Oscar Trustee applied to the Court of Appeal for leave to appeal to the Privy Council (the Leave Application). Before the Leave Application was heard, Oscar Trustee, without any reasonable excuse, had breached seven costs orders which had been made against it in favour of MBS. As a result, MBS applied to the Court of Appeal for an unless order staying the Leave Application until Oscar Trustee had paid all its outstanding costs (the Unless Order Application).

The Unless Order Application was rare and unusual as it had been made not where a party was seeking permission to appeal to the Court of Appeal but rather to the Privy Council where such applications are governed, not by the Civil Procedure Rules, but by the Virgin Islands (Appeals to the Privy Council) Order 1967 (the Privy Council Order).

Oscar Trustee argued that the Court of Appeal had no jurisdiction to impose conditions on the Leave Application except for those prescribed by section 5 of the Privy Council Order. The Court of Appeal stated that it was settled in Danone Asia Pte Limited et al v Golden Dynasty Enterprise Limited et al that the court has and always retains a residual inherent jurisdiction to make orders aimed at preventing an abuse of process. This power includes staying an application for leave to appeal on such conditions as the court deems fit as recognised in John v Colonial Life Insurance Company.

In rejecting Oscar Trustee’s argument, the court considered that section 5 of the Privy Council Order was not engaged as it was the Unless Order Application and not the Leave Application that was before it. As a result, the court could exercise its inherent powers to stay the Leave Application pending compliance with all outstanding costs orders. Despite the Privy Council Order, the court retained its residual power to ensure that no injustice of unfairness was caused by one party to another in proceedings before the court.

This decision confirms that the Court of Appeal has extensive inherent powers which can be exercised in appropriate circumstances to police its orders and prevent an abuse of process.

This is the first of a two part blog series. The second part will deal with the factors the court will consider in deciding whether to make a debarring order against a defaulting party to ensure compliance with its orders.

Harneys acts for MBS.