Trafalgar Multi Asset Trading Company Limited (in liquidation) v James David Hadley & Ors

Permission to appeal requires either a realistic, rather than fanciful, prospect of success or another compelling reason for an appeal. Allegations of bias are assessed objectively by reference to the fair-minded and informed observer, not the litigant’s perception.

A stay of execution is exceptional. The applicant must establish solid grounds, ordinarily involving irremediable harm, after which the court balances the risks of injustice. In assessing pre-judgment interest for an investment fund, a broad-brush proxy based on comparable investment returns may be appropriate rather than commercial borrowing rates.

This was a consequential hearing following the liability judgment in Trafalgar Multi Asset Trading Co. Ltd v Hadley and ors [2023] EWHC 1184 (Ch). The court had found liability against several defendants for conspiracy, bribery, breach of fiduciary duty, dishonest assistance and unconscionable receipt, while rejecting claims against others.

The court determined an application by Mr Hadley for permission to appeal and a stay of execution, the claimant’s damages and interest, liability and allocation for costs, and further directions concerning Mr Wright’s costs.

1. Permission to appeal. The application was refused. Under CPR 52.6, the applicant had to show either a real prospect of success or some other compelling reason for the appeal. A real prospect means a realistic prospect, not one that is fanciful. The proposed complaints concerning bias, obstruction, vulnerability and procedural unfairness were unsupported or incapable of affecting the outcome. Even a different result on the FSMA issues would not have altered the findings based on other grounds.
2. The objective test for apparent bias is whether a fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility of bias. The test is not based on the litigant’s feelings. The court applied Porter v Magill [2002] 2 AC 357 and Harb v His Royal Highness Prince Aziz [2016] EWCA Civ 556.
3. Stay of execution. The stay was refused. The possibility that enforcement would cause bankruptcy was accepted as potential irremediable harm and therefore as a solid ground for the balancing exercise. However, the prospects of permission and success on appeal were fanciful. The delay and prejudice to the claimant, its investors and the winding-up process outweighed the highly unlikely risk to Mr Hadley.
4. Damages and interest. The claimant’s elections and calculations were accepted, subject to preventing double recovery. Joint and several liability was appropriate for the relevant conspirators and the defendants involved in the CGrowth bribery claims. For pre-judgment interest, a broad-brush rate reflecting comparable investment returns was appropriate for an investment fund. Simple interest was ordered pending determination of the reserved compound-interest issue. Post-judgment interest was fixed at 8%, running from 29 June 2023 under CPR rule 40.8(1)(b).
5. Costs. The claimant was entitled to costs against the relevant defendants. Joint and several liability was appropriate, subject to limits reflecting the CGrowth claims and the distinction between standard and indemnity bases. Mr Hadley’s, Mr Thwaite’s and PPL’s conduct was out of the norm and justified indemnity costs. Mr Jones withdrew his costs claim, and no order for costs was made in his favour. Mr Wright’s costs application was adjourned for directions.

The judgment was a first-instance consequential decision following the liability judgment reported as Trafalgar Multi Asset Trading Co. Ltd v Hadley and ors [2023] EWHC 1184 (Ch).