Juer v PricewaterhouseCoopers

Permission for a second appeal requires an important point of principle or practice, or another compelling reason. An appellate court must respect a registrar’s or judge’s discretionary decision unless a wrong principle, irrelevant or omitted material, or a plainly wrong outcome is shown. The decision-maker may consider the proposed appeal’s merits when deciding whether to extend time. An unchallenged judgment debt and an insufficiently evidenced cross-claim did not satisfy that threshold. Refusing permission did not determine whether bankruptcy should follow. The county court retained its discretion to consider the debtor’s objections and the wider circumstances of any cross-claim.

PricewaterhouseCoopers served a statutory demand for £10,000 owed under an interim costs order. The demand was challenged in the Brighton County Court, but the application to set it aside was dismissed on paper. A bankruptcy petition was presented, and the petition hearing was adjourned.

Mr Juer’s appeal against the refusal to set aside the demand was out of time. The Bankruptcy Appeals Registrar refused an extension on 7 January 2002. Blackburne J dismissed the appeal on 25 March 2002. The issue before the Court of Appeal was whether permission for a second appeal should be granted, including whether the merits of the proposed appeal had properly been considered and whether the refusal to extend time was plainly wrong.

Outcome. Lord Justice Chadwick refused the applications. The statutory threshold for a second appeal under CPR 52.13 and section 55(1) of the Access to Justice Act 1999 was not met.

1. The question whether to extend time was entrusted to the registrar’s discretion. An appellate court should not interfere merely because it might have exercised the discretion differently. Intervention requires a wrong principle, reliance on irrelevant matters, failure to consider relevant matters, or a decision so plainly wrong that it falls outside the permissible range of reasonable disagreement.
2. The registrar was entitled to consider the likely merits of the proposed appeal when deciding whether there was any purpose in extending time. The only potentially relevant ground for setting aside the statutory demand was a properly arguable cross-claim of sufficient value to extinguish the petition debt, which was an unchallenged judgment debt.
3. The fixed-charge argument, based on the Privy Council advice in Agnew v Commissioners of Inland Revenue [2001] 3 WLR 544, was not dismissed as unarguable. Nor was the related argument under section 245 of the Insolvency Act 1986 conceptually unarguable. But the material did not show an arguable claim against PricewaterhouseCoopers: the claims appeared to be against individual administrative receivers, and there was no material showing that any floating-charge liabilities would be less extensive than the fixed-charge liabilities.
4. The refusal of permission did not immediately make Mr Juer bankrupt or prejudge the bankruptcy petition. At the petition hearing, the county court remained required to consider the debtor’s points under section 271 of the Insolvency Act 1986. A cross-claim could not simply be set off against the petition debt, but might be relevant to whether the discretionary bankruptcy remedy should be exercised in favour of a professional firm whose members faced a substantial claim.

The order was that the applications be refused.

1. Court of Appeal (Civil Division). On 23 May 2002, the application for permission to bring a second appeal was refused.
2. High Court, Chancery Division, Bankruptcy Court. Blackburne J dismissed the appeal against the refusal to extend time on 25 March 2002.
3. Bankruptcy Appeals Registrar. The Registrar refused the application for an extension of time on 7 January 2002.
4. Brighton County Court. A deputy district judge dismissed on paper the application to set aside the statutory demand on 7 November 2001.