England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM HIGH COURT OF JUSTICE
MERCANTILE DIVISION
MANCHESTER DISTRICT REGISTRY
(HIS HONOUR JUDGE HOWARTH)

		Royal Courts of Justice Strand London WC2 Friday, 15th June 2001

Wednesday, 15TH June 2001

1. LORD JUSTICE MANTELL: This is an application for permission to appeal against an order made by His Honour Judge Howarth on 30th January 2001 in Manchester, sitting as a judge of the Queen's Bench Division. By that order the judge dismissed an application to set aside a freezing order and decided to order an enquiry as to damages is respect of the same order, that freezing order having been made in proceedings previously stayed by consent under the terms of a Tomlin Order.
2. The original action was a claim by chartered accountants for the repayment of fees alleged to have been paid for professional services rendered by Mr and Mrs Harrison and said to have been in excess of the defendants' entitlement; alternatively, for damages for misrepresentation. The particular circumstances of the original action do not matter for present purposes.
3. The claim under either head amounted to approximately £190,000. In the early history of the action there was an unsuccessful attempt to obtain summary judgment. Eventually, quite when is not clear, the claimant got wind of the defendants' intention to sell their valuable family home in Prestbury in Cheshire. The claimants applied without notice for a freezing order. The hearing was on 31st January 2000, and was before His Honour Judge Kershaw QC, sitting in the Mercantile Court. The terms of that freezing order are to be found in the second supplemental bundle put in by the applicants, and in effect prevented Mr and Mrs Harrison from dealing with the proceeds of sale of their home above a certain figure subject to undertakings given by the applicant and the usual exceptions.
4. The freezing order continued until 11th February when the matter came back to the court and no order was made on an application by the claimants to continue the freezing order. It is worth remarking therefore that as of that date, 11th February, the freezing order ceased to exist. It was replaced by consent by the offer of undertakings on both sides, the undertakings being given by Mr and Mrs Harrison in relation to the net proceeds of sale of the house at Prestbury. The effect however of the undertakings was much the same as had been achieved by the freezing order made those two or three weeks earlier.
5. On a date in June 2000, the precise date not being apparent from the papers before me, at a further hearing before His Honour Judge Kershaw the whole action was compromised in the terms of what lawyers call a Tomlin Order. It is necessary to look a little more closely at those terms. By consent, says the order, it is ordered that all further proceedings in the action be stayed except for the purposes of carrying such terms into effect, the terms referred to being the terms of the Tomlin Order. The terms are contained, as is usual in a Tomlin Order, in a schedule. "In full and final settlement of claims, including claims of interests and costs, which the parties may have against each other arising from issues raised in the respect of this action", and then the terms which involved the first and second defendants paying damages in the sum of £97,500, and certain further subsidiary terms relating to how it was that Mr and Mrs Harrison would deal with the proceeds of sale recovered from the sale of their property but which included the payment of £22,500 by 4.00 pm Monday 19th June 2000 to the complainant's solicitors, in respect of which, that having been done, Mr and Mrs Harrison would be permitted to deal with the balance of the proceeds freely, subject always to their agreement under the terms of the schedule, to pay off the balance of the agreed damages by monthly instalments.
6. Although on the face of it that consent order disposed of the action once and for all subject to the implementation of its terms, Mr and Mrs Harrison remained unhappy as to the way matters had proceeded. In particular they claim that they were forced into the settlement by the procedures which had led up to the making of the Tomlin Order which began with the obtaining of the freezing order which, in turn, had severely limited their freedom of action in relation to the proceeds of sale of their Prestbury home. Consequently, on 16th January this year, there was an application made to His Honour Judge Kershaw to set aside the Tomlin Order. That application was dismissed, His Honour Judge Kershaw taking the view, entirely correctly in my opinion, that any proceedings to set aside the Tomlin Order would have to be by separate action. It so happens that in passing he made observations with regard to the freezing order, giving the impression, and it may be an impression which can be extracted without difficulty from the terms of his ex tempore judgment, that it was still open to Mr and Mrs Harrison to apply to a separate judge to have the freezing order set aside. If that is what he said and meant, then he was clearly in error because by 16th January of this year the freezing order was no longer in existence.
7. He also gave, so it would appear to me, the clear impression that if there was to be an enquiry as to damages that could be progressed by a further application to a different judge within the same action. Acting in the belief that that was an indication that the matter might be progressed in the way suggested, Mr and Mrs Harrison brought an application before His Honour Judge Howarth, and this is the application in relation to which permission to appeal is now sought.
8. The learned judge, quite rightly in my opinion, endorsed the view of His Honour Judge Kershaw that it was not possible to have the Tomlin Order set aside by an application made in that way but that it would be necessary to commence separate proceedings. It may be that he had not understood fully the effect of what his Honour Judge Kershaw had said, and it may be, as is suggested, that he was not fully informed as to what it was His Honour Judge Kershaw had said, but he went on to say that in his view the same applied to any application for an enquiry as to damages because in his view, looking at the terms of the Tomlin Order, the effect was to stay all further proceedings in the action and an application for an enquiry as to damages to take place was a proceeding in the action.
9. What he said appears at pages 5 and 6 of his ex tempore judgment, and it is I think perhaps worthwhile and it would be helpful to Mr and Mrs Harrison if I were to read out that part of the judgment:

"What is being asked for is that the freezing order granted on 31st January should be set aside and that there should be an enquiry and assessment into the damage and loss suffered by the defendants as a result of the granting of that order and there should be an order that the claimants pay that damage and loss as and when it is assessed. It is said that the order was obtained by misrepresentation and falsehood. There are two detailed affidavits from both Mr and Mrs Harrison setting out far more fully their complaints.

As a matter of procedure, my power to do anything in these proceedings, which are the original 1999 proceedings, seems to me to be severely limited as a result of the making of the Tomlin Order on 19th June last year which stayed all further proceedings save in a very limited form of exception. These proceedings plainly do not fall within that limited exception and that stay was a contractual stay made by the parties. In other words, the parties had agreed as part of the compromise that nothing further would be litigated in this 1999 action.

Unless that is set aside in new proceedings, it seems to me that I cannot accede to the defendants' application because I have no power to do so. It is as simple as that. If they wish to go further down this road then they must, it seems to me, start a new action seeking to have the compromise contained in the order of 19th June 2000 set aside on the ground of misrepresentation, fraud, mistake, or whatever is a good ground.

If it is then set aside, the position would be back to what it had been prior to the hearing on 19th June 2000. Then the 1999 proceedings can be taken further forward. If they succeed, and I am not saying that they will or they will not, it would then come on for trial upon its merits. If the claimants lost their claim at trial, then the defendants would then be in the position to seek an enquiry as to damages and losses suffered as a result of the granting of the freezing injunction."

10. In my opinion that is a very clear and entirely correct statement of the position as it was on the application before His Honour Judge Howarth. Any appeal against that order based upon that judgment would be bound to fail. Accordingly, it would not be of any help to Mr and Mrs Harrison for me to grant them permission to appeal, and I refuse to do so.
(Application for permission to appeal refused)