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 DERBY COUNTY COURT
(His Honour Judge Orrell)

		Royal Courts of Justice Strand London WC2 Wednesday, 4th July 2001

Wednesday, 4th July 2000

1. LORD JUSTICE TUCKEY: This is an application for permission to appeal from a decision of Judge Orrell, sitting in the Derby County Court, who refused permission to appeal out of time from the District Judge's order giving summary judgment in favour of the claimants for £7,997, plus interest and costs. The reason why Judge Orrell refused a permission to appeal out of time was because he thought that the appeal had no real prospect of success.
2. The claimants run a holiday letting agency. For a number of years before 1997 they let a number of cottages at the Old Vicarage in Ramsgill near Harrogate. Before 1992 these cottages were owned by Mr Gow. He got into financial difficulties and in 1992, as part of a deal to bail him out, the applicant, Mr Ludlam, agreed that the cottages should be transferred to his company, Benstone Original Building Company Limited, which at that time traded as Country Byways. From 1992 although the cottages were owned by Benstone, Mr Gow continued to deal with the lettings with Mr Ludlam's consent, since he tells me he lived over 100 miles away.
3. At some stage after 1992 the letting of cottages was carried out through another company called the Cream of Cottages Limited, which also traded as Country Byways and the rents, which were accounted for by the claimants, were paid into a bank account in the name of Cream of Cottages Limited, although the claimant's cheques were simply made out to Country Byways.
4. The claimants' case was that until March 1997 their contract was with Mr Gow. At this time they were contacted by the applicant, who told them that Mr Gow was his resident manager and that future cheques should not be sent to him but to a branch of Lloyds' Bank, where Cream of Cottages had their bank account. A few months later the applicant fell out with Mr Gow, who barricaded himself in the cottages and subsequently damaged them. The applicant informed the claimants of what had happened and confirmed the conversation which he had had with their principal in a letter dated 6th June 1997, which says:

"Because of circumstances as they are at The Country Byways complex in Ramsgill we must ask you please to cease taking any booking forthwith and inform existing bookings that the place has been closed up for the immediate future."

5. The letter was sent on paper headed "Country Byways" and was signed by Mr Ludlam for and on behalf of Country Byways. No company was referred to.
6. It is obvious that the request which Mr Ludlam made would cost money and that the claimants would be entitled to look to someone for payment for carrying out the instructions which they were given. They claimed the amount for which they subsequently obtained summary judgment as being their cost of carrying out these instructions.
7. The applicant's initial response when asked for payment came on paper headed "Cream of Cottages Limited" (which I do not see any sign of having been used before in the papers which have been put before me) saying, in effect, that they could not pay the amount claimed pending settlement of an insurance claim. That was no doubt an insurance claim resulting from upon Mr Gow's activities in the cottages to which I have referred.
8. In his defence to the proceedings Mr Ludlam said that he was not personally liable. Cream of Cottages Limited was. The claimants applied for summary judgment, but their application was adjourned on undertakings contained in a letter from the applicant's then solicitors, which said:
9. "...we have now heard from our Client" [that is Mr Ludlam] "and are able to undertake as follows:-

1. That we will keep your Clients on request from you fully informed as to the progress of the case which we are conducting on his behalf against Nigel Chubb and Richards & Chubb."

10. That was a claim against the solicitors who had acted for the applicant and his company on the purchase of the cottages and whom, it is said, negligently failed to spot a serious planning defect which effectively wrecked the commercial prospects of this venture. The letter continued with a further undertaking:

"2.That upon receipt of any payment either in full or part settlement of the claim or in satisfaction of any Judgment or Order made in favour of our Client in that case or either of them we have our Client's instructions to pay the sum of £8,875.65 in satisfaction of your Client's Summons in their case against our Client..."

11. Some time after this letter was sent the applicant changed solicitors and when the new solicitors (on instructions) would not give the same undertaking, the claimants reinstated their application for summary judgment.
12. When that application came before the District Judge she was faced with an application to adjourn by the applicant because he had been bitten by a dog three weeks earlier and was unable to attend court. No medical evidence, however, was put before the court. The District Judge refused to adjourn and, after hearing evidence from the claimants, she gave judgment against the applicant for the sum claimed.
13. In refusing permission to appeal Judge Orrell said that the undertaking contained in the solicitor's letter amounted to a complete admission of liability.
14. In applying for permission to appeal to this court the applicant disputed this interpretation of the document and relied on the subsequent letter from the solicitor, which said that it was not intended to be an admission of liability but "purely a statement of intention to get rid of a piece of litigation which would be a satisfactory outcome for all concerned". The applicant contends that he has a good case for saying that he is not personally liable for this debt and that he has been denied his day in court to make that case if he can.
15. The only agreement of relevance to this dispute, I think, is the one in which the claimants agreed with the applicant to cancel the booking which is recorded in the letter of 6th June 1997 which I have read. In that letter, as I have said, the applicant writes and signs for and on behalf of Country Byways. There is no reference to any limited company. Whether in fact he was acting as the agent for one or other of his companies as undisclosed principals in making that arrangement is not to the point. The question is whether he made himself personally liable on that contract, which an agent will often do if the principal is not disclosed. I think it is clear from the documents that Mr Ludlam did make himself personally liable on this contract. He does not say he was acting for one of his companies. He does say he was acting for Country Byways but this was not a separate legal identity. It was merely the trading name which Mr Gow formerly and now the applicant used to describe their personal interest in the venture. The undertaking the applicant subsequently gave supports that view, although I would accept that it is not conclusive as the judge thought it was.
16. It follows that, like the judge, but for somewhat different reasons, I do not think the applicant has any real prospect of successfully defending this claim. His application to this court is anyway a second-tier appeal. It does not raise any point of importance, and there is no other compelling the reason for this court to hear the appeal. But, as I have pointed out to the applicant this morning, there would be no point in my granting him permission to appeal if the consequence were simply that he would have his day in court and then lose on the grounds I have explained. Although I am sure he will not see it as such, I think, in those circumstances, I am in fact doing him a favour by refusing to give him permission to appeal to this court; and that is what I do.
Order: Application dismissed. (Order does not form part of approved judgment)