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Fast and furious: a practical view from the Bar

   
In his monthly column originally published by PLC,James Bickford Smith considers four recent decisions concerning the standard to which first instance courts and tribunals will be held when the fairness of hearings, and particularly urgent hearings, is later challenged.

One of the differences between studying law and practising it, lies in the practitioner’s awareness that judges are not simply people who hand down decisions that can later be analysed, but are generally also more or less hard-pressed people managing busy court lists. One consequence of this is that judges will often feel unable to adjourn or stand over matters. Another is that in a case whose urgency has pushed it to the head of the queue, there will always be a very strong desire to resolve matters as swiftly as possible.

The difficult question arises when a hearing conducted in such circumstances comes to be reviewed by an appellate court. Tensions will often be running high at this point: appellants may consider that their key arguments were not engaged with and nurse a deep sense of grievance; winners at first instance may feel that “technical” points are being advanced and that as they were in as difficult a situation as the appellant, they should not be penalised for their legal representatives prevailing on the day.

Such matters are made no easier by the fact that the case law does not offer particularly clear guidance on what is or is not a fair hearing, nor indeed what a fair urgent hearing is. Taking only the example of apparent bias, Porter v Magill [2002] 2AC 357 has always struck me as a much better case for the law student than the practitioner. For the test of “whether the fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility that the tribunal was biased” often raises more questions than it answers. Applying it to off the cuff remarks of a judge sitting in an injunctive matter late on a Friday is not always the easiest of tasks, especially if one is relying on someone else’s note of the hearing (an all-too frequent occurrence given pervasive problems with transcripts).

One of the more unfortunate consequences, both of the current funding crisis facing the courts system and of the proliferation of litigants unable to fund legal representation, is that these difficult questions show every sign of coming more frequently across practitioners’ desks. It is in this regard unsurprising that two of the four cases discussed in this column emanate from the family courts, which seem to be bearing the brunt of funding difficulties.

The seemingly inevitable consequence of these trends is that the appellate courts, and most particularly the Court of Appeal, will face the challenges both of drawing often difficult lines in the sand and of clarifying the law where this seems necessary to provide practical guidance to those called on to advise on potential appeals.

MW v Hertfordshire County Council [2014] EWCA Civ 405

The facts of the case are not material save insofar as they led to a position where the County Court was faced with a case where there had been substantial delay and confusion in proceedings concerning whether two children whose mother had been killed by their father should be placed with maternal family in Poland or local authority foster carers in England. Given the “inordinate delay” in the proceedings it was crucial to the children’s best interests for that issue to be resolved expeditiously.

Key problems facing the first instance judge when seeking to do so were that the maternal family were acting in person through interpreters, and the evidence before him was in poor order. He thus found himself in the position pithily summarised by Macur LJ:

“Quite simply, this case was listed with too short a time estimate to accommodate the participation of Mr and Mrs J and the judge had to conduct the hearing in the context of quite interminable delay which was disastrous for the children. This court must readily acknowledge the necessity for robust case management prior to and throughout any hearing which reflects the limitations of judicial estate, personnel and sitting days to cope with a burgeoning and relentless workload in family law. Necessarily decisions must be made to ensure proportionate allocation of resources to each case. However, that is not to say that a judge may undermine due process and exclude relevant evidence”.

(MW v Hertfordshire County Council [2014] EWCA Civ 405, at paragraph 26.)

After what sounds like a particularly challenging hearing for all concerned (including the judge), the judge decided that the children’s best interests would be served by their being placed with the maternal family. That gave rise to an appeal. The pure family law aspects of this remain outside the scope of this column. As regards the procedural aspect of the appeal, however, the court made notable findings. First, as to the position where parties are acting in person:

  • The judge’s role in such a case is precarious, he must remain the adjudicator of fact and law and avoid descending into the arena but nevertheless ensure that all reasonable assistance is afforded to the non represented ‘party’ in putting their case. It is unrealistic to require advocates representing other parties who oppose the non represented litigant’s application to assist in promoting it, whether by positive action in the framing of questions to be asked of other parties or a reticence to challenge the contrary evidence. In any event, quite apart from possible subconscious taint of process, the inevitable perception of unfairness that an ultimately unsuccessful litigant in person would hold needs no amplification.
  • An advocate’s professional code will require that they do not seek to gain unfair advantage on behalf of their clients by virtue of the unrepresented status of another. In this respect, a judge is entitled to rely upon a professional advocate to draw to the court’s attention any mistake in law or fact articulated, regardless that it would otherwise favour their client. The advocate’s duty to his client is second only to his duty to the court, which is paramount. (MW v Hertfordshire County Council, at paragraphs 18-19.)

This appears to clarify the difficult question of advocate’s and judge’s duties in these circumstances. It suggests that the role of the former is to draw attention to errors but not to feel positively obliged to assist another party. Conversely, the judgment suggests that a degree of assistance by the judge is acceptable. This is a topic that will be returned to in the context of a later column on litigants in person. For present purposes, the significance of these findings is that they followed through into:

  • The court rejecting a submission that the fact matters had not been put to a witness (P) necessitated P’s recall given (a) the fact the judge had had regard to this point (b) that by accepting other witness’ evidence in full the judge had “thereby implicitly rejected the disputed factual evidence of Ms P” and (c) that as much of Ms P’s evidence was on analysis opinion evidence it would have gained little by being reiterated.
  • The court also rejecting a submission that the judge had erred by failing to outline his reasons for rejecting the views of the children’s guardian: “his failure to express his reason for doing so in this case cannot support the argument that he had failed to give due weight to her views. It certainly is not fatal to his decision.”

O’Connell v Rollings and others [2014] EWCA Civ 639

This was an appeal from a High Court judge’s decision to approve a sale of the assets of a business by administrators against the wishes of a fixed charge holder. The key points for present purposes are that:

  • The application was made on very short notice.
  • The fixed charge holder initially appeared in person because both his solicitor and counsel were unavailable.
  • His initial application was for an adjournment to allow him to gather evidence.
  • The judge initially put off the adjournment application and heard the parties given the risk that a proposed purchaser would withdraw from a planned purchase if this was not rapidly approved.
  • On the second day of the hearing, the fixed charge holder appeared by counsel and renewed the adjournment application. This was rejected and the judge proceeded to determine the application in favour of the administrators.

The main ground of appeal focused on the refusal to adjourn (albeit that the point was advanced in part on the related basis that the evidence led before the judge was insufficient to let him determine the application). As to the decision not to adjourn, the Court of Appeal made the following findings:

“76. I entirely accept that the hearing took place before the judge in circumstances which were far from ideal. I also accept that Mr O’Connell was placed in an extremely difficult position which he dealt with as best he could. I may say that, despite the formidable challenge with which he was presented, a review of the transcript reveals that he acquitted himself with distinction and clearly articulated the objections to the order which have been developed more fully on his behalf on this appeal. Further, looking at the matter more broadly, as Ms Hilliard has invited us to, it must be borne in mind that Mr O’Connell had been aware for some time that an application would have to be made if he declined to release his security. This was raised at the hearing before Mann J and pursued by the Administrators with Mr O’Connell as the marketing process unfolded. Further, the application and evidence were served upon Mr O’Connell in draft on 19 September 2013, four clear days before the hearing, albeit that period included a weekend. The judge was also conscious of the difficulties facing Mr O’Connell on the first day and, recognising that he would be assisted by hearing submissions from Mr O’Connell’s counsel, adjourned the application over until the second day.

77. Further, for all the reasons I have explained, the application was indeed urgent. Mr Palma required the side letter because he was not prepared to purchase the business and assets of MSL subject to the Debenture. That side letter required the Administrators to secure an order of the court under paragraph 71 of Schedule B1 by close of business on 25 September 2013. Had the order not been granted, there was, as the judge recognised, a real risk that Mr Palma would withdraw. That would have meant a further marketing exercise of uncertain outcome and the likely accrual of a further rental liability of around £30,875 which was, as the judge noted, no small sum in the context of this particular administration. To that would have had to be added the payroll for September which was, in the event, paid by Mr Palma. In all these circumstances I do not believe it can be said that the judge fell into error in exercising his discretion to case manage the application in the way that he did.”

(O’Connell v Rollings and others [2014] EWCA Civ 639, at paragraphs 76-77.)

Price v Price [2014] EWCA Civ 655

This was a family case in which Mr Price wished to contest the divorce proceedings. The material dispute was as to whether he had served an answer to his wife’s petition in time. He contended that he had but it had for whatever reason not reached the court file. First a District Judge and then a Circuit Judge disagreed. They found that they were not satisfied that he had returned the answer in time. Accordingly, the petition succeeded.

Before the Court of Appeal the key issues were (a) had the courts below dealt with the applications in a procedurally fair manner and (b) was the entire exercise redundant given the lack of merit in any answer. Issue (b) is a family law issue but the short answer to it was “no”. Hence issue (a) was pivotal. In resolving it, Black LJ found as follows:

“42. I have absolutely no doubt that the hearing before the district judge was too robust. Mr Price did not have a proper opportunity to put his case that he had posted the answer to the court and that it must have got lost along the way.

43. [Counsel for Mrs Price] submits that by virtue of Rule 22.7(1) of the FPR 2010, the general rule is that evidence at hearings other than the final hearing is to be by witness statement unless otherwise required and argues that there was therefore no need for the court to hear oral evidence from Mr Price. I do not think Rule 22.7(1) assists greatly. It simply begs the question whether something other than a witness statement was required here.

44. [Counsel for Mrs Price] criticised Mr Price for failing to provide any witness statement in support of his application and I will return to that below. However, she says, he had put detailed written submissions to the court and she submits that this gave him the necessary opportunity to convey what he wished to say. She says that the person who asserts a fact must prove it; the burden was therefore on Mr Price to prove that he filed the answer in time and he failed to discharge it. She says that such evidence as there was pointed to the probability that the answer was not sent and the judge was entitled to place weight on the lack of supporting evidence for Mr Price’s assertion.

46. …. Once the district judge was seised of the hearing, it was his responsibility to ensure that the parties had the necessary opportunity to establish their cases. I need not labour again the problems that arise where litigants are unrepresented and do not know the form but the reality is that they do not always understand the issues or the proper procedure and the judge inevitably bears a greater burden than would be the case with a represented litigant for ensuring that the hearing proceeds in an appropriate form.

47. Here, in my view, it should have been recognised that the issue was, putting it baldly, whether Mr Price was telling the truth when he said that he had posted the answer. It did not follow inexorably from the fact that it had not apparently arrived at the court that he had not posted it. Nor, given that his case was that he simply put it in a post box without obtaining or generating any supporting records, could it be said that the absence of supporting evidence established that he was lying. It all depended on whether he was credible and, in the absence of independent material to assist the judge, he was not in a position to assess that without hearing Mr Price give evidence in the normal way. I note [Counsel for Mrs Price’s] submission that the floodgates will open and the courts will be unable to find the time to hear oral evidence. I stress, however, that I do not intend this to be taken as a universal rule; my view depends on the facts of this particular case and other cases may give rise to different considerations and imperatives. Each case has to be dealt with fairly, depending on what the issues are.”

Underhill LJ’s concurring judgment was that:

“I agree. I wish to add something only in relation to para. 47 of Black LJ’s judgment. The situation where a party asserts that he has posted a document to the Court but where it does not appear to have been received is not uncommon in all kinds of civil proceedings (including tribunal proceedings); and it is also alas not uncommon that the party has retained no independent proof of posting. I agree with My Lady that the fair way of resolving such an issue must depend on the circumstances of the particular case; but where, as here, the party in question is before the Court in my view the right course will normally be for him or her to be required to give evidence on oath (or affirmation) – which evidence can of course then be tested by crossexamination by the other party and/or questions from the Court. If the issue has important consequences, as it often will, it is not satisfactory that the party’s case that the document in question was posted should be rejected – or indeed accepted – without the normal process for resolving a disputed issue of fact being gone through. I can understand the temptation for a Court dealing with the issue in the context of a case management hearing to do so without hearing evidence; but I think that the temptation has to be resisted. Putting the party in the witness box and allowing any relevant questioning will not normally take very long; and, quite apart from being the right course in principle, it ensures that the Court appreciates that, narrow though the issue may be, it is one of fact on which a reasoned – though in most cases it can be very shortly reasoned – decision is necessary.”

(Price v Price [2014] EWCA Civ 655, at paragraph 67.)

(Also see Legal update, Whether decree nisi should be set aside and leave given to file an answer out of time returned to district judge (Court of Appeal) (www.practicallaw.com/6-569-1225).)

Brockton Capital LLP v Atlantic-Pacific Capital Inc [2014] EWHC 1459 (Comm)

This was a challenge under section 68 of the Arbitration Act 1996 based on breach of the duty imposed by section 33 of that Act, which is that:

“(1) The tribunal shall— (a) act fairly and impartially as between the parties, giving each party a reasonable opportunity of putting his case and dealing with that of his opponent, and (b) adopt procedures suitable to the circumstances of the particular case, avoiding unnecessary delay or expense, so as to provide a fair means for the resolution of the matters falling to be determined. (2) The tribunal shall comply with that general duty in conducting the arbitral proceedings, in its decisions on matters of procedure and evidence and in the exercise of all other powers conferred on it.”

(Section 33, Arbitration Act 1996.)

It will be seen that (at least for the purposes of this article) the section 33 duty is materially the same as the common law rules concerning fair hearings underpinning the decisions examined to date.

The key point in Brock ton was that the arbitral panel had decided elements of the case on a legal basis canvassed for the first time APC’s closing submissions. Brockton wrote to the tribunal a letter which while stating that “we do not waive any consideration of or objection to APC’s new arguments” which it then went on to address in part, and briefly.

In ruling on Brockton’s challenge to the award, Field J found as follows:

“In my judgment, Brockton did have an opportunity to make submissions responsive to APC’s pleaded new penalty clause case when, acting by Mr Cymrot, it wrote to the tribunal on 24 April 2013, and the tribunal would have been entitled to conclude that it had decided not to take that opportunity. I say this because: (i) Brockton did not clearly state in the letter that it was objecting to the admission of the new case and wanted a ruling on their objection but instead it merely reserved its position as to the admission of the new case against the possibility it might decide at some future time to allege misconduct on the part of the tribunal; and (ii) Brockton went on to make submissions in respect of certain of APC’s new arguments as to which Brockton was reserving its position.

I am also of the view that Brockton had an opportunity to apply for leave to make submissions on the new penalty clause case following the tribunal’s email of 6 May 2013. Its failure to take that opportunity would, in my view, have reinforced the tribunal’s conclusion that Brockton had opted not to address APC’s penalty clause case.”

(Brock ton Capital LLP v Atlantic-Pacific Capital Inc [2014] EWHC 1459 (Comm), at paragraphs 27-28.)

Nevertheless, Field J found that Brockton had not had an opportunity to make submissions on all of the legal arguments the arbitrators found against them: “whilst the tribunal were entitled to conclude that Brockton had passed up the opportunity of dealing with APC’s penalty clause case on 2 (g) (i), they were not, with respect, entitled to conclude that Brockton had notice of any penalty clause issue going to 2 (g) (ii) and had knowingly passed up an opportunity to deal with that issue. It follows that, in deciding that 2 (g) (ii) was an unenforceable penalty the tribunal dealt with an issue of which Brockton had had no notice and no opportunity to address, and in so doing the tribunal in my judgment acted in breach of s. 33 (1) (a).” The section 68 challenge therefore succeeded insofar as based on these latter points.

(Also see Legal update, Application to set aside arbitral award based on section 33 breach (Commercial Court) (www.practicallaw.com/4-568-4424).)

Analysis and learning points

The following points can be drawn from the above cases:

  • In MW v Hertfordshire and O’Connell v Rollings, the Court of Appeal appears to be sending a clear signal that it will, where possible, uphold the decisions of judges who, faced with difficult circumstances, decide to press on and decide applications on the grounds that those applications are urgent.
  • It is notable that in those cases the court focused hard on the issue of what prejudice the appellants had actually suffered by the courts below continuing. While prejudice has never been an irrelevant consideration, it must be said that in those cases the court set the hurdle for it rather higher than analysis of previous cases would suggest it would lie.
  • Likewise, in Brock ton the decision that Brockton had passed up the opportunity to make further submissions on the new point taken in APC’s post-hearing submissions was a notably robust one.
  • Nevertheless, there remains a limit to the willingness to uphold decisions in the face of fairness challenges. In Price v Price, there had been no urgent need to dispose of the application without giving Mr Price a proper opportunity to be heard, and in Brock ton, the basing of an award in part on arguments Brockton had not addressed at all was held to be unfair.

The key practical lessons are:

  • That assumptions about the likelihood of adjournment need to be revisited. That was, in any event, a developing trend as the Jackson reforms bedded in, but these decisions underline the reality of the risk that a court may simply proceed in any event.
  • That leads to important but oft-forgotten points about ensuring as far as possible that the correct people are ready to attend court if matters do proceed unexpectedly. While their presence may undermine later arguments on appeal, and while in some cases attendance is simply not feasible, any strategy of non-attendance looks ever more risky.
  • That advice on prospects of an appeal based on procedural unfairness will likely need to be recalibrated.
  • That procedural objections, notably to new points being taken, are best made in very clear terms. While easily stated, this raises acute tactical issues in practice, given that protesting vigorously about a new point is never entirely straightforward to reconcile with the fallback submission that it is irrelevant. Nevertheless, Brock ton shows the risk of equivocation.
  • That if one does find oneself in a hearing at which the normal rules of civil procedure are most notable by their absence, it is as well to consider whether some form of rough and ready procedure might be more able to withstand challenge on appeal than no procedure at all. Notably, if someone is de facto giving evidence there is always much to be said for asking them to be sworn in. Likewise, if flurries of late documents or authorities appear, it is often better to secure a copy of them and address them, rather than to trust the court will not base its decision on them.

The more general lesson to draw from these cases, ironically in the era of Mitchell and draconian enforcement of rules of court, whose stated aims include ensuring that parties are not taken by surprise, is that one can never underestimate the capacity of a hearing to take significant unexpected turns at very short notice. Perhaps, however, it is ultimately reassuring to observe that the Jackson reforms have not abolished the need to think on one’s feet.

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