HRH Prince Abdulaziz Bin Mishal Bin Abdulaziz Al Saud v Apex Global Management Ltd and another

An appellate court should interfere with a first-instance case-management decision only where it was plainly wrong and fell outside the generous ambit within which reasonable judges may disagree. Persistent disobedience of a procedural order will ordinarily justify a sanction where continued non-compliance would prejudice a fair trial. Continued disobedience after an unless order will normally justify enforcement of that sanction.

The apparent strength of the defaulting party’s underlying case is generally irrelevant to such case-management decisions. A possible exception arises where the case is sufficiently strong for summary judgment, although the court did not finally determine that exception. The lesser prospect of obtaining permission to proceed on terms does not suffice.

The proceedings arose from cross-petitions under section 994 of the Companies Act 2006 concerning a joint venture. Apex Global Management Ltd claimed that the Prince owed approximately US$6 million. The Prince maintained that the sum had been discharged through payments into the joint venture company’s bank accounts.

The Prince failed to comply with disclosure orders requiring him personally to sign statements. An unless order was made, his defence was struck out, and judgment was entered against him. Applications to vary the disclosure order and obtain relief from sanctions were refused. The Court of Appeal dismissed his appeals in [2014] EWCA Civ 1106.

The central issues were whether the sanction was disproportionate, whether the apparent strength of the Prince’s defence should have affected its enforcement, and whether the likelihood that the payment issue would arise at the eventual trial justified setting aside the judgment.

1. Disposition. By a majority of four to one, the Supreme Court dismissed the appeal. The disclosure order, unless order, entry of judgment and refusal of relief were all within the permissible scope of the judges’ case-management powers.

2. Appellate restraint. Lord Neuberger, with whom Lord Sumption, Lord Hughes and Lord Hodge agreed, held that an appellate court should interfere with a case-management decision only where it was plainly wrong in the sense of falling outside the generous ambit within which reasonable decision-makers may disagree. The requirement that the Prince personally sign the disclosure statements was justified by the seriousness of the allegations, the need for full disclosure and equal treatment of the parties.

3. Personal signature. The majority was tentatively of the view that the standard disclosure procedure ordinarily required personal signature by the disclosing party. The court could permit departure for good reason. This point was unnecessary to the decision because the essential question was whether the judge could properly make the particular order.

4. Proportionality and disobedience. Disobedience of a court order will almost always require a sanction if orders are to retain their authority. Where persistent non-compliance threatens the fairness of the trial, a sanction preventing the defaulting party from pursuing or resisting the claim will ordinarily be justified absent special circumstances. The Prince received repeated opportunities to comply, offered no convincing explanation and still did not propose personal compliance. The sanction and its enforcement were therefore proportionate.

5. Underlying merits. The strength of a party’s ultimate case is generally irrelevant when procedural directions are made or enforced. Considering the merits routinely would create expensive satellite disputes and conflict with efficient case management. The majority assumed, without deciding, that an unanswerable case sufficient for summary judgment might be an exception. A case merely strong enough to justify permission to proceed on payment or security terms would not qualify. The Prince’s defence had good prospects but was not unanswerable.

6. The possibility that the same payment issue might arise at the trial between other parties did not invalidate the default judgment. The risk that later evidence may cast doubt upon relief already obtained is inherent in default judgments.

7. Later developments potentially justifying reconsideration of the procedural orders were matters for a Chancery Division judge. The money held by the Prince’s solicitors was to remain there until a High Court judge directed payment.

8. Dissent. Lord Clarke would have allowed the appeal and set aside the judgment on terms securing the disputed money. He considered that proportionality required scrutiny of all the unusual circumstances, that striking out should remain a last resort, and that the relevance of the underlying merits should not be confined to cases satisfying the summary-judgment threshold.

1. United Kingdom Supreme Court: The appeal was dismissed by a majority of four to one in [2014] UKSC 64. The secured money was ordered to remain with the Prince’s solicitors until a High Court judge directed payment.

2. Court of Appeal: The Prince’s appeals against the case-management decisions were dismissed in [2014] EWCA Civ 1106.

3. High Court, Chancery Division: Vos J ordered personally verified disclosure. Norris J made an unless order in [2013] EWHC 2818 (Ch) and subsequently entered judgment. Mann J refused to vary the disclosure order in [2013] EWHC 3478 (Ch) and refused relief from sanctions in [2013] EWHC 3752 (Ch).