Hall & Anor v Elia & Anor

Permission to appeal requires either a real prospect of success or another compelling reason. The first limb is not a probability test, but it excludes proposed appeals lacking any real prospect of success.

A party debarred from defending cannot dispute the claim, adduce or rely on evidence, or make substantive submissions. The pleadings are not erased, however, and may remain relevant to identify admissions and the ambit of the dispute. The claimant must still prove the case on the evidence properly before the court.

The respondents sought permission to appeal orders made by Mr Registrar Jones in proceedings concerning a purported assignment of a leasehold property, a charge, insolvency transactions, possession and sale. Mrs Elia had been debarred from defending after repeated procedural defaults. The Registrar held that the assignment was a sham and, alternatively, a transaction capable of being set aside under the Insolvency Act 1986. He also limited the charge and made possession, sale and costs orders.

Mr Elia’s participation had been confined to possession and sale. The central issues were whether either respondent had a real prospect of success on the proposed grounds of appeal and whether there was any other compelling reason for an appeal to be heard.

1. Permission test. Under CPR 52.3(6), permission required either a real prospect of success or another compelling reason. The real-prospect limb was not a test of probability, but it excluded appeals lacking any realistic basis.
2. Effect of debarring order. Mrs Elia was debarred from disputing the Trustee’s claims and from adducing or relying on evidence. She could identify a manifest error in the judgment, but no such error was shown. The claimant nevertheless retained the burden of proving the claim. A defence was not erased and could be considered when identifying admissions and the ambit of the dispute. The Court of Appeal’s guidance in Thevarajah v Riordan was treated as a marker that should not be ignored, notwithstanding that the relevant observations were obiter.
3. Mrs Elia’s proposed grounds. The Registrar’s conclusions that the charge secured only €50,000 plus interest, that the assignment was ineffective or alternatively vulnerable under the Insolvency Act 1986, and that the £25,000 consideration had not been paid disclosed no real prospect of success.
4. Mr Elia’s position. His standing was limited to possession and sale. His defence had been struck out except on those issues, and his interest had vested in the Trustee in bankruptcy. The combined hearing was procedurally permissible, and the Registrar’s factual findings, conclusion that Mr Elia was an unreliable witness, and costs assessment disclosed no real prospect of success.
5. Permission to appeal was refused to both respondents. Permission was granted to Mr Elia to lodge his notice out of time, but permission to appeal was refused.

The Registrar held that the purported assignment was a sham, alternatively liable to be set aside, that the charge secured €50,000 plus interest, and made possession, sale and costs orders. Mrs Elia and Mr Elia sought permission to appeal those decisions.

Permission to appeal was refused by the High Court. Previous applications for stays and related appeals had also been unsuccessful, as recorded in the judgment.