Macpherson v Wise

The Court of Appeal refused permission for a second appeal against refusal to set aside a statutory demand. The appellant relied on an alleged post‑January 2010 agreement to postpone repayment of debts until after sale of a property and on a subsequently executed Land Registry charge as evidence of an enforceable variation. The court applied the test for setting aside a statutory demand under the Insolvency Rules (r.6.5(4)(b)) and emphasised the appellant's burden to show a genuine dispute on substantial grounds. It held that (i) the factual matrix did not establish a binding agreement to defer repayment (Foakes v Beer was applied on consideration), (ii) the charge as drafted did not provide the necessary consideration or clear contractual variation, and (iii) fresh evidence in the form of a solicitor's letter was inadmissible because it was privileged/confidential and disclosure had not been waived. Permission to bring the second appeal was therefore refused.

Background and parties: The appellant, Howard Macpherson, applied for permission to bring a second appeal after a statutory demand served by Dennis Wise was not set aside. The statutory demand sought recovery of sums advanced to Mr Macpherson, including a loan with a contractual penalty and other loans and sums from a car sale.

Procedural history: The set‑aside application was dismissed by District Judge Devlin (Slough County Court, 16 July 2010). Norris J dismissed the appellant's first appeal on 17 January 2011 ([2011] EWHC 141 (Ch)). Etherton LJ refused permission to appeal on the papers on 1 March 2011 but granted a stay of oral hearing; the appellant then sought leave to adduce new evidence and applied for permission to bring a second appeal to the Court of Appeal.

Nature of the application: The appellant sought permission to bring a second appeal against the refusal to set aside the statutory demand. He relied on (i) an oral agreement said to postpone repayment until proceeds of sale of the property known as Wells House ("Karina"), and (ii) new documentary evidence (a letter from Ahmud & Co) said to corroborate that a legally binding postponement had been agreed.

Issues framed:

• whether there was a substantial dispute as to the debt's present repayability sufficient to set aside the statutory demand under the Insolvency Rules r.6.5(4)(b);
• whether the execution of a second charge on 5 March 2010 amounted to consideration or objective evidence of a binding agreement to postpone repayment;
• whether the proposed new evidence (letter from Ahmud & Co) was admissible, having regard to legal professional privilege and confidentiality.

Court's reasoning: The appellant accepted indebtedness in principle but contended that the parties had agreed that repayment would be made from the property sale proceeds whenever the property was sold. The court held that such an informal agreement, without fresh consideration, would not be legally enforceable (Foakes v Beer) and that the charge as drafted was ineffective to secure the personal liabilities alleged and did not demonstrate a variation of the parties' January arrangements. The judges found the appellant's evidence insufficient to establish a genuine triable issue. The new evidence (the Ahmud & Co letter) was covered by legal professional privilege and its disclosure to the appellant was a breach of confidence; privilege had not been waived. Applying the principles in Ashburton v Pape and related authorities, the court exercised its discretion to exclude the privileged material. Because that material could not be admitted and the remaining evidence offered no real prospect of success, permission for a second appeal was refused.

Wider context: The court noted that this was not a case raising important points of law or practice and that the balance between privilege and the search for truth weighs strongly in favour of preserving legal professional privilege absent waiver.

Permission to bring a second appeal was refused (appeal dismissed). The court held that the evidence before the lower judges did not establish a substantial dispute as to current repayability and that the additional letter relied on was confidential and privileged (disclosure not waived), so it could not be admitted to support permission.

District Judge Devlin (Slough County Court) dismissed the application to set aside the statutory demand (16 July 2010). Norris J dismissed the appeal in the High Court (Chancery Division) on 17 January 2011 ([2011] EWHC 141 (Ch)). Etherton LJ refused permission to bring a further appeal on the papers on 1 March 2011. The appellant sought to adduce new evidence and applied for permission to bring a second appeal to the Court of Appeal; this application was refused by Patten LJ on 12 April 2011.