Gillan & Ors v HEC Enterprises Ltd & Ors [2017] EWHC 461 (Ch)

Case Nos: 314 and 315 of 2016[2017] EWHC 461 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
COMPANIES COURT
Venue The Rolls Building, 7 Rolls Buildings, Fetter LaneDate 25/01/2017
London EC4A 1NL
Before
MR. JUSTICE MORGAN
Between
(1) IAN GILLANClaimants(2) ROGER GLOVERClaimant(3) IAN PAICEClaimant(4) VICTORIA LORD AND KEITH GLOVERClaimant(2) DEEP PURPLE (OVERSEAS) LIMITEDDefendants(3) MARK SUPPERSTONEDefendant(4) SIMON HARRISDefendant(Joint Administrators of HEC ENTERPRISES LIMITED andDefendantDEEP PURPLE (OVERSEAS) LIMITED)Defendant
Digital Transcription by Marten Walsh Cherer Ltd.,1 st Floor, Quality House, 6-9 Quality CourtChancery Lane, London WC2A 1HP.Telephone No: 020 7067 2900. Fax No: 020 7831 6864e-mail: info@martenwalshcherer.com
MR. EDMUND CULLEN QC (instructed by Russells Solicitors) appeared for ClaimantsMR. ANDREW SUTCLIFFE QC (instructed by Fieldfisher LLP) appeared for RespondentsMR. SIMON JACOBS (of Seddons Solicitors) appeared forManuela EdwardsMR. RAZI MIRESKANDARI (of Simons, Muirhead and Burton) appeared forRichard BlackmoreMR. MICHAEL YATES (of Lee & Thompson LLP) appeared for David Coverdale
JUDGMENT
[1]On 9th December 2016 I gave judgment in relation to two applications in this litigation. The judgment was a reserved judgment, the two applications having been argued over two days on 28th and 29th September 2016.[2]The two applications which were before me are summarised in paragraph 5 of the judgment I gave. The first was an application by the claimants for permission to continue two sets of proceedings, notwithstanding the statutory moratorium on legal proceedings against a company in administration. The second application was by the administrators of the two companies for an order granting them a right of indemnity out of the trust assets in relation to remuneration of costs and expenses. That application was made pursuant to the jurisdiction recognised in ReBerkeley Applegate (Investment Consultants) Limited [1989] 1 Ch 32.[3]The judgment dealt with the factual background based upon the material that the parties chose to put before the court. As regards the first application for permission to proceed with litigation, I was able to determine the substantial issues that were raised in that litigation and that produced the result that it was not necessary to give a formal ruling on the application for permission to proceed: see paragraph 65 of the judgment.[4]However, I went on to consider what I would have done if the application had not been overtaken by events. I dealt with that between paragraphs 66 and 68 of the judgment. In particular, for 15 reasons given in paragraph 68, I reached the conclusion that the court would have given the claimants permission to continue the proceedings and indeed the administrators ought to have consented to the continuation of those proceedings.[5]Those findings are plainly relevant to issues on which I have yet to hear argument as to the costs of that application, but those issues were also relevant to certain conclusions I reached in relation to the second application as to Berkeley Applegate remuneration, costs and disbursements.[6]In paragraph 70 of the judgment I referred to the second application. I stated that there was considerable dispute as to the extent of the relevant principle and also how it applied to the facts of this case. I should say that although the existence of the principle was not in dispute, the extent of it was and certainly the application of the principle to the facts was very much considered and argued based upon the material the parties chose to put before the court at the hearing.[7]I discussed the principle and at paragraph 95 of the judgment I began to identify the relevant considerations and my conclusions on them.[8]In paragraph 100 I stated:
“The real dispute between the parties is as to the extent to which work of the kind described by the administrators’ counsel ... comes within that principle, so that the administrators’ claim should go forward for detailed assessment.”
I then added:
“I consider that I should address the description of the work which has been put forward and to comment upon it and then to consider the result which emerges from that exercise.”
[9]In the following paragraphs I made a number of findings and a number of comments and I then addressed the seven categories of work which had been earlier identified.[10]I held in relation to a number of categories that some of the work could in principle come within the Berkeley Applegate principle, but I was not in a position to make findings as to precisely what work came within the Berkeley Applegate principle and of course therefore not able to identify a figure for remuneration or disbursements in that respect.[11]In relation to some categories I was able to go further, based on the material that had been placed before me. I held, for example, in relation to category 4 that the work did not come within the Berkeley Applegate principle and in relation to paragraph 5 I would not allow the work within that category within the principle.[12]In phrasing the finding in that way “I would not allow the work” I had regard to my findings and comments, but also to the governing consideration expressed in the Berkeley Applegate principle itself, which is that the court’s discretion in this area is one to be sparingly exercised. Having regard to those matters, I held I would not allow the work within category 5.[13]It is also right to comment that in relation to some of the charges which were put forward by the administrators, ostensibly within the Berkeley Applegate principle, I ruled that they were in fact to be dealt with under the court’s jurisdiction as to the costs of litigation, a matter which I have yet to deal with.[14]In paragraph 112 of the judgment I identified the possibilities as to what might happen next. One of the possibilities was that the court would make an order identifying what had been decided and what remained to be decided. Alternatively, the court would simply make no order. It would remain for the administrators to pick up what remained of their claim after costs had been dealt with to particularise it and consistently with the principles in the judgment, which I did not envisage would have to be investigated a second time, the principle would be applied.[15]Unfortunately at this hearing today, which was scheduled to deal with consequential matters, the parties are not agreed on the order I should make to give effect to this part of the judgment. Mr. Cullen QC, acting for the claimants, has invited me simply to make no order on the second application, alternatively to dismiss it. It may be that there is no difference in substance between those two. I have yet to hear from Mr. Sutcliffe QC on behalf of the administrators as to whether he wishes there to be some different order.[16]Instead of the court being in a position to proceed to deal with consequential matters following a reserved judgment, events have taken a surprising turn at the hearing today. Mr. Sutcliffe, appearing on behalf of the administrators, has made an application asking the court to revise certain conclusions I reached. It is said that I have jurisdiction to do that, pursuant to the principle explained by the Supreme Court in ReL-B(Children) (Care Proceedings) (Power to revise judgment) [2013] 1 WLR 634. Mr. Sutcliffe would ask me not only to revise the judgment or reconsider the judgment, but then produce findings which are at variance from the findings I have already made. To advance that application, Mr. Sutcliffe has shown me a substantial body of material which was not put before me at the hearing in September or at any time prior to the giving of the reserved judgment. I have a fourth witness statement from one of the administrators, exhibiting a very substantial body of material. Part of it I was shown before, being the open exchanges between the parties, but that is supplemented by a substantial amount of material which I have not been taken to in detail but which is either headed “without prejudice” in some cases or, more commonly, “without prejudice save as to costs”.[17]I have also been told that there were meetings and the words “without prejudice” were used to describe the character of those meetings, although a submission was made to me that that phrase “without prejudice” should in the context be understood as a statement that the statements made at the meeting, the contents of the meeting, the business of the meeting, was without prejudice save as to costs and not without prejudice simpliciter.[18]Before considering what I should do in relation to the application and the suggested admission of this further material, I think I need to remind myself as to certain things that were said about without prejudice material when the matter was argued earlier. I go to the material that was put before the court before judgment was given. I was provided with a witness statement of Mr. Tregear (on behalf of the claimants) and at paragraph 49 of that witness statement, Mr. Tregear said:
“Following the Administrators’ Report”, in relation to the administration, “I attended a meeting on a without prejudice basis at Fieldfisher’s offices. Fieldfisher have objected to me saying anything as to the attendees, substance and/or outcome of that meeting so I say no more about that meeting.”
[19]I also had a witness statement from Mr. Supperstone (one of the administrators), his first, dated 21st June 2016. At paragraph 35 of that witness statement he refers to the fact that a without prejudice save as to costs letter was sent by the claimants’ solicitors to the administrators’ solicitors. He said this:
“I do not say anything about the contents of that letter because they are subject to the without prejudice save as to costs rules and they are therefore confidential at the moment. However, I can say that Fieldfisher responded on behalf of the Joint Administrators on 11 March 2016. Without waiving privilege in any way, I am advised that, in view of the fact that Tregear 1 has referred to both the existence and content of the without prejudice meeting on 22 March 2016 to which I refer to below, it is appropriate for me to refer to at least the existence of without prejudice exchanges between the parties (but not their content) in this witness statement.”
[20]At the hearing there was a full discussion, with detailed submissions, by reference to the material before me as to what had happened in this case and why it had happened. Mr. Cullen on behalf of the claimants took me in detail to that material, put forward his analysis of it and invited me to take a certain view of the history. Mr. Sutcliffe dealt with that and responded and asked me to take a different view of the history. I then reserved my judgment.[21]Following the hearing, I received a note prepared by Mr. Sutcliffe and his junior, Mr. Wee. I should preface my comment on this note, that at this stage, which was 5th October 2016, I had decided what to do on the first application. I decided various issues in the underlying litigation so that what remained was the Berkeley Applegate application and questions of costs. The note I received from the administrators’ counsel referred to the question of without prejudice privilege. In paragraph 3 of the note it was said that the court had been made aware of the existence of the without prejudice discussions and then this sentence appears, ‘Quite properly the court was not informed of their content’. There were further statements made as to why the court should not deal with comments that had been made as to the history of the matter and the conduct of the parties. It was said it would be procedurally unjust for the court to do that. However, the whole hearing in September had involved an examination of the history of the matter and the parties chose the material to put before the court.As I read this note it was still being accepted that the court would not have before it, for the purpose of resolving the dispute which the parties had raised, ventilated and argued, the without prejudice material. That caused me no surprise as it seemed to me to be obvious that I would have to deal with the matter on the basis of open material without regard to without prejudice material.[22]Following the administrators’ counsel’s note, I received a note in response from Mr. Cullen, who took the stance that the court should determine the matters which had been ventilated on the basis of the open material and without regard to without prejudice material. I plainly had to deal with this matter in the judgment I gave and between paragraphs 90-94 of the judgment I explained my approach to without prejudice material. I explained that I would decide the issues which had been argued on the basis of the open material the parties had put before the court and without regard to without prejudice material. I added that I thought it was inappropriate for counsel for the administrators to suggest that if only he could refer to without prejudice matters, the case would look better from his clients’ point of view so that the court would be guilty of (his phrase) gross procedural injustice if it decided a case on the basis of the evidence before it.[23]As I earlier indicated, the application which is now made is that I should review the findings and comments I made, replace them with different findings, more favourable to the administrators, and I should do that having admitted the without prejudice, or without prejudice save as to costs, material, heard submissions on it and come to my overall assessment.[24]The first comment to make is that the material which is now put before me was all available in September and it was not provided in September. Mr. Sutcliffe has argued that that material is admissible in a court considering the type of points I considered, having heard them argued in September. If it were admissible then, then it should have been raised then and an application made to admit it, if necessary inviting the court to deal first with other matters in relation to which it was not admissible.[25]As I read the evidence before me in September and indeed the note from counsel in October, it was being accepted that I should decide the issues that had been argued, rather than some only of those issues, on the basis of the material before me.[26]Quite apart from that, I have heard argument today from one side, Mr. Sutcliffe, as to whether the material he wishes now to rely upon is admissible for the purpose of the Berkeley Applegate application. Mr. Sutcliffe makes two submissions in the support of the admissibility of that evidence. First, he says that Mr. Cullen waived the without prejudice privilege in the material and therefore it was open to the other party (the administrators) to regard the material as opened up and available to put before the court. Of course if that had been right, that submission could have been made in September but was not made. However, more fundamentally, I am not persuaded that anything that has happened here has amounted to a waiver by the claimants of this without prejudice material. What Mr. Sutcliffe’s submission came to was that Mr. Cullen’s reliance on open material without referring to the without prejudice material resulted in a distorted picture being provided and if only the without prejudice material could have been admitted the overall picture would have looked different. It is obvious that that does not involve a waiver by the claimants of the without prejudice material. For the sake of completeness, I comment that no other argument based on fairness, apart from waiver, was put to me to support the argument that the material had been admissible .[27]The other argument is that the material in question, or much of it, is headed “without prejudice save as to costs”. It is then said, somewhat adventurously, that when that conventional heading referred to “costs”, it was not confined to litigation costs, but extended to all the issues relating to the application in reliance on the Berkeley Applegate principle. In the absence of something special in the circumstances, I would not accept that submission. Without prejudice save as to costs normally refers to litigation costs. Indeed, I am not aware of any case where it has been held that it could refer to anything else. An application by an office holder for remuneration and disbursements under the Berkeley Applegate principle is not an application for litigation costs. It is conceptually quite different. I will not take time in this judgment today to spell out again what is spelt out in my earlier judgment as to the different bases of the jurisdiction. So, on the face of it, the material which is without prejudice save as to costs cannot be somehow smuggled in on a Berkeley Applegate principle with the suggestion that costs extends to Berkeley Applegate remuneration and disbursements.[28]Mr. Sutcliffe says that if only I were to look at the material I would see that the parties here have used the word “costs” in a special way with a special meaning, and therefore I should read it as extending to costs and also to an application for an allowance for remuneration and disbursements under the Berkeley Applegate principle. Mr. Sutcliffe relies upon a statement in Unilever plc v Procter & GambleCompany [2000] 1 WLR 2436 where Robert Walker LJ, as he then was, spelt out that it is possible to vary by agreement the rule of public policy which is that without prejudice matters are excluded from consideration by the court. The way in which the Lord Justice put it at 2445 D does not confine the possibility of such an agreement to using the phrase “save as to costs” but refers to “in other respects” which could be wider.[29]If I were to follow that submission and apply it to the documents in this case, it would inevitably be a detailed exercise that would take some time. I am not prepared to embark on that exercise. This material, if it were open to that treatment, could have been deployed earlier and was not deployed. The court has conducted a hearing and then given a reserved judgment addressing the arguments that were put in September by reference to the material adduced in September. It does not seem to me to be appropriate or just, certainly not just to the other party to the litigation, for the court to be asked to do that exercise a second time. In other words, this seems to me to be the plainest case of a party that has argued their case once, obtained an unfavourable result, coming back and saying to the court the matter should be done again based on the material that was available all along in the hope that on the second bite of the cherry the result would be more favourable.[30]As to my jurisdiction to re-open the judgment, I was referred to the ReLB case. I take from that that the overriding objective of the hearing in September and of this hearing is to produce a just result, having regard to the definition of overriding objective in the Civil Procedure Rules. I have had regard to the Civil Procedure Rules and it seems to me that a fair application of the definition of overriding objective is wholly in favour of me refusing this application rather than entertaining it.[31]If I were to entertain this application, it would not save expense, it would increase it. It would not be proportionate, it would be disproportionate. I would not be dealing with the matter expeditiously and fairly. I would not be allotting to this application an appropriate share of the court’s resources, but an inappropriate share and I would be depriving other litigants to some extent of the time available to deal with their cases.[32]I have no hesitation in rejecting the application to re-open the judgment. There is no proper basis for it. The suggestion that I should do so would be quite unfair to the other parties. There is of course a process of appeal. I say nothing about that, but sitting at first instance my judgment is my judgment.