England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES

		7 Rolls Buildings Fetter Lane London EC4A 1NL
		14 June 2018

MR JUSTICE MORGAN:

1. I am dealing with an application in an action where Mr Gill is the claimant and the defendants are Anami Holdings Ltd and Clark Hill Ltd. The relevant application is made by the defendants by an application notice dated 5 June 2018. The order I am asked to make is an order under the relevant parts of CPR Rule 3.1 to the effect that the forthcoming trial in this action be limited to questions relating to the validity of the settlement agreements and that resolution of the underlying dispute be postponed to a further hearing to be held only in the event that the claimant's challenge to both of the agreements succeed. Before addressing more particularly what is involved in that application I should say that I have heard something of the degree of preparation which has been undertaken in relation to this matter. I have also been told that it is currently listed to be heard with a ten day estimate, including pre-reading and judgment with the trial window beginning on 25 June 2018. It is not just my view, but it appears to be the views of the parties or their representatives, that there is a great deal to be done to be ready for a trial on that occasion and it also appears to be likely that the time estimate of ten days or part thereof may well prove to be challenging and difficult to conform to. I am not in fact asked to give directions between today's date and the trial date as to the steps that need to be taken and I am not asked as such to change the time estimate. What I am asked instead is to make the order as per the application notice which I have read out.
2. In order to make sense of the application for present purposes I need to explain that what is described as the underlying dispute is a dispute which was initially brought in 2011 and is now effectively pleaded out in the counterclaim in these proceedings and the defence to counterclaim. That dispute is on its own a significant dispute. It will require investigation of the relationship between the parties between 2003 and 2007. It will require consideration of whether certain individuals had fiduciary obligations. It will then involve an investigation in detail of a transaction which took place in 2007. It will be necessary for the court to find whether what happened amounted to a breach of fiduciary duty, whether it amounted to actionable misrepresentation, whether it amounted to the tort of deceit and then there may be issues as to quantum. At present that counterclaim is to be tried at the forthcoming trial and it is the underlying dispute which the application notice asks should be postponed to a later trial.
3. The settlement agreements referred to in the application notice are agreements or apparent agreements which were entered into first in 2012 and then in 2014. What is going to trial is whether those agreements were real or whether they should be set aside. In very brief summary, it is being said by Mr Gill, the claimant, that the 2012 settlement was simply a sham, not intended to be genuine and acted upon, and the 2014 agreement while not a sham is vitiated by acts of duress practised upon him by representatives of the defendants. At present the underlying dispute and all the issues about the two settlement agreements are going to be tried. The case has been prepared on that basis. The case has been pleaded on that basis. Disclosure has been given on that basis. Witness statements have been prepared on that basis. The reason for that is there has been quite considerable thought at earlier stages as to how these matters are to be litigated. I have been taken to a transcript of a hearing on 16 June 2017 before His Honour Judge Raeside sitting as a judge of the High Court. He had the benefit of a three day hearing involving an application for summary disposal. He then case managed the case and he made an order. Paragraph 7 of his order of that date directed the defendants to plead out the grounds of claim in the underlying dispute and then there was this phrase: "With a view to resolving all the issues between the parties". That is why the case has been prepared for the underlying dispute to be tried.
4. There was a pre-trial review on 14 May 2018 before His Honour Judge Jarman, again sitting as judge of the High Court and, as I understand it, there was a fairly full court day dealing with the arrangements for the trial. It was not suggested before Judge Jarman on the pre-trial review that the trial should be divided so that what would be tried in a week or so would be the validity of the two settlements leaving the question of the underlying dispute to another time.
5. Coming to the matter afresh, as I do, and without the sort of depth of understanding that I would have acquired if I was myself conducting a pre-trial review I can see quite forceful arguments each way for and against the order I am asked to make. It does seem to be unusual, or at least requiring justification, that the court is going to try the issue whether an action has been settled and also try the action which it might find has been settled. The whole purpose of the suggested settlement was to avoid a trial of the action, but yet that is to happen even at a time when the court has not decided the settlement is ineffective and at a time when the court might in the future hold the settlement was effective. On the other hand, Judge Raeside had reasons for his decision that the three matters should be tried together and Ms Tozer who has appeared under the CLIPS scheme on behalf of Mr Gill today has pointed out that in the course of the trial about the settlements, if the trial is confined to those matters, there is going to be an investigation with the witnesses involving cross-examination which is going to take one into the issues in the underlying dispute, the strength of those issues, the parties' belief as to the strength of those issues so that there is more overlap than one might imagine between the issues in the underlying dispute and the issues in the claims about the settlements. It is, to my mind, quite a difficult judgment to call as to which set of submissions to prefer. I am not, of course, unused to making difficult judgment calls, but in the end I have decided I will not make it in this case.
6. I have an initial difficulty as to my jurisdiction to essentially make a different case management decision from that made by Judge Raeside and acted upon ever since his decision in June 2017. As regards interim decisions generally, a later judge ought not to depart from an earlier interim decision unless usually there is good justification usually involving a change of circumstances. One might take a more relaxed approach in the case of case management, because case management could be regarded as a living thing which changes from time to time, but one should not too readily case manage in a way that is inconsistent with earlier decisions which have been acted upon and which were expected to be the governing decisions. In this case the parties do not agree on what should happen, so the default decision ought to be that the earlier case management direction should prevail. Another reason for hesitation is that this application is being made in the Interim Applications Court under pressure of time. There was very recently indeed a pre-trial review when the application was not made, as it should have been as a more appropriate time, given the amount of notice between the pre-trial review and the hearing itself.
7. In those circumstances, I am not going to change the case management of this case up to date. Having said what I have said, it will remain open, as it always is open, to the trial judge to decide how the trial before him or her is to be conducted. The trial judge is in a special position and has special advantages which were not available to any other case management judge. The trial judge will have seen the pleadings, the witness statements, the bundle, will have read the openings, will for the first time possibly be steeped in the detail and will have developed his or her own views as to how the matter is to be managed. Therefore, the trial judge if he or she takes the view that the case management directions of Judge Raeside should be varied, nothing I say should in any way tie the hands of the trial judge. I in particular want to make it clear that it is not to be submitted to the trial judge that Morgan J said that Judge Raeside's management directions could not be altered. I say nothing of the kind, although I do say that I am not going to alter them at this hearing today.
8. That is my decision on that application.
L A T E R
9. In relation to the application of 18 May as regards expert evidence I will reserve the costs of that application to the trial judge who it seems is likely to hear an application about the evidence of Miss Marsh. In relation to Mr Gill's costs of the application notice of 5 June 2018 I am going to order the defendants to pay Mr Gill's costs as a litigant in person in relation to that application. It seems to me that although I have said the trial judge in his or her special capacity as trial judge has got renewed case management powers, I have essentially held that it was not appropriate for me to be asked to exercise whatever powers I have, in the way envisaged.
10. As to the possibility of a pro bono costs order, I am not going to add that to the burdens of the trial judge. The trial judge has been burdened with plenty already. However, I am not prepared to rule out the possibility of a pro bono costs order in relation to the relevant application of 5 June 2018. I will permit an application for pro bono costs to be made on paper. If it is to be made, it should be made within seven days and it should be responded to. I will give a long period for a response because it will probably involve the defendants' legal advisers doing things when they are going to be really rather busy, so if Ms Tozer wishes to make an application for a pro bono costs order I am going to say 14 days and a response 21 days thereafter. I am increasing the seven to 14, because if the defendants are not going to be able to work on it for some considerable time it is not so essential that they have it. If Ms Tozer takes the view that she will not incur the time and expense of making the application then she can inform Mr Butler that nothing more will be heard of it, but if it is to be pursued, then in writing to me 14 days, response 21 days thereafter.
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