IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE QUEEN'S BENCH DIVISION
MAYORS AND CITY DISTRICT REGISTRY
(His Honour Judge Simpson)
B e f o r e :
LORD JUSTICE MUMMERY
MR JUSTICE BLACKBURNE
| LUKE PERSAUD|
(2) JOHN PERSAUD
|(1) MOHAN PERSAUD |
(2) MILAN DULOVIC
(3) STEPHEN PERSAUD
Smith Bernal Wordwave Limited
190 Fleet Street, London EC4A 2AG
Tel No: 020 7404 1400 Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
MR R STEWART QC (instructed by Reynolds Porter Chamberlain, London WC1 7HA) appeared on behalf of the Respondents.
(AS APPROVED BY THE COURT)
Crown Copyright ©
(1) a declaration that the father and the Company held their assets upon trust for the benefit of the father and the sons, the share of each son being at least 10% of the capital;
(2) an interlocutory injunction restraining the father and the Company from dissipating or disposing of their assets or removing them from the jurisdiction;
(3) damages for breach of contract, alternatively reasonable remuneration for the services rendered; and
(4) damages for breach of trust.
A Mareva injunction was obtained.
"Even if I had accepted the sons' evidence on the facts of this case, it seems to me that they faced formidable difficulties on the law. The alleged contract is void for uncertainty. The essential elements of a contract for the sale and purchase of land are that there must be agreement on the parties, the property and the price. The property must be sufficiently identified by description. In the present case, the houses are not defined or described at all. They could be anywhere. The identity of the houses is a material term. The contract is silent about this term, and the omission cannot be supplied by the law. It follows that there is no contract. Even if this was not so and contrary to my judgment a contract was made, it would be immediately caught by section 2(1) of the Law of Property (Miscellaneous Provisions) Act 1989, which requires a contract for the sale or other disposition of an interest in land be made in writing and by incorporating all the terms which have been expressly agreed. In the present case, there was nothing in writing."
He held that the doctrine of constructive trusts did not help the sons, nor did the doctrine of proprietary estoppel. He further held that if the sons had been entitled to a quantum meruit it can only have been a claim against the Company alone and there were no grounds for piercing the corporate veil. He found that nothing was payable to the sons.
"...any costs incurred by a party-
(a) as a result of any improper, unreasonable or negligent act or omission on the part of any legal or other representative or any employee of such representative; or (b) which, in the light of any such act or omission occurring after they were incurred, the court considers it is unreasonable to expect that party to pay..."
By subsection (13):
"...'legal or other representative', in relation to a party to proceedings, means any person exercising a right of audience or right to conduct litigation on his behalf."
"In those circumstances, I cannot see how the barrister on the other side should be in breach of his duty to the court in continuing the litigation. Even at trial on the first day the application might have been resurrected and I could have decided upon it, thus saving four days' costs, plus the further morning for reserved judgment, and there was, in addition, no submission of no case to answer.
Bearing in mind that I am concerned here with breach of the duty to the court and not to the Legal Aid Fund, and bearing in mind that I do not have instructions or notes of the conferences, and the fact that the father never proceeded with his application to strike out, it seems to me to be impossible to say that this barrister is in breach of his duty to the court and, accordingly, the application to show cause is dismissed."
"The court's jurisdiction to make a wasted costs order against a solicitor is founded on breach of the duty owed by the solicitor to the court to perform his duty as an officer of the court in promoting within his own sphere the cause of justice." (See page 227 between C and D.)
There can be no doubt that the jurisdiction under section 51 of the Supreme Court Act 1981 to make a wasted costs order has now been extended to barristers. It is equally plain from Ridehalgh and Medcalf that the jurisdiction covers all that it previously covered and which was explained in Myers v Elman and may go further. This court in Ridehalgh explained (at pages 232 and 233) the meaning of the words in section 51(7) "improper, unreasonable or negligent". The expression "improper" covers, but is not confined to, conduct which would ordinarily be held to justify disbarment, striking off, suspension from practice or other serious professional penalty (see page 232 between D and E). I need not deal with the term "unreasonable", that not being relied on. The term "negligent" is to be understood in an untechnical way to denote "failure to act with the competence reasonably to be expected of ordinary members of the profession" (see page 233 B-C).
"It is also from the authorities clear, and no submission to the contrary has been here made, that unreasonably to initiate or continue an action when it has no or substantially no chance of success may constitute conduct attracting an exercise of the above jurisdiction."
"Since the applicant's right to a wasted costs order against a legal representative depends on showing that the latter is in breach of his duty to the court, it makes no sense to superimpose a requirement under this head (but not in the case of impropriety or unreasonableness) that he is also in breach of duty to his client."
That guidance given in Ridehalgh was confirmed in Medcalf. Lord Hobhouse in that case at paragraph 26 referred approvingly to Ridehalgh and to the necessity for there to be a breach of the advocate's duty to the court. I need say no more on that first point.
"It is, however, one thing for a legal representative to present, on instructions, a case which he regards as bound to fail; it is quite another to lend his assistance to proceedings which are an abuse of the process of the court. Whether instructed or not, a legal representative is not entitled to use litigious procedures for purposes for which they were not intended, as by issuing or pursuing proceedings for reasons unconnected with success in the litigation or pursuing a case known to be dishonest, nor is he entitled to evade rules intended to safeguard the interests of justice, as by knowingly failing to make full disclosure on ex parte application or knowingly conniving the incomplete disclosure of documents. It is not entirely easy to distinguish by definition between the hopeless case and the case which amounts to an abuse of the process, but in practice it is not hard to say which is which and if there is doubt the legal representative is entitled to the benefit of it."
"They for their part must bear prominently in mind and their advice and their conduct should not be tempered by the knowledge that their client is not their paymaster and so not, in all probability, liable for the costs of the other side."
Thus, if counsel took advantage of the fact that his client was not his paymaster, and so probably not liable for the costs of the other side, to pursue proceedings which ought not to be pursued, then that may amount to an abuse of process, as Mr Stewart readily conceded.
"So it is not enough that the court considers that the advocate has been arguing a hopeless case. The litigant is entitled to be heard; to penalise the advocate for presenting his client's case to the court would be contrary to the constitutional principles to which I have referred. The position is different if the court concludes that there has been improper time-wasting by the advocate or the advocate has knowingly lent himself to an abuse of process. However it is relevant to bear in mind that, if a party is raising issues or is taking steps which have no reasonable prospect of success or are scandalous or an abuse of the process, both the aggrieved party and the court have powers to remedy the situation by invoking summary remedies -- striking out -- summary judgment -- peremptory orders etc. The making of a wasted costs order should not be the primary remedy; by definition it only arises once the damage has been done. It is a last resort."
"nothing in this section affects the creation or operation of resulting, implied or constructive trusts."
The 1989 Act substantially implements the recommendations of the Law Commission in its report, Law Com No. 164 Transfer of Land Formalities for Contracts of Sale of Land. In Part V the Law Commission expressly contemplated that equitable remedies such as promissory estoppel and proprietary estoppel might be available to do justice in cases where there has been a failure to comply with the formal requirements such as that the contract be in writing.
"...receipt of legal aid shall not, save as expressly provided, affect the relationship between or rights of a legal representative and client or any privilege arising out of the relationship nor the rights or liabilities of other parties to the proceedings or the principles on which any discretion is exercised."
I do not see that the fact that Mr Dulovic's clients were legally aided is of any materiality in this present case, though I hasten add that I can, of course, understand fully the disquiet felt by the father at having won his case but remaining at risk of not recovering his costs. However, there is still the prospect of recovery under section 18.
"...it will only be in a very rare case that this court would interfere with a decision by the judge as to whether or not to make a wasted costs order. It must be rarer still that this court will be willing to interfere with a decision of the judge at the first stage."
In my judgment the good sense of that is obvious. The judge has conducted the trial and will be fully aware of the conduct of the legal representatives in the case before him. It is striking that in this case the judge, despite the very severe criticisms made by him of the claims on behalf of the sons, nevertheless refused to make a wasted costs order. This case is not, to my mind, the exceptional case where it would be right to interfere with the exercise of discretion by the judge. Because of the importance of the points that have been raised, I would give permission to appeal. But for the reasons given I would dismiss the appeal.
Order: Appeal dismissed. The costs both here and at the hearing before Silber J should be borne by the unsuccessful defendants, though we would hope that the Lord Chancellor's Department would recognise that the additional costs of the hearing before Silber J appear to have been caused by an error on the part of one of the administrative staff in this court, and we would hope that the Lord Chancellor's department would be able to find some way of recognising that by making a contribution to those costs if not paying those costs. We think it appropriate to make a summary assessment of costs as requested by the successful claimants. We will reduce the costs in this court to £7,000. The costs before Silber J will be reduced to £6,900.