Anthony McGann v Eldonian Community Trust Limited

HHJ Halliwell: Introduction

1. This judgment is given following my earlier judgment on 31 October 2025, [2025] EWHC 3103 (Ch) (“ the 31 October Judgment ”) using the same nomenclature as the 31 October Judgment. It is given pursuant to my order of the same date (“ the 31 October Order ”) formally dismissing the Petition and adjourning, for subsequent determination on paper, all issues as to costs and Mr McGann’s application for permission to appeal. The issues as to costs include whether Mr McGann should be required to make a payment to The Access to Justice Foundation (“ the Foundation ”).

2. By the 31 October Order, directions were made for the sequential delivery of written submissions with provision, in the event he intended to pursue his application for permission to appeal, for Mr McGann to set out, in brief terms, his grounds of appeal. These steps have all been taken.

3. For the avoidance of doubt, I have read and taken into consideration Mr Daniel Crowley’s written submissions dated 13 and 3 December 2025, Mr Conor McLaughlin’s written submissions dated 14 November 2025 and Mr Louis Doyle KC’s written submissions dated 28 November 2025. I have also taken into consideration the Company’s bundle of costs documentation and Mr Doyle’s draft Grounds for Appeal dated 1 December 2025. The Company’s costs

4. The Company instructed its solicitors for reward. It also instructed counsel who agreed to represent it on a pro bono basis. The Company thus seeks an order for Mr McGann to pay its solicitors’ costs of the Petition, including the costs of a discrete application dated 30 September 2025 (“ the 30 September Application ”). I am asked to make an order providing for such costs to be summarily assessed on the indemnity basis.

5. The Petition constitutes insolvency proceedings within the meaning of Rule 1.1(2) of the Insolvency Rules . By virtue of IR 12.41(3), CPR Parts 44 and 47 thus apply. This includes the principle, in CPR 44.2(2), that the unsuccessful party will generally be ordered to pay the successful party’s costs. The Court can, of course, make a different order having regard to all the circumstances, including the parties’ conduct.

6. In the present case, the Company is plainly the successful party. The Petition was for a winding up order. At all times, Mr McGann pursued his claim for such relief. The Company successfully opposed the Petition. By the 31 October 2025 Order, I dismissed the Petition.

7. Since the Company is the successful party and no convincing case has been presented to the contrary, I shall make an order requiring Mr McGann to pay the whole of the Company’s costs of the Petition subject to assessment in the usual way. It is not submitted that I should make an order apportioning such costs or limiting them to a defined period and I can see no good reason to do so. Nor can I see good reason to treat the costs of the 30 September Application separately from the costs of the Petition as a whole. It was issued on behalf of the Company itself and amounted to an application for permission to rely on additional evidence challenging the authenticity of the Exhibited Invoice in the light of correspondence between the parties’ solicitors. This correspondence was outside the time scale originally envisaged for delivery of evidence in DJ Obodai’s order dated 29 April 2025. However, the additional evidence was significant and it was reasonable for the Company, through its solicitors, to file the evidence at court and apply for permission to do so out of time. It is not suggested otherwise. The Foundation Payment

8. I am invited to make an order providing for Mr McGann to make a payment to the Foundation in respect of the services provided by counsel in representing the Company in these proceedings. This differs from the Company’s solicitors’ costs to which the indemnity principle applies. Counsel’s services were provided free of charge . However, in suitable cases, the court has jurisdiction to require a party to make payment to the Foundation in respect of such services under Section 194(3) of the Legal Services Act 2007 .

9. The Foundation is the prescribed charity under this jurisdiction . Its primary object is “the provision of financial and other support (including such financial support as is envisaged by section 194 of the Legal Services Act 2007 …) to persons who provide, or organise or facilitate the provision of legal advice or assistance (by way of representation or otherwise) which is free of charge (that is otherwise than for or in expectation of fee, gain or reward) and which is provided directly or indirectly to people who are in need of such advice or assistance by reason of youth, age, ill-health, disability, financial hardship or other disadvantage”.

10. of the Section 194 2007 Act applies to proceedings in a civil court in which a party, P, is or was represented by a legal representative, R, free of charge. It applies even if P is or was also represented by another legal representative not acting free of charge.

11. provides that, in considering whether to require a party to make a statutory payment and, if so, upon what terms, the court must have regard to whether, had P’s representation not been provided free of charge, it would have ordered the person to make a payment to P in respect of the costs payable to R by P in respect of that representation, and, if so, what the terms of the order would have been. Section 194(4)

12. provides for rules of court to be made in respect of such orders. Such rules have been made and incorporated in the CPR. This includes Section 194(7) CPR 46.7(1)(b) which applies where the Court makes an order under if, as in the present case, the fixed cost jurisdiction in Section 194(3) CPR Part 45 would have been inapplicable had the relevant services been provided otherwise than free of charge. It provides as follows. “…the court may determine the amount of the payment (other than a sum equivalent to fixed costs) to be made by the paying party to the prescribed charity by – (i) making a summary assessment; or (ii) making an order for detailed assessment, of a sum equivalent to all or part of the costs the paying party would have been ordered to pay to the party with pro bono representation in respect of that representation had it not been provided free of charge”

13. The statutory jurisdiction in expressly applies to proceedings in a civil court, including insolvency proceedings. Whilst Section 194 IR 12.41(3) does not expressly import CPR 45-46, IR 12.1 does provide, more generally, that the provisions of the CPR apply for the purposes of proceedings under Parts A1 to 11 of the 1986 Act with any necessary modifications except so far as disapplied by or inconsistent with the Insolvency Rules .

14. In LF2 v Supperstone [2018] EWHC 1776 , Morgan J determined, at [78], that IR 12.1 does not operate so as to require a party to be formally joined to proceedings in order to comply with CPR 46.2 . He was mindful that IR 12.48 made specific provision for applications where a party to or person affected by proceedings in an insolvency applies for an order in relation to their costs after the issue of proceedings. He may also have been of the view that CPR 46.2 was not expressly incorporated in the insolvency jurisdiction by IR 12.41(3) and, in the absence of specific provision in IR 12.41 , it could not have been imported by IR 12.1 .

15. However, CPR 46.2 and 46.7 are not analogous. CPR 46.7 was specifically introduced, under the statutory power in so as to make provision for the procedure to be followed by the courts when making an order under Section 194(7) , The Section 194(3) . Insolvency Rules do not contain inconsistent provision nor do they disapply the provisions of CPR 46.7. Nor, indeed, is it possible to discern any reason why CPR 46.7 should not apply in the insolvency jurisdiction.

16. In Manolete Partners plc v White (No 2) at [20], Snowden LJ observed as follows. [2024] EWCA Civ 1558 “The legislative purposes of section 194 are relatively easy to see. Before the introduction of section 194 , a privately funded party who was litigating against a person who was represented pro bono had the tactical advantage that they were not exposed to the usual risks of an adverse costs order. The introduction of section 194 was designed to put the parties on a more equal footing by exposing the privately funded party to a similar risk of adverse costs. In addition, the identification of a charity as the beneficiary of an order under section 194 and the designation of a charity as the beneficiary of the AJF makes clear the intent that orders under the section should provide a source of funding to support organisations in the provision of free legal help to a wider cross-section of the public who might be in need”.

17. Since these are the statutory purposes of , there is no obvious reason why the procedural requirements in Section 194 Rule 46.7 and Para 4.1 of PD46 should not apply to insolvency proceedings in the same way as other civil cases; indeed, the statutory jurisdiction and the rules made under it are likely to be particularly pertinent in cases involving insolvency. Moreover, the general rules on costs in CPR 44 specifically apply to the insolvency jurisdiction by virtue of IR 12.41(3).

18. Bearing this in mind, PD 46 provides that “where an order is sought under of the section 194(3) the party who has pro bono representation must prepare, file and serve a written statement of the sum equivalent to the costs that party would have claimed for that legal representation had it not been provided free of charge”. Legal Services Act 2007

19. The Foundation has produced a template statement of pro bono costs for use under CPR PD 46 Para 4.1 stating, by way of introduction, as follows. “Pro bono costs awards are available in civil cases where the party had free legal representation. Pro bono costs can be awarded by the court, cost-bearing tribunals, or included in a statement. Pro bono costs represent a vital source of funding for the Access to Justice Foundation, which distributes the funds to agencies and projects to support the provision of free legal help to those in need. The availability of pro bono costs awards can also be helpful to pro bono clients, as they put the other side at a costs risk.”

20. In the present case, written statements of costs on the Foundation’s template have been filed at Court.

21. I am satisfied that I can make an order, under Section 194(3) of the 2007 Act, for Mr McGann to make a payment to the Foundation, in accordance with CPR 46.7 , in respect of the services provided by counsel in representing the Company in the current proceedings. This includes their services of and incidental to the hearings before me on 14 and 31 October 2025. It also includes their services at the hearing before DJ Obodai on 29 April 2025 when the Petition was adjourned with directions. Consistently with Para 4.1 of PD 46, the Company has filed and served written statements of costs although, for reasons to which I shall refer later, these are not without ambiguity.

22. I am persuaded that I should make an order providing for Mr McGann to make a payment to the Foundation in respect of counsel’s services representing the Company at each hearing and providing incidental advice. This is for the following reasons.

23. Firstly, the Company had good reason to defend the Petition. The Petition was presented after the Charity Commission opened a statutory inquiry in relation to the affairs of the Company. It did so with good reason. On 21 March 2025, new charity trustees were appointed. They should be given a proper opportunity to resolve the issues that have arisen in connection with the management of the affairs of the Company, to assess whether there is a realistic prospect of obtaining further funds and, more generally, to determine whether the charity has a viable future. These matters would have been pre-empted had the Petition succeeded.

24. Secondly, had counsel’s services not been provided free of charge, I would have ordered Mr McGann to make a payment to the Company in respect of the costs payable to counsel for such services following the dismissal of the Petition. The Company is the successful party. Given the nature, importance and complexity of the litigation, it was reasonable for it to instruct solicitors to act on its behalf at the hearing of the Petition. It was also reasonable for it to instruct counsel on a pro bono basis. This disposes of the consideration in Section 194(4)(a) of the 2007 Act.

25. Thirdly, in the absence of evidence to the contrary, it can easily be inferred that counsel were engaged on a pro bono basis only because there were insufficient funds to instruct them at their usual professional rates out of the realisable assets of the Company. This is consistent with the Company’s latest accounts for the year ending on 29 March 2025. There is thus a reasonable explanation for the decision of the parties to enter into a pro bono arrangement.

26. Fourthly, Mr McGann has not identified a convincing case for dispensing with such an order, whether with reference to his own personal circumstances or otherwise. On his behalf, it is submitted that the Company has not provided a copy of the retainer, if any. However, Mr Crowley confirms that counsel were instructed “free of charge”, statutorily defined, in ), so as to mean “otherwise than for or in expectation of fee, gain, or reward” and there is no reason to suggest otherwise nor, indeed, to warrant further inquiry. In these circumstances, I can see no good reason for the Company to be required to file in evidence a copy of the written retainers, if any, before I make an order under Section 194 (1 Section 194(3) . The Charity Commission’s costs

27. On behalf of the Charity Commission, Mr McLaughlin seeks an order that Mr McGann also pays the Charity Commission’s costs of the proceedings.

28. The Charity Commission has never been made a party to the proceedings and a technical point potentially arises. This is the point foreshadowed in LF2 Ltd (supra).

29. CPR 46.2(1) provides as follows. “Where the court is considering whether to exercise its power under section 51 of the Senior Courts Act 1981 …to make a costs order in favour of or against a person who is not a party to the proceedings, that person must – (a) be added as a party to the proceedings for the purposes of costs only; and (b) be given a reasonable opportunity to attend a hearing at which the court will consider the matter further”.

30. In LF2 Ltd v Supperstone (supra), Morgan J concluded that CPR 46.2 did not apply to an application for an order requiring the administrators of a company to assign a cause of action to one of the company’s creditors in which the creditor was ordered to pay the costs of a firm of solicitors which was not a party. There was thus no need for the solicitors to be joined as a party before making a costs order in its favour. However, in that case, IR 12.48(1) was specifically applicable to the costs of a non-party affected by the proceedings so as to leave little room for CPR 46.2. IR 12.48 applies to “proceedings in an insolvency” not “insolvency proceedings”; it thus provides for the service of the application on the office holder or official receiver. This is not applicable in the present case. LF2 was thus concerned with a jurisdiction distinct from the present case in which there is no comparable reason to exclude CPR 46.2. More likely than not, IR 12.1 imports the requirements of CPR 46.2 for the purposes of the present application. If this is not the case, it will of course, be necessary for the Charity Commission to be added as a party for enforcement purposes if an order is to be made in its favour.

31. I shall thus make an order formally adding the Charity Commission as a party to the proceedings for the purpose of costs only.

32. There potentially remains an issue as to the requirements of CPR 46.2(1)(b) which provide that, in addition to joining such a person as a party, the court must give it a reasonable opportunity to attend the hearing. This of course applies to the Charity Commission, not Mr McGann. In my view, the Charity Commission has already been afforded such an opportunity since it had the opportunity to call for a further hearing when I canvassed, as a pragmatic solution, the delivery of written submissions so as to dispense with one. I did so at the end of the hearing on 31 October 2025. Counsel were content to proceed on this basis. This included Mr McLaughlin. In any event, such an order is to the Charity Commission’s obvious advantage.

33. In these circumstances, there is no technical barrier to disposal of the relief sought in on behalf of the Charity Commission in respect of its costs. However, I must exercise caution before making an order in its favour. The Charity Commission is not a party to these proceedings otherwise than for the purposes of costs. A creditors’ winding up order is a class remedy. It is for the company’s creditors as a whole. It is not the function of charity proceedings. Where the proceedings relate to a charity, the Attorney General may sometimes intervene as parens patrie . However, this is unusual where the charitable interest is properly represented. Conversely, the Charity Commission has an important role as the regulator and registrar of charities. It has the general functions listed in Section 15(1) of the , including identifying and investigating misconduct in the administration of charities, and the statutory powers, in Charities Act 2011 Section 46(1), 105(1), and 115(1 ) to institute inquiries, to take action in the interests of the charity and to commence proceedings with reference to the charity. By Section 20(1), it can do anything conducive to the performance of its functions or duties. However, it will not generally involve itself in adversarial proceedings between a charity and a third party. In most cases, there can be no good reason for it to do so.

34. Mr McLaughlin seeks an order for the payment of its costs of and incidental to four hearings on 18 February, 29 April, 14 October and 31 October 2025. At the initial hearing on 18 February, DJ Obodai adjourned the Petition to 29 April 2025. On 29 April, she then re-adjourned the Petition with directions for the delivery of further evidence. It eventually came before me on 14 October and I gave judgment orally on 31 October 2025.

35. In the unusual circumstances of the present case, the Charity Commission had good reason to instruct counsel to attend the initial hearing of the Petition on 18 February 2025. The Petition was presented after the Charity Commission opened its statutory inquiry in respect of the Charity but before the appointment of new trustees. In these circumstances, the Company did not instruct anyone to attend the initial hearing. However, Mr McLaughlin secured an adjournment for the delivery of additional evidence. Had he not attended, it is likely the Company would simply have been wound and the statutory inquiry entirely pre-empted. I shall thus make an order requiring Mr McGann to pay the Charity Commission’s costs of and incidental to the hearing on 18 February 2025.

36. However, following the appointment of new trustees, the Company instructed solicitors and counsel to act on its behalf. Mr Crowley appeared on the Company’s behalf at the hearings on 29 April, 14 October and 31 October 2025. He did so with conspicuous skill. On 29 April, the hearing of the Petition was adjourned with directions for the delivery of further evidence. The substantive hearing of the Petition took place on 14 October and I gave judgment on 31 October. It was open to the Charity Commission to arrange for a representative to attend the hearings on its behalf. On each occasion, it did so. However, I am not persuaded that the Charity Commission has shown that there is good reason for an order requiring Mr McGann to pay its costs of instructing counsel to attend these hearings given that the Company was itself properly represented.

37. I shall make an order requiring Mr McGann to pay the Charity Commission’s costs of and incidental to the initial hearing on 18 February 2025 only. Basis of assessment

38. I am invited to direct that the Company’s costs should be assessed on the indemnity basis. The Charity Commission’s written submissions are silent as to the basis of assessment. It is implicit that it is content for its costs to be assessed on the standard basis. However, I can see no good reason to distinguish the basis of assessment for the costs of either party.

39. Having regard to all the circumstances of the case, including the considerations listed in CPR 44.4(3), I am satisfied that the costs of both parties should be assessed on the indemnity basis. In particular, I have reached the conclusion that Mr McGann’s conduct in presenting and pursuing the Petition was “out of the norm”, Excelsior Commercial and Industrial Holdings Ltd v Salisbury Hammer Aspden and Johnson (a firm) When he presented the Petition, he was aware that the Charity Commission had initiated a statutory inquiry and this would be pre-empted if the Company was wound up. Whilst, this was prior to the appointment of new trustees, he can be taken to have been aware, from the outset, that his Petition was not for the payment of a straightforward contractual debt and would inevitably generate grounds for a bona fide dispute on substantial grounds. No doubt mindful of this, he sought to bolster his case by deploying the Exhibited Invoice on the basis that it was an authentic document. [2002] EWCA Civ 879 .

40. In re a Company (No 0012209 of 1991) Hoffmann J observed, at 354, that the abuse of the petition procedure is a high risk strategy where the company is able to put forward a defence in good faith with at least some prospect of success. He thus made an order requiring the petitioner to pay the company’s costs on the indemnity basis. It was a significant feature of the case – reflected in Hoffmann J’s judgment - that the company was solvent. In this respect, the case before him was distinct from the present case. In the present case, there is plainly an issue about the Company’s solvency, whether on a cash flow or balance sheet basis. Since the hearing on 31 October 2025, the Company has filed accounts showing that, as at 29 March 2025, it had net liabilities, on its balance sheet, of £11,221. Nevertheless, in my judgment, the misuse of the petition is accompanied by other features, including the use of a false invoice, which warrant an order for the payment of costs on the indemnity basis. This applies to the Company’s solicitors’ costs and the Charity Commission’s costs. [1992] 1 WLR 351 ,

41. Different principles come into play in relation to Mr McGann’s liability to make a payment under of the Section 194(3) . This is not assessed under the indemnity principle. However, Legal Services Act 2007 ) provides for the court to have regard to the terms of the order it would have made had the representation not been free of charge. This includes the basis of assessment, under Section 194(4) (b CPR 44.4(1). Had counsel’s representation not been free of charge, the attendant costs would have been assessed on the indemnity basis. This is for the same reasons as the Company’s solicitors’ costs and the Charity Commission’s costs, recoverable under the indemnity principle. Assessment

42. It is provided by CPR PD 44 Para 9.2(b) that the Court should generally make a summary assessment at the end of a hearing lasting not more than one day. If the hearing disposes of the claim, the order may deal with the costs of the whole claim. In his written submissions, Mr Crowley urged that I should summarily assess such costs now. It was implicit in Mr McLaughlin’s written submissions that he would also prefer the costs to be dealt with on this basis and Mr Doyle did not advance any argument to the contrary. In the interests of expedition and with a view to bringing the process to an end at the earliest opportunity, I shall summarily assess the Company’s solicitors’ costs and the Charity Commission’s costs and determine the amount payable to the Foundation.

43. In summarily assessing the Company’s solicitors’ costs and the Charity Commission’s costs, I must bear in mind the provisions of CPR 44.3 and 44.4 when considering whether the costs were unreasonably incurred or unreasonable in amount and resolving any doubt in favour of the receiving party. By way of analogy, I shall also take these matters into consideration when determining the amount payable to the Foundation.

44. I shall first assess the Company’s solicitors’ costs. The Company has produced statements of costs limited to the hearing, on 14 October 2025, of the Petition and the 30 September Application. These are in the modest amounts of £7280 and £1522 plus VAT. It has not been clarified whether the Company is registered for VAT. I shall thus assess the Company’s costs in the net amounts with provision for VAT to be added if, as I anticipate, the Company is not registered for VAT.

45. The Company has instructed Liverpool solicitors with two fee earners, at Grades A and D. Liverpool is in National Band 1. Most of the work has been done by the Grade A fee earner at an hourly rate of £300, marginally above the guideline hourly rate of £295. However, in the overall circumstances I am minded to make allowance for a substantial part of the work at this rate where it was reasonable for the Company to instruct a Grade A fee earner in view of the nature and complexity of the task, and the hours consumed on the task.

46. In relation to the costs of the Petition, I shall disallow £500 in respect of the time spent by the Grade A fee earner in reviewing the Petitioner’s statements and exhibits, considering material from the Petitioner’s solicitors and generally considering material from Brabners. This is on the basis that the amount of time spent on these aspects (3.6 hours, £1080) was unreasonable given the nature of these tasks and the extent of the work undertaken by counsel. I shall also disallow £450 in respect of the Grade A fee earner’s work in connection with the preparation of a supplementary bundle (3 hours, £900) given that there is no obvious reason why this could not have been done by a more appropriate fee earner at a considerably lower rate. At an hourly rate of £150, this could comfortably have been achieved in three hours. However, under CPR 44.3(3) the benefit of the doubt must be given to the receiving party. Bearing this in mind, I am not satisfied that the Company’s costs of the Petition were unreasonably incurred or unreasonable in amount in respect of the other tasks itemised on the Company’s Petition costs statement. Once £950 is deducted from £7280, the Company is entitled to £6330 in respect of its costs of defending the Petition on the basis that the costs of the 30 September Application are treated separately. Conversely, I shall allow, in full, the Company’s costs of the 30 September Application amounting to £1,522 plus VAT since I am not persuaded that any item of such costs was unreasonably incurred or unreasonable in amount.

47. The Company’s aggregate costs are thus summarily assessed in the sum of £7,852 plus VAT if the Company is not registered for VAT.

48. The Charity Commission’s claim for costs is limited to counsel’s fees in the aggregate sum of £5269.25 in respect of the hearings on 18 February, 29 April, 14 October and 31 October. For the reasons I have given, Mr McGann must pay the Charity Commission’s costs in respect only of counsel’s attendance on 18 February 2025. For this hearing and his advice on evidence in connection with the hearing, Mr McLaughlin’s fee is £1,586.25. In his written submissions, Mr Doyle does not take issue with the amount of the fee and there is no obvious basis on which to contend it is unreasonable. I shall allow it in full.

49. The payment to the Foundation, under of the Section 194(3) 2007 Act , is to be assessed having regard to the terms of the order that would have been made had the Company not been represented free of charge. Consistently with this, CPR 46.7 (1 ) provides for the assessment of “…a sum equivalent to all or part of the costs the paying party would have been ordered to pay to the party with pro bono representation in respect of that representation had it not been provided free from charge”.

50. Mr Crowley has filed statements of the amounts counsel would have claimed for the legal representation had it not been provided free of charge under Para 4.1 of PD46. This includes substantial amounts for advisory work in addition to attending the hearings on 28 April, 14 October and 31 October 2025. The hearing on 31 October 2025 was a remote hearing only.

51. The aggregate amount of these statements is as high as £51,924.50. This reflects that fact that counsel’s role throughout has been more substantial than the Company’s solicitors. Nevertheless, their notional fees are significantly higher than could reasonably have been expected and they are not the function of arms’ length negotiations between the Company or its solicitors and counsel’s clerk. I shall essentially use them as guidance as to the nature and extent of the work undertaken by counsel with a cross reference to their usual rates. However, I do so bearing in mind that, on the hypothesis counsel’s clerk had been successful in negotiating fees at these rates, Mr McGann cannot be expected to pay more than a reasonable rate in respect of counsel’s fees. I have thus exercised a significant measure of caution in assessing the amount which he should pay to the Foundation.

52. On this basis, the payment to the Foundation shall encompass the sums of £7,500, £10,000 and £1,575 respectively in respect of counsel’s fees of and incidental to the hearings on 28 April 2025, 14 and 31 October (including advisory work and additional work on documents incidental to the hearings). However, it shall include an additional sum of £1,250 in respect of Mr Crowley’s work following the hearing on 31 October 2025. For the avoidance of doubt, there shall be no provision with respect to the work done by Mr Martin Hirst. The statement contains a single item under the description “preparation” with no particulars as to what Mr Hirst may have done and when.

53. It follows that the aggregate amount of the payment to the Foundation shall be in the sum of £20,325. Obviously, this amount shall not carry VAT. Permission to appeal

54. Mr McGann applies for permission to appeal. On his behalf a document has been filed with the heading “Grounds upon which the Petitioner/Appellant seeks permission to appeal….” It contains two Grounds for Appeal.

55. Permission to appeal is refused on the basis that an appeal would have no real prospect of success and there is no other reason, compelling or otherwise, as to why such an appeal should be heard.

56. Ground One conflates a series of unrelated points but appears to be founded on the proposition that I erroneously found that the Exhibited Invoice was amended by or on behalf of Mr McGann (“…the Judge was wrong in a finding of fact that the alteration of the name of the client in the original invoice produced by Mischon de Reya (sic) solicitors…‘to the Eldonian Community Trust’ (in what the Judge defined as ‘the Exhibited Invoice’ [33]) dictated, as the Respondent submitted, that, ‘it is to be inferred that the Exhibited Invoice was amended by or on behalf of Mr McGann…in order to enhance his case in these proceedings” [35] such that the Exhibited Invoice was held to be a forgery attributable to the Appellant [39, ‘…owing to the forgery’]”.)

57. Contrary to this draft Ground of Appeal, there was and is no finding in the Judgment that the Exhibited Invoice was amended by or on behalf of Mr McGann. In Para [34], it was observed that “there is no specific evidence as to when, how and by whom it was done”. In the absence of such evidence, there was no room to conclude that it was amended by or on behalf of Mr McGann and it would have been inappropriate to do so. The critical points were that it was a false document and it was being deployed by Mr McGann to advance his case. This gave rise to the abuse on which the Company primarily relied, [32], and it was to a large extent on this basis that “…Mr McGann’s case and the evidence which he now deploys in support of his case [were treated] with a great deal of caution”. It is true that there was a submission that the Exhibited Invoice had been amended by or on behalf of Mr McGann to enhance his case in the proceedings and the Petition should be struck out on this ground alone. However, nowhere did I accept this submission. At [38], I specifically observed that Mr McGann’s case had not yet been tested at trial, the Petition was being determined only on the witness statements and exhibited documentation and no proper explanation for the forgery had been given. I was also mindful that the current representatives of the Charity could have had no direct knowledge of the transactions to which the forgery related.

58. In the draft Ground of Appeal, it is not specifically contended that I erred in law in treating Mr McGann’s evidence with caution. However, at Para (7) of the Grounds, it appears to be suggested the issues about the forgery are irrelevant “once it is accepted – as it must be – that the MdR Payment was made so as to give rise to the Appellant’s claim”. However, this is founded on the misconception that Mr McGann’s payment would, in itself, suffice to furnish Mr McGann with a restitutionary remedy. For the reasons given, at Paras [40]-[49] of the Judgment, this is incorrect in law.

59. In Ground Two, it is stated that “for the purpose of CPR 52.21(3)(a), the Judge was wrong in the exercise of his discretion under s125(1) of the Insolvency Act 1986 , irrespective of any finding in relation to the claim for £14,400, in dismissing the Petition by reason of his failure to take into account the debts of (a) Clerksroom for a sum of £2,340 in respect of the services of barrister, Huw Shepherd… and (b) BWM Accountants for a sum of £1,285 in respect of accountancy services…as discharged by the Appellant personally so as to give rise to a restitutionary claim against the Trust by the Appellant in respect of each debt…”.

60. However, the Petition was dismissed on the basis that the Court was satisfied that there was a bona fide dispute on substantial grounds as to whether the Company was indebted to Mr McGann and he thus lacked standing to present a petition. If it is correct Mr McGann personally discharged the Company’s debts, it doesn’t follow per se that he has a restitutionary remedy against the Company. See Paras [40]-[49] of the Judgment. Disposal

61. Mr McGann must pay the Company’s costs summarily assessed on the indemnity basis in the sum of £7,852 plus VAT if the Company is unregistered for VAT. He must also pay the Charity Commission’s costs summarily assessed on the indemnity basis in the sum of £1,586.25. He must make a payment to the Foundation in the sum of £20,325. Subject to any immediate submissions to the contrary, payment must be made within 14 days.

62. Mr McGann’s application for permission to appeal is refused.