|[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]|
England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> McTear & Anor v Engelhard & Ors (Rev 1)  EWCA Civ 487 (24 May 2016)
Cite as:  CP Rep 36,  EWCA Civ 487,  3 Costs LR 453,  WLR(D) 283,  4 WLR 108
[New search] [Context] [View without highlighting] [Printable RTF version] [Buy ICLR report:  4 WLR 108] [View ICLR summary:  WLR(D) 283] [Help]
ON APPEAL FROM THE HIGH COURT OF JUSTICE
MR RICHARD SPEARMAN QC SITTING AS A DEPUTY JUDGE OF THE HIGH COURT
CASE No: HC12C00705
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE RYDER
LORD JUSTICE VOS
| (1) Andrew Ian McTear
Christopher Kenneth Williams
|- and -
(1) Michael Conrad Engelhard
(2) Maria Elizabeth Risby
(3) Anna Marie Engelhard
(4) Sylvia Patricia Engelhard
(5) Natasha Risby
(6) Anna Marie Engelhard
(as personal representative of Paul Siegfried Engelhard deceased)
(7) Engelhard Holdings Limited
Defendants/1st, 3rd, 4th, 6th and 7th Defendants as Appellants
Mr Simon Davenport QC and Mr Richard Samuel (instructed by Isadore Goldman) for the Claimants/Respondents
Hearing dates: 10th May 2016
Crown Copyright ©
Lord Justice Vos:
The underlying claims
i) A breach of fiduciary duty and negligent mismanagement by the directors of BWL. The directors against whom this was alleged were the 1st defendant, Mr Michael Engelhard ("Michael"), the 3rd defendant, Mrs Anna Engelhard, who was Michael's elderly and infirm mother ("Anna"), the 4th defendant, Mrs Sylvia Engelhard, who was Michael's ex-wife ("Sylvia"), and the 6th defendant who was Anna sued as the personal representative of her husband, Mr Paul Engelhard ("Paul deceased"), who died on 2nd December 2006. Michael, Anna, Sylvia and Paul deceased (together the "Directors"), and EHL itself are the appellants in this case.
ii) A breach of the Directors' duty to act in the best interests of BWL, when BWL's financial fortunes had deteriorated significantly in 2005/2006.
The procedural run-up to the trial
i) In the alternative, the Sum was automatically set off against the accrued sum of £424,109.58 (the Credit) which was due and owed from BWL to EHL as at 10th March 2014 in respect of management charges. The set off arose from the terms of the CVA that BWL had entered on 18th October 2006, alternatively by way of equitable set off.
ii) In any event, the true amount of the inter-company account on the SAGE account as at 10th March was not the Sum, but rather £267,311.17 (some £145,428 less).
The 1st and 2nd judgment on the procedural issues
i) Items 1, 2 and 3 comprising 140 pages of EHL's manuscript journals, cash book entries, and posting sheets.
ii) BWL's management accounts for June 2004 to March 2005. I might comment that these were for the period prior to the relevant period, and were presumably in the claimants' possession, as the defendants had assumed in their pleading in relation to the relevant management accounts (for March 2005 to April 2006).
iii) 30 pages of EHL's bank statements that mirrored entries on BWL's bank statements already disclosed.
iv) 8 pages of emails all of which ought, the defendants said, to have been disclosed anyway by the claimants, but in respect of which the judge formed no view.
The 3rd judgment
The grounds of appeal
i) The judge wrongly and unjustly applied Mitchell to the facts of this case, leading to the denial of a fair trial for the defendants.
ii) The judge wrongly decided that the late service of the witness statements was not a trivial breach, taking into account factors that were not relevant, namely the facts relating to the additional disclosure, and the inclusion of the new documents in the exhibits to Michael's witness statement.
iii) The judge wrongly failed to countenance other options including allowing the witnesses to give evidence without reference to the new documents, or allowing the other witnesses (apart from Michael) to give evidence.
iv) The judge was wrong to find that there were no good reasons for the delay of 50 minutes in serving the witness statements, taking no proper account of the solicitor's bereavement and his consequent absence the day before the statements were served, and wrongly finding that other fee earners should have been found to undertake the work instead.
v) The judge reached conclusions on the substantive claim that he would not have reached had he not excluded the defendants' evidence, bearing in mind that Mr Scarlett was a wholly independent auditor who had been responsible for the companies' accounts at the material time.
vi) The judge was wrong to refuse to allow reliance on the new documents, because there were breaches of the disclosure orders of 22nd April 2013 and 24th January 2014, and because an adjournment of the trial would otherwise be inevitable. In fact, had the judge looked at the new documents, he would have found that no such adjournment was necessary.
vii) The judge was wrong not to allow the amendment to plead the set-offs, when they were points of law, did not need pleading, did not necessitate an adjournment of the trial, and did not raise any new issues.
viii) The judge was wrong not to allow the new pleading on the true account balance, when it had only just come to light in the new documents and it went only to quantum, and did not prejudice the claimants.
ix) The judge was wrong in his findings on the plea of estoppel in finding there had been no representations by the claimants in the CVA proposal, and in finding that there had been no dealings between the claimants and Michael in his capacity as a director of both BWL and EHL.
The evidence that the Defendants served late
The applicable principles
The first main issue: did the judge properly exclude the defendants' oral evidence?
Was the judge right to dismiss the 2nd application concerning the new documents?
Ought the judge to have allowed the defendants permission to re-amend?
The other grounds of appeal
Lord Justice Ryder:
Lord Justice Moore-Bick: