Health and Home Limited & Anor v Elite Property Holdings Limited & Ors [2026] EWCA Civ 933

[2026] EWCA Civ 933Case No CA-2025-002168
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE, BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES, INSOLVENCY AND COMPANIES LIST (ChD)
David Mohyuddin KC sitting as a Deputy High Court Judge
[2026] EWHC
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 23 July 2026
Before
LADY JUSTICE KINGLORD JUSTICE ARNOLDLADY JUSTICE MAY
Between
HEALTH AND HOME LIMITED (IN LIQUIDATION)Claimants/ANTONY NYGATE AND SHANE CROOKS (AS JOINT LIQUIDATORS)Respondents(1) ELITE PROPERTY HOLDINGS LIMITEDDefendants(2) ANDREAS STAVRINIDESDefendant(3) ANTHONY STAVRINIDESDefendant(4) MARIA CHRISTOFOROUDefendant(5) HEALTH AND HOME (ESSEX) LIMITEDDefendantDECOLACE PROPERTIES LIMITEDThird Party/Appellant
Clive Wolman (instructed by SBP Law) for AppellantMatthew McGhee (instructed by Simmons & Simmons LLP) for RespondentsHearing Hearing date : 24 June 2026
Approved JudgmentThis judgment was handed down remotely at 10.30am on 23 July 2026 by circulation to the parties or their representatives by e-mail and by release to the National Archives..............................

Introduction

[1]The principal question raised by this appeal is: what is a trial? As with many questions of this nature, the answer depends on the purpose for which the question is being asked. As will appear, the case is an object lesson in the need for clarity and precision when drafting case management orders.[2]The appeal is brought by the Third Party (“Decolace”), with permission granted by Falk LJ, against an order made by David Mohyuddin KC sitting as Deputy High Court Judge on 19 June 2025 dismissing an application by Decolace for a retrospective extension of time to file and serve a witness statement and associated disclosure documents and (if necessary) relief from sanction for the reasons given by the judge in his judgment of the same date (no neutral citation number).

Background

[3]Decolace, the First Claimant (“HHL”), the First Defendant (“Elite”) and the Fifth Defendant (“HHEL”) were all at one time part of an informal group of companies and trusts. The Second Defendant (“Mr Stavrinides”) was the driving force behind the group and had effective control over its UK affairs. HHL entered administration in 2013 and liquidation in 2015, and the Second and Third Claimants are its liquidators.[4]In September 2021 the Claimants brought various claims, primarily under the Insolvency Act 1986, against the Defendants (“the Main Claim”). There was also a counterclaim by HHEL. The trial took place before ICC Judge Greenwood in late October 2024. Judgment was reserved.[5]On 1 November 2024 Decolace applied to His Majesty’s Land Registry (“HMLR”) to register a transfer of title into its name of 11 UK properties owned by Elite. These properties appear to be the only substantial assets of the Defendants.[6]On discovering this, the Claimants applied within the Insolvency Act proceedings for a freezing order against Elite. Rajah J granted the order until 18 November 2024. At the same time the Claimants applied for and obtained an ancillary order directing HMLR to suspend registration of Decolace’s application.[7]On 18 November 2024 Richard Spearman KC sitting as a Deputy High Court Judge continued the freezing order against Elite until further order. At the same time the Claimants applied for and obtained a further ancillary order directing HMLR to register the freezing order in priority to Decolace’s application.[8]In addition Mr Spearman KC made a third order joining Decolace to the proceedings pursuant to an application made by Decolace on 12 November 2024 which asserted that:(i) Elite had agreed to sell the 11 properties in question to Decolace in March 2019 for a total consideration of £16.75 million, of which £1.3 million was paid as a deposit, as part of a cross-border intra-group reorganisation for tax reasons;(ii) the sale was competed on 31 March 2020 by a execution of a deed and declaration of trust under which Elite held the properties on a bare trust for Decolace; and(iii) a combination of circumstances meant that Decolace did not decide to register its title to the properties until 2024. At this stage, and for some time thereafter, Decolace acted in person with the assistance of direct access counsel.[9]The order for joinder required Decolace to file and serve evidence as to these transactions by 2 December 2024. Decolace subsequently filed and served two witness statements of Mr Stavrinides dated 29 November 2024 and 4 December 2024, a witness statement of Ferit Bala (a director of Decolace) dated 29 November 2024 and a witness statement of Maria Christoforou (a director of Decolace and of the Fourth Defendant) dated 1 December 2024.[10]On 4 December 2024 Decolace applied by application notice under CPR Part 23 to set aside or vary the order made by Rajah J against HMLR on 4 November 2024. The first hearing of Decolace’s application was on 13 January 2025. Lance Ashworth KC sitting as a Deputy High Court Judge took the view that Decolace’s application notice was defective as drafted. He therefore gave Decolace an opportunity to formulate amendments to remedy the defects and made provision for the Claimants to say whether or not they consented to the amendments, failing which he would decide whether or not to permit them. He also gave directions for the determination of the application. I shall refer to his order dated 13 January 2025 as “the Directions Order”.[11]The key paragraphs of the Directions Order for present purposes were as follows:
“6. The Third Party shall file and serve Points of Claim in support of the Application by 4pm on the day which is 21 days from either the Consent Date or, if relevant, the date on which the Judge determines whether or not to permit the Third Party’s proposed amendments …. 7. The Claimants shall file and serve Points of Defence by 4pm on the day which is 21 days after service of the Points of Claim. 8. The Third Party shall give standard disclosure and provide to the Claimants formal disclosure statements and copies of all the disclosed documents, except of those for which privilege is asserted, by 4pm on the day which is 14 days after the service of the Points of Defence. The copies shall be in their native format insofar as they are available in that format, with the Third Party to provide an explanation as to why the native form of any document is not available. 9. Disclosure shall be limited to all documents on which the Third Party relies and any documents relating to any of the following matters: [various matters were listed at (a)-(j)]. 10. Witness statements, prepared in accordance with the Civil Procedure Practice Direction 57AC, are to be exchanged between the Claimants, on the one part, and the Third Party, on the other, by 4pm on the day which is 28 days after service of the Points of Defence. 11. The final hearing for the determination of this Application, which shall include the live evidence of witnesses, shall be listed for a hearing before a High Court Judge or a Deputy High Court Judge to start on the first available date after 13th May 2025 and within a window closing on 30th June 2025. The hearing shall be listed for three days with a further day made available for the judge’s pre-reading. … 15. There shall be liberty to apply in respect of any matters arising from this Order, including the possible adduction of expert evidence.”
[12]Decolace subsequently amended its application notice with the Claimants’ consent and Mr Ashworth KC’s approval.[13]On 31 January 2025 the Chancery Listing Office issued a “notice of hearing date” stating that the “hearing” was listed in a five-day window from 16 June 2025.[14]On 3 March 2025 Decolace served Points of Claim which claimed(1) the setting aside or variation of both the orders against HMLR,(2) damages to be assessed and(3) interest. On 24 March 2025 the Claimants served Points of Defence which took issue with large parts of Decolace’s case. For example, the Claimants did not admit the authenticity of the purchase contract relied upon by Decolace and required Decolace to prove it, denied that it had been executed and averred that, even if it was authentic and had been executed, it was a sham.[15]On 9 April 2025 ICC Judge Greenwood handed down his judgment in the Main Claim ([2025] EWHC 839 (Ch)), finding that the Claimants’ claims against Elite substantially succeeded. As at 31 December 2025, Elite’s liability under the judgment exceeded £4.3 million.[16]On 10 April 2025 Decolace purported to give disclosure in accordance with paragraphs 8 and 9 of the Directions Order. On the same date solicitors came on the record for Decolace.[17]At that stage the effect of paragraph 10 of the Directions Order was that witness statements were due to be served on 21 April 2025. Decolace’s solicitors made four successive requests for an extension of time for serving witness statements, each of which was consented to by the Claimants. The last extension expired on 3 June 2025.[18]On 2 June 2025 the Claimants’ solicitors served a notice to prove in respect of 21 documents disclosed by Decolace. On 3 June 2025 Decolace’s solicitors wrote to the Claimants’ solicitors stating that they needed time to attend to this, and that service of witness statements that day had therefore become impossible. No extension of time was requested. On 6 June 2025 the Claimants’ solicitors replied noting that the deadline for service of witness statements had passed and reserving the Claimants’ rights.[19]On 11 June 2025 Decolace’s solicitors served evidence, and additional disclosure documents, out of time. No application for an extension of time for service of the late evidence and documents was made. The late evidence and documents comprised:(a) the fifteenth witness statement of Mr Stavrinides (“Stavrinides 15”);(b) some of the documents that were exhibited to that witness statement, including a witness statement from a new witness; and(c) some of the documents that were included in an updated disclosure list. There is an overlap between the documentary evidence in categories (b) and (c).[20]On 12 June 2015, the date on which skeleton arguments were due, Decolace’s solicitors came off the record. Decolace reverted to acting in person represented by direct access counsel. Counsel for the Claimants filed the Claimants’ skeleton argument on 12 June 2025. 14 and 15 June 2025 were a weekend. Counsel for Decolace filed Decolace’s skeleton argument on 16 June 2025.[21]On 17 June 2025 the judge had a reading day. 18 June 2025 was the first of three scheduled hearing days. After dealing with some other matters, the judge started to consider with counsel the consequences of Decolace’s non-compliance with the deadline of 3 June 2025. The judge indicated that he considered that Decolace should make an application for a retrospective extension of time. On 19 June 2025 Decolace served an application notice seeking the following relief: “1. To retrospectively extend time for filing and serving [Stavrinides 15] and all the associated disclosure documents from June 3 to June 11 2025 and 2. To be granted relief from any sanctions under CPR 3.9”.[22]It is not entirely clear what was meant by “all the associated disclosure documents”. On the face of it, that would appear to mean category (b) set out in paragraph 19 above; but that would have the odd result that there was no application in respect of category (c). I presume that that was not the intention. The application was supported by a sixteenth witness statement of Mr Stavrinides (“Stavrinides 16”) and a skeleton argument. After hearing argument, the judge refused the application. As a result, Decolace was forced to withdraw its substantive application.

Relevant rules of the Civil Procedure Rules

[23]Rule 1.4 provides, so far as relevant:
“(1) The court must further the overriding objective by actively managing cases. (2) Active case management includes – … (c) deciding promptly which issues need full investigation and trial and accordingly disposing summarily of the others; …” … (c) deciding promptly which issues need full investigation and trial and accordingly disposing summarily of the others; …”
[24]Rule 2.3(1) provides, so far as relevant:
“In these Rules – … ‘statement of case’ – (a) means a claim form, particulars of claim where these are not included in a claim form, defence, counterclaim or other additional claim, or reply to defence; and (b) includes any further information given in relation to them voluntarily or by court order under rule 18.1; …”
[25]Rule 3.7A1 provides, so far as relevant: “(1) In this rule and in rule 3.7AA—(a) ‘Fees Order 2008’ means the Civil Proceedings Fees Order 2008;(b) ‘fee notice’ means a notice of— (i) the amount of a trial fee; (ii) the trial fee payment date; and (iii) the consequences of non-payment of the trial fee;(c) ‘trial date’ means the date of the trial in relation to which the trial fee is payable, and if the trial in relation to which the trial fee is payable is scheduled to commence during the course of a specified period, ‘trial date’ means the date of the Monday of the first week of that specified period;(d) ‘trial fee’ means fee 2.1 set out in the Table in Schedule 1 to the Fees Order 2008 3 and payable for the trial of a case on the multi-track, intermediate track, fast track or small claims track;(e) ‘trial fee payment date’ means the date by which the trial fee must be paid, calculated in accordance with the Fees Order 2008;(f) ‘revised trial fee payment date’ means, if an application for fee remission is denied in whole or part, the revised date by which the fee or part of it is to be paid, calculated in accordance with the Fees Order 2008. (2) This rule applies in relation to trial fees where that fee is to be paid by the claimant and the court notifies the parties in writing of the trial date. (3) When the court notifies the parties in writing of the trial date, the court must also send a fee notice to the claimant. (4) The fee notice may be contained in the same document as the notice of trial date, or may be a separate document. … (7) If— (a) the claimant has had notice in accordance with this rule to pay the trial fee; (b) the claimant has not applied to have the trial fee remitted in whole or part; and (c) the trial fee has not been paid on or before the trial fee payment date, the claim will automatically be struck out without further order of the court, and unless the court orders otherwise, the claimant will be liable for the defendant’s costs in accordance with rule 44.9(1). …” (a) ‘Fees Order 2008’ means the Civil Proceedings Fees Order 2008; (b) ‘fee notice’ means a notice of— (i) the amount of a trial fee; (ii) the trial fee payment date; and (iii) the consequences of non-payment of the trial fee; (c) ‘trial date’ means the date of the trial in relation to which the trial fee is payable, and if the trial in relation to which the trial fee is payable is scheduled to commence during the course of a specified period, ‘trial date’ means the date of the Monday of the first week of that specified period; (d) ‘trial fee’ means fee 2.1 set out in the Table in Schedule 1 to the Fees Order 2008 3 and payable for the trial of a case on the multi-track, intermediate track, fast track or small claims track; (e) ‘trial fee payment date’ means the date by which the trial fee must be paid, calculated in accordance with the Fees Order 2008; (f) ‘revised trial fee payment date’ means, if an application for fee remission is denied in whole or part, the revised date by which the fee or part of it is to be paid, calculated in accordance with the Fees Order 2008. (a) the claimant has had notice in accordance with this rule to pay the trial fee; (b) the claimant has not applied to have the trial fee remitted in whole or part; and (c) the trial fee has not been paid on or before the trial fee payment date, the claim will automatically be struck out without further order of the court, and unless the court orders otherwise, the claimant will be liable for the defendant’s costs in accordance with rule 44.9(1).[26]Rules 3.8 and 3.9 provide, so far as relevant: “3.8 Sanctions have effect unless defaulting party obtains relief(1) Where a party has failed to comply with a rule, practice direction or court order, any sanction for failure to comply imposed by the rule, practice direction or court order has effect unless the party in default applies for and obtains relief from the sanction. .. 3.9 Relief from sanctions (1) On an application for relief from any sanction imposed for a failure to comply with any rule, practice direction or court order, the court will consider all the circumstances of the case, so as to enable it to deal justly with the application, including the need— (a) for litigation to be conducted efficiently and at proportionate cost; and (b) to enforce compliance with rules, practice directions and orders.(2) An application for relief must be supported by evidence.” (a) for litigation to be conducted efficiently and at proportionate cost; and (b) to enforce compliance with rules, practice directions and orders.[27]Part 31 includes the following rules, so far as relevant:
“31.6 Standard disclosure – what documents are to be disclosed Standard disclosure requires a party to disclose only– (a) the documents on which he relies; and (b) the documents which – (i) adversely affect his own case; (ii) adversely affect another party’s case; or (iii) support another party’s case; and (c) the documents which he is required to disclose by a relevant practice direction. … 31.10 Procedure for standard disclosure (1) The procedure for standard disclosure is as follows. (2) Each party must make and serve on every other party, a list of documents in the relevant practice form. (3) The list must identify the documents in a convenient order and manner and as concisely as possible. … (5) The list must include a disclosure statement. (6) A disclosure statement is a statement made by the party disclosing the documents – (a) setting out the extent of the search that has been made to locate documents which he is required to disclose; (b) certifying that he understands the duty to disclose documents; and (c) certifying that to the best of his knowledge he has carried out that duty. … 31.21 Consequence of failure to disclose documents or permit inspection A party may not rely on any document which he fails to disclose or in respect of which he fails to permit inspection unless the court gives permission.”
Standard disclosure requires a party to disclose only– (i) adversely affect his own case; (ii) adversely affect another party’s case; or (iii) support another party’s case; and (a) setting out the extent of the search that has been made to locate documents which he is required to disclose; (b) certifying that he understands the duty to disclose documents; and (c) certifying that to the best of his knowledge he has carried out that duty.

Standard disclosure requires a party to disclose only–

[28]Part 32 includes the following rules, so far as relevant:
“32.2 Evidence of witnesses – general rule (1) The general rule is that any fact which needs to be proved by the evidence of witnesses is to be proved – (a) at trial, by their oral evidence given in public; and (b) at any other hearing, by their evidence in writing. (2) This is subject – (a) to any provision to the contrary contained in these Rules or elsewhere; or (b) to any order of the court. … 32.4 Requirement to serve witness statements for use at trial (1) A witness statement is a written statement signed by a person which contains the evidence which that person would be allowed to give orally. (2) The court will order a party to serve on the other parties any witness statement of the oral evidence which the party serving the statement intends to rely on in relation to any issues of fact to be decided at the trial. (3) The court may give directions as to – (a) the order in which witness statements are to be served; and (b) whether or not the witness statements are to be filed. 32.5 Use at trial of witness statements which have been served (1) If – (a) a party has served a witness statement; and (b) he wishes to rely at trial on the evidence of the witness who made the statement, he must call the witness to give oral evidence unless the court orders otherwise or he puts the statement in as hearsay evidence. … 32.6 Evidence in proceedings other than at trial (1) Subject to paragraph (2), the general rule is that evidence at hearings other than the trial is to be by witness statement unless the court, a practice direction or any other enactment requires otherwise. (2) At hearings other than the trial, a party may, rely on the matters set out in – (a) his statement of case; or (b) his application notice, if the statement of case or application notice is verified by a statement of truth. 32.7 Order for cross-examination (1) Where, at a hearing other than the trial, evidence is given in writing, any party may apply to the court for permission to cross-examine the person giving the evidence. (2) If the court gives permission under paragraph (1) but the person in question does not attend as required by the order, his evidence may not be used unless the court gives permission. 32.10 Consequence of failure to serve witness statement or summary If a witness statement or a witness summary for use at trial is not served in respect of an intended witness within the time specified by the court, then the witness may not be called to give oral evidence unless the court gives permission. … 32.19 Notice to admit or produce documents (1) A party shall be deemed to admit the authenticity of a document disclosed to him under Part 31 (disclosure and inspection of documents) unless he serves notice that he wishes the document to be proved at trial. (2) A notice to prove a document must be served – (a) by the latest date for serving witness statements; or (b) within 7 days of disclosure of the document, whichever is later.” (a) at trial, by their oral evidence given in public; and (b) at any other hearing, by their evidence in writing. (a) to any provision to the contrary contained in these Rules or elsewhere; or (b) to any order of the court. (a) the order in which witness statements are to be served; and (b) whether or not the witness statements are to be filed. (a) a party has served a witness statement; and (b) he wishes to rely at trial on the evidence of the witness who made the statement, he must call the witness to give oral evidence unless the court orders otherwise or he puts the statement in as hearsay evidence. (a) his statement of case; or (b) his application notice, if the statement of case or application notice is verified by a statement of truth. (a) by the latest date for serving witness statements; or (b) within 7 days of disclosure of the document, whichever is later.”
[29]Rule 36.3 provides, so far as relevant:
“In this Section— … (c) a ‘trial’ means any trial in a case whether it is a trial of all issues or a trial of liability, quantum or some other issue in the case; …”
[30]Rule 57A.3 provides:
“These Rules and their practice directions apply to claims in the Business and Property Courts unless this Part or a practice direction provides otherwise.”
[31]Practice Direction 57AC provides, so far as relevant:
“1.1 This Practice Direction is made under rule 57A.3. It concerns witness statements for use at trials in the Business and Property Courts …. For the avoidance of doubt, nothing in this Practice Direction affects— (1) affidavit evidence, (2) evidence in a witness statement other than a trial witness statement, or (3) the general powers of the court under rule 32.1, to control, exclude or limit factual witness evidence. 1.2 In this Practice Direction (including the Appendix) – … ‘trial’ means a final trial hearing, whether of all issues or of only one or some particular issues, in proceedings (except as provided in paragraph 1.3 below) in any of the Business and Property Courts under CPR Part 7 or Part 8 or upon an unfair prejudice petition under section 994 of the Companies Act 2006 or a contributory’s just and equitable winding up petition under section 122(1)(g) of the Insolvency Act 1986, ‘trial witness statement’ means a witness statement that is served pursuant to an order made under rule 32.4(2), or pursuant to rule 8.5 or an order made under rule 8.6(1)(b), or that is prepared for the trial of an unfair prejudice petition or a contributory’s just and equitable winding up petition, including supplemental or reply witness statements where allowed by the court, and … 1.3 This Practice Direction does not apply to the following proceedings, unless the court at any stage directs that it is to apply: … (3) an application for an order under the Insolvency Act 1986 (other than a contributory’s just and equitable winding up petition under s.122(1)(g) of that Act), under the Insolvency (England and Wales) Rules 2016, under any enactment or statutory instrument providing for a special insolvency or administration regime, and under Schedule 2 to The Cross-Border Insolvency Regulations 2006; …” (1) affidavit evidence, (2) evidence in a witness statement other than a trial witness statement, or (3) the general powers of the court under rule 32.1, to control, exclude or limit factual witness evidence. … ‘trial’ means a final trial hearing, whether of all issues or of only one or some particular issues, in proceedings (except as provided in paragraph 1.3 below) in any of the Business and Property Courts under CPR Part 7 or Part 8 or upon an unfair prejudice petition under section 994 of the Companies Act 2006 or a contributory’s just and equitable winding up petition under section 122(1)(g) of the Insolvency Act 1986, ‘trial witness statement’ means a witness statement that is served pursuant to an order made under rule 32.4(2), or pursuant to rule 8.5 or an order made under rule 8.6(1)(b), or that is prepared for the trial of an unfair prejudice petition or a contributory’s just and equitable winding up petition, including supplemental or reply witness statements where allowed by the court, and … … (3) an application for an order under the Insolvency Act 1986 (other than a contributory’s just and equitable winding up petition under s.122(1)(g) of that Act), under the Insolvency (England and Wales) Rules 2016, under any enactment or statutory instrument providing for a special insolvency or administration regime, and under Schedule 2 to The Cross-Border Insolvency Regulations 2006; …”

Relief from sanction

[32]As is well known, an application for relief from sanction under rule 3.9 must be determined by applying the three-stage approach laid down in Denton v T. H. White Ltd [2014] EWHC 1537, [2014] 1 WLR 3298. The first stage is to assess the seriousness and significance of the failure to comply with the relevant rule, practice direction or order. The second stage is to consider why the default occurred. The third stage is to evaluate all the circumstances of the case, including the two specific factors set out in rule 3.9(1)(a) and (b).[33]It is common ground that rule 32.10 creates a sanction in the event of non-compliance, relief from which requires an application under rule 3.9: see Chartwell Estate Agents Ltd v Fergies Properties SA [2014] EWCA Civ 506, [2014] 3 Costs LR 588.[34]It is well established that some rules which do not expressly impose a sanction in the event of non-compliance nevertheless impliedly do so, relief from which requires an application under rule 3.9. The leading example of this is the time limit for service of an appellant’s notice: see R (Hysaj) v Secretary of State for the Home Department [2014] EWCA Civ 1633, [2015] 1 WLR 2472.[35]If no sanction is expressly or impliedly imposed by a rule, practice direction or order in the event of non-compliance, then relief from sanction under rule 3.9 is not required. In considering a retrospective application for an extension of a time limit which has been missed where there is no express or implied sanction, it can nevertheless be said that the “ethos” of Denton (meaning a greater emphasis on compliance and the need for efficient conduct of litigation at proportionate cost) applies: see Yesss (A) Electrical Ltd v Warren [2024] EWCA Civ 14 at [25], [31] and [32] (Birss LJ). The key difference is that, unlike an application for relief from sanction, such an application should not be approached on the basis that the starting point is that the sanction has been properly imposed and complies with the overriding objective: see Viegas v Cutrale [2024] EWCA Civ 1122, [2025] 1 WLR 1467 at [58] (Newey LJ).[36]The judge gave a careful and detailed extempore judgment running to 70 paragraphs. His reasoning may be summarised as follows: i) The hearing directed by the Directions Order was a trial. Accordingly, rule 32.10 applied. It followed that Decolace needed relief from the sanction imposed by rule 32.10. ii) Even if the hearing was not a trial, and so Decolace did not require relief from sanction, it was necessary to consider the same factors on Decolace’s application for relief in the form of a retrospective extension of time. iii) Neither Stavrinides 16 nor Decolace’s skeleton argument addressed the three-stage test laid down in Denton. For that reason alone the application ought to be dismissed. The judge nevertheless considered those stages. iv) The breach was both serious and significant. A lengthy witness statement had been served out of time, very close to trial. v) There was no good explanation for this. vi) In considering all the circumstances of the case, it was relevant that Decolace should have made an in-time application for an extension, but had not done so, and no application had been issued until 19 June 2025. vii) It was proportionate to refuse relief from sanction. The Claimants and the court were entitled to expect Decolace either to serve its evidence in time or to apply for an extension of time. The Claimants ought to have proper time to consider Decolace’s factual case and they would be denied that if relief were granted. viii) If rule 32.10 did not apply, a retrospective extension of time for service of witness statements should be refused for similar reasons. ix) A retrospective extension of time for disclosure of documents should be refused for similar reasons.

Grounds of appeal

[37]Decolace has permission to appeal on the following grounds (permission having been refused on a number of other grounds).[38]Ground 1 is that the judge was wrong to classify the hearing directed by the Directions Order as a trial. He therefore was wrong to hold that rule 32.10 applied, and therefore was wrong to hold that Decolace required relief from sanction under rule 3.9.[39]Ground 2 is that the judge failed to apply the full range of case management powers available to him to address Decolace’s late service of its evidence. He ought to have considered alternative, more proportionate measures, such as adjourning the hearing on terms that Decolace paid the costs thrown away.[40]Ground 4 is that, as part of his reasoning for holding that the hearing was a trial, the judge was wrong to rely on the fact that the judgment would create finality and be res judicata.[41]Ground 6 is that, if the judge was wrong to classify the hearing as a trial, he was wrong effectively to impose an exclusionary sanction unless Decolace was granted relief from sanction.

Grounds 1 and 4: the hearing was not a trial

[42]Decolace contends that the hearing directed by the Directions Order was the final hearing of an application, not a trial.[43]The term “trial” is not generally defined in the CPR, although it can be seen that there are partial definitions for the purposes of Parts 36 Section I and PD57AC.[44]We were only referred to two authorities which have considered this question. The first is Forcelux Ltd v Binnie [2009] EWCA Civ 854, [2010] CP Rep 7. The first issue in that case was whether the first hearing of a possession claim under CPR rule 55.8 was a “trial” within the meaning of rule 39.3. This Court held that it was not for the reasons given by Warren J at [32]-[49].[45]As he explained, rule 55.8(1) gives the court two options:(a) to decide the claim, or(b) to give case management directions. Rule 55.8(2) indicates that, where the claim is genuinely disputed on grounds which appear to be substantial, case management directions should be given. If the first option is adopted, it can only be because the court considers that it is able to decide the case then and there. In an exceptional case, if the court has time and both sides are fully prepared, the court can conduct a hearing on the merits. Such a hearing could properly be called a trial. In the more usual case, the court, once satisfied that service has been effected, will consider whether the claim is genuinely disputed on grounds which appeared to be substantial, and if the court concludes that it is not, will make an order for possession.[46]As Warren J put it:
“36. I do not consider that such a process of determination and decision can sensibly be called a trial as a matter of the ordinary use of the word. Nor do I consider that it is been seen as a trial within Rule 39.3; the word is not to be given some special and wider meaning in the context of that Rule. Rather, it can be seen more as a summary procedure in the sense of a procedure carried out rapidly with the omission of most of the steps which in an ordinary case lead to trial. It also has a lot in common with a disposal hearing as referred to in the PD to Part 26, … which is clearly not a trial either in the ordinary sense of the word or in the context of the CPR. 37. Moreover, Rules 55.8(1) and (2) have something in common with Part 24 (summary judgment). … In neither case does the court try-out the issues on contested evidence with cross-examination to test each side’s case. Indeed, a defendant may simply have no hint of a defence at all so that the court can deal with the matter in a way which can perfectly be properly be described as summary and as not involving a trial. 38. That conclusion is supported, I consider, by Rule 1.4(2)(c) which contrasts issues which need full investigation and trial with those which can be disposed of summarily. A process of determination and decision such as I have been considering falls clearly, in my view, on the summary disposal, rather than full investigation and trial, side of the line.”
[47]The second is Pickard v Roberts [2016] EWHC 187 (Ch), [2016] BPIR 996. Again, the first issue in that case whether a hearing of an application by Mr Robert’s trustees in bankruptcy for a declaration that a property was beneficially owned by Mr and Mrs Roberts and consequential relief was a “trial” within the meaning of rule 39.3. The application had been listed for a two-day hearing and directions had been given for disclosure, witness statements and cross-examination. John Baldwin QC sitting as a Deputy High Court

Judge held that the hearing was a trial within rule 39.3 for the following reasons:

“32. In my view, the default position with respect to whether or not what takes place at a hearing can be properly described as a trial within CPR 39.3 depends on the context, depends upon the purpose of the hearing and upon the procedural orders which have been made leading up to the hearing, rather than upon the form of whatever has been used in order to get to that hearing. 33. A part of my reasoning is that trials, as distinct from interim hearings, lead to an order which carries with it finality and, if there is no appeal, the issue which has been determined will become res judicata and only in very unusual circumstances will the matter be re-opened. 34. Looking at the procedural history of this matter and at what happened on 26 February 2015, both parties had been through various procedural steps and been subject to various procedural orders so that the matter could be finally and properly and fairly determined and both parties thought the matter would be finally determined on that date. In those circumstances it seems to me that what was intended to take place on 26 February 2015 was, indeed, a trial within the meaning of rule 39.”
[48]In the present case it seems to me to be important to begin by focussing on the context in which the question arises. The question is not what constitutes a “trial” in some general sense, but what is a “trial” for the purposes of rule 32.10, so that the sanction imposed by that rule applies. The rationale for 32.10 is obvious: it is to enable the court to enforce time limits for service of witness statements, and thereby ensure orderly preparation for the “trial”. The question of what is a “trial” should be answered having regard to that rationale.[49]Approaching the question in that way, I consider that the judge was correct to hold that the hearing directed by the Directions Order, and subsequently scheduled for 18-20 June 2025, was a “trial” for the purposes of rule 32.10 for the following reasons.[50]First, it is common ground that Mr Baldwin QC was correct in Pickard v Roberts to say that the nature of the document which started the process which led to the hearing in question is not determinative. Counsel for Decolace nevertheless submitted that the fact that Decolace’s application was brought by an application notice under Part 23, rather than by a claim form under Part 7 or Part 8 or some other originating process, was a factor which pointed away from the hearing being a trial. I accept that application notices under Part 23 do not normally lead to trials, but there is nothing to preclude that procedural result in an appropriate case.[51]Secondly, there is the nature of the issues which were to be determined. These were issues relating to the beneficial ownership of the relevant properties, including various factual issues such as whether documents relied upon by Decolace were authentic and had been properly executed. The ultimate question was whether the properties were beneficially owned by Elite (as the Claimants contended) or by Decolace (as Decolace contended). That is a question as to substantive rights and liabilities.[52]Thirdly, although the Directions Order did not use the word “trial”, it did provide for “[t]he final hearing for the determination of” Decolace’s application. That hearing was intended finally to resolve the issue of beneficial ownership of the properties as between the Claimants and Decolace. The resulting judgment would therefore have had the force of res judicata.[53]Counsel for Decolace relied on the fact that, as is common ground, some persons with a potential interest in the properties, such as a mortgagee, had not been joined, and therefore would not be bound by the judgment. That is immaterial: the Claimants and Decolace (and their privies) would be bound by it. Counsel for Decolace also relied upon the fact that further disputes between the Claimants and Decolace could arise, for example if the Claimants were to bring an application under section 423 of the Insolvency Act (transactions defrauding creditors). That is equally immaterial: the Claimants and Decolace (and their privies) would remain bound by the judgment on this application.[54]More relevantly, Decolace contends that the judge was wrong to treat this as a factor pointing towards the hearing being a trial, because interim applications can in some circumstances lead to decisions which have the force of res judicata: see Spencer Bower and Handley: Res Judicata (6th edition) at 5.31. I accept that this factor is not determinative, but it is a pointer towards the hearing being a trial.[55]Fourthly, the Directions Order made procedural directions of the kind that are normally made in preparation for a trial: service of pleadings, disclosure of documents, exchange of witness statements and a hearing with “live evidence of witnesses”. I shall consider each of these in turn.[56]So far as the pleadings are concerned, the Directions Order required service of “Points of Claim” and “Points of Defence”. The reason for this is that proceedings under the Insolvency Act are generally not brought by way of Part 7 claim form, and so the procedural machinery which applies to claims brought in that way does not directly apply to insolvency proceedings. Counsel for Decolace submitted that such documents were not “statements of case” as defined in rule 2.3(1). That submission is supported by Jones v Richard Slade & Co Ltd [2022] EWHC 1968 (QB), [2023] 1 WLR 383 at [30] (Johnson J), but counsel for the Claimants questioned its correctness. Even if it is correct that such documents are not strictly statements of case, however, they perform precisely the same function, as Norris J explained in Re Coniston Hotel (Kent) LLP [2013] EWHC 93 (Ch), [2013] 2 BCLC 405 at [41]:
“… Counsel for the Applicants submitted that Points of Claim did not require the degree of definition or particularity that would be expected in Particulars of Claim in proceedings under CPR Part 7. I do not agree. In insolvency proceedings Points of Claim must set out concisely every fact necessary to establish the legal basis for the relief which is sought: concisely – but with the degree of particularity which will enable the Respondent fairly to understand the nature of the case he will have to meet at trial. It is not the function of the Points of Claim to set out the evidence by which those concisely stated particular facts will be proved at trial. That is the function of the witness statement. …”
[57]Turning to disclosure, paragraph 8 of the Directions Order required Decolace to give “standard disclosure” and provide “formal disclosure statements” in relation to each of the matters listed in paragraph 9. “Standard disclosure” is defined in rule 31.6. “Disclosure statements” are defined in rule 31.10(6). The obligations only applied to Decolace because the Claimants, being strangers to the transactions between Elite and Decolace, were unlikely to have any relevant documents in their possession, power or control. Decolace was required by the Directions Order to disclose (among other things) all documents adverse to its case that related to any of the listed matters.[58]As for witness statements, paragraph 10 of the Directions Order required these to be “prepared in accordance with [PD57AC]”. This order was made pursuant to paragraph 1.3(3) of PD57AC. Since PD57AC “concerns witness statements for use at trials”, in the words of paragraph 1.1, this is a strong indication that was what envisaged was a “trial”. This is reinforced by the fact that the witness statements served by Decolace in late November and early December 2024 were clearly not considered adequate for that purpose.[59]Finally, there is the provision in paragraph 10 of the Directions Order that the final hearing “shall include the live evidence of witnesses”. This is on any view poorly drafted, but as the Claimants contend it is clearly mandatory and not merely permissive. Although, as counsel for Decolace pointed out, it does not explicitly require the live of evidence of all witnesses, that must have been the intention. Thus the effect of the order, although this could and should have been more clearly spelt out, was that witnesses’ evidence would not be admitted unless they attended for cross-examination (or the court subsequently ordered otherwise). This is another strong indication that what was envisaged was a “trial” to which rules 32.2(1), 32.4 and 32.5(1) applied.[60]Although rule 32.7 enables an order to be made for cross-examination of a witness “at a hearing other than the trial”, it is common ground that there was no application under rule 32.7 before Mr Ashworth KC. Nor is there any reason to think that he made such an order of his own motion. Counsel for Decolace submitted that what Mr Ashworth KC had done was to make an order under rule 32.2(b). It is doubtful whether that power could be used to direct cross-examination of witnesses at a hearing other than a trial instead of rule 32.7, but in any event there is nothing in the Directions Order or the surrounding circumstances to suggest that Mr Ashworth KC did so.[61]All of these directions were clearly designed to provide for “full investigation and trial”, to use the words of rule 1.4(2)(c), of the question of beneficial ownership in order to enable the court finally to resolve that question. Furthermore, orderly preparation for that trial required compliance with the timetable laid down by the Directions Order, and in particular the time stipulated for exchange of witness statements (subject to agreed extensions).[62]Fifthly, two further small pointers towards the hearing being a trial are that paragraph 15 of the Directions Order envisaged that expert evidence might be required and that, otherwise, rule 32.19 would not apply despite authenticity of documents being a pleaded issue (and see paragraph 68 below) .[63]This leaves six other factors relied on by Decolace. The first is that there was no requirement to consider disclosure models or produce a disclosure review document in accordance with Practice Direction 57AD. This is insignificant, because paragraphs 8 and 9 avoided the need for those steps. What matters is that standard disclosure of relevant documents was ordered.[64]The second is that there was no reference in the Directions Order to rule 32.10. This is equally insignificant: rule 32.10 did not need to be referred to in order to have effect.[65]The third is that the Directions Order did not follow any of the standard direction order templates for trial. This again is insignificant. These templates are just that: useful templates. They do not have to be used, and it is not uncommon for bespoke directions for trial to be given.[66]The fourth, fifth and sixth factors can be taken together. The fourth is that no notice of trial date was issued by the court. The fifth is that no fee notice was issued by the court in accordance with rule 3.7A1 requiring the payment of a trial fee and specifying the deadline for payment. The sixth is that the hearing was listed in the cause list for 18 and 19 June 2025 as an “application”, not a “trial”. All three of these factors indicate that the court staff did not appreciate that the effect of the Directions Order was to direct a trial. That cannot affect the proper interpretation of the Directions Order.[67]These factors might have led Decolace to believe that there was no trial, and that belief might have been relied upon as in some way excusing its failure to comply with the extended deadline for service of its witness statements; but Stavrinides 16 said no such thing. To the contrary, Mr Stavrinides exhibited a chronology prepared by a partner in the firm of solicitors who acted for Decolace from 10 April 2024 to 10 June 2024 which includes the following entries: “10/04/2025 Dates received for listing for trial … 10/04/2025 [X] advises he is unavailable for trial – alternatives sought – delay arises in securing counsel for trial and with capacity to prepare statements”.[68]Consistently with these entries, when the Claimants served their notice requiring Decolace to prove documents “at trial” pursuant to rule 32.19 (see paragraph 18 above), Decolace’s solicitors did not respond saying that this was inappropriate because there was not going to be a trial.

Ground 2: alternative measures

[69]Given that the judge was correct to hold that the hearing directed by the Directions Order was a trial, it follows that rule 32.10 applied and Decolace required relief from the sanction imposed by that rule. The judge’s decision to refuse relief from sanction was both an exercise of discretion and a case management decision. Accordingly, Decolace faces a high hurdle in challenging it. Decolace does not challenge the judge’s conclusions that the breach was serious and significant, that no good reason had been given for it and that Decolace ought to have applied much sooner that it did for an extension of time. In those circumstances it cannot be said that the judge was wrong not to grant relief from the sanction provided by rule 32.10 and to impose some different and lesser sanction instead.[70]Rule 32.10 does not apply to the documents in category (c) in paragraph 19 above. Rule 31.21 is not premised upon there being a trial, and it is not clear whether it imposes a sanction which requires relief under rule 3.9 in the event of late disclosure: see McTear v Engelhard [2016] EWCA Civ 487, [2016] 4 WLR 108. It is unnecessary to explore this question because Decolace did not suggest to the judge that, if it was precluded from relying on Stavrinides 15 by rule 32.10, it nevertheless sought to rely upon the category (c) documents. Nor does Decolace contend this upon the appeal.

Ground 6: no sanction if hearing not a trial

[71]Given that the judge was correct to hold that the hearing directed by the Directions Order was a trial, ground 6 does not arise.

Conclusion

[72]For the reasons given above I would dismiss this appeal.[73]I agree.[74]I also agree.

Cited in 1 later judgment