STATEMENT THAT THE APPELLANTS WERE CROOKS DID NOT GIVE RISE TO GROUNDS FOR RE-OPENING AN APPEAL

In the judgment given today in Goldtrail Travel Limited -v- Aydin [2016] EWCA Civ 439 the Court of Appeal rejected an application under CPR 52.17 to re-open an appeal on the grounds of bias.

THE CASE

The Court of Appeal had rejected the appellant’s appeal against a finding that they were liable to contribute £1,400,000 as equitable compensation under section 175 of the Companies Act 2006.

CPR 52.17

(1) The Court of Appeal or the High Court will not reopen a final determination of any appeal unless –
(a) it is necessary to do so in order to avoid real injustice;
(b) the circumstances are exceptional and make it appropriate to reopen the appeal; and
(c) there is no alternative effective remedy.
(2) In paragraphs (1), (3), (4) and (6), ‘appeal’ includes an application for permission to appeal.
(3) This rule does not apply to appeals to the County Court.
(4) Permission is needed to make an application under this rule to reopen a final determination of an appeal even in cases where under rule 52.3(1) permission was not needed for the original appeal.
(5) There is no right to an oral hearing of an application for permission unless, exceptionally, the judge so directs.
(6) The judge will not grant permission without directing the application to be served on the other party to the original appeal and giving him an opportunity to make representations.
(7) There is no right of appeal or review from the decision of the judge on the application for permission, which is final.
(8) The procedure for making an application for permission is set out in Practice Direction 52.

THE PRACTICE DIRECTION ON REOPENING APPEALS (PRACTICE DIRECTION 52A)

SECTION VII – REOPENING APPEALS (RULE 52.17)
7.1  A party applying for permission to reopen an appeal or an application for permission to appeal must apply for such permission from the court whose decision the party wishes to reopen.
7.2  The application for permission must be made by application notice and be supported by written evidence, verified by a statement of truth. A copy of the application for permission must not be served on any other party to the original appeal unless the court so directs.
7.3  Where the court directs that the application for permission is to be served on another party, that party may, within 14 days of the service on him of the copy of the application, file and serve a written statement either supporting or opposing the application.
7.4  The application for permission will be considered on paper by a single judge.

THE JUDGMENT OF THE COURT OF APPEAL

Lord Justice Longmore:
  • This is the judgment of the Court. We shall adopt the same definitions as were used in the judgment of Lord Justice Vos dated 13th April 2016. Following that judgment, on 26th April 2016, the appellants issued an application under CPR Part 52.17 for permission to re-open the appeal for the reasons set out in a statement made by the appellants’ solicitor, Mr Albert Edward Passmore on 26th April 2016. According to the skeleton argument of the appellants’ counsel, the reopening of the appeal is necessary to avoid real injustice, arises in circumstances that are exceptional and where there is no alternative effective remedy.
  • The application under CPR Part 52.17 was, in accordance with the Practice Direction, not served on Goldtrail. The Court decided not to direct that it should be so served for reasons that will become apparent in the course of this judgment, namely that the court did not think that there was merit in the application.
  • Mr Passmore’s statement concludes by saying that Mr Wyatt (one of the appellants) had said to Mr Passmore at the end of the hearing that “he considered that the Lords Justices had decided prior to the hearing of the appeal that he and the other [individual appellants] were crooks and that their appeal had not been properly and fairly considered by the Court of Appeal”. A number of grounds for this belief are set out including that Vos LJ had said on the first morning that “the judge had found that the Appellants were a bunch of crooks” and that “they had been hoist by their own petard”, that the judges had not read any of the documents and witness statements, that they had interrupted the submissions of counsel for the appellants, and that the court had a number of factual misunderstandings.
  • In this judgment, we do not propose to deal with the challenges to the correctness of our judgments. We have refused permission to appeal, and it is now open to the appellants, if they wish, to apply to the Supreme Court for that permission. If they are granted permission, the Supreme Court will no doubt evaluate those challenges. Suffice it to say that, save in respect of one matter that we shall mention in a moment, we stand by our judgments. We think that the other criticisms of Vos LJ’s judgment summarised in paragraph 80 of counsel’s skeleton argument are either simply wrong or at least insubstantial, semantic or one-sided.
  • In dealing with the appellants’ application, we would start by noting that this is not the first time that these appellants have attacked the behaviour of the court. As was recorded in paragraph 70 of Vos LJ’s judgment, the appellants repeatedly suggested that the judge had behaved unfairly in the conduct of the trial (see also paragraphs 6 and 29-31). We all concluded that there had been no basis for that submission. It is, however, a submission that is now repeated in relation to this court.
  • Next, we would make clear that the appellants’ allegation that the court had not read “any document referred to in the appellant’s skeleton argument save for the judgment and the grounds of appeal” is incorrect. The appellants had suggested one day’s pre-reading. All members of the court undertook that period of reading, and Vos LJ actually read for more than 2 days prior to the hearing. In particular, of course, the court had read the passages in the existing and new statements mentioned in the appellants’ suggested pre-reading list, and referred to in paragraph 4.4 of Mr Passmore’s statement.
  • As regards the comments made by Vos LJ concerning what the judge had said, he did indeed comment on the first morning of the hearing that the judge had found that the appellants were “crooks” – a colloquial word indicating that they had behaved dishonestly in relation to these transactions. But that was exactly what the judge had found (see, for example, paragraphs 14-22 and 146-150 of Rose J’s judgment). The comment was made because the appellants’ counsel repeatedly asked the court, in effect, to accept the appellants’ explanations for their conduct, when the judge had expressly rejected those explanations. The court was seeking to make clear to counsel for the appellants that he had not appealed the judge’s findings of fact and could not, therefore, succeed by asking the Court of Appeal to accept facts or explanations advanced by the appellants which the judge had expressly rejected. This latter point seems still to underlie the appellants’ arguments, despite their points having been rejected for the reasons given by Vos LJ.
  • As regards Vos LJ’s comment that the appellants had been “hoist with their own petard”, that was precisely what the judge had found at paragraph 177 of her judgment. Two sentences of her judgment answer many of the basic allegations made by the appellants as to the £1.4 million that she awarded:
“My conclusion on this point is that the Defendants cannot complain if the court adopts the split that they were prepared to agree as reflecting a reasonable valuation of the shares on the one hand and the commitment on the other. The merging of the two values is part and parcel of their participation in the dishonest scheme not only to deprive Goldtrail of the commission to which it was entitled but also to share the benefit of disguising from the tax authorities the total consideration earned by Mr Aydin” (emphasis added).
It was a conclusion with which we agreed (see paragraph 45 of Vos LJ’s judgment).
  • In our judgment, the appeal was conducted in an entirely fair and conventional manner. The appeal lasted 2 court days and the appellants’ counsel made submissions for more than 1 of those days. The court raised issues of concern with counsel as it customarily does. The court’s concerns were not adequately dealt with by counsel for the appellants and he repeatedly reverted to trying to persuade the court to accept explanations offered by his clients for the transactions, which had been rejected by the judge. These aspects are reflected in Vos LJ’s judgment with which the other members of the court agreed.
  • There is, however, one matter raised by the appellants that has substance. That is that Vos LJ appears in paragraphs 54 and 56 to have mistakenly misread paragraph 11 of the Amended Particulars of Claim as referring to the VSSA rather than the Viking Brokerage Agreement. It is not entirely clear from the amended pleading that that is what Goldtrail meant by the term “Viking Agreement” as it refers to paragraphs 21 and 27 of the same document for the definition, when that definition appears in paragraph 24. It would also have been better if the appellants had pointed out the error in their suggested corrections to the draft judgment so that it could have been corrected at the appropriate time. There are two reasons why we do not think that this error affects the substance of our decision. First, as Vos LJ pointed out at paragraph 53 of his judgment, ground 8 could not affect the outcome once the appeal against the judgment of £1.4 million in respect of the section 175 claim had been dismissed. Secondly, even if paragraph 11 was referring to the Viking Brokerage Agreement, paragraphs 26 and 27 of the amended pleading pointed to the allegation that was being made about the deposits (see paragraph 55 of Vos LJ’s judgment), and the reasoning in paragraphs 57-61 is unaffected by the error.
  • In these circumstances, we have concluded that the reopening of the appeal is not necessary to avoid real injustice, and that the circumstances are not in any way exceptional. There was no basis whatever for a submission that the integrity of the litigation process in this case has been undermined, either critically or at all. There is a pressing need for this litigation to be finalised (see the dicta of the Chancellor in Lawal v. Circle 33 Housing Trust [2014] EWCA Civ 1514 at paragraph 65). It would, therefore, be inappropriate for the appeal to be reopened, and we will dismiss this application.

 

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