Background
Health and Home Limited’s liquidators brought Insolvency Act claims against companies and individuals associated with an informal corporate group. After the trial of those claims, Decolace Properties Limited sought to register transfers to itself of 11 properties owned by Elite Property Holdings Limited. Decolace asserted that Elite had sold the properties to it for £16.75 million as part of an intra-group reorganisation and had held them on bare trust for Decolace since March 2020.
The court joined Decolace to the proceedings and directed a three-day final hearing to determine its application to discharge or vary orders that protected the liquidators’ position at HM Land Registry. The directions required disclosure and an exchange of witness statements. After four agreed extensions, Decolace’s deadline expired on 3 June 2025, but it served a lengthy further witness statement and additional documents on 11 June without first seeking another extension. Once the final hearing began, Decolace applied retrospectively for more time and, if necessary, relief from sanctions. The Deputy High Court Judge refused the application, causing Decolace to withdraw its substantive application.
The Court’s Holding
The Court of Appeal dismissed Decolace’s appeal. It held that the final hearing was a “trial” for the purposes of CPR 32.10, even though the dispute had been initiated by an application notice under CPR Part 23 and the directions order called the proceeding a final hearing rather than a trial. The hearing was designed to determine contested questions of substantive beneficial ownership after disclosure, witness statements, live evidence and cross-examination. Its determination would bind the liquidators and Decolace as res judicata.
Because the witness statement was intended for use at trial and had not been served by the court-ordered deadline, CPR 32.10 prevented Decolace from calling the witness without permission, and relief from that sanction had to be considered under CPR 3.9 and the Denton framework. The judge was entitled to treat the breach as serious and significant, find that it lacked a good explanation, and refuse relief given the very late service and Decolace’s failure to apply promptly. He was not required to adjourn the hearing at the liquidators’ expense in time and disruption, and his treatment of the additional disclosure provided no basis for overturning the decision.
Key Takeaways
- A final hearing of a Part 23 application can constitute a trial for CPR 32.10 when it is structured to determine contested substantive rights through disclosure and live evidence.
- The label used in a case-management order is not conclusive; the court examines the hearing’s purpose, the issues to be decided and the procedural steps ordered.
- A party that cannot meet an evidence deadline should seek an extension before it expires. Serving substantial evidence shortly before trial and applying only after the hearing begins substantially weakens an application for relief.
Why It Matters
The decision clarifies that “trial” has a functional meaning under CPR 32.10. Litigants cannot avoid the rule’s sanction merely because a dispute arose through an application rather than a conventional Part 7 or Part 8 claim.
The judgment also underscores the need for precise case-management orders and prompt applications when deadlines cannot be met. An adjournment and costs order are not automatic substitutes for enforcing compliance, particularly where late evidence would deprive the opposing party and the court of adequate preparation time.