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
(HHJ NICHOLAS DAVIDSON QC)

		Royal Courts of Justice Strand London, WC2
		17th January 2006

Tuesday, 17th January 2006

1. LORD JUSTICE JONATHAN PARKER: Before the court are two applications for permission for second appeals in a partnership action, commenced, believe it or not, in the early 1970s. The first appeals were dismissed by an order made by Mr Nicholas Davidson QC on 21st October 2004. The respective applicants are Mr Glyn Weston and his brother Mr Dennis Weston. Each appears in person, although Mr Glyn Weston was assisted by his brother, Mr Alan Weston, who, with my permission, addressed me on his behalf. I heard the two applications for permission to appeal together.
2. Part 52.13 of the CPR applies to each application, with the consequence that permission to appeal will not be granted unless the proposed appeal would raise an important point of principle or practice or there is some other compelling reason why it should be heard.
3. As I have already indicated, this matter has an exceptionally long history; but I can, I think, summarise it relatively briefly.
4. The partners in the partnership, the subject of the partnership action, were three sons of Mr Robert Weston, who had founded the partnership business. The business was a sign-writing business carried on under the name Weston Signs. The three sons in question were Fred, Charles and Robert. Fred died intestate before the action was commenced and his personal representatives, that is to say his widow Ellen and his son Glyn (that is Mr Glyn Weston, one of the two applicants before me today), were the claimants in the action. Ellen has since died, also intestate, and Mr Dennis Weston, the other applicant before me today, is one of her personal representatives. Charles and Robert, the original defendants in the action, have also since died and their respective personal representatives were duly joined as defendants in their place.
5. In about March 1974 a receiver and manager of the business was appointed. In March 1979 he filed his final accounts, which the claimants disputed. However, the final accounts were approved by Master Chamberlain on 11th February 1982 and a sum of £53,000 or thereabouts was paid into court to the credit of the action. There has been no payment out, and the fund in court now exceeds £400,000.
6. On 8th May 1984 Master Chamberlain ordered that the costs of all the parties down to that date be taxed on the trustee basis (a basis of assessment which was, in those days, available under the Rules of the Supreme Court) and paid out of the sum in court; and that the balance remaining after payment of such taxed costs be divided as to 40.3 per cent to Fred's estate, as to 34.46 per cent to Charles' estate and as to the remaining 25.24 per cent to Robert's estate.
7. Master Chamberlain's order was appealed by the defendants and by an order dated 15th November 1984 Nourse J (as he then was) varied it by ordering that the parties' costs since 1979 be referred to the Taxing Master. It appears that the defendants were contending that part, at least, of the claimants' costs should be disallowed and that Nourse J, in effect, adjourned that issue to be determined by the Taxing Master.
8. Regrettably, however, none of the parties took any step to carry Nourse J's order into effect, and no reference to the Taxing Master was ever made. Indeed, no further step was taken in the action until June 1991 when the defendants applied for an order that no step be taken to refer the costs, the subject of Nourse J's order, to the Taxing Master, and that the costs of all parties since 1979 be taxed on the indemnity basis and paid out of the fund prior to distribution. In effect the defendants were giving up the benefit of Nourse J's order and seeking, no doubt in the interests of finality, to carry into effect Master Chamberlain's order. In the event it appears that that application was stood over generally by Master Gowers with liberty to restore.
9. Consistently with the previous history of the action, however, the application was never in fact restored. Indeed no further step seems to have been taken prior to April 2000 when the action was stayed under the transitional provisions which heralded the introduction of the Civil Procedure Rules.
10. In paragraphs 26 and 31 of his judgment on the first appeals Mr Davidson QC found, not surprisingly if I may say so, that the delays which had occurred in the prosecution of the action, and of which all parties were in some degree guilty, were not reasonably excusable. He also concluded that the introduction of the Civil Procedure Rules did not have the effect of improving the parties' position in this respect. Again, that conclusion seems to me to be plainly correct.
11. The next thing that happened was that in May 2002 the defendants' solicitors served notices of assessment of their bills of costs on the footing that, as Master Chamberlain had ordered back in 1984, the parties' assessed costs should be paid out of the funds in court prior to distribution.
12. However, Mr Glyn Weston, by then the sole surviving personal representative of Fred Weston (Ellen Weston having died), contended that each party should pay their own costs; that is to say that the whole of the funds in court should be distributed in the appropriate percentages as ordered by Master Chamberlain, but without any prior deduction being made for costs.
13. In paragraph 43 of his judgment the judge accepted Mr Glyn Weston's evidence that by 2002 he was no longer in a position to submit his own costs to an assessment due to the passage of time and the non-availability of supporting documentation.
14. On 3rd October 2003 Mr Dennis Weston (who is, as I noted earlier, one of the personal representatives of his mother, the late Ellen Weston) applied to be added as a claimant in the action in order, as I understand it, to protect Fred Weston's share of the partnership assets. It seems that by that date he was in some respects dissatisfied with the steps which Mr Glyn Weston was taking to protect their late father's share.
15. In paragraph 52 of his judgment the judge recorded that on the basis of his own questioning of Mr Dennis Weston he was satisfied that:

"... despite earlier animosity between him and Mr Glyn Weston, he was at the date of the appeal [that is, I take it, a reference to the hearing before the judge] in fact aligned squarely with Mr Glyn Weston on the dispute about how the outstanding costs should be handled."

16. On 5th October 1984 the defendants' application to submit their costs to assessment, together with Mr Dennis Weston's application to be added as a claimant, came before Master Bowman. Mr Dennis Weston did not, in the event, attend the hearing, but a subsequent letter to him from Master Bowman demonstrates that the Master was, for his part, in no doubt that Mr Dennis Weston was aware of the hearing. Indeed the judge so found in paragraph 52 of his judgment. In the result, Master Bowman dismissed Mr Dennis Weston's application. There is no official note of the hearing, but in a subsequent letter from the Master to Mr Dennis Weston the Master described the application as "not only inappropriate but mischievous."
17. Unfortunately Master Bowman's order mistakenly referred in its recitals to Mr Glyn Weston being a representative of the estate of the late Ellen Weston, whereas in truth, as everyone must have known, his relevant capacity was as surviving personal representative of Fred Weston.
18. Master Bowman's order went on to direct that the costs of all parties be assessed on the indemnity basis and paid out of the fund in court prior to distribution. In paragraph 57 of his judgment the judge found that the master took that course because, no doubt understandably, he found himself unable to apportion blame for all the delays that had occurred. However, in taking that course he rejected Mr Glyn Weston's contention that the appropriate order in all the circumstances was that there be no order as to costs; that is to say that the funds in court be paid out in the appropriate percentages as directed by Master Chamberlain in 1984 without any prior deduction in respect of costs.
19. Mr Dennis Weston sought to appeal Master Bowman's order and on 15th November 2004 Lindsay J granted him unlimited permission to appeal. Mr Glyn Weston also sought to appeal Master Bowman's order. On 17th June 2004 Pumfrey J granted him permission to appeal, but limited to the question whether Master Bowman should have made no order as to costs as Mr Glyn Weston had contended. Both appeals were listed to be heard together and they were heard by the judge on 9th June and 13th July 2004. Mr Glyn Weston and Mr Dennis Weston appeared in person. The defendants were represented by solicitors and by Mr Gregory of counsel. The judge handed down judgment on 21 October 2004, the day on which his order was made. I will come to the terms of the order in due course.
20. On the first day of the hearing the judge had indicated that he was proposing to dismiss Mr Dennis Weston's appeal. He gave his reasons for so doing in paragraph 52 of his judgment to which I have already referred. After referring to Rule 19.1 of the Civil Procedure Rules which gives the court a discretion as to adding parties, the judge continued:

"I thought it likely that Mr Dennis Weston knew in sufficient time that the hearing was on 5 February 2005 and that he was entitled to attend; I did not consider whether the Master's stated reason (as given in correspondence) for refusal was justified (I certainly would have wanted to consider the justification for drawing the conclusion that someone in this case was behaving mischievously, as opposed to possibly misguidedly in a situation of perplexity and frustration); but I questioned Mr Dennis Weston and was entirely satisfied that, despite earlier animosity between him and Mr Glyn Weston, he was at the date of the appeal in fact aligned squarely with Mr Glyn Weston on the dispute about how the outstanding costs should be handled. Accordingly, there was nothing new or different that he would be bringing to the proceedings were he to be joined. It was not, therefore, desirable that he be joined. It also appeared to me inappropriate to add an additional party when there is so clear a need to bring court proceedings to an end and achieve a distribution. Accordingly, it appeared to me that the Master's decision was right, whether or not one would agree with his reasoning, and I dismissed Mr Dennis Weston's appeal."

21. As to Mr Glyn Weston's appeal, the position as disclosed by the judge's judgment is somewhat more complicated. It appears that the judge was initially strongly inclined to accept Mr Glyn Weston's contention that the appropriate order was no order as to costs, and hence to allow his appeal. Thus, in paragraph 69 of his judgment, he concluded that the Master should have heard evidence on the issue of costs and in paragraph 88 he expressed the view that a delay of such extreme length called for justification as to why the assessment should proceed rather than why not. He went on to note that Peter Smith J had dismissed Mr Glyn Weston's application for permission to appeal on paper on the ground that the master's decision was clearly right. In paragraph 88 of his judgment the judge said that he differed from that view.
22. However, in the event the judge did not accede to Mr Glyn Weston's submission that Master Bowman should have made no order as to costs. Instead he produced a solution which he himself recognised was imperfect and as to which he expressed himself as having "substantial reservations" based on documents which had not been referred to, let alone relied upon, by any party in the course of the hearing before him.
23. These documents were, firstly, a letter from Mr Glyn Weston to the court, dated 24th November 1994, enclosing a taxation certificate relating to the costs of his solicitors in a sum of £8,321 including VAT, together with the costs of assessment and other matters, reaching a certified total of £11,123.73.
24. The judge explained in paragraph 30 of his judgment that he had come across this letter and the order to which it refers in the course of his own researches into the documentation. The judge also referred in this respect to an order that Mr Glyn Weston provide an affidavit justifying the payment of such costs out of the partnership assets. At the end of paragraph 89 of his judgment the judge says this:

"Without the November 1994 letter and taxation certificate I would have allowed the appeal and barred all parties from proceeding with assessment."

25. However, based upon those documents, the judge's solution, as I understand it, was to give the defendants the opportunity to proceed to assess their costs and to have them paid out of the funds in court prior to distribution, but on terms that they agreed with Mr Glyn Weston's costs being assessed in the sum of £12,000 and similarly paid out of the fund in court prior to distribution. That, as I understand it, is the effect of the order which the judge ultimately made.
26. In paragraph 90 of his judgment the judge said this:

"I have substantial reservations about adopting a solution of the type for which I am looking, but I think one can be found. Among the reservations is the fact that the 1994 correspondence was unknown during the hearing and that if I propose a solution based on it the parties will have to be given the opportunity to make a submission against it, [if] they wish, when the judgment is to be handed down."

27. The judge initially produced a draft judgment which, in accordance with the accepted practice, he circulated to the parties before handing it down. The fly sheet attached to the draft judgment contains the following paragraph:

"The parties will see that, particularly at paragraph 29, I refer to a letter from Mr Glyn Weston to the Court dated 24 November 1994 and a copy Order from other proceedings to which it refers. Copies of both these documents are appended for the parties' information, but will not form part of the judgment."

28. Unfortunately, although the cause of the confusion is not clear to me at the moment, Mr Glyn Weston did not receive a copy of the draft or of the fly sheet attached to it containing the paragraph which I have quoted, until after the judgment was handed down on 21st October 2005. Accordingly he did not make further submissions at the handing down of the judgment.
29. Indeed I am informed by Mr Alan Weston that the first that Mr Glyn Weston heard of the terms of the judgment and of the order made upon it was when he received a copy of a letter written by the judge personally to Mr Dennis Weston, replying to a letter from Mr Dennis Weston of 21st October. It appears that, like Mr Glyn Weston, Mr Dennis Weston was also absent when the judgment was handed down. In the course of his letter the judge says this:

"While I was sorry to hear that the draft judgment had not reached you until Thursday, I decided not to adjourn the proceedings ..." [He goes on to explain why he did not do that].

30. For present purposes the relevance of these matters is that no further submissions were made by Mr Glyn Weston or on his behalf in relation to the judge's reliance on the documents to which I have referred, and in particular on the taxation certificate. No doubt had Mr Glyn Weston had the benefit of professional advice he might have applied to go back to the judge before the perfection of the order and invited the judge to hear submissions as to these additional documents upon which the judge relied. However, Mr Glyn Weston was acting in person and, for better or worse, the view was taken that the appropriate course was to seek permission to appeal.
31. Returning to the judge's order, the result was that, despite the judge's expressions of support for Mr Glyn Weston's position, he effectively dismissed the appeal with the result, given the defendants' agreement in relation to the quantum of Mr Glyn Weston's costs which was expressed by Mr Gregory when the judgment was handed down, that Fred Weston's share bears some 43 per cent of the defendants' assessed costs.
32. Mr Alan Weston has informed me today that although Mr Glyn Weston is not in a position to produce documentation substantiating any detailed assessment of his costs (a matter to which I referred earlier in this judgment), nevertheless his costs over the entire period of the action very substantially exceed the sum of £12,000 which the judge incorporated in his order, based upon the taxation certificate to which I have referred.
33. The taxation certificate itself has been placed before me in the course of this hearing. It appears to be an order made, upon an application by solicitors Coley & Tilley for taxation of their costs, against the three brothers, Mr Glyn Weston, Mr Alan Weston and Mr Dennis Weston. The figures are as the judge described. The solicitors' costs amounted to £8,321.02. There were then to be added the costs of the reference, the costs of objections, and a deduction of a balance due on cash account resulting in a net balance due to the solicitors of the figure of £11,123.73.
34. The judge appears to have proceeded on the basis that those figures related to the costs of the partnership action. However, there has also been placed before me, in the course of this hearing, a bundle of documents relating to a different action altogether, viz a passing-off action brought by the partnership against certain individuals. Mr Alan Weston has informed me that the taxation certificate relates not to the costs of this action at all, but to the costs of the passing-off action. If that be correct, and I have no reason to suppose that it is not, then it would follow that the judge reached his intermediate solution of the problem in relation to costs on a basis which was fundamentally mistaken.
35. That then is the background to the two applications which I have to address today. Against that background I turn, first, to Mr Dennis Weston's application to be added as a claimant in the action. Despite all that he has said to me, both in his helpful skeleton argument and orally, I can, for my part, see no basis for granting him permission to appeal against the refusal of Master Bowman and of the judge to allow him to be added. He submits, in effect, that since his late mother, as next of kin of his late father, took a beneficial interest in his late father's estate under his intestacy, and since he is one of her personal representatives, it is necessary or at least desirable that he be joined as an additional claimant in order to protect the interests of her estate. In this respect he considers that his brother, Mr Glyn Weston, is not performing that duty satisfactorily.
36. However, as I pointed out to Mr Dennis Weston in the course of argument, Fred's estate is already represented by Mr Glyn Weston. Mr Dennis Weston is not a personal representative of his late father and it was his late father who was, in effect, the claimant in the partnership action. At the very least I can see no good grounds for interfering with the Master's exercise of his discretion under CPR 19.1. In any event, to add an additional party at this stage in the litigation would, it seems to me, be quite unthinkable. So the proposed appeal by Mr Dennis Weston has, in my judgment, no real prospect of success.
37. Moreover, as I noted at the start of this judgment, the requirements of CPR 52.13 apply and they are plainly not fulfilled in relation to Mr Dennis Weston's application. His proposed appeal raises no important point of principle or practice, nor is there any other compelling reason why it should be heard. Accordingly I dismiss Mr Dennis Weston's application.
38. I turn then to Mr Glyn Weston's application. In the first place I have an uneasy feeling that, quite apart from procedural considerations, the practical effect of the solution which the judge adopted, and on which he did not, in the event, have the benefit of hearing submissions by or on behalf of Mr Glyn Weston, may not be entirely on all fours with his reasoning. But that apart, the possibility, if not the probability, that the judge was fundamentally mistaken as to the significance of the document which he himself appears to have unearthed, namely the taxation certificate, seems to me to play a crucial part in any consideration of Mr Glyn Weston's application for permission to appeal.
39. It came, as it seems, as a complete surprise to the parties when appended to the draft judgment, and, in any event, as I have indicated, Mr Glyn Weston was not aware of the terms of the draft judgment until after it had been handed down. The judge himself does not appear to have thought it necessary to investigate why Mr Glyn Weston was not in attendance when the judgment was handed down, or whether he wished to make any further submissions (as the judge appears to have anticipated he might in paragraph 90 of his judgment in the passage which I quoted earlier).
40. These circumstances seem to me to make this an unusual and, it may be thought, unsatisfactory case. In those circumstances, and notwithstanding the extreme need for finality in this litigation, it seems to me in the interests of justice that there is a compelling reason why the Court of Appeal should hear Mr Glyn Weston's proposed appeal.
41. I would accordingly allow his application and grant him permission to appeal. I would only say that, despite the considerable assistance which Mr Alan Weston has been able to give me on this hearing, for which I am very grateful, it is highly desirable that, if possible, Mr Glyn Weston is legally represented at the substantive appeal. I would urge both him and Mr Alan Weston to make the necessary approaches to the relevant authorities, including the Bar Pro Bono Unit.
42. So I will allow Mr Glyn Weston's application and I will dismiss Mr Dennis Weston's application. I am also asked to stay the judge's order pending the hearing of the substantive appeal. I will grant a stay pending the substantive appeal with liberty to the defendants to apply on notice to discharge it.
43. Finally, I must make some case management directions. The appeal for which Mr Glyn Weston has now been granted permission should be heard by a constitution of three judges, one of whom may be a High Court judge. I do not direct any expedition. The time estimate for the hearing should be given as four hours.

ORDER: Glyn Weston's application allowed; Dennis Weston's application refused; judge's order below stayed pending substantive appeal with liberty to defendants to apply on notice to discharge it; appeal to be heard by three judges, one of whom may be a High Court judge; time estimate of 4 hours.