JP Murphy Ltd v Downey & Anor

Factual and Procedural Background

The Plaintiff/Appellant, Company A, trading as a consulting engineering firm, initiated proceedings against the Defendants/Respondents claiming a liquidated sum of £129,986.29 for professional engineering fees arising from an agreement related to a proposed multi-storey hotel development in The City. Company A alleged it was appointed as part of a designated design team and completed substantial work including inspections, surveys, and structural designs. A writ of summons was issued on 14 August 2014, and after the Defendants failed to enter an Appearance, the Plaintiff obtained a default judgment.

The Defendants challenged the default judgment by seeking orders to set aside the judgment and the writ on the grounds of expired writ service and non-service, supported by affidavits disputing timely receipt of the writ. The Plaintiff claimed the writ was delivered by recorded mail on 12 August 2015, while the Defendants denied receipt before the writ's expiry on 13 August 2015.

Following a series of affidavits and contested hearings before the Master of the High Court, the default judgment was set aside, and the writ service was declared invalid. The Plaintiff did not appeal the initial order setting aside the default judgment but later appealed the Master’s subsequent orders. The Plaintiff also sought discovery orders and leave to serve Khanna subpoenas, which were refused by McCloskey LJ. The current appeal concerns whether leave to appeal that interlocutory order should be granted.

Legal Issues Presented

1. Whether the Plaintiff/Appellant should be granted leave to appeal the refusal of specific discovery and leave to serve Khanna subpoenas by McCloskey LJ.
2. Whether the documents sought by the Plaintiff/Appellant are relevant to the issues in the interlocutory appeal concerning the setting aside of the default judgment and writ service.
3. The appropriate exercise of judicial discretion in refusing discovery applications in interlocutory proceedings.

Arguments of the Parties

Appellant's Arguments

• The Plaintiff/Appellant sought discovery of all relevant papers in the possession or power of the second Defendant, including documents held by third parties via Khanna subpoenas.
• The purpose of the discovery was to establish formal retention by the Defendants and the validity of the claimed fees.
• The Plaintiff/Appellant challenged the credibility of the Defendants’ affidavits regarding service of the writ.

Respondents' Arguments

• The Defendants contended that the refusal of discovery was correct and within judicial discretion.
• They argued the test for leave to appeal had not been met, as there was no arguable case with a reasonable prospect of success.
• Additionally, they submitted that a company director who is not an employee cannot represent the company in proceedings, but the court did not decide on this point.
• The Defendants emphasized that the Court of Appeal should only interfere with discretionary decisions if plainly wrong or made under error of law, principle, or fact.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Melanie Stanley v London Borough of Tower Hamlets [2020] EWHC 1622 (QB)	Test for setting aside default judgment: real prospects of success or other good reason.	Cited to explain the discretion exercised by the court in setting aside default judgment.
Ewing v Times Newspapers Ltd [2013] NICA 74	Test for leave to appeal: arguable case with reasonable prospect of success or compelling reasons.	Applied to assess whether leave to appeal should be granted.
HSBC Bank plc v Robinson and another [2017] NICA 64; [2020] NIJB 71	Review of discretionary decisions by appellate courts.	Applied to confirm that discretion should only be interfered with if plainly wrong or exercised under error.
Evans v Bartlam [1937] 2 All ER 646; [1937] AC 473	Discretion exercised under mistake of law.	Referenced in context of appellate review of discretion.
Young v Thomas [1892] 2 Ch 134	Discretion exercised in disregard of principle.	Referenced regarding limits on appellate interference with discretion.
Egerton v Jones [1939] 3 All ER 889	Taking into account irrelevant matters in discretion.	Cited to illustrate grounds for appellate intervention.
Crowther v Elgood (1887) 34 Ch D 691	Failure to exercise discretion.	Referenced in appellate review principles.
G v G [1985] 2 All ER 225; [1985] 1 WLR 647	Scope of discretion and reasonable disagreement.	Used to define the ambit within which a judge’s discretion is respected.
Flynn v Chief Constable of the Police Service of Northern Ireland [2017] NICA 13	Reluctance of appellate court to overturn factual findings and discretionary decisions.	Guided the court’s cautious approach to interfering with the lower court’s discretion on discovery.

Court's Reasoning and Analysis

The court analysed the relevance of the documents sought by the Plaintiff/Appellant to the issues before the Master, specifically whether the default judgment and writ service should be set aside. It agreed with McCloskey LJ that discovery should be limited to documents relevant to the interlocutory appeal, and the documents requested were not sufficiently linked to the appeal issues.

The court noted that the Plaintiff/Appellant already possessed evidence confirming its appointment and work on the project, diminishing the need for discovery to prove these facts. The application for discovery was viewed as an attempt to undermine the Defendants’ credibility regarding writ service, but such credibility assessments are properly made by the trial judge at the substantive hearing, potentially with oral evidence and cross-examination.

In considering leave to appeal, the court applied the established test requiring an arguable case with a reasonable prospect of success or compelling reasons. It found no such case, concluding that the refusal of discovery was a discretionary decision made with sound legal reasoning and within the judge’s discretion.

The court emphasized the principle that appellate courts should not interfere with discretionary decisions unless plainly wrong or made under error of law, principle, or fact. Given the careful consideration by the lower court and the absence of any error, the court declined to grant leave.

Holding and Implications

LEAVE TO APPEAL REFUSED.

The court refused leave to appeal the interlocutory order refusing specific discovery and leave to serve Khanna subpoenas. The decision confirms that discovery in interlocutory appeals will be strictly limited to documents relevant to the issues on appeal and that appellate courts will defer to the discretion of lower courts unless there is a clear error. The substantive appeal against the setting aside of the default judgment remains outstanding and must be listed promptly. This decision does not establish new precedent but reinforces established principles regarding appellate review of discretionary interlocutory orders and the scope of discovery.