In a recent High Court case, an application to present additional evidence in insolvency proceedings following a draft judgment being circulated was rejected.
Manolete Partners Plc v White [2023] EWHC 1644 (Ch)
Case summary
This case concerned Mr Ian Russell White (the Respondent) who served as a Director of Lloyds British Testing Limited between 26th June 2002 and 23rd December 2016. The business went into administration in November 2016 and then voluntary liquidation a year later.
The applicant (Manolete Partners Plc) is the assignee of claims asserted on behalf of the business and its liquidators against Mr White.
The Courts ruled that the Respondent had breached his fiduciary duties, which he owed to the business, in making a range of payments, including for expensive cars, holidays, and his personal home, in the time that ultimately led to the business going into administration. Mr White was ordered to pay £996,014.22 due to the breach, which he failed to pay.
The High Court was then asked to consider if Mr White should be required to draw down his benefits under an occupational pension scheme to settle the unpaid judgment debt. Mr White and his legal representatives claimed, relying on Section 91 (2) of the Pensions Act 1995, that the Court could not make any type of order that would restrict him from receiving his pension under the occupational pension scheme. However, the High Court did not agree.
The Court ruled that it was “…just, equitable and convenient” to order the Respondent to draw down his pension pot in accordance with the rules of the scheme.
In making its decision, the High Court relied on the ruling in Bacci v Green [2022] EWCA Civ 1393, [2023] Pens LR 2. In this case, it was held that a pension drawdown to pay a judgment debt was sufficient and it did not contravene the prohibition in Section 91 of the Pensions Act 1995.
In respect of Mr White, he would have to provide written notice to the pension scheme provider requesting that his remaining pension fund be designated as a drawdown pension fund, which would be transferred to a nominated bank account in his name. This would mean that the remaining pension fund would be received by Mr White instead of remaining within the scheme wrapper.
Claim to introduce new evidence following draft judgment
Following the three-day High Court hearing, the Judge reserved judgment and then a draft judgment was released. Following its circulation, Mr White attempted to present new evidence which was refused.
In response to the request made by the Respondent, the following judgement was issued:
“VI. At the commencement of this hand down hearing, Mr Asquith has invited the court, in so far as this further evidence might be relevant to the exercise of the court’s discretion, to take it into account. Mr Colclough, who appears without the leading counsel, Mr Curl KC, who had appeared before me on Monday (because Mr Curl had previously made it clear that he had another commitment this afternoon), objects to Mr Asquith’s attempt to re-open my judgment at this late stage. Mr Colclough makes the following points:
VII. First, that the evidence given by Mr White in his witness statement is entirely clear. That evidence was that the pension fund purchased the leasehold property using company funds. Mr Colclough points out that Mr White was sitting behind counsel throughout the hearing, which was in open court in Manchester on Monday, and that he had given instructions to Mr Asquith on other matters during the course of the hearing. Second, Mr Colclough makes the point that Mr Asquith is now seeking to put three pdf forms, sent as an attachment to an email some 38 minutes before the hand down, into evidence. Third, Mr Colclough points out that, at its highest, the pdf forms show that the pension scheme appears to have purchased the leasehold interest from the company. But Mr Colclough makes the point that the company was the principal employer under the pension scheme and therefore it was the employer that had funded the pension scheme in any event. Mr Asquith accepts that further evidence, in particular in the form of bank statements showing the movement of funds, might be required for the court to adjudicate finally upon this aspect of the matter.
VIII. I do not consider that it is appropriate to allow this further evidence in at this late stage. I have already spent a considerable time in preparing a draft judgment, setting out my considered views on the evidence that was before me. The application notice is dated 22 September 2022, and the supporting evidence of Ms O’Callaghan, a solicitor and legal director with Addleshaw Goddard, the applicant’s solicitors, was submitted on the same date. There have been no less than three case management orders, made by DJ Woodward, on 14 December 2022, 1 February 2023 (which granted an extension of time for Mr White’s witness evidence), and a later order, made by consent, which is undated, extending time – I think – for the applicant’s evidence in reply. Mr White’s witness statement is dated 8 February 2023, and Ms O’Callaghan had submitted evidence in reply on 28 February 2023.
IX. It would not be fair to the applicant to allow further evidence to be submitted now. Moreover, I have already considered the matter on the basis of the evidence that was placed before me, and I have reached my conclusion. It would not be right to re-open that by reference to further evidence that could have been placed before the court but was not.
X. For those reasons therefore, I propose to hand the judgment down in the form in which I sent it out at about the same time as Mr Asquith was sending his most recent email to me.
11. So, I formally hand down judgment in the form of the written, approved judgment. I fully understand that Mr Asquith has acted perfectly properly in trying to follow his client’s instructions. That concludes this extemporary ruling.”
Comment
This judgment shows the importance of ensuring all evidence is supplied before trial as either party is unlikely to be allowed a further opportunity.
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