Lee Castleton v Post Office Limited & Anor

A preliminary-issues trial may proceed on a hybrid basis, with some facts assumed and others determined, but only if the approach remains fair, workable and useful. The court must assess factual overlap, disclosure, evidence, cross-examination, credibility and the risk of inconsistent findings. In an unconscionability challenge to reliance on a settlement or release, proof that the releasee knew of viable claims and of the other party’s ignorance is not sufficient by itself. The court must decide whether reliance would be unconscionable in all the circumstances. An appellate disagreement with case management does not, without more, require remittal to a differently constituted court.

Mr Castleton appealed against a directions order made by Trower J and Master Kaye on 23 January 2026 in his 2025 Action against Post Office Limited and Fujitsu Services Limited. The action concerns alleged fraud and unlawful means conspiracies connected with an earlier judgment and the parties’ settlement of Group Litigation Order proceedings. The order directed a separate trial of preliminary issues concerning construction of the Settlement Deed, unconscionability and alleged fraudulent misrepresentation. It provisionally assumed that the Historic Claims were viable and that Post Office Limited knew this, while requiring factual findings on other elements of unconscionability. It also postponed defences to parts of the pleading. Permission to appeal was granted on ground 6, but the Court considered the wider question identified by the reason for granting permission: whether the hybrid approach was workable and fair.

Zacaroli LJ gave the judgment, with which Popplewell LJ and Peter Jackson LJ agreed. The appeal succeeded to the extent that the preliminary-issues order could not stand in its present form. Consequential directions were deferred pending short submissions.

1. The scope of the appeal was not confined to the narrow wording of ground 6. The Court had to have due regard to the reason given when permission was granted, which expressly identified the propriety of conducting the preliminary trial partly on assumed facts and partly on facts to be found. The issue also concerned the efficient use of court resources and the parties’ private interests.
2. A hybrid approach is not unacceptable in principle. The question is whether the particular assumptions make the proposed preliminary trial fair, workable and capable of determining the issues assigned to it. An assumption that the Historic Claims were viable was likely to be appropriate for deciding construction and was not challenged.
3. The parties agreed that an unconscionability challenge required proof of four elements: viable claims; knowledge by the releasee of their viability; lack of knowledge, and reasonable means of knowledge, by the other party; and knowledge by the releasee of that lack of awareness. Those elements are not a tick-box exercise. Consistently with Bank of Credit and Commerce International SA v Ali [2001] UKHL 8; [2002] 1 AC 251, the court must address the overarching question whether reliance on the settlement is unconscionable in all the circumstances.
4. The provisional assumption concerning Post Office Limited’s knowledge was a legal assumption without supporting facts. That knowledge could overlap with the facts relevant to the claimant’s awareness and to the overall unconscionability question, including who knew what, when, the seniority of the individuals involved, suppression of information and the credibility of witnesses. If those facts were excluded, the other issues could not be fairly determined. If they were investigated, the approach risked duplicated evidence, a second trial, and inconsistent findings. The order therefore had to be revisited.
5. The passages in Part A for which defences could be postponed also required reconsideration. The request to remit the matter to different judges was refused: disagreement with a case-management decision, without more, did not justify changing the assigned judges or imply criticism of them.

• Court of Appeal (Civil Division): In [2026] EWCA Civ 577, held that the High Court’s hybrid preliminary-issues order could not stand in its present form and invited submissions on the consequential directions.
• High Court of Justice, Business and Property Courts, Business List (ChD): At a directions hearing on 23 January 2026, Trower J and Master Kaye ordered a separate trial of preliminary issues, provisionally assumed the viability of the Historic Claims and Post Office Limited’s knowledge of that viability, and postponed certain defences.