In  Gama Aviation (UK) Ltd v Taleveras Petroleum Trading DMCC [2019] EWCA Civ 119 the Court of Appeal overturned a first instance decision where a summary judgment application was adjourned on terms that the defendant provided security for costs.  The defendant had served its witness evidence late. The judge ordered that the statement could only be admitted in evidence if £1 million security were provided. This approach did not find favour with the Court of Appeal.


The claimant sought summary judgment in a claim for services provided in relation to a plane.  The claimant applied for summary judgment. The defendant served its witness evidence in response late and applied for permission to rely on late service.

The judge, at the summary judgment application, made an order that the defendant could rely on the witness statement if it provided security for costs of £1 million.

The defendant appealed that order to the Court of Appeal.


The Court of Appeal held the order made erred in principle.
  1. In the present case the claimant had given no prior notice that it would seek a conditional order, either as an alternative to its summary judgment application or as a condition of the defendant being allowed to rely on the witness statement of Mr School. That was not in fact the claimant’s position. Rather its position was that the statement should not be admitted. The suggestion that a conditional order might be appropriate came from the judge in the course of the hearing. Although it is fair to say that it would not have been difficult for those acting for the defendant to predict that such a suggestion might be canvassed, it would not be appropriate in the light of Anglo-Eastern Trust Ltd v Kermanshahchi to criticise the defendant for not having addressed that possibility in its evidence served prior to the hearing.
  2. Once the suggestion was made, however, it was incumbent on the judge to give the defendant a reasonable opportunity to explain (if it wished to do so) why it would be unable to comply with such a condition. Unfortunately the judge did not do so. It was not reasonable to expect Ms Wilmot-Smith to be pre-armed with evidence to discharge the burden upon the defendant immediately the point was raised. It is apparent that she sought and obtained prompt instructions as best she could and that those instructions were to the effect that the defendant was unable to make the payment and wished to have an opportunity to put appropriate evidence before the court. However, having already given judgment, the judge declined to give the defendant that opportunity.
  3. In those circumstances, where judgment had been given but no order had been sealed, there were two possible courses which the judge could have taken. He could have taken the course for which Ms Wilmot-Smith was contending, that is to say to proceed to hear the summary judgment application without admitting Mr School’s witness statement. Alternatively, if he wished to maintain his view that the appropriate order was to admit the witness statement and adjourn the summary judgment application on conditions, he should have given the defendant an opportunity to adduce evidence of the resources available to it to comply with the proposed condition. Had he taken this latter course, it would have been reasonable to require the defendant to adduce such evidence in fairly short order, not only out of fairness to the claimant but also because while a defendant is not expected to adduce such evidence in advance of a summary judgment application where there is no notice that a conditional order will be sought, it is reasonable to expect it to be in a position to do so promptly if (as is not uncommon) such a possibility arises at the hearing. An adjournment would have been necessary, which would mean some delay, but this need not have been prolonged.
  4. In the event the judge took neither of these courses. In my judgment his failure to do so was an error of principle. …
Was the judge wrong to make the provision of security a condition for admitting the witness statement? – purpose and proportionality
    1. It would still be necessary, however, for the court to consider two matters. First, it would need to identify the purpose of imposing such a condition. The judge did this, saying that it was to enable the defendant to demonstrate that it was “genuine in its defence and … not simply playing for time”. It is apparent from the paragraphs of his judgment set out above that the judge formed (at the very least) a strong suspicion that the defendant was “simply playing for time”, that the application to admit the witness statement was “simply another attempt by the defendant to delay the inevitable”, and that it was wasting the court’s time. These were strong and repeated statements, giving the impression that the judge had formed a clear view of the merits adverse to the defendant.
    2. There are in my judgment two problems with this approach. The first is that it was not necessary for this purpose to require the defendant to pay into court, or provide security for, what was in effect over 90 per cent of the sum claimed. A lesser payment would have enabled the defendant to demonstrate its good faith to the extent that this was necessary. To require payment into court of something approaching the full sum claimed was in my judgment disproportionate.
    3. Second and more fundamentally, however, it is difficult to see how the judge could fairly conclude that the defendant was “simply playing for time” or attempting “to delay the inevitable” when the defendant had, albeit belatedly, set out its case on the merits and the judge had not yet heard submissions about it. Without giving the defendant an opportunity to address the merits of the summary judgment application, the judge was not in a position to reach a view that judgment for the claimant was “inevitable” or that the defendant was “playing for time”. At most he might conclude that this was a possibility, but it would be necessary to set against that the fact that the defendant had now set out detailed reasons in the witness statement and in Ms Wilmot-Smith’s skeleton argument to say why it had at least a real prospect of successfully defending the claim.
    4. For these reasons I consider that the judge was wrong to impose the condition of payment into court. He lost sight, in my judgment, of the caution which the court must exercise before making such an order.
Was the judge wrong to order that judgment would be entered against the defendant if the security was not provided?
  1. Second, and on the assumption that a payment condition was appropriate, the court would need to satisfy itself of the appropriateness of the proposed sanction for non-compliance, in particular that it represented a proportionate and effective means of achieving the purpose in question. Typically, the nature of the sanction will be obvious. An order giving permission to rely on a witness statement conditional on making a payment into court contains its own sanction. If the payment is not made, there will be no permission to rely on the statement. In the present case, however, the judge went further, allowing the claimant to enter judgment if the payment was not made. He did so at a stage when he had not heard submissions on the merits of the summary judgment application and it was therefore not open to him to reach any conclusion about it. Nor was it suggested that this was a case where the claimant would be entitled to a freezing order.
  2. The effect of this further sanction was that the defendant was worse off than if it had simply been refused permission to rely on the witness statement. In that event it would have been able to put forward the arguments which did not depend on any new factual evidence and which, as it happens, were set out in the witness statement. I say nothing as to whether those arguments would have been successful in defeating the summary judgment application, but they were arguments which the defendant was entitled to have the court consider. As it was, if the defendant did not make the payment, judgment would be entered against it notwithstanding the fact that it might have a good defence to the claim.
  3. In these circumstances the sanction imposed by the judge was disproportionate and for this reason also his order cannot stand.
  4. It is, moreover, relevant to consider briefly the nature of any judgment which would have been entered as a result of the defendant’s failure to make the payment into court or provide security. It would not be a judgment based on a consideration of the merits, which is what the claimant was seeking in order to avoid potential enforcement difficulties, but rather something in the nature of a default judgment, which the claimant had indicated by making its summary judgment application that it did not want. Although this is not decisive as the claimant could always change its mind, it does not appear that this point was considered at the hearing. It is a further indication that something went wrong.


The Court of Appeal held that there were no grounds for ordering a substantial payment as a condition to defend. The witness statement should be admitted and the application for summary judgment heard.

What order should this court now make?
    1. As the order made by the judge cannot stand, it is for this court to determine what order should now be made.
    2. I have concluded that the making of a conditional order requiring a substantial payment as a condition of reliance on the factual matters in the witness statement would not have the effect of stifling the defence of the action, but that in circumstances where the merits of the summary judgment application are for future determination, it is not appropriate to make a conditional order of the kind made by the judge, even in some lesser but still substantial sum. In the end this is simply a case where the defendant served late evidence which required an adjournment of the hearing. There is no reason to suppose that an adjournment of what was no more than a two hour hearing need have been particularly lengthy. Once the judge decided to admit the evidence, justice would have been served if the judge had ordered the defendant to pay the costs thrown away as a result of the adjournment. He could have assessed those costs summarily and made prompt payment a condition of the defendant’s entitlement to rely on the factual matters set out in the witness statement.
    3. That is the order which I would be inclined to make on this appeal. Unfortunately, however, the judge did not assess the costs thrown away as a result of the adjournment and we do not have the material with which to do so. We have been provided with the claimant’s schedule of costs for the summary judgment application which shows that its total costs incurred on the application amounted to some £43,000. Many of those costs, however, will not be wasted as a result of the adjournment as (for example) such matters as the preparation of evidence and of a skeleton argument will not need to be repeated. Any attempt by us to assess the wasted costs would be little more than guesswork although, in any event, the figure will be modest.
  1. I have throughout this judgment kept well in mind that the order appealed from is a discretionary case management decision with which this court should not interfere in the absence of some error of law or principle by the judge. In my judgment, however, there was such an error for the reasons which I have explained.
  2. In the result I would allow the appeal by setting aside that part of the judge’s order which required the defendant to pay £1 million into court or to provide security in a like sum and provided that if the defendant failed to do so, there would be judgment for the claimant. I would substitute an order that the defendant has permission to rely on the witness statement of Mr School. The remaining case management directions given by the judge will stand although the claimant will now need longer to file any responsive evidence. Such evidence should be served within 21 days after hand down of this judgment. I would order that the defendant pay the claimant’s costs thrown away as a result of the adjournment, but in the absence of any material with which to assess those costs I would not make this a condition of the defendant’s reliance on the witness statement. For the avoidance of doubt and because this was canvassed at the hearing, I see no good reason why the defendant should not be permitted to refer to the Defence which it has served.