District judge recused from business rates case after High Court finds apparent bias

A High Court judge has quashed a district judge's refusal to recuse himself from a business rates case brought by Rotherham Metropolitan Borough Council against a property firm, after finding that the test for apparent bias was met.

District Judge Spruce had reserved to himself a case brought against Ladybill Limited, part of the MCR Property Group, having been critical of another company in the group, Emeraldshaw Limited, in a previous judgment.

In Ladybill Ltd v Sheffield Magistrates' Court [2025] EWHC 1169 (Admin) (15 May 2025), Mr Justice Turner said District Judge Spruce "went too far in seeking unnecessarily to advocate in favour of the soundness of his earlier decision".

The district judge handed down his judgment in Sheffield City Council v Emeraldshaw Limited in March 2024, which involved a claim brought by Sheffield for payment of around £70,000 worth of non-domestic rates.

The defence was that Emeraldshaw was not liable because it had transferred liability to a third party.

District Judge Spruce found that Emeraldshaw was liable to pay the rates and that the true commercial relationship between it and the third party amounted to nothing less than "a deliberate and calculated rates avoidance scheme" based upon sham documents which were intended to create a false impression.

Emeraldshaw sought to challenge the judge's decision by way of judicial review.

While the appeal was pending, separate proceedings were being brought by Rotherham against Ladybill also claiming payment of non-domestic rates.  

There were a number of common factors shared between the Ladybill case and the earlier claim against Emeraldshaw.

District Judge Spruce went on to reserve the Ladybill case to himself.

Mr Justice Turner said: “It must therefore have been a disappointment to Ladybill and MCR that the judge, who had been so critical of Emeraldshaw in his judgment, reserved the Ladybill case to himself. They cannot have been optimistic that their prospects of success had thereby been improved.

“However, developments in the Emeraldshaw case later became the catalyst to an application made on behalf of Ladybill that the judge should recuse himself from hearing the Ladybill case. Ladybill rightly accepts that merely because the judge had made strongly adverse findings against Emeraldshaw in the first proceedings would not, of itself, have afforded any sound basis for a recusal application. Although it contends that his decision was unfair, it does not say that it displayed bias.”

The first area of controversy arose out of District Judge Spruce’s involvement in the procedural progress of Emeraldshaw's application for judicial review of his decision.

In the acknowledgement of service form, the judge indicated he did not want to make a submission but later completed a section intended for use only where submissions are to be made.

In this section, he wrote: "THIS IS NOT A SUBMISSION, but it is an observation on the Claim, which is intended to provide the Administrative Court with as much assistance as it can about the decision to help the Higher Court perform its judicial function." [Emphasis not added]

The district judge went on to say: "The Court stands by its written judgement (sic) (attached) which sets out a clear basis for the conclusions reached, with little else required."

Mr Justice Turner said that “Unhappily, what follows amounts, in large part, to a rather strenuous attempt to defend his decision in ways that provide little or no assistance to the Administrative Court".

In light of the acknowledgement of service form in the Emeraldshaw case, Ladybill applied to the judge to recuse himself from hearing its case. During the course of the hearing, the judge made a number of comments which included:

1. "One-sided judgment they called it in the judicial review. It was a careful reasoned judgment. It was not one-sided. It was not biased."
2. "Did you have a part in drafting the judicial review?" Directed to counsel appearing on behalf of Ladybill.
3. In reference to the contents of section 3. "It is not suggesting arguments. Sheffield are capable of presenting their own arguments."

District Judge Spruce refused Ladybill's recusal application in what Turner J described as "robust terms".

Giving various reaons for dismissing the application, the district judge said: "I have been a judge for 17 years and have never had an application [to recuse] as far as I remember".

He also said his one-page commentary "cannot possibly be a defence of a claim which is 46 pages long".

Mr Justice Turner concluded that the district judge's “oratorical contribution” to the acknowledgement of service form, some of his comments during the recusal hearing and some of the comments he gave in his reasons for refusing to recuse himself met the test of whether a fair-minded and informed observer would conclude there was a real possibility that the judge was biased.

The High Court judge said: “It is only human nature that a judge may feel a mixture of emotions when facing a challenge to one of his or her decisions whether by way of appeal or review.

"Ultimately, however, he or she must thereafter be seen to act in a way which is consistent only with the objective demands of fairness and justice.

“Where a judge has made adverse findings against a party in one claim it is particularly important that the impression is not given thereafter that he or she may approach later related cases with anything other than an open mind.”

In this case, Mr Justice Turner said, the fair-minded and informed observer "would be entitled to conclude that there was a real possibility that this judge was likely to be influenced by the extraneous desire to decide the Ladybill case in a way which validated, ex post facto, his earlier decision in the Emeraldshaw case”.

However, the judge said that it "would be wrong" to conclude his judgment "without expressing some sympathy for the position of the judge".

Mr Justice Turner said: "I suspect that many, if not most, judges, while no doubt genuinely welcoming legal clarity from the appeals or review process, would often prefer that such clarity were not achieved at the expense of the success of the challenge to their original decision.

“I make no comment as to the substantive merits of the challenge to the Emeraldshaw decision but it is clear that the judgment was one which was the product of much commendable time and effort.”

The High Court judge added: "Regrettably, in my view, the judge thereafter went too far in seeking unnecessarily to advocate in favour of the soundness of his earlier decision in a way which the fair-minded and informed observer would consider gave rise to a real risk that in the Ladybill proceedings he would struggle to keep a sufficiently open mind on the issues which fell to be determined in that case."

Mr Justice Turner quashed the decision refusing the recusal application and substituted an order that the district judge be recused from sitting on the Ladybill claim.

Adam Carey