Global Torch Ltd v Apex Global Management Ltd (No.2)

This appeal concerned the proper exercise of case management powers where a party refused to comply with directions requiring personally signed disclosure statements (paras 14 and 15 of Vos J's order) in proceedings under section 994 of the Companies Act 2006. The majority held that the judge below (Vos J) and the subsequent judges (Norris J and Mann J) acted within the generous ambit accorded to first-instance case management decisions in directing personal signing and imposing an "unless" order and then enforcing it by entry of judgment when the direction was not complied with. The Court emphasised the importance of compliance with court orders, the availability of sanctions for non-compliance (including striking out or entering judgment), and that the ultimate merits of the underlying claim are generally irrelevant to routine case management decisions save in the narrow class of cases where a party has an unanswerable case entitling it to summary judgment. The appeal was dismissed (majority) because there were no special factors justifying departure from ordinary practice and the sanctions imposed were not disproportionate.

Background and parties:

• Apex Global Management Ltd and Mr Almhairat ("the Apex parties") and Global Torch Ltd, the Prince and others ("the Global/Prince parties") were in bitter dispute following a joint venture which led to a petition under section 994 Companies Act 2006. The Apex parties claimed roughly US$6m (plus interest) was owing by the Prince; the Prince said he had paid that sum into Fi Call bank accounts.

Procedural posture and relief sought:

• Global issued a section 994 petition seeking share purchase orders and pecuniary and declaratory relief; Apex issued a cross-petition. Vos J made detailed case management directions including paras 14 and 15 requiring parties (other than Fi Call) to file and serve personally signed statements identifying relevant electronic devices and accounts. The Prince did not personally sign the statements and his adviser signed on his behalf. The Apex parties sought an "unless" order and, when the Prince did not comply, applied for judgment under the order; judgment was entered on the papers by Norris J. Mann J later refused to vary the order or to relieve the Prince from sanctions. The Court of Appeal ([2014] EWCA Civ 1106) dismissed the Prince's appeals. The Prince appealed to the Supreme Court.

Issues framed by the Supreme Court:

1. Whether Vos J was entitled to order that disclosure/statements of truth should be personally signed by the Prince;
2. Whether the imposition and enforcement of an "unless" order and the entry of judgment for non-compliance were disproportionate;
3. Whether the strength of the Prince's underlying defence (that he had paid the US$6m) meant the court should not have enforced the sanction or should have ordered a different sanction;
4. Whether any possible trial determination of the payment issue made the sanction inappropriate.

Court's reasoning and findings:

• The majority (Lord Neuberger, Lords Sumption, Hughes and Hodge) held that personal signing of disclosure statements is reflected in CPR 31.10 and PD31A and that Vos J was within the normal and proper exercise of case management power in directing personal signing. The alleged Saudi protocol did not justify a departure.
• The "unless" order and its enforcement by Norris J were lawful and within the generous margin for case management decisions; enforcement was not disproportionate because compliance with orders is essential and no special circumstances justified relief.
• The Court explained that the ultimate merits of a party's case are generally irrelevant to enforcement of case management directions, save where a party has an unanswerable case entitling it to summary judgment; the Prince had not demonstrated an unanswerable case.
• The fact that the matter might arise at trial did not render the sanction inappropriate; the possibility of later restitution or recovery was speculative and did not outweigh the need to uphold orders and the fairness to other parties.

Disposition: The majority dismissed the appeal. Lord Clarke dissented in part and would have allowed the appeal on terms providing security so that the Prince could defend the US$6m claim.

Appeal dismissed (majority). The Supreme Court held that Vos J, Norris J and Mann J were within the generous ambit of reasonable case-management decision makers in directing personal signing of disclosure statements, making and enforcing an "unless" order and entering judgment for non-compliance. The court emphasised the need to uphold court orders and that the ultimate merits are generally irrelevant to case management decisions except where a party has an unanswerable case entitling it to summary judgment. A single Lord (Lord Clarke) dissented and would have allowed the appeal on terms providing security.

First-instance and interlocutory decisions in the Chancery Division (including Vos J, Norris J [2013] EWHC 2818 (Ch) and Mann J [2013] EWHC 3478 (Ch), [2013] EWHC 3752 (Ch)). The Prince's appeals were dismissed by the Court of Appeal: [2014] EWCA Civ 1106. Permission to appeal to the Supreme Court was granted; the Supreme Court heard the appeal and dismissed it on 26 November 2014.