Crabtree v NG

The Court of Appeal considered applications for permission to appeal various case-management orders arising from a petition under section 994 of the Companies Act 2006 and an order sought under section 996(2)(e). The contested orders debarred the appellant from relying on evidence of disputed fact at trial for failure to comply with court directions and refused relief from sanctions. The court declined to disturb the first-instance exercise of case-management discretion and the refusal of relief from sanctions, emphasising deference to the judge, the applicability of CPR 3.9 principles and the risk of prejudice and delay to the respondent. By contrast, the court allowed an appeal against a judge's "show cause" wasted costs order as exceptional: the court had initiated the order, particulars were not given, the respondent did not press the order and the likely amount involved was modest. The Court of Appeal also removed an unnecessary paragraph from Lewison J's order.

This appeal arises from a petition presented on 10 October 2007 under section 994 of the Companies Act 2006, seeking a court-ordered purchase under section 996(2)(e) of the respondent's shares in the Natural Duvet & Pillow Company Limited. The litigation was protracted, with preliminary hearings before Peter Smith J and later directions given that required the appellant, a litigant in person, to file a list of factual issues and the evidence intended to be relied upon by specified deadlines.

The principal procedural history is: the petition was adjourned for further evidence and joinder of a third party (Zhenjiang Liuqiao Feather Company Limited); the parties agreed the amount of the ZLF debt; successive orders required the appellant to provide detailed lists of factual issues and disclosed evidence and warned of debarment for non-compliance. The appellant repeatedly failed to comply fully and was given opportunities but ultimately was refused relief from sanctions by Lewison J.

The matters before the Court of Appeal were: (i) applications for permission to appeal against the case-management and debarment orders and against Lewison J's refusal of relief from sanctions; and (ii) an application for permission to appeal a "show cause" wasted costs order made by Peter Smith J in relation to counsel who acted in the proceedings.

The Court of Appeal (Master of the Rolls, Arden LJ and Carnwath LJ) held that: (i) case-management decisions, enforcement of debarring orders and relief from sanctions are primarily for the judge at first instance and will not be disturbed unless there has been serious error in principle or misapprehension; (ii) the appellant, although a litigant in person, had been given fair opportunities and the court did not identify unfair treatment amounting to denial of a fair trial; (iii) permitting the late factual evidence would have caused prejudice and delay and risked undermining the scheduled trial, particularly when much of the disputed matters fell within expert accounting evidence (notably the report of Ms Chung) and primary records were unavailable; and (iv) for those reasons permission to appeal on the case-management issues was refused and Lewison J's orders were upheld except that paragraph 2 was deleted as otiose. Separately, the court allowed the appeal on the wasted costs show cause order as exceptional because the court had initiated the order, particulars were lacking, the respondent did not pursue it, and the potential amount was small.

The appeal was allowed in part. The Court of Appeal refused permission to appeal the case-management and debarment orders and upheld Lewison J's refusal of relief from sanctions, subject to deleting an unnecessary paragraph 2 from Lewison J's order. By contrast the court allowed the appeal against the "show cause" wasted costs order made by Peter Smith J on exceptional grounds: the court had initiated the order without giving particulars, the respondent did not support the wasted costs application, and the likely amount was modest.

Appeal from the Companies Court (Mr Justice Lewison). Earlier interlocutory hearings and directions were given by Peter Smith J (including orders of 10 June 2010, 1 March 2011, and listings in April 2011). The petition under section 994 was originally presented on 10 October 2007. Neutral citation: [2011] EWCA Civ 1455.