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Cite as: [2000] EWHC Admin 312
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KENNETH EDWARD ROGERS & ANR And RHYS EVANS (A FIRM) and ORS [2000] EWHC Admin 312 (30th March, 2000)
Case No: QBENI 99/0743
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL
FROM THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
BRISTOL DISTRICT REGISTRY FROM THE
ORDER BY H.H.JUDGE DYER
Royal Courts of Justice
Strand, LONDON, WC2A 2LL
Thursday 30 March 2000
LORD JUSTICE EVANS
AND
MR JUSTICE PARKER
-----------------------------
KENNETH EDWARD ROGERS & ANR
APPELLANTS
RESPONDENTS
(Transcript of the Handed Down Judgment of
Smith Bernal Reporting Limited, 180 Fleet Street
London EC4A 2HD
Tel No: 0171 421 4040, Fax No: 0171 831 8838
Official Shorthand Writers to the Court)
-----------------------------
Miss Barbara HEWSON (Instructed by Burges Salmon, Bristol for the Appellants)
Mr Christopher GIBSON QC & Mr Nigel GERALD (Instructed By Wansbroughs Willey Hargrave, Birmingham for the Respondents)
Judgment
As Approved by the Court
Crown Copyright ©
MR JUSTICE JONATHAN PARKER:
This is an appeal by the first claimant in the action, Mr Kenneth Rogers,
against an Order made by His Honour Judge Dyer (sitting as a High Court Judge)
on 15 April 1999, striking out the action as an abuse of process. The second
claimant in the action is a company called Great Norwood Developments Ltd (I
will refer to it hereafter as "GND"). The Order was made on the application
of the sixth defendant in the action, Messrs Rhys Evans (a former firm of
solicitors). The Judge refused Mr Rogers permission to appeal, but
permission was subsequently granted on paper by Sir Anthony McCowan. Notice
of appeal was subsequently issued on behalf of Mr Rogers, followed by a
cross-notice on behalf of the sixth defendant seeking to affirm the judgment on
the alternative basis that the action should be dismissed for want of
prosecution on the ground that there has been inordinate and inexcusable delay,
giving rise to serious prejudice to the sixth defendant and a substantial risk
that it may not be possible to have a fair trial.
Mr Rogers appears by Miss Barbara Hewson of counsel; the sixth defendant by
Mr Christopher Gibson QC and Mr Nigel Gerald of counsel.
GND was a property development company formed by Mr Rogers. It was
compulsorily wound up in March 1991 and dissolved in 1997. It appears that
prior to GND's liquidation Mr Rogers took an assignment from GND of all its
causes of action in relation to certain property transactions entered into by
GND in 1988 and 1989, two of which are the subject of the action.
In the action, which was begun by writ on 23 November 1993, Mr Rogers (in
his own right and as assignee of GND's causes of action) claims damages against
two property companies, Idris Davies Holdings Ltd and Millerhurst Ltd (the
first and second defendants, to whom I shall refer hereafter as "IDH" and
"Millerhurst" respectively); a firm of estate agents, Messrs Kirkham Prior (the
third defendant); the NatWest Bank (the fourth defendant); and two firms of
solicitors, Messrs Robson & Brooks and Messrs Rhys Evans (the fifth and
sixth defendants respectively). Rhys Evans (the sixth defendant) was a firm
of solicitors retained by Mr Rogers and GND in 1988. It had two partners, a
Mr Paul Stanfield and a Mr Peter Driver. Mr Stanfield was the partner who
dealt with Mr Rogers and GND. In 1989 Mr Stanfield was struck off, and the
firm was subsequently dissolved. Accordingly the sixth defendant (and the
respondent to Mr Rogers' appeal) is effectively Mr Stanfield, and I shall treat
him as such. Mr Stanfield is in turn backed by the Solicitors' Indemnity Fund
("the Fund").
At the time of issue of the writ Mr Rogers was represented by Messrs Trump
& Partners, of Bristol.
The writ, which is generally indorsed, claims damages for negligence against
the fifth and sixth defendants (the two firms of solicitors) in acting for Mr
Rogers and GND in connection with three development sites in Gloucestershire;
one at Greet, one at Andoversford, and a third at Staverton. In the event,
Mr Rogers makes no claim against the fifth and sixth defendants in relation to
the Staverton property, which accordingly drops out of the picture for present
purposes.
On 15 March 1994 Mr Rogers issued a second writ, in the same terms as the
first.
It is common ground that on or about 22 March 1994 the first writ was
personally served on Mr Stanfield by Mr Rogers (who was by then acting in
person, legal aid having been withdrawn). Service was effected by Mr Rogers
handing Mr Stanfield a copy of the writ. Mr Stanfield was at that time
managing a café in Cheltenham owned by a firm of solicitors. He says
that he handed the writ to his employers so that they could pass it on to the
Fund. In the event, however, no notice of intention to defend was served by
or on behalf of Mr Stanfield.
According to Mr Rogers, he served the second writ on Mr Stanfield personally
at the same time as he served the first writ. However, Mr Stanfield asserts
that he was never served with the second writ. In any event, no notice of
intention to defend the second action was served by or on behalf of Mr
Stanfield.
In addition to serving the first writ and (as he maintains) the second writ
on Mr Stanfield, Mr Rogers sent the originals of both writs to the Fund. The
evidence does not disclose whether the original writs had been indorsed as
having been served on Mr Stanfield. At all events, the Fund returned both
writs to Trump & Partners under cover of a letter from Miss Alison Lynas, a
Senior Solicitor, in which she stated that she had no authority to accept
service of the writs and asked Trump & Partners to return them to Mr
Rogers.
It appears that the first, second, third and fourth defendants have never
been served with the proceedings in either action.
In due course (the precise date does not appear in the evidence) Mr Rogers
served the fifth defendant with a Statement of Claim in the second action,
setting out his claims against the fifth and sixth defendants. The Statement
of Claim was not, however, served on Mr Stanfield or, for that matter, on the
Fund.
On 13 May 1994 the fifth defendant (which had retained Messrs Wansbroughs Willey Hargrave ("Wansbroughs")) served a Defence in the second action, denying it had been retained by Mr Rogers or GND in relation to the property transactions in issue. The matter was dealt with through the Bristol office of Wansbroughs.
On 29 June 1994 Mr Rogers entered interlocutory judgments for damages to be
assessed against Mr Stanfield in both actions, in default of service of notice
of intention to defend. Mr Rogers asserts that he served the default
judgments on Mr Stanfield and that Mr Stanfield handed them back to him, saying
that the matter had been passed to the Fund. However, Mr Stanfield has no
recollection of this, asserting that he did not learn that judgment had been
entered against him until February 1998.
Mr Rogers also asserts that he contacted the Fund's Bristol office and was
told that the matter would be dealt with by the Fund's London office, and that
he then wrote to the Fund's London office enclosing a copy of the judgment.
In evidence is a photocopy of a letter dated 29 June 1994 from Mr Rogers to the
London office of the Fund. Mr Rogers asserts that he duly sent the letter on
or about the date which it bears. The letter reads as follows:
"I refer to your correspondence with Trump & Partners and my telephone
conversation with Alison Lynas' secretary at your Bristol office. Although
Alison Lynas declined to speak to me regarding the matter her secretary has
advised me that "due to pressure of work" all correspondence regarding this
claim should be sent to your London office. I should point out that whilst I
agree that Trump & Partners are not currently acting (due to legal aid
difficulties), I am assured that service has been affected [sic] and this is
by no means the end of the matter as I will be continuing myself. I have
been informed by Mr Stansfield [sic], partner in Rhys Evans, your insured, that
the matter has been passed to yourselves. Therefore, please find enclosed
judgment entered against your insured on 24th June regarding the
above action." (Emphasis supplied.)
Mr Gibson QC tells us on instructions that the Fund cannot trace having
received such a letter, but he very properly acknowledges that the Fund is not
in a position to allege that the letter was never sent. In the
circumstances, I proceed on the basis that it was sent by Mr Rogers and
received by the Fund. In the event, no response was made to it by the
Fund.
On or about 24 July 1994 an order was made on the application of the fifth
defendant consolidating the two actions (although it appears that neither the
summons seeking consolidation nor the order for consolidation were served on Mr
Stanfield). However, shortly thereafter Mr Rogers decided not to take any
further step in the second action. In the circumstances, it is common ground
that it is only the judgment in the first action which is material to the
appeal.
A further factor in an already complicated procedural history is the fact
that on or about 3 November 1992 Mr Rogers was adjudged bankrupt, and that he
remained a bankrupt until his bankruptcy was annulled by Order of the
bankruptcy court dated 7 August 1995. Thus, he was an undischarged bankrupt
when the writs were issued and when he obtained the default judgments. On the
face of it, therefore, he had no title to bring either of the two actions.
However, although Mr Stanfield reserves his right to take this point should the
action proceed, it has not been argued on this appeal as a ground for striking
out the action. When we inquired why this possibly fundamental point had not
been addressed on this appeal, we were informed that the view had been taken on
both sides that the issue whether the annulment of the bankruptcy operated
retrospectively so as to cure any want of title to sue on Mr Rogers' part
raised an arguable question of law. In the circumstances, not having heard
argument on the point, I proceed for the purposes of this appeal on the basis
that Mr Rogers had the necessary title to sue (that being the basis on which
both sides addressed us on this appeal).
After June 1994, neither Mr Stanfield nor the Fund heard any more from Mr
Rogers or his advisers until the Fund received a letter dated 28 January 1998
from Burges Salmon, acting on behalf of Mr Rogers. Burges Salmon had been
instructed by Mr Rogers in January 1997 in place of a Mr David Jeacock, who had
acted for Mr Rogers since October 1994. In their letter, Burges Salmon
informed the Fund that they had been instructed on behalf of Mr Rogers, who was
legally aided, to apply for an assessment of damages under the judgment in
default in the first action. They stated that KPMG had been appointed as
"relevant experts in the quantum assessment", and that they had provisionally
assessed Mr Rogers' claim at £150,000 (£290,000 including interest).
They went on to set out in some detail the nature of Mr Rogers' claim against
Mr Stanfield and the facts on which that claim was based. As no Statement of
Claim had ever been served on Mr Stanfield in either action, this was the first
occasion when Mr Rogers' claim had been set out in any detail.
The factual basis for Mr Rogers' claims, as set out in that letter, is (in
summary) as follows.
Mr Rogers was a building contractor carrying on business with his brother as
Rogers Building Contractors. He also carried out small-scale property
development. In March 1987 Mr Rogers set up GND as a vehicle through which to
carry out the property development side of the business. Mr Rogers was the
majority shareholder and one of two directors of GND.
The dispute the subject of the action arose out of advice allegedly received
from Rhys Evans (in the form of Mr Stanfield) in relation to the sites at Greet
and Andoversford.
So far as the Greet site is concerned, the facts appear to be as follows.
The Greet site was purchased by GND in about July 1987 for £41,000. In
about December 1987 Mr Rogers was introduced to a Mr Davies, a local
businessman. Mr Davies owned two development companies, Idris Davies Holdings
Ltd ("IDH") and Millerhurst Ltd ("Millerhurst"). (IDH and Millerhurst are
named as the first and second defendants in the two writs, although, as I said
earlier, in the event the proceedings were never served on them.) Mr Davies
expressed an interest in the Greet site, and acting (allegedly) on advice given
by Mr Stanfield, Mr Rogers agreed to negotiate with Mr Davies with a view to
entering into a joint venture agreement. On 6 January 1988 Mr Rogers received
a letter from Millerhurst headed "Subject to contract" in which Millerhurst
offered to purchase the Greet site (which was at that time partly developed)
for £50,000. GND were to carry out the building works and would retain
the profits on the expected sale price of £65,000 per unit. IDH was to
receive £15,000 as a development fee. This sum was to be deducted from
the proceeds of sale prior to the calculation of profit. If the sale price
exceeded £65,000, the additional profit element was to be split equally
between GND and IDH. The letter specified 15 January 1988 as the date for
completion. Formal contracts were never signed, but Mr Rogers' understanding
was that there was a concluded contract, and he was consequently expecting
payment of the purchase moneys on 15 January 1988. In the event, payment was
not made. By March 1988 (according to Mr Rogers) he had told Mr Stanfield
that he considered Mr Davies to have reneged on the deal, and that consequently
the deal was off. GND proceeded to complete the development, which was
completed by mid-April 1988. On or about 18 April 1988 IDH paid GND
£80,000, on account of the purchase moneys. According to Mr Rogers, he
was unaware that that sum had been paid until he received a bank statement at
the end of April 1988. Mr Rogers alleges that he discussed the matter with
Mr Stanfield, who advised him that GND was bound by the terms of the letter
dated 6 January 1988 since GND had partly performed the contract by paying the
first instalment of the purchase price. However, Mr Rogers (so he alleges)
nevertheless instructed Mr Stanfield to sell the completed units without
reference to Mr Davies. The units were duly sold, for a total consideration
of £195,000, but the Transfers were executed by Millerhurst as the site
was by then in Millerhurst's name. Mr Rogers alleges that he had not
previously been made aware that the site had been transferred to Millerhurst.
It appears that the Transfer to Millerhurst took place in May 1988. Mr Rogers
claims that the transfer to Millerhurst was completely contrary to his
instructions to Mr Stanfield, and that Mr Stanfield ought to have advised him
that no binding contract existed, alternatively that if a binding contract had
been concluded it was unenforceable or liable to be rescinded. In that event,
he asserts, GND would have received the entirety of the profits from the
development. KPMG puts GND's losses in respect of the Greet site at
£58,555.
The Andoversford site was purchased by GND on or about 20 November 1987 for
£75,000. It was proposed that the existing barns on the site would be
redeveloped into five dwellings and that two further properties would be
constructed. Planning permission was duly granted. At that stage (it is
alleged) the site had a value of £250,000. In the event, however, no
building work was carried out by GND on the Andoversford site. As in the case
of the Greet site, Mr Rogers entered into negotiations with Mr Davies with a
view to a joint venture agreement. A site meeting took place, but no
agreement was reached. Mr Rogers then received a letter from IDH offering to
purchase the site for £100,000, together with two cheques, one by way of a
deposit, the other in respect of architect's fees. The letter referred to
completion taking place on 20 February 1988. It further stated that it was to
create a binding contract pursuant to the Law of Property Act 1925, and it
requested Mr Rogers to sign a copy of the letter as a memorandum. Mr Rogers
did not sign a copy of the letter, as requested, but he nevertheless believed
that a contract was concluded in a telephone conversation with Mr Davies
following receipt of the letter. Consequently, he was expecting payment of
the purchase moneys on 20 February 1988. When payment was not made, he
consulted Mr Stanfield, who advised (so it is alleged) that there was a binding
and enforceable contract for the sale of the site to IDH. In May 1989, the
Andoversford site was sold by Millerhurst for £250,000. The site had
apparently been transferred to Millerhurst on 11 July 1988 for a stated
consideration of £100,000. Mr Rogers makes similar claims against Mr
Stanfield to those which relate to the Greet site. KPMG puts GND's losses in
respect of the Andoversford site at £88,263.
In essence, therefore, it appears that Mr Rogers' case against Mr Stanfield
is that had Mr Stanfield given correct advice, that is to say had he advised
that GND was not locked into a joint venture with Mr Davies and his companies
in relation to either of the two sites, GND would have developed the sites
itself, raising its own finance, and would have retained the entirety of the
development profits.
Having set out the factual background as I have summarised it above, Burges
Salmon's letter concluded:
"Our instructions are, as stated, to apply for an assessment of damages. Before we do so, we are prepared to allow you 28 days in which to investigate the position and respond accordingly. Our client is now keen to finally resolve this matter and the application for assessment of damages will be made if settlement is not forthcoming."
On receipt of that letter the Fund retained Wansbroughs to act for Mr
Stanfield. The matter was thereafter dealt with through Wansbroughs'
Birmingham office.
On 10 February 1998 Wansbroughs wrote to Burges Salmon informing them that
they had been instructed on behalf of Mr Stanfield, and asking for time to
enable them to investigate the matter. They also asked for a List of
Documents. A List of Documents was provided on 15 May 1998.
On 5 August 1998 Wansbroughs issued an application to dismiss the action for
want of prosecution, alternatively to set aside the default judgment. Notice
to proceed had previously been served, as a preliminary to the alternative
application to set aside the default judgment.
On 22 December 1998 District Judge Stuart-Brown acceded to Mr Stansfield's application, and struck the action out. She found that there had been an abuse of process, on the footing that it was to be inferred that Mr Rogers had decided to abandon the action as against Mr Stanfield, as well as against the fifth defendant, well before June 1997. In the alternative, should that be wrong, she held that the action should be struck out for inordinate and inexcusable delay, coupled with serious prejudice to Mr Stanfield. She found prejudice to Mr Stanfield in that documents were missing and recollections must have faded over the passage of time. She concluded that it would not be possible to have a fair trial on the question of quantum of damages.
The District Judge gave Mr Rogers leave to appeal, and he duly did so.
The appeal came before His Honour Judge Dyer on 15 April 1999, when he made an
order dismissing it. That is the order against which Mr Rogers appeals to
this court.
I turn next to Judge Dyer's judgment.
The judge delivered a lengthy extempore judgment, in the course of which he
referred to a number of authorities which had been cited in argument. In the
circumstances, it is perhaps to be expected that in some respects his reasoning
is not expressed quite as clearly as it might otherwise have been.
At all events, central to his judgment, as I read it, is his conclusion (a
conclusion based, necessarily, on inference from the surrounding circumstances
and in particular from the delay which had occurred from June 1994 onwards)
that after obtaining the default judgments Mr Rogers had taken a decision not
to prosecute the action. Thus, at page 13C-E of the transcript of his
judgment, he said this:
"There is no .... evidence that the case was really being got ready for
assessment of damages. It is much more likely that at the time [Mr Rogers]
had decided to take no further action in any of these actions (and in
particular against the sixth defendant), and he just did nothing and let the
years drift by. Then he changes his mind. Surely the reason for that, it is
clear, is the Solicitors' Indemnity Fund, and that is all."
Further, at page 21B of the transcript the judge said:
"I find it incredible that one can really say that there was no abuse by [Mr
Rogers] in this case; it just does not ring true to me in the context of a
person who is genuinely trying to bring an action on for trial."
As I read his judgment, the judge found that that factor was sufficient to
turn the delay which had occurred into an abuse of the process, notwithstanding
his acceptance of the proposition that mere delay, unaccompanied by intentional
and contumelious conduct, does not amount to an abuse. On that basis, the
judge upheld the decision of the District Judge that the delay was an abuse of
process, and dismissed the appeal. At the conclusion of his judgment, the
judge expressly disavowed the District Judge's conclusion that in any event the
action should be dismissed for want of prosecution by reason of inordinate and
inexcusable delay coupled with prejudice to Mr Stanfield. Thus, at the
conclusion of his judgment the judge said this (transcript page 24H):
".... as Miss Hewson says, striking out an action where there has been a
default judgment is a power which is there - there is no doubt about that, it
is conceded by both parties - is a Draconian power and should only be granted
in a strong case, where the court is satisfied that the defendant cannot have a
fair trial of the action. For the reasons which I have attempted to give I
have come to the conclusion that this is one of those cases, and it is those
circumstances that I fear that I must make the order - and I make it
unhesitatingly - that I am satisfied that there has been an abuse of process.
Inordinate delay is coupled with it, but I do not make the finding that the
learned District Judge did. If she was separating it and giving it under two
heads, I would say that I am bound by authority, as I have made clear, that
delay is not of itself a ground for granting this. But, as Miss Hewson
says, these two things overlap; you cannot shut your eyes to one and say that
does not exist and treat them as if they are two different sides of a coin. It
seems to me that the action for abuse of process is made out and I therefore
uphold the judgment of the learned District Judge on that ground." (Emphasis
supplied.)
In concluding that the delay in this case amounted to an abuse of process,
the judge followed the decision of the House of Lords in Grovit v.
Doctor [1997] 1 WLR 640. In the course of his judgment in that case, Lord
Woolf said this (at page 647G):
"To commence and to continue litigation which you have no intention to bring
to conclusion can amount to an abuse of process. Where this is the situation
the party against whom the proceedings is brought is entitled to apply to have
the action struck out and if justice so requires (which will frequently be the
case) the courts will dismiss the action. The evidence which was relied upon
to establish the abuse of process may be the plaintiff's inactivity. The same
evidence will then no doubt be capable of supporting an application to dismiss
for want of prosecution. However, if there is an abuse of process, it is not
strictly necessary to establish want of prosecution under either of the limbs
identified by Lord Diplock in Birkett v. James [1978] AC 297. In this
case once the conclusion was reached that the reason for the delay was one
which involved abusing the process of the court in maintaining proceedings when
there was no intention of carrying the case to trial the court was entitled to
dismiss the proceedings."
The judge also followed a decision of Garland J in North London Waste
Authority v. McGovern (unreported, judgment delivered 19 February 1999),
where Garland J dismissed the action as an abuse on the basis that the
plaintiff's activity raised an inference that it did not intend to bring the
litigation to a conclusion. In that case, Garland J concluded that delay
could not provide a basis for dismissing the action for want of prosecution
(that is to say, could not be regarded as "inordinate" for the purposes of the
application of second limb of Lord Diplock's formulation in Birkett v.
James) where it was not accompanied by default in complying with procedural
rules or time limits imposed by orders of the court. The judge in the instant
case accepted that proposition.
Notwithstanding his express rejection, on that ground, of the argument that
the action should be dismissed for want of prosecution under the second limb of
Birkett v. James, the judge at various points in his judgment considered
the question of prejudice to Mr Stanfield and the question whether it was
possible to have a fair trial of the issue of quantum of damages. Although
he made no express findings on these questions, it is clear that he took the
view that the delay had caused serious prejudice to Mr Stanfield, and that were
the action to proceed it would be impossible to have a fair trial. In the
circumstances, it is not necessary to quote the various passages in his
judgment from which this appears.
In this court, Mr Gibson QC does not seek to support the judge's conclusion
(following Grovit v. Doctor) that in the instant case Mr Rogers had
taken a deliberate decision not to prosecute the action until such time as he
realised that the Fund was involved. The concession was rightly made, for
the evidence renders such a conclusion unsustainable. As I related earlier,
Mr Rogers was at all material times aware that the Fund was involved: he had
attempted to serve the writs on the Fund in March 1994. Moreover, the
evidence establishes that during the period of the delay following the
obtaining of the default judgments Mr Rogers was taking steps to progress his
case on the assessment of damages.
It follows that the judge's exercise of his discretion cannot stand, and
that this court must exercise its own discretion in the matter. Both sides
have invited us, in so doing, to apply the Rules of the Supreme Court ("the old
rules"), and both counsel have addressed us on that basis. We therefore
proceed on the basis of the old rules.
Although Mr Gibson QC does not seek to support the judge's finding of abuse
of the Grovit v. Doctor type, he does seek to support the judge's
conclusion that the delay amounts to an abuse by inviting us to infer that Mr
Rogers took a deliberate decision to delay the proceedings in order to conceal
the fact of his bankruptcy. I must say straight away that I can see no
evidential basis whatever for such a contention, and I reject it.
On that basis, the issue which has to be resolved on this appeal is whether
Mr Stanfield can bring his case within the second limb of Birkett v.
James: that is to say, whether he can establish (a) that there has been
inordinate and inexcusable delay on the part of Mr Rogers or his lawyers, and
(b) that such delay gives rise to a substantial risk that it is not possible to
have a fair trial of the issue of quantum of damages or is such as is likely to
cause or to have caused serious prejudice to Mr Stanfield.
Miss Hewson submits that there can be no inordinate delay for the purposes of
the second limb of Birkett v. James unless the delay involves a breach
of procedural rules or an order of the court. She points out that under the
old rules there are no prescribed time limits for proceeding under an
interlocutory judgment for damages to be assessed. The only relevant rules
are Order 37 rule 1, which provides that the party entitled to the benefit of
the judgment must give the other party at least 7 days' notice of the
appointment before the Master at which the assessment is to take place; and
Order 37 rule 3, which provides that where the judgment is in default of notice
of intention to defend, and the action is proceeding against other defendants,
the damages under the judgment shall be assessed at trial, unless the court
otherwise orders. Miss Hewson points out that Order 37 rule 3 cannot assist
Mr Stanfield since shortly after obtaining the default judgments Mr Rogers
decided not to proceed further against the fifth defendant. Miss Hewson
submits that under the old rules a party was entitled to delay prosecuting his
proceedings, so long as in so doing he did not breach any prescribed time
limits. In support of this submission she relies on the decision of this
court in Arbuthnot Latham v. Trafalgar Holdings Ltd [1998] 1 WLR 1426.
In the course of his judgment in that case, Lord Woolf MR cited a passage from
the judgment of Aldous LJ in Barclays Bank plc v. Maling (unreported,
judgment delivered 23 April 1997) in which Aldous LJ said that "mere delay,
whether or not caused by incompetence, cannot amount to an abuse of process
which will enable an action to be struck out".
As to possible prejudice, and the risk that it may not be possible to have a
fair trial of the issue of quantum, Miss Hewson submits that the assessment of
damages will be essentially a simple mathematical exercise (an exercise which
KPMG have already performed). She accepts that question of causation may
arise, but she submits that few material documents appear to be missing and
that all material witnesses will be available to give oral evidence.
Mr Gibson QC submits that it is not a necessary element of an "inordinate"
delay, for the purposes of the second limb of Birkett v. James that it
should involve breach of prescribed time limits. In support of this
submission he cites Lord Diplock's observation in Birkett v. James
(ibid. p.323E) that a litigant has a right to prosecute his action to trial
"so long as he does so with reasonable diligence". He further submits that
the delay in the instant case is both inordinate and inexcusable. He submits
that difficulties experienced by Mr Rogers in relation to his bankruptcy and in
relation to the obtaining of legal aid cannot excuse the delay; still less can
the fact that Mr Rogers has been represented by three different firms of
solicitors. As to prejudice and the risk that it may not be possible to have
a fair trial of the issue of quantum, Mr Gibson QC has painstakingly taken us
through such evidence as there is as to the extent to which material
documentary evidence which is not available now might have been available in
1994, in support of the submission that the delay since 1994 has made matters
significantly worse in this respect. As to oral evidence, he submits that
the memories of material witnesses will inevitably have faded, and that
recollections which might have been reliable had the assessment hearing been
held timeously will in all probability no longer be so.
In so far as the submissions made to us in relation to the second limb in
Birkett v. James raise questions of law, I have had the advantage of
reading in draft the judgment of Evans LJ in which he addresses such questions,
and I respectfully agree with his analysis and with his conclusions. In the
circumstances, suffice it to say that I do not accept the submission that the
application of the second limb in Birkett v. James is limited to cases
in which there has been a breach of a prescribed time limit. Like Evans LJ, I
can see no warrant for confining the application of the relevant principles in
this way. Indeed, Lord Diplock's reference, quoted earlier, to a litigant
being under a duty to prosecute his action with reasonable diligence seems to
me to confirm that the application of the relevant principles is not to be so
confined.
So has there been inordinate delay in this case? Whether a delay has been
"inordinate" for this purpose may well depend on what its consequences have
been (which will in turn bring into account any prejudice which it may have
caused). To that extent, the inquiry whether a delay has been inordinate
becomes somewhat circular. However, I am content to proceed in the instant
case on the basis that the delay since the obtaining of the default judgments
in June 1994 has been inordinate.
Is the delay since June 1994 inexcusable? In my judgment, this question
falls to be addressed in the context of the fact that Mr Rogers had served a
copy of the default judgment (albeit the judgment in the 1994 action, but since
the judgments were in identical terms this is immaterial), and, significantly,
that he did so under cover of a letter in which he said expressly:
In these circumstances Mr Rogers was, in my judgment, entitled to assume that the Fund, having been apprised of the default judgment and of the fact that it was Mr Rogers' intention to proceed to an assessment of damages, would be taking appropriate steps to prepare its case on quantum; or at the very least to take such steps as were open to it with a view to ensuring that relevant documentary evidence was preserved. In the event, although it had been given the opportunity to do this, the Fund appears to have taken no action at all until it received Burges Salmon's letter dated 28 January 1998.
By contrast, Mr Rogers was throughout the relevant period attempting to advance his case. In October 1994 his legal aid certificate was transferred from Trump & Partners to a Mr David Jeacock. There followed a delay in transferring the file to Mr Jeacock, due to the need for Trump & Partners to complete the taxation of their costs. In January 1995 discussions took place between Mr Rogers, Mr Jeacock and the trustee in bankruptcy with a view to determing how the matter should proceed. An individual voluntary arrangement was subsequently proposed, and accepted by the creditors in July 1995. This was followed by the annulment of the bankruptcy on 7 August 1995. Counsel (not, at that stage, Miss Hewson) was instructed in September 1995, and a conference was held with counsel in October 1995. KPMG was retained in or about November 1995. Following discussions concerning the terms of its retainer, files were sent to KPMG in April 1996. In August 1996, KPMG produced a draft report. In January 1997 Mr Rogers retained Burges Salmon in place of Mr Jeacock, taking the view that he required the services of a larger firm. Burges Salmon were concerned as to whether Mr Rogers had status to sue, given his bankruptcy, and further consideration was given to that question. In April 1997 an application was made to the Legal Aid Board to extend the legal aid certificate so as to cover increased expenditure (the limits were eventually increased in November 1997). In May 1997 Miss Hewson was instructed. Thereafter, further discussions took place with the Legal Aid Board. In December 1997 discussions took place with KPMG concerning its draft report. The report was finalised in January 1998.
In those circumstances the delay from June 1994 to the end of January 1998 cannot, in my judgment, be fairly be said to be inexcusable, given (a) the fact that the Fund had been told that Mr Rogers was proceeding under the default judgment, and (b) the fact that under the old rules there were no prescribed time limits for so doing.
That conclusion makes it unnecessary to consider the associated questions of prejudice and the risk that it may not be possible to have a fair trial of the issue of quantum, but for completeness I turn to those questions briefly.
It may well be that potentially difficult questions of causation may arise on the assessment of damages, but it was ever so. I am not satisfied that the delay has made matters significantly worse in this respect. Despite Mr Gibson QC's thorough review of the evidence, I remain unpersuaded that the unavailability of documentary evidence is a significantly greater factor now than it was in June 1994. Equally, I am not satisfied that the delay has made the task of the court in holding a fair trial on the issue of quantum significantly more difficult than it was in 1994.
For those reasons, I conclude that Mr Stanfield has failed to bring this case within the second limb of Birkett v. James, and I would accordingly allow this appeal.
LORD JUSTICE EVANS:
I agree with the judgment of Jonathan Parker J. I add a comment on Miss
Hewson's submission that there could not be inordinate delay for the purposes
of the second limb of the erstwhile rule in Birkett v. James [1978] A.C.
249 unless there was a breach of a prescribed time limit under the R.S.C. or of
an Order of the Court.
I do not think this can be correct. In his speech in Birkett v. James,
Lord Diplock referred to the plaintiff's right to prosecute the action to trial
and judgment "so long as he does so with reasonable diligence" (p.323D). That
was in the context of a writ issued late in the limitation period. Lord
Diplock emphasised that even in such a case the plaintiff could not be
penalised if he complied with the timetable established by the Rules. But as
was recognised then and in later authorities, a more stringent test of what was
inordinate delay, outside periods allowed by the Rules themselves, was adopted
when the writ was issued late in the limitation period.
In my judgment, this supports Mr Gibson Q.C.'s submission that there could be
inordinate delay for the purposes of the Birkett v. James test even when
no time-limit was broken. Conversely, however, inordinate delay means
something more than failing to proceed with reasonable diligence, and here the
question has to be answered without reference to any express timetable.
On the matter generally, I would observe only that the chronology cannot be
relied upon to establish that Mr Rogers was not genuinely trying to bring the
remaining issue, the assessment of trial, throughout the period from 1994 to
1998. He was in communication throughout with the professional persons who
effectively controlled the speed of progress - his trustee in bankruptcy, his
solicitors when legal aid was available and the forensic accountants KPMG when
they were instructed on his behalf. The need to deal with the Legal Aid
authorities was a constant factor.
I agree with Jonathan Parker J. that the delay, even if it was inordinate, was
not inexcusable in the circumstances of the case. The fact that Mr Rogers sent
a copy of the judgment to the London office of the Solicitors' Indemnity Fund
with his letter dated 29 June 1994, as we must assume he did, after failing to
obtain a response from its Bristol Office, but received no reply to his letter,
seems to me to be an important factor in his favour.
(Order does not form part of the approved judgment)
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