Cole v Howlett & Ors

The power under CPR 3.1(7) to vary or revoke an order is discretionary and is not confined by rigid conditions. The court should not normally allow a review application to become an appeal or a re-run of the earlier hearing. Final decisions attract a stronger presumption of finality, but the court must still consider all the circumstances. A change of circumstances or misleading of the judge will commonly support review, but neither is indispensable. The court may consider the merits, whether an abuse has been cured, prejudice capable of compensation in costs, delay and the interests of justice. At an interim stage, it must not conduct a provisional merits assessment to strike out a properly arguable claim.

The claimant sought permission to amend his claim to plead that, after his bankruptcy estate’s cause of action had vested in the trustee, the Official Receiver had assigned the relevant rights to him. He also sought variation of an earlier order which had characterised the claim as an abuse, stayed it and provided for strike-out if the Official Receiver did not intervene.

The earlier order followed the claimant’s failure to disclose the copyright asset in his 1990 bankruptcy and his consequent lack of title to sue. The Official Receiver subsequently sold the cause of action to the claimant, who became its assignee. The central issues were whether the earlier order could be varied under CPR 3.1(7), whether the abuse had been cured and whether the claim should proceed.

1. Application granted. The order of 22 April 2015 was not a final order giving rise to issue estoppel. It contemplated further applications and directions.
2. CPR 3.1(7) confers a broad discretionary power to vary or revoke an order. The power is not subject to rigid rules or conditions. The court will generally resist using it as an appeal or simple re-run of the earlier hearing, and will approach review of a final decision less favourably. A material change of circumstances or misleading of the judge will commonly be relevant, but neither is a condition precedent.
3. The claimant’s acquisition of title from the Official Receiver was a material change. The claimant proceeded as an assignee deriving title from the person empowered to realise the bankruptcy asset. His earlier misconduct was therefore not sufficient to prevent the application. The court should not go behind the Official Receiver’s decision to realise the asset at the best reasonably obtainable price.
4. The abuse had been cured so far as relevant to the application. The size or ascertainment of the bankruptcy creditors did not require payment in full before assignment. Any prejudice to the defendants could be addressed through costs, and there had been no significant delay.
5. The court was not conducting a pre-trial assessment of the claim’s strength. A plainly hopeless case may be struck out or dealt with under CPR 24. A properly arguable case must proceed to trial; there is no intermediate procedure for striking out on provisional and untested evidence.

The amendments were allowed. Consequential and costs orders were reserved for further submissions if not agreed.