AWG Group Ltd v Morrison
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE MUMMERY |
| Judgment Date | 20 January 2006 |
| Neutral Citation | [2005] EWCA Civ 1618,[2006] EWCA Civ 6 |
| Docket Number | Case No: A3/2005/2736,A3/2005/2736, A3/2005/2739 |
| Court | Court of Appeal (Civil Division) |
| Date | 20 January 2006 |
[2005] EWCA Civ 1618
Lord Justice Mummery
Lord Justice Latham
Lord Justice Carnwath
A3/2005/2736, A3/2005/2739
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
(MR JUSTICE EVANS-LOMBE)
Royal Courts of Justice
Strand
London, WC2
MISS AMANDA HARINGTON (instructed by Messrs Dechert LLP, London EC4V 4QQ) appeared on behalf of the Appellant/First Defendant
MR PHILLIP MARSHALL QC and MR DEEPAK NAMBISAN (instructed by Messrs Olswang, London WC1A 6XX) appeared on behalf of the Appellant/Second Defendant
MR CHARLES ALDOUS QC , MR CHARLES BÉAR QC and MR DOMINIC O'SULLIVAN (instructed by Messrs Herbert Smith, London EC2A 2HS) appeared on behalf of the Respondents
We would like to thank all the counsel and their supporting teams of solicitors for the expedition with which this appeal has had to be brought on, for the quality of the preparation of the papers and of the arguments that we have heard. This has had to be treated as a very urgent appeal because on 1st December the judge refused an application to recuse himself in the trial, which is due to start tomorrow. So it had to be heard today and we have to give a ruling today.
Our ruling is that the appeal will be allowed, and we make an order that Evans-Lombe J be recused from hearing the trial of these proceedings.
We need to take time to reduce our reasons to writing. There are several important points that need to be carefully explained in our judgments. The parties will be notified when our draft judgments are available. We hope that in the light of those they will be able to agree all the consequential matters that will have to be resolved on the allowing of this appeal. We only need to see you back here if there are matters that simply cannot be agreed or cannot be the subject of written submissions.
The final remark we would make is that it is now for the parties to make enquiries in the appropriate quarters about the possibility of a new date for the commencement of this trial before a different judge.
MR ALDOUS: My Lord, I was going to say that we will immediately make an application to the Chancellor for a replacement judge as soon as possible.
Thank you all again for your excellent arguments and the help you have given to the court.
Apologies to the case that has been kept waiting. I see counsel at the back of the court. We will rise for a short time in order to enable you to get out in a seemly fashion and for the next case to come on. Then we will come in and hear that.
[2006] EWCA Civ 6
Lord Justice Mummery
Lord Justice Latham and
Lord Justice Carnwath
Case No: A3/2005/2736
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
MR JUSTICE EVANS-LOMBE
Royal Courts of Justice
Strand, London, WC2A 2LL
Miss Amanda Harington (instructed by Dechert) for the First Appellant
Mr Philip Marshall QC & Mr Deepak Nambisan (instructed by Olswangs for the Second Appellant
Mr Charles Aldous QC and Mr Charles Bear QC (instructed by Herbert Smith) for the Respondent
Lord Justice Mummery :
The appeal
This is an appeal against the decision of Evans-Lombe J on 1 December 2005 not to recuse himself from trying an action in the Chancery Division. He granted permission to appeal.
As the trial of the action was due to start on 6 December 2005 and is estimated to last for about 6 months, arrangements were made for the appeal to be heard urgently on 5 December. The case was very well argued at short notice by Mr Philip Marshall QC for the appellant, Mr Stephen McBrierty, and Ms Amanda Harington for the other appellant, Sir Alexander Morrison, (they are the defendants in the action) and by Mr Charles Aldous QC and Mr Charles Bear QC for the respondents (the two companies, who are the claimants in the action) . After considering the written and oral submissions the court announced its decision that the appeal would be allowed. The judge was directed to recuse himself from hearing the trial. It was stated that reasons would be given in judgments to be handed down in due course.
Background facts
The circumstances of the application and the nature of the proceedings were helpfully summarised by the judge in the opening paragraphs of his judgment, which I quote verbatim. The summary is accepted by the parties as broadly accurate for present purposes, although Mr Marshall and Ms Harington had certain reservations about the accuracy of some of the details in paragraph 2 which are not material for present purposes:
"1. I have to deal with an application made by the defendants Sir Alexander Fraser Morrison ("FM") the 1 st defendant and Stephen John McBrierty ("SM") the 2 nd defendant, made on Wednesday the 30 th November the week immediately preceding the intended commencement of the trial on the 5 th December, that I should recuse myself from trying the case. The application arises in this way: in the course of my pre-reading into the case I noticed that it was intended to call as a witness for AWG Group Ltd ("AWG") Mr Richard Jewson ("Mr Jewson") who, at all material times until March 2002 was a director of AWG and chairman of the audit sub-committee of its board. Alerted by the name I then discovered that Mr Jewson is well known to me of which fact I then alerted the parties on the 29 th November. The response of the claimants was to indicate that, rather than risk my withdrawal and the consequent delay in obtaining another judge and his completing the pre-reading process on which I had already spent a week, they would not call him to give evidence since they did not regard him as other than a relatively peripheral witness. The response of the defendants is contained in a letter from Messrs Dechert LLP of the 30 th November the conclusion of which was to ask me to withdraw.
2. The case arises from the takeover by AWG of Morrison plc ("Morrison") in which FM and SM were respectively the chairman, and, in effect, the chief executive officer. They also held between them a substantial proportion of AWG's shares. In August 2000 AWG made an approach to Morrison with a view to bidding for the whole of the issued share capital of that company. In due course a bid was made which AWG declared to have gone unconditional on the 21 st September 2000. It is AWG's case that it was procured to make the bid and to declare it unconditional as a result of a representation that Morrison's profits in the full year to March 2001 would be £30.5m, that that representation was made to the board of AWG by the defendants at a time when they had no bona fide belief that such a level of profit would be achieved, and that, in making the representation, the defendants fraudulently procured Morrison to conceal from AWG's "due diligence" inquiries, material facts from which AWG might well have concluded that that level of profit was unachievable and that they should withdraw their bid.
3. At the outset of the hearing of the defendants' application I described my connection with AWG and with Mr Jewson in the following terms: AWG is a company whose primary business is supplying water to industry and the public in East Anglia and in particular in Norfolk. My family are farmers/landowners in Norfolk and so in the area of operation of AWG. I have had dealings with AWG, not always harmonious, over the years on such subjects as access for the purpose of sinking boreholes and running pipelines. Mr Jewson lives in the next village to the village where I and my family live being approximately 1 mile distant. Our families have known each other for at least 30 years. Our children are friends and we have dined with each other on a number of occasions. Mr Jewson and I in the past were tennis players. Mr Jewson has recently been appointed Lord Lieutenant of Norfolk. I would have the greatest difficulty in dealing with a case in which Mr Jewson was a witness where a challenge was to be made as to the truthfulness of his evidence.
4. As is apparent the case which the claimants seek to make out against the defendants involves serious allegations against prominent businessmen for whom, if those allegations are found proved, most serious consequences would follow both in the damages which they might be required to pay and in the consequences that such findings would have for their future careers.
The test for apparent bias
As Mr Marshall made clear, his client's sole objection to Evans-Lombe J trying the case was the real possibility of apparent bias. There was not, it should be emphasised, any suggestion of actual bias or personal interest. The judge had no personal interest, pecuniary or otherwise, in the outcome of the litigation. In no sense would he be a judge in his own cause. The detailed objections in Dechert's letter of 30 November 2005 (referred to in paragraph 1 of the judgment) were based entirely on an apprehension of the real possibility of apparent bias.
Upholding the bias objection on the eve of the trial would cause considerable disruption: the trial would have to be...
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