Horler v Rubin & Ors

On a renewed application for permission to appeal, the Court of Appeal should grant permission where the proposed ground has a real prospect of success, but refuse it where the challenge merely seeks appellate re-evaluation of facts or a discretionary, multifactorial judgment without compelling reasons for intervention. A proxy’s authority to vote is not confined to cases in which the principal gave express instructions: the Insolvency Rules permit voting as directed or in the proxy’s own discretion. A challenge to reliance on expert or professional material turns on whether reliance was reasonable, not simply on whether the underlying conclusion was right.

The appellant sought permission to appeal from a judgment of His Honour Judge Raynor QC in the Chancery Division concerning the respondent trustee in bankruptcy’s dealings with assets found to belong to a partnership. Patten LJ had granted permission on the Carl Zeiss point but refused permission on other grounds.

On renewal, the Court considered four further grounds: the authority of a proxy who voted at meetings; the reasonableness of reliance on an accountant’s report; alleged failures to evaluate significant facts; and the refusal of further remuneration on an account. The central questions were whether the first two grounds had a real prospect of success and whether the latter challenges disclosed a proper basis for appellate intervention.

1. Permission granted in part. The Court granted permission on the grounds concerning Mr Hogg’s authority as proxy and the reasonableness of Mr Rubin’s reliance on Mr Henry Lam’s report. The Court refused permission on the remaining grounds.
2. Under Rule 8.1(5) of the Insolvency Rules, a proxy must vote as directed or in accordance with the proxy’s own discretion. The Court considered that there was a real prospect of persuading the appellate court that the judge had taken too restrictive a view of what amounted to authority for the vote.
3. The challenge to the Lam report raised the correct question of reliance. The issue was not merely whether Mr Lam’s overall conclusion was right or wrong, but whether it was reasonable for Mr Rubin to rely upon it. The proposed argument that the report addressed absence of shared risks or profits, rather than only formal partnership documents, had a real prospect of success.
4. The complaint about significant facts was purely factual. The judge had evaluated the facts in a long and careful judgment, and there was no real prospect that the Court of Appeal would interfere with that assessment.
5. The refusal of further allowances was a multifactorial value judgment. Since the judge had already allowed remuneration, found that no further significant costs had been incurred, and found no sufficient basis for further payment from non-estate assets, there were no compelling reasons for appellate interference.

The order was: Allowed in part.

• High Court (Chancery Division): His Honour Judge Raynor QC gave the judgment under challenge concerning the trustee in bankruptcy’s dealings with partnership assets.
• Court of Appeal: Patten LJ granted permission on the Carl Zeiss point and refused permission on other grounds. On renewal, Mr Justice Lewison granted permission on the proxy-authority and Lam-report grounds, and refused permission on the factual-evaluation and further-allowances grounds: [2011] EWCA Civ 1555.