“The second respondent was interested (at least in a general, non-technical sense) in [the revesting issue under section 283A] because it claimed as successor in title to the first respondent. If that created another issue to be resolved, that is, the validity and effectiveness of the transactions between the first and second respondents, then that issue would have to be pleaded out and tried so that it could be resolved as rule 19.2 requires. If on the other hand joinder of the second respondent to the Bankruptcy Application did not involve a new issue between the applicants and the second respondent, and was only for the purpose of binding the second respondent to the decision on the revesting issue, then the only issue to be resolved would be that section 283A issue. It may be that Mr John Jarvis QC thought that the answer was the former rather than the latter (although it is fair to say that this was before the strike out application was made). I also thought (but later) that it was the former, and that is one reason why I said what I said in paragraphs 37 and 38 of my judgment of23 March 2020 . The applicants take the same view. But the second respondent submits that the answer is the latter, not the former.”
“29. … It is to be noted that this was a case where the applicant for a vesting order (Mr Hunt) indeed challenged the local authority’s title, and argued that the local authority had no business being involved in the case. Yet the judge, far from requiring the local authority to prove its title, summarily dismissed the application to remove it. As he said, the local authority was the obvious respondent.”
“30. In the light of the second respondent’s fuller arguments at the hearing I am persuaded that my earlier view (formed without the benefit of, inter alia, Hunt v Conwy CBC) was wrong, and that the purpose of joining the second respondent was not to raise a new issue which had to be pleaded and tried out, but instead so that the second respondent should be bound by the decision in the claim between the applicants and the first respondent. The issue between the applicants and the first respondent was as to where the rights to the cottage and the strip lay as between them. If it were then to be decided that those rights lay with the first respondent as trustee in bankruptcy (ie if the claim under section 283A failed) then, so long as there was no prospect of all the creditors being paid and a surplus being realised, the applicants would have no further interest in where the title went after that. On the other hand, the creditors would or might be interested, because, if the first respondent dealt with the property so as not to realise as much as could reasonably be done, then they would lose money. But it would make no difference to the applicants. 31. Whether the second respondent has a good claim to any rights in the cottage and the strip that the first respondent might have is a matter between the first and second respondents (and possibly the bankruptcy creditors), but it does not concern the applicants. Their concern is with the claim to revesting under section 283A. On the other hand, the second respondent is directly affected by the litigation between the applicants and the first respondent, because the second respondent claims under the first respondent. If the first respondent has no rights (because they have been allocated to the applicants by operation of bankruptcy rules) then the second respondent obviously gets nothing. It is in this respect exactly like the Hunt case, where the local authority claimed (indirectly) under the trustee in bankruptcy who had disclaimed the fee simple estate, so that it escheated to the Crown. As I have said, Morgan J said, in circumstances where the trustee in bankruptcy had been released and had no further interest in dealing with the claim, that the local authority was the obvious respondent. 32. In my judgment, that is sufficient to resolve this application. The second respondent was joined because it would be directly affected by the result of the litigation between the applicants and the first respondent, and it is necessary or at least desirable that the second respondent be joined in order that it is bound by the result, thus avoiding a multiplicity of litigation. In my judgment the second respondent is not obliged to go on and prove the validity of transactions between the first respondent and itself. That is not an issue in the section 283A claim. It was an issue in other parts of the Bankruptcy Application put forward by the applicants, but they were struck out for lack of standing. It would be an issue between the first and second respondents, if the first respondent chose to make it so, or perhaps between the bankruptcy creditors and the respondents, but they have not chosen so to argue.”
“46. So far as relevant to this case, there are two important and related rules in the administration of justice. One is that no-one should be a judge in his or her own cause: Dimes v Grand Union Canal (1852) 3 HLC 759, 793. The other is, as Lord Hewart CJ once famously remarked, “that justice should not only be done, but also must be manifestly and undoubtedly be seen to be done”: R v Sussex Justices, ex p McCarthy[1934] 1 KB 256 , 258. The two rules overlap. It is obvious that, if a person judges his or her own cause, justice will not be done, or at any rate will not be seen to be done. Where a judge has a pecuniary or other significant personal interest in the outcome of the case, such as the promotion of a cause, the judge is automatically disqualified: R v Bow Street Metropolitan Stipendiary Magistrate, ex parte Pinochet Ugarte (No 2)[2000] 1 AC 119 , HL. It does not matter whether the judge knew or not of the interest. “that justice should not only be done, but also must be manifestly and undoubtedly be seen to be done”: R v Sussex Justices, ex p McCarthy[1934] 1 KB 256 , 258. 47. But the second rule goes wider. It extends beyond cases where the judge has a personal interest to cases of bias. As the Court of Appeal once put it, “Bias is an attitude of mind that prevents the judge from making an objective determination of the issues that he [or she] has to resolve”: Re Medicaments and Related Classes of Goods (No 2)[2001] ICR 564 , [37]. The law distinguishes actual bias from apparent bias. The former is subjective, and deals with the judge’s state of mind, while the latter is objective, and deals with the judge’s conduct and the surrounding circumstances. Where a judge is actually biased in a decision, then justice has not been done. Where a decision is tainted by apparent bias, then justice is not seen to be done. Cases holding that there has been actual bias employed by a judge are rare. Most cases dealing with bias are argued and decided on the basis of apparent bias. 48. As to the law in relation to recusal by judges for bias, the claimants cited Howell v Lees-Millais[2007] EWCA Civ 720 (referring to Porter v Magill[2002] 2 AC 357 , Lawal v Northern Spirit[2003] ICR 856 , HL, and AWG Group v Morison[2006] 1 WLR 1163 , CA). The general principle is not in any doubt. In Porter v Magill[2002] 2 AC 357 , the House of Lords endorsed the approach taken by Lord Phillips MR in Re Medicaments and Related Classes of Goods (No 2)[2001] ICR 564 , as follows: “[85] … The court must first ascertain all the circumstances which have a bearing on the suggestion that the judge was biased. It must then ask whether those circumstances would lead a fair-minded and informed observer to conclude that there was a real possibility, or a real danger, the two being the same, that the tribunal was biased.”
“25. [ … ] By contrast, a real danger of bias might well be thought to arise if there were personal friendship or animosity between the judge and any member of the public involved in the case; or if the judge were closely acquainted with any member of the public involved in the case, particularly if the credibility of that individual could be significant in the decision of the case; or if, in a case where the credibility of any individual were an issue to be decided by the judge, he had in a previous case rejected the evidence of that person in such outspoken terms as to throw doubt on his ability to approach such person's evidence with an open mind on any later occasion; or if on any question at issue in the proceedings before him the judge had expressed views, particularly in the course of the hearing, in such extreme and unbalanced terms as to throw doubt on his ability to try the issue with an objective judicial mind [ … ]; or if, for any other reason, there were real ground for doubting the ability of the judge to ignore extraneous considerations, prejudices and predilections and bring an objective judgment to bear on the issues before him. The mere fact that a judge, earlier in the same case or in a previous case, had commented adversely on a party or witness, or found the evidence of a party or witness to be unreliable, would not without more found a sustainable objection. In most cases, we think, the answer, one way or the other, will be obvious. But if in any case there is real ground for doubt, that doubt should be resolved in favour of recusal. We repeat: every application must be decided on the facts and circumstances of the individual case. The greater the passage of time between the event relied on as showing a danger of bias and the case in which the objection is raised, the weaker (other things being equal) the objection will be.”
“26. We do not consider that waiver, in this context, raises special problems [ … ]. If, appropriate disclosure having been made by the judge, a party raises no objection to the judge hearing or continuing to hear a case, that party cannot thereafter complain of the matter disclosed as giving rise to a real danger of bias. It would be unjust to the other party and undermine both the reality and the appearance of justice to allow him to do so.”
“29. [ … ] while I fully understand the judge's concerns (see paragraph 15 of his judgment quoted above) about the prejudicial effect that his withdrawal from the trial would have on the parties and on the administration of justice, those concerns are totally irrelevant to the crucial question of the real possibility of bias and automatic disqualification of the judge. In terms of time, cost and listing it might well be more efficient and convenient to proceed with the trial, but efficiency and convenience are not the determinative legal values: the paramount concern of the legal system is to administer justice, which must be, and must be seen by the litigants and fair-minded members of the public to be, fair and impartial. Anything less is not worth having.”
“I have just ascertained that Dr Geoffrey Guy, director of Chedington Court Estate Ltd, and therefore effectively a party to these proceedings, attended the same school as me, and was indeed in the same form, during the late 1960s and early 1970s. During this time we were friends, although eventually our paths diverged, as he was interested in the science subjects and I in the arts. I do not think we have seen each other for over 40 years. We live in different parts of the country and have pursued different career paths.”
“The test for when a judge should recuse himself or herself is that the circumstances would lead a fair-minded and informed observer to conclude that there was a real possibility of bias. In the circumstances that I have set out above, I do not consider that there is any such possibility. But I am setting all this out so that the parties can consider whether they wish to take a different view.”
“40. [ … ] The concern addressed in this statement is that a fair-minded and informed observer would conclude that there was a real possibility of bias arising out of the manner in which the judge has avoided acknowledging the existence of the central claims of Unlawful Conduct alleged against Dr Guy and the Trustee. 41. Those claims of Unlawful Conduct on the part of Dr Guy are the claims that form the basis of the relief claimed under s. 303(1) for both Reversal and, against Chedington, on the Vesting Issue. In five separate rulings or judgments, starting with the 2 March Judgment, the judge has not once referred to Dr Guy’s Unlawful Conduct. This is not feasible in a case where the main issues that the judge has had to determine since he became involved earlier this year have concerned whether the Applicants and Chedington respectively have a legitimate interest in litigating the dispute about the Unlawful Conduct.”
“In the 4 May judgment, the judge does not address any of the following submissions of the Applicants: 36.1 The No Appeal Point – the judge has not identified the jurisdiction he was exercising in the absence of an appeal against the earlier decisions that the question of Chedington status should be tried on the pleadings. 36.2 The No Dispute Point – the judge has not addressed the fact that there is no longer any dispute between the persons whom he found in paragraph 24 to be the true parties to the Vesting Issue (in respect of which Chedington was to play a passive role under a Type 1 joinder). 36.3 The Inconsistency Point – the judge has not considered Chedington’s conduct in avoiding determination of the question whether it has any interest in the Cottage Eviction Proceedings by successfully persuading that court that the nature and extent of its interest was to be determined in the Bankruptcy Application. 36.4 The Timing Point – the judge has not addressed the submission that Chedington should have taken the point when it was fully debated and decided at the CMC on12 December 2019 . 36.5 The Purpose Point – the judge has not considered the lengths to which Chedington has gone to avoid the court looking at the merits of its claim to have acquired an interest in the Cottage. 36.6 The No Strike out Point – although it is not clear, the judge appears to have proceeded in paragraphs 34 and 35 of the judgment of 4 May on the basis that the Applicants’ pleaded case that Chedington has no legitimate interest is struck out without referring to the No Strike out Point. 36.7 The If Not Now, When? Point – the judge has overlooked the Applicants’ submission that, after it made the Declaration Application, Chedington itself has acknowledged that the question of its status must be tried, but has not identified when. 36.8 The Unviable Declaration Point – the judge has not explained the basis upon which any court could make the declaration sought, namely, that a court would try a case at the instigation of a person who has no legitimate interest in the outcome. 36.9 The Counter-Factual Point – the judge has failed to address the fundamental change of circumstances since10 May 2019 or the submission that Chedington would not have been joined underCPR 19.2 if there was no dispute inside the bankruptcy and if Chedington had submitted that it had no legitimate interest in the outcome.” 36.1 The No Appeal Point – the judge has not identified the jurisdiction he was exercising in the absence of an appeal against the earlier decisions that the question of Chedington status should be tried on the pleadings. 36.2 The No Dispute Point – the judge has not addressed the fact that there is no longer any dispute between the persons whom he found in paragraph 24 to be the true parties to the Vesting Issue (in respect of which Chedington was to play a passive role under a Type 1 joinder). 36.3 The Inconsistency Point – the judge has not considered Chedington’s conduct in avoiding determination of the question whether it has any interest in the Cottage Eviction Proceedings by successfully persuading that court that the nature and extent of its interest was to be determined in the Bankruptcy Application. 36.4 The Timing Point – the judge has not addressed the submission that Chedington should have taken the point when it was fully debated and decided at the CMC on12 December 2019 . 36.5 The Purpose Point – the judge has not considered the lengths to which Chedington has gone to avoid the court looking at the merits of its claim to have acquired an interest in the Cottage. 36.6 The No Strike out Point – although it is not clear, the judge appears to have proceeded in paragraphs 34 and 35 of the judgment of 4 May on the basis that the Applicants’ pleaded case that Chedington has no legitimate interest is struck out without referring to the No Strike out Point. 36.7 The If Not Now, When? Point – the judge has overlooked the Applicants’ submission that, after it made the Declaration Application, Chedington itself has acknowledged that the question of its status must be tried, but has not identified when. 36.8 The Unviable Declaration Point – the judge has not explained the basis upon which any court could make the declaration sought, namely, that a court would try a case at the instigation of a person who has no legitimate interest in the outcome. 36.9 The Counter-Factual Point – the judge has failed to address the fundamental change of circumstances since10 May 2019 or the submission that Chedington would not have been joined underCPR 19.2 if there was no dispute inside the bankruptcy and if Chedington had submitted that it had no legitimate interest in the outcome.”
“Good or bad, or a mixture of each, these submissions had to be addressed.” “Good or bad, or a mixture of each, these submissions had to be addressed.”
“(2) The court may order a person to be added as a new party if – (a) it is desirable to add the new party so that the court can resolve all the matters in dispute in the proceedings; or (b) there is an issue involving the new party and an existing party which is connected to the matters in dispute in the proceedings, and it is desirable to add the new party so that the court can resolve that issue.”
“12. Crucially, the Declaration Application was expressly made on the footing that, if it was not granted, Chedington would have to call Dr Guy as a witness. The choice provided to the Judge was: do not try the pleaded case or we will have to call Dr Guy. At that stage, there was no witness statement from Dr Guy and Chedington made it clear that it was not intended to call Dr Guy. Chedington was even going to call the Trustee – ie Dr Guy’s collaborator in the alleged Unlawful Conduct. But there was no intention to call Dr Guy unless the Declaration Application was dismissed. And so the Judge was faced, in reality, with the decision whether or not to preside over a trial in which his former school friend (who is a party in all but name) would be cross-examined on the basis that he had participated in and/or had notice of the Unlawful Conduct.”
“26. This was especially so in circumstances where: 26.1 There had been no appeal against the earlier decisions that the issue should be tried. 26.2 The issue was fully pleaded and no application to strike out had been attempted. 26.3 There had been no material change of circumstances since23 March 2020 when the question had been determined decisively. 26.4 The need for a trial of Chedington’s status was particularly acute because there was otherwise no dispute between the proper parties (i.e. within the bankruptcy). 26.5 Even without the procedural history and assuming all other considerations in Chedington’s favour, it could cite no authority, textbook or other learning in support of the proposition that a party could insist on a full trial of an issue without having a legitimate interest in its determination.”
“Declining to make the declaration sought on grounds that the parties are too close to trial when, in fact, the reason is more likely to be an acknowledgement that no court could reasonably make a declaration in the terms sought”
“27.2 The judge decided not to make the declaration (it is inferred because no court would do so in the terms sought) but to proceed to trial as if it had been made.”
“37 In the present case I do not think that a declaration is necessary, because the purposes for which it is sought relate to a hearing before the court beginning shortly. It is not needed, for instance, in order to persuade a third party to behave in a particular way, as in the example given by Lord Woolf above. The court will obviously take notice of what it has previously held on this application.”
“13 At the PTR, the judge indicated a preliminary view in favour of having a trial without establishing Chedington’s right to oppose it – effectively of reversing his decision of a few weeks earlier, ignoring the pleadings and avoiding the need to call Dr Guy.”
“… having an open mind, which I certainly do because I haven't heard any arguments yet as to what the tests ought to be except from Mr Sutcliffe, and therefore I'm interested to know what your arguments are, I can't measure the arguments until I have both sides…”
“In the light of the second respondent’s fuller arguments at the hearing I am persuaded that my earlier view (formed without the benefit of, inter alia, Hunt v Conwy CBC) was wrong, and that the purpose of joining the second respondent was not to raise a new issue which had to be pleaded and tried out, but instead so that the second respondent should be bound by the decision in the claim between the applicants and the first respondent.”
“29 … the Observer would see that the judge has been hyper-critical of the Applicants he has criticised publicly and extensively on procedural matters.”
“41. It seems to me that, in essence, what the Brakes are seeking to do by these two applications is to subvert the substantive decisions which I made on 2 and3 March 2020 . What I then decided was that the only matter of substance to be determined in May was the section 283A issue. The Brakes would have me sweep that aside, and replace it with an entirely new issue, not disclosed on the pleadings as they stand, dealing instead with the validity of the Licence. In my judgment, this is quite wrong, and I have no hesitation, for the reasons given above, in refusing the Notice Application.”
“1. On 2 and3 March 2020 I heard and decided a number of matters arising in this lengthy and hard-fought insolvency litigation. Since then the parties have been unable to agree a form of order to give effect to my various rulings given on those days. I have seen emails from counsel for both the Brakes and Chedington, giving their views on what the form of order should be. It is therefore necessary for me to rule further on the matter. 2. I may say that I do not do so with any enthusiasm. This matter is already consuming far more of scarce judicial resources than is appropriate or proportionate. For some reason, both of the main protagonists in this matter seem inclined to devote unlimited resources to this litigation. Every point that can possibly be taken on each side is being taken, and the result is close to stalemate.”
“Finally, I have more than once in this long-running litigation had cause to mention the heavy claim that it is making on scarce judicial resources…”
“7. … I mention in passing that this is an irregularity, because parties should not appear on the record in two separate capacities. There are a number of authorities which deal with that … But I do not pause to deal further with it now. In the present case it does not make any difference in substance, at least for present purposes.”
“On10 March 2020 Mr Stephen Davies QC for the Brakes submitted a skeleton argument in order to make and support an application (as foreseen at the hearing on 2 and3 March 2020 ) to lift the stay imposed by Mr John Jarvis QC on12 December 2019 on the Eviction Proceedings, pending trial of the Bankruptcy Application and the Liquidation Application, then listed for seven days from11 May 2020 . So far as I am aware, no formal application notice has ever been issued, or any fee paid. As agreed at the hearing of 3 March, but especially in the circumstances of the present health emergency, where the courts are being urged to deal with cases so far as possible without a physical court hearing, I have dealt with the matter on paper.”
“I accept that this behaviour on behalf of the Brakes is unhelpful, and wasteful of judicial and other resources. It is indeed unfortunately symptomatic of the unnecessarily aggressive approach taken hitherto by both sides in this litigation, and is much to be deprecated.”
“It seems to me that the interests of justice here demand that the issues between the parties should be dealt with at trial as soon as possible, with no more skirmishing between them.”
“(i) An order underCPR 3.1 (2)(f) that the Bankruptcy Application be stayed generally or pending final determination of the appeal of the decisions of HHJ Paul Matthews dated3 March 2020 (the Appeal) and the trial of the Bankruptcy Application listed in the w/c11 May 2020 (the Trial) be vacated; or in the alternative: – (ii) An order underCPR 3.1 (2)(b) that the Trial be adjourned generally or pending final determination of the Appeal.”
“In the light of the rules, and the default position that they create, the burden is on the Brakes to show that a stay should be granted. However, there is no evidence (or even argument) to show that any harm, let alone any irreparable harm (see DEFRA v Downs, above, at [9]), will be done to them in the meantime if execution of the order is not stayed and yet the appeal is successful. And, on the material before me, I see no other basis for ordering a stay of the order. I therefore refuse a stay.”