Colin Wright v Michael Wright Supplies Ltd and Another
| Jurisdiction | England & Wales |
| Judge | Sir Alan Ward,Mr Justice David Richards,Lord Justice Hughes |
| Judgment Date | 27 March 2013 |
| Neutral Citation | [2013] EWCA Civ 234 |
| Docket Number | Case No: A2/2012/0536 |
| Court | Court of Appeal (Civil Division) |
| Date | 27 March 2013 |
[2013] EWCA Civ 234
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
HIS HONOUR JUDGE THORNTON QC
HQ10X02365
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Hughes
Mr Justice David Richards
and
Sir Alan Ward
Case No: A2/2012/0536
Mr Clive Wolman (instructed through direct access) for the appellants
Mr Colin Wright the respondent appeared in person
Hearing date: 13th December 2012
Introduction
This judgment will make depressing reading. It concerns a dispute between two intelligent and not unsuccessful businessmen who, after years of successful collaboration, have fallen out with each other and this and other litigation has ensued with a vengeance. Being without or having run out of funds to pay for legal representation, they have become resolute litigators and they litigated in person. Some unlucky judge had to cope with the problems that inevitably arise in the management of a case like this. Here the short straw was drawn by His Honour Judge Anthony Thornton QC. He struggled manfully, patiently, politely, carefully and conscientiously. Many may not have done so. It is, therefore, hugely unfortunate that the appeal is launched essentially on the ground that the judge allowed himself to become distracted and so wrongly conducted the trial on the written information he had without allowing the defendants to call live evidence. The appeal is based upon that alleged procedural impropriety.
What I find so depressing is that the case highlights the difficulties increasingly encountered by the judiciary at all levels when dealing with litigants in person. Two problems in particular are revealed. The first is how to bring order to the chaos which litigants in person invariably — and wholly understandably — manage to create in putting forward their claims and defences. Judges should not have to micro-manage cases, coaxing and cajoling the parties to focus on the issues that need to be resolved. Judge Thornton did a brilliant job in that regard yet, as this case shows, that can be disproportionately time-consuming. It may be saving the Legal Services Commission which no longer offers legal aid for this kind of litigation but saving expenditure in one public department in this instance simply increases it in the courts. The expense of three judges of the Court of Appeal dealing with this kind of appeal is enormous. The consequences by way of delay of other appeals which need to be heard are unquantifiable. The appeal would certainly never have occurred if the litigants had been represented. With more and more self-represented litigants, this problem is not going to go away. We may have to accept that we live in austere times, but as I come to the end of eighteen years service in this court, I shall not refrain from expressing my conviction that justice will be ill served indeed by this emasculation of legal aid.
My second concern is that the case shows it is not possible to shift intransigent parties off the trial track onto the parallel track of mediation. Both tracks are intended to meet the modern day demands of civil justice. The raison d'être (or do I simply mean excuse?) of the Ministry of Justice for withdrawing legal aid from swathes of litigation is that mediation is a proper alternative which should be tried and exhausted before finally resorting to a trial of the issues. I heartily agree with the aspiration and there are many judgments of mine saying so. But the rationale remains a pious hope when parties are unwilling even to try mediation. Judge Thornton attempted valiantly and persistently, time after time, to persuade these parties to put themselves in the hands of a skilled mediator, but they refused. What, if anything, can be done about that? You may be able to drag the horse (a mule offers a better metaphor) to water, but you cannot force the wretched animal to drink if it stubbornly resists. I suppose you can make it run around the litigation course so vigorously that in a muck sweat it will find the mediation trough more friendly and desirable. But none of that provides the real answer. Perhaps, therefore, it is time to review the rule in Halsey v Milton Keynes General NMS Trust [2004] EWCA Civ 576, [2004] 1 WLR 3002, for which I am partly responsible, where at [9] in the judgment of the Court (Laws and Dyson LJJ and myself), Dyson LJ said:
"It seems to us that to oblige truly unwilling parties to refer their disputes to mediation would be to impose an unacceptable obstruction on their right of access to the court."
Was this observation obiter? Some have argued that it was. Was it wrong for us to have been persuaded by the silky eloquence of the éminence grise for the ECHR, Lord Lester of Herne Hill QC, to place reliance on Deweer v Belgium (1980) 2 EHRR 439? See some extra-judicial observations of Sir Anthony Clarke, The Future of Civil Mediations, (2008) 74 Arbitration 4 which suggests that we were wrong. Does CPR 26.4(2)(b) allow the court of its own initiative at any time, not just at the time of allocation, to direct a stay for mediation to be attempted, with the warning of the costs consequences, which Halsey did spell out and which should be rigorously applied, for unreasonably refusing to agree to ADR? Is a stay really "an unacceptable obstruction" to the parties right of access to the court if they have to wait a while before being allowed across the court's threshold? Perhaps some bold judge will accede to an invitation to rule on these questions so that the court can have another look at Halsey in the light of the past 10 years of developments in this field.
The background
After that introduction let me sketch the background to this appeal. The claimant, Mr Colin Wright, (the judge sometimes referred to him as "MW", rather than "CW") had worked for Rank Xerox and gained good experience of that market. In 1972 he formed the first defendant company, Michael Wright (Supplies) Ltd (MWS) in order to supply Xerox materials to the commercial and business operators. In about 1972, he employed Mr Nigel Turner as a delivery driver but in time promoted him and forged a firm friendly relationship with him. Thirty years later Mr Wright was ready to relax the reigns of control and to sell MWS to Mr Turner. At that time Mr Wright estimated that the company had an annual gross profit in excess of £1 million per annum. He, Mr Wright, owned the entire share capital and the value of the company was thought to be nearer £2 million than £1 million. However, Mr Turner did not have the resources for an immediate buy-out and the two men alighted on a method of selling the company in a way that enabled the purchase price to be paid to Mr Wright over a number of years out of the on-going profits expected to be earned by the company. Although Mr Wright was ceasing to own the company, he would continue to be actively involved in its management acting as a consultant. This would provide valuable continuity for the company, would enable Mr Turner to master the necessary management skills and would enable Mr Wright to maximise his prospect of being paid in full since he would continue to have an active role as consultant and manager of the business. The structure created to achieve that purpose involved the incorporation of a new company, the second defendant, Turner Wright Investments Ltd (TWI). TWI would purchase all the MWS shares from Mr Wright and then Mr Wright would own one half of the shares in the new company and Mr Turner the other half. Although there was some dispute about it, the judge appears to have accepted that the sale price was £1,775,000. He recited the terms of the share sale agreement to have provided as follows:
"Whereas:
(a) CW is the holder of £50,000 shares in MWS
(b) CW has agreed to sell the shares to TWI (TWI) for the price and in the manner hereinafter appearing.
(1) CW will sell and TWI will purchase the shares at a price being £35.50 per share (the total price hereinafter called "the share price").
(2) TWI will pay the share price by way of equal instalments (or such other payments as may be agreed between the parties of £… [the original document referred to by the judge did not have any figure filled in after the £ sign].
…
(4) Payment of the total share price will be over such period as may be agreed between the parties being not more than 5 years from the date of this agreement.
(5) Payments of the total share price are to be made monthly on the 28th of each month and in the event of TWC failing for any reason to pay any of the said payments within 14 days of the said 28th of each month then CW will have the option to terminate this agreement by giving not less than 1 month's notice in writing to TWC.
(6) In the event of the agreement being terminated by CW then CW shall be entitled to return the shares from TWC and TWC will sign appropriate transfer forms."
Two different copies of the sale agreements in the appellant's bundle placed before us confirm the price being £35.50 per share but clause 2 provides that the share price be paid by way of equal monthly payments (or such other payments as may be agreed between the parties) of £21,750. If there were 60 payments this price would be £1,305,000. A further payment of £447,000 (or should it be £445,000?) was apparently to be paid in advance but there is no written mention of that sum. The second agreement is in identical terms save that an extra clause was added that "CW's shares to be passed to Nigel...
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