Ronald Albert Popely v Ayton Limited & Anor

Where a court proposes to make serious, legally consequential findings against a non-party, procedural fairness ordinarily requires notice of the case, disclosure of relevant material, and a proper opportunity to respond. A non-party is not responsible for failing to attend proceedings to which he was not invited. The court must assess adverse findings as a whole where they form part of one alleged scheme; it should not separate findings artificially to preserve an unfair process. Where the process was unlawful, the appropriate remedy may be to set aside the findings and consequential orders, without ordering a retrial if that would be disproportionate. A judge who has expressed trenchant concluded views before hearing the affected person should recuse himself where a fair-minded and informed observer would see a real possibility of apparent bias.

Ayton brought proceedings against Alan Mosley concerning the ownership and sale of White Owl Barn. The County Court judgment made serious findings against Ronald Albert Popely, who had not been a party or witness and had not been named in the pleaded case. Following those findings, Popely was joined for the purposes of a non-party costs application and sought recusal of the Recorder.

Popely appealed against the adverse findings and the Recusal Order. The appeals concerned whether the findings had been made through an unfair process engaging Articles 6 and 8 of the European Convention on Human Rights and the common law, what remedy was appropriate, and whether the Recorder should have recused himself.

1. First appeal allowed. The adverse findings against Popely were made against a non-party, concerned serious allegations of dishonest conspiracy, and went beyond the pleaded issues. Popely had received no notice of the allegations, evidence or possibility of adverse findings and had no opportunity to obtain representation or respond. The process was intrinsically and wholly unfair, engaging Articles 6 and 8 of the European Convention on Human Rights and common-law procedural fairness.
2. A person who is not involved in proceedings and has not been asked to give evidence cannot properly be treated as responsible for failing to attend trial. That is materially different from drawing an adverse inference against a party whose witness could obviously have assisted that party’s case.
3. The findings concerning Popely’s alleged conspiracy, motivation, funding and involvement in the conduct of the transactions formed one complete narrative. They could not be artificially separated into unobjectionable and objectionable categories.
4. The adverse findings amounted to an unlawful judicial act. The proportionate remedy was to set them aside and treat them as if they had never been made. Setting aside the whole County Court judgment and ordering a retrial would be disproportionate.
5. The April 2019 Order joining Popely for the non-party costs application, and requiring him to respond to that application, was set aside. The existing costs application was dismissed. Ayton retained liberty to apply for a fresh application on evidence independent of the tainted findings.
6. The recusal appeal fell away as a result of the orders above. Had it remained live, it would have been allowed. Applying the apparent-bias test, a fair-minded and informed observer would conclude that there was a real possibility that the Recorder had prematurely formed concluded views about Popely’s conduct and credibility. The non-party costs procedure did not provide a fair mechanism for challenging the findings.

• Chancery Appeals, High Court: Appeals from decisions of the County Court at Central London dated 4 April 2019 and 5 July 2019. The adverse findings were set aside, the relevant joinder and costs orders were discharged, and the non-party costs application was dismissed. The recusal appeal therefore fell away, although the court stated that it would otherwise have allowed it.