Sir Henry Royce Memorial Foundation v Mark Gregory Hardy
| Jurisdiction | England & Wales |
| Judge | Paul Matthews |
| Judgment Date | 01 April 2021 |
| Neutral Citation | [2021] EWHC 817 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: CR-2020-BRS-000017 |
| Date | 01 April 2021 |
[2021] EWHC 817 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS IN BRISTOL
INSOLVENCY AND COMPANIES LIST (ChD)
Bristol Civil Justice Centre
2 Redcliff Street, Bristol, BS1 6GR
HHJ Paul Matthews
(sitting as a Judge of the High Court)
Case No: CR-2020-BRS-000017
Charlie Newington-Bridges (instructed by Willans LLP) for the Claimant
The Defendant appeared in person
Consequential matters dealt with on paper
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Introduction
On 19 January 2021, I heard this claim for an order under section 117 of the Companies Act 2006. I handed down my written judgment on 26 March 2021, having circulated a draft in advance (see now [2021] EWHC 714 (Ch)). In brief, I decided that the defendant's request for copy documents or inspection under section 116 was invalid, and in addition was not made for a proper purpose. The parties have attempted to agree an order, but have been unsuccessful. The claimant seeks its costs of the claim on the indemnity basis with summary assessment, whereas the defendant seeks no order as to costs, or at any rate a detailed assessment of costs ordered on the claim, and on the standard basis only. The defendant also seeks permission to appeal against my decision, which the claimant resists.
When circulating the draft judgment, I directed the parties to let me have any written submissions on consequential matters by email by 4 pm on 26 March, and any written submissions in reply to the other side's submissions by 4 pm on Monday 29 March 2021. I subsequently extended time for both sides for submissions in reply to Wednesday 31 March 2021, at 4 pm. I received submissions from the defendant on 24 March 2021 (earlier than required) and from the claimant on 26 March 2021. These latter submissions also replied to the defendant's submissions, which had been filed early. I then received submissions in reply from the defendant on 31 March 2021, but I did not receive any further submissions from the claimant, no doubt because those submissions had already been made.
Costs
I have now considered the written submissions by both parties and here give reasons for my decision. I begin with the question of costs. This concerns both the general law, and also a specific rule in section 117 of the 2006 Act. The specific rule is that:
“(3) If on an application under this section the court is satisfied that the inspection or copy is not sought for a proper purpose –
(a) it shall direct the company not to comply with the request, and
(b) it may further order that the company's costs … on the application be paid in whole or in part by the person who made the request, even if he is not a party to the application.”
In my judgment this adds nothing to the general rules on costs, beyond conferring a further power on the court to make a non-party costs order against the person who made the request, over and above that which arises under section 51 of the Senior Courts Act 1981. So I turn to consider the general law.
Under the general law, costs are in the discretion of the court, but if the court decides to make an order about costs, the general rule is that the unsuccessful party in the proceedings pays the costs of the successful party: CPR rule 44.2. In my judgment it is appropriate to make a costs order in the present case. Overall, the claimant is clearly the successful party. Is there any reason why the general rule should not apply in this case? The defendant argues that the claimant failed to show that two of the three purposes for the request were not proper, and this should be taken into account. In my judgment, the fact that the claimant did not succeed on all its arguments does not change matters. Even if it had only succeeded on one point, the invalidity of the request, it would still have succeeded in the claim. I consider that the general rule should apply, and that the defendant should pay the claimant's costs of the claim.
Basis of assessment
The claimant seeks an order that its costs be paid on the indemnity basis. It refers to the decision of the Court of Appeal in Excelsior Commercial and Industrial Holdings Limited v Salisbury Hammer Aspen and Johnson [2002] EWCA Civ 67. In that case, Lord Woolf CJ said:
“32. … before an indemnity order can be made, there must be some conduct or some circumstance which takes the case out of the norm. That is the critical requirement.”
Waller LJ agreed, saying:
“39. The question will always be: is there something in the conduct of the action or the circumstances of the case which takes the case out of the norm in a way which justifies an order for indemnity costs?”
Laws LJ agreed with both judgments.
The claimant relies on a number of features of the present case in support of its argument. It says that the defendant's conduct of the case, including taking every possible point, has escalated costs, and that his correspondence has included offensive remarks. I have been referred to some examples of the latter, which show the defendant (on his own admission) to be using intemperate language, and (in my reading) in a rather condescending manner. In my judgment, this behaviour is unnecessary, and indeed counter-productive, because more time and resources are then spent on dealing with these problems of tone and language than in addressing the real issues in the case.
As to the former, I have read the correspondence between the parties in October and November 2020, before the PTR. This shows that the defendant was vigorously insisting that the remote trial of the claim should be live streamed on the Internet, because there was great public interest, and indeed there would be “possibly hundreds of requests to join”. Yet, at the PTR itself, as I recall, the defendant conceded the point without argument, and accepted that anyone interested could obtain a link from the court and participate that way. In the event, no more than 14 members of the public did. The defendant's correspondence once again shows him as difficult to deal with, condescending and indeed offensive.
Another example was the defendant's insistence on exhibiting a 500 page transcript of a meeting of the Club (not the company at all) to an unauthorised witness statement, which when challenged led to an order made by the district judge that the defendant should make a further witness statement, not exceeding five pages in length, identifying relevant passages in the transcript said to be relevant (and why). The defendant thereupon made a five-page witness statement, exhibiting the same 500 pages of transcript, but without identifying the relevant passages, as required by the court. Instead, the defendant summarised what he said the transcript said, and excerpted eight short passages, on which he commented. In any event, none of this was more than remotely relevant to the issues in the case.
A further example is the defendant's excessive correspondence with the claimant, contained in two lever arch files of the trial bundle. I am told that this is not the whole of his correspondence. In December 2020 the defendant sent 46 emails or letters to the claimant, whereas the claimant sent 9 to the defendant. Overall, there are 185 emails or letters in the bundle from the defendant to the claimant or its solicitors. At bottom, this is a straightforward claim based on a request for inspection or copy of the members register. It does not require such disproportionate efforts on the part of the defendant.
Finally, there were serious allegations made in pre-trial correspondence by the defendant against Mrs Jane Pedler, of deceiving the court, and perverting the course of justice. In my judgment I expressly stated that I found Mrs Pedler to be telling the truth in the evidence she gave to the court. There was also an accusation in correspondence by the defendant that “she is guilty of fraud … proven to the criminal standard”. But no such thing was in fact proved before me. In his original email submissions to me of 24 March, the defendant said that the evidence before me showed that the directors had admitted committing wrongdoing. But this was not particularised or supported by reference to the evidence.
In his reply submissions of 31 March the defendant returned to this theme. He said that the directors of the claimant had indeed admitted their guilt of the offences of which he accused them, and referred to the amended accounts of the Club (not the claimant), which he said reflected “correction of fraudulent accounting policies and refunds of monies misappropriated from its members as alleged by the Defendant”. But the defendant was not entitled to do this. He should have put this in his original submissions. In any event, it does not follow from the fact that the directors of the Club have amended its accounts that the persons who are the directors of the claimant company are admitting any wrongdoing. This is a long way from proof to the criminal standard of any offence having been committed.
He also says more generally that “the conduct of the applicant [that is, the claimant] was so egregious that any consideration of the indemnity basis is wholly inappropriate and unwarranted”. He relies on an allegation that the applicant's costs have already been met by non-refundable donations from third parties, and that this has been withheld from the court in breach of what he says are the duties of candour towards the court...
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