Secure Mortgage Corporation Ltd & Anor v Harold & Ors

A judgment or order generally takes effect when given or made, whether or not it has yet been sealed, subject to any later date specified by the court. Consequential relief should reflect the relief sought, the issues determined and procedural fairness. Additional mandatory or injunctive relief may be adjourned where the opposing parties have not had a proper opportunity to respond. An order rectifying the register under Companies Act 2006, section 1096, must specify precisely what is to be removed and where it appears. Indemnity costs require conduct or circumstances taking the case out of the norm.

This was a consequential judgment following the court’s main judgment, [2020] EWHC 1364 (Ch), which declared that Peter Harold’s appointment as administrator of Secure Mortgage Corporation Ltd was void and invalid. A new appointment of administrators had meanwhile been made by the company’s director.

The court determined H Commercial Capital Ltd’s standing, the scope of consequential declarations and relief, the effect of the unsealed judgment and order, rectification of the companies register, and costs. The central issues were what orders were procedurally justified at that stage and whether the respondents’ conduct warranted indemnity costs.

1. Standing. H Commercial Capital Ltd had standing to remain joined. Its contractual rights under the 2019 Charge were potentially affected by the proceedings, even though the court had not determined the enforceability or priority of the 1998 Debenture or Charge. Further satellite evidence on its standing would be disproportionate and contrary to the Overriding Objective.
2. Consequential relief. The court declined to grant, immediately, an open-ended inquiry into liabilities, accounts, payment of receipts and delivery up of property. Those matters involved substantial mandatory or injunctive relief, had not been specifically canvassed at the hearing, and required the respondents to have an opportunity to file evidence. The additional claims were therefore adjourned, with directions for further evidence. A more limited injunction and delivery-up order could properly be considered on that evidence.
3. Effect of judgment and order. Under Rule 12.1 of the Insolvency (England and Wales) Rules 2016, the CPR applied. A judgment or order took effect when given or made, unless the court specified a later date. The fact that it had not yet been sealed did not postpone its legal effect. The court relied on Holtby v Hodgson, (1890) LR 24 QBD, and explained the limited effect of the sealing provisions discussed in Re Barrell Enterprises, [1973] 1 WLR 19.
4. Register rectification. The court had jurisdiction under section 1096 of the Companies Act 2006 to order removal of material derived from the invalid appointment. The Registrar did not need to be joined. However, section 1096(2) required precise particulars of what was to be removed and its location on the register, so the application was deferred pending that information.
5. Costs. The applicants were the successful parties and were entitled to the respondents’ whole costs. The application was not analogous to a pleading, and the case did not succeed on an impermissibly unpleaded basis. Applying Excelsior Commercial and Industrial Holdings Ltd, [2002] EWCA Civ 879, the respondents’ conduct was out of the norm, justifying indemnity costs. An interim payment of £75,492.30 was ordered.

First-instance consequential judgment following the court’s main judgment dated 28 May 2020, [2020] EWHC 1364 (Ch). The present judgment made consequential directions, adjourned additional relief, determined standing and costs, and ordered an interim payment.