URT Group Ltd & Ors v Dowers & Ors

A court may reconsider an oral decision before the resulting order has been sealed where, having regard to the overriding objective and all the circumstances, justice requires it. A carefully considered change of mind or a plainly relevant point of law raised late may justify reopening, particularly where the opposing party has not acted to its detriment and prejudice can be compensated in costs.

On an interlocutory delivery-up application, an arguable case that property constitutes tenant’s fixtures may amount to a seriously triable defence. The court should then consider the remaining stages of the American Cyanamid test. Different considerations apply to a late amendment before summary judgment from those applicable immediately before trial.

The claimants sought delivery up of property situated at premises formerly leased by an associated company, Composites. In an earlier extemporary judgment, the court ordered delivery up of the relevant items after rejecting the only pleaded argument that they were landlord’s fixtures.

Before the order was sealed, the defendants advanced a new argument that the items had been tenant’s fixtures and that, because they remained on the premises when Composites’ lease ended, title had vested in the landlord and then the new tenant. The court had to decide whether to reopen its earlier decision and, if so, whether the new argument raised a seriously triable issue and affected the interim injunction.

1. The earlier decision was reopened. Applying Re L and another (Children) (Preliminary Finding: Power to Reverse) [2013] 1 WLR 634, the court held that the power to revisit a decision before the order is perfected is not confined to exceptional circumstances. The overriding objective and the particular circumstances governed the exercise of the discretion. The defendants’ new point was legally relevant, although raised late and without an earlier amendment.
2. The earlier judgment had decided only that the items were not landlord’s fixtures. It had not decided whether they were chattels or tenant’s fixtures. The test for fixtures discussed in Berkley v Poulett [1977] 1 EGLR 86 did not prevent an item from being a tenant’s fixture where it was annexed for trade or convenience and was physically removable without substantial damage.
3. The court accepted that there was a seriously triable issue. The principle stated in New Zealand Government Property Corp v HM&S Ltd [1982] QB 1145, together with the evidence about the items and the absence of authority on the interaction with section 178(4) of the Insolvency Act 1986, made the defendants’ argument at least arguable. The possible effect of section 181(2) and (3) also required consideration.
4. The court therefore ordered an expedited preliminary trial on entitlement to delivery up. Since a seriously arguable defence existed, it was inappropriate to use the shortcut described in Trad Hire & Sales Ltd v Holbrook Investments Ltd [2010] EWHC 90 (Ch). Applying the remaining American Cyanamid considerations, the claimants could not satisfy the court that the defendants would be adequately compensated in damages, and the balance of convenience favoured refusal.
5. The earlier order for delivery up was confirmed for the other items but reversed for the relevant items. Costs were awarded to the claimants in respect of the prejudice caused by the late point.

The judgment concerned the reconsideration of an earlier extemporary judgment of the same court, before the resulting order had been sealed. The earlier order for delivery up of the relevant items was reversed; delivery up of the other items remained ordered.