Ian Charles Hannam v RPA Systems Limited & Anor

The court dismissed the First Respondent’s application to transfer a s.994 Companies Act 2006 petition from the High Court to the Central London County Court. Key legal principles considered were the power to transfer under s.40(2) of the County Courts Act 1984, the matters to which the court must have regard under CPR r.30.3 and the additional guidance in Practice Direction 57AA. The judge held that the application was unpersuasive because it was late, there had been no meaningful practical engagement with the Central London County Court or with the judge proposed to hear the consolidated matters, and the asserted factual overlap was materially overstated.

Other material grounds for refusal were that transfer would cause significant wasted costs (including issues arising from the existing Disclosure Review Document and the Disclosure Pilot), would produce substantial delay to the already listed five day liability trial (currently fixed for February 2023), and would not materially reduce duplication or inconsistency given the different parties, issues and stages of the related proceedings. The court therefore concluded that transfer would not be convenient or fair and would impede the overriding objective.

Background and parties: The petitioner, Mr Ian Hannam, brought a s.994 petition against Pyser Optics Limited ("POL") and RPA Systems Limited ("RPA"). The petition concerns a dispute between Mr Hannam and the late Mr Michael Markham (whose shares and corporate roles passed to his widow) about the ownership of 50% of POL and whether that shareholding was held on trust or subject to a condition precedent, and, alternatively, whether RPA should be ordered to sell those shares at fair value reflecting alleged misconduct.

Procedural posture: The petition was the subject of case management in the Business and Property Courts. A split trial of liability and quantum was ordered on 30 November 2021 and disclosure had been completed. A five day liability trial was listed to commence on 13 February 2023. RPA applied shortly before a case management conference to vacate the trial and to transfer the petition to Central London County Court for case management and hearing together with related Part 7 proceedings (the Rangemaster, Chislehurst and Pyser Health proceedings).

Nature of the application: The First Respondent sought orders to vacate the High Court liability trial and to transfer the petition to Central London County Court so that it could be case managed and ultimately tried alongside the related claims. The petitioner opposed, contending the application was late, would cause wasted costs, and there was no such degree of overlap as to justify transfer.

Issues framed by the court:

• Whether the transfer application should be granted having regard to s.40(2) County Courts Act 1984, CPR r.30.3 and PD57AA;
• Whether there was sufficient factual and issue overlap between the petition and the other proceedings to justify transfer, and whether transfer would be practicable given the absence of agreement from the county court judge proposed to hear the matters;
• Whether transfer would promote convenience, fairness and the overriding objective, including considerations of cost, duplication, disclosure regimes and the effect on the listed liability trial and the trading company POL.

Court’s reasoning and conclusions: The judge found that the transfer application was issued very late and without proper prior consultation with the Central London County Court or the judge RPA proposed to hear the matters. The asserted overlap between the claims was overstated: the majority of common material was background or admitted and would not give rise to inconsistent findings. Little practical thought had been given to how disclosure, evidence or findings would operate across separate claims absent formal consolidation. Transfer would therefore generate wasted costs, require revisiting the disclosure order (given the Disclosure Pilot applied in the High Court), and cause substantial delay to the liability trial, likely for a year or more. That delay would be prejudicial to POL as a trading enterprise. Overall, transfer would not be convenient or fair, would impede the overriding objective and so the application to transfer was dismissed. The court also declined an informal request to transfer the related county court proceedings to the High Court.

The transfer application is dismissed. The court held that, applying s.40(2) County Courts Act 1984, CPR r.30.3 and PD57AA, the First Respondent had not shown that transfer would be convenient or fair: the application was late, there had been inadequate practical engagement with the receiving court and judge, the claimed overlap was overstated, transfer would cause wasted costs and substantial delay to the five day liability trial listed for February 2023, and would not further the overriding objective.