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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Multicultural Media Centre For The Millennium Ltd v Millennium Commission [2001] EWCA Civ 1687 (19 October 2001) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2001/1687.html Cite as: [2001] EWCA Civ 1687

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IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CHANCERY DIVISION
(MR JUSTICE RIMER)

		Royal Courts of Justice Strand London WC2 Friday, 19th October 2001

Friday, 19th October 2001

1. LORD JUSTICE JUDGE: I will ask Lord Justice Chadwick to give the first judgment.
2. LORD JUSTICE CHADWICK: This is an appeal against an order made on 6th December 2000 by Rimer J for the winding up by the court of Multicultural Media Centre for the Millennium Limited under the provisions of the Insolvency Act 1986. The company, which appeals against that order, has been represented before this court (as it was before Rimer J) by Mr Joseph Harte, its chief executive and the leading force in its affairs, with permission granted under CPR 39.6.
3. The petition upon which the winding-up order was made was presented to the court on 26th June 2000 by the Millennium Commission, a corporate body established under section 40 of, and schedule 6(2) to, the National Lottery Etc Act 1993. The Commission has the functions described by section 41(1) of that Act. In particular, the Commission may make grants out of any money which it receives from the National Lottery Distribution Fund for the purpose of funding, or assisting in the funding of, such projects as it thinks appropriate to mark the year 2000 and the beginning of the third Millennium. In making a grant under section 41 of the Act the Commission may impose such conditions as it thinks fit, including conditions requiring the amount of the grant to be repaid forthwith on breach of any condition: see section 41(2) of the 1993 Act.
4. The company is a company limited by guarantee and incorporated on 6th December 1996 under the Companies Act 1985 for charitable purposes. Its principal objects include "the advancement of all philanthropic and benevolent purposes by the promotion and development of the education of members of the black and ethnic minority communities in the United Kingdom of Great Britain and Northern Ireland through the dissemination and publication of educational materials including (but not limited to) providing training in all forms of communication media."
5. Paragraph 4 of the petition is in these terms:

"The Company is indebted to the Petitioner in the sum of £17,742.18 in respect of funds currently held by the Company which were granted to it by the Petitioner under a grant agreement dated 31 March 1999. Pursuant to the grant agreement the Petitioner is entitled to request and has requested repayment of the said funds but the Company has failed to comply and has not repaid the funds."

6. Paragraph 5 of the petition alleges the service on 5th May 2000 of a statutory demand requiring payment of the petition debt of £17,742. Paragraph 6 asserts that the company, having acknowledged the demand, has neglected to pay or to satisfy the debt or to make any offer to the petitioner to secure or compound the debt.
7. The order for winding-up is sought under order 122(1)(g) of the Insolvency Act 1986 - that is to say on the ground that it is just and equitable that the company should be wound up. Curiously, the petition does not contain an express allegation under paragraph (f) of section 122(1) of the Act that the company is unable to pay its debts; although it may have been the intention of the petitioner that that allegation should be inferred from the reference in paragraphs 5 and 6 to the company's failure to pay or secure the amount of the statutory demand - see section 123(1)(a) of the Act.
8. Proceedings under the Insolvency Act 1986 are governed by the Insolvency Rules 1986 (SI 1986/1925). Chapter 3 in Part 4 of the 1986 Rules governs proceedings on a petition to wind up a company. Rule 4.12(1) requires that the petition be verified by an affidavit that the statements in the petition are true to the best of the deponent's knowledge, information and belief. Sub-rule (6) of that rule provides that the affidavit is prima facie evidence of the statements in the petition to which it relates.
9. In the present case the petition was verified by a short formal affidavit sworn by a barrister in the employ of the solicitors instructed by the Commission. The affidavit contains no information to supplement or expand the allegations in the petition.
10. The petition must be read in conjunction with the statutory demand, to which it refers. The demand is dated 3rd May 2000. It is for the amount of £17,742.18. Particulars of that alleged debt are set out on page 2:

"Pursuant to an agreement made between the Debtor and the Creditor dated 31 March 1999 (the Agreement), the Creditor provided funding to the Debtor for certain projects relating to the work of the Debtor. The Creditor provided such funding pursuant to its role as the body responsible for the distribution of public funds to bodies who apply to the Creditor for financial assistance with projects and schemes intended to mark the turn of the new millennium.

The conditions on which the Creditor provided funds to the Debtor were contained in the Agreement and Clauses 6.1.3.3 and 7.5 of the Agreement entitled the Creditor to demand repayment of sums paid to the debtor in the event of default by the Debtor (as defined in Schedule 3 of the Agreement). Having previously notified the Debtor that it was in default, by a letter dated 13 March 2000, the Creditor demanded repayment of the sum of £21,796.66 being monies previously provided to the Debtor by the Creditor. The Creditor authorised the debtor to pay to third parties the sum £4,054.48 out of the said £21,796.66 with the balance to be paid to the Creditor. The Debtor has failed and refused to repay the same. The debt was incurred on 13 March 2000 and the sum outstanding at the date of the demand is £17,742.18."

11. The circumstances in which the Commission and the company entered into the agreement dated 31st March 1999, which is referred to in the particulars of debt, are not in dispute to any material extent; and may be summarised as follows.
12. In January 1998 the Commission invited applicants from grant-making organisations who wished to participate in a Millennium Awards Scheme - that is to say, a scheme under which the participating organisation (to be known as an "Award Partner") would make financial contributions towards the training of individuals (to be known as "individual Award Recipients") by external agencies.
13. The company made such an application for funding in respect of the training of individuals in media studies by, amongst others, the British Broadcasting Corporation. The company's application was successful. That led to the agreement between the Commission and the company, which is dated 31st March 1999. The agreement was signed some five months after the company had been notified that it was to become an Award Partner; and, it seems, after the company had begun to operate under the scheme.
14. The agreement is described as the Millennium Award Scheme (Conditions of Grant). The obligations of the company under the agreement are imposed by Clause 5 of those conditions and are set out in schedule 2. Schedule 3 contains a list of matters which, if they occur, are to be treated as events of default. For present purposes it is sufficient to note that schedule 3 includes (as item 4) the following event of default:

"Breach of obligation:

At any time, the Recipient fails to perform and observe any obligation owed to the Commission under any Award Scheme Document (not being an obligation under any other paragraph of this schedule) and which, if capable of remedy, the Recipient shall not have remedied to the Commission's satisfaction within twenty-one (21) days of notice by the Commission of alleged breach."

15. Clause 6.1 of the conditions of grant sets out the procedure which is to apply following an event of default. It is in these terms:

"6.1.1. If an Event of Default occurs and is continuing the Commission will consider the seriousness of the Event of Default and whether or not it is remediable.

6.1.2. The Commission will first take reasonable steps to discuss the matter with the Recipient and to try and agree a course of action to be taken, but it is not obliged to do so where it reasonably considers that:

6.1.2.1The Recipient is not willing to discuss the matter; or

6.1.2.2The Recipient is not acting in good faith; or

6.1.2.3The Event of Default is irremediable; or

6.1.2.4The Commission considers than the Award Scheme Purpose is unlikely to be fulfilled in accordance with the terms of this agreement.

6.1.3 If (a) the Commission is not obliged to discuss the matter with the Recipient, or (b) the Commission and the Recipient do not agree on a course of action, or (c) a course of action is agreed but it is not followed, or any conditions attached to it are not met, or (d) the course of action fails to remedy the Event of Default to the Commission's reasonable satisfaction, then the Commission may by notice to the Recipient, do any, all or a combination of the following:

6.1.3.1suspend all further payment of Grant,

6.1.3.2make all further payments of the Grant subject to such conditions as it may specify,

6.1.3.3demand immediate repayment of the whole or any part of the Grant (having regard to whether or not Successful Completion has been achieved or is, in the Commission's opinion, likely to be achieved) and (subject to clause 6.2) below the Recipient shall immediately repay..."

16. Clause 7.5 (to which reference is also made in the particulars of debt) requires that any sums falling to be paid by the recipient to the Commission under this agreement shall be paid on demand. In the context of those provisions, "the Recipient" is the company who has been appointed as an Award Partner.
17. The assertion in the particulars of debt contains by implication (i) an assertion that an event or events of default within the meaning of schedule 3 of the conditions of grant had occurred and was or were continuing; (ii) an assertion that the Commission had taken reasonable steps to discuss the matter with the company and to try to agree a course of action to be taken, or that the Commission was not obliged to make such an attempt for one of the reasons set out under Clause 6.1.2; and (iii) an assertion that one or other of the preconditions to the service of notice under Clause 6.1.3 were satisfied. But none of these matters are particularised, either in the particulars of debt or in the petition or in the affidavit verifying the petition. The nearest to a particularisation of those matters is the reference in the particulars of debt to a letter of 13th March 2000 addressed by Mr Mike O'Connor, director of the Millennium Commission, to Professor David Dabydeen, then chairman of the company, in which Mr O'Connor informs the Professor that the Commission's decision communicated in an earlier letter of 8th March 2000 is final. The letter of 13th March 2000 contains the assertions that the company has received a total of £209,197 in grant; and that, under the financial directions issued to it by the Secretary of State for Culture Media and Sport, the Commission is now required to reclaim all grant that has been paid to the company in respect of the Award Scheme. The letter goes on to say that, without prejudice to its right to reclaim the full sum of £209,999, the Commission seeks repayment of all cash funds and money then held at the company's bank representing grants from the Commission less £4,054 set aside to meet the outstanding PAYE and NIC contributions.
18. Rule 4.18 of the 1986 Rules provides that, where a company intends to oppose the petition, its affidavit in opposition is to be filed in court not less than seven days before the date fixed for the hearing of the petition. In the present case the date fixed for the first hearing, and endorsed on the petition itself, was 9th August 2000. A witness statement in opposition to the petition was signed by Mr Harte, a director of the company, on 3rd August 2000. Paragraph 1 of the witness statement contains the assertion that the whole of the debt demanded by the statutory demand was disputed on the grounds that the company had not breached the agreement of 31st March 1999. Paragraphs 7 and 8 of the witness statement acknowledge and aver that the grant was withdrawn unilaterally and without notice on 8th March 2000. Paragraphs 9, 10, 15 and 17 are in these terms:

"9. The last payment of staff salaries was made by the Petitioner in February 2000.

10. The Petitioner has refused to pay staff salaries and other running costs including telephone charges incurred in the management administration of the scheme, up to the date of withdrawal of funding on the 8th March 2000. ...

15. From the commencement of the scheme and on presentation by the company of its budgeted expenditure, all monies for the management and administration of the scheme including staff salaries were paid to the company by the Petitioner, on the instructions of and approval by the Petitioner, at the end of each quarter through the company's bank account in which the cash contributions from company's sponsors were also deposited.

All salaries were paid monthly under the agreement. ...

17. The company states that under the contract as aforesaid, the Petitioner is indebted to it in the sum of £70,110.05, being monies owed to it by the Petitioner for the management and administration of the scheme, which the Petitioner has consistently refused to pay over to the company, despite repeated demands made by the company of the Petitioner since March 2000."

19. Exhibit H to that witness statement (which is referred to in paragraph 17) sets out a schedule of payments to be made by 31st March 2000. The purpose of that Schedule is to support the figure of £70,110.05 claimed in paragraph 17 of the witness statement. £70,110 is a net amount after deducting from a gross amount of £91,106 the sum of £21,796.66 then standing to the credit of the company's bank account. That sum (£21,796) is the sum mentioned in the statutory demand before deduction of the £4,054 that the company was allowed to retain for payment of PAYE and NIC. The gross sum, £91,106, includes (1) salaries of £12,829; (2) PAYE due to the Inland Revenue - a total of £13,163, of which the £4,054 (to which I just referred) is the amount payable in respect of PAYE and National Insurance Contributions to February 2000, and the remainder is the amount due for March 2000; (3) an amount of £64,112, said to be due to the BBC in respect of training fees - that is to say, due to the BBC as fees for training individuals placed by the company under the scheme. The balance of the £91,906 is made up of relatively small items in respect of stationary, telephone and professional fees.
20. Paragraphs 18 and 21 of Mr Harte's witness statement in opposition to the petition are in these terms:

"18. The company has, since the commencement of the scheme in March 1999, contributed substantially to the development and the enhancement of the status of the scheme by its own work and initiative...

...

21. The Petitioner has now taken over the scheme without any remuneration to the company for its intellectual property, and despite the company's fulfilling the purpose of the grant..."

21. Analysis of the witness statement - and, in particular, the passages to which I have referred - leads to the conclusion that the petition was opposed on three grounds. First, that there had been no breach of the grant agreement of 31st March 1999; and so no obligation to make repayment of any grant received by the company. Second, that the company had a counterclaim against the Commission in the amount of £70,110 in respect of moneys which it said the Commission was obliged to provide in order to fund expenses incurred in the management and administration of the scheme for March 2000; that is to say, expenses incurred before the notice of termination was given. Third, that the company had a crossclaim against the Commission in respect of violation of its intellectual property rights.
22. The petition came before the registrar on 9th August 2000 for a first hearing. No copy of any order made on that day has been made available to this court; but it is accepted on behalf of the Commission that no order was made on that occasion for the filing of any further evidence. The probability, it seems to me, is that the petition was adjourned so that the Commission could consider Mr Harte's witness statement of 3rd August 2000.
23. In any event, the petition was adjourned. It came back before the registrar on 20th September 2000. Had the Commission intended to respond to Mr Harte's witness statement of 3rd August, I would have expected its advisors to have raised that matter at the hearing on 20th September 2000; and, either to obtain permission to file and serve evidence already sworn or to obtain a direction for the service of further evidence by a specified day. The company, through Mr Harte, would then have had an opportunity to respond to any further evidence that was advanced on behalf of the Commission. But nothing was said to the registrar on 20th September 2000 as to the possibility of further evidence.
24. The registrar must have thought that the evidence on this petition was complete. His order of 20th September 2000 adjourned the petition to the judge for a date to be fixed. That is not unusual in the case of a disputed petitioner. But what I would find surprising would be for the registrar to have done that without any directions as to further evidence if he had been told that the Commission intended to rely on further evidence. The reason is obvious. If there were to be further evidence, then provision for that had to be built into the timetable; otherwise the matter might arrive in front of the judge in a form in which it was not ready to be heard. That is what happened in this case.
25. The petition was fixed for hearing before the judge on 28th November 2000. At that stage the only evidence on the petition was the formal affidavit verifying its contents, and Mr Harte's witness statement putting in issue the questions whether there had ever been a breach of the conditions of grant and whether any moneys were repayable under Clauses 6.1.3.3 and 7.5, and raising a counterclaim in respect of moneys said to be due on termination. The witness statement also raised a crossclaim in respect of violation of intellectual property rights. For my part, I think it inevitable (or at least very likely) that if the petition had come before the court on that evidence alone it would have been treated as an attempt to invoke the winding-up jurisdiction on the basis of disputed debt; and would have been dismissed on that ground.
26. It may be that the same thought occurred it those advising the Commission. On 21st November 2000 Mr O'Connor (to whom I have already referred), a director and the accounting officer of the Commission, swore an affidavit. The purpose of the affidavit appears from paragraph 4. It is to set out the detail of the dispute between the Commission and the company. It is said that the petition was presented following a protracted course of dealing between the parties; and that the Commission was concerned to ensure that all relevant facts are placed before the court.
27. It might have been hoped that all relevant facts would have been placed before the court at the time when the petition was presented; rather than some four or five days before it was due to be heard. No satisfactory explanation has been offered as to why that affidavit was not sworn until 21st November 2000. It is said - with, if I may say so, little conviction - that the Commission was very busy in the meantime and could not obtain the information it needed or contact the personnel who were to swear to the affidavit. Again it might be hoped that a public body which seeks to invoke the winding-up jurisdiction of the court would have marshalled the facts upon which it intended to rely before the petition was presented, rather than some five months later.
28. The affidavit contains 51 paragraphs and extends over 19 pages. It refers to four exhibits which, themselves, fill a substantial lever arch file and comprise over 300 pages. There is some controversy as to the date upon which Mr Harte (or the company) received the affidavit and its exhibits; but we have been invited to proceed on this appeal on the basis that he did not receive that material until Sunday, 26th November 2000.
29. At the commencement of the hearing on Tuesday, 28th November, Mr Harte told the judge that he had not had time to read or respond to the material which he had just received. The judge referred to the point at the beginning of the judgment which he was to give on 6th December 2000. He said this:

"The petition came before the Registrar on 9th August and again on 20th September 2000, when it was adjourned to be heard by a judge and it came on for hearing before me on 28th November. Mr Hubbard appeared for the Commission, and Mr Harte appeared in person on behalf of the company. In the meantime, a very full affidavit in further support of the petition had been made on 21st November by Mr Michael O'Connor. Mr Harte made some justified complaint that this affidavit had been served late as it had been and said that, had it been served earlier, he could and would have provided a full written answer to it. However, on my inquiry as to whether he wanted an adjournment he said he did not and was willing that the hearing of the petition should proceed. In due course, he advanced an eloquent address to me as to why the petition should not succeed. Inevitably, as is invariably the case with litigants in person, much of what he said was in the nature of evidence rather than submission."

30. What the judge does not say in that passage - but what has been common ground in this Court - is that Mr Harte also told the judge that he, Mr Harte, had not read Mr O'Connor's affidavit. Whether or not the judge had had the opportunity to read and fully digest the affidavit and its exhibits in advance of the hearing on 28th November does not appear from the judgment. The hearing proceeded over a full day. We were told that the judge pressed counsel for the Commission with questions arising from the contents of Mr O'Connor's affidavit during the course of the morning; and that Mr Harte addressed the judge in the afternoon. Having seen and considered Mr O'Connor's affidavit of 21st November (and its substantial exhibits) myself, I find it impossible to conclude that Mr Harte could have absorbed its contents to the extent necessary to make a properly considered response during the day that he was in court. That could not, in my view, be done by a litigant in person who was attempting at the same time to conduct the case in person. To do so would, I think, have taxed the skills of the most experienced professional advocate. More to the point, I would be amazed if an experienced advocate had attempted the task.
31. The judge reserved judgment until 6th December 2000. It is clear from the judgment which he gave that he went through the material in Mr O'Connor's affidavit of 21st November with care. He directed himself correctly (at page 5 of the judgment) that, on a winding-up petition, it was necessary for the court to be satisfied that the debt upon which the petition was based was not the subject of substantial dispute. He said this:

"If Mr Harte is able to satisfy me that there is a substantial dispute as to the whole of the claimed indebtedness then I would have to conclude that the Commission has not established that it is a creditor entitled to present a petition for the winding-up of the company, and ought then to dismiss the petition, leaving the Commission to prove its case, if it can, by action. Secondly, even if I am satisfied that the Commission is an undisputed creditor of the company, if I am also satisfied that the company has a genuine counterclaim against it for a sum overtopping the amount of its debt then I consider that it would follow that I ought also to dismiss the petition: see, as to the latter point, In re Bayoil S A [1999] 1 WLR 147."

32. After examining the material in Mr O'Connor's affidavit - but without (so far as appears from the judgment) any reference to contradictory material in Mr Harte's witness statement - the judge came to the conclusion which he expressed at page 21C-D:

"I find that the Commission was entitled to conclude by 10th February 2000 that the company was either unable or unwilling to comply strictly with the terms of the agreement and supplemental agreement and that it had in any event committed breaches which were irremediable and which constituted events of default. I do not consider that there is any substantial dispute about that."

33. He then went on to consider the company's counterclaim for the £70,000-odd (to which I have already referred), and said this:

"The claim is in respect of obligations said to be due to staff and incurred in February and March 2000. I can identify no basis on which the Commission can be said to have assumed any such obligation. The Commission's only obligations were to pay such grant moneys, if any, as were due to the company. Once it had lawfully terminated its obligation to make any such payments it was under no further duty to the company to make any further payments, and, indeed, strictly, it was entitled to reclaim payment of everything it had paid to the company to date, although I have indicated the way in which it has moderated its claim in that respect. I find that there is no substance in the suggested counterclaim."

34. On that basis the judge made the usual compulsory order for winding-up. He refused permission to appeal to this Court.
35. Permission to appeal to this Court was granted on 22nd March 2001. When giving permission to appeal I indicated to Mr Harte that it would be likely to assist this Court if, on the hearing of the appeal, he were able to put forward in writing a note of the responses that he would have given to Mr O'Connor's affidavit of 21st November 2000 if he had had sufficient time to consider the affidavit and prepare a reasoned response. Prompted by that suggestion Mr Harte has put before the Court, today, 27 pages (with 69 paragraphs) of answers which he would have wished to give had he seen Mr O'Connor's affidavit in time for him to deal with it properly.
36. The first question for this Court, as it seems to me, is whether the judge was right to proceed with the hearing of the petition on 28th November 2000 in the circumstances as they then were. The proper analysis of the position, as it seems to me, was this. The Commission, as petitioner, required permission to put in and rely on Mr O'Connor's affidavit of 21st November 2000. It required that permission because there is no provision for further evidence of that nature under the 1986 rules; and there had been no order for further evidence made by the Court (as, no doubt, there would have been, if such an order had been sought). Absent the material in the affidavit of 21st November 2000, the petition was bound to fail. Accordingly the affidavit of 21st November 2000 was essential if the Commission were to proceed.
37. In those circumstances the judge was faced with a position in which (i) the petition would fail if he did not allow the Commission to put in and rely upon the affidavit of 21st November 2000; but (ii) a fair hearing of the matter could not proceed on 28th November if the Commission were allowed to rely on that affidavit.
38. There could not be a fair hearing because Mr Harte had not read Mr O'Connor's affidavit, and was reasonably to be excused for not having done so. For the reasons that I have sought to explain, in a matter of this complexity it was impossible to have a fair hearing on the basis that Mr Harte would somehow pick up the points "on the hoof", as it were, during the course of the hearing on 28th November.
39. But neither Mr Harte, nor (I assume) the Commission, wanted an adjournment of the hearing on 28th November. No doubt Mr Harte wanted to avoid the need for a further hearing in the future. The judge acted on the basis of Mr Harte's consent to the matter proceeding. That was understandable; but, in my view, the judge ought to have recognised that if he did proceed with the hearing (even with Mr Harte's consent) that could not be a fair hearing in the circumstances. The real choice for the judge was between refusing to admit the affidavit of Mr O'Connor (which he would have been entitled to do); and requiring an adjournment so that a proper response to that affidavit could be provided. To proceed to hear a petition in circumstances in which the hearing could not be a fair hearing was not an available option.
40. For those reasons, and in the very exceptional circumstances of this case, I have reached the conclusion that the judge's decision to proceed with the hearing on 28th November cannot be supported. It has led to a situation in which Mr Harte has not been able to put before the court hearing the petition the matters which he wanted the court to take into account before reaching its decision.
41. That defect has not been cured, as it seems to me, by the self-evident fact that the judge took time and trouble carefully to consider and analyse the matters in Mr O'Connor's affidavit; and reserved his judgment for that purpose. However careful a judge may be in addressing the material before him, his careful analysis is no substitute for the litigant's own submissions on that material. A judge cannot proceed on the basis that the litigant will have nothing useful to say; so that it is unnecessary to give him the opportunity to say what he would wish to say.
42. Nor, in my view, can the matter be cured by the invitation, made by the Commission in this Court, for this Court to go through Mr Harte's written points which are now before us. We have had the opportunity to read Mr Harte's supplemental skeleton argument. As I have indicated, it is substantial. It cannot, in my view, be dismissed as adding nothing to the points which the judge had to consider. In particular, the supplemental skeleton argument makes what seems to me to be a powerful case for the consideration of the March 1999 agreement in the context of the Partnership Award Scheme and the way in which that scheme was actually operated; and it requires the Court to consider whether the arrangements between the Commission and the company were such that the Commission could terminate its grant on little or no notice without making some arrangements to fund the commitments into which the company had already entered as an Award Partner. That is a matter which goes to the root of the company's counterclaim and which, as it seems to me, requires careful consideration in the light of the points which Mr Harte wishes to make.
43. It is because I am not able to take the view that the course adopted by the judge on 28th November could have made no difference to the possible outcome of this petition that I am not persuaded that the observations of Laws LJ in this court in Lloyds Bank Plc v Dix & Another, 26th October 2000 - to which we have been referred by Mr Hubbard - lead to the conclusion that the appeal should be dismissed. Laws LJ observed that, if an adjournment would or might reasonably have made a material difference to the outcome of the litigation, there should be a new trial; but, on the facts of the appeal before that Court on that appeal, he was satisfied that an adjournment would have made no difference. I am not so satisfied in this case. Further, as Laws LJ pointed out in Lloyds Bank v Dix, that was a case in which the appellants, whose legal aid funding had been withdrawn at short notice, ought to have prepared themselves to conduct the case in person. That is not a feature of this case. It cannot be said that Mr Harte should have come to court on 28th November prepared to meet a case which was advanced for the first time in Mr O'Connor's affidavit of 21st November. If that was the case which the Commission wished to put before the Court, it had had five months to do so.
44. For those reasons, in my view, the order made by the judge should be set aside, and this petition should be remitted to the Chancery Division. I would direct that it is heard by another judge. I would so direct, not because I intend any criticism of Rimer J - who was taking a difficult decision in difficult circumstances and clearly devoted a great deal of care and attention to this case - nor because I have any doubt that Rimer J would be unable to bring to a fresh consideration of this petition an open mind, freed from any fetters imposed by the judgment that he had already given; but because, if this matter came before Rimer J again and that judge reached the same conclusion as that which he has already reached, Mr Harte would or might be left with the feeling - understandable although not objectively justifiable - that that result was pre-ordained and that he had still not had a fair trial.
45. LORD JUSTICE JONATHAN PARKER: I agree with the order which my Lord has proposed for the reasons which he has given.
46. At the hearing of the petition on 28th November 2000 the judge was faced with a highly unsatisfactory procedural situation with Mr Harte (effectively as a litigant in person) complaining that he had not had sufficient time to properly consider the mass of evidential material which had only very recently been served on him by the petitioner; evidential material which was, as my Lord has pointed out, essential to the petitioner's case. The judge offered Mr Harte an adjournment but Mr Harte did not accept that offer. He was content for the hearing to continue. In the circumstances, the judge proceeded with the substantive hearing and heard submissions from Mr Harte. At the conclusion of the hearing he reserved judgment. In his detailed and careful judgment delivered about a week later, he concluded that the debt, the subject of the petition, was not substantially disputed.
47. The judge was, I have no doubt whatsoever, fully conscious of the difficulties under which Mr Harte was labouring, and, as Mr Hubbard, counsel for the petitioner, has told us, the judge subjected the petitioner's evidence to detailed and anxious scrutiny, and he questioned Mr Hubbard closely about it.
48. Nevertheless, I have come to the conclusion like my Lord that, notwithstanding Mr Harte's consent to the hearing continuing, it was not in the circumstances appropriate for the judge in the unsatisfactory situation with which he was faced to proceed with and to conclude the hearing without the benefit of informed submissions from Mr Harte: informed, that is, by a full knowledge and understanding of the evidence which had been served by the petitioner.
49. For those reasons, which are in substance the same as those which my Lord has given, I agree with the order which he has proposed.
50. LORD JUSTICE JUDGE: I agree with both judgments. As Chadwick LJ's judgment shows, this is an exceptional case. At the last moment the appellant, a litigant in person, was served with a vast bundle of papers filled with detailed and, in some instances, complex information, which contained the only real evidence on which the petitioner could base the petition. The fact that the bundle included many documents which are now said on behalf of the petitioner to be immaterial did not ameliorate the huge burden of reading them. It is elementary that if they were not material they should not have been included in the bundle. Irrespective of the waste of time and costs and the sensible conduct of proceedings by focusing on that which matters, neither Mr Harte himself, nor for that matter the judge, could possibly have known which (if any) of the documents were immaterial until the whole bundle had been read.
51. By the morning of the hearing Mr Harte had not read the bundle. No one criticises him for that. The judge admitted the bundle. He offered Mr Harte the opportunity of an adjournment which Mr Harte undoubtedly and clearly refused. So the case went on, in effect, with Mr Harte picking up the case against him as he went along with it, without ever providing his own written evidence in answer to the claim, and no doubt anticipating rightly, that the judge would give his case all the practical assistance which a judge can. Nevertheless in the circumstances of this case that process was not fair. My conclusion can be tested by recognising that if Mr Harte had had the advantage of counsel and solicitors that morning the case would undoubtedly have been adjourned and, for the best of reasons: without an adjournment counsel would not have been able to do justice to Mr Harte's case and to take his instructions so as to answer the points raised against his client on affidavit paragraph by paragraph.
52. In short, in my judgment, the judge should not merely have given an opportunity of an adjournment to Mr Harte: he should have directed one. He should have told the petitioner that if the new papers were to be admitted for use at the hearing the case would have to be adjourned. The petitioner had no real case without the new papers; so in reality he would have had no choice but to agree that an adjournment was inevitable. As it was, the invitation offered to Mr Harte did not go as far as it should have done, and the end result is that, despite the great care and scrupulous attention given by the judge to this case at the hearing and in the preparation of his judgment, this litigant was under too great a disadvantage at the hearing for the original order to be allowed to stand.
53. Like my Lords, I agree that the original order should now be set aside. Accordingly the appeal will be allowed.
(Appeal allowed; the company's costs of the appeal to be paid by the petitioner; the petitioner to pay costs incurred by the company after 22nd November, those costs t0 include costs incurred by Mr Harte; cost to be assessed if not agreed).