Surinder Grewal v Sarjit Nikki Charkraborty & Ors

This judgment refused permission to appeal against Master Kaye’s order of 8 October 2024 and certified the application as totally without merit. The court applied the usual test for a first appeal (realistic prospects of success or other compelling reason) and concluded that the appellant had not shown compliance with the unless order nor a realistic prospect that Master Kaye was wrong to join the trustees in bankruptcy or to strike out the Fraud Proceedings for lack of standing. The court also made an Extended Civil Restraint Order (an ECRO) under CPR 3.11 and Practice Direction 3C because the appellant had persistently issued totally without merit applications and there was a high risk of further such applications.

Legally significant subsidiary findings included that the appellant’s arguments based on Articles 5 and 6 of the Company’s articles were unlikely to succeed and, even if arguable, were not relevant to the specific grounds relied upon to challenge the Order Under Appeal; and that the appropriate remedies for alleged earlier procedural errors did not permit the appellant to side-step the requirement to show standing or compliance with an unless order. The ECRO was imposed to prevent continued abuse of process while allowing the appellant to defend trustee applications and to bring further applications only with the nominated judge’s consent.

Background and parties: The appellant, Mr Grewal, brought earlier proceedings under section 994 of the Companies Act 2006 (the Unfair Prejudice Claim) in which HHJ Johns QC found in 2021 that Ms Chakraborty was majority shareholder and had acted in a manner unfairly prejudicial to Mr Grewal. Subsequent appeals were refused or dismissed and Mr Grewal became bankrupt following non-payment of costs. He later issued wide-ranging proceedings (the Fraud Proceedings, BL-2023-001696) alleging fraud and conspiracy by numerous participants in the earlier litigation, and sought numerous other remedies including private prosecutions. Marcus Smith J made an unless order requiring proper service in the Fraud Proceedings.

Procedural posture and relief sought: Master Kaye, by an order of 8 October 2024 (the Order Under Appeal), joined the trustees in bankruptcy as intervenors, made a limited civil restraint order, dismissed three applications as totally without merit and struck out the Fraud Proceedings for (a) failure to comply with the unless order and (b) lack of standing because the cause of action vested in the trustees. The appellant sought permission to appeal that order; Miles J refused permission and certified the application as totally without merit. The present hearing was before Richards J on an application for permission to appeal against Master Kaye’s order and on an application by the trustees for an Extended Civil Restraint Order (ECRO).

Issues framed by the court:

• Whether the appellant should be given permission to bring a late appeal and, if so, whether the appeal had realistic prospects of success.
• Whether Master Kaye was wrong to strike out the Fraud Proceedings for failure to comply with the unless order and for lack of standing.
• Whether the threshold for an ECRO under CPR 3.11 and Practice Direction 3C was met and, if so, whether an ECRO should be made.

Court’s reasoning and disposition: The judge treated the permission application as a rehearing and granted permission for a late appeal to be advanced so that the substantive arguments could be heard, but concluded that the appellant had not shown a realistic prospect of success. The appellant did not contend that he had complied with the unless order and did not meaningfully challenge Master Kaye’s central conclusion that any cause of action vested in the trustees and could not be pursued by him personally. Arguments based on Articles 5 and 6 of the company’s articles were considered to be of doubtful force and, in any event, did not negate the standing and procedural defects relied on by Master Kaye. The application for permission to appeal was dismissed and certified as totally without merit. The court then applied the principles governing extended civil restraint orders (including the need to show at least three totally without merit applications and to assess the threat of future unmeritorious litigation) and concluded that the appellant’s pattern of proceedings met the threshold and presented a high threat level. An ECRO was ordered, with specified safeguards allowing the appellant to defend trustee applications and to apply to the nominated judge for permission to bring further applications.

Other matters: The judge refused a range of other extreme orders sought by the appellant (including orders to rescind earlier orders and requests for criminal prosecutions), stating there was no prospect of such relief.

The court refused permission to appeal against Master Kaye’s order and certified the appeal as totally without merit because the appellant had not shown a realistic prospect of success, had not shown compliance with the unless order and had no standing to pursue the cause of action held by the trustees. The court granted the trustees’ application for an Extended Civil Restraint Order under CPR 3.11 and Practice Direction 3C because the appellant had persistently issued totally without merit applications and posed a high threat of further such litigation; the ECRO includes a mechanism to seek the nominated judge’s consent for future applications.

Master Kaye made the Order Under Appeal on 8 October 2024 joining the trustees, making a limited civil restraint order and striking out the Fraud Proceedings. Miles J refused permission to appeal and certified the appellant’s application as totally without merit on 19 November 2024. This hearing before Richards J (4 February 2025) considered a rehearing of the permission application and the trustees’ application for an ECRO. Earlier related steps included the 2021 judgment of HHJ Johns QC in the section 994 claim, Adam Johnson J’s dismissal of an appeal in November 2021 and the Court of Appeal’s refusal of permission (Asplin LJ), and intervening orders in 2023–2024 including refusals by Leech J and Zacaroli J and an order of Marcus Smith J (unless order) on 17 June 2024.