England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE CCRTI 96/1418/G

COURT OF APPEAL (CIVIL DIVISION )

((His Honour Judge Byrt QC)

Royal Courts of Justice

Strand

London WC2

Friday, 25th April 1997

B e f o r e :

LORD JUSTICE HIRST

LORD JUSTICE PHILLIPS

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SUSAN HUNTER

Plaintiff

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VICTOR SKINGLEY

Defendant

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(Computer Aided Transcript of the Stenograph Notes of

Smith Bernal Reporting Limited

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MR. R. BAILEY-KING (instructed by Messrs Shindler & Co., London, EC3) appeared on behalf of the Appellant/Plaintiff.

MR. M. RIVALLAND (instructed by Messrs Stoffel & Co., London, SE6) appeared on behalf of the Respondent/Defendant.

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J U D G M E N T (As approved by the Court)

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Crown Copyright

LORD JUSTICE HIRST: This is an appeal by the plaintiff, Susan Hunter, against the decision of His Honour Judge Byrt QC in the Mayors and City of London County Court on 16th September 1996, whereby he allowed an appeal from the decision of District Judge Samuels rejecting the application of the defendant, Victor Skingley, for the dismissal of the plaintiff's action for want of prosecution, and ordered that all further proceedings consequent upon the judgment against the defendant, dated 9th June 1988, should be stayed.

The facts are that between February and April 1987 the first defendant carried out building works for the plaintiff at 25, High Street, London, SW1. I note in parenthesis that originally there was a second defendant, Rita Skingley, but the case is no longer effective as far as she is concerned. On 10th November 1987 a writ was issued endorsed with a claim for damages for breach of contract in the sum of £18,623.41. The statement of claim specified the claim as being "for damages for breach of written or oral contracts, made on or about 13th March 1987 and subsequently, to repair the house, being the property of the plaintiff", and then a claim against the second defendant which does not matter. On 26th November 1987 a summons under O.14 was issued. That was heard on 17th May 1988 by Master Grant who gave the first defendant ("the defendant") leave to defend conditional on paying £8,000 into court within 14 days, and also ordering that the action should be transferred to the Mayors and City of London County Court.

On 31st May 1988 the 14 day time period for payment expired without any payment having been made. As a result, on 9th June 1988 the plaintiff entered final judgment against the first defendant for damages to be assessed. Shortly afterwards in September, Master Grant gave directions for affidavit evidence to be used at the hearing of the assessment. At or before this juncture, remarkably -- this gives the case its somewhat unusual aspect -- the defendant completely disappeared for more than two years without leaving an address. However, he resurfaced on 27th July 1990 when he applied for an extension of time for appealing from Master Grant's order and for Master Grant's judgment to be set aside. That application was supported by an affidavit sworn at the end of July 1990 on which Mr. Rivalland, on the defendant's behalf, placed strong reliance, and to which I shall be referring later in this judgment. That application was heard by Morland J sitting as judge in chambers on 31st July, leave to appeal out of time was refused, and the application to set the judgment aside was dismissed.

There was then an ex parte application on paper to a single Lord Justice for leave to appeal which was granted by Slade LJ, but was subsequently on 11th February 1991 set aside on an inter partes hearing before Lord Donaldson M.R. In May 1992 the first defendant's solicitor called for mutual discovery by exchanges of lists. After some to'ing and fro'ing, in November 1992 there was an agreement for mutual discovery by way of the exchange of lists. On 16th November 1992 the summons for directions was issued. The summons was heard and directions were given. On 26th April 1993, Master Grant having sadly died, and following a short hiatus while another Master was appointed to take over his lists, there was a trial before Master Rose of a preliminary issue, namely whether the defendant was debarred by way of issue estoppel or otherwise from asserting that the nature of the contract which he entered into with the plaintiff was not a fixed price contract as had been originally intended, but (by agreed variation) was a contract for labour and materials at agreed rates. It was held that the first defendant was not so debarred.

That point marks a stage in the action which is of some importance because, as will be apparent when I refer to the judge's judgment, he held that up to that stage the plaintiff was in no way culpable for what amounted to about five and a half years of delay, the first two years of which he blamed fairly and squarely on the defendant. Thereafter, there were two periods of delay, first, from April 1993 to May 1994, and the second from September 1994 to February 1996, for which, as will shortly appear, the judge held the plaintiff was culpably responsible. On 4th March 1996 the present summons to strike out was issued.

In his judgment the judge first went through the period of five and a half years or so up to April 1993, and he said this:

"During this first part of the period I have been talking about, there was substantial delay caused by the disappearance of the defendant and there is no denying that he is entirely responsible for the delays that occurred during that period. It was well-nigh impossible for the plaintiff to progress her case in any meaningful way in his absence. Thereafter there was a further period of delay in which the defendant took certain legitimate steps [he described them, such as challenging the judgment and so on]. One way or another this period of time, lasting some five and a half years, was a period of delay which was in no way the fault of the plaintiff. In part, it consisted of a period of time when the defendant himself was taking steps which he was entitled to take, but necessarily caused a protraction of these proceedings.

That period came to an end on 26 April 1993..."

He then referred to the first period of delay for which he held the plaintiff entirely responsible, (26th April 1993 to 11th May 1994), and said that this constituted inordinate delay and that no excuse was advanced as to why it took place. He then said that there was a flurry of activity between May and September 1994, and went on to consider the second of the plaintiff's periods of delay between September 1994 and February 1996, as follows:

"Excuses in relation to that period of time were advanced in the [plaintiff's solicitor's affidavit]. The expert the plaintiff intended to rely upon, Mr Westlake, was taken seriously ill and the plaintiff was faced with the decision whether to go to another surveyor and incur major costs and expense again. There was the additional factor that the second expert would be in an even more difficult position to be able to give a proper assessment of the valuation than Mr Westlake had been. Faced with this problem, the plaintiff decided to await Mr Westlake's recovery and that is the reason advanced for this second period of delay."

The judge then directed himself correctly under the well known principles laid down in Birkett v. James , and having held that those two periods of delay on the plaintiff's part were inordinate and inexcusable, he went on to consider the question of prejudice and the possibility of holding a fair trial, and said this:

"The case advanced on behalf of the defence by Mr Rivalland, is that as a result of the delays, three important witnesses he would have sought to call at a hearing have either died or disappeared. There was one witness, a subcontractor, who died in 1988. There was another subcontractor who died in the May of this year, 1996; and there was a third contractor who has disappeared, following completion of his work for the plaintiff and has not been and cannot be traced. It is said that as a result of the delay, those three witnesses are no longer available. [Counsel, in addition, relies on the fact that the memories of the plaintiff and the defendant -- the only two remaining witnesses who can help in this case -- have necessarily been dimmed by the passage of time."

The judge then said:

"A problem arises because there has been a very substantial period of delay, caused by the defendant himself."

He then summarized the five and a half years again and concluded:

"...anybody who is engaged in litigation in this court will know that over a period of five and a half years the recollection of any witnesses who can talk about the facts of a case is seriously affected, so much so that one is entitled to ask as to whether at that distance of time a fair trial can be conducted."

The judge went on to consider further arguments put forward on behalf of the defendant and cited a passage from Lord Browne Wilkinson's speech in Roebuck v. Mungovin [1994] 2 AC 224 with which the other members of the appellate committee agreed, at page 234F: having considered whether it was necessary to adduce specific evidence that the prejudice flowed from the loss of memory at some later period on the facts of that case, Lord Browne Wilkinson stated:

"I have no doubt that such evidence is not necessary and that a judge could infer that any substantial delay at whatever period leads to a further loss of recollection but, even so, the attempt to allocate prejudice to one rather than another period of delay is artificial and unsatisfactory."

It is that last phrase which particularly influenced the judge, and the rest of his judgment proceeded on that basis. The judge continued:

"At the end of the day one has to ask oneself, in a case where the plaintiff has been guilty of substantial, inordinate and inexcusable delay, whether a fair trial remains possible."

He concluded as follows:

"I have considered whether it would be fairest, in that both have been responsible for the delays which have occurred in this case, that the parties should be afforded the opportunity of shaping up against each other in court, as the only two remaining witnesses as to fact, and leaving it to the court to decide who was telling the truth, who was the most reliable witness, and letting the parties have a decision of the court in that way. But that would mean that the outcome would be something of a lottery and that is not the way our courts decide their cases. It would clearly be wrong to leave the contest to chance in that way. There is no doubt about it, that the delays overall here have been long and substantial. It is impossible for me to say that the most serious prejudice, namely the dimming of the parties' own recollections, has not been substantially made worse by the delays which the plaintiff has been responsible for. It has significantly affected the problem and added to it. In all the circumstances, I think it would be wrong for me to let this case progress further."

The Birkett v. James test, which is so well known as to scarcely need mention, is that (a) there has been inordinate and inexcusable delay on behalf of the plaintiff or his lawyers, and (b) that such delay would give rise to the substantial risk that it is not possible to have a fair trial of the issues of the action or is likely to cause or to have caused serious prejudice to the defendant. It is well settled that the decision on a matter of this kind is one for the discretion of the judge, and that the Court of Appeal should not interfere unless the judge has committed an error of principle or was otherwise plainly wrong.

Mr. Bailey-King, on behalf of the plaintiff, submitted that the judge did err in principle in his approach to the period of delay of over two years at the start of the whole period, for which the judge held that the defendant was culpably responsible, together with the ensuing period of three years or so when the plaintiff was not to blame. He drew our attention to the principle summarised in the notes in the Supreme Court Practice 1997, page 465, where there is the following paragraph numbered 7, headed

"Both to blame..

The court will look at the conduct of both parties. If the defendant has considerably contributed to the delay or, a fortiori, has actually agreed to it, he will seldom obtain the dismissal of the action."

Then two authorities for that are cited. Although here there was no actual agreement to the delay, there was clearly a considerable contribution to it by the defendant.

Mr. Bailey-King then contended that the judge was wrong in applying the dictum of Lord Browne Wilkinson in Roebuck v Mungovin to a case like the present where both sides are potentially to blame, in which case, Mr. Bailey-King submitted, it is not artificial to allocate prejudice in relation to the periods for which the parties are respectively responsible. He concluded this section of his argument by submitting that there was a fundamental unfairness to the plaintiff in treating the timescale as starting with the inception of the action when, in fact, the case had hardly got off the ground through no fault of hers until the middle of 1993.

Mr. Rivalland, on behalf of the defendant, submitted that the judge's approach was correct and that the proper approach is to examine the entire period, starting with the issue of the writ, and that if the plaintiff's inordinate or inexcusable delay added more than minimally to the prejudice already caused and however caused, and also added to the risk of it being impossible to conduct a fair trial either because of the dimming of memories of witnesses or because of the non-availability of witnesses, then the defendant was not debarred from succeeding in his application.

In considering these rival submissions, I do not in any way detract from the force and validity of Lord Browne Wilkinson's dictum in Roebuck v Mungovin: but that case was only concerned with the allocation of prejudice between the various periods of the plaintiff's delay in a case where the plaintiff was solely and entirely responsible for the delay which had occurred. In those circumstances, of course, an allocation of prejudice to one rather than to another period is artificial and unsatisfactory. Here, however, the defendant was seriously to blame for part of the delay, as the judge held. In those circumstances, it seems to me not only proper but necessary to consider the various periods of delay and the various items of alleged prejudice, and to decide, where possible, to whose fault they are attributable: and that, in these special circumstance, where the defendant has been responsible for some of the delay himself, such allocation is not artificial. I would also adopt as correct the note in the Supreme Court Practice which I have already quoted.

It follows that the judge did unfortunately, in my judgment, err in principle. Consequently, as is common ground between the parties in such a situation, it is appropriate for the court to re- assess the case and to exercise a discretion afresh.

I first consider the question of whether the plaintiff was guilty of inordinate and inexcusable delay in the two periods identified by the judge from 1993 onwards.

In the first period of just over a year, from April 1993 to May 1994, no explanation was proffered on the plaintiff's behalf. But so far as the second period was concerned, September 1994 to February 1996, an explanation was proffered, namely the illness of the plaintiff's expert, Mr. Westlake. That Mr. Westlake was ill is in no way challenged in point of fact by the defendant, and the judge indeed recorded it in his judgment, as I have already noted, but did not make any express finding as to whether or not it was a valid explanation. In my judgment, Mr. Westlake is clearly a crucial witness, not merely as an expert, but also as a witness of fact, since he inspected the premises at the relevant time and is in a position to give first hand evidence of their condition, of the quality of the work done, and of any work which ought to have been done but was not done. In my view it would have been unthinkable to try and replace him so long after the event with another expert who would not have seen the premises at the crucial time, so long as Mr. Westlake was potentially available once he had recovered from his illness. It follows that I think that a valid explanation was proffered for the second of the plaintiff's two periods of delay. Consequently, that second period should be discounted.

That leaves the first period only, just over one year. It is not suggested that it was excusable. I am prepared to accept the judge's conclusion that it was inordinate, though I think it was somewhat near the borderline. However, it is proportionately very short in duration when judged in the light of the totality of the delay.

I now turn to the question of prejudice. Although judgment has been obtained by the plaintiff on liability and all that is left is an assessment of damages, it is plain that there are substantial issues of fact which arise on the assessment of damages, particularly in the light of Master Rose's order of 26th April 1993, which was not appealed, and which left the defendant free to present his case on the nature of the contract on the footing that it was not a fixed price contract but, by an agreed variation, a contract for labour and materials at agreed rates. The outstanding issues include the nature of the contract as just mentioned, the degree of completion of the works, the existence or otherwise of defects in workmanship, and the extent to which the plaintiff ordered extras or countermanded previous instructions. All these matters are fully set out in considerable detail in the defendant's affidavit to which I have already referred, which was sworn in 1990 for the purpose of the application to set aside Master Grant's order, and which Mr. Rivalland very properly was extremely anxious we should read, as we did.

Under this heading of prejudice, two main considerations arise, firstly, the loss or diminution or dimming of memory and, secondly, the non- availability of witnesses. In this case, while the evidence on some of the issues is either visually apparent from inspection of the premises, or is documented, or is covered by the two expert witnesses' reports, the determination of other issues, as Mr. Rivalland fairly points out, will depend upon resolving conflicting testimony in which inevitably memories will have dimmed over the years.

So far as the availability of witnesses is concerned, the two chief protagonists, namely the plaintiff and the defendant, are still available. But the three witnesses, to whom the judge referred in one of the passages which I have quoted from his judgment, are no longer available, and while I do not go so far as to agree with Mr. Rivalland that they are vital witnesses, there are, as explained in the defendant's affidavit, some questions on which their evidence would have been significant.

I first consider diminution or dimming of memory. That is essentially a function of time. The first period, 1988 to 1990, over two years, is clearly very important in this context, as that would be the time when memories would be freshest and when full statements can and should have been taken from the witnesses by the defendant's solicitors. I would add that in the case of the three missing witnesses, had that been done there would have been statements which would no doubt have been admissible under the Civil Evidence Act. For that important period in this context the defendant only has himself to blame.

During the second period, July 1990 to April 1993, no doubt there must have been a further dimming of memories, but that is a period also for which the plaintiff is not to blame, as the judge held. I do not accept Mr. Rivalland's submission that the plaintiff can be criticised for not setting the case down at that stage, which was certainly not the judge's view, since he made it expressly clear that the plaintiff was free of any blame throughout the first five and a half years.

Then comes the plaintiff's only period of inordinate and inexcusable delay, April 1993 to May 1994, which is followed by the final period until today for which, for the reasons I have given, neither side was to blame. In my judgment, the extent of the contribution towards the dimming of memories which could properly be attributed to the plaintiff's blameworthiness is very small.

As far as the availability of witnesses is concerned, Mr. Street, a subcontractor, died in 1988 during the defendant's period of culpable delay, so that any prejudice in his case is not attributable to the plaintiff. Mr. Thompson, another subcontractor, has disappeared, and that is due to no fault of the plaintiff since it was the defendant's responsibility to keep in touch with his own witnesses. Mr. Armstrong, the third subcontractor witness, died in 1996, so that in so far as the plaintiff's culpability contributed to the overall delay, she must no doubt bear responsibility for his no longer being available. However, overall, when looking at the three missing witnesses collectively, the plaintiff's share of the blame is small.

It follows from this analysis that the prejudice for which the plaintiff was responsible is, to my mind, at most marginal and notably less than the defendant's contribution, especially in relation to the loss of memory during the first two years when recollections must have been freshest and when statements should have been taken from everybody, including the three missing witnesses. It would therefore offend against my sense of justice that the defendant should reap the benefit of a delay for which he bore the greater responsibility so long as a fair trial is not impossible to conduct.

I therefore ask the final and very important question, whether it is still possible to have a fair trial, which the judge said would be a lottery. As I have already said, much of the evidence is either visible on the premises, and/or documented and/or covered by the experts' reports.

On the remaining issues, where conflicting recollections will need to be resolved, it seems to me that with the two main protagonists still available, it is by no means impossible for a fair trial to take place even without the three missing witnesses. It is noteworthy that the defendant has carefully explained his version of the crucial issues in the affidavit he swore in 1990, to which I have already referred, and from which he will be able to refresh his memory. Any dimming of the memory of the plaintiff, on whom the burden of proof on quantum lies, will redound to her disadvantage rather than to the defendant's.

It follows that, in exercising a fresh discretion, I would decline to accede to the defendant's application, and I would therefore allow this appeal.

LORD JUSTICE PHILLIPS: I agree. This is a striking out case of unusual facts. The plaintiff issued her writ in November 1987. It was for breach of contract by the defendant in the performance of building works at her home.

It was of such strength that, on an application for summary judgment, the defendant was only given leave to defend on condition that he paid £8,000 into court. He did not satisfy that condition but vanished without leaving a forwarding address. The plaintiff signed judgment for damages to be assessed, but, in the absence of any trace of the defendant, did not proceed to attempt to prove her claim in his absence. She may well have thought that the costs of this exercise could not, in those circumstances, be justified. At all events, the judge found that:

"... there was substantial delay caused by the disappearance of the defendant and there is no denying that he is entirely responsible for the delays that occurred during that period. It was well-nigh impossible for the plaintiff to progress her case in any meaningful way in his absence."

It must be a rare case where the court finds that substantial delay is attributable to the fault of a defendant, but this is such a case. Mr. Rivalland for the defendant has conceded that delay from February 1988 to July 1990 was attributable to the culpable default of his client.

In my judgment, this was a particularly significant period of inertia. It is the defendant's case that there were three important witnesses of fact, his subcontractors. In addition to making a careful record of his own recollection, proper preparation of his defence should have led him to take statements from these witnesses while events were still fresh in their minds. In the event, one of these witnesses died during this period and the defendant failed to keep track of the second, who has never been traced.

By April 1993 six years had passed since the material events, and Mr Rivalland does not challenge the judge's finding that at this stage the plaintiff had been guilty of no inordinate and inexcusable delay.

That delay came thereafter. No excuse has been advanced for the 13 months delay between April 1993 and May 1994. Between September 1994 and February 1996 delay occurred which, on the plaintiff's evidence, was attributable to the serious illness of her principal witness, Mr. Westlake. He was not merely an expert witness, but a contemporary witness of the facts upon which his expert evidence was based. I agree with my Lord that it is hard to see why the judge did not consider that the illness of this witness excused delay at this point. His judgment gives no explanation for this.

In May 1996 the third of the defendant's potential witnesses died. He was an electrician. No statement appears to have been taken from him as to the material events, and it must be a matter of some conjecture as to how much light his evidence could have thrown on the issues.

The judge found that the speech of Lord Browne-Wilkinson in Roebuck v Mungovin [1994] 2 AC supported the following proposition:

"...an attempt to allocate prejudice to one rather than another period of delay is artificial and unsatisfactory. At the end of the day one has to ask oneself, in a case where the plaintiff has been guilty of substantial, inordinate, and inexcusable delay, whether a fair trial remains possible."

In most cases dealing simply, as Lord Browne-Wilkinson was, with prejudice resulting from the dimming of memory, this approach will be apt. But this case turns not simply on dimming of memory but involves the unusual feature of a substantial period of inertia at an early stage being due to the culpable fault of the defendant. In these circumstances, I consider that the judge erred in principle in not considering whether it was possible to determine whose fault was substantially responsible for such prejudice as has been caused to the defendant by the passage of time. If that is right, then it is for this court to pose and answer that question. For the reasons that I have given, I consider that the substantial responsibility falls upon the defendant. Exercising my discretion in place of the judge, I would not strike out the plaintiff's case in such circumstances. I also would allow this appeal.