Reliance National Insurance Company (Europe) Limited v Ropner Insurance Services Limited

Proceedings do not come before a judge on paper merely because a judge reads correspondence and responds to it. The phrase in paragraph 19 of the Practice Direction to Part 51 refers to proceedings being considered through a procedure recognised by the Civil Procedure Rules, normally an application under Part 23 or an exercise of the court’s own initiative under CPR 3.3. An informal letter may suffice only if the judge chooses to treat it as an application and acts under the Rules, including applicable safeguards. Where the judge’s response indicates that no procedural step has been taken, the automatic stay remains effective.

The appellants brought claims for misrepresentation and material non-disclosure arising from reinsurance business. The proceedings had become dormant after disclosure. Before the deadline in paragraph 19 of the Practice Direction to Part 51, the appellants sent correspondence to the Commercial Court seeking directions and asking that the papers be placed before a judge. The judge endorsed the correspondence: Automatic stay to apply.

The Commercial Court’s response was treated as an order, and the appellants appealed. The central issue was whether the proceedings had come before a judge on paper within the meaning of paragraph 19, so that the automatic stay did not arise.

1. Appeal dismissed. The proceedings were stayed under paragraph 19 of the Practice Direction to Part 51. The appellants remained entitled to apply to the Commercial Court for the stay to be lifted.
2. Per Lord Justice Latham, the context of the transitional provisions required “come before a judge ... on paper” to mean an occasion when the judge considered exercising powers under the Civil Procedure Rules 1998. Under CPR 3.3, the court could exercise its powers on an application or of its own initiative. Applications were governed by Part 23 and could be dealt with without a hearing under CPR 23.8.
3. A letter to the court did not constitute an application notice. It could nevertheless be treated as an application where the court properly exercised its powers under CPR 3.3. The judge’s endorsement in this case was not an exercise of those powers. It indicated that no step had been taken which prevented the automatic stay from operating.
4. Per Lord Justice Chadwick, the alternatives contemplated by paragraph 19 were an application under Part 23 dealt with at an oral hearing or an application dealt with without a hearing. Where there was no agreement, the court could proceed on paper under CPR 23.8(c) only if it considered a hearing inappropriate and complied with the safeguards in CPR 3.3 for affected parties.
5. The proceedings could not be forced before a judge merely by sending a letter which the judge read administratively. The judge had to decide whether to treat the correspondence as bringing the proceedings before him. The annotation Automatic stay to apply was inconsistent with such a decision, because a stay imposed after the proceedings had come before the judge would have required a separate order.
6. The application to lift the stay was for the Commercial Court, not the Court of Appeal as an adjunct to the appeal. The appellants were ordered to pay the necessary costs of the appeal.

• Commercial Court, Queen’s Bench Division: Morison J endorsed the correspondence with the words “Automatic stay to apply”.
• Court of Appeal (Civil Division): Appeal dismissed. The proceedings were stayed under paragraph 19 of the Practice Direction to Part 51. Any application to lift the stay was to be made to the Commercial Court.