[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]
	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> European Reinsurance Consultants & Run-Off Consultants Ltd v Pearce [2002] EWCA Civ 84 (21 January 2002) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2002/84.html Cite as: [2002] EWCA Civ 84

[New search] [Printable RTF version] [Help]

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
APPLICATION FOR PERMISSION TO APPEAL
AND APPLICATION FOR A STAY OF EXECUTION

		Royal Courts of Justice Strand London WC2 Monday, 21st January 2002

1. LORD JUSTICE LATHAM: Mr Pearce applies today for permission to appeal an order of 15th October 2000 made by His Honour Judge Levy QC. By that order the judge required Mr Pearce to pay the costs of two sets of proceedings, payment of costs on account and to pay £11,000 for the costs of the hearing. It is against those orders for costs that Mr Pearce asks for permission to appeal today
2. The dispute in which he was engaged related to the company, European Reinsurance Consultants and Run-Off Ltd, a company owned 50 per cent by Mr Pearce and his wife and 50 per cent by Mr Palmer and his wife. It was involved in the business of reinsurance but appears at all relevant times to have traded simply with a French company, Caisse Mutuelle d'Assurances. The structure of the company was such that although Mr Pearce and Mr Palmer were the two directors, each having an equal vote, Mr Palmer was the chairman and as such he had a casting vote. Perhaps not surprisingly with a company which only had one client, questions arose between Mr Palmer and Mr Pearce as to whether that was an appropriate method of continuing to trade. It would appear as though the two failed to come to any agreement in that regard.
3. By March 2001 Mr Pearce had taken the view that the relationship between the two of them was such that the company really could not properly continue in that form and he petitioned for a winding up order on the grounds the company was a quasi-partnership in which the parties' relationship had broken down irretrievably. Unhappily in one sense, he then went to France, to the French company, to inform them of his disagreements with Mr Palmer. This triggered action by Mr Palmer, who instructed solicitors to act on behalf of the company to apply for an ex parte injunction. That was granted by Mr Justice Jacob on 19th March 2000. It prohibited Mr Pearce from communicating any of the company's internal affairs to third parties other than with Mr Palmer's agreement. The solicitors acting on behalf of the company were in fact Mr Palmer's personal solicitors.
4. On 27th April 2001 an extraordinary general meeting was called at which Mr Pearce - with Mr Palmer exercising his casting vote - was removed as a director. Thereafter between then and October - that is the hearing before His Honour Judge Levy - attempts were made between the parties to come to some sort of accommodation. It is clear from the correspondence that it was acrimonious. Mr Pearce is of the view that the way in which the proceedings were dealt with was a deliberate attempt by Mr Palmer to ensure that Mr Pearce was disadvantaged financially and forced eventually to accept as low a price for his shares - which was the inevitable consequence of the breakdown of the relationship - as Mr Palmer could achieve.
5. Ultimately, Mr Pearce concluded that he could not proceed with his petition to wind up the company because he had been starved of funds which would enable him to continue. Accordingly, by notice of 18th July 2001, the petition was discontinued.
6. The company continued with proceedings which they had brought for the injunction, asking for the injunction to be made permanent. But by the autumn of 2001 they had determined they did not wish to proceed with any claim for damages. Accordingly, an application was made in September 2001 for summary judgment on its claim for the injunction with permission to discontinue the balance of the proceedings. It was that application that came before His Honour Judge Levy for determination in October 2001.
7. Mr Pearce's complaints about the orders made fall essentially into three parts. First, he submits that the procedure adopted was deficient on the part of the company and resulted in prejudice to the way in which he was able to present his claim. Secondly, he submits that the solicitors acting on behalf of the company had a conflict of interest because they were the solicitors of Mr Palmer and were not in a position properly to advise the company. Thirdly, he submits that he had, throughout the summer and right up to the hearing, indicated that he was in any event prepared to provide an undertaking and therefore there was no necessity for the hearing. As far as the first of his complaints is concerned, he submits that, first, his bundle of documents was not put before the judge albeit it was contained within the bundle of documents the company put before the judge. Second, he submits that the company sought to rely on and put before the judge material which was served on him so close to the hearing date that he was unable to deal with it. Third, he was confronted with a skeleton argument immediately before the hearing so that he had no proper means of answering it.
8. I sympathise with Mr Pearce to this extent that it is always a matter for concern, particularly for a litigant in person, to find that the material upon which he had prepared his case has in fact been subject to change in some way by reason of either a restructuring of the relevant documents or the addition of material which he has not had a proper opportunity to consider. The difficulty for him seems to me to be this. While I understand the fact that he felt concern at the time, there is nothing in the information before me which suggests he was prejudiced in any way which could have had any effect on the way the judge would have approached the case. By that I mean that even if he had been given time to consider both the new bundling of the documents and the new material it could have made no difference to the result. The judge was, in my judgment, bound to come to the same conclusion. It was an inevitable conclusion at the end of the day.
9. As far as the solicitors are concerned, the position is that undoubtedly there was the potential for a conflict of interest between the company and Mr Palmer, but the problem for Mr Pearce is that that is a matter which could have resulted in complaint by either the company or Mr Palmer. It cannot produce any right in Mr Pearce personally to any relief, particularly on appeal. The position was that the company's interests were being represented by the solicitors and it would appear that in that regard Mr Pearce cannot properly have any complaint which could justify the conclusion that the order made in these proceedings was one which was inappropriate or in any way wrong.
10. As far as the fact that he was prepared to provide an undertaking is concerned, it is true that he repeatedly wrote or otherwise communicated with the company solicitors indicating that he was prepared to provide an undertaking. There was no formal undertaking submitted by him however until 11th October when he submitted, by way of fax transmission, his suggested undertaking which included, in effect, a cross-undertaking by Mr Palmer to the like effect. That was not the ultimate form of the order made by the judge and was not an order therefore which Mr Pearce had been able to persuade the judge was appropriate. Accordingly, the form of undertaking ultimately obtained by the company was one which they were properly able to say had required them to go to court to obtain.
11. In those circumstances I can see no grounds upon which the order for costs can properly be challenged by Mr Pearce. He has had to face that very uncomfortable position - which, sadly, the court has to deal with on frequent occasions - of the shareholder of a company who, either because he is in a minority or has not sufficient voting rights to ensure matters proceed in the direction he would wish, is and was always vulnerable to litigation which was likely to result in expense unless somehow or other he was able to persuade Mr Palmer not to use the rights that Mr Palmer had within the company. He was unable to persuade Mr Palmer to exercise those rights. Accordingly, the consequences are he has to face the fact that litigation costs must be borne by him as ordered by His Honour Judge Levy QC.
12. I do not consider that I can help by giving him permission to appeal. If it is any consolation, but I doubt it is, I suspect that if I had given permission to appeal it would have ultimately increased the costs burden which Mr Pearce would have had to face and might have made his position significantly worse. I refuse both permission to appeal and the stay of execution.
Order: Application refused