Cardiff Civil Justice Centre
2 Park Street
B e f o r e :
|CHRISTOPHER MICHAEL EATON||Claimant|
|MITCHELLS & BUTLER PLC||Defendants|
Cater Walsh Reporting Ltd., 1st Floor, Paddington House
New Road, Kidderminster, DY10 1AL. Official Court
Crown Copyright ©
JUDGE KEYSER QC:
The defendant's application
"The cause of action arose, and was vested in the deceased lad, at the moment when he was injured … That chose in action was his. … If he had left a will, it would at the moment of his death automatically have vested in his executor. As he died intestate, it vested in the President of the Probate, Divorce and Admiralty Division, and remained in him until letters of administration were issued. Then - and not before - it would automatically pass from the President to the administrator. As the writ was issued on September 17, 1942, and there was no grant till November, it follows, necessarily, that at the time of writ issued the plaintiff had no shadow of title to his son's surviving chose in action, in respect of which he purported to issue a writ, falsely (although no doubt quite innocently) alleging that he issued it as administrator. It purported to launch a representative action under Or. III, r. 4 - an action in which he confessed, first, that he was not suing in his own right, and, secondly, that he had no right in that action to prosecute any claim except in his representative capacity. … Such an action was, in my opinion, incapable of conversion by amendment into a valid action - just as much so as if he had issued a personal writ claiming to be lawfully possessed of the estate of the deceased and had subsequently asked leave to amend by substituting a representative claim. It is true that when he got his title by the grant of administration he prima facie became entitled to sue, and could then have issued a new writ, but that was all. An application by him to treat the original writ of September 17 as retrospectively valid from that date would have been refused by the court, not only because it might prejudice existing rights of defence, but because it would not be permissible under the Rules of the Supreme Court or the Judicature Acts. The old writ was, in truth, incurably a nullity. It was born dead and could not be revived. If that conclusion is right it follows equally that the statement of claim was not delivered in any action recognized by the Rules of the Supreme Court, and all subsequent proceedings in the supposed action, including the judgment of the learned county court judge, were likewise nugatory, for, if the action and the pleadings were bad, there was no valid action before the learned judge to try and it is our duty to say so."
At 166 Scott LJ said:
"It follows that on the issue raised by each plea he is driven back to the same replication, viz. the doctrine of relation back but, in my opinion, that doctrine does not help him on either plea. If the writ was bad when issued, the action was never commenced."
These passages put the matter in two related but not obviously identical ways: first, the plaintiff did not have the cause of action when he commenced proceedings and his later obtaining of the cause of action did not render the claim good; second, the writ was a nullity and there was no valid action before the learned judge to try. The second way of putting the matter goes beyond the first matter unless nullity is merely a way of saying that the plaintiff did not have the cause of action he claimed to have. For my part, respectfully, I should think that the first way sufficed and that it was enough to say that the trial judge had a valid case to hear, in that there was something to try and give judgment on, even if the result had to go one way.
"It is true that, when a grant of administration is made, the intestate's estate, including all choses in action, vests in the person to whom the grant is made, and the title thereto then relates back to the date of the intestate's death, but there is no doubt that both at common law and in equity, in order to maintain an action the plaintiff must have a cause of action vested in him at the date of the issue of the writ."
That, as it seems to me, is the critical point in Ingall v. Moran. At 169 Luxmore LJ said:
"I have no doubt that the plaintiff's action was incompetent at the date when the writ was issued and that the doctrine of the relation back of an administrator's title to his intestate's property to the date of the intestate's death when the grant has been obtained cannot be invoked so as to render an action competent which was incompetent when the writ was issued. In my judgment, the learned judge was wrong in coming to the contrary conclusion. It follows that no proper action was commenced before the statutory period of limitation expired."
Goddard LJ said at 170: "The question is whether he was entitled to sue when he did. If he was not it follows that the action is bad as being brought by a person who had no title to sue and no other question will arise". At 172 he said: "The result is that this action was and always remained incompetent and judgment ought to have been entered for the defendant."
"It is agreed that Judge Langan was correct that, subject only to any help that the claimants may derive from Part 19.8(1), their claim was a nullity that must be struck out and could not be retrospectively validated by a grant of letters of administration. That is because whereas an executor derives his title to sue from the will and not from the grant of probate—and so can validly sue before obtaining a grant (although he will have to obtain it later in order to prove his title)—an administrator derives his title to sue solely from the grant of administration (see Chetty v. Chetty  1 AC 603, at 608, 609, per Lord Parker of Waddington)."
At  he said that the point was illustrated by Ingall v. Moran, and at  he continued:
"I regard it as clear law, at least since Ingall, that an action commenced by a claimant purportedly as an administrator, when the claimant does not have that capacity, is a nullity. That principle was recognised and applied by this court in Hilton v. Sutton Steam Laundry  KB 65 (per Lord Greene MR, at 71) and Burns v. Campbell  1 KB 15 (per Denning LJ, at 17, and Hodson LJ, at 18). In Finnegan v. Cementation Co. Ltd  1 QB 688, Jenkins LJ said, at 700:
'As to the law, so far as this court is concerned it seems to me to be settled by Ingall v. Moran and Hilton v. Sutton Steam Laundry and, I may add, by Burns v. Campbell, that an action commenced by a plaintiff in a representative capacity which the plaintiff does not in fact possess is a nullity, and, further, that it makes no difference that the claim made in such an action is a claim under the Fatal Accidents Acts which the plaintiff could have supported in a personal capacity as being one of the dependants to whom the benefit of the Acts extends.'"
Hooper LJ agreed with Rimer LJ, as did Lord Neuberger MR, who said at :
"[W]hatever one's views of the value of the principle applied and approved in Ingall v. Moran  KB 160, it is a well-established principle, and, once one concludes that it has not been abrogated by CPR Part 19.8, it was the judge's duty to follow it, as it is the duty of this court, at least in the absence of any powerful contrary reason. The need for consistency, clarity and adherence to the established principles is much greater than the avoidance of a technical rule, particularly one which has a discernible purpose, namely to ensure that an action is brought by an appropriate claimant."
"As a general rule the only cases in which decisions should be held to have been given per incuriam are those of decisions given in ignorance or forgetfulness of some inconsistent statutory provision or of some authority binding on the court concerned: so that in such cases some part of the decision or some step in the reasoning on which it is based is found, on that account, to be demonstrably wrong. This definition is not necessarily exhaustive, but cases not strictly within it which can properly be held to have been decided per incuriam must, in our judgment, consistently with the stare decisis rule which is an essential feature of our law, be, in the language of Lord Greene M.R., of the rarest occurrence."
More recently, in Lloyd v. London Borough of Lewisham  EWCA Civ 923, in the context of failure to refer to a specific statutory provision, Arden LJ, with whose judgment Jackson and McCombe LJJ agreed, cited Morelle v. Wakeling and said:
"For an omission to consider a particular provision to result in a decision being per incuriam it must be shown that the provision means that the conclusion that was reached cannot stand".
To put the point shortly: it would not be open to me, sitting as I am in the county court, to decline to follow a decision of the Court of Appeal or the High Court simply on the ground that I might think the decision a bad one or even wrong; that would be a recipe for anarchy. I can refuse to follow an otherwise binding decision only on the basis that it involves a clear and certain mistake, whether of logic or of oversight of an incontrovertible principle or rule of law that is determinative of the case and dictates a different result.
"Mr Symons relied on the decision of this court in Ingall v Moran  KB 160. But that decision was on a different point (change of capacity); was described (while still extant) as a blot on English jurisprudence; and has since been overturned by section 35(7) of the Limitation Act 1980 and CPR r 17.4(4). So far as it embodied any larger principle it has been overtaken by the modern approach as described by Evans LJ in Hendry v Chartsearch Ltd  CLC 1382, para 23. In that case this court disapproved the more rigid approach adopted in Eshelby v Federated European Bank Ltd  1 KB 254."
The other members of the court, Carnwath and Schiemann LJJ, expressly agreed with Robert Walker LJ on this point, although they disagreed with him on a different matter.
"I would reject this submission. The scope of the RSC has been extended since the days when Eshelby was decided in 1932. In accordance with modern practice generally, the court has a general discretion which should not be restricted by hard-and-fast rules of practice, if not of law, such as that which is suggested here. The judge therefore was wrong to consider that the court had no power to give leave to make the re-amendment. In my view, he was wrong also to consider that the discretion was somehow restricted by what he called 'the principle set out in Eshelby and in Roban' (page 22). It is a general power which in modern parlance has to be exercised in accordance with the justice of the case."
"The central question on this appeal is not, pace Mr. Evans for the third defendant, the effect of the bankruptcy order upon the rights of the bankrupt in relation to the property owned by him. That effect is plain, having regard to section 306 of the Insolvency Act 1986, which vested in the trustee in bankruptcy property such as the bankrupt's claimed interest in 18, Arundel Gardens, Ilford on the bankruptcy. Instead the question to be answered is whether the bankrupt had the capacity to retain a solicitor to commence the proceedings which he did commence. Those proceedings are not a nullity such as would have been the case if the plaintiff did not exist. But they were liable to be stayed or struck out because the bankrupt did not have any interest in the property, such interest as he did have prior to the bankruptcy order having vested in the trustee in bankruptcy. They might be stayed pending the decision of the trustee in bankruptcy to take over the proceedings. Alternatively if the trustee did not wish to do so, a defendant could apply to strike out the action."
It can be said that that passage is obiter dictum. But, given its source and (with respect) the clarity and force of its reasoning, it is not to be brushed aside. Mr. Mitchell also says that the dictum is inconsistent with Ingall v. Moran. However, it is consistent with the approach in Smith v. Henniker-Major & Co and Hendry v. Chartsearch Ltd. It is also, as will be seen, consistent with the approach that has always been taken by the Court of Appeal in the bankruptcy cases, at least in modern times. In my judgment, Peter Gibson LJ was not nodding Homerically; he was expressing the usual understanding of the position.
"So I turn to consider the basis on which it is said that the proceedings in this case were an abuse. In my view the starting point is that where a man starts proceedings knowing that the cause of action is vested in someone else, then it is hard to see why those proceedings are not an abuse. He has started proceedings in which, even if he proves all the facts he wants to prove and establishes all the law he wants to establish, he will still lose because he does not have a right to sue. It is hard to see how that cannot be an abuse. Only people who own causes of action, or who have an appropriate interest in proceedings, have any business asserting the cause of action or starting proceedings. Any other use of the court's proceedings is improper. The position would be likely to be otherwise if the claimant does not know, or is uncertain, as to whether he has title to the relevant cause of action. In those circumstances, at least until it is authoritatively determined that the claimant does not own the cause of action, it may well not be appropriate to characterise the proceedings as an abuse, but that is different from the case currently under consideration."
"26. That being the case, I think that it provides the answer to the second of the two questions before us, namely whether permission to amend to plead the cause of action ought to have been given. The purist view might well be that proceedings which are started by someone without the relevant cause of action vested in them are fundamentally technically flawed and cannot be saved by a subsequent assignment and pleading of that assignment. While amendments are to some extent retrospective in their effect, that retrospectivity does not affect the date from which the assignment vests the cause of action in the claimant, so that as at the date of commencement of proceedings he still did not have the relevant cause of action in his hands on which the court is asked to adjudicate. However, if that is the purist view, it has been overtaken by the practical one adopted by the courts which allow such a thing – see the cases gathered together and cited in Smith v Henniker-Major & Co  BCC 544 at 553-4. Permission can apparently even be given where a limitation period expires after a failed assignment – see Smith v Henniker-Major on appeal at  Ch 182.
27. However, it would in my view be wrong to grant that permission. A permitted amendment would not so much cure the abuse of process as be a reward for it. It seems to me to be wrong in principle to confer such rewards on those who act in that way. This is not a point which is dealt with in Smith v Henniker-Major at either level. That case had some elements in common with the case before us - the claimant did not have the cause of action vested in him at the date that he sued (albeit that in that case it was because of an invalid assignment) and he sought to fix the problem by taking a later assignment and then amending to plead it. However, the factual basis on which that case was proceeding did not seem to include the fact that the claimant knew that he did not have the cause of action when he started his proceedings. The debate about amendment therefore did not take place against a background of a finding of abuse of process. The case therefore does not help us, and certainly contains nothing to gainsay what I consider to be the proper approach as set out at the beginning of this paragraph.
28. The learned judge … therefore failed to take a central point into account and it falls us to consider the exercise of the discretion afresh. For the reasons just given I would determine it against the claimant and refuse him permission to amend to plead the assignment."
"(1) This rule applies where (a) a party applies to amend his statement of case in one of the ways mentioned in this rule, and (b) a period of limitation has expired."
"(4) The court may allow an amendment to alter the capacity in which a party claims if the new capacity is one which that party had when the proceedings were started or has since acquired."
The decision in the case was that r. 17.4(4) did not apply, because the claimant's capacity was unaltered. In this context capacity was taken to refer to the question whether one sued in a personal capacity or in any one of however large a number of representative capacities. The claimant in Haq v Singh had sued and proposed still to sue in a personal capacity. The rule, therefore, was not engaged.
"15. Where a bankrupt is commencing or pursuing a claim which he knows he does not have the abuse of process in commencing or pursuing that claim is obvious. No claimant is entitled to sue on a right which he knows belongs to someone else. The abuse lies in knowingly pursuing a claim which, as at presently constituted, is bound to fail. The abuse does, however, depend on actual knowledge of the lack of title to the cause of action, not on what he or she ought to have known.
16. Nevertheless, where an action is commenced or continued after the cause of action has vested in a trustee in bankruptcy the action does not abate and the position is capable of being regularised by the joinder of the trustee or by the taking of an assignment from him. Whether the court will permit that to happen will involve in exercise of discretion. It will be necessary to have regard to the interests of those likely to be affected, including the creditors in the bankruptcy. The court would be likely to stay the action until the position in the bankruptcy is clarified."
That passage treats the commencement and continuance of proceedings as materially similar, in that each situation raises the question of abuse of process. The reasoning is entirely inconsistent with supposition that the commencement case—that is, a case such as the present—ipso facto involves a nullity in the sense of an incurable defect. There is no proper basis for saying that this decision, which is consistent with Pickthall and with all the other bankruptcy cases, was decided per incuriam.
"It follows, in my judgment, that there was in fact no abuse of process established either in the claimant's issuing these proceedings or in continuing these proceedings. I think it is important to add that this does not mean that the Court is powerless to stop claims going forward where a claimant in fact has no standing but due to erroneous advice of his lawyers wrongly believes he does. In order to succeed at trial, a claimant must, of course, not only show that there is a good claim vested in someone but that it is vested in him. If, therefore, it an be shown that the claim, whether good or bad, is incontrovertibly not vested in him and for that reason the action is doomed to failure, whatever its merits, the court must be in a position to stop the claim proceeding to trial. I do not see any procedural difficulty in this. The defendant in an appropriate case can apply to strike the claim out on the basis that the statement of case discloses no reasonable cause of action, see CPR rule 3.4(2)(a), or can apply for what is often called reverse summary judgment, see CPR Part 24, or can apply to have the matter determined as a preliminary issue. All that I have decided is that he cannot strike out on the basis that there is an abuse of the Pickthall type unless he establishes that the claimant either brought or continued the action knowing that the cause of action was not vested in him. Of course, if the Court rules, despite the claimant's advisers' best endeavours, that the cause of action is not vested in him, then it would constitute an abuse for the claimant to continue with the action thereafter, at any rate if the position could not be cured."