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	England and Wales High Court (Chancery Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> St Albans Court Ltd v. Daldroch Estates Ltd [1999] EWHC Ch 237 (10th May, 1999) URL: http://www.bailii.org/ew/cases/EWHC/Ch/1999/237.html Cite as: [1999] EWHC Ch 237

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St Albans Court Ltd v. Daldroch Estates Ltd [1999] EWHC Ch 237 (10th May, 1999)

DALDORCH ESTATES LIMITED AND OTHERS

 Ruling of The Hon Mrs Justice Arden DBE

(1) I am giving this ruling to draw attention to a number of unsatisfactory features in the skeleton argument of the claimant and in the pre-trial preparation of this case.

1. Claimant's skeleton argument

(2) I have two points at this stage on the claimant's skeleton argument:

1. Counsel for the Claimant delivered a skeleton argument which began with the following passage:

"It would be most helpful if the Judge was able to read all of the pleadings and the witness statements of all of the parties prior to commencement of the trial...The background appears sufficiently from those documents and it is not therefore proposed to rehearse it in this skeleton."

The documents in question are contained in three lever arch files and there are some 13 other bundles of documents in this case. None of bundles contains any summary of the case.

It is essential in a case of any size that there should be a summary of the case, which the Judge can read before the case starts. That should appear in the Claimant's skeleton argument if it does not appear elsewhere. It is not adequate for Counsel merely to invite the court to read voluminous pleadings and witness statements. A Judge is likely to have only very limited time for pre-reading.

2. The skeleton argument refers to a number of respects in which it is said that the defendant directors have acted in breach of duty - not all of which have been pleaded - and concludes:

"Note that the above is not an exhaustive list, and further examples of breaches of fiduciary duties by these defendants will arise in opening and upon cross-examination."

Likewise in relation to a claim in conspiracy the skeleton says:

"Note that these are mere examples of the conspirators actions and not in any way an exhaustive list of them."

(3) These passages again display a misunderstanding as to the function of a skeleton argument. Its function at the start of the trial is to identify the issues that really matter. It cannot enlarge the case that the party has pleaded.

2. Absence of a Core Bundle

(4) There is no core bundle in this case. The reason given in the claimant's skeleton argument is that

"It is common ground that this is not a case which turns on particular documents which might ordinarily be included in a core bundle. Accordingly there is no core bundle and the claimant's counsel proposes to take the Judge throughout the pertinent parts of the documents in opening. It is believed that this will be the quickest and most effective way of dealing with this particular action."

(5) As to this, the new Civil Procedure Rules require that "where there are numerous bundles, a core bundle should be prepared containing the core documents essential to the proceedings, with reference to the supplementary documents in other bundles." The present case concerns a series of corporate transactions of some complexity: there are clearly a number of crucial documents. Given the number of bundles in this case, this is clearly a case where a core bundle is needed and one of the directions which I propose to give at the end of this ruling is that the core bundle is provided by the start of tomorrow's hearing.

3. No core reading list

(6) In addition, the passage quoted ignores paragraph 8.38 of the revised (provisional) Chancery Guide. This states that "the skeleton argument should identify any core document which the Judge should, if possible, read before the hearing starts." Now that the new Civil Procedure Rules are in force, Counsel should not assume that they have the option of taking the Judge through the documents at the start of the trial. A great deal of time and cost can be wasted in this way. If only part of a document needs to be pre-read, the skeleton should make that clear.

4. Estimates/trial timetable

(7) The next unsatisfactory feature in the pre-trial preparation relates to the estimate in this case. This case has a written estimate of ten days. The case was allocated to me for hearing on the business day before the case was due to start and I then asked for a trial timetable from the parties. I am grateful to Counsel for their prompt response. But, when Counsel faxed through to me that afternoon the timetable that they had agreed between themselves, it was drawn up on the basis that the case would take not 10 but 12 days. Their timetable concluded with the following passage:

"Accordingly it is presently envisaged that the trial will last approximately 12 days. The parties will use their best endeavours to ensure that the case is dealt with as speedily and efficiently as possible."

(8) No reason was given for this sudden increase in the estimate previously given to the court. This not acceptable. Now that the Civil Procedure Rules are in force, any revision in an estimate of this kind has to be justified, and a proper reason given, since the Court and the parties will have made their plans for the case on the basis of the estimate previously submitted.

(9) In the circumstances I propose to exercise my power under the CPR to set a trial timetable myself. I will do this in three stages:

• First, I have drawn up a provisional list of 9 issues on which it would appear that oral evidence is required. I will read out my list at the end of this ruling and I will ask Counsel whether they agree with my list.

• Second, I will ask Counsel calling each witness to identify the evidence relevant to the issues which it is anticipated that each witness can give. I have read the witness statement of the first witness. It is 67 pages, and seems mainly to be a detailed narrative of the witness's relationship with the claimant company and the defendants. There was little in it that I could see that went to any of the issues as I have identified them. I note, however, that Counsels' timetable allows for this witness to be cross-examined for 2½ days. As I see the issues, this is excessive.

• Third, having heard Counsel who is to cross-examine, I will form a view as to the amount of time needed for cross-examination.

(10) By this process I intend to set a timetable for this trial. Counsel will have to observe the timetable unless I am persuaded for good reason to vary it.

(11) I now set out the provisional list of issues that in my judgment call for oral evidence in this action. This should be read with the directions that I am going to give. My directions include directions to the parties to see if they can agree a number of detailed matters. I have assumed that they will be able to do so. Some minor issues may remain. If so the list of issues will have to be amended accordingly.

Provisional list of issues

1. Was Mr Haq a shadow or de facto director of SAC on 11 February 1994?

2. Did the non-disclosure by Mr Haq of his interests in Desgold cause SAC to enter into the Desgold agreement ?

3. Did the shareholders of SAC approve the Desgold agreement?

4. Was clause 8 of the special conditions forming part of the Desgold agreement a penalty clause?

5. Has the claimant's claim (if any) to the Desgold payment already been compromised? (There is also an issue raised by the 9^th defendant as to whether the judgment obtained against the claimant in respect of the Desgold payment makes the payment res judicata, but this does not require evidence).

6. Did the directors of SAC make the Desgold payment on advice?

7. Was the Daldorch agreement valid and binding?

8. Did the directors of SAC act in good faith in what they considered to be the best interests of SAC in entering into the Daldorch agreement?

9. If the Daldorch payment was made without consideration, has Daldorch changed its position?

(12) In future, Counsel should prepare and if possible agree a list of issues before the case starts, and submit it with their skeleton arguments. The revised (provisional) Chancery Guide states (para 8.39)

"In most cases before a Judge, ... a list of issues will also be required. The ... list of issues should be agreed where possible. The claimant/applicant ...should deliver his or her list of issues to the Court with his or her skeleton argument."

(13) There are a large number of other issues raised, including a claim in conspiracy. However my provisional view is that that claim adds nothing to the matters already in my list of issues for the following reasons. Intent to injure is not pleaded; reliance is merely placed on breach of fiduciary duty. If, however, the Desgold payment is in breach of section 320 of the Companies Act 1985, it is recoverable without the claim in conspiracy. If it was not in breach of the section, there can be no claim in conspiracy arising out of an agreement to pay it since it would on that basis have been a lawful liability of SAC. Likewise, there is a claim for the costs incurred by SAC in defending a claim which it is alleged that Mrs Hardisty had to bring for unfair prejudice because of payments which the directors of SAC were going to make. The issues arising in relation to those payments are in my provisional list of issues. If they are improper payments, then (in my provisional view) it does not matter whether there was also a conspiracy. As to the costs allegedly incurred by Mrs Hardisty, reference should be made to my directions below. There is a further claim that Mrs Hardisty was delayed in replacing the directors of SAC because of the appointment by the defendant directors of additional directors, but no loss is alleged to flow from this, and my provisional view is that there is therefore no point in pursuing that claim.

Directions

(14)

1. Subject to any direction to the contrary, the CPR apply to this case.
2. The witness statements are to stand as evidence in chief. There will be no further evidence in chief unless CPR rule 32.5(4) applies. I also direct that supplementary witness statements should be provided in this event.
3. Counsel should use their best endeavours to prepare schedules of and to agree:

• the rent received for the bungalows

• the amounts due (subject to the cross-claims made by the claimant in this action) in respect of the summary termination of the services of 2^nd, 5^th and 7^th defendants.

• the value of the improvements to the bungalows effected by Desgold.

• any other item of loss or expenditure pleaded in this action, including the costs alleged to have been incurred by SAC in relation to Mrs Hardisty's unfair prejudice proceedings and the amounts claimed by the 8^th defendant.

4. I direct that the experts should meet to draw up a list of the matters relevant to the issues in this case on which they agree, and a list of the matters on which they do not agree with their principal reasons for the difference of opinion between them.
5. I further direct that the claimant's solicitors should produce and index to the pleadings bundle, and provide a core bundle by the start of the hearing tomorrow.

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