Frey& Ors v Labrouche

A judge considering an application to strike out all or part of a claim must give the applicant a fair opportunity to advance oral submissions, subject only to proper limits required for the administration of justice. Full written argument does not remove that duty. A judge may state a preliminary view and manage the hearing robustly, but must make clear that the view is provisional and permit the affected party to seek to change it. An appellate court will rarely entertain a procedural objection not raised below, but there is no waiver where the judge has clearly refused the party an opportunity to argue.

Forester Labrouche, a beneficiary under an English-law will trust, brought claims against former trustees and others for accounts, inquiries, payment and declarations concerning the trust assets. The defendants sought to strike out parts of the claim as an abuse of process or subject to issue estoppel, relying on earlier proceedings in Switzerland and Liechtenstein.

Peter Smith J dismissed the strike-out applications without hearing the applicants’ oral submissions, although he intended to preserve issue-estoppel arguments for trial: [2011] EWHC 3854 (Ch). The trustee defendants appealed. The central issue was whether the judge had improperly refused to hear their applications and, if so, what consequential order should follow.

1. The appeals were allowed. The strike-out applications were remitted to the Chancery Division for an early hearing before a different judge.

2. A party who brings a strike-out application is ordinarily entitled to have it properly considered and to a fair opportunity to present oral argument. This is a fundamental feature of civil justice, although it remains subject to established limits such as contempt, civil restraint orders and reasonable time limits. A judge who has read the papers may indicate a provisional view and may dispose of an application shortly after hearing argument. However, the judge cannot dismiss an application merely on the papers without allowing the unsuccessful applicant a fair opportunity to make its case orally.

3. On the transcript, the judge had made clear that he regarded oral argument as pointless and refused an express offer to explain the trustees’ case. The trustees had therefore not elected to accept that course or waived their objection. Although an appeal will rarely succeed on a point not taken below, that principle did not apply where the judge had firmly closed off the opportunity to argue.

4. The court did not determine whether the strike-out applications were substantively well founded. The fact that some claims might survive, and that another defendant had not appealed, did not justify depriving the trustees of a hearing on their own applications.

5. The court emphasised that first-instance judges should remain robust in case management. A preliminary view must nevertheless remain open to persuasion. Moses and Rimer LJJ agreed with the Master of the Rolls.

• Court of Appeal (Civil Division) — Allowed the trustees’ appeals in [2012] EWCA Civ 881 and remitted the strike-out applications to the Chancery Division for hearing before another judge.
• High Court of Justice, Chancery Division — Peter Smith J refused the strike-out applications without hearing oral argument: [2011] EWHC 3854 (Ch).