England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
COMPANIES COURT
(Mr Justice Park)

		Royal Courts of Justice Strand London WC2 Friday, 5th July 2002

1. LORD JUSTICE MUMMERY: This is a renewed application for permission to appeal. The application is made by Mr. Darton on behalf of Mr. Andrew Selby, who wishes to appeal against an order made by Park J in the Chancery Division on 15th April 2002. By his order Park J struck out Mr. Selby's appeal notice dated 22nd December 1998. The appeal notice was against a disqualification order made by Mr. Registrar Simmonds on 25th November 1998 for a period of two and a half years. The order was made under the provisions of the Company Directors Disqualification Act 1986. The term of the disqualification expired over a year ago in May 2001.
2. When the application for permission to appeal against a striking out order was dealt with on the papers by Robert Walker LJ, he gave his decision on 21st May 2002 refusing permission for the following reasons:

"This is in form an application for a first appeal and I treat it as such, as the judge did, but it does not meet the test for a first appeal to the Court of Appeal. The judge carefully and sympathetically weighed up the relevant considerations and exercised his discretion. I do not think there is any substance in the criticisms of his exercise of discretion."

3. Under the CPR rules, Rule 52, it is provided that, on an application for permission to appeal, the court must be satisfied that the proposed appeal has a real prospect of success, and that is the question I must ask myself when considering the submissions of Mr. Darton.
4. The background to the case need not be described in detail. It is an unfortunate series of events, occurring to a young man who was put into a difficult situation by being made a director, at the age of 19, of a company which later become insolvent. This all happened as long ago as July 1991. The real driving force behind the companies concerned was Mr. Selby's father, who was also disqualified from acting as a director, but for a longer period of seven years. That was an order made pursuant to the procedure known as the Carecraft procedure which is invoked in many cases in the 1986 Act. I am not immediately concerned with whether the disqualification order was correctly made or not because the basis on which Park J dealt with the matter was that Mr. Selby was not, in all the circumstances, entitled to proceed with an appeal, which had been started as long ago as December 1998 and not brought on for hearing.
5. The question for decision by Park J arose out of two applications made to him, the initial application being by Mr. Selby himself. He applied for an order that the stay imposed on his appeal under the provisions of Part 51 of the Civil Procedure Rules 1998 be lifted and that his appeal against the order of Mr. Registrar Simmonds should be allowed to proceed, it having become stayed after 25th April 2000 under the provisions of Part 51 of the CPR. He submitted that, prior to the imposition of the stay, the hearing of the appeal on 20th April 1999 had been adjourned with the consent of the Secretary of State for Trade and Industry pending the resolution of Mr. Selby's application for legal aid. It was submitted that it would be just, in the exercise of the court's case management powers under the CPR, to lift the stay and give directions for the hearing of the appeal.
6. That application came on with a counter-application by the Secretary of State applying for an order that Mr. Selby's appeal be struck out or dismissed due to time outstanding, because of the length of time which had elapsed since the appeal had been launched. In deciding how to deal with these applications, Park J said that he heard full argument on whether the appeal should proceed and also full argument on the substantive merits of the appeal. But he added:

"It was visualised that, if I decided that the appeal should proceed, I would be able to continue immediately to decide whether it succeeded or failed without the need for further argument."

7. He then proceeded to say that his decision on the first question was that the appeal should not succeed. In those circumstances, he did not say how he would have decided the appeal if he had not struck it out.
8. Having set out the factual background to the disqualification proceedings, their procedural history and the procedural history of the appeal, he posed the question, should the appeal proceed? In saying that it should not, he directed himself that he had a discretion under the CPR to strike out the appeal on the grounds that it would be unsatisfactory and an abuse of process for it to continue. He was satisfied that he had that jurisdiction. He then went on to consider the exercise of his discretion, having stated that he did not consider that his decision involved any breach of Mr. Selby's rights under Article 6 of the European Convention on Human Rights to a fair trial of his civil rights and obligations. He was well aware of the unusual nature of the application, pointing out that he had not been referred to any authorities on striking out an appeal, as opposed to an action at first instance, for want of prosecution.
9. Mr. Darton does not dispute that the judge had the power to make a striking out order in relation to an appeal. His grounds of challenge in his skeleton argument and oral submissions today were directed to the way in which the judge exercised his discretion. His principal point was that the judge did not give the consideration that he should have done to the proportionality of the sanction of the striking out which he imposed. In particular, he did not consider other possible sanctions which can be imposed for the dilatory conduct of legal proceedings short of striking out, such as making orders for costs. He also criticised the decision of the judge on the ground that the judge himself, having heard the argument on the merits, found that there were some prospects of it succeeding. In the judge's words, he said:
10. I said at an earlier point that this is not the sort of case of which I can say that, if Mr. Selby's appeal proceeded, it would be virtually bound to fail",
11. adding, however, that it would, all the same, be a difficult appeal.
12. Mr. Darton said that there was no prejudice, either to the Secretary of State who had brought the disqualification proceedings and was a respondent to the appeal, or to the good administration of justice, in allowing this appeal to proceed. He asked what was to be gained by not giving a judgment on the merits of the appeal. The person who would be prejudiced by the lack of such a judgment would be Mr. Selby himself, who would be deprived of his right to challenge the disqualification order on the appeal. The consequence of being deprived of that right would be that there would be a stain or mark on his character in the form of the disqualification order, even though it had now expired.
13. In brief, Mr. Darton's submission was that Park J was mistaken in the exercise of his discretion in treating the case before him as an all or nothing case. That was a serious misdirection. When the full range of options was properly considered, the more appropriate exercise of the discretion would be to allow the appeal to proceed and perhaps make an order for costs in order to deal with the delay, an order, for example, that Mr. Selby should pay the costs of the appeal, whatever the outcome.
14. In my judgment, while deserving of sympathy, Mr. Selby faces a difficult task, both in challenging the judge's order and, even if he succeeded in challenging the judge's order, in overturning the disqualification order. I shall, however, like the judge, express no views on the prospects of success in relation to the appeal against the disqualification order.
15. The judge dealt with Mr. Darton's submissions to him very comprehensively and helpfully summarised his reasons for his conclusion under six heads. He said that, first, the appeal was completely stale. That is undoubtedly true. The judge was dealing with the matter in April 2002 in respect of an appeal notice of 22nd December 1998. As I have already indicated, the period of disqualification expired over a year ago. Secondly, he said that he was dealing with a civil matter, not a criminal matter. Thirdly, referring back to the background to the history of delay, he found grounds for criticizing the way in which the appeal had been handled, particularly in relation to the decisions which had to be taken when the legal aid authorities made it clear that there would be no continued public funding for an appeal. He said that, once the Legal Aid Board's appraisal had reached that stage, Mr. Selby ought either to have withdrawn his appeal or proceeded with it promptly and without legal aid. Instead, it was left on foot while his then solicitors engaged in what the judge described as a wild goose chase, in attempts to get legal aid restored. He did not consider that it was acceptable that Mr. Selby should now try to revive the appeal at his own expense, now that his personal financial circumstances had improved. Fourthly, he found that the Treasury Solicitor, who acts for the Secretary of State, had not been kept fairly or fully informed of what was going on. Fifthly, he accepted the submissions from the Secretary of State's counsel that it was against the public interest for a stale appeal against a disqualification order to be revived, and that it could discredit the system if appeals were left in a state of suspense for protracted periods so that no one could be sure if a person had been properly disqualified or not. Finally, he said that there were unsatisfactory aspects of the proceedings before him. He referred to new bits of evidence being produced from time to time as the hearing progressed. It was for that accumulation of reasons that the judge decided that the appeal ought not to be allowed to go on.
16. He then gave over a section of his judgment to dealing with the merits. He stated in conclusion that the disqualification order had been only made for a short period. It had now expired and, in his view, Mr. Selby was now entitled to put the unfortunate matter behind him and to stop thinking of what had happened as a stain on his character.
17. Like Robert Walker LJ, I do not think that this appeal has a real prospect of success. I have sympathy for Mr. Selby, but one has to face up to the reality that this court will only interfere with the exercise of a discretion if it has been exercised on a wrong legal basis, such as by taking account of irrelevant matters or leaving out of account relevant matters, or if one is able to say, looking at the exercise of the discretion, that it was plainly wrong. Even though this court or another judge might have exercised the discretion differently, it does not mean that the judge's order was wrong. There is, in the concept of discretion, a range of permissible choices open to the person exercising it. It is only if he strays outside the range of permissible choices that the court will interfere on an appeal. In my view, Park J gave more weight to some factors than I would have given, but I am unable to say, at the end of the day, that his decision was plainly wrong, or that it was flawed by not taking account of relevant matters. I take the point from Mr. Darton that the judge did not specifically consider the alternative order of making an order for costs. I do not think that that would have been a realistic way of dealing with an appeal which had been languishing so long without being progressed. As for Mr. Darton's emphasis on the lack of prejudice to the Secretary of State, I do not think that is in any way a decisive matter in cases of this kind. Expedition in dealing with appeals, as well as with trials, is part of the regime of the good administration of justice which a member state of the Convention is entitled to enforce consistently with the rights of litigants under Article 6. It cannot be good for the administration of justice for appeals to be lodged and then not proceeded with for years, even though one of the excuses advanced is that the matter was in the hands of solicitors, who were to be criticised for letting down their client in not doing what they should have done. I do not enter into who is at fault between solicitor and client in this matter. The position is that Mr. Selby had solicitors and, if they were not dealing with the case on his instructions as they should have done, then the remedy was with him, namely withdraw instructions and instruct others who would progress the appeal. For those reasons I reach the same conclusion as Robert Walker LJ. This appeal has no real hope of succeeding, and it would not be a service to anybody to allow what I regard as a hopeless appeal to proceed to a full hearing. The application is refused.
Order: Application refused.