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Midland Premier Properties Ltd & Anor v Doal & Ors
Smart Summary
Factual and Procedural Background
The appeal arises from multi-defendant proceedings issued in late 2021. Company E (the second claimant) alleges that it lent Company A £1.5 million so Company A could acquire a property known as "The Square" in The City for development. Company E contends the contract entitled it to high interest and 50% of any profit on resale, and that Company A transferred its interest in the property to Company B for no consideration to avoid accounting for profit. Company E sued Company A and various associated defendants (including Company B, Company C and an individual associated with those companies) for breach of contract, inducement and unlawful means conspiracy.
There was a split trial direction by Judge Phillips ordering a first hearing to determine liability and the appropriate counter-factual scenario for quantum, with a subsequent quantification hearing if liability were established. A contested disclosure process culminated in orders of 3 July 2024 (the "3 July Order") requiring forensic imaging and production of reporting and a schedule by an external E-disclosure provider (Company G). On 31 July 2024 Judge Rawlings made an unless order (the "Unless Order") prescribing strike-out and debarment sanctions if specified steps were not taken by specified dates.
Company G produced a report on 9 August 2024 and a schedule was provided to the claimants' solicitors shortly before the 16 August 2024 deadline, but issues emerged about (i) imaging and processing of a second email tenant, (ii) an apparent date-range limitation applied to one mailbox and (iii) whether the served schedule contained all information required by the 3 July Order. The claimant applied to strike out or to declare strike-out; the defendants sought relief from sanction. On 13 September 2024 Judge Rawlings held that the second to sixth defendants had breached the Unless Order, refused relief from sanction, struck out their defences and debarred them from defending (the "Debarring Judgment"). A trial proceeded with those defendants debarred; a Trial Judgment followed on 24 December 2024 finding liability against certain defendants but deferring choice of counterfactual to the quantification hearing. The present appeal challenges the debarment/strike-out and related orders; a second appeal challenges the Trial Judgment direction on counterfactual scenarios.
Legal Issues Presented
- Whether the appellants failed to comply with the Unless Order and, if so, whether the sanction of striking out defences and debarment was properly applied (and whether relief from sanction should have been granted).
- Whether paragraph 4(b) and/or paragraph 3(a)–(e) of the 3 July Order required the appellants to ensure the completeness of the schedule produced by the E-disclosure provider (Company G) or only to give specified instructions and supply the produced schedule to the claimants.
- Whether, alternatively, striking out/debarment was a proportionate remedy given the disclosure history, available alternatives (including a further unless order) and the risk to the trial timetable.
- Whether the trial judge's post-trial direction adjourning the counter-factual issues to the quantification hearing impermissibly departed from Judge Phillips' earlier split-trial order (raised as part of the second appeal).
Arguments of the Parties
Appellants' Arguments
- Paragraph 4(b) of the 3 July Order required the appellants only to give appropriate instructions to Company G and to supply a copy of whatever schedule Company G produced; it did not require the appellants to guarantee the schedule was complete or sufficient.
- The appellants gave the required instructions in draft and final form, incorporated claimant comments as directed, and provided the schedule produced by Company G within the procedural framework specified by the order.
- Even if there were deficiencies, relief from sanction should have been granted; striking out and debarment was disproportionate and a further unless order was the obvious, less draconian alternative.
Respondent's Arguments
- The 3 July Order required production of a schedule containing the specific details set out at paragraph 4(b)(i)–(v) and that was inextricably linked to paragraph 2's forensic imaging requirement; if no compliant imaging existed, no compliant schedule could be produced.
- Any deficiency by Company G which went beyond de minimis meant paragraph 4(b) had not been complied with and the Unless Order therefore took effect.
- The judge below was entitled to conclude that further disclosure could not be completed in time and that strike-out/debarment was an appropriate, proportionate response in the circumstances.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Realkredit Danmark A/S v York Montague Ltd [1998] WL 104421 |
Whether a list served under an unless order could be treated as compliance if served in good faith and not "illusory". |
The court recorded Realkredit's principle that a list served in good faith can satisfy an unless order; discussed in relation to whether the schedule was a compliant product of the appellants' instructions. |
| Lakatamia Shipping Co Ltd v Su [2014] EWHC 275 (Comm) |
Relief from sanction where disclosure was only slightly late; non-compliance may be trivial and warrant relief. |
Cited by the judge as an authority that trivial non-compliance may attract relief; considered in assessing whether the Report’s lateness and other failings justified debarment. |
| Gravity Highway v Maritime Maisie [2020] EWHC 1697 (Comm), [2021] 2 All ER (Comm) 340 |
Set out an objective test for compliance with an unless order for provision of further information: whether information is plainly incomplete or insufficient. |
The court adopted Butcher J's objective test from Gravity Highway as appropriate to assess whether the served schedule was plainly incomplete or insufficient under the 3 July Order. |
| Reiss v Woolf [1952] 2 QB 557 |
Historic test that delivery must be "a document made in good faith" and reasonably entitled "particulars"; not simply whether demands have been substantially met. |
The judgment summarised Reiss and noted its continuing relevance but also that its significance has been qualified by later authorities (eg QPS). |
| QPS Consultants Ltd v Kruger Tissue (Manufacturing) Ltd [1999] BLR 366 |
Post-CPR approach: wide judicial discretion in dealing with breached unless orders; answers insufficient do not automatically amount to breach; consider whether responses could reasonably be thought complete and sufficient. |
Discussed as altering the strict Reiss approach; the court balanced QPS against other authorities when identifying the correct test to apply to the 3 July Order and Unless Order. |
| Morgans v Needham [1999] 10 WLUK 837 |
If an unless order is hopelessly unclear or imprecise, it may not be breached; emphasises clarity of orders. |
Cited in support of the proposition that the terms of an unless order must be clear and of appropriate precision when sanctions are attached. |
| Smailes v McNally [2014] EWCA Civ 1299 |
Failure to carry out a search required by an unless order (for critical documents) can be a clear breach; good faith does not automatically equate to compliance. |
Used to illustrate that good faith is relevant but insufficient where the court finds searches or disclosure were not reasonable or compliant with Part 31.7. |
| Pan Petroleum AJE Ltd v Yinka Folawiyo Petroleum Co Ltd [2017] EWCA Civ 1525 |
Principles on construing injunctive orders: restrictively, give ordinary meaning in context; orders with penal consequences must be clear. |
Applied to support restrictive construction of the 3 July Order and Unless Order given the penal consequences of debarment. |
| Gumbrell v YPG Pembroke Studios Ltd [2026] EWCA Civ 44 |
Unless orders must clearly specify required acts because sanctioning consequences are automatic; earlier authority (Abalian) cited. |
Reinforced the need for precision in unless orders; cited in the court’s synthesis of principles governing construction and enforcement. |
| Biguzzi v Rank Leisure Ltd [1999] EWCA Civ 1972, [1999] 1 WLR 1926 |
Striking out is a draconian remedy and alternatives should be considered to achieve justice. |
The court relied on Biguzzi to underscore that debarment/strike-out must be last resort and that reasonable alternatives (eg further unless orders) should be considered. |
| Singh v Dass [2019] EWCA Civ 360 |
Appellate caution about new points raised on appeal; pure points of law may be allowable if based on facts found below and not causing prejudice. |
Invoked to explain why a new argument about paragraph 4(b) could be considered on appeal despite not being argued below. |
| Notting Hill Finance Ltd v Sheikh [2019] EWCA Civ 1337 |
Appellate discretion to permit new points if pure law and other party has opportunity to meet argument without prejudice. |
Supported the appellate court's decision to consider a new legal argument regarding the construction of paragraph 4(b) on the basis no prejudice resulted. |
| In re Sprintroom [2019] EWCA Civ 932 |
Standards for interfering with first-instance evaluative assessments: appellate court should look for identifiable flaws such as gaps in logic or failure to take material factors into account. |
Applied to assess whether the trial judge's evaluative decision to strike out was open to appellate interference; used to test cogency of the strike-out reasoning. |
| Devoy-Williams v Hugh Cartwright & Amin [2018] EWHC 2815 (Ch) |
Authorities on precision of orders and their consequences. |
Cited in relation to the need for clarity in orders imposing penal consequences. |
Court's Reasoning and Analysis
The appellate court undertook a textual and contextual construction of the 3 July Order and the Unless Order, applying the principles set out in the cited authorities (including Realkredit, QPS, Gravity Highway, Pan Petroleum and Gumbrell). The court proceeded in stages:
- Test for compliance: the court adopted the objective Gravity Highway test for whether provided information was "plainly incomplete or insufficient" where an unless order required specified further information; it also reviewed authorities on the relevance of good faith and the need to construe penal orders restrictively.
- Interpretation of paragraph 4(b): the court concluded, applying ordinary meaning and context, that paragraph 4(b) obliged the appellants to instruct the E-disclosure provider (Company G) to produce a schedule containing specified items and to provide a copy of the schedule produced to the claimants' solicitors, but did not itself impose on the appellants an obligation to ensure the completeness or accuracy of Company G's work.
- Consequent conclusion on paragraph 2 of the Unless Order: because paragraph 4(b) required only the giving of instructions and the passing-on of the resulting schedule, the appellants had complied with paragraph 4(b) (they had provided draft instructions, obtained claimant comments, given final instructions and supplied the produced schedule). Therefore paragraph 2 of the Unless Order (which attached strike-out/debarment to non-compliance with paragraph 4(b)) did not take effect.
- Compliance with paragraph 1/paragraph 3: the court agreed with the trial judge that paragraph 3 likewise required the appellants to instruct Company G to take specified steps and that the appellants had done so; the appellants' responsibility did not extend to ensuring that Company G completed every step satisfactorily.
- Assessment of strike-out as alternative remedy: the court examined the trial judge's further reasoning that even absent the unless-order breach he would have struck out the defences. Applying In re Sprintroom and Biguzzi, the appellate court found that the judge had not considered a less draconian remedy available (notably making a further unless order permitting the appellants to complete disclosure within a tight timetable). The court identified material factors insufficiently addressed below (scope of paragraph 2, the fact most relevant accounts had been imaged before the hearing, the discovery of large volumes of documents and the potential for timely disclosure, and the claimants' own contribution to delay) and concluded the strike-out/debarment decision was disproportionate.
- Practical consequences: because the court held the appellants had complied with the operative provisions required by the Unless Order and because the strike-out/debarment was disproportionate, the court allowed the first appeal, set aside the contested orders (so far as they affected the appellants) and remitted the matter for re-trial before a different judge. As a result, the second appeal (concerning the trial judge's direction on counterfactual scenarios) was not determined on the merits and was to be considered at the re-trial stage.
Holding and Implications
HOLDING: The court allowed the first appeal, holding that the appellants had complied with the relevant instructions provisions of the 3 July Order and that the strike-out and debarment orders made on 13 September 2024 (and related orders) were disproportionate and should be set aside. The matter was remitted for re-trial before a different judge.
Implications:
- The core effect is that the prior orders striking out the appellants' defences and debarment are set aside in so far as they affect the appellants, and a re-trial is ordered before a different judge.
- No determination was made on the second appeal; directions on counter-factual scenarios will be considered in the re-trial process.
- The judgment emphasises (i) restrictive construction of penal/unless orders, (ii) the distinction between instructing an external provider and guaranteeing its outputs, and (iii) that strike-out/debarment is a last-resort remedy; courts should consider intermediate measures (eg further unless orders) before taking draconian steps.
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