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Gumbrell v YPG Pembroke Studios Ltd
Factual and Procedural Background
The Appellant commenced a money claim in the County Court against Company A by online claim form issued 21 January 2022, asserting unpaid quarterly rental payments under a sale and purchase contract for a flat. Company A filed an acknowledgement of service and a short defence contending the claim should be against Company B and produced quarterly statements. On transfer to the County Court at Reading, Judge Harrison ordered on 13 May 2022 that the Appellant "must file and serve particulars of claim complying with CPR 16 by 4:00pm on 10th June 2022 and in particular attaching a copy of the contract and identifying with reference to the contract the sums due and not paid" and provided that in default the claim would be struck out. The Appellant sent a package to the Court on 8 June 2022 including a copy of the contract and a one-page sheet setting out calculations; she also sent similar materials to Company A. The Court thereafter listed the claim for trial and issued directions. Company A made a Part 36 offer which the Appellant accepted and DDJ Alderwick entered judgment for the Appellant on 19 April 2023. Company A applied to set aside that Order on the ground that the Appellant had not complied with Judge Harrison's order and that the claim had been struck out on 10 June 2022. DDJ Davies heard that application on 30 October 2023 and held the Appellant had not filed particulars of claim, declared the claim struck out from 10 June 2022, set aside the April 2023 judgment and refused permission to appeal. Permission to appeal was later granted; Judge Murch dismissed the first appeal on 5 August 2024. The Appellant obtained permission to appeal to this Court. Between permission being given and the hearing, Company A was wound up and the Official Receiver was appointed; the Court considered s.130(2) Insolvency Act 1986 and granted leave for the appeal to proceed.
Legal Issues Presented
- Whether the Appellant complied with the 13 May 2022 Order requiring particulars of claim such that the claim was not struck out for non-compliance with the unless order.
- Whether, given Company A's liquidation, leave under s.130(2) Insolvency Act 1986 was required and, if so, whether leave should be granted to permit the appeal to proceed.
Arguments of the Parties
Appellant's Arguments
- The combination of the online Claim Form (which contained a box for Particulars of Claim) and the one-page sheet filed with the Court on 8 June 2022 (together with the copy contract) satisfied CPR Part 16 and complied with Judge Harrison's order.
- The one-page sheet identified contractual clauses, calculated each quarterly payment and listed the nine outstanding payments; she understood the Order to require supplementation of her existing online particulars rather than a fresh freestanding document.
- She accepted the Part 36 offer and contended that judgment entered on 19 April 2023 should be reinstated (or otherwise the matter remitted for further consideration).
Respondent's Arguments (Company A)
- The documents filed on 8 June 2022 did not amount to particulars of claim as required by Judge Harrison; the Court wanted a freestanding particulars document identifying contractual clauses relied upon and why breach had occurred.
- As a result of non-compliance, the claim was struck out from 10 June 2022 and the Part 36 offer could not be accepted; Company A applied to set aside the April 2023 judgment on that basis.
- Separately, Company A maintained that the correct defendant may have been Company B (Perennial) rather than Company A.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| re Armada Shipping SA [2011] EWHC 216 (Ch) | The section (s.130(2) Insolvency Act) confers a broad and unfettered discretion; the court has a "free hand to do what is right and fair according to the circumstances of each case." | Used to explain the Court's discretion when deciding whether to grant leave to proceed against a company in liquidation; supported granting leave. |
| Mortgage Debenture Ltd (in administration) v Chapman [2016] EWCA Civ 103, [2016] 1 WLR 3048 | The purposes of moratorium provisions are to protect pari passu distribution and to protect insolvency adjudication procedures by preventing unnecessary litigation. | Quoted to explain the purposes behind s.130(2) and to inform the approach to whether leave should be given. |
| Bourne v Charit-Email Technology Partnership LLP [2009] EWHC 1901 (Ch), [2010] 1 BCLC 210 | Leave should generally be refused if issues can conveniently be decided in the liquidation to avoid burdening liquidators with difficult litigation. | Cited as part of the established principles but Court found the appeal could only be determined by this Court and so granted leave. |
| Abalian v Innous [1936] 2 All ER 834 | Orders dismissing actions unless something is done must be absolutely precise and clear to avoid serious injustice to litigants, especially at interlocutory stages. | Applied to conclude Judge Harrison's order was not sufficiently precise to put the Appellant in no doubt; informed finding of reasonable interpretation by the Appellant. |
| Devoy-Williams v Hugh Cartwright & Amin [2008] EWHC 2815 (Ch) | Supports the principle that clarity is required for unless orders under current civil procedure rules. | Cited to support the application of Abalian under the CPR regime in assessing the clarity of the order. |
| Marcan Shipping (London) Ltd v Kefalas [2007] EWCA Civ 463 | Where an unless order is breached, the sanction specified takes effect automatically under the CPR; traced historically to Whistler v Hancock. | Noted as the general principle on automatic effect of sanctions for breach, but the Court considered whether it was open to Company A to take the point long after the parties and Court treated the claim as on foot. |
| Whistler v Hancock (1878) 3 QBD 83 | Historical authority for the automatic effect of sanctions for breach of interlocutory orders. | Referred to via Marcan Shipping as part of the legal background; the Court observed practical unfairness in late reliance on an alleged earlier breach. |
Court's Reasoning and Analysis
The Court first addressed insolvency. It held the appeal was a "proceeding against the company" within s.130(2) Insolvency Act 1986 and leave was therefore required. Applying established principles (including the need to protect pari passu distribution and liquidation procedures), the Court granted leave because hearing the appeal could not give the Appellant priority in the liquidation and only this Court could determine whether the judgment under appeal should stand.
On the central issue of compliance with Judge Harrison's 13 May 2022 Order, the Court analysed what the Order required and how the Appellant understood it. The Appellant had already completed the online Claim Form particulars and, in response to the Order, sent to the Court on 8 June 2022 a package including a copy of the contract and a one-page sheet identifying contractual clauses, calculations and a table of outstanding payments. The Court compared the online particulars with the one-page sheet and concluded that, read together, they satisfied the CPR Part 16 requirement for a concise statement of facts: they identified the contract, payment dates, the total claimed and the contractual clauses (8.3 and 8.4) giving rise to the payments and showed how each quarterly payment was calculated.
The Court considered whether Judge Harrison's Order required a fresh freestanding document and found the Order unclear. It applied the principle that unless orders must be precise, and accepted that a litigant in person might reasonably interpret the Order as requiring supplementation of the Claim Form particulars rather than a new freestanding particulars document. The Court placed significant weight on the fact that the file was re-referred and Judge Harrison subsequently made a directions order for trial, which indicated Judge Harrison accepted that there had been sufficient compliance. Company A, having been given an express right to apply to set aside the directions order within seven days, did not challenge compliance at that time and continued to prepare for trial and to make settlement offers. Against that backdrop, the Court held the Appellant was not in material breach of the Order.
The Court noted but did not decide related points: whether the one-page sheet could have stood alone as particulars, whether the lack of a separate statement of truth on the one-page sheet was fatal (CPR r 22.2(1)(a) preserves effectiveness unless struck out), and whether Company A could validly raise the compliance point many months later after the parties and Court had treated the claim as on foot. Those points were discussed as arguable but unnecessary to decide given the finding of sufficient compliance.
Holding and Implications
HOLDING: The appeal is allowed. The Order of Judge Davies dated 30 October 2023 is set aside insofar as it declared that the claim stood struck out from 10 June 2022; the Court concluded there was sufficient compliance with Judge Harrison's 13 May 2022 Order. The Court granted leave under s.130(2) Insolvency Act 1986 to proceed with the appeal despite Company A's liquidation. The Court ordered that the Official Receiver (as liquidator of Company A) and the Appellant be given an opportunity to file brief written submissions on whether the judgment entered by DDJ Alderwick on 19 April 2023 should be reinstated or whether the matter should be remitted to the County Court for further consideration; and the Appellant was ordered to pay Company A's costs of the set-aside application below.
Implications: Direct consequences are that the claim is not treated as struck out from 10 June 2022 and the question of reinstatement of the April 2023 judgment or remittal to the County Court remains to be determined on written submissions. The opinion does not purport to establish a new binding precedent; it applies existing principles about insolvency leave, the content of unless orders and the circumstances in which late reliance on an alleged breach may be resisted.
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