England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE SOUTHAMPTON COUNTY COURT
(His Honour Judge Thompson QC)

		Royal Courts of Justice The Strand London WC2
		19th January 2000

1. LORD JUSTICE EVANS: Lady Justice Hale will give the first judgment.
2. LADY JUSTICE HALE: This is a claimant's appeal (with permission from Schiemann LJ) from the order of His Honour Judge Thompson QC made on 10th June 1999 in the Southampton County Court. The action arose out of a road traffic accident which took place on 29th February 1996. Proceedings were issued against the defendant, a Mr Brown, on 19th February 1999, just before the limitation period expired. A Defence was filed on 6th April 1999, claiming that the claimant had sued the wrong person. Mr Brown was the keeper of the vehicle and the policyholder, but his wife, Mrs Brown, was driving the car at the time. The defendant applied on 15th April 1999 for the claim to be struck out. The claimant applied on 17th May 1999 to join Mrs Brown as the second defendant. The learned judge granted the defendant's application and struck out the claim and refused the claimant's application. That, on the face of it, is, in the light of the circumstances of this case, a most unpalatable result.
3. The defendant's vehicle ran into the back of the claimant's vehicle which had stopped because a car ahead of her was waiting to turn right. Liability was never effectively in dispute. The claimant and Mr Brown exchanged particulars at the time. It is common ground that that exchange took place between the claimant and Mr Brown. It is the driver's obligation under the Road Traffic Act 1988 section 170(2) to give such particulars which should include his own name and address as well as the name of the owner and, under section 170(5), a certificate or evidence of insurance.
4. As a result of this exchange the claimant informed her insurers, Direct Line. In her claim she named Mr Brown as the driver. On the 5th March 1996 Direct Line wrote to Mr Brown personally, as follows:

"The information presented to us suggests that you were responsible ..."

5. and asking him to refer the matter to his insurers. On 16th March 1996 his insurers, Bradford-Pennine, wrote to Direct Line confirming that:

"... for negotiation purposes liability will not be an issue."

6. The claimant also consulted solicitors. On 23rd April 1996 those solicitors wrote to Mr Brown personally as follows:

"You are held wholly responsible for such loss, the accident having been caused by your negligent driving."

7. On the same day the solicitors wrote to his insurers, Bradford-Pennine:

"Your insured is held wholly responsible for the said loss, the accident having been caused by negligent driving."

8. So it is quite clear at that stage whom the claimant, her insurers and her solicitors took to be the driver.
9. For my part, I do not see how references to the "driver of your insured's vehicle" in later letters from Direct Line to Bradford-Pennine, which are at best neutral, change that situation. No denials or clarifications were forthcoming, either from Mr Brown or from his insurers. It is clear from Mr and Mrs Brown's report to Bradford-Pennine (which is dated 5th March 1996) that they were both saying at that stage that Mrs Brown was the driver. Bradford-Pennine may therefore have known the position, but the claimant and her advisers certainly did not.
10. Thereafter there was correspondence between the claimant's solicitors and Bradford-Pennine on the basis that liability was not in dispute. Three interim payments were made; medical reports and statements were disclosed; an offer in settlement of general damages was made but rejected; further clarification of the special damage claim and loss of earnings was sought. On 3rd December 1998 the claimant's solicitors sent a schedule of special damage and supporting documents, and also said that the claimant's witness statement would follow shortly, as it did under cover of a letter of 17th December 1998. The letter of 3rd December had made it plain that the claimant's solicitors were aware that the limitation period was fast expiring.
11. A letter giving formal notice to Bradford-Pennine of the claimant's intention to proceed is dated 17th February 1999 and this asserted that the car was being driven by Mr Brown at the time. The first that the claimant knew that this was being disputed was, apparently, the defendant's solicitor's letter of 6th April 1999 enclosing a copy of the Defence and saying:

"Liability for the accident is denied on behalf of Mr J McAlpine-Brown, since he was not driving at the time of the accident."

12. and suggesting that they discontinue the proceedings. Subsequently, witness statements were prepared from Mr Brown and his wife, saying that his wife was driving at the time. There was a witness statement from the claimant saying that she did not actually see the defendant driving before the accident, but she did see him get out of the driving seat. It was he with whom the conversations had taken place. It includes the words:

"During our conversation the man did all the talking and wrote his details down on a piece of paper which he then gave to me. He gave his details as Mr J McAlpine-Brown of 2 Reeves Close, Draycot, Somerset. He also included the name of his insurance company which was Bradford-Pennine Insurance. I also gave him my details."

13. The claimant took the defendant, Mr Brown, to be the driver of the car which had run into her.
14. The two applications, for a strike out and to add Mrs Brown as a party, were heard together. The judge did not hear oral evidence, but he did consider the factual issue as to who had been driving the car at the time. He held that all the direct evidence was to the effect that the defendant's wife had been driving: against that, he was only invited to draw an inference from the claimant's evidence that Mr Brown had been driving. Hence he concluded:

"It seems to me quite clear, on the evidence which I have heard, that Mrs McAlpine-Brown was the driver."

15. That being so, the primary limitation period against Mrs Brown would have expired and so in order to make her a party he would have had to disapply it under section 33 of the Limitation Act 1980 before he could join her. He placed considerable reliance on the decision of this court in Howe v David Brown Tractors (Retail) Ltd [1991] 4 All ER 30. There was no application under section 33 of the 1980 Act before the court. He also indicated that an application to adjourn for that purpose had not been made: but in any case he would have refused such an application as it was wholly disproportionate to the value of this claim. The claim was outside the small claims track, but in his view undoubtedly within the fast-track limit. Therefore, in view of his decision as to who was the driver, if the claim could not be amended, it should be struck out.
16. In the course of his judgment he made the observation that:

"What is so regrettable is that the proceedings were not incepted until the eleventh hour. If they had commenced earlier, this matter no doubt could and would, and certainly should, have been ironed out before the limitation period had expired, and all the problems that have arisen could have been avoided. But there it is: parties have three years in which to bring proceedings. If they choose to go to the wire, there is always the risk that they will be cut down by that wire."

17. As I said at the outset, in my view that result, in the circumstances which I have described, is a most unpalatable one.
18. What are the principles which apply on this appeal? One of the these applications (that is the defendant's application) was made before the Civil Procedure Rules came into force on 26th April 1999. The other one was made afterwards. Part 51 of those rules, and paragraph 15(3) of the Practice Direction associated with it, suggest that the principles of the Civil Procedure Rules should apply. It also appears that everyone in this case must have approached it on that basis, as will become apparent in a moment. There was, however, very little reference to the actual provisions of the rules in the judgment, and so it is possible to speculate (neither of the counsel who have appeared before us appeared below) that the judge himself was not referred to those provisions in detail.
19. The Civil Procedure Rules provide in Rule 1.1 that their overriding objective is to enable the court to deal with cases justly. Of course the question of proportionality comes into that question and the court's powers of active case management entail consideration of that issue. But again, for my part, to deprive a claimant of what on the face of it would otherwise be a cast iron claim, in circumstances such as those I have described, might not accord, it might be thought, with most people's sense of justice.
20. The first issue is whether the judge should have determined the question of the driver's identity summarily and, indeed, on paper evidence alone. The judge did not refer to the criteria for striking out a claim in the Civil Procedure Rules, rule 3.4(2). These allow the court to strike out a statement of case if it appears to the court:

"(a) that the statement of case discloses no reasonable grounds for bringing or defending the claim;

(b) that the statement of case is an abuse of the court's process or is otherwise likely to obstruct the justice disposal of the proceedings; or

(c) that there has been a failure to comply with a rule, practice direction or court order."

21. The judge would not have been able to strike this claim out on those grounds, whether under the old rules or under the new. The essence of a strike out is that one does not look at the evidence on the claim. It is odd that the defendant's solicitors should have suggested this to the claimant. It also odd that they should have put into their application that the claimant knew the identity of the driver - which might of course have made it an abuse of process - when the only evidence for that assertion came from the Browns and does not appear in any communication or disclosure to the other side.
22. Hence the learned judge could only dispose of the claim after a decision had been taken on the factual issue. It was, of course, open to him to decide that this was an issue which could be disposed of. He would be doing so, technically, not under a strike out application but under Part 24 of the Civil Procedure Rules which deals with summary judgment. For the first time it allows summary judgment to be given for the defendant as well as for the claimant. The grounds are set out in rule 24.2:

"The court may give summary judgment against a claimant or defendant on the whole of a claim or on a particular issue if-

(a) it considers that-

(i) that claimant has no real prospect of succeeding on the claim or issue; ... and

...

(b) there is no other reason why the case or issue should be disposed of at a trial."

23. Obviously there are some matters which could be disposed of appropriately in this way. But this issue as to who was driving the vehicle in question was not a straightforward one. The claimant obviously thought one thing. She did so as a result of the circumstances of the accident, including the exchange of particulars which I have described as she did. Mr and Mrs Brown have been maintaining another since the claim was put to their own insurers, but Mr Brown had received those letters from the claimant's solicitors and insurance company and had done nothing, either himself or through his insurers, to correct the error. Yet he says in his witness statement that he does not know why it is that she can say that he was driving the car.
24. The judge does not refer at all to those early letters direct to Mr Brown in his judgment, but in any event it is plain that this was a serious live issue of fact of the sort that ought properly to be determined by hearing oral evidence from all involved. Whether this is done at a trial or as a separate issue is another question.
25. The second issue to arise in this appeal is the question of joining Mrs Brown as a party. There are two possible solutions to the problem that the limitation period against Mrs Brown had expired, albeit very recently. Both of those solutions stem from the Civil Procedure Rules, Rule 19.4. This again was not referred to by the learned judge in his judgment, and it may be that it was not referred to him. These provisions follow similar, but not identical, provisions in the Rules of the Supreme Court. The first relevant provision is rule 19.4(2):

"The court may add or substitute a party only if-

(a) the relevant limitation period was current when the proceedings were started; and

(b) the addition or substitution is necessary."

26. Rule 19.4(3) provides:

"The addition or substitution of a party is necessary only if the court is satisfied that-

(a) the new party is to be substituted for a party who was named in the claim form in mistake for the new party;

(b) the claim cannot properly be carried on by or against the original party unless the new party is added or substituted as claimant or defendant; or

(c) ... "

27. Mr Walker QC, who has appeared for the appellant claimant, suggests that (a) is appropriate to this case. The proceedings were started within the limitation period and it would be appropriate to substitute Mrs Brown for Mr Brown because Mr Brown was named in mistake for Mrs Brown. If the judge had been right to decide the factual issue, then it is indeed possible that a claimant might accept that decision and argue as Mr Walker has done. This argument, however, raises very difficult issues as to the scope of this new rule. It is in wider terms than its predecessor in the Rules of the Supreme Court Order 20, rule 5(3). It also raises the question of how it may be reconciled with the Limitation Act 1980 in section 35(3) to (6), which places limitations on the suing of new parties after the limitation period has expired. It is unnecessary for us to decide those issues for the purpose of this appeal because the claimant's primary case is and has always been that Mr Brown was the driver of this car. If that turns out not to be the fact, then of course her case is that Mrs Brown was the driver. The question of substituting Mrs Brown for Mr Brown only arises if the factual issue has been properly determined beforehand. In this case (as for my part I have already suggested) it has not been so determined.
28. The second possibility therefore arises under the Civil Procedure Rules, rule 19.4(4):

"In addition, in a claim for personal injuries the court may add or substitute a party where it directs that-

(a) (i) section 11 (special time limit for claims for personal injuries); or

(ii) of section 12 (special time limit for claims under fatal accidents legislation), of the Limitation Act 1980

shall not apply to the claim by or against the new party; or

(b) the issue of whether those sections apply shall be determined at trial."

29. The claimant (in the skeleton argument put in for her appeal) argued that the case for disapplying section 11 of the Limitation Act under the powers contained in section 33 of the Limitation Act 1980 was very strong. The defendant disputes that and says that further evidence, especially as to the reasons for the delay in issuing proceedings until the very end of the primary limitation period, would be needed.
30. The judge relied heavily on, as I have said, the case of Howe v David Brown Tractors (Retail) Ltd. One can readily see how, in order to join a party, one must first have determined whether or not the limitation period should be disapplied. Nevertheless, there were two answers to that. The first is that the judge could have adjoined proceedings to enable such an application to have been made or, secondly, he could have made use of the power in rule 19.4(4)(b) to make Mrs Brown a party for this purpose and postpone the determination of the section 33 issue until the trial. Obviously, Mrs Brown would only be a party for the purpose of resisting that application under section 33 and the application to join (which is as it should be because it should not be forgotten this action is against Mr or Mrs Brown rather than against their insurers).
31. In my view, it was obviously the right course in this situation to make arrangements for the trial of the issue of identity and the issues of limitation and joinder together. It might perhaps be thought unlikely that in that event the parties would not agree matters in the interim. But I find it difficult to understand how this could be regarded as a disproportionate solution. I say that, if only because there is nothing at all to stop the claimant issuing separate proceedings, together with a section 33 application, against Mrs Brown in any event. To my mind that would indeed be a disproportionate response to what has taken place in this case.
32. I therefore would allow this appeal and, subject to any other views, direct that these issues be listed to be disposed of together. I would also add that in my personal view the real disproportion in this case is the defendant seeking to take a point like this in this way, where it is difficult to see that any real injustice has been done to Mr or Mrs Brown (or to their insurers) yet there would be a very real injustice to the claimant if it were to succeed.
33. MR JUSTICE RATTEE: I agree.
34. LORD JUSTICE EVANS: I also agree and add a reference to the terms in which the defendant's application was made, for reasons which will appear.
35. The application dated 15th April 1999 was to strike out the claim against Mr McAlpine Brown, asserting that the grounds of the application were that he was not driving the vehicle at the relevant time and adding:

"... a fact that was known to the Plaintiff."

36. Mr Lewers told us, on instructions, that the basis for the assertion by the solicitor on behalf of the defendant that Mrs Bridgeman had known that he was not the driver of the vehicle was a telephone conversation between the solicitor and Mr Brown on 18th March. If the solicitor had perused the correspondence which we have seen and had made any further enquiries of Mr Brown and of the insurers, the solicitor would have discovered, first, that there had been two letters to Mr Brown asserting that he was the driver. Those letters were not answered and they may well have been passed to the insurers. In another context, counsel submitted that that would have been the usual thing for the recipient of such letters to do. If we make that assumption and the letters were passed to the insurers, then the insurers were made aware in terms from the outset that Mrs Bridgeman was asserting that Mr McAlpine Brown was the driver.
37. Secondly, the solicitor would have discovered that throughout the whole of the correspondence between the claimant's insurers and solicitors and the defendant's insurers, there had been no hint of a suggestion that Mr McAlpine Brown was not the driver. Liability was admitted for the purposes of the negotiations on behalf of Mr Brown as "our insured" and there was no basis for such liability, except as driver of the vehicle. Specifically, the owner would not be liable for negligent driving merely by virtue of his ownership of the car.
38. It seems that the defendant's insurers overlooked the fact that in the original claim form addressed to them by Mr McAlpine Brown, he had said that his wife was the driver. The insurers could well overlook that fact because from their point of view it made no difference to their liability under the policy as to who was the driver. Then when proceedings were issued against Mr Brown (which was wholly understandable in the circumstances) the papers were passed to the defendant's solicitors. That was a few weeks after the limitation period expired, and the identity of the driver did become relevant because only Mr McAlpine Brown had been sued. The defendant's solicitors did not make the further inquiries to which I have referred. Instead they made their application on the basis that their assertion, for which there was no basis other than the say - so of Mr Brown as regards Mrs Bridgeman's knowledge, was correct.
39. It seems that the defendant's solicitors overlooked the fact that, at best from their client's point of view, there was an issue as to who the driver was. The terms of a letter which we have seen from the solicitors dated 6th May, shows that they were not prepared to acknowledge that there was such an issue. They merely asserted that what they had been told and had not enquired into was correct. If they had realised that there was an issue they would also have realised that there was no ground for striking out the claim, which was the draconian remedy that they sought. This attitude seems to have permeated the hearing before the learned judge in June, by which time the Civil Procedure Rules were in force. In the circumstances it remains unfortunate, but is perhaps less surprising, that the learned judge was persuaded to overlook the simple answer which was, as my Lady has said, to direct that there should be a trial on what was essentially an issue as to liability and adjourn to that trial the applications for leave to substitute or add Mrs McAlpine Brown as a party if that course should become necessary.
40. I have made this additional remarks because it seems to me that this was a bad example of taking a technical point (and what is more a wholly unmeritorious technical point) in the hope of preventing the court from deciding the case on its true merits. That was permitted under the Rules of the Supreme Court, but it is certainly contrary to the spirit of the Civil Procedure Rules. I would add that it was also contrary to what had become the best practice in civil litigation, even before 26th April 1999.
41. Taking such a point is not justified, in my view, by an appeal to the financial interests of the insurers or of their shareholders, such as has sometimes been suggested in cases such as this.

ORDER: Judge's order set aside. The action is to be listed for directions in the Southampton County Court forthwith. The appeal is allowed with costs. Claimant to have the costs of the hearing below, save only those items which were specifically referrable to the claimant's own application. Those costs shall be reserved to be dealt with with the application in due course. Costs ordered on an indemnity basis.

(Order not part of approved judgment)