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Charlotte Davies - High Court decision on the relationship between the court's case management powers and Rule 7.16 IR 2016 in Langhelle v Wolf Rock (Cornwall) Ltd [2020] EWHC 2500 (Ch)

24th September 2020

High Court decision on the relationship between the court's case management powers and Rule 7.16 IR 2016 in Langhelle v Wolf Rock (Cornwall) Ltd [2020] EWHC 2500 (Ch)

HHJ Matthews, sitting as a High Court Judge at the Bristol Civil Justice Centre District Registry, today handed down the decision in the long-running corporate insolvency matter of Langhelle v Wolf Rock (Cornwall) Ltd.

The Appellant, represented by Charlotte Davies (2007), sought to appeal against the Winding Up Order made on 6 December 2019 following a day long hearing which - unusually - included several hours of oral evidence. 

The primary ground of appeal was that given the Appellant had complied with Rule 7.16 of the Insolvency (England & Wales) Rules 2016 by serving further witness evidence more than five days prior to the final hearing, the District Judge below should never have required (and ultimately refused) a relief from sanctions application. The Respondent's case was that case management directions on the filing of evidence effectively meant that the court had "taken control" such that Rule 7.16 become defunct.

In thanking both counsel for their "cogent, measured and concise submissions", HHJ Matthews dismissed the appeal finding that once Rule 7.16 had been complied with, then it was not open to the Respondent (as the Appellant then was) to file further evidence and purport to be complying with the rule again. Although the filing of further evidence was not a breach per se, for policy reasons (for example, following Altomart Ltd v Salford Estates (No 2) Ltd [2015] 1 WLR 1825), the proper test was the same as for giving relief from sanction under CPR Rule 3.9. As such, it was correct that a relief from sanctions application had been required.

A secondary point of appeal was the making of the Winding Up Order for an unliquidated sum. Considering Re Pen-Y-Van Colliery Company Ltd (1877) 6 Ch D 477, HHJ Matthews noted the modern wording in s.124(1) Insolvency Act 1986 as "including any contingent or prospective creditor". Furthermore, the decision in Angel Group v British Gas [2012] EWHC 2702 held that provided the claim was for a minimum statutory threshold of £750, it does not matter that the precise amount cannot be ascertained. 

The decision provides what may be the first discussion of the practical interaction between Rule 7.16 IR 2016 and the court's case management powers. It further, perhaps finally, puts to bed any uncertainty over the applicability of an 1877 authority on making Winding Up Orders for an unliquidated sum (previously only "doubted" by Megarry J in Re a Company [1973] 1 WLR 1566) in the context of more recent legislation.

The full decision can be read here: https://www.bailii.org/ew/cases/EWHC/Ch/2020/2500.html​

Charlotte Davies acted for the Appellant and was instructed by DKLM LLP.

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Charlotte Davies - High Court decision on the relationship between the court's case management powers and Rule 7.16 IR 2016 in Langhelle v Wolf Rock (Cornwall) Ltd [2020] EWHC 2500 (Ch)