Michael Wilson & Partners, Ltd v Michael John Short

Hearing date: 16 July 2024

Approved Judgment

This judgment was handed down remotely at 10.00am on 19 August 2024 by circulation to the parties or their representatives by e-mail and by release to the National Archives.

This is my judgment on two applications by the claimant, Michael Wilson & Partners, Limited:

(1) its application dated 18 August 2023 (“the set aside application”)

(2) its application dated 17 September 2023 (“the stay-lifting application”).

Parties and the claim

The claimant is a BVI incorporated company of lawyers and business consultants which operates in Kazakhstan, and has offices or presences in neighbouring countries. Mr Michael Wilson (who describes himself as a director and employee of the claimant, more recently as an employee only) has had the conduct of the claim on the claimant's behalf throughout. The defendant, Michael Short, was the moving force of a company called GBM Minerals Engineering Consultants Ltd (“the company”). The claim seeks, amongst other things, a declaration that the defendant is personally liable to the claimant in respect of what are referred to as judgment debts obtained against the company.

Procedural background

The claim form was issued on 4 May 2021, and served, with particulars of claim, that day or on 5 May 2021. The acknowledgement of service was filed on 17 May 2021. The Defence was therefore required to be filed by 1 or 2 June 2021: CPR 15.4(1)(b).

On 1 June 2021 (and before the time for filing the Defence had expired) the defendant issued an application notice seeking security for costs (“the security application”), and an extension of time for filing and serving the Defence until the security application had been determined.

The security application was listed on 23 September 2021. On 7 September 2021, on the claimant's application, I vacated that hearing and gave directions as to evidence. The hearing was relisted for 25 January 2022, then at the claimant's request on 9 February 2022.

By a consent order dated 7 October 2021, I extended the time for the claimant to file and serve its evidence to 1 December 2021. This was extended by consent to 17 January 2022 by the order dated 7 December 2021 of Deputy Master Linwood. However, no Defence having been filed, the automatic stay provided for by CPR 15.11 came into effect on 2 December 2021.

On 12 January 2022, the claimant filed evidence in the form of a letter of that date from the British Ambassador to Kazakhstan, setting out that Kazakhstan had been in a state of severe civil unrest since 5 January 2022, and that Mr Wilson had suffered an injury on 30 December 2021, which required an operation and hospitalisation for 7–10 days.

On 25 January 2022, I made a consent order vacating the hearing listed on 9 February 2022, and providing for the parties to file, by 1 March 2022, a draft consent order setting the date for the claimant's evidence, or updating the court as to when such an order would be filed.

On 3 February 2022, the security application was listed to be heard on 16 June 2022, the claimant not having filed any dates to avoid,. On 11 March 2022, the claimant applied to vacate that hearing. His application was supported by a witness statement stating that shortly before he was due to be hospitalized, he had developed Covid, so that his hospitalisation had been delayed. He was, he said, finally admitted to hospital on 30 January 2022; and would be unable to work normally until about 1 June 2022.

The claimant's application was listed before Deputy Master Glover, who adjourned it. It was relisted on to be heard on 1 June 2022.

By 27 May 2022, the claimant had still not served any evidence in opposition to the security application. The defendant's solicitors acceded to the claimant's application to adjourn that application in their letter of that date, stating that they wished to avoid having to review that evidence (which could, they said, be voluminous) in the short period before 16 June 2022.

A draft consent order (dated 8 June 2022) was filed on 7 June 2022. This provided for the hearing on 16 June 2022 to be vacated, and for the claimant to file and serve its evidence by 12 September 2022. The time estimate for the security application was 2 days.

On the same day (7 June 2022) I sent the following directions to the parties:

“Please provide a brief explanation, by reference to the legal and factual issues arising, as to why the security for costs application is said to require 2 full days of hearing to determine.”

No response was received to these directions. The draft order remained unapproved and unsealed, and the hearing of the security application unlisted.

There was then a further hiatus until 15 May 2023, when the claimant issued an application seeking an order dismissing the security application (“the strike out application”). The only evidence in support of the application was contained in box 10 of the application notice. This was listed to be heard on 16 August 2023 (“the August hearing”).

At the August hearing, I dismissed the strike out application on two grounds:

(1) the claim had been stayed by the operation of CPR 15.11;

(2) there was no evidence as to the claimant's ability to satisfy an order for security for costs.

I also certified the application as totally without merit. The claimant did not apply to appeal the order of 16 August 2023 (“the August order”).

Set aside application

The set aside application seeks:

“Re-open/reconvene hearing due false submissions re stay given no evidence in support, all orders/documents not before the Court, errors of fact/law, documents improperly obtained by D breaches of CPR/Chancery Guide/defamation Mr Wilson/MWP/no CRO in favour Emmott/Sinclair/Sokol et”

The grounds of the application were stated in box 10, including that the orders were sought in accordance with the jurisdiction as set out in Re Barrell Enterprises [1973] 1 WLR 19 and Re L-B (Children)(Preliminary Finding: Power to Reverse) [2013] UKSC 8, [2013] 1 W.L.R. 634.

The first hearing of the set aside application was on 3 April 2024. At that hearing, an issue arose as to whether the application had in fact been made before or after the order was perfected by sealing (on 18 August 2023), a point described as “the timing issue”. The claimant's position was that the application had been made before the order was sealed, and, on that basis, that the Barrell jurisdiction was available to him. In the course of the hearing, he produced an email dated 17 August 2023 to the defendant stating that he had issued the set aside application.

My order of 3 April 2024 (dated 8 April 2024 in error) provided for further evidence on the timing issue.

After the hearing the following decision came to my attention: Wilson v Emmott[2023] EWHC 2415 (KB), in which Saini J ruled that the court has no jurisdiction to reopen under the Barrell jurisdiction once a final order had been sealed or perfected, even if the reopening application was made before sealing. Mr Wilson had appeared as the claimant's advocate before Saini J, and thus was fully aware of it, but, in breach of his duty to the court, had failed to draw it to the court's attention.

This decision renders the set aside application unarguable, and it is not necessary to consider the grounds relied upon. At the adjourned hearing, Mr Wilson did not seek to rely upon the Barrell jurisdiction, despite having maintained the claimant's reliance on it in his witness statement dated 11 July 2024. In any event, as the defendant's counsel submitted, the Barrell jurisdiction is not intended to give unsuccessful litigants a second bite before they go to appeal. It is reserved for the sort of circumstance identified in Re LB (Children).

Having abandoned its argument based on the Barrell jurisdiction, the claimant sought instead to base its application on the court's powers under CPR 3.1(7). This provision is not referred to at all in its application notice, nor did Mr Wilson refer to it at the first hearing, or indeed provide the court with any authorities as to the principles governing it. The claimant is not in my judgment entitled to rely upon it without amending its application notice, which it did not apply to do.

In case I am wrong about that, I consider whether the claimant can succeed under CPR 3.1(7). This provides:

“A power of the court under these Rules to make an order includes a power to vary or revoke the order.”

The principles applicable to an application to revoke an order pursuant to CPR 3.1(7) are set out Tibbles v SlG PLC (trading as Asphaltic Roofing Supplies)[2012] 1 WLR 2591, paras. 39, 41–42 per Rix LJ, cited with approval by the Supreme Court in Thevarajah v Riordan and others[2016] 1 WLR 76, paras. 15, 18–19 per Lord Neuberger.

So far as relevant to this case, they can be summarised as follows (see [39]):

(1) CPR r 3.1(7) is apparently broad and unfettered, but considerations of finality, the undesirability of allowing litigants to have two bites at the cherry, and the need to avoid undermining the concept of appeal, all push towards a principled curtailment of an otherwise apparently open discretion.

(2) It is not possible or desirable to formulate an exhaustive definition of the circumstances in which a principled exercise of the discretion may arise.

(3) Subject to...