JUDGE – CAN YOU CHANGE YOUR MIND PLEASE? THE CIRCUMSTANCES IN WHICH A JUDGE CAN REVIEW THEIR OWN DECISION

In Altus Group (UK) Limited -v- Baker Tilly [2015] EWHC 12 (Ch) HH Judge Keyser QC reviewed the circumstances in which a judge can change their mind after sending out a draft judgment.

THE CASE

The claimant brought an action alleging negligence on the part of specialist tax accountants.  The defendants admitted breach of duty but denied that the claimant would have implemented the proposal it contended for.  The judge accepted the defendant’s case, the claimant failed.

THE ARGUMENTS SENT OUT AFTER THE DRAFT JUDGMENT WAS SENT OUT

A postcript to the judgment set out the arguments that had been raised by the claimants after the draft judgment was sent out.

Postscript

1. The text of the foregoing part of this judgment is, subject to typographical corrections, substantially the same as that which I circulated in draft on 5 January 2015, when I indicated my intention to hand judgment down today.
2. On the evening of 6 January the claimant’s representatives served submissions in respect of the draft judgment, requesting that I reconsider paragraphs 85 to 92, which deal with primary causation. Mr Turner managed to serve written submissions in response that same evening. I have considered both sets of submissions and the documents accompanying them, as well as a short response received late this morning from the claimant’s solicitors.
3. The claimant’s argument may be summarised shortly as follows. The judgment holds that the breach of duty occurred in January 2009, which is the date when the necessary advice ought to have been given and when the claimant would have begun to take action in response to that advice: see paragraphs 67 to 82, 89 and 181.1 above. The finding against the claimant on causation was based on the premiss that in January 2009 the claimant either had engaged or was about to engage PwC. However, there was no evidence at trial that the claimant had retained PwC as early as January 2009; the evidence went no further than that the retainer had been arranged before 1 June 2009. Further, the claimant has now, “[p]ursuant to [its] continuing duty of disclosure”, re-examined its records, from which it can confirm that the engagement letter was dated 26 May 2009 and signed on 10 June 2009—both dates being several months after the relevant decision would have been made. Therefore “the Court has proceeded in error in assuming that as at January 2009 Dale Lawr had engaged or was about to engage PwC to conduct tax work.” The proper inference is that the claimant would have engaged EY in 2009.
4. I shall not reconsider my decision.
5. For the claimant, Mr Yates referred me to the decisions of the Court of Appeal in In re Barrell Enterprises [1973] 1 WLR 19 and Paulin v Paulin[2009] EWCA Civ 221, [2010] 1 WLR 1057. For the defendant, Mr Turner referred me to the same Court’s decision in Robinson v Fernsby [2003] EWCA Civ 1820. I have also found assistance in the discussion in paragraphs 16 to 27 of the judgment of Lady Hale in Re L and B (children)[2013] UKSC 8, [2013] 1 WLR 634; it seems to me that previous authorities must now be read in the light of that discussion.
6. The following considerations appear to me to be relevant for present purposes.

1) There is no doubt that the power to reconsider and alter the judgment exists. Further, the request for reconsideration has been made in respect of a judgment that has not yet been given; this is not merely a case where a judgment has been handed down and thereby become a public document but where the absence of a sealed order giving effect to the judgment means that the court retains a power to alter its reasoning or even its conclusions.

2) Each case is fact-sensitive, and in deciding whether to exercise its power to alter the substance of a draft judgment the court should apply the overriding objective.

3) Two relevant matters may come into some degree of tension. On the one hand, the court will not wish to hand down a judgment if it has come to the view that the judgment would do injustice as between the parties. On the other hand, the point has repeatedly been emphasised that the practice of providing draft judgments is intended to facilitate the avoidance of errors of typography and detail; it is not intended to provide an opportunity for the parties to reargue points on which they have lost or to seek to adduce new evidence to bolster cases that can now be seen to have been inadequately supported at trial. (In this regard, cf. paragraphs 94 to 98 of Robinson v Fernsby.)

1. In the present case, however, I do not find any tension in the relevant factors. I do not see any reason to alter my conclusion regarding causation. And I do not consider that any proper justification has been shown for seeking to reopen that issue after circulation of the draft judgment.
2. First, I do not consider that the matters raised by the claimant affect the reasoning in the earlier parts of this judgment or require it to be amended. On the basis of the new evidence sought to be adduced by the claimant, which for the purposes of this paragraph only I shall treat as accepted, it now appears that in January 2009 Ms Lawr had not yet appointed PwC; she was to do so in a few months’ time. I have not assumed that there had already been an appointment; see paragraph 90 above. For the purposes of that paragraph, the second alternative—Ms Lawr “was shortly to appoint [PwC] as the Altus Group’s advisers on matters of UK tax—is the correct one. If the claimant’s position is that there is determinative significance in the interval between January 2009 (when the advice would have been received) and 26 May 2009 (when the engagement letter was written), I disagree. There is nothing to suggest that the latter date marks some conversion experience on Ms Lawr’s part, or that her professed admiration for PwC was a recent matter. Moreover, in the end, the matter comes back to this: it was for the claimant to prove its case on causation at trial, and neither the evidence adduced at trial nor the evidence sought now to be adduced is (in my judgment) sufficient for the purpose.
3. Second, I do not consider that there was any justification for the claimant to seek reconsideration of my findings on causation. If it is intended to suggest that my draft judgment was prepared on the basis of a mistake of fact (on the basis of the evidence given at trial), the suggestion is incorrect; I am aware of the evidence summarised in paragraph 4 of Mr Yates’ submissions and have had regard to it. However, to the extent that reliance is placed on the new disclosure, the following observations may be made. First, the documents cannot bear the weight placed on them by the claimant. Second, the claimant’s legal advisers were well aware both of the nature of their duty of disclosure and of the incidence of the burden of proof. They could have disclosed the documents in advance of trial, if they considered them relevant. (If, as is suggested, their relevance became apparent only in the course of or as a result of cross-examination, they could and should have been disclosed at that point.) Third, even if the new documents are said to be produced under a continuing duty of disclosure, the claimant cannot now rely on further documents without permission: r. 31.21. I should regard it as wholly wrong, as being inconsistent both with the well-known purpose for which draft judgments are circulated and with sound case-management and discipline in litigation, to permit the claimant now to re-open the issue of causation and adduce further evidence in that regard.

THE RELEVANT PARAGRAPHS OF THE SUPREME COURT JUDGMENT IN L AND B CHILDREN

The judgment can be found here . Lady Hale, giving, effectively the judgment of the whole court stated.

The jurisdiction

1. It has long been the law that a judge is entitled to reverse his decision at any time before his order is drawn up and perfected.
2. The modern story begins with the Judicature Acts 1873 (36 & 37 Vict c 66) and 1875 (38 & 39 Vict c 77), which amalgamated the various common law, chancery and doctors’ commons jurisdictions into a single High Court and created a new Court of Appeal for England and Wales. In In re St Nazaire Company (1879) 12 Ch D 88, the Court of Appeal decided that there was no longer any general power in a judge to review his own or any other judge’s orders. Sir Richard Malins V-C had permitted a petition to proceed which sought to vary an earlier order which he had made and which had been unsuccessfully appealed to the Court of Appeal. The Court of Appeal held that he had no power to do so. Sir George Jessel MR explained that the Judicature Acts had changed everything. Before they came into force, the Lord Chancellor, Vice-Chancellor and Master of the Rolls had power to rehear their own decisions and, indeed, the decisions of their predecessors. He remarked that “the hope of every appellant was founded on the change of the judge”: p 98. (An example of Jessel MR revisiting one of his own orders is In re Australian Direct Steam Navigation (Miller’s Case) (1876) 3 Ch D 661). But such an application was in the nature of an appeal and jurisdiction to hear appeals had now been transferred to the Court of Appeal. Thesiger LJ added that, “whatever may have been the practice in the High Court of Chancery before the Judicature Act as to the review of their decisions or the rehearing of their decisions, nothing can be clearer than that there was nothing analogous to that in the Common Law Courts” 12 Ch D 88, 101. The court’s conclusions harmonised the practice in all Divisions of the newly amalgamated High Court.
3. Nothing was said in In re St Nazaire about the position before the judge’s order was perfected. In re Suffield and Watts, Ex p Brown (1888) 20 QBD 693, a High Court judge had made an order in bankruptcy proceedings which had the effect of varying a charging order which he had earlier made under the Solicitors Act 1860 (23 & 24 Vict c 127). All the members of the Court of Appeal, citing In re St Nazaire, agreed that he had no power to do this once his order had been drawn up and perfected. Unlike the bankruptcy jurisdiction, the Solicitors Act gave no power of variation. As Fry LJ put it, at p 697:

“So long as the order has not been perfected the judge has a power of re-considering the matter, but, when once the order has been completed, the jurisdiction of the judge over it has come to an end.”

Strictly speaking, the reference to what may be done before the order is perfected was obiter, but that this was the law was established by the Court of Appeal no later than the case of Millensted v Grosvenor House (Park Lane) Ld [1937] 1 KB 717, where the judge had revised his award of damages before his order was drawn up and the court held that he was entitled to do so.

1. Thus there is jurisdiction to change one’s mind up until the order is drawn up and perfected. Under the Civil Procedure Rules (rule 40.2(2)(b)), an order is now perfected by being sealed by the court. There is no jurisdiction to change one’s mind thereafter unless the court has an express power to vary its own previous order. The proper route of challenge is by appeal. On any view, therefore, in the particular circumstances of this case, the judge did have power to change her mind. The question is whether she should have exercised it.

Exercising it

1. As Wilson LJ pointed out in Paulin v Paulin [2009] EWCA Civ 221, [2010] 1 WLR 1057, para 30(c), “Until 1972 the courts made no attempt to narrow the circumstances in which it would be proper for a judge to exercise his jurisdiction to reverse his decision prior to the sealing of the order”. He referred to In re Harrison’s Share Under a Settlement [1955] Ch 260, in which the judge recalled an order approving the variation of a settlement on behalf of infant, unborn and unascertained persons, because after he had pronounced it but before it was formally drawn up the House of Lords had decided that there was no power to make such an order. The Court of Appeal rejected the submission that the order could only be corrected for manifest error or omission (as can a perfected order under the “slip rule”): “When a judge has pronounced judgment he retains control over the case until the order giving effect to his judgment is formally completed”: pp 283-284. The court went on to say that “This control must be . . . exercised judicially and not capriciously” but that was all. The court clearly contemplated that people might act upon an order before it was drawn up, but they did so at their own risk.
2. In 1972, however, the Court of Appeal decided In re Barrell Enterprises [1973] 1 WLR 19, in which it refused to allow the re-opening of an unsuccessful appeal in which judgment had been given some months previously dismissing the appeal but the order had for some reason never been drawn up. Russell LJ, giving the judgment of the court, stated, at pp 23-24, that:

“When oral judgments have been given, either in a court of first instance or on appeal, the successful party ought save in the most exceptional circumstances to be able to assume that the judgment is a valid and effective one. The cases to which we were referred in which judgments in civil courts have been varied after delivery (apart from the correction of slips) were all cases in which some most unusual element was present.”

There was no such justification in that case.

1. In Paulin [2010] 1 WLR 1057, 1070, Wilson LJ also pointed out that the limitation thus placed on the proper exercise of the jurisdiction was “not universally welcomed”. In Pittalis v Sherefettin [1986] 1 QB 868, Dillon LJ had in effect “emasculated [it] into insignificance” by pointing out that it was exceptional for a judge to be satisfied that the order he had previously pronounced was wrong.
2. In Stewart v Engel [2000] EWCA Civ 362, [2000] 1WLR 2268, the Court of Appeal unanimously held that the power to recall orders before perfection had survived the coming into force of the Civil Procedure Rules 1998. However, for some reason (probably the submissions of counsel) they termed this “the Barrell jurisdiction”. By a majority, they affirmed the Barrell limitation, which Sir Christopher Slade said “must apply a fortiori where the judgment is a formal written judgment in final form, handed down after the parties have been given the opportunity to consider it in draft and make representations on the draft”: pp 2274, 2276.
3. Clarke LJ dissented on this point. He did not think that the court was bound by Barrell to look for exceptional circumstances. He clearly took as a starting point the overriding objective in the Civil Procedure Rules of enabling the court to deal with cases justly. He considered that the judge had been right to direct himself that the examples given by Neuberger J in In re Blenheim Leisure (Restaurants) Ltd (No 3), The Times, 9 November 1999,- a plain mistake by the court, the parties’ failure to draw to the court’s attention a plainly relevant fact or point of law and the discovery of new facts after judgment was given – were merely examples: “How the discretion should be exercised in any particular case will depend upon all the circumstances”: [2000] 1WLR 2268, 2285 .
4. Other formulations of the Barrell principle have been suggested. In Cie Noga D’Importation et d’Exportation SA v Abacha [2001] 3 All ER 513, Rix LJ, sitting in the Commercial Court, referred at para 42 to the need to balance the concern for finality against the “proper concern that courts should not be held by their own decisions in a straitjacket pending the formality of drawing up the order”. He went on, at para 43:

“Provided that the formula of ‘exceptional circumstances’ is not turned into a straitjacket of its own, and the interests of justice and its constituents as laid down in the overriding principle are held closely to mind, I do not think that the proper balance will be lost. Clearly, it cannot be in every case that a litigant should be entitled to ask the judge to think again. Therefore, on one ground or another the case must raise considerations, in the interests of justice, which are out of the ordinary, extraordinary or exceptional. An exceptional case does not have to be uniquely special. ‘Strong reasons’ is perhaps an acceptable alternative to ‘exceptional circumstances’. It will necessarily be in an exceptional case that strong reasons are shown for reconsideration.”

1. In Robinson v Fernsby [2003] EWCA Civ 1820, [2004] WTLR 257 May LJ commented that “that expression [“exceptional circumstances”] by itself is no more than a relatively uninformative label. It is not profitable to debate what it means in isolation from the facts of a particular case” (para 94). Peter Gibson LJ commented, at para 120:

“With one possible qualification it is in my judgment incontrovertible that until the order of a judge has been sealed he retains the ability to recall the order he has made even if he has given reasons for that order by a judgment handed down or orally delivered. . . . Such judicial tergiversation is in general not to be encouraged, but circumstances may arise in which it is necessary for the judge to have the courage to recall his order. If . . . the judge realises that he has made an error, how can he be true to his judicial oath other than by correcting that error so long as it lies within his power to do so? No doubt that will happen only in exceptional circumstances, but I have serious misgivings about elevating that correct description of the circumstances when that occurs as exceptional into some sort of criterion for what is required . . . “

The possible qualification was when the judgment has been reasonably relied upon by a party who has altered his position irretrievably in consequence.

1. Thus one can see the Court of Appeal struggling to reconcile the apparent statement of principle in Barrell [1973] 1 WLR 19, coupled with the very proper desire to discourage the parties from applying for the judge to reconsider, with the desire to do justice in the particular circumstances of the case. This court is not bound by Barrell or by any of the previous cases to hold that there is any such limitation upon the acknowledged jurisdiction of the judge to revisit his own decision at any time up until his resulting order is perfected. I would agree with Clarke LJ in Stewart v Engel [2000] 1 WLR 2268, 2282 that his overriding objective must be to deal with the case justly. A relevant factor must be whether any party has acted upon the decision to his detriment, especially in a case where it is expected that they may do so before the order is formally drawn up. On the other hand, inIn re Blenheim Leisure (Restaurants) Ltd, Neuberger J gave some examples of cases where it might be just to revisit the earlier decision. But these are only examples. A carefully considered change of mind can be sufficient. Every case is going to depend upon its particular circumstances.

THE REAL DANGER

There have been cases where litigants have attempted to re-open the whole case and considerable costs have been incurred after the judgment was handed down. Perhaps issues of proportionality should arise as well.