Appeal Division considers test for directing re-trial

Background

Mustard-keen Coren Law Legal Updates readers will recall Humbles & others v Wickers & others (2DS 2025/17) (01.06.26): see Coren Law, Appeal Division on deceit, unlawful distribution, breach of fiduciary duty & limitation (07.06.26).

In Humbles, the Isle of Man Appeal Division overturned a substantial damages award to investors.

The claim followed a failed investment in the development of property overlooking Regent’s Park.

The Appeal Division has now also:

• refused the unsuccessful investors’ application for PTA to the JCPC;
• ordered the investors to make an interim payment on account of costs in the sum of £2 million + VAT; and
• refused an application for a stay (§ 30: “… we are not satisfied that there are the required “solid grounds” showing “irremediable harm or prejudice” of the type commonly required to justify a stay”).

Another important recent development involved whether there should be a (partial) re-trial.

The Appeal Division had sought submissions on the question of whether the investors’ claim in respect of an unlawful distribution should be re-tried.

To recap, the original judgment had held (at § 250):

“In determining whether a payment is an unlawful distribution it is necessary to do so on the basis of the correct factual context and to take account of all relevant matters. There are, as we have explained, compelling reasons for concluding that the Deemster did not do so. The Deemster’s errors are demonstrable and sufficiently material to undermine his conclusion. That being so, we do not consider… it safe to allow the Deemster’s conclusion… that the Success Fee was an unlawful distribution to stand. His conclusion was, we consider, rationally insupportable and must be set aside.”

The re-trial matter was the subject of a discrete judgment, handed down on 10th August 2026.

Test for directing a re-trial

The Appeal Division started with the appropriate test:

“7. Under Rule 14.13(2)(a) – (c) this court’s powers on an appeal include the power:
“(a) to affirm, set aside or vary any order or judgment made or given by the lower court;
(b) to refer any claim or issue for determination by the lower court;
(c) to order a new trial or hearing”.

8. Thus, the court has a discretion to order a retrial.

9. … The most helpful authority for an account of the principles upon which the court’s discretion is to be exercised is Magner v Royal Bank of Scotland International [2020] UKPC 5.

10. … [I]n [§] [13] Lord Hodge said:

“An appeal court has a discretion whether to order a retrial and it is a discretion which must be exercised judicially, based on sound principles… In the Board’s view, the question which the appellate court must ask is whether it is in the interests of justice that a retrial should take place. The Board states the test in those general terms because of the wide range of circumstances in which a trial of fact may go off the rails”.

11. … [T]he discretion is broad. In [§] [15] Lord Hodge said:

“In assessing what the interests of justice require, the appellate court can take into account and balance many factors… [T]hose factors may include the nature and apparent strength of the appellant’s case at first instance, whether the courts have been able properly to adjudicate on the case which the party presented at trial, the circumstances in which the error at first instance occurred, the availability of witnesses for a retrial, the passage of time since the events which would be the subject of evidence in a retrial and the likely effect of that on witnesses’ recollection, and the time, money and resources which a retrial entails”.

12. In that case it was submitted… that an appeal court should order a retrial unless the claim was inevitably destined to fail. That submission was rejected…

13. We also note the decision of the English Court of Appeal in Optis Cellular Technology v Apple [2025] EWCA Civ 552... Birss LJ said at [§] [126]:

“Neither party referred to any authority on the circumstances in which an appellate court would order a retrial. The power to do so is identified in CPR Part 52 at r52.20(2)(c). Nothing further is stated in the rule. In Simetra v Ikon Finance [2019] EWCA Civ 1413, the appellants argued that justice required a retrial… Males LJ (with whom McCombe LJ and Peter Jackson LJ agreed) concluded at [8] that: “however unpalatable the prospect, a retrial is the only just course” and at [187] described a retrial as a “serious step which must be regarded as a last resort”. I agree with this. No doubt the exercise of this power is conditioned by the overriding objective, but bearing in mind the impact of an order for a retrial, the interests of justice will be the paramount consideration, the order is one of last resort and so a retrial will only be ordered if it is the only just course”.

14. … The governing principle is that a retrial should be ordered where to do so is in the interest of justice…

15. The [investors] have also submitted that a denial of a retrial would be a denial of their right to a fair trial of the unlawful distribution claim. We do not accept that Article 6 always requires a retrial where there has been a trial and the judgment has been set aside because of a failure by the first instance court to consider relevant evidence. If that were so, then there would be a retrial in every such case… 

16. Nevertheless, it has been held by the English Court of Appeal that where a judgment has been set aside on appeal by reason of the judge failing to consider relevant matters, there has not been a fair trial; see Harb v Prince Fahd Bin Abdul Aziz [2018] 1 WLR 2709 at [§] [52] per David Richards LJ. However, that mere fact is not sufficient to amount to a breach of Article 6. What matters is whether there has been a disproportionate interference with the right to a fair trial; see Harb at [§] [55]. Thus, one must assess whether a refusal to order a retrial is a disproportionate interference with the right to a fair trial. Whether that is so will no doubt depend upon the very same matters which arise for consideration when determining whether justice requires a retrial. That, we think, must explain why no mention is made of Article 6 in Magner… The principles upon which, at common law, the discretion to order a retrial is exercised, and the principles which govern the effect of Article 6 on that question, are in line with each other.

17. We shall therefore, following… Magner…, consider whether… it is in the interests of justice to order a retrial of the claim that there was an unlawful distribution.”

Interests of justice & the Article 6 point

The Appeal Division weighed the following factors:

“30. This court must balance the competing arguments as to whether justice requires a retrial of the [investors]’ assigned claim. Whilst there is, for the reasons explained by the [investors], a case for a retrial, that case is outweighed, in the judgment of this court, by the burden of the requested retrial on the Appellants, heightened by the circumstance that the [investors] will in any such retrial be able to recast their claim in the light of the problems highlighted by the judgment on appeal. (In this regard it is to be noted that the [investors] sought to uphold the judgment by reference to over 50 additional grounds, many of which were findings of fact not made by the Deemster; see paragraph [50] of the judgment on appeal). Litigants are not normally entitled to two bites of the cherry…

31. The court is therefore persuaded that in the particular circumstances of this case a retrial is not in the interests of justice.

32. In so far as it also necessary to refer to Article 6 of the ECHR, we do not consider that a refusal to order a retrial in the circumstances of this case is a disproportionate interference with the [investors]’ right to a fair trial of the assigned claim for the same reasons we have given for concluding that the interests of justice do not require a retrial.”

 

Note for practitioners: Humbles sets out the criteria which the Appeal Division will follow in the event of an application for a re-trial.

Disclaimer: professional advice should be sought before applying any information in a given case.

For advice on Isle of Man civil procedure, and human rights law, contact Coren Law.

See also Coren Law’s Isle of Man civil procedure portal: Click On | Coren Law.