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Cite as: [2001] EWCA Civ 763

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Neutral Citation Number: [2001] EWCA Civ 763
No A3/2001/0512

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
APPLICATION FOR PERMISSION TO APPEAL
AND A STAY OF EXECUTION

Royal Courts of Justice
Strand
London WC2
Friday, 6th April 2001

B e f o r e :

LORD JUSTICE ROBERT WALKER
LORD JUSTICE SEDLEY

____________________

SECRETARY OF STATE FOR TRADE AND INDUSTRY
- v -
EASTAWAY

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(Computer Aided Transcript of the Palantype Notes of
Smith Bernal Reporting Limited, 180 Fleet Street,
London EC4A 2HD
Tel: 0171 421 4040
Official Shorthand Writers to the Court)

____________________

MR MATTHEW COLLINGS (Instructed by Burton Copeland of London) appeared on behalf of the Appellant
MR RICHARD GILLIS (Instructed by Treasury Solicitor) appeared on behalf of the Respondent

____________________

HTML VERSION OF JUDGMENT
____________________

Crown Copyright ©

  1. LORD JUSTICE SEDLEY: The applicant, ably represented by Mr Collings, seeks permission to appeal against a judgment of the Vice-Chancellor on 15th February 2001 by which his application to strike out disqualification proceedings brought by the Secretary of State against him - the applicant - and against four other former directors of the now defunct Blackspur Group of companies was rejected.
  2. The scene is set by the first two paragraphs of the Vice-Chancellor's judgment:
  3. "1. The fifth defendant and applicant, Mr Nigel Eastaway, was appointed a director of four companies in the Blackspur Group in May 1989. Those and other companies in the Group went into administrative receivership, with an estimated deficiency of £34m, on 2nd July 1990. Following a report by the administrative receivers to the Secretary of State for Trade and Industry in August 1991, on 1st July 1992 the Secretary of State instituted these proceedings against Mr Eastaway and four of his co-directors seeking disqualification orders under s.6 Company Directors Disqualification Act 1986. Thereafter there were a number of delays, which I shall describe in more detail later, until, in December 1988, the hearing of the application was fixed to commence on 4th October 1999 with an estimated length of hearing of four to six weeks.
    2. In the summer 1999 Mr Eastaway wished both to challenge by judicial review the decision of the Secretary of State to continue the disqualification proceedings and, if unsuccessful, to dispose of them on the basis of an agreed statement of facts by the summary procedure approved by the court in Re Carecraft Construction Co. Ltd [1994] 1 WLR 172. Mr Eastaway issued his application for permission to move for judicial review on 18th August and, through his solicitors, agreed a statement of facts on or shortly before 13th September.
    It was in those circumstances that on 13th September 1999 Hart J made an order by consent vacating the date for the hearing on the undertaking of Mr Eastaway `that in the event that his application for judicial review (no CO/3352/1999) is concluded and
    (a) is unsuccessful; or
    (b) is successful and the Secretary of State thereafter decides in accordance with law that the disqualification proceedings remain expedient in the public interest and ought not to be discontinued (and there is no challenge to this further decision);
    he will sign the Carecraft statement agreed with the Secretary of State (or have it signed on his behalf by Burton Copeland) and will agree to the determination of the disqualification proceedings by way of the Carecraft procedure on the basis of that signed statement.'"
  4. Mr Justice Collins, on the papers, and then Mr Justice Sullivan, following an oral hearing, refused the applicant leave to move for judicial review. Lord Justice Buxton subsequently refused him permission to appeal against that refusal. It is clear from the judgment of Lord Justice Buxton (which we have) that the refusal was not because the applicant necessarily lacked an arguable case to the effect there had been such delay as to invade his Article 6 rights to a hearing within a reasonable time, but because, first, the judicial review proceedings were an impermissible flanking movement upon the Companies Court proceedings and, secondly, the application was made well outside the three-month time limit with no acceptable excuse. If, in other words, the delay point was to be taken it must be in the present disqualification proceedings. But the applicant had by then blocked his own retreat by undertaking that if his judicial review application failed he would collaborate in a Carecraft disposal of the disqualification proceedings; in other words, that the delay issue would no longer be open to him before the Companies Court. Accordingly, he asked the Vice-Chancellor if necessary - that is to say, if contrary to his primary argument the undertaking now blocked him - to release him from it. He also argued the substantive delay issue, and the Secretary of State, not content simply to shelter behind the undertaking, met him on this ground as well.
  5. On all three issues - delay, the undertaking and release from the undertaking - the Vice-Chancellor found in successive alternatives against the applicant. My Lord, Lord Justice Robert Walker, on considering the papers, took the view that in the absence of any prospect of oversetting the Vice-Chancellor's decisions on the undertaking, the merits of the delay point, whatever they might be, were of no consequence. This is not a view from which, in the absence of oral argument from Mr Collings on the undertaking, I would dissent. But having heard him, and having first read the papers, I have some initial sympathy for the applicant even though the trap he is now in is of his own making. He waived his undoubted right to canvass delay in the disqualification proceedings in order to canvass it in the Crown Office List. When he went to the Queen's Bench Division he found the door was barred to him partly because he was not taking the point in the Chancery Division. For this reason, and setting on one side the not insignificant fact that the applicant was shut out of the Queen's Bench Division because of delay, I am content to look, as Mr Collings invites us to do for today's purposes, directly at the merits of the argument on delay, making the assumption that the undertaking either does not operate or would be waived by the court. Mr Collings, for his part, recognises that unless he has a reasonable prospect on delay the other issues, however strong, cannot avail him.
  6. The delay was dealt with in full by the Vice-Chancellor. He reminded himself that the jurisprudence of the European Court of Human Rights is not a source of factual analysis but a body of principles, and these he set out as far as material in paragraph 7:
  7. "A number of propositions are common ground or, in so far as they may be disputed, are clearly established by the authorities. They are:
    (1) Time starts when the relevant proceedings are instituted, ie 1st July 1992 (EDC v UK [ibid] para. 48).
    (2) The relevant circumstances include the consequences of joining a number of respondents to the same proceedings where such joinder is reasonable (EDC v UK [ibid] para. 58).
    (3) Delay arising from the conduct of Mr Eastaway is to be left out of account in determining whether a reasonable time was exceeded (Eckle v Germany (1982) 5 EHRR 1 para 82 and EDC v UK [ibid] paras 52-54).
    (4) Delay to enable associated criminal proceedings to be concluded is prima facie reasonable (EDC v UK [ibid] para 58).
    (5) Conduct of Mr Eastaway's co-respondents which leads to delay should not be attributed to him (EDC v UK [ibid] para 52)."
  8. The Vice-Chancellor also set out in an appendix a detailed chronology, summarising it in the body of his judgment. It will serve no purpose to read it out now. What matters is that on carefully explained grounds he concluded, in essence, first that the Secretary of State, having instituted the proceedings in July 1992, had been dilatory in failing to serve his full evidence until December that year. Secondly, that the related criminal proceedings which had been begun on the same date as the disqualification proceedings were not concluded until July 1994 when the applicant was acquitted; and that it did not count as time wasted in the conduct of the disqualification proceedings to wait for a verdict. Thirdly, shortly after the acquittal, when asked by the applicant to halt these proceedings, the Secretary of State having failed to do so, the applicant asked the registrar to strike them out; but on 27th January 1994 the registrar refused. It was not until April 1995 that the applicant sought leave to appeal that refusal out of time. His application was dismissed by Mr Justice Carnwath. His fellow director Mr Davies went on to the Court of Appeal which in May 1996 dismissed that appeal. Although the applicant was not a party to it, the Vice-Chancellor took the view that it would have operated in the applicant's favour had Mr Davies succeeded and therefore that it was reasonable to put the proceedings on hold pending the appeal. Fourthly, the period thereafter until November 1997 was spent in a series of negotiations and applications designed to secure a compromise of the disqualification proceedings by undertakings. Fifthly, in a history spelt out in detail by the Vice-Chancellor, the remainder of the time amounted, in retrospect, to a combination of dilatoriness and distraction, all of it initiated by the applicant with if not the object then at least the effect of deferring or deflecting the final disposal of the application to disqualify, the judicial review expedition being simply the most recent step in the series. The Vice-Chancellor then stood back and looked at the entire passage of time. He said:
  9. "18. It is true that the events in question occurred between May 1989 and July 1990, that is over ten years ago. It is also true that eight and a half years have now elapsed since the proceedings were commenced. In those circumstances it is necessary to look critically at the events of the intervening period to determine whether more than a reasonable time has elapsed so as to constitute an infringement of Mr Eastaway's Convention rights. In my view most of the time elapsed is to be attributed either to the requirements of justice down to the conclusion of the criminal proceedings in June 1994 or to the conduct of Mr Eastaway. Such conduct includes the attempt to strike out the proceedings concluded in May 1996, Mr Davies' unsuccessful attempt, with which Mr Eastaway was associated, from October 1996 to November 1997 to have the proceedings stayed, the negotiations for a summary disposal under the Carecraft procedure from February to October 1998, the renewed attempts for that purpose between June and September 1999 and Mr Eastaway's unsuccessful attempts between August 1999 and November 2000 to obtain a judicial review of the decision of the Secretary of State to continue.
    19. In the judgments of the Court of Appeal given in November 1997 in Re Blackspur Group [1998] 1 WLR 422, 427H and 433B it was recorded that Mr Davies did not suggest then that a fair trial was impossible. Mr Eastaway does not now suggest that the delay has been such that a fair trial is impossible. A very large proportion of the undoubtedly long time which has elapsed since these proceedings were commenced is due to the various actions taken by Mr Eastaway. Those actions were taken not to obtain but to avoid a fair and public hearing by an independent and impartial tribunal either within a reasonable time or at all. In my view there has been no breach of Mr Eastaway's Convention rights under Article 6 and for the Secretary of State now to proceed with these proceedings would not be incompatible with them."
  10. For my part I do not see, after listening to Mr Collings' attractive submission, any realistic prospect, even assuming that procedural obstacles are cleared from the path, of oversetting this decision of the Vice-Chancellor in this court.
  11. Of the criticisms set out in Mr Collings' skeleton argument and advanced in oral submissions today I would mention these, which I believe to be the sharpest of them. It is argued that the Vice-Chancellor wrongly blamed the applicant for the delay caused by criminal proceedings. I accept that to do so would have been wrong but it is not, in my judgment, what the Vice-Chancellor did. He declined to blame the Secretary of State for it, which is not the same thing. Mr Collings submits however that in the case of EDC v United Kingdom [1998] BCC 370 the European Commission of Human Rights treated the timetable of criminal proceedings as part of the aggregate delay which would be treated as amounting to anunreasonable length of time. This may be so in a particular case where, regardless of fault, the total passage of time includes periods of pure inertia and is excessive. What it is not is a proposition of law. It is equally legitimate to regard waiting for a verdict as a proper step for the state to take before going any further in its disqualification proceedings. It is to be remarked that the Commission, in paragraph 58 of its decision, accept the propriety of waiting for a verdict. If so, it is not necessarily logical, it seems to me, to count that time against the state. Its proper role may be, at highest, to add to the total lapse of time which - if there is in other respects either fault on the state or no fault at all - may amount eventually to excessive delay.
  12. It is said that the conduct, at least in this court, of the strike out proceedings was not the applicant's responsibility. This is so once the point of judgment by Mr Justice Carnwath is passed. It was still manifestly sensible for the Secretary of State to await that outcome given the possible effect on the applicant. The outcome would have included a most serious obligation on the Secretary of State, had Mr Davies succeeded, to consider whether notwithstanding that the applicant was not a party to the appeal it was now an appropriate use of his powers to continue to move against him.
  13. I accept Mr Collings' criticism that the Vice-Chancellor in paragraph 18 may not have been justified - and I stress "may" because we have not heard Mr Gillis on the other side - in blaming the applicant for the time taken by Mr Davies' appeal. But for reasons I have indicated it does not follow that any blame falls on the state. It was eminently reasonable for the state to wait.
  14. The other criticism which Mr Collings advanced was the allocation of blame in the latter part of paragraph 18 of the Vice-Chancellor's judgment which is, in my view, sufficiently answered by the Vice-Chancellor's own account of the facts in the preceding paragraphs.
  15. It is said by Mr Collings that the judicial review proceedings were necessary as the only way, prior to October 2000, of raising the Convention issue. I find the greatest difficulty with this submission. The Convention issue is not a novelty. It has always been part of the inherent jurisdiction of our courts to prevent the abuse of their process by inordinate and inexcusable delay. Until the Human Rights Act came into force the Convention applied neither in the Queen's Bench Division nor in the Chancery Division. But by choosing not to rely upon the Chancery Division's own inherent jurisdiction the applicant forfeited the argument, which it seems to me would have been available to him, that one element of the abuse of which he complained was the Secretary of State's failure to follow what Mr Collings tells us, and rightly so, was the departmental policy prior to October 2000 of acting in a Convention compliant fashion. If the aim of going to the Queen's Bench Division had been to gain enough time to let the Human Rights Act come into effect then Mr Collings accepts that he could not justify delay. He tells us that this was not the purpose, and I accept that is so.
  16. Nevertheless, it seems to me that the time taken in seeking judicial review is fairly to be laid - as the Vice-Chancellor laid it - at Mr Eastaway's door. Mr Collings criticises the Vice-Chancellor for not taking into account the special nature of disqualification proceedings. On the Vice-Chancellor's findings, it seems to me that this cannot have been a determinative consideration. There is a two-year time limit for initiating them. While two years is not generous in relation to other time limits, it is not ungenerous in relation to some. Everything has to turn on the events affecting the particular case and the Vice-Chancellor's judgment is fully alive to this fact.
  17. Mr Davies', a fellow director's, application to the European Court of Human Rights was referred by the court, under its new system, for a government response in relation to admissibility. Mr Collings can therefore legitimately say the application of Mr Davies, which ran parallel with that of Mr Eastaway, was not manifestly ill-founded. But neither the Davies decision, as far as it went, nor EDC, which never reached the court, is, in spite of the Human Rights Act, a compelling source of law for present purposes. Neither sets an arithmetical time limit. The principle to be derived from EDC is to be found at paragraph 57 of the decision in the sentence:
  18. "The Commission also considers that the present case calls for an overall assessment of the reasonableness of the length of the proceedings."
  19. That, it seems to me, is what the Vice-Chancellor specifically set about doing.
  20. This is not to say that no judgment on delay will be appealable so long as the correct questions have been posed. The answers must still add up. In my judgment, in spite of Mr Collings' well crafted criticisms, the Vice-Chancellor's answers on the facts before him on delay add up, within the principles I have mentioned, to the outcome at which he arrived. I do not consider there to be a realistic prospect of success on any appeal against the Vice-Chancellor's findings on the substantive question of delay. If so, as Mr Collings accepts, permission to appeal should be refused. It is therefore not necessary to embark upon the potentially overriding question fo the undertakings and the Vice-Chancellor's refusal to relieve the applicant of them.
  21. I would refuse permission to appeal.
  22. LORD JUSTICE ROBERT WALKER: I agree. The court refuses permission to appeal.

    Order: Application refused with the costs - detailed assessment.


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