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But equity nonetheless operates in accordance with principles. Ratio |
While most equitable remedies are discretionary, those principles provide a framework which makes equity part of a system of English law which is renowned for its predictability. Ratio |
I have sought to identify from the cases the settled principles upon which this equitable remedy works. Ratio |
One of them is that the client has a responsibility for the solicitors charges. Ratio |
It is simply wrong in my view to seek to distil from those cases a general principle that equity will protect solicitors from any unconscionable interference with their expectations in relation to recovery of their charges. Ratio |
Furthermore the careful balance of competing interests enshrined in the RTA Protocol assumes that a solicitors expectation of recovery of his charges from the defendants insurer is underpinned by the equitable lien, based as it is upon a sufficient responsibility of the client for those charges. Ratio |
Were there no such responsibility, it is hard to see how the payment of charges to the solicitor, rather than to the client, would be justified. Ratio |
Furthermore, part of the balance struck by the RTA Protocol is its voluntary nature. Ratio |
Its voluntary use stems from a perception by all stakeholders that its use is better for them than having every modest case go to court. Ratio |
If the court were to step in to grant coercive remedies to those affected by its misuse by others, that balance would in all probability be undermined. Ratio |
Mr Tonkin Ratio |
It was submitted for Haven that the particular facts about Mr Tonkins case did not entitle Edmondson to an equitable lien because, it was said, Edmondsons work pursuant to its retainer made no significant contribution to the settlement. ARG |
The submission was that Haven offered Mr Tonkin a settlement before, and without regard to, Edmondson logging Mr Tonkins claim onto the Portal. ARG |
I disagree. Ratio |
The relevant chronology is as follows. Ratio |
On 12 April 2012, shortly after the accident, Haven contacted Mr Tonkin to discuss the provision of a hire car for him. Ratio |
This had nothing to do with a personal injury claim, although of course it arose from the same accident. Ratio |
Mr Tonkin and Edmondson entered into a CFA for the purpose of pursuing his personal injury claim on 16 April and, on the following day, Edmondson logged the details of that claim onto the Portal. Ratio |
Three days later, on 20 April, and after Haven had acknowledged the claim on the Portal, Mr Tonkin telephoned Haven. Ratio |
The transcript of the conversation shows that he was ringing about the provision of a hire car. Ratio |
Haven took that opportunity to make him an oral settlement offer for his personal injuries, initially of 2,200, later revised after negotiation to 2,350. Ratio |
This was repeated in writing by Haven on 23 April, and accepted by Mr Tonkin on the following day. Ratio |
Solicitors for a claimant generally contribute to a settlement by logging an RTA claim onto the Portal in two ways. Ratio |
First, they thereby supply to the insurer the essential details of the claim necessary for the insurer to appraise it and decide whether, and if so in what amount, to make a settlement offer. Ratio |
These go well beyond the details the insurer is likely to receive from its insureds accident report, although that report will be likely to assist the insurer to decide whether liability should be put in issue. Ratio |
Secondly, they thereby demonstrate that the claimant intends seriously to pursue a claim for personal injuries, and has obtained, by the CFA, the services of solicitors for that purpose on terms which do not require the claimant to provide his own litigation funding up front. Ratio |
The incentive which that will usually supply to the insurer to settle a modest claim early, before costs increase, and where liability is not in issue, is obvious. Ratio |
In Mr Tonkins case the evidence does not show that Haven had, before Edmondson logged the claim onto the Portal, already obtained any, let alone any sufficient, information about the personal injuries claim. Ratio |
The earlier discussion with Mr Tonkin was about the provision of a hire car. Ratio |
Moreover the chronology shows that Haven had already received and acknowledged Mr Tonkins personal injury claim via the Portal before it made him a settlement offer. Ratio |
Nor did Mr Tonkin telephone Haven on 20 April to seek such a settlement. Ratio |
The inference is plain that Haven was encouraged by the logging of the claim onto the Portal to make an early offer of settlement, and nothing in the judges findings of fact displaces it. Ratio |
Mr Tonkins claim is not therefore an exception to the others, so far as concerns the application of the established principles about the solicitors equitable lien. Ratio |
Edmondson made a modest but still significant contribution to the obtaining of the settlement which ensued, and that was sufficient to trigger the lien. Ratio |
Conclusion RPC |
For those reasons, which differ from those of the Court of Appeal, I would nonetheless dismiss this appeal, subject to one point of detail. RPC |
The Court of Appeal proceeded upon the basis that the equitable remedy could be deployed to provide a means for Edmondson to recover from Haven precisely those fixed costs, disbursements and success fee provided for under the RTA Protocol, regardless of the amount agreed to be paid in settlement. RPC |
By contrast the remedy exists to provide security for the solicitors charges under his retainer, limited to the amount of the debt created by the settlement agreement. RPC |
In the present cases, one effect of the retainer was to limit those recoveries to the amount recoverable from the defendants or their insurers. RPC |
To the extent that the fixed costs regime limits those recoveries below that recoverable under the tables in the CFAs, that limitation would have to be taken into account, as it has been by the Court of Appeals order. RPC |
Calculations carried out at the courts request suggest that the Protocol based recovery was, in all cases other than Mr Tonkin, slightly greater than the amounts agreed to be paid in settlement of the respective claims. RPC |
The Court of Appeals order for payment therefore needs to be reduced to the settlement amount in each case. RPC |
The same calculations show that the Protocol-based recovery was, in the case of Mr Grannell, slightly higher than the corresponding entitlement under the relevant CFA: (2,070.50 as against 2,043.50). RPC |
But since both amounts exceed the settlement figure of 1,900, no additional adjustment appears to be necessary. RPC |
Counsel are asked to agree the precise form of the order which should now be made, in the light of this courts reasoning. RPC |
Calculations carried out at the courts request suggest that the Protocol based recovery was, in all cases other than Mr Tonkin, slightly greater than the amounts agreed to be paid in settlement of the respective claims. RPC |
The Court of Appeals order for payment therefore needs to be reduced to the settlement amount in each case. RPC |
The same calculations show that the Protocol-based recovery was, in the case of Mr Grannell, slightly higher than the corresponding entitlement under the relevant CFA: (2,070.50 as against 2,043.50). RPC |
But since both amounts exceed the settlement figure of 1,900, no additional adjustment appears to be necessary. RPC |
Counsel are asked to agree the precise form of the order which should now be made, in the light of this courts reasoning. RPC |
The appellant (Onur), a Turkish corporation, appeals against orders made by Patten LJ in the Court of Appeal on 21 January 2016. FAC |
An understanding of the nature of his orders requires reference to the following summary of the background. FAC |
(a) On 22 May 2014 Rose J, [2015] 1 BCLC 89, gave judgment against Onur in favour of the respondent (Goldtrail), a UK company in liquidation, in the sum of 3.64m plus interest. FAC |
(b) On 15 December 2014 Floyd LJ granted permission to Onur to appeal to the Court of Appeal against the order of Rose J on the basis that the appeal had a real prospect of success. FAC |
(c) On 11 June 2015 Floyd LJ, by way of variation of an earlier order for the imposition of conditions upon the continuation of Onurs appeal, made it conditional, among other things, upon Onurs payment into court (or provision of other security for it) of 3.64m by 9 July 2015. FAC |
(d) On 29 October 2015, in the absence of any payment into court (or provision of other security), Goldtrail applied for an order dismissing Onurs appeal and on 7 December 2015 Onur cross-applied for an order that the condition for payment into court be discharged on the ground that it could not comply with it and that... |
(e) At the hearing before Patten LJ on 14 January 2016 of the application and cross-application referred to at (d), Goldtrail, in disputing that the condition for payment was such as to stifle Onurs appeal, relied in particular on the financial relationship between Onur and its wealthy owner, Mr Bagana. FAC |
As explained by Patten LJ in his reserved judgment dated 21 January 2016, his orders were first to dismiss Onurs cross-application and thereupon to grant Goldtrails application for an order that, by reason of Onurs failure to comply with the condition imposed on 11 June 2015, its appeal should be dismissed. FAC |
In the above circumstances this court is asked to address the principles by reference to which the Court of Appeal should determine an application by a respondent/claimant that, as a condition of any appeal to it, the appellant/defendant should pay into court (or otherwise secure payment of) part or all of the judgment... |
In the event there has been little dispute between the parties as to the principles which the Court of Appeal should apply. Ratio |
The more lively issue has been whether Patten LJ can be seen to have applied those principles in reaching his conclusions first that Onurs relationship with Mr Bagana was such as to defeat its complaint that the condition for payment would stifle the appeal; second that the condition should therefore remain in being; a... |
THE SUBSTANTIVE DISPUTE FAC |
Prior to its liquidation, Goldtrail was a holiday tour company which had been wholly owned by Mr Aydin. FAC |
Onur is a Turkish airline, largely owned by Mr Bagana. FAC |
In the proceedings before Rose J Goldtrail, by its liquidator, sued Onur in relation to two agreements and, irrelevantly for present purposes, sued other defendants in relation to other agreements. FAC |
The claim against Onur arose out of the latters aspiration to cause Goldtrail to buy seats for its tourists on Onurs flights between the UK and Turkey. FAC |
Such was the context of agreements that Mr Bagana would buy 50% of Mr Aydins shares in Goldtrail for 1m (which he paid) and that Onur would pay 3.64m (which it paid) to another company owned by Mr Aydin for its purported brokerage of an agreement by Goldtrail with Onur to buy a specified number of seats on its flights.... |
Rose J found that, properly analysed, the payment of 3.64m represented consideration for Goldtrails agreement to buy the seats; that, in breach of his fiduciary duty to Goldtrail, Mr Aydin had diverted receipt of Onurs payment away from Goldtrail to his other company; that Onur had dishonestly assisted Mr Aydin in thus... |
ONURS APPEAL FAC |
In January 2015, following the grant on paper of permission to Onur to appeal against the order of Rose J, Goldtrail applied for the imposition of conditions. FAC |
It was too late for it to apply under Rule 52.3(7)(b) (now Rule 52.6(2)(b)) of the Civil Procedure Rules for the actual permission to be made subject to conditions. FAC |
It therefore applied under Rule 52.9(1)(c) (now Rule 52.18(1)(c)) for the court to exercise its discretion to impose conditions upon which an appeal may be brought. FAC |
Paragraph (2) of Rule 52.9 (now Rule 52.18(2)) provided that the court should exercise its powers under para (1) only where there was a compelling reason for doing so. FAC |
By its application, Goldtrail requested conditions that Onur should pay or secure 600k under interim orders for costs made by Rose J; should provide security for Goldtrails costs of the appeal in the sum of 150k; and in particular should pay into court the sum of 3.64m which Rose J had awarded to it by way of damages. ... |
In response Onur entered no substantive challenge to the request for the first two conditions. FAC |
The dispute related to the requested payment into court of the judgment sum. FAC |
Goldtrail relied on the agreed fact that in October 2014, after 22 years of flying its aircraft to the UK, Onur had ceased to do so; and Goldtrail submitted that, since Onur was likely to have no other assets even temporarily in England and Wales, there was a compelling reason for the judgment sum to be secured. FAC |
Onurs response was that its decision to cease flights to the UK had been taken for operational reasons and that there was no evidence that it had taken steps or would take steps to obstruct enforcement of the judgment in the event of the dismissal of its appeal. FAC |
What at that time Onur did not allege was that the disputed condition would stifle its appeal. FAC |
By an order on paper dated 7 April 2015 Floyd LJ imposed the disputed condition. FAC |
Onur exercised its right to cause him to reconsider his decision at the hearing which took place on 11 June 2015. FAC |
Although in his judgment Floyd LJ expressed a willingness to assume that there was a respectable commercial explanation for the cessation of Onurs flights to the UK, he maintained his earlier conclusion that there was a compelling reason for imposing the condition. FAC |
Upon Onurs continuation of the appeal, he therefore imposed the condition that it should pay into court (or otherwise secure payment of) 3.64m by 9 July 2015. FAC |
On 14 July 2015, by then in breach of the condition, Onur applied for variation of it so as to permit it to make the payment into court by seven monthly instalments. FAC |
On 27 July 2015 Floyd LJ on paper refused the application but shortly before 21 October 2015, when pursuant to Onurs request he was due to reconsider it at a hearing, Onur changed its stance. FAC |
Its new contention was that the condition for payment of the judgment sum into court was a breach of its rights under the European Convention on Human Rights and was unlawful and that therefore the payment would not be made. FAC |
So Floyd LJ dismissed the application for variation and directed that Goldtrails oral request for the consequential dismissal of Onurs appeal be made by formal application. FAC |
Thus it was that on 14 January 2016 Patten LJ heard not only the anticipated application by Goldtrail for dismissal of the appeal but also a cross-application by Onur dated 7 December 2015 for discharge of the condition for payment into court of the judgment sum on the ground - asserted for the first time - that its co... |
The relevant findings, observations and conclusions of Patten LJ in his judgment dated 21 January 2016 were as follows: In 2013 he lent US $28m to Onur. RLC |
(a) Mr Bagana was extremely wealthy and had, for example, given evidence to Rose J that 5m was not a significant outlay for himself personally. RLC |
(b) He directly held 3.67% of the shares in Onur and held 81.19% of the shares in a company which held a further 92% of the shares in Onur. RLC |
(c) Between 2008 and 2011 Onur had paid substantial dividends to him, which he had lent back to it, secured against its assets. RLC |
(d) (e) By 2014 his loan account with Onur had increased to $68m. RLC |
(f) For some reason Onur had guaranteed debts owed to him by another shareholder. RLC |
(g) As Onurs largest secured creditor, Mr Bagana was in a position to decide which of Onurs unsecured debts should be paid and at what time. RLC |
(h) He had a more than usually close relationship with Onur and effectively controlled its financial affairs. RLC |
(i) According to Onurs Chief Financial Officer, Mr Bagana had said that he would contemplate making further loans to Onur only in exceptional circumstances to enable it to make commercial payments necessary to keep it in business. RLC |
(j) With Mr Baganas support Onur was able to continue to trade. RLC |
(k) Even had it been difficult for Onur to make the payment into court out of cash generated from its trading activities, it could have done so with his support. RLC |
(l) Mr Bagana had decided not to fund the payment by Onur. RLC |
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