Osuji v Holmes & Ors

This is a renewed application for permission to appeal. It is a second appeal and so should not in the usual way be granted unless there is an important point of principle or practice or some other compelling reason why the court should hear the matter. The application was turned down by Pitchford LJ on paper.

The background is briefly as follows. The appellant obtained a High Court injunction from Sullivan J (as he was) restraining the respondents from enforcing a liability order that had been made by the Magistrates relating to unpaid rates. It appears that initially the order was obtained by way of telephone outside office hours, but subsequently it was renewed at an oral inter partes hearing.

The bailiffs who were seeking to enforce liability were apparently present at the telephone hearing and it appears they may have made submissions to the judge at that stage but they were not successful in resisting that interim injunction. The terms of the injunction were to restrain the defendants or any other person from taking action under the order until final determination of the claim or further order, and they were subject to the usual undertakings as to pay damages and, crucially, "UPON the Claimants undertaking to commence proceedings within 7 days of the date of this Order".

The skeleton argument that was relied upon by the claimants apparently stated that it was intended to initiate proceedings in the High Court. In fact, proceedings were initiated within the seven days but in the county court.

The claim included pleas of trespass and nuisance and in fact no specific injunction was sought. Subsequently the claimant decided to discontinue the claim. It was alleged that was for purely commercial reasons. A notice of discontinuance was served. No permission to discontinue was obtained from the court. The notice of discontinuance was conditional on there being no order as to costs.

The third defendant took the point that the claimant could not discontinue without obtaining permission from the court. This is based on the fact that under CPR Rule 38.2(2)(a) a claimant must obtain permission of the court if he wishes to discontinue all or part of a claim in relation to which (1) the court has granted an interim injunction and (2) any party has given an undertaking to the court.

In fact, the third defendant obtained a default costs certificate from the county court without permission to discontinue being given by the court. The claimant now contends that the certificate is invalid and ineffective because although the claimant had sought to discontinue without the consent of the court it could not do so. Its contention is that CPR 38.2(2)(a) applies. The submission is that there has been no lawful discontinuance, therefore, any costs orders or certificates made pursuant to that invalid discontinuance cannot stand.

The application to set aside the default costs certificate issued to the third defendant was first considered by District Judge Lightman and on appeal by His Honour Judge Bailey, both of whom held that in the circumstances no consent of the court was required to effect a lawful discontinuance, essentially on the basis that the proceedings should have been pursued in the High Court under the terms of the order made by Sullivan J and they were pursued in the county court. In those circumstances it was concluded that CPR 38.2(2) did not apply.

I see considerable force in the observations made by the judges in those two decisions but there does not seem to be any clear authority on this question, namely whether permission to discontinue is required where the injunction is obtained in the High Court and proceedings are initiated in county court in circumstances where the terms of the injunction itself merely require proceedings to be undertaken within seven days without specifically identifying where those proceedings should be commenced.

I have assumed that the validity of the original Magistrates’ order was still in dispute and I am told by counsel on instructions that it is, although at one point it was suggested that the order might now have been complied with. I also have concerns whether the sums involved in this case merit this matter going to a full hearing. But in the end I have concluded that there is a point of principle which does not seem to have been determined by a court and that if he wishes to take the risk of pursuing it and paying costs on this appeal, the applicant before me should have the right to do so.