Home Information Cases Ian Gillan v HEC Enterprises Ltd (2017)

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Ian Gillan v HEC Enterprises Ltd (2017)

Summary

The court refused an application by administrators for the court to review findings made in a previous hearing by reference to "without prejudice save as to costs" material.

Facts

The court had to determine whether it could revise certain conclusions it had reached in [2016] EWHC 3179 (Ch), [2017] 1 B.C.L.C. 340.

In that case, the third and fourth defendant administrators had argued that they were entitled to be indemnified for their work out of trust assets under the principle in Berkeley Applegate (Investment Consultants) Ltd (No.1), Re [1989] Ch. 32. However, the court found that the work carried out did not fall within the Berkeley Applegate principle and that the sums claimed in relation to the litigation should be dealt with in accordance with the general principles as to the costs of litigation. In the instant case, the administrators asked the court to review those findings and replace them with ones favourable to them. It was their case that the court should do so having admitted, and heard submissions on, "without prejudice" or "without prejudice save as to costs" material.

The administrators argued that

(1) the claimants had waived the without prejudice privilege in the material;

(2) much of the material in question was headed "without prejudice save as to costs" and when that conventional heading referred to "costs", it was not confined to litigation costs, but extended to all the issues relating to the application in reliance on the Berkeley Applegate principle;

(3) the parties had used the word "costs" in a special way with a special meaning and the court should read it as extending to costs and also to an application for an allowance for remuneration and disbursements under the Berkeley Applegate principle;

(4) the court had jurisdiction to reopen the judgment pursuant to the principle explained in L-B (Children) (Care Proceedings: Power to Revise Judgment), Re [2013] UKSC 8.

Held

(1) The material which had been put before the court had all been available at the time of the earlier hearing but was not provided. Had the administrators' submission regarding waiver been right, it could have been made at the earlier hearing. However, the court was not persuaded that anything that had happened amounted to a waiver by the claimants of the without prejudice material. What the submission came to was that the claimants' reliance on open material without referring to the without prejudice material resulted in a distorted picture being provided and if only the without prejudice material could have been admitted, the overall picture would have looked different. However, that did not involve a waiver by the claimants of the without prejudice material (see para.26 of judgment).

(2) Without prejudice save as to costs normally referred to litigation costs. An application by an office holder for remuneration and disbursements under the Berkeley Applegate principle was not an application for litigation costs. It was conceptually quite different. The material which was without prejudice save as to costs could not be somehow smuggled in on a Berkeley Applegate principle with the suggestion that costs extended to Berkeley Applegate remuneration and disbursements, Berkeley Applegate referred to (para.27).

(3) The court had conducted a hearing and given a reserved judgment addressing the arguments that were put in that hearing by reference to the material adduced at that time. It did not seem to be appropriate or just for the court to be asked to perform that exercise a second time. The administrators, who had argued their case once and obtained an unfavourable result, were coming back and saying to the court that the matter should be heard again based on material that had been available all along in the hope that on the second bite of the cherry the result would be more favourable (para.29).

(4) The overriding objective of the earlier and instant hearings was to produce a just result, having regard to the definition of the overriding objective in the CPR. A fair application of the definition of overriding objective was wholly in favour of the court refusing the application. If the court was to entertain the application it would increase expense and be disproportionate, and the court would not be dealing with the matter expeditiously and fairly. There was no proper basis for the application to reopen the judgment, L-B (Children) considered (paras 30-32).

Application refused

Chancery Division (Companies Ct)
Morgan J
Judgment date
25 January 2017
References
LTL 17/3/2017