EDF Energy Customers Ltd v Re-Energized Ltd

On an appeal from a winding-up order, the appellate court ordinarily reviews the decision below. It allows an appeal only where the decision was wrong, or unjust because of a serious procedural or other irregularity. A litigant in person is entitled to appropriate assistance, but not to a lower standard of compliance or a general indulgence. In insolvency proceedings, a debtor should raise challenges to the debt at the earliest opportunity. Arguments previously advanced and rejected, or available but not advanced, should not ordinarily be reopened at a later stage absent a material change of circumstances or other special reason. Contractual dispute-resolution provisions do not exclude a winding-up petition unless properly construed as doing so. A liquidated-damages provision answers an argument that no loss was suffered, provided it is not an unenforceable penalty.

Re-Energized Ltd appealed against an order made by District Judge Watkins on 18 July 2017 compulsorily winding it up on a petition by EDF Energy Customers Ltd. The petition concerned contractual liquidated damages and replacement costs arising from failures to supply agreed energy-efficiency measures. The debtor had previously sought, unsuccessfully, to restrain advertisement of the petition. At the winding-up hearing it sought to revisit arguments considered on that application and advanced further contractual arguments. The district judge declined to reopen the earlier issues and made the winding-up order. The appeal raised procedural fairness, the treatment of a litigant in person, the scope of appellate review, and whether the contractual and loss arguments could be pursued at the later stage.

1. Appeal dismissed. The district judge had invited the debtor’s director to raise any new points, considered the documents and written arguments available, and gave sufficient reasons. The hearing was neither procedurally unfair nor unlawful. There was no duty to conduct a checklist exercise to identify arguments which an articulate and knowledgeable litigant in person had not raised.

2. Under CPR r 52.21(1), an appeal is ordinarily a review. Under CPR r 52.21(3), it succeeds only if the decision was wrong, or unjust because of serious procedural or other irregularity. The principle stated in Evans v Bartlam was now accommodated by the express rule.

3. A court must provide such assistance to a litigant in person as the circumstances require while remaining impartial. Representation does not generally justify disapplying rules, orders or directions. Limited allowance may be appropriate where a rule is obscure or difficult to understand, or at the margins of applications concerning promptness or relief from sanctions. No such allowance was justified here.

4. In insolvency proceedings, the court must consider whether the conditions for a winding-up order are satisfied, but a debtor should not reargue matters already determined, or matters which it had an opportunity to raise earlier, absent a change of circumstances or other special reason. The principle is based on avoiding waste of judicial and party resources and giving effect to the statutory scheme. The debtor’s later legal representation was not such a change.

5. On the contractual arguments, sums not disputed under clause 15.7 had to be challenged within the contractual ten-day period or, alternatively, within a reasonable time. Clauses 15.7 and 16.2 did not exclude a winding-up petition. The adjudication mechanism was not compulsory and did not prevent another method of debt collection where the debt was not disputed on substantial grounds.

6. The suggested implied term preventing EDF from relying on its own default was unnecessary. Contract construction and implication of terms are distinct exercises, and the contract had to be considered as a whole. Further, the claim was contractual and loss was not an element of the cause of action. The agreed liquidated-damages provision answered the no-loss argument unless void as a penalty. The order for compulsory winding up was therefore upheld.

• High Court (Chancery Division): appeal from the winding-up order made by District Judge Watkins on 18 July 2017 dismissed.