England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE QBENI 97/1399/E

Royal Courts of Justice

Strand, London WC2

Friday, 23rd January 1998

B e f o r e :

LORD JUSTICE AULD and

SIR JOHN BALCOMBE

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HEINZ MICHAEL SIMON CAMPBELL

(by his Mother and Next Friend, Beatie Dorothea Campbell)

Plaintiff/Respondent

-v-

MICHAEL ROBINSON MYLCHREEST

Defendant/Appellant

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MR R DAVIES QC and MR C CORY-WRIGHT (instructed by Messrs Edward Lewis, London WC1) appeared on behalf of the Appellant Defendant.

MR C MACKAY QC and MR D BRADLY (instructed by Messrs Osborne Morris & Morgan, Leighton Buzzard) appeared on behalf of the Respondent Plaintiff.

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J U D G M E N T

(As Approved by the Court)

Crown Copyright

Friday, 23rd January 1998

LORD JUSTICE AULD: Sir John Balcombe will give the first judgment.

SIR JOHN BALCOMBE: This is an appeal, with the leave of the full court, from an order made by Mr Justice Blofeld on 2nd October 1997, when he ordered that the defendant should make an interim payment of £100,000 (out of monies currently standing in court) to the plaintiff. The money was in fact to be paid to the Court of Protection for the benefit of the plaintiff. The full court also stayed execution of Mr Justice Blofeld's order pending this appeal.

The plaintiff, Simon Campbell, a resident of the Isle of Wight, sustained a catastrophic head injury in a road traffic accident on 5th April 1995. He was a passenger in a car driven by his fiancée, Lisa Mylchreest, the daughter of the defendant in this action, who was tragically killed in the accident. In June of 1995 the plaintiff was transferred from St Mary's Hospital on the Isle of Wight to the Brain Injury Rehabilitation Unit at the Royal Hospital for Neuro-disability in Putney. On 9th May 1996 he was transferred to the Frank James Unit on the Isle of Wight, where he is near his family.

The Frank James Unit is a long-term National Health unit for severely disabled people. The plaintiff's parents live nearby in a reasonably large house together with their two other children, both in their twenties. They have taken a very responsible attitude about their son's injuries and about looking after him. To start with, they arranged for a special vehicle, which has been paid for by funds from an interim payment. With that vehicle they have in fact taken him from the Frank James Unit back to their house. At first, he was going to their house three days a week for some of the daylight hours. Since the spring of 1997, and at the time of the hearing before Mr Justice Blofeld, he was spending from midday Friday to some time on Monday at their house. We are told that the position today is that he spends slightly more time at his parents' house than he does in the hospital, so that, whereas at the time of the hearing before Mr Justice Blofeld the position was that he spent some two and a half days of the week at his parents' house and some four and a half days in the hospital, that position is now largely reversed.

The plaintiff's expert, Dr Andrews, who, as the judge says, is experienced in this field, takes the view that as a result of his home visits the plaintiff's quality of life is improved. Dr Andrews says in his report:

"... Simon does seem to be aware of his environment and he certainly responds to his family's attendance. There is no doubt in my mind that he was much more relaxed at home, seemed to take more interest in his surroundings and was maintained in a better posture in his wheelchair because his family and carers knew what should be done."

As the judge said, that level of personal care is apparently difficult to maintain in the hospital.

But - and this is a major issue in this appeal - that evidence is to be challenged on behalf of the defendant when the case comes for hearing on quantum in March of this year. Indeed, in the material before us there is a report by Professor Behan on behalf of the defendant which asserts that the plaintiff is effectively in a persistent vegetative state. In their skeleton argument the representatives of the defendant say that they may not, when the case comes to trial, put the case quite as high at that, but that nevertheless the plaintiff's cognitive abilities are of an extremely low order.

Liability in this case was never in dispute. The only issue on liability was about contributory negligence; in particular, whether the plaintiff was wearing a seat belt at the time of the accident and whether he was aware that the driver had drunk a considerable amount on the evening of the accident. The couple had apparently been celebrating their engagement. However, the parties reached agreement on the basis of 25% contributory negligence on the part of the plaintiff. This compromise was approved by Mr Justice Blofeld on behalf of the plaintiff, and on 1st October 1997 he gave judgment for damages to be assessed. The following day he made the order which is the subject of the present appeal.

At this stage I should refer to Order 29, rule 11, which is the order authorising interim payments in respect of damages. The appropriate parts of the order are as follows:

"If, on the hearing of an application under rule 10 in an action for damages, the Court is satisfied ...

(b) that the plaintiff has obtained judgment against the respondent for damages to be assessed [as happened here]

the Court may, if it thinks fit ... order the respondent to make an interim payment of such amount as it thinks just, not exceeding a reasonable proportion of the damages which in the opinion of the Court are likely to be recovered by the plaintiff after taking into account any relevant contributory negligence ..."

It was common ground before us and before the judge that the amount of the interim payment of £100,000 awarded by the judge would not in fact exceed a reasonable proportion of the damages likely to be recovered by the plaintiff in this case, even taking into account the question of contributory negligence.

The real issue on this appeal stems from a single sentence in an affidavit sworn by the plaintiff's solicitor in support of the application for an interim payment. At the end of that affidavit Mr Alldred, the solicitor, says:

"In these circumstances I ask this Court to make an Order that the Defendant be directed to pay to the Plaintiff a further interim payment in such sum as this Honourable Court thinks just and reasonable. The monies required will with Court of Protection approval be applied to the setting up and running of a home care regime for the plaintiff on a permanent long term basis."

It is the defendant's case that there are three main issues to be decided at the trial of the quantum issue. The first is as to the plaintiff's medical state: whether he is, as the defendant's expert states, in a persistent vegetative state with no awareness at all, or whether he is, as the plaintiff's expert states, in a low awareness state and, even if he is in such a state, what is the extent of his awareness. The second main issue (which will depend in part, of course, on the decision on the first) is as to the current and future care needs of the plaintiff: whether, as has been his case, supported by his expert evidence, he reasonably needs to be cared for at home or, as the defendant asserts, he is best cared for at the Frank James Unit; and, putting it quite bluntly, the Frank James Unit being a National Health Service hospital, it will be the defendant's contention that that would require a much smaller sum to be awarded by way of damages than if he were to be cared for at his parents' home, with the attendant private nursing care that would then be needed. There will also be a debate at the trial about the plaintiff's estimated life expectancy, but, as is conceded by the defendant, that issue is irrelevant for the determination of this appeal.

The defendant's case was before the judge and has been before us that the interim payment, if made and applied for the purposes to which the plaintiff's solicitor said it was to be applied, could have an effect before the hearing so as to enable the plaintiff to live permanently at his parents' home, and it might therefore have an effect on the result of the assessment of damages. To use the metaphor currently in favour, as it has been used throughout in both the skeleton arguments and in the hearing before us, the playing field will have been rendered unlevel prior to the trial to the actual or reasonably perceived disadvantage of the defendant.

The only relevant case which comes anywhere near the issues which arise in the present case is Stringman (a Minor) v. McArdle [1994] 1 WLR 1653, a decision of this court. That was a case where a young plaintiff under a disability had asked for an interim payment of £100,000 to adapt a house already bought. McCullough J upheld the refusal of the district judge to make that interim payment, taking the view that the plans for the conversion of the house were over-elaborate and might leave the plaintiff insufficiently provided for by way of future care. There was no suggestion in that case that the position of the defendant might be prejudiced.

I will read the second judgment of Stuart-Smith LJ because it encapsulates in a reasonably short form what was the decision in that case. He said:

"The error into which the judge fell in this case was, in my opinion, when he concerned himself with what was to be done with the damages in the hands of the plaintiff or those responsible for her care. Once the threshold conditions in RSC Ord.29, r.11(1), sub-paragraphs (a), (b) or (c) are satisfied, what the court has to do, if it thinks fit, is to make an interim payment of such amount as it thinks just not exceeding a reasonable proportion of the damages which in the opinion of the court are likely to be recovered by the plaintiff after taking into account contributory negligence and any set-off or counterclaim. It should be noted that the plaintiff does not have to demonstrate any particular need over and above the general need that a plaintiff has to be paid his or her damages as soon as reasonably may be done. It will generally be appropriate and just to make an order where there will be some delay until the final disposal of the case. Therefore what the court is concerned with in fixing the quantum is that it does not exceed a reasonable proportion of the damages which in the opinion of the court are likely to be recovered. It is quite clear here that the amount will on any basis substantially exceed the sum of £187,000, which is the sum awarded by way of interim payment to date plus the £100,000 which is now sought. That is all the judge should have been concerned with. In the case of an adult of sound mind, the court making an order under RSC Ord.29, r.11 is not concerned in any way with what the plaintiff does with his damages. In the case of an infant, the money will normally be paid into court and then the next friend will apply to the district judge for payment out as and when the money is required. Where the Court of Protection is concerned, it is for that court to decide how and when the money is to be spent."

However, it was not there suggested that the interim payment could affect what has been called the level playing field or otherwise prejudice the interests of the defendant.

Before Mr Justice Blofeld it was argued by counsel for the plaintiff that in this case all the criteria and all the threshold conditions put by Stuart-Smith LJ had been satisfied and he could only exercise his discretion in one way. However, the judge rejected, and in my judgment rightly, that particular submission. The judgments in Stringman v. McArdle , as in any case, have to be read in the light of the facts to which they are referring. There was no suggestion in that case that an interim payment could affect the playing field or could somehow prejudice the interests of the defendant. Therefore, what the Lords Justices were saying in that case was that in those circumstances the court does not have to go into the purposes for which the payment is to be applied.

In the course of argument before us it was canvassed whether it was necessary for the plaintiff's solicitor in this case to have made a statement as to the purposes for which this interim payment was to be applied. Strictly as a matter of law, it would appear that he was not bound to do so. But we were told (and one can see the reasons for this) that in practice it is often necessary, or at any rate desirable, to state those purposes because it is a discretion which the rule confers upon a judge and the judge is more likely to be persuaded to exercise the discretion favourably if he feels that the interim payment is required for a sensible purpose for the benefit of the plaintiff. It is therefore unnecessary to speculate what would have been the position if Mr Alldred had not made the statement he did. The position is that there was here evidence before the court (and in other cases there might be similar evidence, wherever it comes from) that the interim payment was to be applied for a particular purpose which it is suggested could affect the level playing field and thereby prejudice one party or the other.

However, as I have said, the judge in this case rightly took the view that the factual basis was different from Stringman v. McArdle and he was not technically bound by it. However, he went on to say:

"I ... regard the observations of the Lords Justices in Stringman v. McArdle as very persuasive, and loyally I do my best to apply those principles to the present case, but I am not bound by it. I start on the basis that once liability has been settled, the money that can with certainty be known to be going to be awarded to the plaintiff should be in the plaintiffs' hands quickly. Secondly, as this plaintiff is under a disability, I recognise that the Court of Protection has to be consulted. It has been consulted, and I recognise that the spending of that money is a matter for the Court of Protection and not for this court. Consequently, I have come firmly to the conclusion that in the circumstances of this case it is just to make an interim payment of £100,000 and I so order."

It is to be observed that up to that point the judge has not made any reference, in giving his reasons for making the interim payment, to what I have called the level playing field factor. He then goes on:

"I enter this caveat: that if it is spent in making permanent arrangements for Simon Campbell with the knowledge that this case is to come up for trial on damages next term, then the trial judge who tries that issue of damages is entitled to know that factor and to give it such weight as he thinks fit. I do not express any opinion one way or the other upon it because that is a matter for him. I certainly would not wish him to be fettered with some observation of mine one way or the other."

Then come these words:

"Consequently, it follows that, having weighed Mr Davies's arguments [Mr Davies was before the judge, as he has been before us, leading counsel for the defendant] and recognising, as he says, that he has a duty to protect the commercial interests of his clients, in the circumstances of this case I am not persuaded that his arguments should succeed."

We have been referred by Mr Mackay QC, for the plaintiff, to the well known case of Eagil Trust Co. Ltd. v. Pigott-Brown [1985] 3 All ER 119, and in particular to the judgment of Griffiths LJ at pp.121-122, as to the approach to be adopted by this court in looking at the judgment of a judge who is exercising a discretion. I have to say that it is not clear to me that in the way he came to his decision Mr Justice Blofeld was giving proper consideration as a factor to be taken into account, along with other factors, to the level playing field argument. He seems to have made his decision based solely on the Stringman v. McArdle argument before he even turned to considering the arguments put to him about the level playing field.

It is accepted before us that the level playing field argument can never be an absolute bar to an interim payment. It might otherwise be possible for a defendant, by introducing one dissident voice, to hold up indefinitely an interim payment which the overwhelming preponderance of medical evidence showed desirable for the benefit of the plaintiff. It can at best be a factor which the judge exercising his discretion should take into account. The weight he gives to that factor is for him, unless it can be said, on all the facts of the case, that it is plainly wrong. But equally it must be true, and indeed it is conceded in this case, that what might be called the Stringman v. McArdle factor - the fact that, when the threshold conditions have been satisfied, prima facie it is the plaintiff's money one is talking about - is also a factor which the judge must take into account.

As I have said, in my judgment Mr Justice Blofeld appears to have reached his decision on making the interim payment without taking into account the level playing field factor. He deals with it as an afterthought. We have not been referred to any other decision in which the level playing field argument had been introduced as a factor to be taken into account on the question of making an interim payment. I am not satisfied that Mr Justice Blofeld took into account what he should have done by way of a relevant factor in reaching his decision.

On that basis, it comes to be a matter for this court to decide. The discretion is ours to be exercised as of today's date. There are a number of matters which seem to be relevant to our decision. First, there is the fact that the home regime (by which I mean that the plaintiff is spending a considerable part of his time at home) has been in operation for quite a long time now. It was in operation at the time of the hearing before Mr Justice Blofeld, and I have already said that the proportion of time spent at home has increased. Nevertheless, he still spends part of his time in the Frank James Unit. Clearly, with a person as severely disabled as this plaintiff is, even spending a part of his time at home will require substantial expenditure to enable the house to be adapted towards his needs.

Second, we are told, and indeed I think it is in evidence, that the plaintiff's parents, who are not without means themselves and who have the ability to borrow from the banks, have already spent a substantial sum of their own money in making alterations to the house; and part at least of the purpose of the interim payment, if sanctioned by the Court of Protection, as I anticipate it will be, will be to repay them that expenditure.

Third, as I have said, the plaintiff is even today spending a substantial part of the week in the Frank James Unit. We are told by Mr Mackay on instructions, and there is no evidence to the contrary, that there is no suggestion that before the hearing of the trial on damages (which is, as I have said, to take place in March) he will have left the Frank James Unit permanently. In other words, he will still be based at the Frank James Unit, in part at least, and any question of the availability of a bed for him there will still be the same at the date of the hearing, so that the playing field will not have been altered in that respect.

Then there is what I call the Stringman v. McArdle factor: that essentially this is the plaintiff's money. As I have said, it is anticipated that, whatever the result of the issues which I have indicated will be dealt with at the hearing of the assessment of damages, the interim payment is substantially less than the amount which will be recovered by the plaintiff.

In my judgment, therefore, applying and taking into account all the factors which I have indicated we should as of today's date, I am satisfied that an interim payment of £100,000 is fully justified. It will enable the plaintiff's parents, so far as may be appropriate, given the sanction of the Court of Protection, to continue the arrangements which, on the present regime, are already in operation. Mr Davies has very fairly conceded that, although it will be his client's case at the hearing that the plaintiff's welfare does not necessarily require him to be at home, he accepts, nevertheless, as a matter of humanity, that part of the plaintiff's time will inevitably be spent at home. He could not resist that. So on that basis, even if the plaintiff is not to spend the whole of his time at home, as the defendant and his advisers will seek to argue, he will spend part of his time there, which will require the expenditure of monies to enable the house to be adapted for that purpose, if no other.

There is also the question of the effect that this payment may have on the level playing field. Mr Davies has very fairly submitted that judges are human, and that considerations of this kind are therefore likely to affect them, even if they try to apply the strict logic which flows from the evidence before them; and that if a judge were to know that a permanent home regime had been introduced before the hearing of the assessment of damages, it could not but affect his or her mind, even though, as a matter of the strict application of the evidence, the logical result would be the other way.

There must, I accept, be some force in that argument, but judges are trained to act as dispassionately as possible, and if the evidence were to be that it would not be to the plaintiff's benefit that he should have a regime at home but that he should stay in the Frank James Unit with just occasional visits home, I do not believe that the judge would be so affected by the introduction of a permanent home regime, so far as that may have gone, as to be seriously affected by it. But in any event, considering the realities as of today's date, there is no serious risk (because we are now at the end of January and the trial is to be in March) that there could be any major change between now and March. Indeed, Mr Mackay has told us that, so far as he is instructed, there is unlikely to be any further change between now and then, even though he is not in a position to give any formal undertakings about it.

There is also, it seems to me, substance in Mr Mackay's submissions that the judge who hears this argument is going to be helped by knowing how the plaintiff does fare at home, and there is a perfectly valid ground for asking how the judge can make a decision without at least some indication as to that. The playing field is not slanted all one way.

For all these reasons I am satisfied, in the exercise of our discretion today, that the interim payment of £100,000 should go ahead. I would therefore dismiss this appeal and discharge the stay which the full court ordered.

LORD JUSTICE AULD: I agree.

A judge, when considering an application for an interim payment, has a discretion in the matter. This court's decision in Stringman v. McArdle [1994] 1 WLR 1653, has not changed that, as Lady Justice Butler-Sloss emphasised at p.1656D. It is true that, as a guide to the exercise of that discretion, it indicates that the court should normally order sought interim payments within the amount of the likely recoverable damages without investigation or consideration of the plaintiff's intended use of the money.

However, there may be instances where there may be another matter or other matters relevant to the exercise of the discretion. Mr Mackay has helpfully suggested possible examples in other circumstances: first, that the payment is sought too close to the trial to justify ordering it; second, that the sought payment may be too small for it to be worthwhile as an exercise of the power; and third, where a plaintiff is not getting on with the claim and simply putting off the day of trial by repeated applications for interim payments.

Returning to this case, where the use to which a plaintiff intends to put money received by way of interim payment might prejudice the fair conduct of the trial in some way, it is, in my view, a relevant factor for consideration by the judge, along with the Stringman v. McArdle starting point, when exercising his discretion whether to order a payment. More particularly, where the use to which the plaintiff intends to put the money might pre-empt in some way the outcome of an important issue in the trial, that is a matter relevant to the exercise of the discretion.

As my Lord, Sir John Balcombe, has observed, such a possibility of prejudice to the defendant resulting from ordering an interim payment did not arise in Stringman v. McArdle . Butler-Sloss and Stuart-Smith LJJ cannot have had it in mind in the central thrust of their judgments that it is not the concern of the defendant or of the court what the plaintiff intends to do with the money. Here the position is different. Blofeld J recognised in his judgment the claim of a possibility of prejudice to the defendant. However, he does not appear to have assessed it or weighed it alongside the Stringman v. McArdle starting point when reaching his decision. Certainly, there is no clear indication in his judgment that he did or did properly take the matter into account in the exercise of his discretion. On the contrary, the way in which he has cast his judgment suggests a somewhat mechanistic application of the Stringman v. McArdle approach. In such a jurisprudentially uncharted field, his reasoning does not appear to meet the guidance given by Griffiths LJ in Eagil Trust Co. Ltd. v. Pigott-Brown [19850 3 All ER 119 at 122C-D, that a judge should give his reasons in sufficient detail to show the principles on which he has acted and the reasons that have led him to his decision.

I agree, therefore, with my Lord that this is a matter that we must decide for ourselves. For the reasons he has given I conclude that there is no real possibility of risk to the prejudice of this trial in ordering the payment of the sum sought. I therefore agree that the proper exercise of discretion of the court is to order the payment, there being no countervailing consideration to that identified by this court in Stringman v. McArdle and no other factor drawn to the attention of the court which should weigh against it.

The appeal is therefore dismissed.

Order: appeal dismissed with costs; stay removed and sum to be paid into the Court of Protection forthwith from the money currently standing in court; legal aid taxation of the plaintiff's costs; leave to appeal to the House of Lords refused. [Not part of approved judgment]