Martin Hague & Anor v David Hague & Ors

The court exercised case management powers to defer to the second phase of the proceedings the question whether remuneration paid to the individual respondents and certain family members was excessive. The Petitioners had identified non-fanciful reasons to challenge the joint expert's report, principally because the expert relied on median salary data from a third party (TBP2 Limited) without sufficient disclosure of the underlying sample or comparator methodology. Applying the guidance in Daniels v. Walker, the judge held that fairness required permitting the Petitioners to seek further expert evidence and that it was impractical and prejudicial to require that to be done during the ongoing liability trial. The judge did not decide whether any subsequently obtained expert report will be admitted at phase 2, leaving that question for later determination.

Background and parties:

• This is an unfair prejudice petition concerning Hague Plant Limited, brought by Mr Martin Hague and Mrs Jean Hague against Mr David Hague, Ms Dianne Hague and Hague Plant Limited. The proceedings were bifurcated so that liability is being determined first and valuation/quantum in a second phase.

Nature of application:

• The court considered an application by the Petitioners to defer to phase 2 the issue of whether remuneration paid to the two individual respondents and certain family members was excessive. The Petitioners sought permission to obtain further expert evidence rather than have the matter decided at the present liability hearing.

Factual and procedural context:

• The disclosure exercise on remuneration issues was delayed by defaults by the Respondents. The Respondents were granted relief from sanction on condition that they and the Petitioners use a single joint expert, Mr Baxter, who produced a report on 16 May 2024 shortly before the liability trial due to start on 3 June 2024.
• The Petitioners raised concerns about Mr Baxter's reliance on median salary data from TBP2 Limited lacking clear information about the sample and comparator methodology; TBP2 maintained that raw survey data remained confidential. The Petitioners said they would wish to instruct their own expert to cross-check Mr Baxter's conclusions.

Issues framed by the court:

• Whether the Petitioners had identified reasons which were not fanciful to obtain further expert evidence contrary to the usual expectation that a single joint expert suffices (applying Daniels v. Walker).
• Whether it was practicable to allow additional expert work during the ongoing liability trial without unfair prejudice to either side, and whether the matter should therefore be deferred to phase 2.

Decision and reasoning:

• The judge applied the Daniels v. Walker principle that a party may obtain further expert evidence if it identifies reasons which are not fanciful. The Petitioners had cleared that hurdle because of the late production of the joint report, the opacity of the TBP2 data source and remaining concerns despite questions put to the joint expert.
• On case management grounds the court found it impractical and unfair to require the Petitioners to instruct and permit a meeting of experts during the ongoing trial, and that proceeding on the basis of the joint report alone risked procedural injustice to the Petitioners caused by the Respondents' earlier disclosure defaults.
• The judge therefore allowed the Petitioners' application to remove the excessive remuneration issue from the present liability trial and deal with it in the valuation/quantum phase. The judge expressly reserved any later decision on whether a subsequently obtained expert report will be admitted into evidence.

Comments on wider context: The court acknowledged the unsatisfactory nature of deferral but considered it the least worst option in the interests of fairness given the procedural history caused by late disclosure.

The Petitioners' application to defer the issue of excessive remuneration to the second phase of the proceedings is allowed. The judge held that the Petitioners had demonstrated non-fanciful reasons, under the approach in Daniels v. Walker, to seek further expert evidence because of concerns about the joint expert's reliance on opaque third-party survey data and because late disclosure made it impractical to obtain and test further expert evidence during the ongoing liability trial. The question whether any subsequently obtained expert report will be admitted is reserved for phase 2.