Norden v Yeldon & Anor

A claimant must prove by evidence the loss said to flow from a breach of duty or fraud. The seriousness or moral culpability of the alleged misconduct cannot, by itself, support an inference of loss. Where preferential liabilities create a threshold before the claimant can establish any recoverable loss, evidence must show loss exceeding that threshold. A preliminary estimate or guideline is insufficient if it is not evidence of the loss claimed. Permission to appeal may properly be refused where the claimant has no reasonable prospect of overcoming that evidential deficiency. A very late amendment seeking punitive damages, shortly before trial, requires an overwhelmingly strong reason, particularly where no proper basis for the claim is shown.

Norden v Yeldon & Anor arose from claims by a former managing director against administrative and Law of Property Act receivers. He alleged that they had breached their duties and acted fraudulently by selling company assets and properties to his former wife at an undervalue.

At a hearing in the High Court at Manchester on 13 November 2000, His Honour Judge Kershaw QC refused a late application to amend the statement of claim to add punitive damages. He also, in effect, gave summary judgment for the defendants because Mr Norden had produced no evidence establishing the quantum of loss, including loss exceeding approximately £43,000 attributable to preferential creditors. Permission to appeal was refused below. The central issues before the Court of Appeal were whether there was a realistic basis for challenging those decisions, and whether allegations of bias, improper communication, procedural unfairness or breach of Article 6 justified permission.

Application for permission to appeal dismissed. Lord Justice May delivered a single judgment.

1. The essential difficulty was evidential. A claimant, like any other litigant, must establish the claim by evidence. Mr Norden had to prove the loss flowing from the alleged breaches of duty or fraud. The alleged failure by the receivers to obtain valuations did not relieve him of that obligation.
2. The alleged misconduct could not be used as a substitute for proof of loss. Its degree of culpability or moral reprehensibility had no necessary connection with the amount of loss caused. Mr Norden also had to establish loss exceeding approximately £43,000, because preferential creditors had to be paid before any shortfall could affect his liability as guarantor. He came to trial without evidence establishing that threshold. The preliminary material from Morse Rowland was expressly only a guideline and not a valuation of damages. On that basis there was no reasonable prospect of successfully challenging the effective summary judgment.
3. The refusal to add a claim for punitive damages was plainly unarguable on appeal. The proposed amendment came long after the relevant events and when the trial was about to begin. An overwhelmingly strong reason would have been required, and no proper basis for allowing the amendment was shown.
4. The allegations of private communication and judicial bias were unsupported. The transcript indicated that Mr Norden himself had referred to the solicitors’ delay in providing hearing bundles. That allegation therefore supplied no proper basis for an appeal. The complaint that he had been prevented from making a strike-out application did not provide a viable ground either.
5. The asserted Article 6 and procedural-fairness complaints did not overcome the absence of evidence on quantum. Permission to appeal was accordingly refused, and the formal order was that the application for permission to appeal be dismissed.

1. High Court at Manchester, Queen’s Bench Division, Mercantile List: on 13 November 2000, His Honour Judge Kershaw QC refused a late amendment seeking punitive damages, in effect entered summary judgment for the defendants on the absence of evidence proving loss, and refused permission to appeal.
2. Court of Appeal (Civil Division): permission to appeal was refused. The application was dismissed.