Maimann v Reyhanian

MR JUSTICE LEWISON: This is an applicant for permission to appeal arising out of a neighbour dispute. The claimant and the defendants live in the Hampstead Garden Suburb. Both are freeholders. Their freeholds are subject to restrictive covenants under a Leasehold Reform Act Scheme managed by the Hampstead Garden Suburb trust. One of the restrictions relates to boundary hedges and fences.

Both the claimant and the defendant are Jewish. The dispute between them was referred to the arbitration of the Beth Din under a written arbitration agreement. The arbitration agreement provided in clause 7 that the Beth Din has power to make orders under Jewish law both as to its own costs and as to the costs incurred by any party in participating, bringing or defending any claim or counterclaim. Clauses 6 and 9 also require the Beth Din to decide the matter under Jewish law incorporating such other law as Jewish law deems appropriate.

The Beth Din made an award on 23 May 2001. In paragraph 8 of the award the Beth Din ordered that the current fence be removed and replaced as required by the Trust at the joint expense of both parties. There was no application for permission to appeal against that award. The arbitration claim form was issued on 22 January 2002 and an application notice for permission to enforce the judgment was issued on 28 July 2002.

The application was heard by Morrison J on 5 August 2002. The defendant was present in person. The judge said that the award would be enforced, but declined to make an order at that time. He adjourned the application, reserving it to himself in the hope that peace would reign. His hope was misplaced and in January 2005 the claimant restored the application for hearing. Again it came before Morrison J on 8 April 2005. The defendant was neither present nor represented at that hearing, having been notified of it only the previous day. Morrison J made an order giving the claimant permission to enforce the award as if it were a judgment. He also ordered the defendant to pay the costs of the claimant to be the subject of a detailed assessment if not agreed. Within a few days, on 11 April 2005, the defendant, through his solicitors, Messrs Traymans, became aware that the order had been made. At that stage the defendant had two choices: first, to apply to the court to relist the application under Part 23.11 of the Civil Procedure Rules on the ground that it was an order made in his absence, or to seek permission to appeal under Part 52.3 of the Civil Procedure Rules. An application for relisting under Part 23.11 of the Civil Procedure Rules has no express time limits but an application for permission to appeal must be made within 14 days of the date of the order under Part 52.4 of the Rules. The defendant did neither.

An appellant's notice was eventually filed on 16 August 2005, some four months late. No application for relisting has been made. On 23 November 2005 Chadwick LJ refused permission to appeal on the papers.

Since the application for permission to appeal is itself made out of time, Part 3.9 of the Civil Procedure Rules apply.

I must have regard to the checklist in that Rule, but the following are the most important parts of the checklist. First, was the application made promptly? The answer in this case is plainly, "No". Second, was there a good explanation for the delay? Three months of the delay appear to be attributable to ignorance on the part of the defendant's former solicitors of the avenues of appeal available to the defendant. A knowledge of time limits for appealing should be in the toolbox of any competent firm of solicitors. There is nothing arcane about the application of these time limits to Arbitration Act appeals. One month appears to be attributable to the defendant's second set of solicitors in asking questions and obtaining documents. The only relevant documents, having regard to the matters contained in the written skeleton arguments submitted on the defendant's behalf, are the award itself and the judge's order. There is, in my judgment, no good explanation for the delay. Third, was the failure due to the party himself or his legal representatives? In this case it seems to be the legal representatives, but in general under the Civil Procedure Rules inaction by legal representatives must be treated as inaction by the party himself. Fourth, the effect which the failure has had on each party and the effect the grant of relief against sanctions would have. This requires some evaluation of the strength of the grounds of appeal.

In the course of the oral submissions made to me this morning it is by no means clear to me what, if any, points of law the defendant wishes to raise. He is plainly aggrieved by the fact that the claimant began arbitration proceedings in the first place. That, however, was a matter for the arbitrators. He is plainly aggrieved that the judge made a costs order against him on the application for permission to enforce the award as if it were a judgment. But the general rule is that the successful party recovers costs from the unsuccessful party. The judge followed that rule and no grounds have been seriously suggested for interfering with the judge's discretion.

The real ground of complaint is the size of the costs bill which the claimant's solicitors have put forward. But that, as I shall explain in a moment, can be dealt with on the detailed assessment. I have of course had regard to the written argument put in on behalf of the defendant by Mr Miller of counsel. He does not appear today because the defendant has apparently dispensed with his services. The two questions which Mr Miller raises in the skeleton argument are these. First, he says the Beth Din had no power to make the award it did and consequently the judge should not have allowed the award to be enforced in a judgment. Second, even if the Beth Din did have power, the judge should not have allowed the claimant to enforce it because the claimant was not the winner.

The first point is based on section 48(5)(b) of the Arbitration Act 1996. That section provides that, unless otherwise agreed by the parties, the Tribunal has the same powers as the court (a) to order a party to do or refrain from doing anything, (b) to order specific performance of a contract other than a contract relating to land. Here, Mr Miller argues that the Beth Din had no power to make the order that it did because it was ordering specific performance of a contract relating to land.

In my judgment, this point faces formidable difficulties. First, the Tribunal has a power to order a party to do something under section 48(5(a); second, specific performance of a contract is a remedy sought by one party to a contract against another. There is no contract in the present case between the claimant and the defendant, although both may be bound in equity by restrictive covenants. Third, "a contract relating to land" in this context means a contract involving the creation or transfer of an interest in land and not a contract which happens to require performance on land. Fourth, the exclusion of specific performance from the Tribunal's powers is the default rule which the parties can enlarge under section 48(1). Here, the parties agreed that the Beth Din would hear the dispute in accordance with Jewish law. Whether Jewish law would give the tribunal these powers has not been addressed.

The second point assumes that the Beth Din did have power to make the order. If so, there is no reason, in my judgment, why the claimant should be disentitled from having the award enforced. It is not the function of the court at the stage of giving permission to enforce an award to decide who has won and who has lost. That is the function of the arbitral Tribunal. The court's function is to give aid to the arbitration process.

So far as the costs order is concerned, as a matter of principle it was within the judge's discretion and no ground has been shown for interfering with the judge's discretion. Accordingly, I conclude that the grounds of appeal are not sufficiently strong to overcome the obstacles to the grant of relief from sanctions in CPR Part 3.9. As I have said, the real cause of alarm is the size of the costs bill. The claimants have put in a costs schedule of over £20,000. An application for permission to enforce the award should be a summary procedure. At the hearing on 8 April 2005 when the judge was told that the costs then stood at £16,000, he himself said that nothing like that would be recoverable; and he indicated that he would expect the recoverable costs not to exceed £4,500. That, however, is a matter for a detailed assessment of costs which will be carried out if the parties cannot agree by a costs judge in the Supreme Court Costs Office. It is not a matter with which this court is concerned.

For those reasons I refuse permission to appeal.