was an obvious danger that the CFR might be used manipulatively by one of the parties; that the reaction of a CFR who was alerted to concerns about sexual abuse would depend whether the material was a discovery or a second-hand account of what someone else had discovered and, if the latter, he should consider whether the information had been relayed to the police or social services, whether there was a history of past complaints, the plausibility of the material, whether the informant was a party to proceedings, and whether, if so, he had put the material into his evidence; and that it would also be important to consider whether the abuse would or could amount to significant harm, whether there was a need for urgent action, and what were the risks of delay.

COSTS

Defendants losing negligence action liable for costs - defendants seeking issue-based order because claimant lost on one issue - judge right not to make issue-based order where percentage order practicableBudgen v Andrew Gardner Partnership: CA (Lords Justice Simon Brown, Mance and Latham): 31 July 2002

The judge gave judgment for the claimant on his action in negligence against the defendant firm of solicitors and awarded him damages in excess of the amount paid into court by the defendants.

The claimant having failed on one issue, the defendants sought an issue-based costs order under the Civil Procedure Rules 1998 (CPR), rule 44.3(6)(f).

The judge made a percentage order under rule 44.3(6)(a) whereby the defendants were required to pay 75% of the claimant's costs on a standard basis.

The defendants appealed.

Bernard Livesey QC (instructed by Thomson Snell & Passmore, Tonbridge) for the defendants; Dermod O'Brien QC and Timothy Lord (instructed by Druces & Attlee) for the claimant.

Held, dismissing the appeal (Lord Justice Mance dissenting), that judges should be readier to make costs orders which reflected not merely the overall outcome of proceedings but also the loss of particular issues; that, if the 'winning' party had not merely lost an issue but pursued it when clearly he should not have done, that should be reflected in the costs order, both as a sanction to deter such conduct in the future and to relieve the 'losing' party of at least part of his costs liability; that it did not follow that the judge should give effect to those considerations by making an issue-based costs order rather than a percentage costs order since rule 44.3(7) made plain that the contrary was the case; that it was unclear whether the judge had rule 44.3(7) in mind, but there was no question here of a percentage order not being 'practicable'; and that, while the judge had recognised that he was taking a broad-brush approach, he could not be forced by the parties' failure to provide him with more precise information into making an issue-based order.

CRIMINAL

Manslaughter - immigrants dying in defendant's lorry while attempting to gain illegal entry to UK - defendant criminally liable for deathsR v Wacker: CA (Lord Justice Kay, Mr Justice Colman and Mr Justice Ouseley): 31 July 2002

The defendant's lorry was stopped on disembarkation at Dover and the bodies of 58 immigrants of Chinese origin were discovered hidden in the lorry's container, with two other such immigrants who were still alive.

The defendant was convicted of conspiracy to facilitate the entry into the UK of illegal immigrants and 58 offences of manslaughter.

He appealed against the convictions for manslaughter, on the ground that the law did not recognise the relationship between those involved in a criminal enterprise as giving rise to a duty of care owed by one participant to another.

Michael Lawson QC and Simon Russell Flint (assigned by the Registrar of Criminal Appeals) for the defendant; Victor Temple QC and Duncan Penny (instructed by Crown Prosecution Service, Headquarters) for the Crown.

Held, dismissing the appeal, that as a matter of public policy the criminal law would not decline to hold a person criminally responsible for the death of another simply because they were both engaged in some joint unlawful activity at the time or because there might have been an element of acceptance of a degree of risk by the victim in order to further the joint unlawful enterprise.

Defendants pleading guilty after refusal of stay for abuse of process - inadequate disclosure and dishonest evidence from prosecution witnesses - convictions set asideR v Early and others: CA (Lord Justice Rose, Mr Justice Colman and Mr Justice Roderick Evans): 31 July 2002

The appellants pleaded guilty to offences involving fraud on the revenue by the improper diversion to the UK market from a bonded warehouse of large quantities of duty suspended alcohol, ostensibly intended for other countries in the European Community.

They appealed on the grounds that they had pleaded guilty on the false assumption that full and proper disclosure had been made to them by the prosecution, particularly in relation to the true roles of two participating informants.

Two of the appellants additionally contended that lying evidence by prosecution witnesses to judges, on the voire dire, had precluded them from making an effective application to stay proceedings as an abuse of process.

Ian Bridge and Alexander Stein (instructed by Bark & Co) for Early; Peter Guest and Alan Jenkins (instructed by Murdochs) for Bajwa; Brian Reece (instructed by Ashley Bean & Co, Romford) for Vickers; Abbas Lakha and Samantha Cohen (instructed by Alexander Johnson) for Dowell; Noel Lucas and Mark Rainsford (instructed by Solicitor, Customs & Excise) for the Crown; Jeremy Carter-Manning QC and Phillipa McAtasney (instructed by Percy Short Cuthbert) for Patel (Rahul) and Patel (Nilam); David Batcup (instructed by Attridge Solicitors) for Pearcy; Jeremy Gompertz QC and Jonathan Ashley-Norman (instructed by Solicitor, Customs & Excise) for the Crown; Anthony Arlidge QC and Kieran Galvin (instructed by Bark & Co) for Patel (Madhusudan Maganbhai); Anthony Glass QC and Tom Kark (instructed by Solicitor, Customs & Excise) for the Crown.

Held, allowing the appeals, that in view of the false evidence presented to each of the Crown Court judges as to the role of participating informants and the relationship between the bonded warehouse and customs, the exercise of discretion by each judge in refusing to stay the proceedings before them as an abuse of process was fatally flawed; that when inadequate disclosure was sought to be supported by dishonest prosecution evidence to a trial judge, the Court of Appeal was unlikely to be slow to set aside pleas of guilty following such events, however strong the prosecution case might appear to be; and that, accordingly, the convictions would be quashed.

FAMILY

Husband ordered to transfer interest in matrimonial home to wife - husband made bankrupt before transfer effected - order giving wife equitable interest in home enforceable against trustee in bankruptcyMountney v Treharne: CA (Lords Justice Aldous, Laws and Jonathan Parker): 8 August 2002

The district judge made a property adjustment order under section 24(1)(a) of the Matrimonial Causes Act 1973 in ancillary relief proceedings, ordering the husband to transfer all his interest in the former matrimonial home to his wife.

By virtue of section 24(3), the order took effect shortly afterwards when the decree absolute was pronounced; but the following day, and before the transfer was effected, the husband was made bankrupt.

The district judge declared that the home vested in the husband's trustee in bankruptcy, free from any rights of the wife.

The judge dismissed the wife's appeal.

The wife appealed.

Paul Morgan QC and William Hansen (instructed by Jefferies Solicitors, Westcliff-on-Sea) for the wife; Raquel Agnello (instructed by Sprecher Grier Halberstam LLP) for the trustee in bankruptcy.

Held, allowing the appeal, that the rule that an order which directed a party to provide security and contemplated the completion of the security by the execution of the appropriate deed created an immediate equitable charge, provided that the property the subject of the charge could be sufficiently identified, was directly applicable to an order made pursuant to section 24(1)(a); that, therefore, the order in the instant case had the effect of conferring on the wife an equitable interest in the property at the moment when the order took effect; and that, accordingly, the trustee in bankruptcy took subject to the wife's equitable interest under the order by virtue of section 283(5) of the Insolvency Act 1986, and the wife was entitled to enforce the order against the trustee.

HUMAN RIGHTS

Persons conceived by artificial insemination seeking non-identifying information relating to donor - request refused by public authorities - convention right to respect for private and family life engaged R (Rose and another) v Secretary of State for Health and another: QBD (Mr Justice Scott Baker): 26 July 2002

The claimants, who had been conceived as a result of artificial insemination by donor, sought from the secretary of state and the Human Fertilisation and Embryology Authority non-identifying information about the donor relating to blood type, medical history, social and family background, religion, skills and interests, occupation, reasons for donation, willingness to be approached for identification and willingness to provide updating information; and to establish a voluntary contact register to exchange information between willing donors and offspring.

Their request was denied.

The claimants sought judicial review on the ground that the defendants were obliged by article 8 of the European Convention on Human Rights to accede to the request.

Monica Carss-Frisk QC and Thomas De la Mare (instructed by Joanne Sawyer, Liberty) for the claimants; Nigel Giffin (instructed by the solicitor, Department of Health) for the secretary of state.

Dinah Rose (instructed by Morgan Cole, Cardiff) for the authority.Held, granting judicial review, that the claimants were seeking to obtain information which went to the very heart of their identity, and to their make-up as people; that it was artificial to distinguish between identifying and non-identifying information at the stage of considering whether article 8 was engaged; that respect for private and family life had been interpreted by the European Court of Human Rights to incorporate the concept of personal identity; and that, therefore, the right to obtain information about a biological parent who would inevitably have contributed to the identity of his child was within the ambit of article 8.

IMMIGRATION

HIV positive mother on asylum support - claim for additional support to fund purchase of formula milk for child - circumstances capable of being exceptional for the purposes of additional asylum supportR (T and another) v Secretary of State for Health and another: QBD (Sir Edwin Jowitt): 29 July 2002

The claimants were a single parent in receipt of asylum support and a child born in March 2002.

The parent was HIV positive.

The parent was receiving a lower level of financial assistance by way of asylum support and additional benefits than a parent receiving income support or job-seeker's allowance.

The parent's application under section 96(2) of the Immigration and Asylum Act 1999 for additional asylum support in order to buy formula milk for the child was rejected on the grounds that her circumstances were not so exceptional as to merit the provision of additional support.

The claimants sought judicial review.

Dinah Rose (instructed by Sarah Clarke) for the claimants; Shaheen Rahman (instructed by the Treasury Solicitor) for the secretaries of state.

Held, granting judicial review, that the search for circumstances which were exceptional for the purposes of section 96(2) of the 1999 Act had to focus on the reason why the parent should not breast feed her child and whether there was a risk that, despite the risk of transmitting HIV to the child, she would try to suckle her because she received insufficient money to enable her to buy formula milk; and that those circumstances were capable of amounting to exceptional circumstances, bearing in mind the appalling consequences to the child if the parent attempted to suckle her and the real risk that she might do so.

Asylum applications - Palestinians born in 1970s - not automatically entitled to refugee statusEl Ali v Secretary of State for the Home Department; Daraz v Secretary of State for the Home Department (United Nations High Commissioner for Refugees, intervening): CA (Lord Phillips of Worth Matravers, Master of the Rolls, Lords Justice May and Laws): 26 July 2002

Two Palestinian Arabs, born in the 1970s to parents who had lived in Israel before the establishment of that state, were registered with the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) in Lebanon.

They left to claim asylum in the UK.

The secretary of state refused their claims to asylum under article 1D of the Convention Relating to the Status of Refugees 1951, which provided, to those who came within it, automatic refugee status.

Their appeals to the adjudicator and the Immigration Appeal Tribunal were dismissed.

They appealed.

Nicholas Blake QC and Raza Husain (instructed by Salfiti & Co) for El Ali; Ramby de Mello and Chris Williams (instructed by Nijher & Co Ltd) for Daraz; Tim Eicke (instructed by the Treasury Solicitor) for the secretary of state; Prof Guy Goodwin-Gill (instructed by Baker & McKenzie) for the intervener.

Held, dismissing the appeals, that only persons who came within the definition in article 1D of the convention when the agreement was concluded in 1951 and for whom the organs of the United Nations ceased to provide assistance and protection were entitled to be treated as refugees; that, although the claimants' parents were Palestinians who came within that definition, because the claimants were not born until the 1970s they did not themselves fall within article 1D; and that, accordingly, they were not automatically entitled to be treated as refugees.

INSOLVENCY

Applicant bringing proceedings against company - company paying money into account and undertaking not to dispose of it as condition of discharge of freezing order - applicant secured creditor on company's insolvencyFlightline Ltd v Edwards and another: ChD (Mr Justice Neuberger): 2 August 2002

The applicant commenced proceedings against a company and obtained a freezing injunction.

That injunction was discharged following payment, on the company's behalf, of a sum into a bank account in the joint names of the parties' solicitors.

The company undertook not to withdraw or in any way dispose of or deal with its interest in those monies without further order of the court.

Subsequently, the company became subject to insolvency proceedings and provisional liquidators were appointed.

The applicant sought permission, under section 130(2) of the Insolvency Act 1986, to continue its action on the ground that it was a secured creditor in relation to the sum paid into the joint account.

Gabriel Moss QC (instructed by Field Fisher Waterhouse) for the applicant; Martin Pascoe QC (instructed by Lovells) for the liquidators.

Held, granting the application, that where a court made an order under CPR part 24 or part 36, the money was to be treated as security for the claimant's claim; that a payment into a bank account in the names of both parties' solicitors, to abide the decision of the court and made by the defendant in lieu of payment into court, would have the same status as if it had been paid into court; that whether such money was security was to be determined partly by reference to policy or established principle, and partly by reference to the intention of the parties and/or the court; and that, in the circumstances, the sum held in the joint account was security for any judgment which the applicant might obtain and the applicant should, therefore, have permission to proceed with its claim.

LIMITATION OF ACTION

Claimant bringing action out of time alleging failure to diagnose dyslexia - extension of limitation period for personal injury claim - court to be slow to find balance of prejudice in claimant's favourRobinson v St Helens Metropolitan Borough Council: CA (Lords Justice Peter Gibson and Brooke and Sir Murray Stuart-Smith): 25 July 2002

The claimant brought an action against the local education authority alleging negligent failure to diagnose or treat his dyslexia while a pupil at one of the authority's schools.

On a preliminary issue, the judge found that the action was not one for personal injuries; that the relevant limitation periods had expired; and that if it were a personal injuries claim he would not exercise his discretion to extend the limit.

The claimant appealed.

Nicholas Bowen (instructed by Maxwell Entwistle & Byrne, Kirby) for the claimant; John Norman (instructed by Weightmans, Manchester) for the authority.

Held, dismissing the appeal, that the action was for personal injury; that on the exercise of discretion, the question of proportionality was important; that the onus was on the claimant to show that the balance of prejudice was in his favour and he should fully identify the psychological or emotional harm suffered before embarking on the trial of such a preliminary issue, otherwise the court might find it difficult to identify the psychological harm relied on to bring the case within the specialist regime for personal injuries litigation; that the likely amount of an award was an important factor, especially, if those issues were likely to take a considerable time to try; that a claim that dyslexia had not been diagnosed or treated many years before at school, brought long after the expiry of the limitation period extended as it was until after the claimant's majority, would inevitably place the defendants in great difficulty in contesting it; that court should be slow in such cases to find that the balance of prejudice was in favour of the claimant; and that there were no grounds for interfering with the exercise of the judge's discretion.

NATURAL JUSTICE

Judicial bias - permission to appeal granted on renewed application - judge who refused initial application not required to recuse himself from hearing substantive appealSengupta v Holmes and others (Lord Chancellor intervening): CA (Lords Justice Laws, Jonathan Parker and Keene): 31 July 2002

An application by the applicant, a general practitioner, for permission to appeal against a decision that complaints against him should proceed to hearing by the General Medical Council, was refused by a single Lord Justice.

A renewed application for permission before two Lords Justice was subsequently granted.

At the hearing of the appeal, the applicant challenged the constitution of the court, which included as one of its members the Lord Justice who had refused the initial application, alleging apparent bias which required the judge to recuse himself.

Mary O'Rourke (instructed by Radcliffe Le Brasseur, Cardiff) for the applicant; Mark Shaw QC (instructed by Field Fisher Waterhouse) and Conor Gearty (instructed by Graeme John & Co, Aberdare) for the complainants; Gordon Pollock QC and Paul Stanley (instructed by the Treasury Solicitor) for the Lord Chancellor; Eleanor Grey (instructed by the Treasury Solicitor) as advocate to the court.

Held, that there was nothing in the circumstances to suggest any special consideration for the judge's recusal; that the Lord Justice had rejected the application knowing that his views could be reconsidered at an oral hearing; and that no reasonable basis existed for supposing that he would not bring an open mind to bear on the hearing of the appeal, if, after permission granted by other judges, he was a member of the court constituted to deal with it.

PRACTICE

Action limited to 15,000 allocated to fast-track - district judge normally to exercise unfettered discretion to re-allocate case where amendment allowed to increase value substantially - district judge entitled to refuse permission at trial to delete limit and claim 80,000 special damagesMaguire v Molin: CA (Lords Justice Brooke and Dyson and Mr Justice Wall): 24 July 2002

The claimant brought an action in negligence against the defendant.

Her particulars of claim limited damages to 15,000 and her case was assigned to the fast- track.

She later had advice and at trial sought permission to delete the limitation and serve an updated schedule of special damages in the sum of 80,000.

The district judge refused permission, continued the hearing and found for the claimant on liability.

The judge dismissed her appeal.

She appealed.

Robert Leonard (instructed by Gambrills, Folkestone) for the claimant; the defendant did not appear and was not represented.

Held, dismissing the appeal, that a district judge had jurisdiction to continue to hear a case allocated to the fast-track which was amended so that its financial value exceeded 15,000, if in all the circumstances it was just to do so; that CPR rule 26.10 gave the district judge an unfettered discretion whether to re-allocate and relevant factors to consider were the amount by which the value of the claim exceeded the normal limit and the category of judge chosen to try the case; that if the revised financial value exceeded 15,000 by a small amount the claim might be re-allocated, but not if that would cause substantial disruption to the progress of the litigation; that where the excess was substantial there should usually be a re-allocation, even if that meant causing delay to the completion of the litigation; and that, accordingly, in the circumstances the district judge had been entitled to exercise his discretion and refuse to abort the trial at such a late stage.

Discovery - misfeasance in public office alleged in respect of supervision of bank - test to be applied on application against non-party for disclosure of documents from inquiry into supervision of bankThree Rivers District Council and others v HM Treasury and another: CA (Lord Phillips of Worth Matravers, Master of the Rolls, Lords Justice Chadwick and Keene): 7 August 2002

The claimants, former depositors of a bank in liquidation, brought an action against the Bank of England for misfeasance in public office in respect of its supervision of the bank.

They applied for an order against, among others, HM Treasury (which was not a party to the action) for disclosure of documents in an archive compiled for an inquiry into the Bank of England's supervision of the bank.

The judge held that the threshold conditions in CPR rule 31.17(3)(a) to order disclosure against a non-party were met, but he could not order disclosure because confidentiality and public interest immunity needed investigation.

HM Treasury, among others, appealed.

Charles Hollander QC and Sarah Lee (instructed by the Treasury Solicitor) for HM Treasury; Nicholas Stadlen QC, Bankim Thanki and Ben Valentin (instructed by Freshfields Bruckhaus Deringer) for the Bank of England; Gordon Pollock QC, David Mildon QC and Barry Isaacs (instructed by Lovells) for the claimants.

Held, dismissing the appeals, that to determine, under CPR rule 31.17(3)(a), whether disclosure of the documents sought was likely to support the applicant's case or damage another party's case on an application for disclosure by a non-party, the court should ask whether the documents 'might well' support or adversely affect one party's case; that in determining whether the threshold condition in rule 31.17(3)(a) was met in relation to a class of documents, it could be appropriate critically to examine each sub-class to establish whether each document came within rule 31.17(3); and that the judge had been entitled to conclude that the threshold conditions were met.

(WLR)

TRADE

Endangered species - valid export permit - importing state not required to satisfy itself that convention conditions metR (Greenpeace Ltd) v Secretary of State for the Environment, Food and Rural Affairs and another: CA (Lords Justice Mummery, Laws and Dyson): 25 July 2002

The government of Brazil had listed Brazilian mahogany under appendix III of the Convention on International Trade in Endangered Species of Wild Fauna and Flora 1973 since 1998.

The exploitation of mahogany in Brazil was forbidden by the Brazilian constitution unless authorised by IBAMA, the management authority.

In 2001, widespread illegal logging of mahogany led IBAMA to ban indefinitely its commercial exploitation.

Timber companies sought court orders from a Brazilian court requiring IBAMA to issue export permits for mahogany.

Without notice to IBAMA, orders were made.

In response to those court rulings, IBAMA issued export permits.

A shipment of mahogany with such an export permit arrived at a UK port.

On an application for judicial review, the claimant sought the detention of the cargo and declarations that the importation of the cargo contravened the European Union's regulatory regime for endangered species.

It was refused.

The claimant appealed.

Jon Turner and Rebecca Haynes (instructed by Kate Harrison, Solicitor to Greenpeace) for the claimant; Clive Lewis (instructed by the Treasury Solicitor) for the secretary of state; Philippa Whipple (instructed by the Solicitor to Customs and Excise) for the Customs and Excise Commissioners.

Held, refusing judicial review (Lord Justice Laws dissenting), that an importing state presented with an export permit which complied with article VI of the convention was entitled to treat the permit as sufficient documentary evidence of its validity unless it had been cancelled by the issuing authority or set aside by agreement or a court; and that the importing state was not obliged to satisfy itself that the requisite conditions had been properly met before the permit had been issued.

(WLR)