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
(HER HONOUR JUDGE ALTON)

		Royal Courts of Justice Strand London, WC2
		7th April 2005

1. LORD JUSTICE CLARKE: There are two applications for permission to appeal before the court. The first application, A3/2004/2585, relates to a refusal by Lightman J on 28 June 2004, in what is sometimes called a Taylor v Lawrence application now made under CPR 52.17 to reopen and set aside an order by Mr Deputy Master Cousins, made on 17th August 2001, as will appear in a moment. Deputy Master Cousins struck out the applicant's (that is Mrs Freeguard's) claim in its entirety. An appeal against that decision succeeded in part, before Mr Simon Berry QC sitting as a Deputy Judge of the Chancery Division.
2. The second application, A3/2005/0087, relates to a refusal by Her Honour Judge Alton to allow an appeal against an order of Master Bowles refusing an application for permission to reamend the Particulars of Claim in some respects. The decision of her Honour Judge Alton was made on 20 December 2004. The order of Master Bowles was made in August 2004.
3. Some time after the decision of Master Bowles the trial of this part of the action which was not struck out as a result of the appeal to Mr Berry was fixed to take place in the Chancery Division in March of this year. Thus when the matter came before her Honour Judge Alton, the trial of those issues was already fixed. I am told that the trial took place in the middle of March. It came before Mr B Livesey QC sitting as a Deputy Judge of the Chancery Division. The judgment was reserved and has not yet been handed down.
4. The history of the matter is long and complicated. The factual history from which the original claim arose is set out in detail by Mr Berry in his judgment and it is not necessary to repeat that detail here. In short, Mrs Freeguard, and, I think, her husband, owned a house and adjoining land and also some adjacent land in Brixton, Devon. (I should interpose to say that I earlier permitted Mr Freeguard to represent his wife on these applications and he has done so with persistence and courtesy this morning.)
5. Much of the adjacent land was sold to a Mr James Edgar and a Mr Robert Edgar, but Mrs Freeguard retained an area at the back of the house, which is known as "the Back Land", and also a further strip of land, which is known as "the Strip" or "the Ransom Strip". After Mr James Edgar died Mr Robert Edgar also purchased the Back Land and the Strip, although Mrs Freeguard was granted an option to reacquire the land. Mr Edgar later charged the Back Land and the Strip to the Royal Bank of Scotland (the Bank). The option was subsequently exercised by Mrs Freeguard.
6. Litigation ensued which resulted in a decision by the Court of Appeal upholding a decision of a Deputy Judge in the Chancery Division that the bank charge had priority over Mrs Freeguard's interest. Mrs Freeguard subsequently became registered proprietor of both the Back Land and the Strip and the bank charge was also registered and noted on the title.
7. The Bank later exercised its power of sale in relation to both the Back Land and the Strip. Mrs Freeguard brought a claim against the Bank which was struck out, in its entirety, on 17 August 2001 by Deputy Master Cousins. Her case initially included a number of varied assertions, including (i) that the Bank was not entitled to register its interests as legal charge; (ii) that Mrs Freeguard should have taken title free of the legal charge; (iii) that if the Bank had a legal charge Mrs Freeguard would be deemed to be the mortgagor; (iv) that no power of sale arose because the interest was merely equitable; (v) that the Bank sold the Back Land and the Strip without Mrs Freeguard's knowledge and the sales were unlawful and fraudulent; (vi) that both the Strip and the Back Land was sold at an undervalue; and (vii) that the Bank committed both fraud and forgery.
8. Mrs Freeguard sought permission to appeal against the order striking out the claims. The appeal was limited to Mrs Freeguard's case that the land was sold at an undervalue. The grounds of appeal included, as I read them, an allegation that the Bank was in breach of a duty owed to the claimant, namely a duty of care and a duty of good faith, to obtain a proper price in relation to both the Back Land and the Strip.
9. When the matter was before the Deputy Master he said, at page 65 of the bundle, that:

"Various issues of fact have been raised by Mrs Freeguard by reference to earlier valuations made as to the Back Land. The sales of these parcels, as she asserts, were for prices not much in excess of the valuation made in December 1987."

10. The Deputy Master had referred to that valuation. The Deputy Master had rejected Mrs Freeguard's case that the Bank owed her any duties. As to the loss, the Deputy Master observed that Mrs Freeguard had provided no independent valuations of what she considered to be the true values of the Strip and the Back Land. On that footing he said that he did not consider that the submission that the Bank sold those parcels at an undervalue had any merit.
11. When the matter came before Mr Berry on appeal, unconditional permission having been granted by Patten J, Mrs Freeguard said in paragraph 2 of her second statement:

"Following the Deputy Master's decision, I sought advice from solicitors and counsel and as a result I sought permission to appeal in respect of only one of these issues, namely whether the Strip was sold by the defendant at an undervalue."

12. I think I am right in saying that Mrs Freeguard was not represented by counsel before the Deputy Master, but she was represented by counsel, Mr Machell, before the Deputy Judge. In paragraph 26 of the skeleton argument prepared by Mr Machell for the purposes of the appeal against the order of the Deputy Master, he included this:

"It is accepted that the Claimant did not provide any independent valuations of the Strip and the Back Land. (An independent valuation of the Strip has now been obtained; see below paras 35?37. A claim in respect of the Back Land is not being pursued at this stage)".

13. Thus, when Mr Berry came to give his very detailed judgment in this matter, although he referred in the introductory and descriptive parts of his judgment to the "Back Land", he did not focus specifically on the Back Land at all. He held, as I have indicated, that it was at least arguable that the Bank did owe duties to the applicant, Mrs Freeguard. Those duties would no doubt relate both to the Strip and the Back Land. However, he did not consider any evidence in relation to the Back Land because no expert evidence was before him relating to it. He did, however, consider detailed evidence from Mr Stagg in relation to the Strip. He admitted the evidence, contrary to the Bank's submissions, and partly on the basis of it formed the view that Mrs Freeguard had an arguable case that she had suffered loss as a result of a breach of duty on the part of the Bank. It was on that basis that the appeal was allowed.
14. The Deputy Judge handed down his judgment on 26 March 2002. The proposed amendments to the Particulars of Claim had been left over for debate when the remaining issues came to be considered. On 29 May 2002, Mr Berry heard argument on a number of issues, including a preliminary issue, costs and the proposed amendments to the Particulars of Claim. He made a specific decision refusing permission to amend in relation to a distinct matter and he left the parties in effect, to agree the order in the light of his decision. His order includes the following:

"1 the following orders be substituted for the orders made by Deputy Master Cousins on 17th August 2001:

a) the Claimant's Statement of Case be struck out save for the Claimant's claim that the Defendant sold the land referred to in the judgment of the Deputy Master as 'the Strip' in breach of the duty it owed to her to take reasonable steps to obtain a proper price for the Strip ...

...

3. the Claimant have permission to amend the Particulars of Claim in the form attached hereto and initialled by the Judge; the costs thrown away by the amendment of the Particulars of Claim be the Defendant's costs in any event;"

15. I have not seen the Particulars of Claim in the form in which they were apparently initialled by the judge. However I have seen the amended Particulars of Claim which were subsequently served pursuant to that order. In that pleading there is no reference to the Back Land in the way in which the duty is pleaded. There is, however, this reference to it, under the heading "Breach":

"In breach of the duty set out in paragraph 59, the Defendant failed to take reasonable precautions to secure a proper price ... for the Strip and the Back Land."

16. There then appear detailed particulars. However, all the particulars relate to the alleged breach of duty with respect to the realisation of the value of the Strip. The loss alleged is the loss said to have been caused by that breach of duty and is thus restricted to the loss relating to the Strip.
17. The position was therefore that after the appeal against the decision of the Deputy Master the action remained struck out except in relation to the claim relating to the Strip. Thereafter directions were given leading up to the proposed trial of the issues relating to the Strip. No immediate attempt was made further to challenge the decision of the Deputy Master, or indeed the order made by Mr Berry on appeal from it. However, well over 18 months after the order made by Mr Berry, Mrs Freeguard made an application that the order of Deputy Master Cousins be set aside on a number of grounds, including that the Deputy Master should have treated Mrs Freeguard as the mortgagor. She also appears to have alleged bias against the Deputy Master.
18. The application did not purport to be an appeal against the decision of the Deputy Master, but appears to have been based upon what is sometimes called the Taylor v Lawrence jurisdiction. That fact was confirmed today in argument by Mr Freeguard.
19. The matter came before Lightman J who rejected it in forthright terms on 28 January 2004. He rejected the application on the simple basis that the Taylor v Lawrence jurisdiction does not apply to first instance decisions, but only to decisions of a Court of Appeal. The jurisdiction is now contained in CPR 52.17, which by paragraph 1 provides:

"The Court of Appeal or the High Court will not reopen a final determination of any appeal unless-

(a) it is necessary to do so in order to avoid real injustice;

(b) the circumstances are exceptional and make it appropriate to reopen the appeal; and

(c) there is no alternative effective remedy."

20. In my judgment the judge was plainly correct to hold that that jurisdiction is not available to challenge a decision of a judge of first instance. The only way to challenge such a decision is by way of an appeal. Lightman J correctly held that Mrs Freeguard was able to appeal to a judge. Indeed she did so. She appealed to Mr Berry. The problem is that she did not raise the issues which she has now sought to raise. The judge also expressed the view that the decisions complained of were correct. Thereafter it was not until 7 December 2004 that Mrs Freeguard filed an application for permission to appeal against the decision of Lightman J.
21. I do not know what the reason for that delay was, but Mrs Freeguard's application for permission to appeal faces two insuperable obstacles. The first is the one that I have already mentiond, namely that the decision of the judge that the application was not a proper procedural use of the Taylor v Lawrence jurisdiction is plainly right. The second is that this court, that is the Court of Appeal, has itself no jurisdiction to entertain an appeal from a decision of a judge of the High Court under CPR 52.17.
22. That this court has no jurisdiction was decided in this court in a case called Andrew Parker v Graham Hutchings [2004] EWCA Civ 254, where Brooke LJ so held. He said in paragraph 11:

"11. As I have said, there are three matters before us today. The first is the attempt to challenge the Taylor v Lawrence order. In my judgment there is no right of recourse to a further appeal court after a lower appeal court, in this case Neuberger J, has refused to re-open the matter. In paragraph 56 of his judgment in Taylor v Lawrence [2002] EWCA Civ 90, [2003] QB 528, Lord Woolf, giving the judgment of a five-judge court, made it clear that a Taylor v Lawrence application would be considered on paper, that there would be no right to an oral hearing of the application unless the court so directed (as Neuberger J did), and that the court should exercise strong control over any such application so as to protect those who are entitled reasonably to believe that litigation is already at an end. There is no suggestion that there is a right to go on challenging a refusal to re-open a decision of an appeal court.

12. Accordingly, I am satisfied that Mr Hutchings' first application is doomed to failure for want of jurisdiction in this court."

23. The attention of Mrs Freeguard was drawn to that decision by the court office and no submissions have been made on her behalf on the jurisdiction issue. In short, as Mr Freeguard quite fairly and openly recognises, what Mrs Freeguard is seeking to do by this application is to challenge the decision of Deputy Judge Cousins. The only way in which she could properly do that was by way of appeal. It is now far too late to seek to challenge that decision a second time now after all this time. It follows that since this court has no jurisdiction it would be quite wrong, in principle, for me to grant permission to appeal. I therefore decline to do so.
24. I turn to the second application. This is an application for permission to appeal against a decision of Her Honour Judge Alton dismissing an appeal against the decision of Master Bowles, made on 2nd August 2004, refusing an application for permission to reamend the Particulars of Claim. The particular re-amendment sought included a claim that the Back Land was sold at an undervalue and to allege malicious falsehood and slander of title.
25. Master Bowles gave detailed reasons for his judgment in a judgment running to 17 pages and some 16 paragraphs. An application for permission to appeal was made and granted by Peter Smith J on 20 September 2004. In doing so he expressed what appear to me to be some reservations. However it is right to say that when the appeal came before Her Honour Judge Alton in December 2004 she treated Mrs Freeguard as having been given permission to appeal on all the points which she wished to advance.
26. Her Honour Judge Alton also delivered a lengthy judgment. She considered the issue of the Back Land between paragraphs 12 and 30. She set out the submissions on both sides and concluded that the judge was right. In short she held that the effect of the order of District Judge Cousins was to strike out the whole claim and the order of Mr Berry was to reinstate the claim only with reference to the Ransom Strip. She recognised that the same duty must have existed in relation to both the Ransom Strip and the Back Land, but identified the distinction between them as being that only in the case of the Ransom Strip was there expert evidence admitted and relied upon by Mr Berry when he reached his conclusion on appeal from District Judge Cousins (see paragraphs 19 to 29 of her judgment.)
27. Between paragraphs 31 and 51 she considered the appeal against the Master's refusal to allow Mrs Freeguard to raise a claim alleging malicious falsehood and/or slander of title. The judge dismissed the appeal, albeit for somewhat different reasons from those given by the Master. Master Bowles had concluded that the alleged false statement which had led to the malicious falsehood and slander allegations was a mistake rather than an indication of deliberate falsehood. The judge held that there was a real prospect of succeeding on an argument that the statement was intentionally false rather than merely a mistake, but that Mrs Freeguard had no prospect of proving that the statement was calculated to cause loss or that any such loss arose as the direct and natural consequence of the publication.
28. The difficulty which Mrs Freeguard faces in this application is that it is an application for permission to advance a second appeal. CPR 52.13(2) provides that the Court of Appeal will not give permission to appeal on a second appeal unless it considers that:

"a) the appeal would raise an important point of principle or practice; or

(b) there is some other compelling reason for the Court of Appeal to hear it."

29. There is no possible basis on which it could be said that this appeal raises an important point of principle or practice and to be fair to Mr Freeguard he does not suggest that the appeal would raise any such question. He says, however, that this is a case in which there is a compelling reason for the Court of Appeal to hear an appeal. He submits that it is unjust not to allow Mrs Freeguard to advance her claim in relation to the Back Land in addition to a claim in relation to the Ransom Strip.
30. He explained to me in the course of his argument, by reference to a very clear Land Registry plan showing the various parcels of land, the strength of the case in principle in relation to the Back Land. He made his point very clear by reference to the plan, at any rate once I had understood which bits of the plan represented what.
31. However, the difficulty is that in a recent decision of this court before Tuckey LJ and Dyson LJ called Uphill v BRB (Residuary) Limited [2005] EWCA Civ 60, the Court considered the correct approach to an application of this kind. In paragraph 19 Dyson LJ said, giving the judgment of the court:

"19. We turn to CPR 52.13(2)(b) and 'some other compelling reason'. What is contemplated here is an appeal which does not raise an important point of principle or practice. 'Compelling' is a very strong word. It emphasises the truly exceptional nature of the jurisdiction. This is because the philosophy which underlies CPR 52.13(2) is, as explained by Brooke LJ in Tanfern, that second appeals are exceptional."

32. Dyson LJ then referred to a further statement by Brooke LJ in Iftakar Ahmed v Stanley A Coleman and Hill [2002] EWCA Civ 935, which stressed the importance of finality. The Court in Uphill then considered a number of previous cases, which had focused on the meaning of compelling reason, and expressed the view that it is a very stringent test. For example, in paragraph 24(1) Dyson LJ said:

"Subject to what we say at (3) below, anything less than very good prospects of success on an appeal will rarely suffice."

33. He emphasised the narrow scope of the test. One possibility the Court considered was the case where there has been some procedural irregularity in the court below.
34. Here there is a suggestion in the grounds of appeal that Mrs Freeguard did not have a sufficient opportunity to put her case. However, I am unable to accept that submission. There is no reliance in the grounds of appeal upon a particular point which could not fairly have been put before the judge because of late submission of the Bank's skeleton argument. The judge adjourned the hearing for a short period to allow Mrs Freeguard, or realistically perhaps Mr Freeguard, to read the Bank's skeleton argument. The judge also said that she would ignore the documents sent to her by e-mail by the Bank that were not made available to Mrs Freeguard.
35. There is no sensible basis upon which this court could hold that Mr Freeguard did not have every opportunity to put Mrs Freeguard's case to the judge. Indeed it is clear that the judge considered the various issues of the case with considerable care.
36. What Mr Freeguard says, in essence, is simply that he should now, or Mrs Freeguard should now, be able to put material before the court to show that the Bank was in breach of duty in relation to Back Land and that she has suffered substantial loss. The problem from Mrs Freeguard's point of view is that these are matters which were matters properly to be put before the Deputy Master in 2001. Some material in relation to Back Lane was put before the Deputy Master just as material relating to the Ransom Strip was put before the Deputy Master. The problem was that no attempt was made to put independent evidence before the Deputy Master in relation to either the Back Land or the Ransom Strip.
37. Indeed, when the matter came before Mr Berry on appeal the Bank said that it was too late for Mrs Freeguard to put fresh evidence before the judge. However, the judge admitted the evidence in relation to the Ransom Strip, as I have already indicated. The time to seek to put such evidence before the court was either before the Deputy Master, or, at the latest, before the Deputy Judge on appeal.
38. I can see no reason why it should not have been possible to obtain independent evidence to support the case which Mr Freeguard now seeks to make. The case is clear from the Land Registry plan. It is one that Mr and Mrs Freeguard must always have had in mind, but for some reason they chose not to put it before Mr Berry, as they did in the case of the Ransom Strip. It may be that Mr Stagg would have wanted some further material to support any opinion that he might reach, but I can see no reason why appropriate material should not have been put before the court in 2001 or 2002.
39. As I see it, that was essentially the basis upon which the decisions were made refusing the application. Both the Master and the Judge thought that these were matters which were precluded by the earlier decision. In any event they thought that it was now far too late especially given the fact that the trial of the Ransom Strip action was already fixed by December 2004 for March 2005.
40. It appears to me that if permission were to be granted the prospects of success would be very poor. There is certainly no compelling reason within the meaning of the test identified by Dyson LJ upon which I could properly grant permission to appeal.
41. So for those reasons, although I appreciate they will be disappointing to Mr Freeguard, and although I am very grateful to him for the clear way and courteous way he has addressed the court, I have no alternative but to refuse the applications. As I indicated earlier, I shall not order Mr Freeguard to pay any of the Bank's costs, although it is fair to say that they are not applying for them.

Order: Applications are refused. No order as to costs.