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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Secretary Of State For Trade & Industry v Winter & Anor [2001] EWCA Civ 960 (12 June 2001)
URL: http://www.bailii.org/ew/cases/EWCA/Civ/2001/960.html
Cite as: [2001] EWCA Civ 960

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Neutral Citation Number: [2001] EWCA Civ 960
A3/01/1213

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
COMPANIES COURT
(Mr Justice Blackburne)

Royal Courts of Justice
Strand
London WC2

Tuesday, 12th June 2001

B e f o r e :

THE VICE CHANCELLOR
LORD JUSTICE MUMMERY

____________________

SECRETARY OF STATE FOR TRADE AND INDUSTRY
- v -
(1) ALBERT GRAHAME WINTER
(2) ANDREW GARETH MOORE

____________________

(Computer Aided Transcript of the Stenograph Notes
of Smith Bernal Reporting Limited
190 Fleet Street, London EC4A 2AG
Telephone No: 0171-421 4040
Fax No: 0171-831 8838
Official Shorthand Writers to the Court)

____________________

MR. C. JONES (instructed by Messrs Irwin Mitchell, Birmingham) appeared on behalf of the Applicants Mr Winter and Mr Moore.
MR. P. JONES (instructed by Messrs Howes Percival, Norwich) appeared on behalf of the Respondent.

____________________

HTML VERSION OF JUDGMENT
____________________

Crown Copyright ©

  1. THE VICE CHANCELLOR: This is an application by Mr Winter and Mr Moore for permission to appeal, with appeal to follow if permission is granted, from the order of Blackburne J made on 22nd May 2001, whereby he dismissed their application for an adjournment of the trial fixed for 18th June 2001 with an estimated length of hearing of 10 to 15 days.
  2. The underlying proceedings are an application by the Secretary of State for Trade and Industry for disqualification orders under the Company Directors Disqualification Act 1986. Mr Winter and Mr Moore were each of them directors of Maples Stores Plc. The company went into receivership in September 1997 and into voluntary liquidation on 27th November 1997 with a deficiency with regard to creditors estimated at approximately 20m.
  3. The Secretary of State commenced these proceedings by an originating summons issued on 31st August 1999. The grounds of his application appear by the affidavit of Mr Leinster and are in summary that each of them, Mr Winter and Mr Moore, misled creditors and others as to the financial stability of Maples by the manipulation of its books and records and some of the underlying transactions. The answer of Mr Winter and Mr Moore to the Secretary of State's evidence in support of his application was served on 29th November 1999. It raises conflicts of primary fact on many of the relevant issues but was plainly prepared with the benefit of professional assistance. There was some delay before the Secretary of State's evidence in reply was completed in May 2000. As is commonly the case, issues of fact having been raised by evidence in answer, it is then incumbent on the Secretary of State to obtain primary evidence in support of the original allegation which was made on information and belief. Thus, it is unsurprising that it took several months to obtain.
  4. In June 2000 a trial window was identified for the hearing which had been estimated to take between 10 and 15 days. The hearing was fixed to commence on 18th June 2001, next Monday. Seemingly, the defence of Mr. Winter and Mr Moore was being financed through an insurance policy taken out by Maples to cover directors against liability for costs in relation to claims made against them. That cover was withdrawn on 21st March 2000. The firm of solicitors, who were then acting for the insurers, passed the papers to another firm of solicitors who took the same view. We have been told that the insurance cover was withdrawn because it was considered that the nature of the allegations made by the Secretary of State involved dishonesty and other issues which were excluded from the insurance cover. Why it should have taken so long for that point to be taken has not been explained to us. One would have thought that it would have been evident from the Secretary of State's evidence in support of his application precisely what was alleged, thereby enabling the insurers to determine initially whether or not the cover was available for the defence of the proceedings.
  5. Whether that is so or not, on 1st May 2001 the solicitors for Mr. Winter and Mr Moore wrote to those for the Secretary of State seeking an adjournment of the trial in order to resolve the insurance position or to consider giving undertakings under the Carecraft procedure. On 3rd May the Secretary of State's solicitors sent drafts of the undertakings which would be acceptable to him. This would involve a disqualification order against Mr Moore for six years and in the case of Mr Winter for eight years. This appears not to have been acceptable to them. On 16th May they applied for the date fixed for the hearing to be vacated. They did so on the basis that they were advised that they had good prospects of resisting the application if they were legally represented. They considered that, in the absence of such representation, either they would have to appear in person or submit to an order under the Carecraft procedure. Their evidence in support of their application made it clear that the adjournment sought was substantial, at least nine months, for the purpose of raising or saving the requisite funds which, on the footing of a hearing of 10 to 15 days, was estimated to be 150,000. It was considered that they should be separately represented, at a cost of 75,000 each.
  6. That was the application that came before Blackburne J on 22nd May. He refused it. He commented on the failure of either applicant to indicate what he had done in an attempt to raise the funds required to pay for his defence. He did not consider that they needed to be separately represented and he did not consider that a fair trial was not possible without such representation or that any litigant could expect an adjournment of proceedings to enable him to save up the amounts required. He also rejected the suggestion that the Secretary of State was guilty of unreasonable delay or that there was an arguable Human Rights Act point. The judge also refused permission to appeal.
  7. By their appellants notice Mr Winter and Mr Moore suggest that the judge was plainly wrong. They seek an adjournment to at least 1st March 2002 for the purpose of saving sufficient funds from their current income to enable them to finance their defence to this claim. They also sought permission to adduce fresh witness statements to cover the deficiencies in their evidence perceived by Blackburne J. That part of the application is not opposed. We have read the further witness statements that they submitted. Mr Winter states that he can only raise the necessary money by saving out of future income because he can borrow no more. He suggests that he has a surplus income of 3,500 per calendar month available to be saved for legal expenses. He points out that he is entitled to suspend mortgage repayments for six months and that his wife will assume some of the expenses from her salary of 13,000 per annum. Mr Moore states that he can only raise the necessary funds by saving and borrowing. He might be able to raise a limited amount by the remortgage of his house. 2,500 per calendar month could be saved by his wife undertaking an additional liability for the mortgage repayments, endowment assurance and certain utility costs.
  8. Both Mr Winter and Mr Moore by their counsel accept that the question of an adjournment was a matter for the discretion of the judge, but they submit that the judge was wrong in the view to which he arrived, thereby entitling us to set aside the exercise of his discretion and re-exercise it ourselves.
  9. The submissions on their behalf may be summarised as follows. The evidence demonstrates that neither of them can now afford the cost required to obtain professional assistance on the scale considered necessary to defend the allegations if they are heard on Monday next. It is suggested that such representation is needed because the case is substantial, both in relation to the issues which are raised with regard to the length of the hearing and with regard to the number of witnesses requiring to be cross-examined. Reliance is also put on the consequences to Mr Moore and Mr Winter if the case is made out and they are disqualified. It is suggested that to deny them the opportunity of raising further funds by granting the adjournment sought is to produce an unfair contest and to drive them into conceding the case of the Secretary of State by entering into the Carecraft procedure and giving the undertakings which he tendered to them on 3rd May. We were told that a conditional fee arrangement was not open to Mr. Winter and Mr Moore, and some reliance was placed on a decision of the European Court of Human Rights in Airey v Republic of Ireland [1979] 2 EHRR 305. It was suggested that it was thoroughly disproportionate for the judge to refuse an adjournment and that they should be permitted to have it in order to raise the money necessary to finance their defence.
  10. On behalf of the Secretary of State it is pointed out that Mr Winter and Mr Moore are continuing to act as directors. If the Secretary of State's allegations are correct (and only a trial will tell), then the sooner they are disqualified the better. He suggests that further delay will reduce the clarity of the evidence. The date for the hearing, which was fixed for 18th June, was fixed for the convenience of the considerable number of witnesses who will give oral evidence. He points out that there is no legal issue involved, purely the factual issue which is, in effect, who said what, to whom and when. He specifically submits that it is not necessary, in a case such as this at least, for legal representation at all, let alone on the scale which is suggested should be provided, in order for there to be a fair trial. He points out that the result of refusing the adjournment is not in any sense to force Mr Winter and Mr Moore into giving the undertakings sought as it would still be open to them to change their minds and contest the proceedings if they thought fit.
  11. I can express my conclusion on these rival submissions shortly. The matter was undoubtedly a matter for the discretion of Blackburne J. He determined, on the issues as presented to him, that the case for an adjournment was not made out. I might or might not have reached the same conclusion as he did. But one thing seems to me to be quite clear. It cannot be said that the conclusion at which he arrived was plainly wrong. There is a public interest in these proceedings being determined as early as is reasonably possible. It is true that the directors should have a fair opportunity of presenting their case. That they have had. In agreement with the learned judge, I do not accept that where the issues are purely factual a fair trial is not possible if the respondent is not legally represented. I am not satisfied that the adjournment sought would in fact provide the funds necessary to fund the legal representation suggested. On the short ground that the judge is not shown to have been plainly wrong, I would refuse permission to appeal. The hearing will commence on Monday next, 18th June.
  12. LORD JUSTICE MUMMERY: I agree.
  13. Order: Application refused with costs, to be subject to detailed assessment.
    (Order not part of the judgment of the court)


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URL: http://www.bailii.org/ew/cases/EWCA/Civ/2001/960.html