Property & Real Estate Barristers
Chancellor “ought to have recused himself” from hearing case involving Andrew Butler QC
12th July 2022
In a remarkable decision handed down on 11 July 2022, the Court of Appeal has held that the Chancellor of the High Court, Flaux LJ, should have recused himself from hearing an application presented by Andrew Butler QC in a long-running commercial court case, UCP v Nectrus.
Having been instructed to represent Nectrus shortly before trial, Andrew had identified a possible defence based on the principle of reflective loss. While Nectrus’s defence substantially succeeded on other grounds, this particular argument was rejected and Nectrus sought permission to appeal. Permission was granted by Flaux LJ, but subject to the right to review the grant on publication of the case of Marex v Sevilleja, another case on reflective loss then being considered by the Supreme Court.
On publication of that decision, the parties both submitted letters to the Judge explaining why they considered that it helped their respective cases. Flaux LJ, in agreement with the position expressed by UCP in their letter, withdrew Nectrus’s permission to appeal without a hearing, and without giving Nectrus the opportunity to make detailed representations. Nectrus applied under CPR Part 3.3(5) to set this decision aside, but the Court declined even to issue this application. Nectrus then applied to re-open the appeal under CPR Part 52.30 and asked Flaux LJ to recuse himself from hearing that application. Flaux LJ declined to do so and dealt with the application at an oral hearing in January 2021, dismissing it.
Some months later, the Privy Council decided in yet another reflective loss case (Primeo Fund v Bank of Bermuda [2021] UKPC 22) that Nectrus’s defence based on reflective loss was well-founded and that UCP v Nectrus was wrongly decided on this point. Nectrus thus made a second application to re-open the appeal. Although success even in first applications under CPR Part 52.30, let alone second applications, is vanishingly rare, a differently constituted Court of Appeal (Vos, Underhill and Lewiston LJJ) have acceded to the application, granting Nectrus permission to appeal the original decision at trial. Nectrus was represented by Paul McGrath QC at the hearing of this application. A copy of the decision can be found here.