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 HIGH COURT OF JUSTICE
CHANCERY DIVISION
(Mr Justice Hart)

		Royal Courts of Justice Strand London WC2 Tuesday 23rd October, 2001

1. LORD JUSTICE ALDOUS: I invite Lord Justice Laws to give the first judgment.
2. LORD JUSTICE LAWS: This case concerned a share option agreement. Mr Gloyne, the claimant, at one stage claimed to recover $97,879 which he had paid in satisfaction of option rights which had purportedly been enjoyed by a Mr Richardson. The appellant in the proceedings was his widow and executrix. This court held on 18th May 2001 that Mr Gloyne was entitled to recover this money as having been paid under a mistake of fact and granted a declaration to that effect. I refer to the judgments given on that date for all the details which I do not here repeat.
3. Mr Gloyne's originating summons by which the proceedings were commenced only asked for a declaration as to any duty or liability of Mrs Richardson to pay; and that is what this court gave. But the appellant, Mrs Richardson, has now asserted that there was no order for payment, and if one had been asked for at the hearing before us earlier she would have objected and/or asserted various defences, including that of plene administravit in the context of her executorship of her deceased husband's estate. We are asked by Mr Gloyne to amend the order made on 18th May 2001 under the slip rule so as to add an order for payment of the sum in question by Mrs Richardson.
4. Mr Walford on behalf of Mr Gloyne points to certain passages in the judgment given by myself on 18th May which he says indicate that this court was distinctly holding that Mrs Richardson was obliged to pay over the money to Mr Gloyne, in the light of the conclusions that we reached upon the issues in the case relevant to whether or not she was so obliged.
5. It is plain to my mind that the scope or ambit of the proceedings with which we were concerned was in effect the construction of the relevant contract. In paragraph 2 of my judgment I said this:

"The proceedings were commenced by originating summons, by which a number of declarations were sought as to the true construction of an option agreement made by deed dated 25 July 1988 as varied by a deed dated 30 November 1992, and as to certain related matters."

6. Mr Walford points to the fact that the originating summons contains a prayer for further and other relief. Perhaps I may be forgiven if I describe that as something of a formality. Certainly it does not alter the perceived nature of the proceedings which were before us.
7. The references in the judgment given by myself to Mrs Richardson's obligation to pay were plainly made in the context of the issues which concerned the construction of the agreement and were without regard to any defences which might arise had Mrs Richardson been faced with an application for an order for payment. As it seems to me, and indeed as my Lord put to Mr Walford in the course of the hearing this morning, if application had been made at the May hearing for an order to pay objections would then have been made; and that itself shows that this is not a matter for the slip rule. We are in effect being asked to decide a substantive question between the parties; i.e. whether the appellant should not be allowed to run the defences which she has put forward in response to an application for an order for payment. That as I say is a substantive question requiring distinct judicial determination upon its own merits. To my mind that consideration clearly takes this matter far away from the slip rule.
8. In Bristol-Myers Squibb Co v Baker Norton Pharmaceuticals Inc [2001] EWCA Civ 414 my Lord, Lord Justice Aldous, said this at paragraph 25 of the judgment referring to earlier authority:

"Those cases establish that the slip rule cannot enable a court to have second or additional thoughts."

9. That observation, with respect, seems to me also to embrace the proposition that the court cannot embark upon substantive judicial consideration of issues that have not previously been canvassed. It is right that there is authority to show that the slip rule may be deployed in circumstances where counsel has omitted to draw to the court's attention some aspect of the case which requires a further order, and such further order may be added in by the slip rule. But only, as it seems to me, where the matter is in reality uncontentious.
10. Mr Walford refers to the fact in May that we were asked to make and did make an order under Part 36.21(2) of the Civil Procedure Rules. I will not read out the sub-paragraph. Mr Walford's submission is that the making of such an order implies an apprehension on the court's part that the case concerned a distinct award to the claimant of the money in question. On the face of it, Part 36.21(2) indeed concerns situations of that kind. But for my part I certainly did not have in mind the kind of issues that have arisen before us today. I do not think the making of that order brings the case any closer to the slip rule.
11. I would reject this application for all those reasons. If Mr Gloyne seeks by fresh process to obtain an order for payment against Mrs Richardson, then as it seems to me the defences which Mr Ashton would wish to raise on her behalf may be pleaded. There may be an issue whether she is entitled to raise them and should in truth have raised them in these proceedings. There may be issues of course as to the merits of those defences. All those matters are for such further proceedings if they are brought.
12. LORD JUSTICE ALDOUS: I agree.
13. For myself I believe that I was deciding a case revolving around construction of an agreement. It never crossed my mind that I was deciding a case which has been put forward in the skeleton arguments before us. In those circumstances, I conclude that the slip rule cannot apply.
14. I only add this to my Lord's judgment. There is an application before us, made on behalf of Mrs Richardson, for the order to be amended. We have not had time to consider it, but hopefully the matters that are raised could be dealt with by another court. If not, the matter will have to be restored for further hearing.
ORDER: Application by Mr Gloyne refused; application by Mrs Richardson adjourned to be restored; order that Mr Gloyne pay the costs of Mrs Richardson assessed at £4,000 and that sum to be set-off against orders for costs in the favour of Mr Gloyne. (Order not part of approved judgment)