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 LEEDS DISTRICT REGISTRY
(MR RECORDER STEWART QC)

		Royal Courts of Justice Strand London WC2 Tuesday, 31 July 2001

1. SIR MARTIN NOURSE: This is an application by the claimant, Peter Paul Popek, for permission to appeal against an order made on 16 May 2001 by Mr Recorder JSH Stewart QC sitting as a deputy judge of the Queens Bench Division in Leeds whereby he struck out the statement of claim and dismissed the action on the ground that no reasonable grounds for bringing the claim were disclosed (see Civil Procedure Rules, Part 3.4 2(a)).
2. For today's purposes the facts can be briefly stated. The writ in the action was issued on 8 October 1997. At the material time Mr Popek owned and operated a construction business. In giving judgment in the court below the learned recorder described the essence of Mr Popek's pleaded case as being that Mr Danks, who was at all material times the manager of the branch of the defendant, the National Westminster Bank Plc's branch at Wibsey near Bradford, with which Mr Popek dealt, failed from June 1988 to offer and/or advise Mr Popek to restructure his borrowing with the bank from an overdraft facility to a mortgage facility, and that as a result of that failure, he, Mr Popek, has suffered grave financial loss having to pay a greater amount of interest on his loan than otherwise would have been the case. This led, Mr Popek claims, to the loss of his business and to his being made bankrupt.
3. On 14 February 2000 the district judge made an order for an expert in the provision of small business finance to be instructed by the parties jointly. That led to a report being prepared by Miss Jane Blythe. Further questions were put to her on behalf of Mr Popek by his then solicitors. They were answered on 14 October 2000. Up to that stage Mr Popek had been represented by solicitors and counsel, but at about the beginning of December, apparently as a result of Miss Blythe's report, his legal aid was withdrawn. Since then he has conducted his case in person.
4. I suffer today from the disadvantage of not having seen Miss Blythe's report, nor the further questions which were put to her. I have only seen her answers to those questions dated 14 October 2000. Mr Popek has a copy of the report in court, but it comes too late for me to consider it for the purposes of today's application. However, I do not think that that is a crucial objection to my dealing with the application in the way in which I propose to deal with it. The important point about Miss Blythe's report is that it appears from the recorder's judgment that, in paragraph 156 she expressed the view that, as at October 1991, no reasonable banker would have been prepared to substitute an alternative, but cheaper, method of financing Mr Popek's debt to the defendant bank. On that conclusion the recorder placed great weight. No doubt it was also the cause of an application made by Mr Popek to His Honour Judge Hawkesworth QC in January of this year for an order permitting him to rely on two further reports. However, Judge Hawkesworth refused that application and there has been no appeal against that refusal.
5. The trial of the action, Mr Popek tells me, was originally fixed to start some time during the course of last year. However, there appears to have been difficulty in getting a judge to hear it and it was refixed for three days, to start on 14 May of this year.
6. It was not until after Mr Popek had made his opening address to the recorder, which he tells me lasted only a few minutes, that counsel for the defendant applied to have the action struck out on the ground that no reasonable grounds for bringing the claim were disclosed in the statement of claim.
7. As was pointed out by this Court, under the old rules, in Halliday v Shoesmith [1993] 1 WLR 1:

"An application to strike out a pleading should not be entertained at the commencement of the trial after the costs of preparation have been incurred, save in a most exceptional case and on receipt of a valid explanation for the lateness of the application."

8. That general rule would seem to be of even more force where the claimant is unrepresented. So that is a point which has caused me some concern.
9. Mr Popek has told me this afternoon that he was very shocked when counsel made that application, without, as I understand it, any prior notice to him. From what Mr Popek tells me it appears that counsel's application lasted a considerable length of time and that, although he, Mr Popek, was given a further opportunity to state his position, most of the time was taken up with counsel's application and the necessary interchanges with the recorder.
10. Another point which concerns me is the way in which the recorder approached Miss Blythe's report. At page 5 of the transcript of his judgment he said:

"The Claimant's solicitor applied to the Court for the appointment of a joint expert upon banking procedures. The Defence opposed that application, but it was granted. The expert chosen by the Claimant's solicitor was Miss Jane Blythe...Miss Blythe's credentials are impeccable."

11. The recorder then referred to her conclusion, which I have already recounted, and a little later continued:

"The Plaintiff chose to prove his case relying upon Miss Jane Blythe's report. He could have, if he had wished, have invited the Court to allow experts to give evidence on each side. He did not do so. He chose, instead, to be a hostage to fortune, and to rely on Miss Jane Blythe's report.

In the event, upon this aspect of the case, with which I am now dealing, her report was wholly unfavourable to him."

12. Accepting, as I certainly do for present purposes, what the recorder there said, would it not still have been open to Mr Popek to put questions to Miss Blythe in order to test her conclusions? Without any expert evidence to the contrary, and as a result of Judge Hawkesworth's order there could be no such evidence, it would still have been open to Mr Popek to ask Miss Blythe questions; and he has told me this afternoon that he did indeed tell the recorder that he wanted to take that course. But once the recorder had come to the conclusion that the case ought to be struck out there was no trial and no opportunity for Mr Popek to ask Miss Blythe questions, which he also wanted to do, any opportunity for him to ask Mr Danks any questions.
13. So those are my two concerns about the case. It may be that when the other side has been heard on those matters, those concerns will be modified or even eliminated, but in the light of them I do not feel able to determine this application today. I could not do that satisfactorily without hearing submissions on behalf of the defendant bank. I have explained to Mr Popek the risk as to further costs which he will incur if the matter goes the further stage of having the defendant represented and he has said that he is prepared to take that risk.
14. I therefore propose to adjourn the application so that the defendant can be represented. I will adjourn it with the appeal to follow, if permission is granted, unless the defendant objects to that course, in which case the application will be dealt with on its own. In either event, the matter will be heard by a two judge court.
15. I mention three further points at this stage. First, Mr Popek must put further documents before the court. They are copies of Miss Blythe's report, copies of the figures which are part, and indeed the main part, of the report by Audit UK Ltd, and also any transcript of Judge Hawkesworth's judgment which he may be able to obtain. It may be that there is no means of obtaining a transcript. If that is the case, then it is to be hoped that counsel for the defendant, who Mr Popek tells me was present on that occasion, will have made a note of the judge's judgment which can be put before the court instead. No doubt the defendant will supplement Mr Popek's documents if it wishes to do so.
16. Secondly, I have not overlooked the fact that there is an important limitation point in the case, reference to which I have so far deliberately avoided. However, I anticipate that the full court will wish to be addressed on that point, particularly in regard to the recent decision of this court in Cia de Seguros Imperio v Heath (REBX) Ltd (2001) 1 WLR 112.
17. Thirdly, Mr Popek has asked me whether the order I propose to make will enable him to seek the advice of a solicitor, I assume with legal aid. That is a question on which I have been unable to help him. However, since he is in receipt of income support it seems to me to be right that I should direct that he be supplied with a transcript of this judgment at public expense. He will then be able to show that transcript to anybody whom he wishes to consult. Mr Popek, so there it is. Have you followed all that?

THE APPLICANT: Yes, I have.

SIR MARTIN NOURSE: As I say you will get a copy of the transcript and you will get a copy of the order when it has been drawn up.

THE APPLICANT: Thank you very much indeed. My Lord, did you receive my second skeleton argument? I prepared this document for the court, in particular for yourself.

SIR MARTIN NOURSE: Yes, I did.

THE APPLICANT: It does refer to Jane Blythe's supplementary questions.

SIR MARTIN NOURSE: Yes.

THE APPLICANT: Which does concern me. The problem I face on this is why has my legal team not helped and advised as to these discrepancies?

SIR MARTIN NOURSE: I did intend to refer to your second skeleton argument in my judgment and I will ask the shorthand writer to make a note saying that today Mr Popek has put in a further written skeleton argument in which he has raised points, some of which may have some merit in relation to Miss Blythe's answers dated to 14 October 2000. I am sorry, I missed that point, Mr Popek. I did read this very carefully.

THE APPLICANT: No, problem, my Lord.

Order: Application adjourned to be heard inter parties, with the appeal to follow, if permission is granted, unless the defendant objects to that course, in which event the application will be dealt with on its own; in either event, the matter to be heard by a two judge court; copy of the transcript to be provided to the applicant at public expense.