Ceredigion Recycling & Furniture Team v Pope

The Court of Appeal may reopen a final determination, including a refusal of permission to appeal, only under rule 52.30 of the Civil Procedure Rules 1998. There is no parallel inherent jurisdiction or power under rule 3.1(7) to reconsider a refusal merely because it may be wrong.

Each requirement in rule 52.30(1) must be satisfied. The earlier process must have been critically undermined, the resulting injustice must outweigh the strong public interest in finality, and there must be a powerful probability of a different decision. A failure expressly to address an argument does not justify reopening where that argument was legally untenable and permission was rightly refused.

The High Court held that two directors of a company limited by guarantee had breached their statutory and fiduciary duties by transferring substantially all the beneficial interest in the company’s principal property to their pension schemes and leasing it back. Relief was adjourned to a later hearing. The decision was reported as [2021] EWHC 1783 (Ch).

After permission to appeal was refused on paper, the first defendant applied to reopen that refusal. He contended that the Court of Appeal possessed an inherent supervisory jurisdiction in addition to rule 52.30 of the Civil Procedure Rules 1998. He also argued that section 39 of the Companies Act 2006 permitted the company’s only members to authorise the transactions notwithstanding its constitution.

The central issues were whether any jurisdiction to reopen existed outside rule 52.30, whether the permission process had been critically undermined, and whether the proposed company-law argument had sufficient merit to establish injustice.

1. Application dismissed. Rule 52.30 of the Civil Procedure Rules 1998 provides the exclusive procedure for reopening a final appellate determination, including a refusal of permission to appeal. The Court of Appeal has no separate inherent jurisdiction permitting reconsideration merely because the refusal was arguably wrong.

2. Rule 3.1(7) did not provide an alternative jurisdiction. Its power to vary or revoke an order is normally available where circumstances have materially changed or the facts underlying the original decision were misstated. Neither condition existed. The residual jurisdiction recognised in Taylor v Lawrence had been subsumed into rule 52.30.

3. Each requirement of rule 52.30(1) is a prerequisite to reopening. The jurisdiction is exceptional because it protects the finality of litigation. It requires the integrity of the earlier process to have been critically undermined, a powerful probability of significant injustice, and the absence of an effective alternative remedy. A wrong result, an important point, fresh evidence or a large sum at stake is not sufficient without corruption or equivalent failure in the process.

4. The judge who refused permission did not expressly address the argument based on section 39 of the Companies Act 2006, but permission was nevertheless rightly refused. Section 39 protects the validity of company acts as between the company and third parties. It does not release directors from liability to the company for breach of duty merely because they also constituted all the company’s members. Section 40(5) expressly preserves that liability. Under Bilta, directors’ wrongdoing and knowledge cannot be attributed to the company as a defence to its claim against them.

5. The remaining argument had been expressly addressed when permission was refused. Particular transactions contrary to the constitution could not be treated as an informal agreement to amend it. Further, section 62 of the Companies Act 2006

6. There was no real injustice and no exceptional failure affecting the integrity of the permission process. It was unnecessary to determine conclusively whether a possible claim against professional advisers amounted to an alternative remedy. The stay of the High Court proceedings was lifted. Newey and Edis LJJ agreed with Sir Julian Flaux C.

• Court of Appeal (Civil Division): By [2022] EWCA Civ 22, unanimously dismissed the application to reopen the refusal of permission to appeal and lifted the stay of the High Court proceedings.
• Court of Appeal—permission stage: Popplewell LJ refused permission to appeal on paper. Andrews LJ subsequently directed that the reopening application be heard by the full court and stayed the High Court proceedings meanwhile.
• High Court: By [2021] EWHC 1783 (Ch), HHJ Jarman QC held that both directors had breached their statutory and fiduciary duties. The determination of relief was adjourned.