Neutral Citation No [2002] EWCA Civ 10                                             B1 2001 0755 CHANI
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT 
CHANCERY DIVISION – Mr Justice Rimer
Royal Courts of Justice
Strand, 
London, WC2A 2LL

Wednesday 23 January 2002
Before :

LORD JUSTICE PILL
LORD JUSTICE TUCKEY
and 
LORD JUSTICE JONATHAN PARKER
- - - - - - - - - - - - - - - - - - - - -
Between :

	Mrs Denyse Audergon	Claimant/
Respondent	
	- and -		
	La Baguette Ltd & Ors 	Defendant/
Appellants	

- - - - - - - - - - - - - - - - - - - - -
(Transcript of the Handed Down Judgment of
Smith Bernal Reporting Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040,  Fax No:  020 7831 8838
Official Shorthand Writers to the Court)
- - - - - - - - - - - - - - - - - - - - -
Mr Peter Ralls QC and Mr Stuart Hornett  (instructed by Messrs Philip Ross & Co) for the Appellants
Mr Peter Crampin QC and Mr John Smart of Counsel (instructed by Alexander Mercouris of the Bar Pro Bono Unit) for the Respondent
- - - - - - - - - - - - - - - - - - - - -
Judgment
As Approved by the Court

Crown Copyright ©

Lord Justice Jonathan Parker : 

INTRODUCTION
1.	This appeal raises questions of general application under the Civil Procedure Rules (“the CPR”): firstly, as to the approach which an appeal court hearing an appeal from a court of first instance should adopt in considering whether to exercise the discretion conferred on it by CPR  r. 52.11(1)(b) to hold a “rehearing” as opposed to a review of the decision of the lower court; and secondly, as to the approach which the court of first instance should adopt when faced with an application under paragraph 19(2) of the Practice Direction supplementing CPR Pt 51 (“the Practice Direction”) to lift the automatic stay imposed by paragraph 19(1) of the Practice Direction.
2.	The appeal is brought by the defendants in the action, namely La Baguette Ltd (“the Company”), Mrs Francesca Norton, Mr Stephen Prior, and Mr Prior’s daughter-in-law Mrs Stephanie Prior, against an order made by Rimer J on 8 March 2001 whereby he allowed the appeal of the claimant Mrs Denyse Audergon (the respondent to the appeal) against an order made by Master Winegarten on 10 July 2000.   Permission for this second appeal was granted by Robert Walker LJ on 28 June 2001. 
3.	It is common ground that as at 10 July 2000 (the date of the hearing before Master Winegarten) the action was stayed by virtue of the automatic stay imposed by paragraph 19(2) of the Practice Direction (the terms of which are set out in paragraph 7 below).   Before the Master on that hearing were an application by Mrs Audergon for permission to amend her Particulars of Claim and a cross-application by the Company, Mrs Norton and Mrs Prior that the action be struck out on the ground that by reason of Mrs Audergon’s delay in prosecuting the action it was no longer possible to have a fair trial.   Neither side expressly sought the lifting of the stay, but such relief was clearly implicit in the relief sought on Mrs Audergon’s application (if not also in the relief sought on the cross-application) and the hearing proceeded on that basis.    
4.	Master Winegarten concluded that since under the former Rules of the Supreme Court he would have dismissed the action for want of prosecution, the stay should not be lifted.    He accordingly left the stay in place and made no order on either of the two applications before him.     Mrs Audergon appealed to the High Court.   On the appeal, Rimer J exercised the discretion under CPR r.52.11(1)(b) to proceed by way of rehearing.   In the event, he allowed Mrs Audergon’s appeal, set aside Master Winegarten’s order and lifted the stay.   He gave Mrs Audergon permission to amend her pleading and gave directions as to the future progress of the action.   He dismissed the cross-application.   
THE RELEVANT PROVISIONS OF THE CPR
5.	It is convenient at this point to set out those provisions of the CPR which are of direct relevance to the issues which arise on this appeal.
The appeal court’s discretion to proceed by way of rehearing 
6.	CPR r.52.11, which is headed “Hearing of appeals”, provides as follows (so far as material for present purposes):
“52.11 – (1) Every appeal will be limited to a review of the decision of the lower court unless – 
(a) ....; or
(b) the court considers that in the circumstances of an individual appeal it would be in the interests of justice to hold a rehearing.
	  (2) Unless it orders otherwise, the appeal court will not receive – 
(a) oral evidence; or
(b) evidence which was not before the lower court.
	  (3) The appeal court will allow an appeal where the decision of the lower court was – 
(a) wrong; or 
(b) unjust because of a serious procedural or other irregularity in the proceedings in the lower court.
  (4) ....
  (5) ....”   (Emphasis supplied.)
The court’s discretion under paragraph 19(2) of the Practice Direction to lift the automatic stay imposed by paragraph 19(1)
7.	CPR Pt 51 provides for the application of transitional arrangements to proceedings issued before 26 April 1999 (defined in paragraph 1(1) of the Practice Direction as “existing proceedings”).   Paragraph 19 of the Practice Direction, which is headed “Existing proceedings after one year” provides as follows (so far as material for present purposes):
“(1)  If any existing proceedings have not come before a judge, at a hearing or on paper, between 26 April 1999 and 25 April 2000, those proceedings shall be stayed.
 (2)   Any party to those proceedings may apply for the stay to be lifted.
 (3)  ....
 (4)   ....”
8.	Neither CPR Pt 51 nor the Practice Direction contains any express guidance on the approach which the court is to adopt when faced with an application to lift the stay pursuant to paragraph 19(2) of the Practice Direction.
9.	In the course of argument it was submitted by Mr Ralls QC (for the appellants) that an application under paragraph 19(2) of the Practice Direction is an application which falls within CPR r.3.9, which is headed “Relief from sanctions”.   I shall return to that submission in due course, but it is convenient at this point to set out the material part of CPR r.3.9, which reads as follows:
“(1) On an application for relief from any sanction imposed for a failure to comply with any rule, practice direction or court order the court will consider all the circumstances including – 
(a) the interests of the administration of justice;
(b) whether the application for relief has been made promptly;
(c) whether the failure to comply was intentional;
(d) whether there is a good explanation for the failure;
(e) the extent to which the party in default has complied with other rules, practice directions and court orders and any relevant pre-action protocol;
(f) whether the failure to comply was caused by the party or his legal representative;
(g) whether the trial date or the likely date can still be met if relief is granted;
(h) the effect which the failure to comply had on each party; and 
(i) the effect which the granting of relief would have on each party.
(2) ....”
10.	The above rules fall to be applied against the background, and in the context, of the “overriding objective” identified in CPR r.1.1, which provides as follows:
“(1)  These Rules are a new procedural code with the overriding objective of enabling the court to deal with cases justly.
(2) Dealing with a case justly includes, so far as practical – 
(a) ensuring that the parties are on an equal footing;
(b) saving expense;
(c) dealing with the case in ways which are proportionate – 
(i) as to the amount of money involved;
(ii) to the importance of the case;
(iii) to the complexity of the issues;
(iv) to the financial position of each party;
(d) ensuring that it is dealt with expeditiously and fairly; and 
(e) allotting to it an appropriate share of the court’s resources, while taking into account the need to allot resources to other cases.”
FACTUAL AND PROCEDURAL BACKGROUND
11.	Mrs Audergon is a Swiss national.   She is married to Mr Michel Audergon.   Mrs Norton is Mr Audergon’s daughter by a previous marriage.   Mr Prior is a friend of Mrs Norton.   As already mentioned, Mrs Prior is Mr Prior’s daughter-in-law.
12.	In about 1970 Mr Audergon, who had experience in the catering trade, bought premises at 13-15 Selsdon Rd, Croydon (“the Property”), in which he ran a wine bar known as “Le Refuge”.   In about 1990 Mrs Audergon began running a tapas bar in neighbouring premises at 32 Selsdon Rd.   She claims that in early 1992 she acquired the wine bar business from Mr Audergon, and that at about the same time he granted her a 12-year lease of the Property.  These claims are disputed by the appellants.   In particular, they contend that the purported lease is a forgery designed to support what they say is a trumped up case by Mrs Audergon.   In his judgment, Rimer J commented that a number of evidential matters to which he had been referred gave rise, at least at first sight, to a strong inference that the alleged lease did not exist at the time Mrs Audergon claims it existed; but he concluded that that issue could only be resolved at a trial.
13.	The Company was bought off the shelf by Mr Audergon in about September 1992.   Initially, it appears that Mrs Audergon was its sole director.   Of the two subscriber’s shares, one was registered in the name of Mrs Norton, who was also the Secretary of the Company.    Mrs Audergon contends that the other subscriber’s share was registered in her name, but the appellants deny this (although they accept that Mr Audergon probably intended that the respondent should become a member of the Company).   The appellants say that Mr Audergon granted a lease of the Property to the Company.   
14.	Mrs Audergon further claims that pursuant to an arrangement made orally between her and Mrs Norton in late 1992 Mrs Norton agreed to hold the one subscriber’s share registered in her (Mrs Norton’s) name as nominee for Mrs Audergon, with the consequence that Mrs Audergon thereupon became the beneficial owner of the Company.    This too is denied by the appellants.   
15.	The appellants say that the original plan was that the Company should operate in the catering trade, in which Mrs Norton also had some experience, having helped her father run the wine bar at the Property.    Mrs Audergon, on the other hand, contends that it was agreed between her and Mr Audergon that the Company should take over the wine bar at the Property.   She says that the Company duly did so and started running the wine bar, although she says she retained her (alleged) leasehold interest in the Property.   As Rimer J observed in the course of his judgment:
“.... the basis on which, if at all, the company actually acquired the business of Le Refuge is left shrouded in vagueness”.
16.	From December 1992 onwards Mrs Audergon spent an increasing amount of time in Switzerland.   In February 1993 Mr Audergon became bankrupt.   At about that time Mr Prior suggested to her that as from 1 March 1993 Mrs Norton and Mrs Prior should become directors of the Company and should take over the running of it, on the basis that he (Mr Prior) would continue to provide advice.   It appears that at that time Mr Prior was himself being threatened with bankruptcy.    It was part of this new arrangement that Mrs Audergon would be able to dismiss the two new directors on three months’ notice and to that end each of them provided her with an undated resignation letter.    It appears that initially Mrs Audergon alleged that she had been induced to agree to this new arrangement by misrepresentations of some kind, but she subsequently abandoned that allegation.
17.	In April 1993 the Company’s share capital was increased and 10,000 new £1 shares, paid up as to 50p, were allotted to each of Mrs Norton and Mrs Prior.   Mrs Audergon says that she did not agree to this, and that what appears to be her signature on the relevant resolution is a forgery.   She further contends that she had a prior right to the allotment of the new shares.    The appellants contend, however, that the shares were issued in consideration of an injection of cash by Mrs Norton and Mrs Prior which the Company desperately needed and which Mrs Audergon either could not or would not provide.
18.	Mrs Audergon complains that thereafter Mrs Norton and Mrs Prior held themselves out to suppliers as owners of the Company.   This is broadly accepted by the appellants, on the basis that the only cash available to the Company had come from Mrs Norton and Mrs Prior.   
19.	There is also an issue was to whether (as the appellants contend) in late 1993 Mrs Audergon resigned as a director of the Company.
20.	In March 1995 Mr Prior was made bankrupt.   
21.	In June 1995 the Company sold the wine bar business and the Property to Regent Inns plc (“Regent”), having previously bought in the freehold in the Property from Mr Audergon’s trustee in bankruptcy for £10,000.  The consideration for the sale to Regent was shares in Regent.   In the event, the shares were issued not to the Company but to Mrs Norton and Mrs Prior.   The appellants say that this was done as part of a tax planning exercise.
22.	Mrs Audergon claims that the Company owes her some £34,704.   She also claims that by their activities from 1993 onwards Mrs Norton, Mr Prior and Mrs Prior conspired to misappropriate the Company and its assets and that they are accountable for the fruits of the sale to Regent (that is to say, the Regent shares).   
23.	In 1995 a bankruptcy petition was presented against Mrs Audergon by H.M. Customs & Excise.   On 17 October 1995 the bankruptcy petition was adjourned until 19 December 1995 to enable Mrs Audergon to seek legal aid to pursue her claims against the appellants.   Emergency legal aid was granted on 1 December 1995, limited to obtaining further evidence, obtaining counsel’s advice and the settling (but not serving) of proceedings.  On 19 December 1995 the bankruptcy petition was adjourned once again.   On 21 December 1995 Mrs Audergon’s legal aid was withdrawn, on the basis that her disposable income exceeded the prescribed limits.   On 14 February 1996 her legal aid was restored, and on 26 February 1996 counsel gave advice concerning her claims against the appellants.   Some two months later, on 2 May 1996, the writ in the present action was issued, indorsed with a Statement of Claim.
24.	On 24 May 1996 Mrs Audergon applied ex parte in the action for a freezing order.    Lightman J refused that application on grounds of delay.   The application was renewed inter partes, but was subsequently abandoned.   On 17 January 1997 Robert Walker J (as he then was) made an order by consent dismissing the application with costs in favour of the Company, Mrs Norton and Mrs Prior.   No order was made in respect of the costs of Mr Prior, who had apparently represented himself.
25.	In the meantime, in or about July 1996 Mrs Audergon had indicated through her solicitors Messrs Streeter Marshall that she proposed to serve an amended Statement of Claim, and had agreed that time for delivery of Defences be extended generally pending service of the amended pleading.   In the event, however, no amended pleading was served.    Indeed, no further step was taken in the action until the applications to Master Winegarten which led to his order dated 10 July 2000.
26.	It appears that in July 1996 the bankruptcy petition was adjourned once again, in contemplation of payment or of a possible individual voluntary arrangement (“IVA”).   An IVA was in fact approved by Mrs Audergon’s creditors on 6 September 1996, with the consequence that the bankruptcy petition was deemed to have been dismissed.    Notwithstanding that the main asset in the IVA was (it appears) Mrs Audergon’s claim against the appellants, nothing seems to have happened in that connection for several weeks.   There were various communications with the Legal Aid Board over the ensuing months, and leading counsel was at some stage instructed to advise.   So far as the legal aid negotiations are concerned, Rimer J commented that they were carried out in a “leisurely manner”.   At all events, by mid-June 1997 it was clear that legal aid was to continue, and on 30 June 1997 Mrs Audergon’s solicitor, Mr Moore of Streeter Marshall, instructed counsel (Mr Smart) to settle the long awaited amended Statement of Claim.
27.	Rimer J commented that the next 12 months, until July 1998, reflected what he described  as “a high water mark of inactivity”.   It appears that the papers submitted to Mr Smart to enable him to settle the amended pleading were defective (Rimer J described them as being “in a mess”), with the consequence that he promptly returned them to Mr Moore.    Mr Moore apparently delegated the task of putting the papers in order to Mrs Audergon, who did nothing about it until about December 1997 (a period of some six months).   In December 1997 Mrs Audergon returned the papers to Mr Moore.   As to the state of the papers by this stage, Rimer J said:
“What, if anything, she had attempted to do with them was apparently also hopeless and so Mr Moore devoted himself to reorganising them properly.   That took him until June 1998 [a further period of some six months] when he returned the papers to Mr Smart.   In summary, Mr Moore took a year to put the papers in a proper state of order so that counsel could deal with the matter.   I find it difficult to understand how more than a day or so could have been required for the task.”
28.	Mr Smart appears to have given some advice on 9 September 1998, and on 17 November 1998 Mrs Audergon’s legal aid certificate was discharged.   She duly appealed, and in April 1999 legal aid was reinstated.   A month or so later, on 24 May 1999, Mr Moore once again instructed Mr Smart to settle an amended Statement of Claim.   Mr Smart then pointed out that the legal aid certificate was not sufficiently widely drawn.   This led to what Rimer J described as “a leisurely exploration of the position with the Legal Aid Board”.    In the event, the matter was not resolved until September 1999.
29.	Mr Smart apparently produced a draft amended pleading on 26 November 1999 – nearly three months later.    Following a conference, a further draft amended pleading was produced by Mr Smart on 24 February 2000 – some three months after the production of the first draft.    A further three weeks were allowed to pass before, on 16 March 2000, Mr Moore served notice of intention to proceed with the action.
30.	By this stage, the imposition of the automatic stay was imminent.   In the hope of avoiding it, on 19 April 2000 (the day before Maundy Thursday) Mr Moore drafted an application notice seeking, if necessary, permission to amend the Statement of Claim because “the Claimant wishes to clarify her existing claims and bring fresh claims”.   The application notice also sought leave to continue the proceedings against Mr Prior (who had been discharged from bankruptcy in March 1998, some two years earlier).    On the same day Mr Moore wrote to the High Court Issuing Office enclosing the application notice.  He also enclosed a letter addressed to Master Winegarten’s Clerk referring to the application notice.
31.	In the event, the application notice was not issued until 17 May 2000.   In the circumstances, as noted earlier, Mrs Audergon accepts that the action was automatically stayed as from 26 April 2000.
32.	On 4 July the Company, Mrs Norton and Mrs Prior issued their counter-application seeking the striking out of the action.   Mr Prior did not issue a formal application notice but he attended the hearing before Master Winegarten and made submissions.
THE HEARING BEFORE MASTER WINEGARTEN
33.	At the hearing before Master Winegarten Mrs Audergon was represented by  Mr John Smart of counsel; the Company, Mrs Norton and Mrs Prior were represented by a Mr Paul Infield of counsel; Mr Prior appeared in person.   The hearing was listed to last two and a half hours but in the event it continued without a break from about 10.30am until shortly after 2pm.   At the conclusion of the hearing the Master delivered a short approved judgment, an agreed note of which is before us.
34.	According to that note, after referring to the applications before him the Master continued:
“The court will readily lift a stay if the case is such as has not already gone to sleep for such a long time that the court would strike it out under the old rules for want of prosecution.
I must say immediately that my decision is, on balance, not to lift the stay and if the stay had not fallen I would strike it out for want of prosecution.   This is on balance but it is not an easy case to decide and I will give leave to appeal.   Because of the lateness of the hour I will just deal with the outlines of my reasons, which is all that is necessary.”
35.	After summarising the history of the matter, as set out earlier in this judgment, the Master continued:
“There are two periods of unexplained delay, or delay which having heard the explanation given is unsatisfactory.   The first one was for a whole year between July 1997 until July 1998 when what was being done was putting the papers relating to the Claimant’s case in order.   And there has been delay more recently but under the present rules what is most important is the overriding objective.   The decision in this case over whether the stay should be lifted or the claim should be struck out under the inherent jurisdiction are all to be determined by this.
The overriding objective is to enable the court to deal with cases justly and includes so far as practicable ensuring that the parties are on an equal footing; saving expense; dealing with the case in ways which are proportionate to the amount of money involved, the importance of the case, the complexity of the issues and the financial position of each party; ensuring that it is dealt with expeditiously and fairly; and allotting to it an appropriate share of the court’s resources, while taking into account the need to allot resources to other cases.
In this case the delay is such that the parties have to remember what was said and agreed orally in 1993.   It is true that the abortive proceedings in 1996 generated affidavit evidence and there may be some tape recordings to refresh their memories of what was said in 1995 – even if there is privilege preventing the court from listening to them I cannot see why the parties themselves cannot listen to them.
I have also to take into account even now the European Convention on Human Rights and the consideration of whether there is any possibility of a fair trial within a reasonable time by an independent tribunal.   This applies to any party whether a claimant or defendant and it is difficult to think a rehearing in 2001 of events in 1993 in the context of a case started in 1996 will be a reasonable time in which any party can have a claim heard.
I am satisfied on balance that despite the existence of affidavits about the dispute that because the nature of the whole arrangement or scheme was oral it is now going to be difficult to hold a fair trial.   Therefore I will not lift the stay and would have acceded to the request to strike out the Statement of Claim.   I have arrived at my decision on balance and I cannot say that another tribunal might not have dealt with the matter differently.   I cannot say that the claimant has no real prospect of success on appeal.   These are the reasons for my decision and I will make the appropriate order.”
THE APPEAL TO THE HIGH COURT
36.	Mrs Audergon appealed against Master Winegarten’s order on four grounds set out in Section 7 of her Appellant’s Notice.   The first ground was that it would be in the interests of justice for the judge to hold a rehearing of the two applications “because of serious procedural or other irregularity leading to an unjust decision”.   Particulars of the matters relied on in support of this ground of appeal are set out in two subparagraphs, as follows:
“(1)   As the Master found, a letter dated 19 April 2000 addressed to the Clerk to the Master sent with the Claimant’s Application Notices was received by the Court on 20 April 2000 but as a result of a backlog in correspondence the letter did not come before the Master until 11 May.   The application was issued on 17 May.   The stay was imposed on 25 April on account of administrative reasons, which were not the Claimant’s fault and it should therefore have been lifted.   The Master should not have had regard to whether he would have struck out the action for want of prosecution.
 (2)   The Master had not pre-read the entirety of the bundles of affidavits and witness statements before the hearing and even though he sat from 10.35am to 2pm without a break, he had not by 2pm been able to consider the entirety of the materials placed before him.   He ought to have acceded to Counsel for the Claimant’s request to reserve his judgment in order to give him the opportunity to read all of the affidavits and the cases referred to in the Claimant’s skeleton argument.  Instead, he delivered a short judgment at 2.10pm.”
37.	Mrs Audergon’s second ground of appeal was that the Master was wrong in principle to refuse to lift the stay for the reasons set out in paragraph (1) quoted above.   Her third ground of appeal was that the Master erred in law or in principle in holding that he would have struck the action out for want of prosecution (detailed supporting grounds being then set out).   Her fourth ground of appeal was that the Master’s decision was one which no reasonable Master could have reached, and that it ought accordingly to be set aside.
38.	At the hearing before Rimer J Mrs Audergon appeared once again by Mr Smart; the appellants were unrepresented, and Mr Prior addressed the court on behalf of all of them.   The hearing lasted, we are told, some three court days.
39.	In his submissions in support of Mrs Audergon’s first ground of appeal, Mr Smart referred the judge to CPR r 52.11(1)(b), submitting that it was in the interests of justice to hold a rehearing.  In the course of his submissions Mr Smart said (at page 40D of the transcript):
“So the first point that is made is really on Part 52 and really the question of whether your Lordship considers this as simply a review of the Master’s decision of a rehearing de novo.   My submission is there should be a rehearing in the old sense”.
40.	When the judge asked why that was necessary, Mr Smart responded (at page 40E of the transcript):
“Because if the court has the matter dealt with as a rehearing it is not bound by the Master’s decision.”
41.	After further discussion, Mr Smart said (at page 42G of the transcript):
“The second reason for seeking to have the matter dealt with as a rehearing was an unfortunate one and that concerned the time that was allowed for the hearing.   The initial time estimate was two and a half hours.   Then the cross-application for the strike out was listed at the same time and that itself had an estimate of an hour.   As set out in ground 1(2) of the Notice of Appeal the Master had not read the entirety of the affidavits and witness statements before the hearing.   That is not to criticise him, but though he sat from 10.35 till 2 without a break, he had not by 2pm been able to consider the entirety of the material that was placed before him.   What [is] said is that he ought to have acceded to my request to reserve his judgment in order to give him the opportunity to read all of the affidavits and the cases referred to in my skeleton argument.”
42.	At that point Mr Smart referred to an exchange of correspondence which had taken place between him and the Master following the hearing, in which the Master had made it clear that Mr Smart was not to feel inhibited “from raising with the judge any matter which you think ought to be raised”.   Mr Smart then submitted as follows (at p.45B of the transcript):
“The main point, and the reason why I submit it is in the interests of justice to hold this appeal as a rehearing is particularly the contents of the affidavits that were filed in the Mareva proceedings in 1996.   This was evidence which the Master did not have in time to consider and unfortunately that has undermined his conclusion that it is not possible to have a fair trial which was the main reason that he refused to lift the stay and said he would have struck out the case for want of prosecution, the problems with witness recollection.   ....   It unfortunately was not a hearing that was one which can be said to be a hearing where really the whole of the case put forward by the Applicant to have the stay lifted was taken into account.”
43.	The judge then said (at p.46A of the transcript):
“Can I see whether there is any opposition?   I have no particular objection to dealing with this by way of a rehearing, but I do not know whether Mr Prior wants to argue otherwise.   I see the way you put it, Mr Smart, and no doubt you do too, Mr Prior.”
44.	The following exchange then took place between Mr Prior and the judge (at pp.46-47 of the transcript):
“MR PRIOR: Yes.   If your Lordship felt that that is the better way to proceed I do not violently object to it.   I see it as a much narrower issue.   In fact one of the things that happened below was that Master Winegarten was looking clearly at the issue of the stay, although I will refer to the fact that I do not think there was an application as such before him on that.   But he was looking at whether anything in the argument that was being put on strike out, whether that affected the stay.   The thing rather grew like Topsy and we were discussing the amending of the writ and so on.   We did not deal with, I felt ... I felt the Master dealt adequately with the issue that he subsequently ruled on.  
MR JUSTICE RIMER:  I think the main point is that there is a perceived concern on the part of the Claimant that the Master may not have had sufficiently close regard to everything that could have been extracted from the affidavits.  That is the real point, I think, and judging from the time the Master had to deal with the thing there is probably something in that, because there is quite a lot to read and if that is basically all the time he had, he obviously could not have had regard to everything on the detail.   That being what seems to me to be a good arguable point, I am quite sympathetic to hearing the thing as it were de novo, i.e. to hearing the thing as a rehearing.   Do you want to argue against that? 
MR PRIOR:  No.  I have no objection to that, my Lord, but I would ask you perhaps to help me on what my understanding of it is.   What are we actually hearing de novo?   Is it an application to lift the stay or is it an application to amend?
MR JUSTICE RIMER:  I think if I am disposed to I hear what was before the Master as it were afresh and I am going to rule in favour of that....”
45.	The appeal accordingly proceeded by way of a rehearing.
46.	I can now turn to Rimer J’s judgment.   After introducing the parties and the issues, the judge referred to the fact that the appeal had proceeded by way of rehearing, saying this:
“I should mention at the outset that I dealt with the appeal by way of a rehearing rather then simply by way of a review of the Master’s decision.  Part 52.11 (1) (b) of the CPR empowered me to do this if I considered that, in the particular circumstances of the case, it was in the interests of justice to do so.   Mr Smart had submitted that it was.   The point that concerned him was that he claimed that the Master had arrived at his decision without having first had or taken the opportunity to read the entirety of the evidence in the case, in particular that served in relation to an application for a freezing order which Mrs Audergon had made in June 1996.   The evidence is quite substantial and it appears that the Master had not read all of it before the hearing before him started.   That hearing commenced in the morning and ran on uninterrupted until about 2.10pm when the Master gave a short extempore judgment.   It is clear that all that evidence was not read to him during the hearing either.   In those circumstances Mr Smart submitted that justice demanded that I should treat this appeal as a rehearing, on the basis that there was a fear that the Master had not taken due account of all the factual matters that he should have done.   The defendants did not resist my adopting that course and I considered it right to do so.   I add that I am not to be taken to be criticising the Master for dealing with the matter in the way he did.   I have no doubt that he was satisfied that he had absorbed sufficient of the factual essence of the case to make a fair judgment in it.   Having regard to the particular issues raised before him, it was not in my view the type of case where it was essential for the court to have grasped every single factual detail before being put in a position to form a judgment.”
47.	The judge then turned to the factual history, as summarised earlier in this judgment.   Having set out the relevant facts, and having referred to the claims made by Mrs Audergon against the appellants (and in particular the individual appellants), the judge turned to the procedural history, observing that:
“.... [t]he history of the steps Mrs Audergon has taken to advance her claim makes for lamentable reading”.
48.	Having set out the procedural history at some length, the judge commented that he regarded Mr Moore’s efforts to avoid the imposition of the threatened automatic stay as “pathetic”.
49.	The judge then referred to the Master’s decision and to his extempore judgment, noting that the basis of the Master’s decision was that it was no longer possible to hold a fair trial on issues which depended on disputed evidence about oral arrangements or agreements made as long ago as 1993.
50.	Turning next to the arguments which had been addressed to him, the judge said this:
“The argument before me, as I have said, has been in the nature of a rehearing and I have in substance heard argument on only one aspect of the issues before the Master, namely whether the action should be dismissed on the grounds of prejudicial delay.   If it should then, in principle, as I have indicated, I consider it would be right to lift the stay and dismiss the action.   If if should not, then in my view it ought logically to follow that I should lift the stay and give directions with a view to the matter coming on for an early trial.
I do not regard the exercise which I have to perform as an easy one, nor indeed does it appear that the Master regarded it as an easy one.”
51.	The judge then referred to a passage from the judgment of Neuberger J in Annodeus Entertainment Ltd v. Gibson & Anor (unreported, 2 February 2000) where Neuberger J listed a number of matters to which he considered the court should have regard in addressing the question whether an action should be dismissed on grounds of delay.   The list reads as follows (so far as material):
“First, a claimant has and always has had a duty to get on with proceedings, and is liable to sanctions if he does not.
Secondly, this duty was taken more seriously under the RSC even before the CPR came into effect: see Arbuthnot Latham v. Trafalgar Holdings [1998] 1 WLR 1426.   This is a point of significance because part of the period of the delay was before the CPR came into force.
Thirdly, following the coming into effect of the CPR, keeping to time limits laid down by the CPR or by the court itself is accorded more importance than it was previously, see per Lord Woolf in Biguzzi v. Rank Leisure plc [1999]1 WLR 1926 at 1932G.  One sees that principle reflected also in the observations of Lord Lloyd of Berwick in UCB Corporate Services Ltd v. Halifax SW Ltd (unreported 6 December 1999 at paragraph 17).
Fourthly, under the old law a claim could normally only be dismissed for want of prosecution where the plaintiff’s default or delay had been intentional and contumelious, or where he had been guilty of inordinate and inexcusable delay, giving rise to a substantial risk that a fair trial would not be possible, or to serious prejudice to the defendant (see Birkett v. James[1978]AC 297).
Fifthly, the court is now prepared to dismiss a claim for delay even if neither of Lord Diplock’s two requirements as laid down in Birkett v. James [1978] AC 297 is satisfied (see Biguzziv. Rank Leisure plc [1997]1 WLR 1926 at 1932 G).
Sixthly, the duty of a claimant to pursue an action expeditiously and in accordance with the rules is all the more important when the claimant has already had a significant benefit at the expense of the defendant from the action – for instance, in this case the benefit of the search order.   This is perhaps even more true where the claimant has, and continues to have, the benefit of a continuing interlocutory injunction to the defendant’s disadvantage, which injunction is to run to trial.   ....
Seventhly, the CPR enable the court to adopt a more flexible approach.   The previous “all or nothing” extremes of either dismissing the claim for delay or permitting it to continue are now merely the two ends of a spectrum.   The court has other sanctions at is disposal which it can and, in appropriate cases, should impose, rather than adopting one of the two extreme positions.  ....
Eighthly, in light of general principle and the overriding objective (see CPR r.1.1(2)) the sanction, if any, to be invoked by the court to deal with a particular case of delay should be proportionate.   To dismiss a claim where the claimant appears to stand a reasonable chance of success and of recovering substantial damages is a strong thing to do.   Particularly so bearing in mind Article 6(1) of the [ECHR] ....
Ninthly, it appears to me that it is normally relevant to consider the following factors.   First, the length of the delay; secondly, any excuses put forward for the delay; thirdly, the degree to which the claimant has failed to observe the rules of court or any court order; fourthly, the prejudice caused to the defendant by the delay; fifthly, the effect of the delay on trial; sixthly, the effect of the delay on other litigants and other proceedings; seventhly, the extent, if any, to which the defendant can be said to have contributed to the delay; eighthly, the conduct of the claimant and the defendant in relation to the action; ninthly, other special factors of relevance in the particular case.”
52.	After observing that the matters numbered eight and nine in Neuberger J’s list were the matters which he considered must largely govern the exercise of his discretion in the instant case, the judge continued:
“The first observation I would make is that I do not regard Mrs Audergon’s case as an obviously strong one.   The to-ing and fro-ing with the Legal Aid Board speaks fairly eloquently as to that, and the more Mr Prior took me into the history of the matter the more doubtful I became as to whether Mrs Audergon really does have a claim of substance.  Her case looks to be weak and gives rise to many questions.   Having said that, however, the defendants’ application is not one seeking to strike out the action on the grounds that it cannot possibly succeed and nor do I consider that I can safely arrive at any such conclusion on this application.   I conclude that I should not approach this application on the basis that the action is either certain or indeed likely to fail.  I approach it on the basis that it must be regarded as having at least some prospect of success and that in principle, subject to all other considerations, it is a claim which Mrs Audergon ought to be allowed to prosecute to trial.   Put the other way, I consider that it would be seriously prejudicial to her if she were deprived of that right.
Secondly, her prosecution of the claim to date has been lamentable.   It would seem that her causes of action probably accrued in 1993, and at the latest it may have been early 1994 when she first learnt, so she says, that she had been removed from the board.   Yet she did not sue until June 1996, having learnt about the all-important sale to Regent over a year earlier.   Her initial stroll to the court was therefore a leisurely one, for which there appears to be no explanation.
Thirdly, when in due course she did sue her pursuit, or non-pursuit, of the action was quite extraordinary.”
53.	The judge referred at that point to the unexplained delays between July 1997 and July 1998, and to the delay from September 1999 to 24 February 2000 in producing an amended pleading, and continued:
“Although much of the remainder of the overall period is explained as having involved endless correspondence, etc, in connection with legal aid problems and difficulties of one sort or another I find it difficult to regard the entirety of that period as having been adequately explained or excused, although I that much of it has been.   Taking an admittedly broad brush view, I consider that this is a case in which about two years of the overall delay of just under four years is inadequately explained or excused.
Fourthly, however, the case is an unusual one in that it does not appear to me that, despite these extraordinary delays, Mrs Audergon can be said ever to have been in breach of any rule or order of the court.   Having extended the defendants’ time generally for their Defences at an early stage, I do not consider that Mrs Audergon ever became subject to any obligation to comply with any such rule or order – at least the contrary has not been demonstrated or suggested to me.   In these circumstances, I do not regard this as a case in which Mrs Audergon has simply displayed a blatant disregard of the rules or orders of the court, or that she can be regarded as having acted in a way which amounts to an abuse of the process of the court.
Fifthly, although the defendants are now, as defendants always are in these sorts of applications, full of criticisms of her delays, there is no reason at all why they could not themselves have taken steps to have the action prosecuted.   ....   Like all defendants, they much preferred to let sleeping dogs lie hoping that if the action was ever revived they could complain bitterly, as defendants always do, about how irremediably prejudiced they have been by the delay.”
54.	The judge then recorded two further submissions made to him by Mr Prior: firstly that any trial which might subsequently take place would not be within a reasonable time after the issue of the writ and would accordingly infringe the defendants’ rights under Article 6 of the European Convention on Human Rights (“the ECHR”); and secondly that since the defendants could not afford legal representation and would not have the benefit of legal aid, they would not be on an equal footing with Mrs Audergon.   He continued:
“Having outlined the bare bones of the main points made to me, I have to deal with the issues raised by this appeal having regard to the overriding objective of the CPR and should, in particular, abstain from any inclination to decide this case by reference to the principles and authorities which governed this sort of issue prior to the CPR.   In doing so I cannot, I consider, avoid assessing Mrs Audergon’s conduct in her prosecution of this case during the pre-CPR period by reference to the former practice.   But, for reasons given, I do not, despite the considerable delays to which I have referred, find that she has been guilty of an abuse of the process of the court or can fairly be accused of engaging in conduct which can be regarded as an affront to the court.   Nor, despite a submission from Mr Prior to the contrary, do I regard this as a case in which it is legitimate to draw an inference that Mrs Audergon does not wish to bring her case to trial.   The case did of course become stayed in the circumstances I have mentioned, but that was because of the incompetence of Mrs Audergon’s solicitors and their half-baked efforts to keep the action on track, not because Mrs Audergon was simply content to allow it to become stayed.
Ultimately, I consider that the question I have to ask myself is whether, despite all the admitted delay, it is still now possible to have a fair trial of the issues as I understand them to be.”
55.	The judge went on observe that memories would inevitably have faded since the events in issue, and that he regarded it as unlikely that by June 1996, when the writ was issued, anyone would have retained a detailed recollection of those events.   He also observed that had Mrs Audergon delayed in issuing her writ until towards the end of the limitation period (which he considered would not have expired until about early 1999) there probably would not have been a trial before the date of the current hearing.   As to the individual appellants, the judge noted that they were aware of Mrs Audergon’s claims in 1992 and 1993 and that they accordingly had the opportunity “to prepare the fullest statements for their own use of all the relevant events”, and that if they had not taken that opportunity their failure to do so could not be laid at Mrs Audergon’s door.  He further noted that the passage of time would also work to Mrs Audergon’s disadvantage, bearing in mind that the burden of proof would be on her and that in view of the serious nature of many of her allegations that burden would be a heavy one to discharge.
56.	The judge then expressed his conclusion on the question whether there could be a fair trial of the action, saying this:
“The question whether in this case there can still be a fair trial is not, as I have said, a wholly straightforward one.  The Master took a like view and it is one on which different minds would be likely to have different views.   Ultimately, however, I have come to the conclusion that it would be disproportionately prejudicial to Mrs Audergon to strike out her action.   Despite all her delays, I do not regard her as having abused the process of the court and I am not satisfied that this is a case in which there cannot be a fair trial....” 
57.	The judge then turned to Mr Prior’s further submissions based on Article 6 of the ECHR and on the lack of legal representation of the defendants.   He rejected those submissions, concluding that there was little or no substance in them.
58.	In the result, the judge allowed Mrs Audergon’s appeal against the Master’s order, although he marked the court’s dissatisfaction with the delays which had occurred in the prosecution of the action by disallowing interest on any damages recovered by Mrs Audergon in respect of the twelve-month period from July 1997 to July 1998 and of the nine-month period from October 1999 to June 2000.
THE GROUNDS OF APPEAL FROM RIMER J
59.	The appellants’ first ground of appeal to the Court of Appeal is that Rimer J was wrong and erred in law in proceeding by way of rehearing.   Secondly, the appellants contend that the judge erred in principle in so far as he rested his decision to lift the stay on his finding that Mrs Audergon had not been guilty of an abuse of process.   They contend that it is not necessary to find that a claimant has been guilty of an abuse of process in order for to it to refuse to lift the stay.   Thirdly, the appellants contend that in any event the judge erred in principle in finding that there had been no abuse of process by Mrs Audergon and/or that the circumstances of the instant case did not justify striking out the action.   They contend that in the light of (among other things) the procedural history, the serious nature of the allegations sought to be made by Mrs Audergon, and the inevitable fading of memories, he ought to have concluded that it was no longer possible to have a fair trial and that the action should accordingly be struck out. 

THE ARGUMENTS ON THIS APPEAL
60.	As to the judge’s decision to hold a rehearing, Mr Ralls QC (for the appellants) submits that as a general rule an appeal takes the form of a review of the decision of the lower court, and that there was no  justification for departing from that general rule in the instant case.   In support of this submission he relies on the decisions of the Court of Appeal in Tanfern v. Cameron-MacDonald [2000] 1 WLR 1311 and Asiansky Television plc & Anor v. Bayer-Rosin [2001] EWCA civ 1792 (to which further reference will be made below).
61.	 In particular, submits Mr Ralls, there was no such irregularity in the proceedings before the Master as could justify a rehearing of the matter before the judge.   Mr Ralls submits that the Master cannot have been expected to read the entirety of the affidavit evidence prior to the hearing; that Mr Smart had ample opportunity during the three and a half hour hearing to refer the Master to any specific parts of that evidence on which he particularly wished to rely; and that the Master cannot be criticised for having declined to accede to Mr Smart’s suggestion that he reserve judgment in order to read the entirety of the evidence and for having elected to deliver an extempore judgment.   Mr Ralls further points out that Rimer J made it clear in his judgment that he intended no criticism of the Master in this respect, taking the view that: 
“.... it was not the type of case where it was essential for the court to have grasped every single factual detail before being in a position to form a judgment”.

62.	As to the judge’s decision to lift the automatic stay and to allow the action to proceed, Mr Ralls submits that an application to lift the automatic stay is an application for relief from a sanction within CPR r.3.9, and that the Master and the judge should accordingly have addressed the various matters listed in paragraph (1) of the rule (quoted earlier).    In support of this submission Mr Ralls relies on Neo Investments Inc v. Cargill International SA [2001] 2 Lloyds L.R. 33 (a decision of Aikens J), BCCI v. Bugshan (unreported, judgment delivered 14 March 2001, a decision of David Steel J), Stacey v. The Joint Mission Hospital Equipment Board Ltd (unreported, judgment delivered 16 October 2001, a decision of Owen J) and Stanford v. Stanford [2001] EWCA Civ 1289 (a decision of the Court of Appeal).    I shall return to these authorities below.
63.	Mr Ralls submits (as does Mr Crampin in relation to CPR r.52.11(3) in the context of the rehearing issue: see below) that in providing that on an application under the rule the court “will” consider all the circumstances including the various matters specifically referred to, paragraph (1) of CPR 3.9 imposes a “mandatory” obligation on the court.   He submits that both before the Master and before the judge matters went (as he put it) “off the rails” because neither the Master nor the judge was referred to CPR r.3.9 and accordingly neither addressed himself to the various matters listed in paragraph (1) of the rule.
64.	Mr Ralls further submits that in concluding that the appellants had failed to establish that the further prosecution of the action by Mrs Audergon would be an abuse of process, the judge was in effect reversing the burden of proof.   He submits that the burden of persuading the court to lift the stay and allow the action to proceed was throughout on Mrs Audergon.
65.	Mr Ralls submits that had the appeal before the judge proceeded by way of review rather than by way of rehearing, there could have been no justification for interfering with the Master’s decision.  In support of this submission he relies on the judge’s observation (quoted earlier) that the question whether it was still possible to have a fair trial was “one on which different minds would be likely to have different views”.
66.	Mr Ralls submits, relying once again on BCCI v. Bugshan, that the judge should have taken account of the fact that no good reason had been shown as to why Mrs Audergon and her advisers had allowed the action to stagnate during what David Steel J in BCCI v. Bugshan called “the otherwise ample opportunity afforded during the relevant year” (a reference to the year ending on 25 April 2000). 
67.	Mr Ralls contends, in the alternative, that Mrs Audergon has been guilty of an abuse of process in that she has commenced and continued litigation which she has no intention of bringing to a conclusion.   In support of this submission he relies on Grovit v. Doctor [1997] 1 WLR 640 HL and Arbuthnot Latham Bank Ltd v. Trafalgar Holdings [1998] 1 WLR 1426.   
68.	Mr Crampin QC relies on the fact that whereas CPR r.52.11(3)(b) provides that the appeal court “will” allow an appeal where the decision of the lower court was unjust because of a serious procedural or other irregularity (he refers to this as a “mandatory” provision), the power under CPR r.52.11(1)(b) to hold a rehearing is essentially discretionary in nature.   He submits that this indicates that, in considering whether it would be in the interests of justice to hold a rehearing, the appeal court may apply a lower threshold than that required by CPR r.52.11(3), and that it is a not prerequisite to the exercise of the discretion that the irregularity in question should be so serious as to render the order of the lower court unjust (or, for that matter, that the appeal court should be satisfied that the order of the lower court was wrong).   
69.	Mr Crampin submits that the Court of Appeal can only substitute its own view for that of the judge if it concludes that no reasonable appeal court could have exercised the discretion by holding a rehearing.    Turning to the circumstances of the instant case, Mr Crampin submits that the judge’s decision to hold a rehearing was one which, in the exercise of his discretion, the judge could properly make, since it did not “exceed the generous ambit within which a reasonable disagreement is possible” (see G v. G [1985] 1 WLR 647 at 652 per Lord Fraser of Tullybelton).    Accordingly, he submits, there is no basis on which the Court of Appeal can substitute its own view.
70.	Amongst other factors, Mr Crampin relies on Mr Prior’s consent, given on behalf of all the appellants, to the appeal proceeding by way of rehearing (although in course of argument he conceded that there was no basis on which it could be said to have been in the appellants’ interest so to consent, given that the lower court had exercised its discretion in their favour by declining to lift the stay).   The fact that such consent had been given was, he submits, a factor of which the judge was entitled to take account.  He submits that a further relevant factor was the existence of the time constraints on the hearing before the Master, which, he submits, resulted in Mr Smart having an inadequate opportunity to develop Mrs Audergon’s case.
71.	Mr Crampin submits that an application to lift the automatic stay is not an application for relief from a sanction within CPR r.3.9, properly construed.   At the same time, he accepts that there is a considerable overlap between those considerations which are material to an application to lift the automatic stay and those which are material to an application for relief from a sanction within CPR r.3.9.    As a demonstration of the degree of overlap, he points to the list of matters identified by Neuberger J in Annodeus, and compares it with the list of matters set out in paragraph (1) of CPR r.3.9.   He submits that it is not necessary for the court to formulate its decision on applications in either category by reference to a checklist of matters to be taken into account: he submits that that is too mechanistic an approach.   Rather, he submits, the court has in every case to consider all the circumstances in order to see where the justice of the case lies.   Mr Crampin submits that the fact that in its judgment the court may not refer expressly to all the various factors which have affected its decision is not in itself a valid criticism of the judgment.
72.	Turning to the circumstances of the instant case, Mr Crampin submits that the instant case cannot be categorised as an abuse of process case; rather it is a delay case.    Consequently in striking it out the court would be exercising its inherent jurisdiction (a jurisdiction which is expressly preserved by CPR r.3.4(5)).   In that context, the central question, as both the Master and the judge identified, is whether there could be a fair trial of the action.   That was a matter for the court’s discretion.    Assuming for the purposes of the stay issue that the judge was justified in proceeding by way of rehearing, and in substituting his own exercise of discretion for that of the Master, there are (submits Mr Crampin) no grounds on which the judge’s exercise of his discretion can be impugned in the Court of Appeal.   In support of this submission he referred us to a passage from the judgment of Hobhouse LJ in Shtun v. Walewska [1996] 1 WLR 1270 at 1288D-E where Hobhouse LJ said:
“The drawing of inferences and the assessment of risk involves an element of judgment by the tribunal.   Inevitably, in cases near the margin, the judgment made can differ.   But this does not convert the willingness or unwillingness to draw an inference into a proposition of law.   Questions of risk of prejudice or unfairness and loss of memory are difficult ....”

CONCLUSIONS
73.	I turn first to the judge’s decision to hold a rehearing.   
74.	CPR Pt 52, which came into force on 2 May 2000, provides for a uniform system of civil appeals.   Thus, CPR r.52.11(1) provides that “[e]very appeal will be limited to a review of the decision of the lower court unless” either a practice direction directs otherwise or the “appeal court” (that is to say, the court to which the appeal is made”: see CPR r.52.1(3)(b)) exercises its discretion under CPR 52.11(1)(b) to hold a rehearing.    This is in contrast to the system which obtained under the former Rules of the Supreme Court whereby what used to be called “interlocutory” appeals from a Master or District Judge took the form of a complete rehearing.    On such an appeal the appeal court was free to exercise the court’s discretion afresh, notwithstanding that the Master of District Judge may not have been guilty of any error of law.   

75.	In Tanfern, Brooke LJ explained the nature and importance of the changes effected by CPR Pt 52.   In the section of his judgment headed “The appellate approach: the general rule”, Brooke LJ said this:

“30.   As a general rule, every appeal will be limited to a review of the decision of the lower court.   This general rule will be applied unless a practice direction makes different provision for a particular category of appeal, or the court considers that in the circumstances of an individual appeal it would be in the interests of justice to hold a rehearing: CPR r.52.11(1).   The appeal court will only allow an appeal where the decision of the lower court was wrong, or where it was unjust because of a serious procedural or other irregularity in the proceedings of the lower court: CPR r.52.11(3).

31.   This marks a significant change in practice, in relation to what used to be called “interlocutory appeals” from district judges or masters.   Under the old practice, the appeal to a judge was a rehearing in the fullest sense of the word, and the judge exercised his/her discretion afresh, while giving appropriate weight to the way the lower court had exercised its discretion in the matter.  Under the new practice, the decision of the lower court will attract much greater significance.   The appeal court’s duty is now limited to a review of that decision, and it may only interfere in the quite limited circumstances set out in CPR r.52.11(3).

32.   The first ground for interference speaks for itself.   The epithet “wrong” is to be applied to the substance of the decision made by the lower court.   If the appeal is against the exercise of a discretion by the lower court, the decision of the House of Lords in G v. G (Minors: Custody Appeal) [1985] 1 WLR 647 warrants attention.   In that case Lord Fraser of Tullybelton said, at p.652:

“Certainly it would not be useful to inquire whether different shades of meaning are intended to be conveyed by words such as ‘blatant error’ used by the President in the present case, and words such as ‘clearly wrong’, or simply ‘wrong’ used by other judges in other cases.  All these various expressions were used in order to emphasise the point that the appellate court should only interfere when they consider that the judge of first instance has not merely preferred an imperfect solution which is different from an alternative imperfect solution which the Court of Appeal might or would have adopted, but has exceeded the generous ambit within which reasonable disagreement is possible.”

33.   So far as the second ground for interference is concerned, it must be noted that the appeal court only has power to interfere if the procedural or other irregularity which it has detected in the proceedings in the lower court was a serious one, and that this irregularity caused the decision of the lower court to be an unjust decision.”

76.	In paragraph 38 of his judgment in Tanfern, under the heading “Powers of the appeal court: the general rule”, Brooke LJ said this:
“The general rule set out in CPR Pt 52 provides that every appeal court has all the powers of the lower court: CPR r.52.10(1).   It also has power to affirm, set aside or vary any order or judgment made or given by the lower court, to refer any claim or issue for determination by the lower court, to order a new trial or hearing or to make a costs order: CPR r.52.10(2).   It may exercise its powers in relation to the whole or part of an order of the lower court: CPR r.52.10(4).   In other words every appeal court, whether a circuit judge or a High Court judge or the Court of Appeal, has been expressly given the same powers in relation to appeals governed by CPR Pt 52.   ....”  

77.	Finally, in paragraph 50 of his judgment, under the heading “Conclusion”, Brooke LJ said this:
“....   In future the decision of the “first instance” judge in what used to be called an “interlocutory appeal” will assume a much greater importance than it ever did in the days when the judge in chambers conducted a complete rehearing, with an entirely fresh discretion to exercise.   And the decision of the “appeal court”, whether a circuit judge or a High Court judge, is in most cases now likely to be final.   These changes will compel litigants and their advisers to pay even greater attention to the need to prepare their cases with appropriate care, because they may find it much more difficult to extricate themselves from the consequences of an ill-prepared case before a judge at first instance in a lower court.”

78.	In Asiansky, the Court of Appeal considered the general nature of the discretion to hold a rehearing, as opposed to a review, and the principles which should be applied in considering whether to exercise that discretion.   In that case, the Master struck out an action in negligence and breach of contract brought against the claimant’s former solicitors, on the ground that the claimant’s statement of case disclosed no reasonable grounds for bringing the claim (see CPR r.3.4(1)(a)).   The claimant appealed to the High Court and sought a direction in advance of the substantive hearing that the appeal proceed by way of rehearing.   Initially such a direction was made on paper, but it was subsequently agreed between parties that the question whether the appeal should be by way of review or rehearing should be considered at the substantive hearing of the appeal.   The judge hearing the appeal (Mrs Justice Steel) decided that the appeal should proceed by way of review.   In the result, she dismissed the appeal.   The claimant appealed to the Court of Appeal.
79.	In the course of his judgment, referring to the question whether an appeal should proceed by way of review or by way of rehearing, Clarke LJ said this (at paragraph 10):
“There was some debate before us as to what criteria should be used to decide that question.  However for my part I do not think that it is desirable to fetter the wide discretion which Rule 52.11(1)(b) gives to the court.   As I read the rule, it contemplates that in the ordinary case the appeal will be by way of review, but provides for the court to hold a rehearing if it “considers that in the circumstances of the individual [appeal] it would be in the interests of justice” to do so.   Since the circumstances of individual cases may be almost infinitely variable, it is not in my judgment appropriate to lay down criteria to be satisfied before the appeal court holds a rehearing.   All will depend on the particular circumstances of the case.”

80.	Clarke LJ also referred to paragraph 30 of the judgment of Brooke LJ in Tanfern (quoted above) in which Brooke LJ observed that “as a general rule” every appeal is limited to a review of the decision of the lower court.
81.	In paragraphs 13 to 16 of his judgment in Asiansky, Clarke LJ said this:
“13.   Thus a review of an exercise of discretion is different in principle from a rehearing, at any rate if the rehearing is (as Brooke LJ put it) a rehearing in the fullest sense of the word, as occurred under the old RSC Order 58, rule 1.   It seems to me that CPR Rule 52.11(1) empowers the appeal court to hold a rehearing of that kind if the justice of the particular case requires.   It may be that the nature of the rehearing which is appropriate will itself depend upon the particular circumstances; so that there may be a difference between an appeal from a decision of this kind, involving an exercise of discretion, and an appeal after a trial of an action.   It is not, however, necessary to explore that possibility further in this case.

14.   On a review of a decision like that of Master Eyre which involved the exercise of a discretion, the appeal court, subject to one proviso, is limited to considering whether he took account of irrelevant considerations, or failed to take account of relevant considerations, or whether he was wrong in the sense described by Lord Fraser in G v. G ....

15.   The proviso is that where the appeal court receives evidence on a review (as it may do under Rule 52.11(2)) the review will take account of that evidence in deciding whether the exercise of the discretion by the court below was flawed.   Such a review is very different from the kind of rehearing envisaged by Brooke LJ, in which the appeal court is exercising its own discretion and, because of the “generous ambit within which a reasonable disagreement is possible”, might well legitimately arrive at a different conclusion from the Master or judge in the court below.

16.   I should perhaps add that now that an appeal from a master will, for the most part, be a review and not a rehearing, it is important that the master should give reasons for his decision – which may be short and concise, but should be sufficient to enable the appeal court to know by what process of reasoning he reached his conclusion.”

82.	Mance LJ and Dyson LJ agreed with Clarke LJ’s reasoning and conclusions.   Dyson LJ delivered a judgment in course of which he made certain observations on the principles to be applied in deciding whether there should be a review or a rehearing.   The relevant passage in his judgment reads as follows:
“78.   I agree that the circumstances of an individual case are infinitely variable, and that it is not therefore appropriate to lay down fixed criteria that are to be satisfied before the appeal court holds a rehearing.   Nevertheless, the instant case has shown that it may be difficult to determine whether a particular appeal should be by way of review or rehearing.   For that reason it may be helpful to make a few comments on that issue.

79.   The starting point is that, as Brooke LJ said in [Tanfern], the general rule is that every appeal from a lower court will be limited to a review of the decision of that court.  It is for the party who wishes the appeal to be by way of rehearing to persuade the appeal court to adopt that course; viz. “every appeal will be limited to a review of the decision of the lower court unless ....” (CPR r.52.11(2)).

80.   There must,  however, be some feature of the case that unusually makes it unjust for the appeal to be limited to one of review.   The fact that the appellant wishes to rely on evidence that was not before the lower court is not often likely by itself to be a sufficient reason for holding a rehearing rather than a review.  That is because the power given by CPR r.52.11(2) to receive such evidence is exercisable whether the appeal is by way of rehearing or review.

82.   But there may be cases where it is difficult or impossible to decide on appeal justly without a rehearing; for example, if the judgment of the lower court is so inadequately reasoned that it is not possible for the appeal court to determine the appeal justly without a rehearing; or if there was a serious procedural irregularity in the court below so that, for example, the appellant was prevented from developing his case properly.   But where the decision of the lower court is adequately reasoned and there has been no such procedural irregularity, it should usually be possible for the appeal court to determine the appeal by review and not rehearing.”

83.	In my judgment, having regard to the terms of CPR r.52.11 itself, to the overriding objective of the CPR as set out in CPR r.1.1, and to the judgments in Tanfern and Asiansky, the following general observations may be made with regard to the discretion to hold a rehearing conferred on an appeal court by CPR r.52.11(1)(b):
1.   The general rule is that appeals at all levels will be by way of review of the decision of the lower court. 
  
2.   A decision to hold a rehearing will only be justified where the appeal court considers that in the circumstances of the individual appeal it is in the interests of justice to do so.

3.   It is undesirable to attempt to formulate criteria to be applied by the appeal court in deciding whether to hold a rehearing.   There are two main reasons for this.   The first reason is that the decision to hold a rehearing must inevitably rest on the circumstances of the particular appeal.   The second reason is that any attempt to formulate such criteria would in effect be to rewrite the rule in more specific terms, thereby restricting the flexibility which is inherent in the general terms in which the rule is framed.

4.   In a case involving some procedural or other irregularity in the lower court it will be material for the appeal court, when considering whether to hold a rehearing, to have regard to the fact that an appeal will be allowed where the decision of the lower court is rendered “unjust because of serious procedural or other irregularity” (see CPR r.52.11(3)(b)).    Thus, where in such a case the decision of the lower court was made in the exercise of its discretion, the appeal court will be free to exercise the discretion afresh, without the need to hold a rehearing.    However, what weight (if any) this factor may have will depend on the circumstances of the particular case.

5.   The word “will” in the opening words of CPR r.52.11(3) (“The appeal court will allow ....” (my emphasis)) throws no light on the approach to be adopted in deciding whether to hold a rehearing under CPR 52.11(1)(b).    In context, the word “will” in CPR r.52.11(3) does not purport to impose some mandatory duty on the appeal court – any more than does the word “will” in the opening words of CPR 52.11(1) (“Every appeal will be limited to a review ....” (my emphasis)) or the word “will” in the provision in CPR 52.11(2) that unless it orders otherwise the appeal court “will” not receive oral evidence or evidence which was not before the lower court.  It is, after all, hardly necessary to impose a mandatory duty on an appeal court to allow an appeal against a decision of a lower court which is either wrong or unjust because of some irregularity.   CPR r.52.11(3) simply makes clear when an appeal “will” be allowed, just as CPR 52.11(1) makes clear how appeals “will” henceforth proceed and CPR 52.11(2) makes clear what evidence the appeal court “will” receive unless it orders otherwise.   That is not to say that the word “will” when used in other contexts may not import an imperative: my observations as to the meaning the word “will” are confined to CPR r.52.11.
84.	I turn now to the circumstances of the instant case.   
85.	In some cases a decision by the appeal court to hold a rehearing may make little practical difference.   However, the instant case is certainly not such a case.   In the instant case, as in all cases where the decision of the lower court has been reached in the exercise of a discretion, there is a significant difference between an appeal by way of review and an appeal by way of rehearing in that whereas on a review the appeal court is subject to the well-known constraints referred to by Brooke LJ in paragraph 32 of his judgment in Tanfern (see paragraph 75 above), a decision by the appeal court to proceed by way of rehearing frees it from such constraints and allows it to exercise the discretion afresh in circumstances where it would have been unable to do so had the appeal proceeded in the normal way, by way of review.   That is precisely what happened in the instant case.   As noted earlier, Rimer J said in terms in the course of his judgment that the question whether it was possible to have a fair trial was “one on which different minds would be likely to have different views”.   In saying that, he clearly was not intending to say that different people would be likely to disagree; rather, what he was saying was that the question was one on which “reasonable disagreement was possible” (see per Lord Fraser of Tullybelton in G v. G (Minors: Custody Appeal) at p.652, quoted earlier).
86.	It follows that in considering whether it was in the interests of justice to hold a rehearing in the instant case, it was a highly material factor that a rehearing would inevitably  result in the appeal court exercising the discretion afresh – a course which might not have been open to the appeal court (and which, on the basis of the judge’s own conclusions, would not have been open to it) had the appeal proceeded by way of review.    It might have been otherwise had the judge taken the view that the Master’s decision was tainted by some irregularity, but, as noted earlier, the judge went out of his way to make clear that he made no criticism of the Master for not having read the entirety of the evidence or for having elected to deliver an extempore judgment.
87.	Thus it is hardly surprising that Mr Crampin was constrained to concede in the course of argument that on no basis could it be said to be in the appellants’ interest that the appeal should proceed by way of rehearing.

88.	In these circumstances the conclusion seems to me unavoidable that had the judge explained to Mr Prior the implications of holding a rehearing (as he should have done), and had Mr Prior fully understood those implications, he would not have given his consent.   The consent which he in fact gave was not a fully informed consent, in that although it is plain from the transcript that he understood that a rehearing was a hearing “de novo”, it was not explained to him, nor did he appreciate, that in consenting to a rehearing he was depriving himself and his co-defendants of a substantial advantage by enabling the appeal court to, in effect, free itself from the constraints under which it would otherwise have had to operate when faced with an exercise of discretion by the lower court.   In the circumstances, the judge was in error in placing any reliance on Mr Prior’s consent, and for that reason alone his decision to hold a rehearing cannot stand.
89.	Further, if one accepts the judge’s conclusion that no criticism could be levelled at the Master for not having read the entirety of the evidence and/or for having elected to deliver an extempore judgment, there was in my judgment no basis on which the judge could properly find that it was in the interests of justice to hold a rehearing.   In any event, the judge’s conclusion that there was, in effect, no procedural or other irregularity in the proceedings before the Master was in my judgment a correct conclusion, for reasons given later in this judgment.
90.	In substance, the judge’s decision to hold a rehearing seems to have been based on the view that had Mrs Audergon’s counsel had more time to develop her case before the Master, her application might have succeeded; and that accordingly she should be allowed a further opportunity to make her application, free from the time constraints which applied before the Master (as noted earlier, the hearing before the judge lasted some three court days).  In my judgment, however, absent any irregularity in the proceedings in the lower court in the form of a time constraint the imposition of which gave rise to a risk of injustice, the mere assertion by an appellant that had he had more time to develop his case the lower court might have been persuaded to reach a different result cannot justify holding a rehearing.   As has been said many times, litigants do not have the right to unlimited amounts of court time.  The interests of other litigants must be taken into account.  Time constraints are a necessary part of the efficient administration of the civil justice system, both at first instance and on appeal.
91.	For those reasons, I conclude that the judge was in error in deciding to hold a rehearing.   
92.	The next question is as to the consequences of that conclusion so far as the present appeal is concerned.    There appear to be four possible ways in which this court could proceed on this appeal.   One possibility would be to treat the present appeal as an appeal against the judge’s re-exercise of the discretion to lift the automatic stay, thereby in effect adopting the judge’s decision to hold a rehearing.   At the other extreme, this court could conclude that the judge’s decision to hold a rehearing so completely vitiated his reasoning and approach that his order should be set aside and the Master’s order restored, without any consideration of the substance of Mrs Audergon’s appeal against the Master’s decision.   As a third possibility between those two extremes, this court could remit the matter back to another judge of the High Court to review the Master’s decision.   The fourth possibility is a variant of the third, viz. that this court should exercise its own discretion under CPR r.52.11(1)(b) to hold a rehearing of Mrs Audergon’s appeal against the Master’s decision, and itself conduct a review the Master’s decision.   
93.	Neither Mr Ralls nor Mr Crampin made detailed submissions on this question.  For his part, as noted earlier, Mr Ralls merely submitted that both the Master and the judge went “off the rails” in failing specifically to apply CPR r.3.9.   It would appear to be implicit in that submission that he is inviting this court to re-exercise the discretion under CPR r.52.11(1)(b), either on the footing that both orders below were either wrong or unjust by reason of a serious irregularity (see CPR r.52.11(3)) or on the footing of a rehearing in this court.   Mr Crampin agrees with Mr Ralls to the extent that he submits that it would be wrong for this court to adopt the second of the four possibilities identified above, since the consequence would be that the substance of Mrs Audergon’s appeal would not have been properly considered either by the judge or by the Court of Appeal.   Neither Mr Ralls nor Mr Crampin advocates the first of the four possibilities identified above.   
94.	In my judgment the first two possibilities identified above should be rejected.   As to the first, the judge’s erroneous decision to hold a rehearing clearly affected both his approach and his conclusions: indeed, had he proceeded by way of review of the Master’s decision he must, on his own findings, have reached a different result.   As to the second possibility, I accept Mr Crampin’s submission that simply to set aside the judge’s order and restore that of the Master would leave Mrs Audergon’s appeal effectively unheard.   As between the third and fourth possibilities, I can see no merit in remitting the matter for a further hearing when it has been fully argued before us.   In my judgment, therefore, the fourth possibility is the one which this court should adopt.   In the unusual circumstances of the present appeal, it is in my judgment in the interests of justice that this court should rehear Mrs Audergon’s appeal against the Master’s decision by undertaking a review of that decision, as the judge hearing the appeal should have done.
95.	I accordingly proceed on that basis.  
96.	In the context of a review of the Master’s decision, the position as between the appellants and Mrs Audergon, somewhat ironically, is that if Mr Ralls is right in his submission based on CPR r.3.9 Mrs Audergon’s appeal ought to have succeeded before the judge; whereas if Mr Crampin is right it ought to have failed.   Nevertheless the point has been fully argued on both sides, and accordingly I must deal with it.
97.	I turn first to the authorities cited to us which bear upon the question whether an application under paragraph 19(2) of the Practice Direction is an application for relief from a sanction within the meaning of CPR  r.3.9.
98.	In  Neo Investments Aikens J said (at paragraph (8)):
“It is accepted (at least by inference) by Mr Hamblen [counsel for the claimants] that there has been a failure by the claimant to comply with any rule, Practice Direction of Court order, in the sense that the case did not come before a Judge either at a hearing or on paper during the period April 26, 1999 to April 25, 2000.   In my view, Mr Hamblen was absolutely right to make that concession because it is clear to my mind that the intent of paragraph 19.1 of the Practice Direction to Part 51 was to ensure that all cases that were alive and kicking should go before a Court during that period under the new CPR regime.”

99.	In BCCI v. Bugshan David Steel J accepted the claimant’s submission that the court’s refusal to lift the stay:
“.... would in effect constitute a sanction in the form of a strike-out”.   

100.	In paragraph 13 of his judgment in Stacey, Owen J summarised the proper approach to an application to lift the automatic stay as follows (so far as material):
“i)  The application must be determined by reference to the overriding objective in CPR r.1.1.

ii)  An automatic stay under CPR PD 51.19 is a sanction within the meaning of CPR r.3.9; and accordingly the court must consider all the circumstances including the matters listed in CPR r.3.9(1)(a)-(i).

iii)  It is for the parties seeking to set aside the automatic stay under CPR PD 51.19 to show that it is just and proportionate to do so, see .... BCCI v. Bugshan.
.....”
101.	In Stanford the judge at first instance treated an application to lift the automatic stay as an application for relief from sanctions, and the Court of Appeal accepted that that was the correct approach (in paragraph 6 of his judgment, Latham LJ, with whom Longmore and Potter LJJ agreed, said that the judge below had “properly” treated the application as an application for relief from sanctions).
102.	There can be no doubt that, in ordinary parlance, the automatic stay imposed by paragraph (1) of the Practice Direction may aptly be described as a sanction.    The question explored in argument, however, is whether it is a sanction “imposed for a failure to comply with any rule, practice direction or court order” within the meaning of CPR r.3.9.   It seems to me that on the basis of the above authorities that question must be answered in the affirmative.  
103.	However, it does not follow that the Master was in error in not referring specifically to the rule in his judgment and/or in not framing his judgment specifically by reference to the list of matters contained in paragraph (1) of the rule.   In my judgment the rule does not require the court to adopt such an artificial and mechanistic approach.    
104.	I reach that conclusion for two main reasons.   In the first place, I reject Mr Ralls’ submission that the word “will” in CPR r.3.9 imposes a mandatory duty on the court to deal specifically and separately in its judgment with each of the matters listed in paragraph (1).   As in the case of CPR r.52.11, the word “will” in CPR r.3.9(1) is not an imperative: the paragraph merely identifies a number of specific matters which the court “will” consider in every case.    No doubt one of the reasons why the rule refers specifically to such matters is to assist litigants to focus their evidence and their arguments on relevant aspects of the particular case. 
105.	In the second place, one must not lose sight of the fact that the overriding objective of the court in considering applications under the rule is to determine in each case where the justice of the case lies (see CPR r.1.1)   The discharge of that task involves, by definition, a consideration of all the relevant circumstances (as the opening words of CPR r.3.9(1) make clear); and that will in turn include a consideration of the various matters listed in the paragraph.    But provided always that the court gives sufficient reasons to enable those affected by its decision to understand the basis for that decision, it is not in my judgment a legitimate criticism of the court’s judgment that it does not refer specifically to the rule, or that its judgment is not framed specifically by reference to the list of matters contained in paragraph (1) of the rule.
106.	Accordingly in the instant case it is not, in my judgment, a legitimate criticism of the Master (or, for that matter, of the judge) that in their judgments they did not address themselves specifically to CPR r.3.9.
107.	As to Rimer J’s reliance on the various matters identified by Neuberger J in the passage from his judgment in Annodeus quoted earlier, although the point does not arise directly on this appeal (on the footing that this appeal is a rehearing of Mrs Audergon’s appeal from the Master), I would nevertheless wish to say that, whilst I do not suggest that Neuberger J was other than fully justified in formulating and applying that checklist in the particular circumstances which obtained in Annodeus itself (that point not having been argued before us), I do respectfully doubt the value of adopting a judicially-created checklist which does not appear in the rule itself.   Inherent in such an approach, as it seems to me, is the danger that a body of satellite authority may be built up, rather as it was under the old rules in relation to the dismissal of an action for want of prosecution, leading in effect to the rewriting of the relevant rule through the medium of judicial decision.    That would seem to me to be just the kind of undesirable consequence which the CPR were designed to avoid.
108.	I turn now to the substantive issue raised by Mrs Audergon’s appeal against the Master’s decision; and for reasons already explained I do so on the footing that the function of the appeal court in considering that appeal is limited to that of reviewing the Master’s decision.
109.	The first question which arises in this connection is whether there was an irregularity in the proceedings before the Master which renders his decision unjust.   I have already rejected the submission that the Master’s judgment was defective in that he did not address himself to the provisions of CPR r.3.9.   As already noted, Mrs Audergon also submits that the Master ought to have reserved judgment so as to enable him to read the entirety of the evidence filed in the action, including the evidence filed by the appellants on her abortive application for a freezing order.   In my judgment, that submission must also be rejected.   It was entirely a matter for the Master whether to deliver judgment extempore or whether to reserve it so that he could read those parts of the evidence to which he had not been specifically referred in the course of the hearing.    I can see no basis on which he can be criticised for electing to deliver judgment extempore.   Indeed, I entirely agree with the judge when he said, in the course of his judgment, that he had no doubt that the Master was satisfied that he had absorbed sufficient of the factual essence of the case to make a fair judgment, and that the instant case was “not .... the type of case where it was essential for the court to have grasped every single factual detail before being in a position to form a judgment”.

110.	The next question is whether the Master’s decision not to lift the stay was “wrong”, in the sense that it “exceeded the generous ambit within which reasonable disagreement is possible” (see per Lord Fraser of Tullybelton in G v. G (Minors: Custody Appeal) quoted earlier).   Once again I agree with the judge that, as the Master himself indicated in the course of his judgment, the question whether the stay should be lifted and the action allowed to proceed was one on which different minds might reach differing conclusions.
111.	Nor, in my judgment, can it be said that in reaching his decision the Master took into account irrelevant matters or that he failed to take into account relevant matters.   The Master rightly addressed himself to the central question whether, given the substantial delays which had occurred, it was still possible to  have a fair trial of the action.   His conclusion that it would be difficult to have a fair trial, and that “on balance” the stay should not be lifted, seems to me to be unassailable on appeal.
112.	Accordingly I conclude that Mrs Audergon’s appeal against the Master’s decision must fail, and that the judge should have so held.   
113.	For completeness, I should add that had I been in the position of the Master I would have reached the same result as he did, save only that in the interests of procedural tidiness I would have ordered that the action be struck out rather than allow it to remain stayed sine die.  In my judgment, this is a plain case in which the substantial delays on the part of Mrs Audergon have placed such a difficulty in the way of a fair trial of the issues which she seeks to litigate that justice requires that the action should not proceed further.
114.	For those reasons, I would allow the appellants’ appeal, set aside the order of Rimer J, and strike out the action.   

Lord Justice Tuckey :
115.	I agree.
Lord Justice Pill :
116.	I also agree.

ORDER: 
1. The appeal against the order of Rimer J made on 8 March 2001 to be allowed, and the said order be discharged save that paragraphs 1, 2, 26, 28 and 29 of the order do stand.
2. The order of Chief Master Winegarten dated 10 July 2000 be restored and varied as follows:
(1) in paragraph (1) thereof there be added the words "and the action is struck out"
(2) in paragraph (2) thereof the word "motion" be substituted by the word "action" and after the word "action" there be inserted the words "including the costs of the applications dated 19 April 2000 and 4 July 2000".
3. The claimant shall pay the defendant's costs here and  before Rimer J (without prejudice to the costs ordered to be paid by the 3rd defendant to the claimant in accordance with paragraph 26 of the Order of Rimer J made on 8 March 2001), such costs to be the subject of a detailed assessment if not agreed.
4. In respect of the costs incurred during the period in which the claimant was in receipt of Legal Aid, the determination of the claimant's liability for such costs as an assisted person pursuant to section 17 Of the Legal Aid Act 1988 shall be postponed, save that the 3rd defendant be permitted to set off any such costs against his liability under paragraph 26 of the Order of Rimer J dated 8 March 2001.
5. There be a Legal Aid Assessment of the claimant's costs.
6. Permission to appeal to the House of Lords is refused.