Ultraframe UK Ltd v Fielding & Ors

I have before me today an issue arising in a case management conference in this complex litigation in which Ultraframe UK Ltd. will be referred to as ‘the Claimant’, and Gary John Fielding, Sally Anne Fielding and the Burnden Group plc will be referred to as ‘the Defendants’. The liquidator of North Star Systems Ltd. and Seaquest Systems Ltd. will be referred to simply as ‘the Liquidator’.

The issue I have to determine may be stated simply: should the trial of the four separate actions involving these parties - all of which are due to be tried together - come on in October of this year, or should I allow an application by the Liquidator for summary Judgment, and by the Defendants to strike out what is called ‘the Leeds action’, to proceed in March of this year in advance of the trial?

In late October of last year, Master Weingarten ordered the summary Judgment and strike out applications to come on in March. Mr. Purvis, who appears on behalf of the Defendants, says that those directions should remain in place, whereas Mr. Speck, who appears for the Claimant, says that there is no point in having the application for summary Judgment and strike out at that time, and that a more efficient use of Court time, and the least expensive course, would be to have all issues - including those raised on those two applications - to be determined with all the other issues at the trial in October of this year.

Mr. Moody-Stuart, who appears for the Liquidator, adopts something of a middle position. His clients are in fact funded by Ultraframe, and wish to have a determination of their application, but they are content for that to take place this year - that is to say, they are content for their application to stand over to be determined with the trial in October, if there is a trial in October. However, he says that his clients do not wish their application to be moved from its current March slot if the trial of the substantive actions is not to take place until next year.

These proceedings have a long and complicated history, which has been referred to in a Judgment which I gave in October 2002, and then in a Judgment of the Court of Appeal in December 2003. There are, as I have indicated, a number of actions. Many issues are raised, including issues as to whether or not the directors, or senior executives, of a number of companies in the Defendants’ camps have behaved fraudulently or in breach of trust towards their companies

When the first application for the determination of preliminary points came before me in 2002, I found against Ultraframe. However, I made an order for costs which was unusual in that I ordered that the costs be reserved to the determination of the Leeds action. That was particularly unusual, because my finding would have the effect of bringing to an end the London action in which summary Judgment was being sought.

The matter went to the Court of Appeal where an appeal against my order on costs was unsuccessful, and an appeal against my findings in relation to these preliminary issues was successful in part, but not as to the overall result of the case. In other words, even after the Court of Appeal’s Judgment, Ultraframe’s title to sue in London action was held to be non-existent.

The reason I had made an order that the costs should be reserved to the determination of the Leeds action was because it seemed to me, as I expressed in my Judgment, that the issues were so numerous, and so inter-connected, and the cases were so complex, that it might well be that at the end of the day a Judge who had seen the whole picture, rather than just the small picture to be seen on an application for determination of preliminary issues, might determine that the winning parties - that is to say, the Defendants before me - did not deserve to have an order for costs made in their favour, even in relation to the preliminary issues on which they had succeeded.

It was after my judgment that Master Weingarten, with the agreement of the parties, ordered the determination of the strike out and the application for summary Judgment which, as I have indicated, is due to be heard in March of this year.

In the Court of Appeal in December, Lord Justice Longmore dealt with the costs issue and, amongst other things, he said this:

“We have been told that there are various applications to strike out parts of the pleadings in some of the actions and it is again desirable for a Judge to determine whether those applications should go ahead on their own, or whether they should be heard as part of a trial of all the issues in all the actions”.

In my view, it is quite clear that Lord Justice Longmore was not there saying that the preferable course was that the applications to strike out and for summary Judgment should be put off to the trial in the actions. All that he was saying was that the Judge seized with this action - and if it turned out to be me - should consider de novo whether, in all the circumstances, the most efficient way of dealing with this litigation was that there should be interlocutory hearings in March and then a full trial at some later date. It is that which informs the approach that I adopt to this application.

Should there be the determination of the interlocutory applications in March, or should they all be stood over as an exercise of case management powers to be determined with all the other issues in the actions in October of this year? In my view there is little doubt but that the most efficient way to proceed would be to have all of these matters come on at the same time - that is to say, in October of this year. In saying that, I have borne in mind a number of factors, including the fact that even if these applications are heard in March, it is likely that all, or most, of the factual disputes which would need to be resolved at the trials will continue to need to be resolved at the trial. In other words, there will be no substantial saving on the evidence or disclosure which would need to be given for the trial in October.

I also bear in mind the fact that if the interlocutory applications proceed in March, whatever their outcome, there is a real chance that there will be appeals from one, or both, of them. That would give rise to the unsatisfactory result that some of the issues would be out of step with others. The Leeds action is now some five years old. The main argument for retention of the March date is centred on the Defendants’ desire to run a Foss v Harbottle point in relation to that action. Were there a larger gap between the March application and the trial of all these proceedings, perhaps different considerations would have arisen. However it appears to me that taken in the context of the timetable for the Leeds action, and the other points to which I have referred, no significant hardship will be suffered by requiring the points to be raised by the Defendants on their application to be determined at the action itself, and it seems to me there are reasons to expect that course to be more efficient and less wasteful of costs. As it is, the trials in October are expected to last between four and six weeks, with about three days’ pre-reading for the Judge. It seems to me quite likely that even if there are interlocutory applications in March, the duration of the trials in October and the necessary pre-reading will be much the same. On the other hand, the interlocutory applications in March, I am told, are likely to take three days, and pre-reading for them will be a day and a half.

It seems to me that there is no benefit to be obtained by retention of the March date for the interlocutory applications which outweighs the greater efficiencies which ought to be achieved by having all of the issues determined at one time in October of this year. For these reasons, I will adjourn the March applications, to come on to be determined with the con-joined trials.