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EXTRA DIVISION, INNER HOUSE, COURT OF SESSION
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Lord Osborne
Lord Macfadyen
Lord Kingarth
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[2006] CSIH 40
P187/05
OPINION OF THE COURT
delivered by LORD OSBORNE
in
RECLAIMING MOTION
by
HER MAJESTY'S SECRETARY OF
STATE FOR TRADE AND INDUSTRY
Petitioner and Respondent;
against
EDWARD COAKLEY
Respondent and Reclaimer:
for
a disqualification order
in terms of the Company Directors Disqualification Act 1986
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Act: A.F. Stewart; Semple Fraser LLP
Alt: Lindhorst; Russel & Aitken
29 June 2006
[1] In
this reclaiming motion against the interlocutor of the Lord Ordinary, dated 14 February 2006, in the
grounds of appeal which have been lodged by the respondent and reclaimer, a
number of points of criticism are made of the Lord Ordinary's decision in
relation to the procedural course which he has adopted. In the interlocutor of 14 February the Lord
Ordinary did a number of things. In
particular, those which are important in the context of the reclaiming motion
are these. The respondent's motion at
the Bar for a further period of adjustment was refused. Further, the Lord Ordinary allowed parties a
hearing on the petition and answers. It
is apparent from the interlocutor itself, which granted diligence for citing
witnesses and havers, and also from the Note which the Lord Ordinary has
written in relation to this interlocutor that he contemplated what he describes
as a proof before answer. That is
apparent from the terms of paragraph 18 of the Note.
[2] In
the course of the discussion of the decision of the Lord Ordinary, consideration
was given to the procedure which ought to be followed in a case of this nature,
that is to say a petition under section 6 of the Company Directors Disqualification
Act 1986 and answers thereto. At one
point it was suggested that Rule of Court 60.5 might have application to these
proceedings, but it is now clear to us that that cannot be so, by virtue of the
provisions of Rule of Court 60.1, which governs the scope of the succeeding
provisions of Chapter 60 of the Rules of Court.
It provides that that Chapter applies only to an application for
suspension, suspension and interdict or suspension and liberation. This petition is none of those things. Rule of Court 14.8, however, we consider is
applicable in the circumstances of this case and indeed that was accepted by
counsel for the reclaimer. It provides
that:
"Where
answers to a petition have been lodged, the petitioner shall, within 28 days
after the expiry of the period of notice, apply by motion for such further
procedure as he seeks, and the court shall make such order for further
procedure as it thinks fit."
So, in these circumstances, in our
opinion, the Lord Ordinary had a discretion as to the procedure which should be
followed in this petition and answers.
[3] The
argument for the reclaimer was developed in relation to several points. In the first instance, it was said that, in
the interlocutor of 14
February 2006, no mention was made of the pleas-in-law of the
respondent and, in particular, what were conceived to be preliminary
pleas. It is undoubtedly the case that
the respondent has tabled certain pleas which, on any view, are preliminary
pleas, although the status of others is uncertain. It appears to us that, unless a plea is in
fact expressly or, by necessary implication, repelled, that plea is to be taken
as standing until such time as it is the subject of decision. Accordingly, we consider that, although the
Lord Ordinary, in the interlocutor in question, did not mention preliminary
pleas, or indeed, any other pleas-in-law specifically, he has not repelled
them. Our view is confirmed by what the
Lord Ordinary says in paragraph 18 of his Note.
He there explains that the interlocutor of 14 February 2006 in paragraph 5 thereof, stated
that the court allowed parties a hearing on the petition and answers and
granted diligence for citing witnesses and havers. That form of words, he says, was intended to
convey that the court was allowing a hearing of the petition and answers at
which parties would be entitled to lead evidence. In other words the court was allowing a proof
before answer. Accordingly, it is clear
to us that the Lord Ordinary has not repelled any plea of the respondents and
that they all remain standing awaiting determination.
[4] In
the second place, it was contended that the Lord Ordinary demonstrated that, in
relation to a significant element in this petition, he had prejudged certain
matters. The area in which it was said
that he had prejudged those matters was in relation to the public
interest. It should be explained that,
in terms of section 7(1) of the Company Directors Disqualification Act 1986, it
is provided that:
"If it
appears to the Secretary State that it is
expedient in the public interest that a disqualification order under section 6
should be made against any person, an application for the making of such an
order against that person may be made"
by the persons specified, who
include the Secretary of State. In connection
with that provision it was contended that therefore an issue of public interest
arose in relation to the bringing of this petition. We say nothing at all as to whether any such issue
can properly be ventilated in this petition itself, but it is clear that, in
the averments made by the reclaimer, such issues are sought to be raised. Accordingly, it is necessary to consider
whether anything said by the Lord Ordinary in his Note suggests that he has, in
any way, prejudged these matters. In
paragraph 9 of the Note, in the first alleged example of his having prejudged
such matters, there is a reference to the public interest. The Lord Ordinary says there, in relation to
a refusal of leave to reclaim, that:
" ... it
seemed to me to be contrary to the public interest to allow these proceedings
to be further delayed without good reason".
In our view, it is quite clear that
the public interest to which the Lord Ordinary was referring in that passage is
the obvious public interest in the expeditious disposal of this case and not to
any public interest issue arising out of the terms of section 7(1) of the 1986
Act.
[5] We
now turn to paragraph 12 of the Lord Ordinary's Note, which was also cited as
an indication that he had prejudged the public interest in a relevant
sense. In that paragraph the Lord
Ordinary states that:
"It
appeared to me to be in the public interest that a hearing should be fixed on
the petition and answers".
That was said in the context of the
Lord Ordinary's refusal to allow further opportunity for adjustment to be made
by the respondent. Again, in our view,
it is entirely clear that that reference is a reference to the public interest
in the expeditious disposal of litigation and not to any issue that might arise
in connection with section 7(1) of the 1986 Act.
[6] The
final reference to the public interest made by the Lord Ordinary which was said
to indicate a prejudging by him of the relevant issue in the petition is to be
found in paragraph 16 of the Note.
Again, in that paragraph the Lord Ordinary was considering the course
which the proceedings should take and he was contemplating whether preliminary
issues, whether of fact or law, should be determined in advance of a full
hearing, as separate matters. In
connection with these issues he stated:
"I noted
that proceedings of this nature are brought in the public interest. It appeared to me that a considerable period
had already elapsed since the commencement of the proceedings. It was in my view important, in the public
interest, that the petition and answers should be determined, as a whole,
without further unnecessary delay. That
could be achieved if a hearing were to be allowed encompassing all issues
raised in the petition and answers, and at which proof would therefore be led."
In that passage there are two
distinct references to public interest.
The first is that there is a passing reference to the public interest
issue, based upon the terms of section 7(1) of the 1986 Act. On that the Lord Ordinary says no more than to
make that reference. The second
reference is plainly, once again, a reference to the public interest in the
expeditious disposal of litigation.
Accordingly, looking at all of these passages of the Lord Ordinary's
Note we cannot discern any indication that he has prejudged any issue which may
be ventilated in the hearing.
[7] In
the third place, in a response to a question by the court, counsel for the
reclaimer indicated those pleas in law which he considered might reasonably be
disposed of as preliminary matters; it
is not appropriate for us, at this stage, to go into any detail concerning
those matters, or to comment on the merits of any of those pleas. It is sufficient to note that in paragraph 16
of the Lord Ordinary's Note he considered the possibility of certain preliminary
issues being disposed of separately. He
considered the possibility of the respondent's status as a director being so
disposed of and he said that he could see merit in that idea. He also said he could see some merit in
dealing with some of the legal points raised by the respondent in a
debate. However, having regard to other
considerations to which we have already referred, he concluded that the better
course was for the petition and answers to be determined as a whole which would
conduce to an early disposal. We can see
no valid basis for criticism of the Lord Ordinary's exercise of his discretion
in that connection.
[8] Fourthly,
criticism of the Lord Ordinary was made in connection with that part of the
interlocutor of 14
February 2006 in which he refused a further opportunity to the
respondent and reclaimer for adjustment.
That also was discussed by him in paragraph 16 of the Note. He plainly contemplates that, even though a
hearing were to be fixed, the respondent would have, in the nature of things, a
significant period of time in which to make any necessary changes to his
pleadings, if so advised. It appears to
us that there is really no substance in the criticism of the Lord Ordinary in
not allowing an adjustment period. No
injustice was done because the Lord Ordinary had contemplated that the
pleadings could be changed in the period between 14 February 2006 and the holding of the
hearing.
[9] Finally,
it was said that, in any event on the matter being remitted to the Outer House,
this court should order that it should be remitted to a different Lord Ordinary
from the one who pronounced the interlocutor of 14 February 2006. It is not suggested that there was any actual
bias on the part of the Lord Ordinary, who had previously dealt with the matter,
but, on the basis of some circumstances to which we have already referred, it
was argued that apparent bias was present and, against that background, the
motion should be granted. We have
considered the various points that were advanced in support of that view and,
for the reasons we have already indicated, we do not consider that any of these
points demonstrate apparent bias. We
therefore see no reason why these proceedings should not be remitted back to
the Lord Ordinary from which they have come.
[10] For all these reasons we shall refuse the reclaiming motion.
