Robinson v Nichols (t/a Redman Nichols)

On a second appeal, permission requires both a reasonable prospect of success and an important point of principle or practice. A viable argument alone is insufficient. A claim may be struck out where, even taking the pleaded facts as proved, they disclose no legally viable cause of action. A liquidator does not ordinarily owe personal duties of care to a director or shareholder merely because of that person’s position. Such a duty may arise from an assumption of responsibility in special circumstances, but those circumstances must be pleaded. In their absence, claims in conversion or negligence cannot proceed.

Mr Robinson brought claims against an insolvency practitioner for conversion of a cheque and negligence in connection with the liquidation of his company. A District Judge struck out the claim when Mr Robinson was absent through illness. On appeal, His Honour Judge Cockroft accepted the reason for his absence and reheard the strike-out application afresh, reaching the same conclusion.

Ouseley J granted permission to appeal to the Queen’s Bench Division on the basis that some arguments might be viable, but did not have Judge Cockroft’s full reasons. It was later accepted that any further appeal lay to the Court of Appeal. The central issues were whether the contentious witness statements required a trial and whether the pleaded claims disclosed any legally sustainable cause of action.

Application dismissed. Time for making the application was extended because the loss of the court papers and the banking of Mr Robinson’s cheque provided a sufficient explanation for the delay.

1. Second appeal. Permission requires more than a viable argument. The proposed appeal must have a reasonable prospect of success and raise an important point of principle or practice. The application failed both requirements.
2. Strike-out procedure. A court considering whether a claim is legally sustainable may examine the pleaded case without conducting a trial. It must avoid resolving genuinely disputed questions of fact where those questions require evidence. Judge Cockroft had carefully directed himself around the disputed factual issues and had not purported to determine them. The contentious witness statements therefore did not prevent a proper decision on the pleadings.
3. Conversion and negligence. The conversion claim was untenable. The claims described as negligent advice and wilful neglect were also incapable of succeeding. A liquidator does not owe an individual personal duties of care merely because that individual is the company’s principal director and shareholder. A duty may arise where the liquidator assumes responsibility in particular circumstances, but that requires circumstantial proof of a special kind. No such circumstances had been pleaded.
4. Even if the matter had been a first appeal, there would have been no reasonable prospect of success. The Court of Appeal accordingly dismissed the application for permission to appeal.

1. Court of Appeal (Civil Division) — Time for the application was extended, but the application for permission to appeal was dismissed.
2. Leeds County Court — The District Judge struck out the claim. His Honour Judge Cockroft reheard the issues afresh on appeal and reached the same conclusion.
3. High Court — Ouseley J granted permission to appeal to the Queen’s Bench Division, without having Judge Cockroft’s full judgment. It was subsequently accepted that any appeal lay to the Court of Appeal.