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
CHANCERY DIVISION
(MR JUSTICE LLOYD)

		Royal Courts of Justice Strand London, WC2 Friday, 11 October 2002

1. LORD JUSTICE POTTER: I will ask Lord Justice Carnwath to give the first^_ judgment.
2. LORD JUSTICE CARNWATH: This is an application by Mr Perotti for permission to appeal against an order of Lloyd J given on 24 May 2002 on an application by the second^_ defendant, Mr Frank Hinks, for summary judgment in the claim brought by Mr Perotti for negligence. The case had a long background and the relevant history is set out in considerable detail in Lloyd J's judgment. I do not need to repeat it.
3. The matter came before Lloyd J in circumstances which were somewhat unfortunate. Mr Perotti, who has been appearing on his own behalf for some time, was unable to be present because he was in the course of being evicted from his house. There was some discussion before the judge as to the circumstances of that, as a result of a note from the solicitors for the other side suggesting that Mr Perotti should make an application for an adjournment, which he had not done. The judge decided to proceed with the hearing, bearing in mind that Mr Perotti would have the right, under the rules, to apply to set it aside if it went against him, provided he could show that he had good reason for non-attendance and that he had a reasonable case.
4. The judge went on to consider the matter on the merits with the assistance of counsel for Mr Hinks. The judge was also concerned to address the possibility that there might be some consideration as to whether he should recuse himself. Mr Justice Rimer had done so in earlier proceedings because he knew Mr Hinks professionally and he felt it was not appropriate to deal with the case. Lloyd J dealt with this point and made it clear in his judgment that he did not have any personal knowledge of Mr Hinks, although he did have knowledge of Mr Hinks' counsel, Mr Walford. As has been made clear in the court of Appeal in Locabail (UK) Ltd v Bayfield Properties Ltd & Anor [2000] 1 All ER 65, the fact that a judge has a professional connection through being a member of the same chambers as a barrister, does not mean his function is impaired.
5. Having dealt with those matters, the judge went on to deal with the arguments raised by Mr Perotti in his claim. He also had the statement from Mr Hinks in which he explained his background in the case, and his response to the suggestion that he was negligent on all the various points alleged by Mr Perotti. The judge concluded at the end of his judgment that there was nothing in any of the points made which offered the slightest chance of success for Mr Perotti and he made the order in favour of Mr Hinks.
6. Mr Perotti appealed. At the time he lodged his appeal, he made no reference to the decision on merits. He said he was not able to give full grounds because he did not have the transcript at that stage. When the matter came before Aldous LJ on the original permission to appeal application, he considered, first,^_ whether there was any purpose in leaving Mr Perotti to his remedy of applying to have the original judgment set aside. He said that was probably not sensible given the strong view the judge had taken on the chances of success. Aldous LJ did not, on 23 August 2002, have the copy of the transcript available. He ordered that one be made available at public expense to Mr Perotti. He adjourned the matter to be relisted on notice. Shortly thereafter, Lloyd J approved the transcript, which Mr Perotti now has and so do we.
7. The grounds that Mr Perotti argued strenuously before us had not been set out in any written notice. However, he helpfully focused on what he said were his most important points. The first point in the judgment concerns the failure of Mr Hinks to take on board the point that the estate had not been invested in equities but in the money market. This is dealt with by the judge at page 17 where he refers to complaints of inefficiency against Mr Watson who administered the estate. He also referred to the decision of the Court of Appeal in the Nestle case. The judge refers at the bottom of page 18 to the complaint that Mr Watson had invested the monies of the estate in fixed interest but nothing in equities, as a result of which Mr Perotti was saying that the estate had lost a substantial amount.
8. The judge then refers to Mr Hinks' response and, in particular, to Mr Hinks' point that, in the absence of sufficient information on the papers, he could not have advised effectively or pleaded a claim in relation to management or investment. The judge then makes this comment:

"[Mr Hinks] also makes the point, which seems to me to be highly pertinent, that this is not a case in which it is said that a particular cause of action had to be pleaded by such and such a date because otherwise it would be barred by limitation. There is not a limitation point in this case, or at least none has yet been raised. What Mr Hinks had to do was to provide a suitable draft amended pleading which could be served by the Wednesday in order to keep the action alive."

9. It is against that background that Mr Hinks had been instructed, where there was a risk of the whole action being struck out unless a proper claim was put in within a matter of a few days. The judge is there saying, "Whatever the merits of the particular point, it is not as if this is the last chance". He then goes on to say towards the end of page 20:

"Mr Hinks could, I suppose, reasonably have expected that the matter might come back to him at a time when there was more leisure to consider what, if any, other claims Mr Perotti might advance, and it may be that questions of this kind could then have been thought about. But that did not happen because Collyer Bristow ceased to act and Mr Perotti ceased to act and Mr Perotti then continued to conduct the matter on his own."

10. The other main point upon which Mr Perotti relies is at page 22 of the judgment where the judge said:

"Failing to advise and plead that administrators cannot charge for their services to the estate in the absence of a charging clause in the will, there being none."

11. The judge continued:

"There is a very simple answer to that. Mr Watson has admitted that he is not entitled to charge for his services to the estate. Whereas he may have claimed charges in the past, he does not say that he was entitled to those moneys now, and indeed he brought a second separate proceeding before the court, the fate of which I do not know, asking to be allowed by the court to retain and be paid in relation to his services. Therefore I do not need to consider this point because plainly Mr Perotti has not suffered any loss. I do not, by saying that, mean to imply that I consider that Mr Hinks ought to have advised on it or claimed relief on that basis. But even if it was arguable that he might have done, the point is of complete irrelevance because no loss has been suffered."

12. That point about the loss is expanded in more detail in Mr Hinks' statement put in in November 2001. Mr Perotti has made other points. I do not feel I need to refer to them in any detail because it seems to me that they are fully answered by the judge. Furthermore, the crucial point, to which the judge referred in the passage I have recited, is the way in which the matter came before Mr Hinks in December 1992. It was then necessary to get the case back on track and to avoid being struck out completely. As a result, he had to advise on the matter within a few days. The instructions make it clear that the solicitors were regretting that fact and regretted placing counsel under considerable pressure.
13. Mr Hinks prepared the appeal which kept the action alive. There would have been plenty of time later on, had he continued to be instructed, for any other matters to be investigated with the assistance of Mr Perotti and any other documents to be included.
14. Mr Perotti points to the attendance note of the hearing. He points to the fact that the instructions talk about the importance of him having comprehensive advice and to the conclusion of the attendance note where counsel advised that Mr Perotti should put in as strong a claim as possible and get out of the action at an early stage by settling if he could. Mr Perotti says that was Mr Hinks giving him clear advice, and thee was no suggestion that there might be other points which might come up if he had more time and more material.
15. That in my mind, gives no weight to the need, where counsel is instructed in such circumstances, for counsel to focus on what is the immediate task in hand, which in this cae was to make sure the action was kept alive. The advice which counsel gave at that time, on the basis of that information, was intended to give Mr Perotti a realistic view of how to proceed. The points which Mr Perotti now goes through in detail, 10 years on, were not points which Mr Hinks can be held negligent for not having picked up in that short space of time. As the judge said, in the normal course of events, if Mr Perotti was going to proceed, there would be further opportunities to look at the detail.
16. In conclusion, there has been nothing from Mr Perotti to contradict effectively the evidence given by Mr Hinks as to circumstances and nature of his limited role in the case. I do not think there is any realistic chance of persuading the court that the approach of Lloyd J was wrong.
17. For that reason, I would refuse permission to appeal.
18. LORD JUSTICE POTTER: I agree. Mr Perotti has argued with great vigour that the judge was wrong in the conclusion which he formed, which was by way of contrast to that of Neuberger J when he had earlier refused to strike out the claim as against Collyer Bristow. He says that his two principal points as to the failure to invest in equities and the occurring of wasted costs commended themselves to Neuberger J as requiring investigation before judgment was given, and that they should equally have commended themselves to Lloyd J as a reason for refusing the application of Mr Hinks.
19. He criticises counsel for Mr Hinks in not bringing that judgment to the attention of the judge. He submits that the same considerations and criticisms apply to both parties. He goes on to submit that it would be just and appropriate to require Mr Hinks to proceed to be retained in the action with a view to proceeding to trial in order to avoid the two parties playing off their cases against each other.
20. On careful consideration, I do not think that is correct. This will be long and expensive litigation. Mr Hinks is entitled, as a defendant, to have the case dealt with against him on its own merits, which is what the judge did. There was no evidence before the judge to contradict the witness statement of Mr Hinks in the matter and there is still none, despite the vigorous submissions of Mr Perotti.
21. Mr Perotti has relied on one additional point in particular, namely, that he should have been advised by Mr Hinks of the possibility of an increased liability for costs if he joined parties additional to Mr Watson in the administration action. I am satisfied that is to be wise after the event. At the time there appeared to be good reason for joining all those parties against whom maladministration was alleged. I see no likelihood of a finding of negligence against Mr Hinks.
22. I too would dismiss the application.

Order: Application refused with costs to be subject to detailed assessment. Transcript of judgment to be supplied at public expense.

(Order does not form part of the approved judgment)