Compagnie Noga D'importation Et D'exportation SA v Abacha & Ors

This is an appeal against an order for costs made on 4 November 1999 by Longmore J (as he then was) at an interlocutory stage in these complex proceedings. Permission to appeal was granted by Rix LJ on 26 June 2001. For the overall history, context, and detail of the dispute I refer with gratitude to the judgment of my Lord Waller LJ in what has been called the ‘Noga 1’ appeal.

Freezing orders had been obtained in the Commercial Court by Noga against the S J Berwin defendants. An application was made to discharge those orders. That was unsuccessful. Rix J (as he then was) dealt with the costs of that application on 30 July 1999. At the same time there was before him a further application, to discharge a bank guarantee which had been supplied by Noga to the S J Berwin defendants. So far as it related to those defendants it was in the sum of £325,000. Rix J said this (transcript page 6, lines 20 ff):

That was, of course, before August 1999, when the critical documents of 11, 13, and 16 August were entered into. On 4 November 1999 Longmore J had to deal with the question of the date of trial for the issues relating to those documents or agreements. On the same occasion, however, there was also before him a further application for security for costs brought by the S J Berwin defendants against Noga. This is what he said (transcript, page 4, lines 24 ff):

There followed the trial of the settlement agreement issues before Rix LJ, who ordered that Noga should have 50% of their trial costs against the S J Berwin defendants on an indemnity basis. On 26 June 2001 Noga went back to Rix LJ and sought permission to appeal against the order for costs made against them by Longmore J on 4 November 1999. Mr Gee submitted that the reason why Longmore J made that order, rather than the more usual order to the effect that the costs of the security application be costs in the case, was that he had misunderstood the order made by Rix LJ on 30 July 1999; or rather, had misunderstood the nature or purport of the undertaking which Rix LJ had then extracted from Noga. On 26 June 2001 Rix LJ expressed himself as satisfied that he had intended that the undertaking should provide ‘if required by the court’, although those last three words had not been included in the order as drawn. Rix LJ amended or rectified his order so as to add ‘by the court’. He granted permission to appeal against the costs order of 4 November 1999, notwithstanding the passage of time since that date.

Mr Gee submits that we should set aside the order made by Longmore J, and order that the costs of 4 November 1999 should be dealt with in the same fashion as Noga’s trial costs, so that, rather than have to pay any costs to the S J Berwin defendants, Noga would recover 50% of their costs of the security application of 4 November 1999 and on an indemnity basis.

In my judgment it would be quite wrong to take that course. Essentially Mr Gee seeks to support it on two grounds. First, he submitted that the basis of the order made by Longmore J was the judge’s misapprehension as to what Rix LJ had intended by the undertaking extracted on 30 July 1999. Secondly, he said that we should have regard to the findings made at trial by Rix LJ which were adverse to the S J Berwin defendants: in particular, the judge’s findings to the effect that the S J Berwin defendants’ case on the facts was shot through with dishonesty. For my part I am not satisfied that Longmore J made the order he did because of his erroneous (as it turned out) understanding of the purport of the undertaking. It is at least a possibility that he might have made the same order had the undertaking been expressed to be given to the court. Secondly, it would be wrong in principle to have regard to the results of the trial in determining the merits of an interlocutory order for costs in any event made before trial. It was of course a premise of the order of 4 November 1999 that the trial could go either way – or, rather, in any of several directions – and against that premise Longmore J made an order for costs in any event. The only question can be whether it is demonstrated that he was wrong to do so in the circumstances prevailing when the application was made to him on that date. That is by no means demonstrated to me, and I would dismiss the appeal.

I should add that I consider, with great respect to Rix LJ who gave permission for this appeal, that it is quite wrong for this court to be asked to entertain an appeal against an interlocutory order after this enormous distance in time, unless there is some wholly exceptional circumstance which makes it just to do so. The order made by Longmore J was right or wrong at the time he made it. If it was to be appealed it should have been appealed then. In the events which have happened, the bringing of this appeal is in my view a distortion of the appellate process.

I agree.

I also agree.