England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
APPLICATION FOR PERMISSION TO APPEAL
AND AN EXTENSION OF TIME

		Royal Courts of Justice Strand London WC2 Thursday, 26th April 2001

1. MR JUSTICE LLOYD: This is an application by Mrs Pickles acting on behalf of her mother as personal representative of her late father, Mr Petersen, for permission to appeal in relation to a judgment of His Honour Judge Nicholas Chambers QC given at the end of a solicitor's negligence action in the Mercantile Court in Cardiff last year. The appellant's notice was lodged slightly late because of various practical difficulties and misunderstandings, but I am satisfied that an extension of time should be allowed notwithstanding the delay. That delay was entirely excusable and should not preclude Mrs Pickles from applying to this court for permission to appeal.
2. As for the substantive question of permission to appeal in itself, the matter stands in this way. Judge Chambers gave a lengthy judgment on 24th July 2000 at the conclusion of the trial. That has been transcribed and, with a little bit of exchange between him and counsel at the end, it comes to 56 pages. Perhaps unfortunately, at two points in the judgment, he said that letters are to be taken as read into his judgment but when it came to be transcribed they were not set out. Mrs Pickles has been able to show us both those letters and they assist us considerably in dealing with the matter. At the trial it is fair to say that every possible aspect of the matter seems to have been at issue. The trial came on in unfortunate circumstances, but circumstances that are relevant for this purpose, because Mr Petersen, the client, had died, but also Mr Rivlin the solicitor had died. Therefore, the judge was not faced with oral evidence from the direct parties to the retainer as to what their beliefs were or what their instructions were or what advice had been given. That had to be a matter of inference partly from documents and partly from oral evidence given by Mrs Petersen and Mrs Pickles and by Mr Swinburne called on behalf of the defendants.
3. The judge held that Mr Rivlin had been negligent. The circumstances underlying the matter are of some degree of complexity, and I do not need to go into much of it. The negligence was in relation to a transaction whereby Mr Petersen bought a property from three separate vendors. He bought the property knowing and facing the fact that it was burdened with litigation because there was an extremely litigious neighbour, Dr Bar-Gur, who, by the time of the contract, was suing the vendors on the allegation that their property had not been maintained properly and had led to flooding in his property. Mr Petersen bought the property and the law suit, so to speak. What was at issue was the terms on which he had dealt with the litigation in the contract. The judge accepted that Mr Rivlin was negligent in failing to advise Mr Petersen, in the light of a letter which the judge found had been sent by Mr Petersen to Mr Rivlin early in 1990 before contracts were exchanged. It was made plain in that letter that Mr Petersen wished to achieve a situation in respect of the purchase which it is clear was not achieved. The judge accepted that there was negligence and accepted, going on from that, that if Mr Rivlin had given the correct advice, in the light of that, to Mr Petersen before exchange of contract Mr Petersen would not have entered into the transaction. That established negligence and causation.
4. Nevertheless, the judge went on to hold that no damage had been suffered and that therefore led to the dismissal of the action.
5. It is his denial of damage to the claimant that is really at the heart of the matter. There are two aspects to that. One is his decision that Mr Petersen failed to mitigate his own loss and was the author of the whole of his own loss. The essential feature there is that it is said that he should have made or contributed to the making of a payment into court in the action brought by Dr Bar-Gur in the early part of 1991 and that he was wholly unreasonable in failing or refusing to do so. So far as that is concerned, while the judge recites a number of matters which are clearly relevant and perhaps even powerful evidence in support of the proposition that Mr Petersen was being obstinate and perhaps obdurate in ignoring advice to him, he also had to deal (this is one of the letters the judge refers to without reciting) with a letter that Mr Rivlin wrote to the solicitors, Messrs Merrils Ede, who had acted for the vendors of the property and were, I think, continuing to act for the defendants in the litigation. That is a letter which the judge says can be the basis of a suggestion that Mr Petersen acted reasonably in failing to lend himself to the payment into court and that Mr Rivlin was negligent in advising Mr Petersen. We have seen the letter in which Mr Rivlin said:

"As the evidence appears to be wholly against the plaintiff, we feel it would be inadvisable at this late stage for money to be paid into court. The defendants would risk paying substantial costs."

6. The judge went on to say that that could, in certain circumstances, be properly relied on as a reason why the claimant might say he acted reasonably in refusing to make payment into court. He does not accept that proposition on the basis that it was not Mr Petersen's letter but Mr Rivlin writing at Mr Petersen's dictation. That seems to us to be a rather strong conclusion to which to come.
7. Moreover, it seems to us that the judgment does not fully take account of the fact that there may have been some substance in the proposition that it was inadvisable to make a payment in at that stage because of the fact that if the payment were taken out, the parties making the payment - in effect, Mr Petersen and to some extent the vendors - would make themselves liable for Dr Bar-Gur's costs up to that date as well as being liable for their own costs. Mr Petersen was going to be liable under the contract for 90 per cent of the costs up to then. There are indications in the papers that at that stage the view taken of the prospects in the litigation was such as not necessarily to make it appropriate to expose the defendants to that sort of liability.
8. Moving on from mitigation, the judge then dealt, in case his ruling on mitigation were wrong, with heads of damage. He rejects, in particular, two heads of damage that seem to me to be points that have some substance. One is the legal costs of the deceased in Dr Bar-Gur's action, a sum of around £21,500, and the other is a sum of £42,500 which stands in a different position. There is a finding in the judge's judgment that Mr Petersen believed the limit on his liability for costs applied only to the liability to Dr Bar-Gur rather than the defendant's costs. A criticism of that is levelled by Mrs Pickles largely but not only on the basis of a skeleton argument which we have seen, which was prepared by Mr Wynn Williams QC, who acted for the estate at the litigation, and who was able to prepare this in advance of the application made unsuccessfully to Judge in Chambers for permission to appeal from him. It seems to me that that is not a point that it would be useful to explore on appeal because the fact is that, the judge having held that Mr Rivlin was negligent and that but for that negligence Mr Petersen would not have entered into the transaction, it follows he also would not have incurred liability for those costs. Therefore, while it is or may be arguable that there should be a deduction of £10,000, subject to that it seems that this is a loss which followed from the negligence, if the mitigation point is out of the way.
9. There is a separate point as to the £42,500. That arises because Mr Petersen ws unfortunately mdae bankrupt in consequence if hisliability to the vendors' by way of contribution following Dr Bar-Gur's successful judgment, albeit that judgment was reduced on appeal. Mr Petersen owned a house and that vested in his trustee in bankruptcy. That house was sold in order to pay the debts. It was sold for £42,500, as I understand it, to a relation of Mrs Pickles' husband. The claim for that loss is put in the schedule of damage in a way that I am not sure is entirely appropriate in the circumstances because it is simply claimed as the otherwise unnecessary costs of the deceased's bankruptcy of £42,500. It is plain from the judge's judgment that he rejected that item on the basis the sum was paid by someone other than the estate. If that were all there were to it that would be a perfectly good answer. But in Mr Wynn Williams' skeleton argument it is explained on the basis that the argument was slightly more refined than that. It was that the loss was not £42,500 paid by a third party but the loss of the property in consequence of the bankruptcy, valued at £42,500 on the basis of that being the sale price to a third party. Although that does not fit altogether well with the schedule of damage, Mr Wynn Williams asserts in his skeleton argument that that is how the matter was argued. It seems to me that this is at least arguable and that the judge failed to take that into account, perhaps understandably, but clearly at the end of his very long judgment when he came to deal with damages.
10. For those reasons, for my part, it seems to me that while Miss Pickles clearly faces a substantial task in pursuing the appeal, it would be wrong to say that there is no reasonable prospect that she may succeed. Accordingly, so far as the issues relevant to damages are concerned, including mitigation, for my part, I would grant her permission to appeal.
11. LORD JUSTICE JUDGE: I agree. I should emphasise to Mrs Pickles, who is here before us, that our judgment does not mean, nor should she take it to mean, that her appeal will be successful. What we have had to decide and have decided is that it is arguable. That is a long way away from triumph.
Order: Application granted