COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CHANCERY DIVISION
DEPUTY JUDGE LIVESEY
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE MOORE-BICK
LORD JUSTICE ETHERTON
| (1) Land Securities PLC
(2) LS Wilton Plaza Limited
(3) LS Park House Limited
|- and -
|Fladgate Fielder (A Firm)
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Mr Alan Steinfeld QC and Mr Tom Leech (instructed by Barlow Lyde & Gilbert) for the Respondents
Hearing dates : 21 and 22 October 2009
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Lord Justice Etherton :
"I believe that we should give serious consideration to attacking this for the following reasons:
1. The idea of an affordable housing credit is novel and I believe that there may be reasonable grounds for challenging this in the High Court;
2. The concept is important in connection with the proposed development of Park House. If affordable housing will have to be provided on site at Park House the profitability of the scheme will be significantly affected.
3. The idea of the affordable housing credit is strategically important for a developer such as Land Securities who would seek to use it in connection with other schemes also.
4. It is an early shot across the bows of Land Securities and would give a firm signal of our intentions."
"A high proportion of affordable housing is proposed, above normal policy requirements. The applicant, Land Securities, is requesting that the increase in both market units (over and above the floorspace in the previous permission on this site) and affordable units proposed, form a "residential credit" under a "land banking strategy" to be used against other mixed use/commercial/housing schemes by Land Securities in the future (subject to planning), where it is not viable /feasible to provide the full requirement of market housing and/or affordable housing sought under mixed use policies on site. The principle of a "credit" has been accepted by the Council on previous occasions".
"For the above reasons, it is my opinion that the formulation of the land banking strategy is unlawful. The essential grounds for any application for judicial review would, in brief, be (1) that it is unlawful to formulate such a planning strategy which is not a general land use strategy but one designed to benefit exclusively one individual, and (2) that in any event, the substance of the strategy, and the process by which it is evolving, constitutes an unlawful departure from established processes for the making of land use policy.
"I also said that the firm was anticipating three years of "hell" while the development was under construction. Mr Hussey asked me what we wanted. I remember him saying "Do you want money?" to which I replied: "Absolutely not".
I suggested that one way out would be for Land Securities to take an assignment of our lease. I said that this would enable us to "slip away" with Land Securities' assistance. Otherwise an alternative would be to delay the development of Park House until the end of our lease in 2013. ……… Mr Goreing asked Mr Hussey if Land Securities had any stock in W1 (which would have enabled us to swap our existing building for other premises)".
"My view is that the financial co-operation they sought, whilst unidentified, was intended by them to go beyond assistance in their plans to relocate, although it was presented in part in that context. …. I believe that when they discovered that Land Securities were applying for planning permission to redevelop Park House in February 2006, Fladgate Fielder saw an opportunity to use the possibility of judicial review (and other tactics as in Mr Harnett's note) as a weapon to force us to the negotiating table, with a view to assisting them to implement their plans by financial payment. In spite of Mr Cohen's denials, I do think they were looking for a windfall".
"nevertheless there clearly is a risk that the court may refuse to hear our application on the basis that our principal concern is with another development, namely Park House. However, if the court refuses to grant "standing" for this reason this may pave the way for a further application for a reconsideration of the issue when the Park House scheme falls to be considered by Westminster Council.
If the application is successful, then Land Securities will have to reconsider how it intends to proceed. To some extent, the options available to it will depend upon the action taken by the court. It may for example decide to quash the council's declaration of the affordable housing credit but refuse to quash the permission itself. Alternatively, it may of course take the opposite action or quash both decisions. In any event, a successful action would require Land Securities to substantially rethink its proposals for Park House which would result in a considerable delay to the implementation of its scheme. This has already been partially achieved to the extent that Westminster City Council has put on hold its consideration of the planning application for the redevelopment of Park House until the outcome of this challenge is known. We have put in a holding objection to the grant of planning permission for Park House and will put in further detailed objections in due course.
There are a number of reasons why delaying the development is the best feasible option available to the firm, all of which relate to the achievement of our long term ambitions.
We have identified during the business plan process we can only thrive as a business with continued growth. We require increased critical mass and spread of expertise in order to continue to attract the high value or complex transactions we are targeting.
We are approaching capacity in our building and have identified the need to expand our premises in order to accommodate our plans.
Relocation … would allow us to maintain the efficiencies we enjoy here but with increased facilities and project the positive image of a thriving firm required to attract those who will contribute to our development.
Unfortunately these plans are now untenable due to the Park House development. These premises have effectively become un-assignable given their size, the length of the lease and the effect of the development.
We have explored our options and concluded that leaving these premises vacant or paying compensation to withdraw from our obligations are both currently too expensive.
Each month that passes towards the expiry of our lease reduces these potential obligations by some £100,000.
It follows therefore that the longer we can delay the development the greater the options open to us albeit with a short term requirement for overflow space."
"5. The Claimants claim substantial damages for the tort of abuse of civil process.
6. The Defendant threatened to issue and then issued and pursued two applications for judicial review of planning permissions obtained by the Second and Third Claimants in respect of Wilton Plaza and Park House respectively. In so doing, the Defendant sought to pressurise the Claimants into making financial contributions and assisting it to relocate its business from its premises opposite Park House. The Defendant was not motivated by concern about the lawfulness of the planning permissions and its purpose was not to prevent the developments from taking place, but rather to force the Claimants to assist it to move. That objective was beyond the scope of the judicial review proceedings and amounted to an improper and collateral advantage. That conduct by the Defendant amounts to an abuse of civil process and is tortious.
7. The acts of the Defendant relied on as constituting the tortious conduct are set out in more detail below, but by way of summary:
The Defendant's dominant purpose in threatening and then issuing and pursuing the judicial review proceedings was not to prevent either development, but to bring pressure to bear on the Claimants to force them to assist the Defendant to relocate its business.
The Defendant had no interest in preventing the development at Wilton Plaza, which was some distance away from its premises and would not affect the Defendant at all, but rather objected to that development as a means of bringing pressure on the claimants by impeding the Second Claimant's proposed development of Wilton Plaza and the third Claimant's proposed development of Park House.
In relation to the proposed development at Park House, the Defendant stated in terms that the development itself "looked fine" and that it "wished [the Claimants] well with it".
Although the Defendant expressed concern at the potential of the development at Park House to disrupt and adversely affect its business, it took no steps to discuss the development project with the Claimants in an attempt to minimise that disruption, as would be normal in such circumstances.
The Defendant has never contended that either redevelopment would result in an actionable nuisance in respect of noise and disturbance to the Defendant.
The Defendant sought by means of threatening and then issuing and pursuing the judicial review proceedings to obtain protection from alleged future disturbance of its use and enjoyment of its premises in circumstances where no such protection was available in the law of nuisance or otherwise and sought thereby to exert pressure on the Claimants to facilitate a relocation from its premises.
8. The Claimants have suffered substantial loss as a result of the delay to both developments caused by the Defendant's actions and seek to recover such loss as damages.ouse, the Defendant stated in terms that the development itself "looked "
The Defendants' Applications
The Judgment of the Deputy Judge
"What appears plain is that Fladgate saw that it had a valuable negotiating position vis a vis the claimants and sought to use it to assist to get relocated and that it intended that the assistance should be at some material cost to the claimants and of financial benefit to themselves: it is fair to assume for the purposes of this application that it was this purpose which was driving their actions. It may also have had the additional intention, in the event that it did not reach satisfactory terms with the claimants, to oppose the application to delay it, but I do not have this in mind for the purposes of considering the applications."
"84. The factor which in my judgment breaks down the claimants' argument is the fact that there is an obvious connection between the Credit Resolution passed in relation to the Wilton Plaza application and the use intended to be made of it in relation to the third claimant's application to redevelop Park House. That it was a real connection is evident from the fact that the claimants did not seek to defend the Judicial Review proceedings to the end but instead severed the connection by offering to make payment of some £5.769 million in lieu of affordable housing at Park House to the Westminster Affordable Housing fund and amended both planning applications accordingly.
85. The matters in the preceding paragraphs do to my mind greatly affect what amounts to a collateral purpose for the purposes of the application of the tort to judicial review proceedings. If, as I am satisfied is the case, a property owner is entitled to use judicial review proceedings for the protection of his interest in and enjoyment of his property, why should he not compare the diminution in the value of his interest and enjoyment of his own property, which is likely to attend the development, with the countervailing (and perhaps very substantial) development gain which the developer will enjoy from the same development? Why should it be a collateral purpose if the property owner seeks to use any negotiating position he may have to restore the value he believes he will lose by the development by getting it from the person who caused it – who happens also to be the only person who might be prepared to pay it?"
"(3) The so-called "rule" in bankruptcy is, in truth, no more than an application of a more general rule that court proceedings may not be used or threatened for the purpose of obtaining for the person so using or threatening them some collateral advantage to himself, and not for the purpose for which such proceedings are properly designed and exist; and a party so using or threatening proceedings will be liable to be held guilty of abusing the process of the court and therefore disqualified from invoking the powers of the court by proceedings he has abused."
"Relief in tort under the principle of Grainger v Hill is not, in our judgment, available against a party who, however dishonestly, presents a false case for the purpose of advancing or sustaining his claim or defence in civil proceedings. This may well cause hardship to an injured party who cannot be sufficiently compensated by an appropriate order for costs. However, if there is a gap in the law it rests on sound considerations of public policy, as does the rule of law which gives immunity to witnesses against civil actions based on the falsity of evidence given in judicial proceedings. If the position were otherwise, honest litigants might be deterred from pursuing honest claims or defences and honest witnesses might be deterred from giving evidence…"
"When we look back to the decision of the judges of earlier times … we find it laid down by Holt CJ in Savill v Roberts that there are three heads of damage which will support an action for malicious prosecution. There is damage to a man's person, as when he is taken into custody, whether that be, as in former times, upon mesne process or upon final process, or whether it be upon a criminal charge. To take away a man's liberty is damage, of which the law will take notice. Secondly, to cause a man to put to expense is damage, of which the law will take notice. But Holt CJ adds a third head of damage, and that is where a man's fair fame and credit are injured. This is also a head of damage of which the law will take notice. Under the old law as to bankruptcy it was held that where a man was falsely and maliciously and without reasonable or probable cause made a bankrupt, two kinds of legal injury were inflicted upon him: first, in order to get rid of the bankruptcy, he was obliged to incur expense, and that was an injury; secondly, it was held that to allege of a trader that he was insolvent and liable to be made a bankrupt, was injury to his fair fame and credit, of which the law would take notice. Therefore under the old system of bankruptcy a trader had a good cause of action, if he was made a bankrupt falsely and maliciously and without reasonable or probable cause."
"Thirdly, that a man put to answer an indictment is put to charges is notorious; and if so, it is an injury to his property; and if this injury be occasioned by a malicious prosecution, it is reason and justice he should have an action to repair him the injury …"
"The inquiry must proceed from the premise of the law as it stands. The tort of malicious prosecution is narrowly defined. Telling lies about a defendant is not by itself tortious: Hargreaves v Bretherton  1 QB 45. A moment's reflection will show what welter of undesirable relitigation would be permitted by any different rule… Damage is a necessary ingredient of the tort. This element of the tort was explained in a dictum of Holt CJ in Savill v Roberts (1698) 12 Mod. Rep. 208. Holt CJ defined the interest protected by the tort as follows:
"there are three sorts of damages, any one of which is sufficient to support this action. First, damage to [the plaintiff's] fame, if the matter whereof he be accused be scandalous. Secondly, to his person, whereby he is imprisoned. Thirdly, to his property, whereby he is put to charges and expenses."
"… for essentially practical reasons I am not persuaded that the general extension of the tort to civil proceedings has been shown to be necessary if one takes into account the protection afforded by other related torts…. Instead of embarking on a radical extension of the tort of malicious prosecution I would rely on the capacity of our tort law for pragmatic growth in response to true necessities demonstrated by experience."
"It is a misuse of legal proceedings for a person to use or threaten them for the predominant purpose of obtaining some collateral advantage to himself beyond the proper scope of the proceedings. Such a misuse (traditionally labelled "abuse of process") is both a ground for staying or striking out the proceedings (if the relevant purpose can be established to the necessary standard on a stay/strike out application); and is a wrongful act which, if it causes damage, is actionable as a tort on the Grainger v Hill principle."
Discussion and conclusion
"23. In my judgment, if a claimant has no sufficient private interest to support a claim to standing, then he should not be accorded standing merely because he raises an issue in which there is, objectively speaking, a public interest. As Sedley J said in R v Somerset County Council, Ex p Dixon  JPL 1030, when considering the issue of standing, the court had to ensure that the claimant was not prompted by an ill motive, and was not a mere busybody or a trouble-maker. Thus, if a claimant seeks to challenge a decision in which he has no private law interest, it is difficult to conceive of circumstances in which the court will accord him standing, even where there is a public interest in testing the lawfulness of the decision, if the claimant is acting out of ill-will or for some other improper purpose. It is an abuse of process to permit a claimant to bring a claim in such circumstances. If the real reason why a claimant wishes to challenge a decision in which, objectively, there is a public interest is not that he has a genuine concern about the decision, but some other reason, then that is material to the question whether he should be accorded standing."
"… judicial review applications by would-be developers or objectors to development in planning cases are, by their very nature, driven primarily by commercial or private motive rather than a high-minded concern for the public weal."
Lord Justice Moore-Bick
". . . this is an action for abusing the process of the law, by applying it to extort property from the Plaintiff, and not an action for a malicious arrest or malicious prosecution, . . . In the case of a malicious arrest, the sheriff at least is instructed to pursue the exigency of the writ: here the directions given, to compel the Plaintiff to yield up the register, were no part of the duty enjoined by the writ. If the course pursued by the Defendants is such that there is no precedent of a similar transaction, the Plaintiff's remedy is by an action on the case, applicable to such new and special circumstances; and his complaint being that the process of the law has been abused, to effect an object not within the scope of the process, it is immaterial whether the suit which that process commenced has been determined or not, or whether or not it was founded on reasonable and probable cause."
"It is an action for abusing the process of law, by employing it to extort property to which the Defendants had no right: that is of itself a sufficient cause of action . . . "
"In a civilised society, legal process is the machinery for keeping and doing justice. It can be used properly or it can be abused. It is used properly when it is invoked for the vindication of men's rights or the enforcement of just claims. It is abused when it is diverted from its true course so as to serve extortion or oppression: or to exert pressure so as to achieve an improper end. When it is so abused, it is a tort, a wrong known to the law. The judges can and will intervene to stop it. They will stay the legal process, if they can, before any harm is done. If they cannot stop it in time, and harm is done, they will give damages against the wrongdoer."
"In the instant proceedings the defendants have to show that the plaintiff has an ulterior motive, seeks a collateral advantage for himself beyond what the law offers, is reaching out "to effect an object not within the scope of the process": Grainger v Hill (1838) 4 Bing. (N.C.) 212 , 221 per Tindal C.J. In a phrase, the plaintiff's purpose has to be shown to be not that which the law by granting a remedy offers to fulfil, but one which the law does not recognise as a legitimate use of the remedy sought: see In re Majory  Ch. 600 , 623."
"Men go to law to redress a grievance. They may not know or understand the limits of the remedies provided by law — though no one suggests that Sir James Goldsmith's advisers could be said to suffer from ignorance of the law. But, equally, a man, while pursuing the remedies offered by law, may negotiate to secure, by arrangement with the parties sued, terms more favourable than, or different from, what he would get in the absence of agreement. Such a negotiation, undertaken taken by properly advised parties, each of whom may have a legitimate interest in avoiding litigation and may be prepared to concede more than the law requires of them to achieve that end, does not necessarily mean that the plaintiff by his litigation is reaching out to secure a collateral advantage. In the context of libel, he may reasonably see in settlement a more effective way of protecting his reputation than by action; and, whether he pursues his litigation to judgment, or settles it, he may in either case be seeking no more than the way he thinks best in the circumstances to protect his reputation. Since that is the object of the law of libel (see Gatley on Libel and Slander, 7th ed. (1974), Chap. 1, p. 1, para. 1) it would, in my judgment, need strong evidence that the plaintiff was in fact seeking something beyond the protection and vindication of his reputation before the court could stay his action as an abuse of process."
"For the purpose of Lord Evershed's general rule [sc. the rule in Re Majory], what is meant by a "collateral advantage"? The phrase manifestly cannot embrace every advantage sought or obtained by a litigant which it is beyond the court's power to grant him. Actions are settled quite properly every day on terms which a court could not itself impose upon an unwilling defendant. An apology in libel, an agreement to adhere to a contract of which the court could not order specific performance, an agreement after obstruction of an existing right of way to grant an alternative right of way over the defendant's land — these are a few obvious examples of such proper settlements. In my judgment, one can certainly go so far as to say that when a litigant sues to redress a grievance no object which he may seek to obtain can be condemned as a collateral advantage if it is reasonably related to the provision of some form of redress for that grievance. On the other hand, if it can be shown that a litigant is pursuing an ulterior purpose unrelated to the subject matter of the litigation and that, but for his ulterior purpose, he would not have commenced proceedings at all, that is an abuse of process. These two cases are plain; but there is, I think, a difficult area in between. What if a litigant with a genuine cause of action, which he would wish to pursue in any event, can be shown also to have an ulterior purpose in view as a desired byproduct of the litigation? Can he on that ground be debarred from proceeding? I very much doubt it. But on the view I take of the facts in this case the question does not arise and it is neither necessary nor desirable to try to lay down a precise criterion in the abstract."
"In English law there has long been recognized a form of wrong by malicious use of process—such as by malicious arrest. But in order to maintain an action for malicious use of the process there must have been a termination of the suit in plaintiff's favour. If, however, there has been an abuse of the process, as distinguished from the use of it, it is unnecessary to show any such termination of the suit. If the object sought to be effected by the process is within the lawful scope of the process, it is a use of the process within the meaning of the law, though it may be malicious, or even fraudulent, and in the circumstances the fraud may be an answer; if, however, the object sought to be effected by means of the process is outside the lawful scope of the process, and is fraudulent, then—both circumstances concurring—it is a case of abuse of that process, and the Court will neither enforce nor allow it to afford any protection, and will interpose, if necessary, to prevent its process being made the instrument of abuse. Grainger v. Hill 4 Bing. (N.C.) 242 laid down the distinction."
"In English law the tort of malicious prosecution is not at present generally available in respect of civil proceedings. It has only been admitted in a civil context in a few special cases of abuse of legal process. Sometimes these cases are described as constituting a separate tort of abuse, but in my view Fleming, The Law of Torts, 9th ed. (1998), p. 687 is correct in observing that they "resemble the parent action too much to warrant separate treatment." "
Lord Justice Mummery :
"17. 368 …..The exact shape of this tort remains uncertain and even its existence has been viewed with scepticism. Nevertheless its existence is warranted by Grainger v. Hill where the defendant was made liable for using arrest for debt as a means to force the claimant to give up the registration documents of his vessel without which he could not sail."