Law reports

COSTS

Discretion of court - general rule that unsuccessful party should bear costs - abnormal order not justified

Alpha Chauffeurs Ltd v Citygate Dealership Ltd and another; CA (Lords Justice Mummery, Chadwick and Dyson); 20 February 2003

The claimant sought to rescind a hire purchase agreement made with the second defendant for the purchase of a car and claimed damages against the first defendant for breach of warranty and misrepresentation.

The second defendant served a part 20 notice on the first defendant seeking indemnity for the claimant's claim.

The claimant recovered nominal damages from the first defendant and substantial damages from the second defendant.

The second defendant recovered substantial damages against the first defendant under the part 20 claim.

The judge ordered the second defendant to pay 80% of the claimant's costs of action against both the defendants and 80% of the costs payable by the claimant to the first defendant.

The second defendant appealed in respect of the costs order of the action.

The claimant appeared by its director; Alexander Gunning (instructed by Beachcroft Wansboroughs) for the first defendant; Michael Lazarus (instructed by DLA, Leeds) for the second defendant.

Held, allowing the appeal, that where the burden of the costs order made by the judge had not fallen on the party against whom the judgment had been given as a whole and the reason given by the judge did not provide support for that result, the Court of Appeal was bound to correct the error; that since the judge had exercised his discretion on a basis which could be seen to have been flawed, the court would order the first defendant to pay the second defendant the second defendant's costs of the action and of the part 20 proceedings, including the costs payable by the second defendant to the claimant, to give effect to the general rule that the costs of the litigation should be borne by the party who was unsuccessful.

Interim payment on account of costs - claim settled after trial but before inquiry into damages held - not appropriate for judge to decide on interim payment application where unaware of detailed issues covered in trial

Dyson Appliances Ltd v Hoover Ltd (No 4): ChD (Mr Justice Laddie): 18 February 2003

Two weeks before an inquiry into damages was due to be held, the claimant accepted the defendant's payment into court.

Before a costs judge had assessed costs, the claimant applied under the Civil Procedure Rules 1998 (CPR), rule 44.3(8) for an interim payment on account of a substantial bill of costs.

The defendant resisted the application on the basis that, since the judge had not had the benefit of hearing the full trial or inquiry, the normal rule for ordering interim payments was not applicable.

James Mellor (instructed by Olswang) for the claimant; Iain Purvis (instructed by Weightmans Vizards, Liverpool) for the defendant.

Held, refusing the application, that, although the court had power on an application under CPR rule 44.3(8) to order an interim payment when that judge had not heard the full trial of the action, where the judge hearing the application was ignorant of the detailed issues covered in the trial and was not in the position of a costs judge, it was not appropriate for him to decide the application; that rule 44.3(8) had to be taken at face value and there was no presumption either that an order should be made or that it should not be made; and that, since the judge had not heard the issues raised either at the trial or on an inquiry into damages, and was not in the position of a costs judge, he had to exercise particular caution and would not order an interim payment.

CRIMINAL

Majority shareholder diverting funds from company - conviction for cheating public revenue in respect of tax unpaid - whole sum diverted property liable to confiscation as 'benefit' obtained 'as a result of or in connection with' commission of offence

R v Foggon: CA (Lord Justice Mantell, Mr Justice Morland and Mr Justice Jack): 14 February 2002

Funds were diverted from a company in which the defendant held a majority shareholding, and tax was unpaid.

The defendant pleaded guilty to cheating the public revenue and the judge imposed a confiscation order in respect of the whole of the diverted sum on the basis that it was a 'benefit' obtained 'as a result of or in connection with' the commission of the offence within the meaning of section 71(4) of the Criminal Justice Act 1988.

The defendant appealed on the ground that the unpaid tax was a 'pecuniary advantage' within section 71(5), so that only the amount of that advantage was liable to confiscation.

Andrew Munday QC (instructed by Nelsons, Nottingham) for the defendant; Andrew Mitchell QC and Dennis Talbot (instructed by the Solicitor, Inland Revenue) for the Crown.

Held, dismissing the appeal, that the tax was due not from the defendant himself but from the company in which he held a substantial shareholding; that tax avoided, or attempted to be avoided, would only be a pecuniary advantage obtained by an offender within section 71(5) where it was tax for which he himself was liable, or where companies involved were fronts for the offender and it was appropriate to pierce the corporate veil; and that, accordingly, the money diverted had been obtained as a result of or in connection with the offence and so fell within section 71(4) and was liable to confiscation in its entirety.

HUMAN RIGHTS

Freedom of expression - prior restraint of media publication - test whether applicant had a real prospect of success

Cream Holdings Ltd and others v Banerjee and another: CA (Lords Justice Simon Brown and Sedley and Lady Justice Arden): 13 February 2003

The applicants sought an injunction to restrain the defendants from publishing, disclosing or using certain confidential information defined in a confidential schedule, save as to certain bodies, prior to trial.

In applying section 12(3) of the Human Rights Act 1998, which provided that no relief affecting the exercise of the right to freedom of expression under the European Convention on Human Rights was to be granted so as to restrain publication before trial unless the court was satisfied that the applicant was likely to establish that publication should not be allowed, the judge considered whether the applicants had established a 'real prospect of success'.

The judge granted the application.

The defendants appealed.

Victoria Sharp QC and Catrin Evans (instructed by Brabners Chaffe Street, Liverpool) for the defendants; Edward Bartley Jones QC (instructed by Wacks Caller, Manchester) for the applicants.

Held, dismissing the appeal, that in deciding whether or not to grant prior restraint of media publication the test under section 12(3) of the Human Rights Act 1998 was whether there was a real prospect of success, convincingly established, that an applicant would establish at trial that publication should not be allowed; and that, on the evidence before him, the judge had been entitled to form the judgment that the applicants had convincingly established a real prospect of success at trial.

IMMIGRATION

Claimant convicted and recommended for deportation - Court of Appeal (Criminal Division) quashing recommendation - duty on secretary of state to give reasons for disagreeing with court's reasoning if subsequently deciding to deport

M v Secretary of State for the Home Department: CA (Lords Justice Ward, Laws and Jonathan Parker): 19 February 2003

In 1998, the claimant, a Bangladeshi citizen, was granted indefinite leave to remain in the UK.

In 2000, he was convicted of indecent assault on young girls and sentenced to 18 months' imprisonment and recommended for deportation.

The Court of Appeal (Criminal Division) held that family hardship to the claimant dictated that that recommendation be quashed.

Subsequently, the Secretary of State for the Home Department decided that the claimant be deported.

The Immigration Appeal Tribunal dismissed the claimant's appeal.

The claimant appealed.

Nicholas Blake QC and Kathryn Cronin (instructed by South West Law, Bristol) for the claimant; Robin Tam (instructed by the Treasury Solicitor) for the secretary of state.

Held, allowing the appeal, that under section 3(5)(a) of the Immigration Act 1971 a person who was not a British citizen was liable to deportation from the UK if the secretary of state deemed his deportation to be conducive to the public good; that in considering whether to order deportation it was incumbent on the secretary of state to consider the prior reasoning of the Court of Appeal (Criminal Division) and to explain, however shortly, what he made of it; and that, accordingly, the secretary of state had failed to discharge his duty of good administration and fairness to the claimant and his order could not stand.

Secretary of state finding that asylum seekers did not make claim as soon as reasonably practicable on arrival - decision-making process flawed - absence of right to appeal breach of asylum seekers' convention rights

R (Q) v Secretary of State for the Home Department; R (D) v Same; R (J) v Same; R (M) v Same; R (F) v Same; R (B) v Same: QBD (Mr Justice Collins): 19 February 2003

After their arrival in the UK, the secretary of state refused to provide or to arrange for the provision of support to the claimant asylum seekers under section 55 of the Nationality, Immigration and Asylum Act 2002, on the basis that their claims had not been made as soon as reasonably practicable after their arrival.

The claimants sought judicial review of those decisions.

Keir Starmer QC and Simon Cox (instructed by Ben Hoare Bell, Sunderland) for J and F and (instructed by the Refugee Legal Centre) for M; Keir Starmer QC and Stephen Knafler (instructed by Clore & Co) for D and B; Ben Hawkin (instructed by Asghar & Co, Slough) for Q; Neil Garnham QC, Clive Lewis and Samantha Broadfoot (instructed by Treasury Solicitor) for the Secretary of State for the Home Department.

Held, granting judicial review, that the decision-making process for considering whether asylum seekers had made their claims as soon as reasonably practicable after arrival in the UK was flawed where there had been a failure initially to investigate sufficiently the circumstances in which entry had been achieved and, when there had been reconsideration, the approach had been coloured by an erroneous assumption that a failure to claim at the port was itself justification for refusal; and that the absence of a right of appeal was a breach of article 6 of the European Convention on Human Rights.

(WLR)

PRACTICE

Interim remedies - power to order party to disclose information about property or assets before period for ordinary discovery - to be exercised only when application for freezing injunction in progress or likely to be made and not to enable fishing expedition

Parker v C S Structured Credit Fund Ltd and another: ChD (Mr Gabriel Moss QC sitting as deputy High Court judge): 12 February 2003

In proceedings relating to an alleged breach of a share sale agreement, the claimant contended that he had received information from 'someone close to' the defendants that an actual or potential sale or exchange of a number of hotels owned by the second defendant 'may be at an undervalue'.

The defendants refused to provide the claimant with any information relating to it on the basis that it was commercially sensitive and confidential.

The claimant applied, pursuant to CPR rule 25.1(1)(g), for an order directing the defendant to provide information about the proposed sale in advance of normal discovery, or alternatively an order for standard and/or specific discovery.

Stanley Brodie QC (instructed by Druces & Attlee) for the claimant; Hilton Mervis, solicitor-advocate (of SJ Berwin & Co) for the defendants.

Held, refusing the application, that CPR rule 25.1(1)(g) was concerned with a situation where either an application for a freezing injunction was in progress or one was likely to be made; that there had to be some credible evidence and grounds upon which to base such an application, and it was not to be used as a fishing expedition to discover if such grounds might exist; that rule 25.1(1)(g) did not create a free-standing jurisdiction to order the discovery of information which could in a remote sense be relevant to some potential future application for a freezing injunction; that it was not possible to order standard or specific discovery ahead of its proper time merely because it would cause no damage to the defendants; that if general discovery were brought forward, it would disrupt the operation of the CPR in the light of the stage of the proceedings reached and there would have to be a strong case supported by credible evidence to persuade the court to take such a course; and that, since there was no evidence of any impropriety regarding the proposed sale, there was no basis for making the orders sought.