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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Graham Group Ltd v Fox [2002] EWCA Civ 1124 (24 July 2002) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2002/1124.html Cite as: [2002] EWCA Civ 1124

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IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
(Mr Justice Neuberger)

		Royal Courts of Justice Strand London WC2 Wednesday, 24th July 2002

1. LORD JUSTICE CARNWATH: This is an application for permission to appeal out of time against a decision of Mr Justice Neuberger given on 26th July 2001.
2. The matter has a long history. It starts in February 1997, when the Graham Group Ltd, the respondents, started an action against Mr Fox as guarantor of the debts of his company, Fox Builders Ltd, for a sum just over £7,000 plus interest. That was based on a guarantee allegedly dated 13th October 1996 which, as appears from later documents, is alleged to be in respect of goods supplied towards the end of 1996 and the beginning of 1997. Fox Builders itself went into liquidation in January 1997. Summary judgment was given on that by Master Tennant in 1998. There were various applications by Mr Fox to set it aside, which were unsuccessful.
3. A bankruptcy petition was in due course lodged by the Graham Group and a bankruptcy order was made at the beginning of 2001 in the Reading County Court. The order again refers to the judgment given in 1998 based on the guarantee dated October 1996. Mr Fox made attempts to have that annulled. They were dismissed in May in the Reading County Court. Eventually he applied to the High Court for permission to appeal and that is the matter which came before Mr Justice Neuberger in July.
4. During this period Mr Fox unfortunately had been suffering from illness and there was before Mr Justice Neuberger a letter from Mr Fox asking for an adjournment because of treatment he had been undergoing. The judge in his judgment accepted that there were, as he said, real grounds for thinking that that letter was based on a genuine illness, but the respondents were before him by counsel and he took the view that he should deal with the matter on the merits provided he was satisfied that the appeal had no prospect of success. He said:

"... I should only deal with this application or appeal if I am satisfied either that I should grant it and therefore no prejudice could be caused to the bankrupt by my entertaining it in his absence, or that it is plainly hopeless."

5. He went on to consider, on the material he had before him, the alleged grounds and decided that there was nothing in them. The only point of substance which he thought was raised was that Mr Fox had complained to police that the guarantee upon which the judgment was obtained was forged. The judge noted that that point was only apparently raised in late 2000, which he said was remarkable given that the judgment had been obtained two years before. He also referred to the fact that the matter had been before the police for seven to eight months without anything emerging. He therefore did not regard that as being a point of any substance.
6. What happened then is something of a mystery. It seems that Mr Fox did not become aware of the fact that the matter had been decided in his absence until much later. I have some letters from him in late 2001 to the Court Office complaining that they seem to be unable to tell him what has actually happened. What emerges from subsequent letters, including a letter from the Court Office dated 4th March 2002, is that the file was apparently lost and so the court is unable to say whether a notice of Mr Justice Neuberger's order was ever served. The letter also indicated that Mr Fox's only possible course of action was to seek permission in this court to appeal against the judgment.
7. Unfortunately, Mr Fox's attention was not drawn to what Mr Justice Neuberger had said about that. Mr Justice Neuberger had suggested, in the letter to Mr Fox accompanying the order, that he should be told that if he had grounds to apply to set it aside he could apply to the court. That would be in accordance with rule 39.3 of the CPR, which provides for applications where judgment has been given in the absence of one of the parties. However, Mr Fox understandably took the advice he was given by the Court Office and applied for permission to appeal to this court.
8. That came before me on 8th July, when Mr Fox appeared in person but was assisted very helpfully by his friend, Mr Bolton. There was a skeleton argument from him which drew attention to certain documents which apparently, so I am told, only became available to Mr Fox in early 2001, when he recovered the files which had been in the possession of the liquidators of his company. What emerges from them is that the guarantee allegedly dated October 1996 was clearly not dated 1996 because the Mr Mitchell who witnessed it had left the company in 1995. In fact, when one looks at that guarantee, the date is probably 1994. It appears that at some point the solicitors for the Graham Group had actually gone back to court to get the orders which referred to 1996 altered to 1994 under the slip rule. So it seems to have been common ground that the correct date of that guarantee, assuming it to be a valid document, was not 1996.
9. In addition, the skeleton referred to three further documents, one being a letter in June 1994 referring to an intended meeting to enter into a personal guarantee with a £3,000 limit; and there is indeed a document which appears to be a guarantee by Mr Fox with a £3,000 limit. That is witnessed by Mr Gosden and is undated on its face, but it appears to tie in with the letter of June 1994. There is also a letter from Mr Fox dated May 1995 to the Graham Group which appears to be terminating his £3,000 personal guarantee with effect from 30th June 1995. So at the very least those documents appear to throw some doubt on precisely what guarantees there were in force in 1996/97, when the goods were allegedly supplied.
10. The skeleton also drew attention to the fact that Mr Fox, in a fax dated 1st June 2001, had sent copies of these documents to the Graham Group's solicitors, raising questions about the basis of the original judgment. Unfortunately, that was not sent to the court, but it was clearly in the possession of the solicitors to the Graham Group when the matter came before Mr Justice Neuberger on 26th July. It is equally clear that Mr Justice Neuberger was not made aware of these documents.
11. In those circumstances I adjourned the matter on 8th July to give the Court Office a chance to write to the solicitors for the Graham Group, Messrs J E Baring & Co, asking them, first, why those documents were not shown to Mr Justice Neuberger and, secondly, what their comments were. They have written on 11th July, saying that they were not shown to Mr Justice Neuberger because, in summary, the allegations of perjury and fraud had been fully dealt with before and there was nothing in them to undermine the judgment on which the bankruptcy was based. In a comment on the actual documents, they suggest that the £3,000 limit might have been an alteration made by Mr Fox himself. They also say that they have another guarantee countersigned by Mr Gosden which is not so limited. So far as the letter of 5th May 1995 is concerned, they say that that has not been mentioned before and it refers to a guarantee that was not being relied on.
12. In those circumstances I am not satisfied that this application can simply be dismissed as hopeless. Equally, I am not satisfied that the issue has been fully explored. It certainly seems unfortunate that Mr Justice Neuberger was not made aware of the fax of 1st June because, if he had been, there was certainly a possibility that he would have wanted to adjourn the matter to hear the explanation of that. There is also a question of some general importance as to whether the judge should have proceeded with the hearing in the face of an apparently genuine excuse for absence by a litigant in person. In those circumstances I propose to adjourn this application for permission and to direct that it should come on on notice to the other side, with the appeal to be heard immediately thereafter if permission is granted. In that way there will not be further delay. I hope this can be arranged as soon as practicable (although it will have to be in the new term now) because this has been dragging on for a long time.
13. However, I think it is important that the various allegations and counter allegations should be put in clear, sworn form. I therefore direct that Mr Fox should file an affidavit setting out his case for challenging the judgment upon which this bankruptcy is based in the light of the documents which are now available; also explaining the delay in obtaining the documents and acting on them, and in his making the application to this court; and also confirming the illness which prevented him appearing in front of Mr Justice Neuberger. That should be done within four weeks of today. I advise very strongly that Mr Fox and Bolton seek the help of the Citizens Advice Bureau in the court in getting the papers into order and getting the affidavit in order. I direct that thereafter the respondents have three weeks in which to file an affidavit responding to that and covering any of the other matters in the letter of 11th July which they feel it appropriate to raise by way of response.
14. I hope that the matter will come on as soon as possible in the new term.
Order: application for permission to appeal adjourned to come on as soon as possible on notice to the other side, with appeal to follow if permission granted; directions given for filing of affidavits; transcript of judgment to be provided to Mr Fox at public expense.