Prompt Motor Ltd v HSBC Bank Plc

Under CPR rule 3.1(7), final orders are subject to a substantially higher threshold for variation or revocation than interlocutory or case-management orders. The rule cannot be used to provide an appeal from a judge to himself. Final orders will generally remain undisturbed in the public interest in finality, subject to proper appellate remedies and exceptional grounds such as fraud. Fresh evidence, or evidence previously available but not deployed, will ordinarily be insufficient. Applications for extended civil restraint orders require persistent claims or applications that are totally without merit. A single such dismissal does not satisfy that threshold.

The claimant sought to set aside an October 2011 order refusing permission to appeal from summary judgment granted against it on its claim and the defendant’s counterclaim. The underlying dispute concerned the bank’s demand for repayment, appointment of administrative receivers and enforcement of security. The claimant relied on alleged errors in a valuation, defects in the demand, impropriety in the receivers’ appointment and allegedly unfair evidence.

The bank applied to join the claimant’s directors and obtain an extended civil restraint order against them and the company. The central issues were whether the court had jurisdiction under CPR rule 3.1(7) to revoke the final order and whether the statutory threshold for a civil restraint order was met.

1. Application to revoke the final order. The claimant’s application was dismissed as totally without merit. CPR rule 3.1(7) distinguishes interlocutory or case-management orders from final orders disposing of the claim or part of it. The latter attract the stronger public interest in finality and cannot be reopened merely because a party wishes to advance further evidence or arguments.
2. The court cannot use rule 3.1(7) to hear an appeal from itself. The principles in Roult v Northwest Strategic Health Authority [2010] 1 WLR 487, Smith v QBE Insurance (Europe) Ltd [2010] EWHC 3172 (Ch) and Satoshi Kojima v HSBC Bank plc [2011] EWHC 611 (Ch) establish the distinction between final and interlocutory orders. A final judgment may exceptionally be set aside for fraud, but fresh evidence, including evidence available at the original hearing but not used, will ordinarily not suffice. The obligation is to present the whole case on one occasion, subject to the right of appeal: Henderson v Henderson (1843) 3 Hare 100.
3. The claimant’s substantive complaints disclosed no real prospect of success. Any error in the valuation did not establish fraud; the bank was entitled to demand further security and, following non-payment, to appoint receivers and demand repayment of the term loan. Any want of authority in the demand was in any event ratified by the bank’s subsequent reliance on it. Alleged differences in an employee’s job title did not establish fraud, and the evidence complained of was a matter of weight rather than admissibility.
4. Civil restraint order. The defendant’s application was dismissed. An extended civil restraint order under Practice Direction C to Part 3 requires persistent claims or applications in different proceedings that are totally without merit. The claimant company posed no continuing litigation risk because it had been restored only to pursue the present application. The directors had not been shown to have made the requisite number of applications adjudicated to be totally without merit.

First-instance decision. The judgment concerns an application to revoke an order made by Mr Justice Peter Smith on 27 October 2011, refusing permission to appeal from Master Price’s summary judgment order of 24 May 2011.