Mirza v Lewin: High Court limits scope of stay pending late appeal bid

When a litigant loses comprehensively at trial and is then hit with a seven-figure interim costs order, the temptation to deploy every available procedural lever to delay payment is understandable. The High Court's latest ruling in the long-running dispute between Camran Mirza and the Part 20 Defendants, Mark Lewin and his fellow directors, offers a useful illustration of just how far that strategy can be stretched, and where it runs out of road.

Mr Justice Thompsell, who handed down the substantive judgement in the underlying claim last summer, was asked to deal with a cluster of enforcement issues: two applications to stay execution of the £1.3 million interim costs order, an application to set aside an order requiring Mr Mirza to be examined as to his means, and the Directors' applications for charging orders over his property and securities.

The most interesting feature of the judgement is not the eventual outcome, which was largely a win for the Directors, but the judge's handling of his own position. Mr Mirza's case relied heavily on the prospect that the Court of Appeal might later find the original trial to have been procedurally unfair, a finding which could in theory unravel the costs order itself. Thompsell J was understandably wary of being asked to assess the likely success of an appeal centred on the fairness of his own trial management. Counsel for the Directors resolved this neatly by conceding, for the purposes of this hearing only, that the procedural unfairness argument should be assumed to have a real prospect of success. That concession allowed the judge to proceed without descending into an exercise that risked looking like marking his own homework, while reserving the substantive question entirely for the Court of Appeal.

On the financial hardship arguments, the judgement is notably unsentimental. Mr Mirza's evidence about his cash position was found wanting, not least because it omitted his own previously stated living expenses and his liabilities for funding the appeal. The judge accepted that meeting the costs order would likely require selling interests in the Walpole Court development, and that this could be commercially disadvantageous given the terms of the Al Rayan Murabaha facility. But disadvantage alone does not amount to the "special circumstances" required under CPR 83.7. Citing Recovery Partners v Rukhadze, the court asked whether a stay would actually produce a better outcome later, rather than simply deferring the problem. On the evidence, it would not.

Where Mr Mirza did succeed, narrowly, was on the procedural fairness point itself. The judge accepted that if an appeal against the Part 20 Claim were actually on foot, a stay would follow under the established balance of injustice test from Hammond Suddard. The difficulty was that no such appeal exists, Mr Mirza having chosen not to appeal that part of the decision when he had the chance. Rather than shutting the door entirely, Thompsell J granted a short stay, just one week, to allow Mr Mirza to seek late permission to appeal the Part 20 Claim specifically on procedural unfairness grounds. If that application is made, the stay continues until the Court of Appeal rules on permission; if not, enforcement proceeds.

The charging order applications were adjourned within the same general stay, largely because triggering an Event of Default under the Facility raised third party prejudice issues that had not been properly argued. The practical effect is a holding pattern, but one with a clear and short fuse, that puts the onus squarely back on Mr Mirza to act.