Prinse v Landmasters (Overseas) Ltd & Ors

A consent order may be varied under CPR 3.1(7) only where there has been a material change of circumstances or the facts underlying the order were misstated. Rectification of a consent order operating as a contract requires proof of common continuing intention accompanied by an outward expression of accord crossing between the parties. A court may admit evidence even where its provenance is potentially improper. The question is whether exclusion best serves the overriding objective, including fairness, equality of arms, proportionality and the proper administration of justice. Evidence supporting enforcement of an admitted breach of a court order may properly be admitted, particularly where exclusion would undermine the court’s interest in ensuring compliance.

The claimant and defendants were engaged in a dispute concerning ownership and control of two companies and their English properties. A consent order approved by Morgan J in August 2018 regulated dealings with company assets pending proceedings in Cyprus and stayed the remaining proceedings, while permitting applications to enforce the order.

The defendants applied to vary or rectify the order so that ordinary business payments, including management fees, would be permitted. The claimant applied to enforce the order after payments totalling £25,000 were made to a company controlled by the fourth defendant. The central issues were whether the order should be varied or rectified and whether bank statements of uncertain provenance should be excluded.

1. Defendants’ variation and rectification application. The jurisdiction under CPR 3.1(7), as explained in Tibbles v SIG Plc [2012] EWCA Civ 518, is confined to cases involving a material change of circumstances or misstatement of the facts on which the order was made. Neither circumstance existed.
2. The consent order was contractual in nature. Applying the principles identified in The Nai Genova [1984] 1 Lloyd's Law Reports 353 and Swainland Builders Limited v Freehold Properties Limited [2002] EWCA Civ 560, rectification for common mistake required proof of a common continuing intention and an outward expression of accord crossing between the parties. The defendants failed to establish either a mistake in the claimant’s understanding of paragraph 2(d) or the necessary outward expression. Rectification for unilateral mistake was also unavailable under Thomas Bates & Son Ltd v Wyndham's (Lingerie) Limited [1981] 1 WLR 505, since there was no evidence that the claimant knew of any mistake.
3. Admissibility of the bank statements. The court should not condone illicit or improper conduct, and confidentiality, human rights and the public interest were relevant considerations. Nevertheless, admissibility was a discretionary procedural and case-management question governed by the overriding objective. The court could admit the statements even assuming they had been obtained unlawfully.
4. The statements supported enforcement of an admitted breach of a court order. There was a public interest in placing such a breach before the court and ensuring that its orders were observed. The considerations concerning disclosure of wrongdoing and the administration of justice discussed in Tchenguiz v Imerman; Imerman v Imerman [2010] EWCA Civ 908 supported admission.
5. The third and fourth defendants were ordered to procure repayment of £25,000 to the second defendant company. The money was to form part of the company’s general assets and remain available for ordinary business expenses. The defendants’ cross-application was dismissed and the claimant’s enforcement application was granted in its modified form.

The judgment describes earlier interim proceedings before Zacaroli J and Fancourt J, which were compromised by a consent order approved by Morgan J on 30 August 2018. The present judgment determined applications to enforce, vary or rectify that order.