Athena Capital Fund SICAV-FIS S.A v Crownmark Ltd

To vary an unless order under Civil Procedure Rules 1998 CPR 3.1(7), the applicant must first establish a material change of circumstances. A claimed creditor commitment to fund litigation must be assessed by reference to its true scope and subsequent conduct. Fresh evidence showing that funding stopped immediately after the variation application succeeded may establish that the necessary change never existed. Where that threshold fails, the order cannot be sustained on the factual basis accepted below. The appeal was allowed on that ground, while wider issues were left undecided.

Athena appealed from an order of Jacobs J in the Commercial Court, reported at [2020] EWHC 2945 (Comm). The order set aside Foxton J’s refusal of Crownmark’s application and extended the deadline in an unless order requiring hard-copy disclosure. Crownmark was in liquidation and relied on a creditor’s alleged written commitment to fund the defence and counterclaim. After the order, funding ceased and Crownmark failed to file the required document list. The central issue was whether fresh evidence showed that the material change of circumstances relied on below did not in fact exist.

1. Disposition and threshold. The appeal was allowed on Ground 4. Jacobs J’s exercise of discretion depended on his finding that Crownmark had established a material change of circumstances since the Unless Order and the Foxton Order. Under CPR 3.1(7), establishing such a change is a necessary threshold before the discretion to vary an order can be exercised. That threshold was identified in accordance with Tibbles v SIG Plc [2012] EWCA Civ 518.
2. Fresh evidence. The appellate evidence showed that Kennedys had not received instructions or funds to progress disclosure after the order under appeal, despite repeatedly seeking them. Gabi’s funding ceased immediately after the application succeeded. The later explanation that Gabi had withdrawn after receiving a costs estimate was inconsistent with the earlier knowledge of the likely scale of the English litigation costs. Neither Gabi nor the liquidator challenged the inference that Gabi had intended to fund only the application. The court accepted that this was the overwhelming and proper inference.
3. Consequence. There had therefore been no material change of circumstances of the kind relied on before Jacobs J, and the judge had been misled on the necessary foundation for his discretion. Ground 4 disposed of the appeal. The court expressed no view on Grounds 1 to 3, including the wider arguments concerning separate legal personality, stifling, and the timing of reliance on those arguments. By the extended deadline Crownmark had still failed to file the document list, so its re-amended defence and counterclaim had in any event been struck out.

• Court of Appeal (Civil Division) Allowed Athena’s appeal on Ground 4. The court expressed no view on Grounds 1 to 3.
• High Court of Justice, Commercial Court In [2020] EWHC 2945 (Comm), Jacobs J set aside Foxton J’s refusal of Crownmark’s application and extended the deadline for compliance with an unless order requiring hard-copy disclosure.