Windmill Racing Stables v Lewis

J U D G M E N T

1. LORD JUSTICE SEDLEY: The first purpose of today's hearing, by direction of Potter LJ given on 30th September 2004, is to permit the claimant, Mr Stephen Barnett, trading as Windmill Racing Stables, to show cause why he should not be debarred from resisting the appeal of the defendant, Gerald Lewis, for which permission was given earlier this year. The ground is Mr Barnett's non-compliance with the order of this court, made on 15th June 2004, that he disclose, initially by 13th July 2004, the pleadings, documents, judgments and orders in two cases between himself and Mr Piper and a Mr Wakefield.

2. The second and related purpose is to consider an application which was made by Mr Barnett on 26th October to adduce further evidence. The initial purpose of that evidence was to demonstrate that the findings of the Recorder in the original trial were correct, but he relies upon this material in support of setting aside the order for the production of documents or, alternatively, for the purpose of excusing his non-compliance.

3. The third purpose is to consider whether, pending the appeal proper, the charging order on Mr Lewis's house in aid of the judgment below should be discharged, so that he can raise funds to instruct lawyers to conduct the appeal.

4. We have had the substantive appeal listed after these applications so that, provided it can be done without injustice, we can deal with the substantive appeal today as well. That, if we reach it, will be our fourth purpose.

5. Although this court has been persuaded of different things at different times in relation to the potential materiality of the papers in the Piper and Wakefield litigation, the position which was finally reached is that which is set out in my judgment of 15th June 2004, to which reference should be made for the history of the appeal and for the issues arising in it. This court on that occasion made a clear and unequivocal order with which, equally clearly, Mr Barnett has not complied.

6. The evidence which he has sought instead to adduce includes some witness statements designed to suggest that the Recorder's decision was correct, insofar as it held, if it did hold, that Mr Lewis had not paid £2,000, even to Mr Wakefield. But that is not what we are here today to decide. Nor does it answer the question which we are here to decide, which is why Mr Barnett should not be debarred from resisting this appeal by reason of his failure to disclose the documents which he was ordered to disclose.

7. Called upon today to show cause why he should not be debarred, Mr Barnett agreed readily that he had not given disclosure of the documents. The reason he gave was that in his view Ward LJ had been right on an earlier occasion to discharge a still earlier order for their production. Therefore, he says, the order of which he is at present in breach should be treated as of no effect. This is an unacceptable answer. The reason why the court reinstated the order for production was spelt out by me, with the agreement of Neuberger J on 15th June. The breach is blatant and unexcused. In those circumstances, I would unhesitatingly make effective the 'unless' order debarring Mr Barnett from resisting this appeal.

8. There is in addition a letter written on 5th February 2003 by Pictons, the solicitors then acting for Mr Barnett, which I will not read out but which points up the appropriateness of the disclosure which has been ordered. That, however, will be a matter now for another court upon another day.

9. LORD JUSTICE WARD: I agree. I originally ordered this discovery. I was persuaded, having seen some of it and returned it, that it took the case no further, but when the appeal was listed before my Lords, Sedley LJ and Neuberger J, the consideration of this court then made it imperative that those documents be disclosed and the court so ordered. Mr Barnett was not entitled to ignore that order as he has done. He has given no justifiable excuse for his intransigence. In those circumstances, he does not in my judgment excuse the operation of Potter LJ's order. I agree that he is to be debarred from resisting this appeal. In those circumstances, I would ask Sedley LJ to deal with the appeal.

( The court then dealt with the appeal )

10. LORD JUSTICE SEDLEY: For reasons which were given in my judgment on 15th June (paragraphs 9 and 16), the case advanced on Mr Barnett's behalf in the County Court had a false basis in law. I will not elaborate upon those reasons, but they are in my judgment unanswered and make it inexorable that the appeal for which Mr Lewis was at an earlier stage given permission must succeed.

11. The error in the claim was, however, at the time that the claim was heard, redeemable by amendment. It seems to me that it is a necessary requirement of justice, associated with the initial success of this appeal, the point having only emerged all these years later in this court, that Mr Barnett should be entitled, upon the remission of the claim, which is itself inevitable, to amend his pleadings if so advised, so as to place his claim on a legally sound footing.

12. This means firstly that the order of this court should be an order which allows the appeal but orders a retrial of the claim. Secondly, it means that upon the retrial Mr Barnett should be permitted by the order of this court to plead his case correctly. It will mean, thirdly, that Mr Barnett, assuming that the case goes the distance, which is not inexorable, will be expected to give full disclosure, notwithstanding his failure to give it to this court. The permission that Mr Barnett needs to amend his claim would, without the permission of this court to make it, run into problems of time and conceivably of limitation. This is something with which this court can and should deal now, by making it clear that the liberty that Mr Barnett is to have to amend his claim is granted without limitation as to time.

( Mr. Lewis then interrupted the judgment )

13. It follows that we are able to deal with the substantive appeal that has been listed second before us in tandem with the first application to debar Mr Barnett.

14. Mr Lewis has put before us an application to stand the appeal over so that he can raise the money to pay solicitors and counsel, but there is no need to do that because the allowance of the appeal is a foregone conclusion. What remains is to determine the ultimate disposal. This too is inevitable: a remission for trial upon a proper basis.

15. It will not be proper at any retrial for either party to rely on the notes of Mr Recorder Ross-Martin's original judgment for any purpose except conceivably that of establishing some particular element of testimony given to him.

16. There remains the question of what if any security ought to be given by Mr Lewis pending the determination of the appeal, and the further question of whether, the judgment upon which it was founded having now gone, the charging order ought to be discharged by this court here and now.

17. LORD JUSTICE WARD: We allow this appeal. We set aside the order of Recorder Ross-Martin of 7th March and order a retrial. We are giving you permission today to amend your pleadings in such way as you think fit, but to plead the alternative case upon which the appeal has been allowed. No point will be taken that you are out of time to raise those allegations. There should be what is called a case management conference fixed by the Wandsworth County Court as soon as possible to take control of this litigation in the County Court. We have been discussing ordering £2,000 to be paid into court. We did so very much on the assumption that the money would be available from Mr Boris. It does not look as though it is going to be. It seems to us that the imposition of a condition of that kind will stultify the whole purpose for which we are allowing the appeal. It seems to us, on reflection, that the better course of action is for Mr. Barnet to go back to the County Court with your amended pleadings. That will require a defence to be put in by Mr Lewis in the usual way. If he fails to co-operate in the County Court proceedings, then no doubt Mr. Barnett would be entitled to apply for summary judgment against him. All of that is a matter for the future conduct of the case. On reflection I think that, in justice, this is such a mess that it would be better that we draw a line through it and start with a clean slate, giving permission to bring the case properly and for Mr Lewis to put in a defence and for you to consider how litigation works thereafter. I think that is the basis on which we would wish to send it back to the county court. You are not entitled to resist the appeal. But it is right that you be given a chance to say what you want to about the terms on which we do send it back to the county court.

18. LORD JUSTICE WARD: For the reasons given by my Lord and with which I agree, the result is that Mr Barnett is debarred from resisting the appeal. Consequently his applications to admit fresh evidence here are dismissed. We therefore allow the appeal and remit the matter to the county court with these further directions. Firstly, that Mr Barnett be at liberty to amend his pleadings in such way as he thinks fit. He will not be statute barred from raising those matters at this stage. Secondly, there should be a case management conference organised by the County Court as soon as possible. We think that Mr Barnett should have six weeks to amend his pleadings and that the case conference should be held as soon thereafter as can be arranged.

19. We had in mind to order Mr Lewis to bring money into court, believing that those funds were available to him. Since they are not it would stultify the whole purpose of this appeal and not do justice between the parties. We prefer to start in the county court with a fresh piece of paper, a clean slate. We will not require money to be brought into court. It is up to Mr Lewis as to how he conducts his defence in the county court. He must understand that if he does not properly participate Mr Barnett will be able to exercise all the remedies available to him, including applications for summary judgment. Those are matters that the parties themselves will have to deal with. It follows from setting aside the order and allowing the appeal that the proceedings in the Chancery Division for the charging orders and possession orders must likewise be set aside. So far as the costs are concerned, subject to what Mr Barnett may say, the inevitable rule is that costs follow the event. He should, subject to what he may say in answer to it, pay the costs, but I do not imagine that those costs are huge, given that Mr Lewis has appeared as a litigant in person at all times. The costs of the court below and the costs of the Chancery proceedings will be costs in the new trial. In other words, whoever wins the new trial, will be entitled to their costs of the previous trial in Wandsworth and the subsequent proceedings in the Chancery Division.

ORDER: Appeal allowed as per judgment .