“The Claimant [DK] is of the view that Judge Thornton has proved to be mendacious and has lost his sense of objectivity in these proceedings. He has adopted a bizarre and unprofessional case management style. He has also intervened unreasonably and in a self-serving manner in complaints that the Claimant has made about the way that the proceedings have been administered. The Claimant therefore considers that it is impossible for the judge to whom matters in these proceedings have been reserved to continue to handle the litigation.”
“We note that on3 February 1999 a winding up order was made against Aptech. The claim which was brought against our client was entirely spurious and without merit. Indeed Aptech has not pursued the claim with any diligence or enthusiasm having vexatiously commenced proceedings in September 1998 and taken no further steps to progress the action. Will you please confirm that you will now serve a notice of discontinuance in these proceedings to enable my client to consider its position?”
“… I would be obliged if you would consider bringing the above case within the auspices of the new Civil Procedure Rules. This case has been inactive since 1998 because Aptech Ltd ran into financial problems and has been in liquidation since February 1999. Over the last few weeks, the financial position has changed due to a cancellation of a sum of£93,000 allegedly due to Customs & Excise. This may permit the case to be heard in the name of Aptech Limited (in liquidation) or alternatively for it to be assigned to me personally, depending on the view of the liquidator appointed by the Official Receiver. I look forward to receiving the necessary document to enable me to make a formal application under the new rules.” 13. This letter was misconceived for the following reasons: (1) In it, DK asked the court to progress the principal claim under the CPR. This was an unnecessary request since the principal claim was already subject to the CPR which had been in force for all civil claims for some time by the time the letter was written. (2) DK had no status to ask for the principal claim to be progressed in Aptech’s name. (3) The request was premature in requesting the court to give DK an opportunity to pursue the principal claim in his name since he could not have taken any step in this claim unless and until Aptech’s liquidator had assigned Aptech’s causes of action to him. That assignment did not take place for another fifteen months. (4) DK never explained why he used the notepaper of another of his companies to write this letter so as to make it appear that the request was being made by Keyspell. That company had had no involvement or interest in the principal claim and it could not, therefore, take an assignment of Aptech’s causes of action. If the letter was to have been written at all, it should have been written in DK’s name on his own notepaper. (3) The striking out of the principal claim 14. Directions for the first CMC. Keyspell’s letter to the court was brought to the attention of District Judge Howard as part of his box work duties and he, after consulting the court file, issued a direction on his own initiative that the action should be listed for a CMC so as to ascertain the current circumstances of Aptech and the present position of the principal claim. DK subsequently complained that this step had been taken unfairly and without there having been a request from either party for a CMC but this complaint was misconceived. The district judge had acted as required by the CPR when issuing this direction since it was issued in compliance with his CPR duty to manage cases and to do so, when necessary, on his own initiative In conformity with his duty to give effect to the overriding objective (CPR 1.1 and 1.2) and his power to exercise his case management powers on his own initiative (CPR 3.2 ). Such powers included those adopted in this instance, namely the power to serve an allocation questionnaire for completion and return by each party (CPR 26.3 ), fixing an allocation hearing (paragraph 6.1 ofCPR PD 26 ), fixing a CMC (CPR 29.2 (1)(b)) and directing the filing of a completed Allocation Questionnaire, a chronology of the action and a summary of the case (CPR 29.6 ). . As a result, the court issued a direction dated17 March 2000 to the parties that a CMC would be held on12 April 2000 without there having been request from the parties for such a hearing. The district judge also directed, again in compliance with his case management duties imposed by the CPRCPR 3.3 (3),CPR PD 26 – paragraph 6 andCPR 29.3 (1). , that Aptech should file a chronology of the action, a summary of the case, a copy of the directions sought and a completed allocation questionnaire at least three days before the hearing. 15. Service on Aptech of notice of the CMC. District Judge Howard’s order was served by post by the court on the parties at their respective addresses for service. The Post Office was unable to serve the notice on Aptech and returned it to the court marked “gone away”
“Sir - are you prepared to deal with this app on paper?” 21. The deputy district judge read the application, WB’s covering letter submitting it to the court, Mr Heath’s witness statement and the other documents relating to the original case management hearing and the striking out order that were on the file. Having done so, he responded to the court clerk’s request as follows: “Yes. Ex parte order as sought. JJ Baird DDJ. 25.5.00”
“23.4 Notice of application (1) The general rule is that a copy of the application notice must be served on each respondent. (2) An application may be made without serving a copy of the application notice if this is permitted by- (a) a rule; (b) a practice direction; or (c) a court order.”
“Applications without service of Application Notice 3. An application may be made without serving an application notice only: (1) where there is exceptional urgency, (2) where the overriding objective is best furthered by doing so, (3) by consent of all parties, (4) with the permission of the court, (5) where paragraph 2.10 applies, (6) where a court order, rule or practice direction permits.” 22. It is clear that the deputy district judge, having read the evidence in Mr Heath’s witness statement, concluded that the court should exercise its discretion to deal with the application without it first being served on Aptech since it was clear that Aptech was in liquidation and was no longer trading, that the liquidator had abandoned the principal claim which was now both stale and dormant, that Aptech had not provided the court with a new address for service when it abandoned its trading address and that there were good reasons for reinstating the striking out order, particularly that it had been made on notice and at a hearing at which Mr Heath had been present. The deputy district judgewas therefore well within his powers in exercising his discretion to direct that the court should forthwith reinstate the striking out order. His direction, albeit written in “CPR-shorthand”, was to this effect: “Having read: (1) The defendant’s application dated12 May 2000 ; (2) Mr Heath’s accompanying witness statement; and (3) The contents of the court file It is ordered on the court’s own initiative (CPR 6.9 and 23.4) that: 1. The application will be dealt with as an ex parte application by the court without a copy of it or the accompanying witness statement of Mr Heath first being served on Aptech. 2. The order that is to be issued forthwith is: It is ordered on the court’s own initiative (CPR 6.9 and 23.4) that: 1. The order of Deputy Judge Armstrong dated26 April 2000 be and is set aside. 2. The Claimant’s claim do remain struck out. 3. There be no order as to costs.” 23. The deputy district judge’s direction that the “order as sought” should be drawn up was given effect to by the court drawing up an order in the terms sought by the application and the perfected order was served on Aptech at its address for service. For these reasons, the recital to the order correctly stated that: “Upon reading the ex parte application, it is ordered that …” since the application had become an ex parte application as a result of the direction of the deputy district judge. This wording was acceptable CPR-shorthand to be inserted into the order albeit that a fuller wording would have read: “Upon reading the application of the defendant that has become an ex parte application following an order of the court made on its own initiative on25 May 2000 .”
“N documents not served, additional information, order upon Claimant”
“6.11 Notice of non-service Where- a) a document is to be served by the court; and b) the court is unable to serve it, the court must send a notice of non-service stating the method attempted to the party who requested service.” a) a document is to be served by the court; and b) the court is unable to serve it, 27. DK sought to make play of the information that he had received that the notice of non-service had not been served on WB. However, the notice did not have to be served on WB because the order that had been served on Aptech’s address for service and had then been returned by the Post Office had been made “ex parte” by virtue of a direction made by the deputy district judge on the court’s own initiative See paragraphs 20 – 22 above. . Therefore, the provisions ofCPR 6.11 were not applicable since that order provides that an notice of non-service is only to be served on a “party who requested service” of the documents in question and, in this case, the documents were served by the court on its own initiative having previously ordered on its own initiative that the application should be treated as having been made ex parte, thereby countermanding WB’s request to serve it. The court’s decision not to issue a notice of non-service was, therefore, both regular and in conformity with the CPR even though an N notice had previously been generated automatically by the court’s automated logging system. 28. In any event, WB was notified of non-service, albeit verbally, in the course of the telephone conversation between Mr Heath and the AOM soon after22 June 2000 when the AOM informed Mr Heath that the order had been served on Aptech at its address for service but that no notice of non-service had been served on WB. 29. Procedural irregularity – non-service of the relevant documents. DK maintained throughout the reinstatement proceedings that the relevant application notices and orders had never been properly served, had not been made the subject of notices of non-service notices and had not, therefore, been regularly served on Aptech. DK submitted that neither Aptech nor its liquidator had not been served with any of the following crucial documents: (1) The court’s notification dated17 March 2000 of its decision to fix the date of a case management hearing on its own initiative as12 April 2000 . (2) The order dated12 April 2000 striking the action out. (3) The order dated26 April 2000 issued by the court on its own initiative setting aside the striking out order and directing a case management hearing and also directing Aptech to file appropriate documents. (4) The application notice issued by WB dated12 May 2000 seeking to set aside the order dated26 April 2000 and to restore the striking out order made on12 April 2000 . (5) The court’s ex parte order dated25 May 2000 in response to the application notice dated26 April 2000 setting aside the order dated26 April 2000 and directing that the action should remain struck out. 30. Summary of DK’s submissions as to non-service. DK submitted during the reinstatement and permission hearings that the non-service of the application dated12 May 2000 and the resulting order dated25 May 2000 had deprived Aptech of the opportunity to oppose the application to reinstate the ex parte striking out order dated25 May 2000 and to apply within time to set it aside. The order was, in consequence, both irregular and one that had deprived both Aptech and him of a fair trial on the merits of Aptech’s case. 31. This submission was advanced on five separate and cumulative grounds: (1) The court had been misled by Mr Heath, who was WP solicitor who had the conduct of the NEP’s defence to the principal claim, in his witness statement that accompanied WP’s application to reinstate the striking out order. In particular, the court had been misled into believing that Aptech’s trading address and its address for service was still its Ponteland address even though he knew that Aptech had vacated that address and that its address for service had been moved to the address of the liquidator. In consequence, the court had served the application and the resulting order by sending them to the Ponteland address so that these documents had never come to Aptech’s attention. DK went so far as to allege that Mr Heath had deliberately misled the court because he wanted the relevant documents to be sent to the wrong address so that they would not come to Aptech’s and the liquidator’s attention with the result that the principal claim would be struck out without any opposition from Aptech and NEP would unfairly be able to succeed in defeating a good claim. (2) The application had been made ex parte and the resulting order was, on that ground alone, irregular and unlawful. (3) None of the relevant documents had been served on Aptech since they had been sent to its old address that it had already vacated and had then been returned to the court by the Post Office marked “gone away”. (4) Even if the Ponteland address had remained the official address for service, the court should have sent additional copies of the documents being served on the liquidator. (5) The court should have served the documents on DK as a person that it knew, or ought to have known, was directly concerned with the principal claim and who were entitled to have the relevant application and the resulting order drawn promptly to his attention. (6) When the striking out order had been returned to the court unserved, a notice of non-service should have been sent to WB. Had WB received this Notice, it would have had to have brought it to the attention of Aptech and Aptech could have applied promptly to set the striking out order aside. Each ground was misconceived for the reasons set out in the following paragraphs. 32. (1) Court misled by NEP’s solicitor. DK’s contention was that Mr Heath had committed perjury in his witness statement when stating that Aptech’s address for service of the application was its Ponteland address when he knew that Aptech had vacated that address and it would not become aware of the application if it was served there. He also contended that the witness statement contained a number of other perjured statements. 33. DK had, prior to the hearing of his application to reinstate the action, applied for permission to cross-examine Mr Heath at the hearing before the district judge in order to seek to show that his statement in his witness statement about Aptech’s address for service was a lie. This application was refused by Judge Walton. Undeterred, DK had subsequently applied to bring contempt of court proceedings against Mr Heath as part of his application for permission to appeal the district judge’s striking out order and that application was dismissed by Judge Moir. In doing so, she made this finding about Mr Heath’s evidence and the suggestion that it was perjured: “I turn then to the further application in which DK alleges that Mr Heath [the solicitor whose evidence he was impugning] did not have an honest belief in the truth of the statement he made. He told me that Mr Heath invented facts, and was determined to influence the judge. … At the time the statement was made on12 May 2000 , I am satisfied that not only did Mr Heath have an honest belief in its contents but that it was a reasonable belief based upon the information before him. … .” 34. It is clear from that finding that Mr Heath had been neither dishonest nor misleading in his witness statement and indeed that all his evidence contained in that witness statement was truthful. This finding was inevitable since Mr Heath, in giving Aptech’s Ponteland address as its address for service, was merely providing the address for service which the CPR required the court to use as its address for service and which it already had been provided with. 35. (2) Ex parte application and order. Given the circumstances set out above, the order that was made, being based on an ex parte application following the direction of Deputy District Judge Baird, was both valid and regular See paragraphs 19 - 22 above. . 36. (3) The documents were not served on Aptech. DK suggested that the order and the subsequent orders setting it aside and then reinstating it were invalid because none of these orders had ever been drawn up, issued or served on Aptech. He had not raised this contention at the reinstatement hearing and it was not referred to in the district judge’s judgment. The submission was misconceived in its entirety. This is because, whenAptech had initiated the principal claim by applying to the court to issue the claim form, it had been required to notify the court of its address for service of all documents relating to that claim. This was the address where any application notice, document or order had to be served, if it had to be served by the court, by first class postCPR 6.5 (2) and 6.5(4).Since 2008, the relevant CPR regime for serving documents on a party to proceedings is now contained inCPR 6.23 which was introduced by theCivil Procedure (Amendment) Rules 2008 as amended by theCivil Procedure (Amendment No 2) Rules 2009 . . Aptech gave this notification to the court in the usual manner by giving it on the claim form and, in Aptech’s case, that address was its Ponteland address. The court subsequently always used that address as Aptech’s address for service by sending all documents it needed to serve on Aptech to that address. The CPR required that address to be used unless and until Aptech notified the court of a new address for service. Furthermore, if Aptech changed its address for service, for example by moving away from the address for service that it had previously notified to the court, it was required to give notice in writing to the court and to all other parties of that change as soon as it had taken place Direction 7 of the Practice Direction toCPR 6 then in force required a party who changed his address for service of documents to give notice in writing to the court and all other parties of that change as soon as it had taken place. . 37. When Aptech went into liquidation, the liquidator should have immediately notified the court of his address as Aptech’s new address for service. However, he did not do so because, as Judge Moir found in her permission judgment, he was well aware of the proceedings yet took no steps to comply with his obligations to inform the court and NEP of this change of address for service. Indeed, the liquidator had taken a conscious decision not to notify the court of Aptech’s new address for service because he had already decided to abandon the principal claim. 38. It followed that Gateshead County Court, as the court that had had the responsibility to serve the relevant documents on Aptech, was unaware of Aptech’s change of address for service since the liquidator never notified it of a change of address for service. Had the court become aware from any other source than the liquidator of Aptech’s new address for service, it would still have been required to serve Aptech at the address for service in Ponteland that Aptech had originally notified it of since only the liquidator could serve a valid notice of change of address for service on behalf of Aptech. In those circumstances, Gateshead County Court was required to serve each of the documents in contention on Aptech’s address for service by posting them to Aptech’s vacated Ponteland address since that remained its notified address for service. It was not disputed in the reinstatement proceedings that that was the address that had been served with these documents since, as was also accepted, the court file showed that each of the five documents in contention had been served on Aptech at its address for service and had also been returned to the court by the Post Office marked “gone away”. 39. (4) Service by the court on the liquidator. DK submitted that the court should have ascertained the liquidator’s address and served the documents for Aptech at that address. His submission was that the court would have learnt from his letter written on Keyspell’s notepaper dated13 March 2000 of Aptech’s new address for service and would have had this confirmed as Aptech’s new address for service on receipt of WB’s letter dated20 March 2000 enclosing the certificate of the appointment of the liquidator. However, the court was not permitted to respond to that information by unilaterally changing the address for the service of documents on Aptech and could only have done so once Aptech’s liquidator or solicitors acting on his behalf notified the court of a different address. Neither Keyspell nor DK nor WB had the authority of the liquidator to act on behalf of Aptech in relation to a notification of a change of the address for service so that any communication from any of them, however clearly expressed, could not constitute a valid notification of a change of the address for service on Aptech and its liquidator. 40. (5) Service by the court on DK. DK also contended that he should have been notified of the applications and orders since it should have been clear to the court that he had an interest in the principal claim. However, it was neither aware, nor had been notified, of any interest that DK had in the principal claim. Moreover, it was under no obligation to serve DK even if it had been notified of his interest in the principal claim since its only obligation, when serving application notices or orders, was to serve each party to the action at its notified address for service. 41. (6) Non-service of a notice of non-service of the documents dated 12 and25 May 2000 on WB. The non-service of a notice of non-service on WB was regular and in conformity with the CPR See paragraphs 19 - 22 above. . 42. Conclusion – irregular service. None of DK’s submissions that the striking out order or any other order was irregular have any validity. District Judge Powell and Judge Moir in their respective judgments considered them at length and rejected them all out of hand and they have no substance. The orders of12 April 2000 ,26 April 2000 and25 May 2000 and the application notices of17 March 2000 and12 May 2000 were regularly served on Aptech and no notice of non-service of the application of12 May 2000 or of the order of25 May 2000 was required to be served on WB. It follows that DK was not entitled to have the order treated as being an irregularity and it was not obtained unfairly, illegally or in breach of his article 6 rights. Furthermore, all his complaints and criticisms of the Gateshead County Court in relation to the various communications, applications, hearings and orders it dealt with in the period March – June 2000 were addressed to and rejected by Judge Moir found them all to be ill-founded. I find that Judge Moir was correct and entitled to find in this way. (4) The application to reinstate the principal claim 43. Assignment to DK. On31 May 2000 , DK wrote to the liquidator with an offer to take an assignment from him of Aptech’s causes of action against NEP. DK did not provide the court with a copy of this letter and he did not explain what triggered it. However, it is of particular note that this letter, which initiated the discussions between DK and the liquidator that led to an assignment to him of Aptech’s causes of action against NEP, was dated six days after the striking out order had been made on25 May 2000 . This coincidence of dates suggests that DK had become aware that a striking out order had been made immediately after it had been made yet he did not issue his application to set it aside until21 November 2001 . 44. DK’s request to the liquidator led to negotiations between them which were conducted at a very leisurely pace and, eventually, DK purchased an assignment of Aptech’s causes of action against NEP when the engrossed deed of assignment was finally completed on6 June 2001 for a modest consideration of£100 plus 15% of any realisation from the principal claim. Some months later, DK issued an application dated21 November 2001 seeking an order to reinstate the action. I will refer to this application hereafter as the “reinstatement application”, to the hearing of that application as the “reinstatement hearing” and to the decision made by District Judge Howard as the “reinstatement decision”
“… the affidavit of Mr Heath … details the names of witnesses whom he would wish to call to give evidence … [three] are no longer with Canon UK and their whereabouts are unknown. [2] are now employed by Canon. There are 9 other witnesses that he details … whom he may wish to call to give evidence. Counsel for the Defendants states that if this case is allowed to be reinstated then because of the difficulty of tracing some of the witnesses to be called, coupled with the fact that this is now an aged claim, it would be unfavourable to Canon to allow this litigation to proceed. He argues that the case should remain struck out and the Claimant’s application for reinstatement be dismissed. He also stated that the Claimant’s claim was speculative in its nature and the Claimant would have great difficulty in succeeding with his action for damages. The Claimant he stated would have an uphill struggle to pursue his claim successfully and it would be very costly for Canon to defend with limited evidence. Security for costs by Canon against the Claimant was not available and the evidence has disappeared or had deteriorated. Upon the basis that the liquidator had decided not to proceed then this claim should not be able to either he argued. The Claimant argues that it would be possible for the newly appointed defendant company to defend the claim and call satisfactory evidence and that he would stand good prospects of success if it proceeded having been reinstated. I take the view that this is aged litigation which began in August 1998. Once the summons was issued by the company, there was total inactivity until22 November 2001 . That was 3 years and 3 months. Since then, many of the Defendant Canon witnesses have move on and I believe this litigation for Canon would be costly to defend because of the passage of time and the lapse of normal memories of everyday witnesses in relation to the Claimant’s litigation. They would be at a substantial disadvantage. They would need the support of many witnesses because I view the Claimant’s original claim as speculative and it would need detailed investigations by the Defendant as to all witnesses who might have been involved with Aptech/NEP. In conclusion therefore because of the huge disadvantage that this would place upon the shoulders of Canon and because of the passage of time of litigation the culpable inactivity of the Claimant in issuing an application for reinstatement once the action was assigned to him, I am left with no alternative but to refuse the Claimant’s application for reinstatement of the claim and confirm that the action remain struck out.” (6) Application for permission to appeal (6) Application for permission to appeal 53. Application for permission to appeal. An appeal from the district judge’s decision would not have been a final appeal so that an appeal from the district judge’s order lay to a circuit judge sitting in the county court. That appeal could only have been brought if DK had obtained permission to appeal. Initially, he applied to the district judge for permission but, since that application had been refused, he had to make a second application to, and obtain permission from, a circuit judge. Unless the court directed otherwise, that second application for permission had to be dealt with on paper without a hearing. Following the issue of DK’s application for permission to appeal, the appeal proceedings were transferred to the Newcastle-upon-Tyne Combined Court where the case remained Except for the period when the cost assessment process was transferred to the Carlisle County Court, see paragraphs 139 & 168 below. . In an order dated13 December 2002 , Judge Walton ordered that: (1) The district judge’s interim payment order would be stayed pending the hearing of DK’s appeal; (2) The permission application would be listed for an oral hearing; and (3) The appeal hearing was “to follow” the application hearing if permission was granted. That direction had the effect that both the permission application and the appeal hearing would be heard together and that both parties would present their arguments in full at the same hearing in relation to both the application for permission and the appeal and the judge would then decide whether to grant permission and, if permission was granted, whether to allow or dismiss the appeal. Such a hearing is frequently ordered and is usually referred to as a “rolled up” hearing. (7) Application for permission to appeal 54. I will refer hereafter to the application for permission to appeal as the “permission application”, the hearing of that application as the “permission hearing” and the decision of Judge Moir in relation to that application as the “permission decision”
“Upon the material before the District Judge and in particular the particulars of claim, it was within his discretion to form the view that the claim was speculative. As have I, the District Judge allowed a considerable amount of court time to enable the Claimant to put fully all the points he wished to raise. I am satisfied that the Claimant would face difficulties establishing his claim. The District Judge described it as speculative, having heard the Claimant I agree with the District Judge. I am satisfied that the District Judge was wholly fair and unbiased in his approach. I am further satisfied that the delay in this case as found by the District Judge has brought about prejudice to the Defendants. … The risk is in my view a substantial one that a fair trial is impossible and the risk has been created by the conduct or inactivity of the Claimant. Having given very careful consideration to all the matters raised by the Claimant I have concluded that there is not a realistic prospect that the Claimant will be able to establish that the District Judge exercised discretion wrongly or that there was a procedural irregularity and, thus, I refuse permission to appeal.” 59. Discussion of the merits of NEP’s and DK’s substantive case. Aptech’s claim had been started with a very generally pleaded particulars of claim document in August 1998 only two months after Aptech had served notice on its creditors that it was unable to pay its debts. No letter before action detailing the principal claim was sent to NEP before the claim form was issued. The claim arose out of a small value annual maintenance contract of the telephone equipment of a small company specialising in the provision of advice and other services to users of special needs technology suffering from learning difficulties. The contract ran for four years for a payment of£187.68 per annum and it ceased when NEP served contractual notice of termination on Aptech. The particulars that Aptech provided of the relevant terms of the contract and of the alleged breaches, causal link between those breaches and the losses suffered and the loss itself were sparse. The principal claim was put forward solely on the basis that NEP had failed to identify, test and rectify faults in the equipment and to report them to BT, the manufacturer of the equipment and Aptech. 60. These unparticularised breaches of contract allegedly caused unparticularised loss that was pleaded as having occurred under three heads of a very general nature. These were: (1) Additional administration time spent by Aptech as a result of the breaches totalling 1280 hours that was charged out at unparticularised hourly rates totalling£39,000 ; (2) Loss of revenue claimed at£30,000 or 10% of total revenue; and (3) Loss of future profits claimed at£30,000 over a 4-year period claimed as being 10% of 60% of 25% of£2m . No expert’s report or further explanation was provided of these alleged breaches and loss even though DK, with his technical training and background in information technology, was well placed to provide extensive particulars of any technical problems that had occurred to Aptech’s telephone system as a result of NEP’s breaches of contract and of the loss if such problems had occurred. 61. The particulars of claim alleged that NEP’s breaches of contract were the sole and entire cause of its “withdrawing from the marketplace”, its business collapse and its consequent liquidation. Aptech’s total deficiency was subsequently identified by the liquidator to be£214,936 . However, in June 1998, eight months before Aptech was wound up, DK had written to Aptech’s creditors See paragraph 5 above. to inform them that Aptech was insolvent and explained that its financial difficulties had been caused by its indebtedness to HMCE following a retrospective assessment of£93,000 for unpaid VAT, by the insolvency of one of its debtors and by its delay in completing a government contract. Although NEP’s breaches of contract were also referred to as a cause of its insolvency, it is clear that they could not have brought about these other problems which were the operative cause of Aptech’s insolvency. It is clear, therefore, that DK had settled Aptech’s particulars of claim knowing that it was untrue that NEP’s actions had been a cause, let alone the sole cause, of Aptech’s financial difficulties and liquidation. 62. Conclusion – merits of Aptech’s claim. DK contended at length and with some passion in the various grounds documents, witness statements and written submissions that he served in connection with his judicial review applications that he had lost the opportunity to put forward a substantial claim which had good prospects of succeeding. A careful consideration of these documents failed to reveal any flaw in the findings of the district judge in his refusal decision and of the circuit judge in her permission decision that the claim had no merit and no realistic prospects of success and was vexatious and speculative. It is therefore clear that the claim was correctly struck out. 63. Delay. District Judge Howard and Judge Moir’s decisions were also based on a number of further factors. The first was the inexcusable delays that had occurred. Having started the principal claim, NEP did nothing to progress it until it went into liquidation in early 1999 whereupon the liquidator rapidly decided, having taken legal advice, to abandon the principal claim. Nothing further happened for two years when, finally, DK took an assignment of NEP’s causes of action. DK issued the application to set aside the strike out after a further unexplained delay of seven months. DK never explained why the case was started by NEP two months after its public announcement that it could not pay its debts, how NEP had intended to fund the action, why he had not taken an assignment of the claim soon after NEP went into liquidation, why that assignment had not been taken much earlier than it was, why the application to set aside the strike out was not issued immediately after he had taken that assignment and why the application was not heard within weeks of it being issued. 64. Prejudice. The delays caused by Aptech, the liquidator and DK were inexcusable and that the resulting prejudice to NEP and Canon was considerable and irremediable. This was particularly so since Canon had lost contact with several significant witnesses and all the evidence had been rendered unreliable as a result of failing memories caused by the events in question having occurred, by the date of the permission hearing, between seven and ten years previously. Furthermore, neither DK nor Aptech had the resources to proceed with the claim and NEP had suffered extensive prejudice by that delay. Canon had also suffered prejudice by the assignment which had precluded its obtaining security for its costs since such security is only obtainable from a company. 65. Overall conclusion. It is clear that Aptech’s original claim was vexatious and that it had never had any prospects of success. Furthermore, the delays that had occurred were unjustified and inexcusable and had caused Canon irremediable prejudice. Finally, Aptech had been in significant and inexcusable breach of a series of CPRs which, amongst much other prejudice, had caused Canon to lose the opportunity to obtain an order requiring Aptech to provide security for costs. For all these reasons, Deputy District Judge Baird had correctly struck the claim out, District Judge Howard had correctly refused to reinstate it and Judge Moir had correctly refused DK permission to appeal District Judge Howard’s order. (9) Judge Moir’s order 66. Hearing and decision not rolled up. The transcript reveals that Judge Moir, just before she reserved judgment, informed the parties that she was going to decide the two applications, for permission and to commit, but that she would not also decide the appeal if she granted permission. This came as a surprise to DK who had argued his entire application on the basis that the hearing was a rolled up permission and appeal hearing. This is clear from this exchange with the judge where DK stated: “I was under the impression that you were hearing the permission and the appeal together.”
“What about the position with regard to costs? I will explain what I intend to do. It seems to me that I need to give a written judgment rather than having everybody back again. Clearly, the question of costs will arise. … Do you want to deal with the issue of costs or do you feel that the position is complicated, or do you just want me to deal with costs in the usual way in a written judgment?”
“Obviously, if both applications fail, then we would obviously be seeking our costs of those applications. … given the manner in which the applications have been pursued, and the allegations made in support of them, it would be appropriate for costs to be assessed on the indemnity basis if we are successful. But the order of principle that I would seek, therefore, would be for DK to pay the defendant’s costs of the applications, to be assessed on the indemnity basis if not agreed with, as the District Judge did perhaps, a provision for payment on account of an appropriate sum. …if DK is successful in his application for permission to appeal, then if there is to be a further hearing then we submit that obviously the costs of the application for permission should be costs in the appeal.”
“… I would like to resist … the proposal that [counsel] has put forward that, in effect, the costs should be added to the costs of the trial if it goes ahead. Essentially, the reason that this appeal has been necessary is the insistence by the defence that what should have been a straightforward request for reinstatement of the case, and allow it to go through the natural process of the law, has led to these huge complications and this escalation of costs on both sides. Certainly, your Honour, I would hope that the costs of the appeal could be quantified and defined as a separate matter for the trial costs.”
“I turn to the issue of costs. The previous costs order made by the district judge on19 November 2002 was not to be enforced pending the hearing of the application for permission to appeal. That application has now been determined, and therefore the suspension lifted. As for the costs of the hearing before me, I asked counsel on behalf of the defendant and the claimant to deal with the issue of costs so that it would be unnecessary for the parties to attend when the judgment is handed down, so that further costs need not be expended. I see no reason to depart from the general rule that the unsuccessful party, namely DK, should pay the costs of the successful party, the defendant. I am asked to order costs on an indemnity basis, but having considered the matter with some care, I decline to do so. I will order costs on the standard basis to be subject to a detailed assessment.” 71. Thus, it can be seen that the judge had stated that she would deal with costs in her reserved judgment and had allowed both DK and Canon’s counsel to make their respective costs submissions on each possible outcome before she reserved judgment. Both took the opportunity to make their costs submissions and there could have been no conceivable basis for DK’s subsequently contention, after the judgment had been handed down and the order had been perfected, that Judge Moir had denied him the opportunity of advancing costs submissions or of his being prejudiced by the judge’s decision to hear all relevant arguments on costs before she reserved judgment. 72. Judge Moir’s order. The order entered by the court following the handing down of Judge Moir’s judgment, which I shall refer to hereafter as “Judge Moir’s order” was made on, and should have been dated, dated11 June 2003 but it was dated, and has since remained dated, as18 June 2003 The date of an order is the date when its contents were “pronounced” by the court. In other words, the date of an order is the date when the court made its oral pronouncement. This date often appears in a recital to the order and it also appears at the end of the order. The other date in the order is the date that the court served order. In CountyCourt orders, this second date is found in the box in the top right hand corner of the order. . This error had no significance and it caused DK no prejudice. Judge Moir’s order, unusually, went through four versions, dated18 June 2003 ,4 July 2003 ,27 January 2004 and23 April 2004 . The changes were described in each order as being amendments albeit that these amendments arose from the use of the slip rule and of the inherent power of the court I refer to the order that is dated18 June 2003 as being “amended” on4 July 2003 ,27 January 2004 and23 April 2004 since that is the word that is used in each order and by DK in his correspondence with the court and in his amended grounds document. Although it is common to refer to corrections to orders that are made under the slip rule as being “amendments”, these changes ought strictly to be referred to as “corrections” and the order in its finalfully corrected form as being “perfected”
“8. Although the judgment itself contains a reference to costs, no formal order was made by Judge Moir relating to costs. This denied the claimant the right to challenge that part of judgment, there being no related order. 9. The claimant subsequently made an application to the Court for HHJ Moir’s order to be modified to include reference to costs. This would allow the whole costs issue to be examined by the court and would reflect the actual judgment of HHJ Moir. 10. HHH Walton and HHJ Moir both refused to perfect the order of HHJ Moir, despite requests made on the claimant’s behalf by Court staff to do so. The application was not processed. 11. As a result of this refusal, the claimant wrote to the Court Service Customer Services Department (CSCSD) to complain about the failure of the Court to process the application. 12. The CSCSD wrote to the Court seeking clarification. The Court sent HHJ Walton’s notes on the case to CSCSD. The claimant was refused a copy. The CSCSD declined to assist the claimant with his complaint throughout the period from September 2003 to January 2004. Repeated requests for a copy of HHJ Walton’s notes were refused.” 80. This correspondence and these complaints were referred to by Judge Walton at the beginning of his judgment delivered on23 April 2004 in the appeal brought by DK from the correcting order dated27 January 2004 made by District Judge Powell. Judge Walton said this about these exchanges: “1. Matters cannot be regarded as accidental slips because for many months after the hearing before Her Honour Judge Moir he was pressing for the order to be corrected in the very ways in which the District Judge eventually intervened, and encountered some resistance from the court service and Her Honour Judge Moir. It has not been a part of this hearing to delve in detail in to that history. I am aware of it and it does not seem to me it would be helpful to go through it in detail. Suffice it to say it is only proper to record that it has left DK feeling he has received poor service in relation to the matters which he has sought to raise, although equally it has occurred to me at times that there has been the possibility of misunderstanding exactly what he was trying to do Emphasis added. . As I say, it is no part of the present hearing to come to a conclusion on that, and I simply note in passing what has taken place. 2. … [DK complained] that he was prevented from opposing what the District Judge was intending to do [in correcting the order to add Judge Moir’s costs order]. So far as that is concerned, it does seem to me that there is something of a non sequitur in DK’s reasoning. In the first instance he says that for many months he had been pressing for Her Honour Judge Moir to do precisely what in due course the District Judge was to do.” 81. Thus, as found by Judge Walton, DK made a series of complaints to the court in the period between June 2003 and27 January 2004 which involved him in trying to persuade the court to reissue the order dated18 June 2000 with the costs order made by Judge Moir and a stay order added. These complaints did not achieve his desired intention because an order could only have been amended after the court had issued and served an application seeking such an order, the application had been served on WB, a judge had then considered and approved the application and a formal order giving effect to that decision had then been issued. Thus, no amendment of the order of the kind sought by DK was made at that stage. (11) Assessment of costs – District Judge Powell’s hearing and order 82. Assessment of costs – initial steps. Meanwhile, WB was moving forward both to enforce the interim costs order made by District Judge Howard and to obtain an assessment hearing to assess the costs of the reinstatement and permission hearings that DK had been ordered to pay Canon. On16 July 2003 , WB initiated detailed assessment proceedings. DK then filed points of dispute on6 September 2003 and WB filed replies on24 September 2003 . WB then filed a request for an assessment hearing on6 October 2003 and an application for that hearing on29 October 2003 . Finally, on18 November 2003 , WB issued Canon’s Part 8 enforcement seeking an order for the sale of DK’s house which had previously been charged with the interim costs order. 83. First assessment hearing –27 January 2004 . The return date for the assessment hearing, which I shall hereafter refer to as the “assessment hearing” was27 January 2004 . DK’s position at the outset of that hearing was that he had tried without success to persuade Judge Moir and the Newcastle Combined Court to amend Judge Moir’s order of18 June 2003 , that he wanted to seek permission to appeal her costs direction contained in her judgment, that he wanted to seek judicial review of the entire decision and that he wanted the assessment hearing adjourned until after the conclusion of both his judicial review and his costs appeal. District Judge Powell considered that the assessment of the costs that Judge Moir had ordered to be paid should be assessed at the same time as the assessment of the costs of the reinstatement application heard by District Judge Howard. However, that joint assessment of costs had to await the conclusion of DK’s permission application and that could not be made until the order of18 June 2003 was amended. He therefore adjourned the assessment hearing to a date to be advised in due course when both costs orders could be assessed together. 84. Orders of District Judge Powell dated27 January 2004 . District Judge Powell immediately after the hearing drew up an order and arranged for it to be issued and served on the parties. The order, dated27 January 2004 and served on28 January 2004 , which I shall hereafter refer to as the “amendment order” directed that Judge Moir’s order should be amended by the addition of a direction that the stay on the enforcement of the interim costs order should be lifted and a further direction giving effect to Judge Moir’s costs direction. Judge Moir’s order, as re-issued by District Judge Powell’s amendment order provided as follows: “The Order dated18 June 2003 is further amended to include the following paragraphs: a. The restriction on the ability of the Defendant to enforce Paragraph 2 of the Order of the District Judge dated19 November 2002 pending the hearing of the application for permission to appeal be and is hereby lifted. b. The Claimant shall pay the Defendant’s costs of this application on the standard basis subject to a detailed assessment. Dated27 January 2004 .” a. The restriction on the ability of the Defendant to enforce Paragraph 2 of the Order of the District Judge dated19 November 2002 pending the hearing of the application for permission to appeal be and is hereby lifted. b. The Claimant shall pay the Defendant’s costs of this application on the standard basis subject to a detailed assessment. The second order issued by District Judge Powell was issued on11 February 2004 and it provided for the adjournment of the costs assessment hearing and directed that it was to be restored upon the application of the defendant. 85. The amendment order incensed DK because he considered that District Judge Powell had made it clear at the hearing that he could not amend Judge Moir’s order. He has always subsequently contended that the district judge acted without jurisdiction in making this amendment order and that he was unfairly deprived of the opportunity of opposing it. His opposition to the amendment relating to the costs of the permission hearing was a complete volte face. He has never explained why his adamant insistence, until27 January 2004 , that the permission order should be amended in the way that it was by District Judge Powell so as to include Judge Moir’s costs order was instantaneously transformed into vehement opposition to the order being amended in that way. The explanation seems to be that his change of stance occurred because he had concluded at the hearing on27 January 2004 that he had no prospect of successfully appealing Judge Moir’s costs order. He therefore decided to change his tactics and, instead, to expand his intended judicial review so that it included Judge Moir’s costs decision within its scope. 86. The hearing before District Judge Powell. DK not only complained that District Judge Powell had issued an amendment order following the hearing correcting Judge Moir’s order, he also complained bitterly that it had been issued as a result of a what he considered to be a the district judge’s serious procedural irregularity. DK contended that the district judge had stated that the absence of a costs order prevented him from undertaking an assessment of the costs of the permission hearing and had then stated that he had no power to amend the order and that only Judge Moir could do that. However, to the anger of DK, the district judge after the hearing issued an order amending Judge Moir’s order by adding a costs order to it. He contended that the district judge lacked the jurisdiction to make such an order and that only Judge Moir could have been made it. Moreover, by stating that he would not make the order, and then in issuing it after the hearing, the district judge had deprived him of the opportunity of arguing that that course should not be followed. 87. DK greatly expanded his objection to the order once he had obtained a transcript of the hearing. He then made the remarkable allegation that a passage in the tape from which the transcript had been taken had been deliberately edited out of the tape by District Judge Powell so that the transcript contained no passage in which the district judge could be seen to have stated that only Judge Moir could amend the order and that the district judge would not amend the order himself. 88. A careful reading of the transcript in its allegedly edited form, however, shows that DK’s contentions are misguided. A summary of what took place is as follows: (1) The hearing opened with DK applying for an adjournment because of his contention that the detailed assessment of costs should await the conclusion of his threatened judicial review. He was asked by the district judge during this part of his opening whether he had appealed the costs order that Judge Moir had made at the end of her judgment. He replied that he wished to appeal that order but had been unable to proceed with that appeal because of the defect in Judge Moir’s order. He also raised with the district judge a further failure, as he saw it, of Judge Moir’s order in that it had not extended the temporary stay on the enforcement of the interim costs order that had been imposed by Judge Walton. (2) The district judge then made a series of statements, the most pertinent being these I have emboldened the critical passages that show that District Judge Powell would himself correct the order under the slip rule following the hearing which he was adjourning and which he stated would be restored thereafter. : “So therefore there is clearly from the judgment [of Judge Moir] an order also for the payment of the costs of the appeal by DK.” “DK, I am inclined to agree with you in connection with the question of the appeal hearing. There isn’t set in the order an order that you pay the costs of the appeal. There should be. The order should therefore be further amended to make it clear that that’s so.” “And [DK] makes the point that he can’t appeal against the costs order until there’s an order.” “And I think that what needs to happen is that the judgement from Judge Moir needs to be perfected The transcript uses the word “effected” in this passage and in several others but the district judge has subsequently made it clear that he used the word “perfected”, the correct word to use in this context and the transcriber must have misheard that word when transcribing from the tapes. , certainly in relation to the costs, and needs to be served on DK. He can then consider whether he needs to apply for leave to appeal.” “Until such time that the order is perfected by the court, time doesn’t run for the purposes of giving any notice of appeal. So, at the moment it seems to me without further research that DK could still apply for permission to appeal Judge Moir’s decision, could he not?” “DJ Powell. Anyway, I’ll adjourn, I’ll adjourn the matter. DK. Thank you sir. DJ Powell. To a date to be advised in due course.” until there’s an order.”
“The order para (4) was made to allow the claimant time to go through the appeal process before enforcement was to be made. The correct process of seeking a judicial review is effectively an extension of that process and hence maintenance of the lifting of the enforcement order should be allowed. The order para (5) was made on the basis that there were no avenues of appeal and the costs were therefore the subject of assessment. The liability to pay the defendant’s costs was challenged and are to be referred to the Judicial Review Team of the Royal Courts of Justice.” 92. This notice of appeal was the first time that DK had indicated that he did not want Judge Moir’s order amended by the insertion of her costs direction and that he did not wish to appeal the costs order but wanted instead to mount an attack on the costs direction contained in Judge Moir’s judgment by way of judicial review. 93. DK’s misconceived objection to District Judge Powell’s order. DK has subsequently challenged the validity, fairness and correctness of the order made by District Judge Powell. His contentions and the answers to them are as follows: (1) District Judge Powell had no jurisdiction to make the amending order. DK contended that only Judge Moir or, possibly, another circuit judge, could correct or amend Judge Moir’s order and that it was not within a district judge’s jurisdiction to amend an order made at the level of a circuit judge. However, there is no rule of law which precludes the exercise by a district judge of the power conferred by the slip rule to correct an order made by or following a decision of a circuit judge assuming that the circumstances exist which make the use of the slip rule lawful and appropriate in that particular case. This is becauseCPR 40.12 states that “the court” (and not “the judge making the order”) may at any time correct an accidental slip or omission in an order. In this context, “the court” means any circuit or district judge (or any deputy judge or deputy district judge) of the Newcastle Combined Court. It is normally good practice for the judge who made the order to be the judge who is asked to amend it when necessary under the slip rule but where there are, as here, good reasons for another judge of the court to make a slip rule order, that other judge has the power to make it instead. (2) In this case, the judge making the slip rule amendment of a circuit judge’s order was the district judge assigned to the costs assessment hearing that the circuit judge had ordered to take place. This assessment hearing could not proceed until the order was amended. The district judge had made it clear, when adjourning the assessment hearing to enable the order to be amended, that it would be the court that would be making the amendment and both parties appeared to agree that this course should be adopted. There were, therefore, very good reasons for the district judge to make the amending order himself immediately after he had adjourned the assessment hearing rather than for him to delay the assessment process (and DK’s proposed appeal of the costs order) by arranging for Judge Moir to make the order on a later date. This is what Judge Walton decided when hearing DK’s appeal from District Judge Powell’s order See paragraph 95(1) below. . (3) The order was made in contradiction of the procedure that District Judge Powell had announced at the hearing. District Judge Powell did not state, as DK contended, that the application to amend the order under the slip rule would be placed before Judge Moir nor that he had no jurisdiction to correct the order. In fact, if the extracts from the transcript that I have quoted are carefully considered, it can be seen that he said that “the court” would correct the order, meaning in context that he would. The fact that DK misunderstood the expression “the court” to mean “Judge Moir” cannot alter the fact that the district judge gave the parties full and proper notice that he was going to amend the order himself under the slip rule following the hearing. (4) The correction of the order by District Judge Powell precluded an appeal of the costs order. DK submitted as follows: “Unless there are unusual and unavoidable circumstances, it is not within a district judge’s jurisdiction to amend an order made at the level of circuit judge. This action precluded the claimant from appealing the costs order at the level above the circuit judge. Paragraph 15 of DK’s witness statement dated2 January 2005 . ”
“… so far as the second order which the District Judge made, that is including the reference to costs, he was correcting what is obviously an accidental slip. And to that extent he was exercising his judgment in a way in which he was entitled to do. While the Practice Direction in Part 40 suggests that on an opposed application to correct an order, the matter should be if practicable referred to the judge whose order it is, there is no other guidance in the Rules to suggest that circuit judge orders have always to go to a circuit judge and that does not seem to me to correctly reflect the position. I have considered whether in this particular case the District Judge was wrong to do what he did in terms of the Practice Direction, and whether he should have referred the matter to Judge Moir, but in the circumstances I do not think that it was necessary for him to do so. The slip was a clear one and in a court where a judge like Her Honour Judge Moir is extremely busy it can take many months to find time for the matter to be mentioned to her. Bearing in mind also the fact that DK had been pressing for the court to do precisely what the District Judge was proposing to do, it seems to me in those circumstances he was entitled to take the step which he did, and to not follow the procedure which the Practice Direction recommended.”
“(1) Permission to appeal be refused.” (2) First correction,4 July 2003 read: 1. “Permission to appeal in respect of the decision of District Judge Howard on19 November 2002 be refused. 2. Permission under Rule 32.14 to bring proceedings for contempt of Court against Mark Gregory Heath be refused. 3. Permission to appeal paragraph 2 of this order be refused.” (3) Second correction,27 January 2004 read: “The Order dated18 June 2003 is further amended to include the following paragraphs: 4. The restriction on the ability of the Defendant to enforce Paragraph 2 of the Order of the District Judge dated19 November 2002 pending the hearing of the application for permission to appeal is hereby lifted. 5. The Claimant shall pay the Defendant’s costs of this application on the standard basis subject to a detailed assessment.” (4) Third correction,23 April 2004 read: 1. “Permission to appeal in respect of the decision of District Judge Howard on19 November 2002 be refused. 2. Permission under Rule 32.14 to bring proceedings for contempt of Court against Mark Gregory Heath be refused. 3. Permission to appeal paragraph 2 of this order be refused. 4. The Claimant shall pay the Defendant’s costs of this application on the standard basis subject to a detailed assessment.” 97. First version of Judge Moir’s order –18 June 2003 . The orderas originally issued contained no directions about the contempt application nor that DK should pay Canon’s costs of the application for permission to appeal nor that that the stay on the enforcement of the interim costs order should be lifted even though all three of these orders had been provided for in Judge Moir’s judgment when it was handed down. The order should never have been perfected in the form in which it was first issued. 98. First correction of Judge Moir’s order –4 July 2003 . The court on its own initiative issued an amended order dated4 July 2003 which added two further paragraphs dealing with the dismissal of DK’s contempt application and refusing permission to appeal this dismissal. Both these matters had been dealt with and decided in Judge Moir’s judgment. It is not now known who directed this change, why it was made on the court’s initiative or why it was confined to these two matters and did not also include the addition of paragraphs relating to the costs of the permission hearing or to the lifting of the stay of enforcement proceedings. A judge, probably Judge Moir, must have approved the order and it is likely that it was initiated when the terms of the original order were drawn to her attention and she appreciated that the order made no reference to her decision in relation to the contempt application that she had decided. 99. The first newly added paragraph was made under the slip rule since the paragraph had been accidently omitted and the second paragraph, refusing permission to appeal the first direction, although not expressly referred to in the judgment, was clearly implied by this passage in her judgment: “I take the considered view that this application was misconceived. … It is an attempt to manoeuvre around the order made by Judge Walton refusing to allow cross-examination of witnesses, which order has not been appealed. I deprecate the use of this procedure in these circumstances to make very serious allegations in respect of the professional integrity and conduct of Mr Heath. It is ill-founded and … I am satisfied that Mr Heath has acted professionally and competently. I refuse permission to bring contempt proceedings. At paragraphs 1 and 2 on page 11 of the judgment. ”
“2. In the interim [pending the detailed assessment of Canon’s costs] DK shall pay Canon the sum of£11,000 on account of costs by Friday6 December 2002 .” (2)13 December 2002 . Judge Walton, as part of his case management directions for DK’s appeal from the reinstatement decision, directed that: “No step shall be taken to enforce paragraph 2 of the order of the District Judge dated19 November 2002 pending the hearing of the appeal.” (3)18 June 2003 . Judge Moir handed down her reserved judgment refusing permission to appeal. The first two sentences of the final paragraph provided: “I turn to the issue of costs. The previous costs order made by the District Judge on19 November 2002 was not to be enforced pending the hearing of the application for permission to appeal. That application has now been determined, and therefore the suspension is lifted.” (4) The first version of the order dated18 June 2003 to give effect to the appeal was issued. The order provided: “1. Permission to appeal in respect of the decision of District Judge Howard on19 November 2002 is refused.”
“DJ Powell … [looking at the transcript of Judge Moir’s judgment] it seems to be clear to me that that stay on enforcement of the payment of£11,000 on account of costs has been lifted. DK Well, that is my contention, sir, that it has no ... . I agree with you, sir, that there is, there is this issue here where it would appear that that could be argued. My argument is … DJ Powell Well, it’s beyond argument. DK Well … DJ Powell It’s clear from the judgment [that the stay has been lifted]. DK Well … DJ Powell The transcript of the judgment. DK … yes, but the judgment is … DJ Powell Signed by the judge.”