CHANCERY DIVISION
Fetter Lane, London, EC4A 1NL |
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B e f o r e :
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RIDGEWOOD PROPERTIES GROUP LIMITED RIDGEWOOD (CLERKENWELL) LIMITED GOLDEN LIMITED HAMLET LIMITED REDWAY LIMITED |
Claimants |
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KILPATRICK STOCKTON LLP FINERS STEPHENS INNOCENT LLP STEVEN WOOLF |
Defendants |
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Patricia Robertson QC and Christopher Knowles (instructed by Bristows LLP) for the First Defendant
David Halpern QC (instructed by BLM LLP) for the Second Defendant
Emer Murphy (instructed by Browne Jacobson LLP) for the Third Defendant
Hearing dates: 14-15 July 2014
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Crown Copyright ©
MR JUSTICE ARNOLD :
Topic | Paras |
Introduction | 1 |
Background | 2-30 |
The Airspace Agreements | 2-12 |
The Texaco proceedings | 13-26 |
The present proceedings | 27-30 |
Assessment of damages for professional negligence | 31-34 |
The Defendants' application to strike out | 35 |
The law | 36-43 |
Application to the present case | 44-59 |
Does paragraph 62(1) involve a collateral attack on | |
Proudman J's findings? | 44-49 |
Would it be manifestly unfair to the Defendants? | 50 |
Would it bring the administration of justice into disrepute? | 51-57 |
Does the new evidence satisfy the Phosphate Sewage test? | 58-59 |
Conclusion | 60 |
The Defendants' application for summary judgment | 61-88 |
Principles applicable to summary judgment applications | 62-63 |
The rule in Hollington v Hewthorn | 64 |
Is there a real prospect of success? | 65-88 |
Clerkenwell Road | 68-71 |
Caledonian Road | 72-75 |
Hove | 76-78 |
Blue Star and Forty Avenue | 79-80 |
Dome | 81-84 |
St Katharine's, Lansdowne and Hendon Way | 85-86 |
KS's alternative argument | 87 |
Wasted expenditure | 88 |
Conclusions | 89 |
Postscript |
Introduction
Background
The Airspace Agreements
Phase | Site(s) | Date(s) |
Phase 1 (Conditional Contract) | Clerkenwell Road | 23 March 2001 |
Phase 2 (Option) | St Katherine's, Caledonian Road, Hove, Landsdowne | 24 July 2003 (Lansdowne 31 July 2003) |
Phase 3 (Option) | Blue Star, Dome, Forty Avenue, Hendon Way | 30 July 2004 |
i) Phase 1: satisfactory planning permission had to be granted by 23 December 2005, unless an appeal had been lodged by that date.ii) Phase 2: satisfactory planning permission had to be granted by 24 January 2006 (or 31 January 2006 for Lansdowne), unless an appeal had been lodged by that date, in which case satisfactory planning permission had to be granted by 11 June 2007 (or 18 June 2007 for Lansdowne).
iii) Phase 3: the definition of "option period" in the Airspace Agreements was ambiguous, so that satisfactory planning permission had to be obtained by either 30 December 2005 or 30 January 2006, unless an appeal had been lodged by that date, in which case satisfactory planning permission had to be granted by 17 June 2008. For the purposes of this application, the Defendants are content to proceed on the assumption that the correct date was 30 January 2006.
The Texaco proceedings
i) No term should be implied into the Airspace Agreements prohibiting a sale of the Sites by Texaco.ii) Nevertheless, Texaco had put it out of its power to perform the Airspace Agreements by assigning the Sites in the way that it had. Accordingly, Texaco had committed a breach of the Airspace Agreements.
iii) The Claimants had consciously and deliberately affirmed the Airspace Agreements and therefore could not rely on repudiatory breach. Furthermore, the Claimants had not communicated any acceptance of repudiation before the Airspace Agreements expired.
iv) The Claimants' claim against Texaco was not statute-barred.
"It is Texaco's case in the action that the claimants could not have obtained satisfactory planning permission in accordance with the terms of the airspace agreements. It is common ground that these are matters of causation which do not fall within the ambit of the preliminary issue I have to decide. However it is difficult to separate the issue of causation from that of the claimants' approach to performance. On the facts it is highly relevant to the preliminary issue whether the claimants believed that they could obtain satisfactory planning permission in accordance with the terms of the airspace agreements. I am therefore dubious whether Master Teverson would have ordered a preliminary issue in the current form, omitting all causation issues, if he had appreciated this. Although I have been asked not to, and I do not, make any findings about causation, not least because the parties say that they have not come prepared to address it, I draw attention to this difficulty."
"84. on the facts of the present case it can be inferred that the claimants knew precisely what they were doing. Mr Lynch accepted in his evidence that from the time the claimants learned that the transfers had been made they were 'working under advice'. The advice received by Ridgewood can be gauged by what the claimants did. Ridgewood proceeded with the airspace agreements, treating them as in full force, rather than claiming that the sale was a breach of a kind entitling them to repudiate.
85. On 30 November 2005 the claimants were plainly considering a claim against Texaco. There is a manuscript note of a telephone conference between Mr Johnstone and Steve Thompson, a consultant to Ridgewood, iterating the importance of complying with the airspace agreements in the meantime.
86. In oral evidence Mr Lynch said that the claimants' aim was to 'establish a loss of the profit that we were going to suffer'. He accepted that there was no doubt in his mind that the sales had taken place and that there was a breach of the option agreements. There was therefore a strategy of continuing with the airspace agreements on the basis that if planning permission were obtained the claimants would be able to crystallise their loss in proceedings against Texaco.
87. The claimants' strategy appears from a number of documents:
88. The claimants say that it was only when (on advice) they realised that the airspace agreements could no longer be enforced that they withdrew their planning appeals. Texaco says that it was only when the claimants realised that the prospects of securing planning permission on appeal was hopeless that they changed their strategy and accepted the breaches.
90. In relation to Clerkenwell Road, again, planning permission was refused after the expiry of the option. Mr Lynch said that the application might have been considered prior to the option expiry date but that this could not happen because of difficulties in notifying Azure. However he eventually accepted that although instructions were given to serve Azure the fault in not doing so was that of the claimants' own agents rather than that of Texaco or Azure.
91. In relation to Blue Star, there was again no satisfactory planning permission in place prior to expiry of the option. The claimants allege that this was the fault of Texaco because the claimants' acoustic consultants were not granted access to the site for a sound survey. However the necessary work had not been completed for the requisite highways study, a matter which was treated separately by the claimants. The claimants had themselves made a mistake about the option expiry date and it was in any event too late to achieve satisfactory planning permission or a non-determination enabling them to keep the option alive.
92. The same applies to Forty Avenue in that, by the time the problem of access became apparent, it was too late to obtain planning permission.
93. In relation to Hove, no valid planning permission was obtained owing to the fault of the claimants. Again, with the Dome, it seems clear that the claimants wanted to keep an appeal on foot in order to establish a platform for suing Texaco.
94. In relation to St Katherine's, Hendon Way and Lansdowne, no planning applications were submitted at all. Mr Lynch alleges that the reason for this was because it became known that Texaco had sold its interest in the properties to Azure and there were 'problems coming to the surface' with the new owners of the sites. However the difficulties with access did not apply to any of these sites and the assertion by Somerfield and Azure that the airspace agreements were personal to Texaco was known, as Mr Lynch accepted, on 8 August 2005.
96. There was a positive decision to perform the airspace agreements so that in the event of a claim against Texaco the claimants would not face an argument that they failed to comply with their own obligations. The performance comprised trying to get planning permission, giving notifications under the terms of the agreements and obtaining positive assurances from Texaco and its agents. The closest Ridgewood came to reservation of rights was in their complaint that they had been denied access to Blue Star and Forty Avenue (a complaint which was not pursued very vigorously and which only affected two of the sites) and there was never any general reservation of rights. The performance continued right up until expiry of the airspace agreements."
i) The Claimants' claim for non-termination damages was not already pleaded, and accordingly the Claimants required permission to amend.ii) The Claimants would be given permission to amend.
iii) Taking into account what had actually happened, all of the Airspace Agreements had lapsed for reasons unconnected with Texaco's breach by transferring the Sites without reserving a right to perform the Airspace Agreements.
iv) It was nevertheless arguable that, as the Claimants contended, damages should be assessed as at the date of breach, namely 21 June 2005, and that what had actually happened thereafter was legally irrelevant. Accordingly, the application for summary judgment would be dismissed.
v) There would be judgment for the Claimants on liability for breach of the Airspace Agreements, but without prejudice to the ability of Texaco and Pannone to argue that this gave rise to nominal damages only.
vi) The issues of causation and the measure of damages would be adjourned for further argument.
"2. My [first] judgment was restricted to the preliminary issue identified by Master Teverson in his order dated 28 September 2011, namely that of liability of the defendant to the claimants.
3. It was common ground that questions of causation were to be comprised within quantum rather than liability. Disclosure had not been given on causation and the claimants said they had not put in their evidence on that issue or otherwise addressed it at all. The exclusion of causation caused some difficulties on the facts of this case as I identified in paragraph 18 of the judgment. Therefore in some respects I did trespass into the field of causation where it was not possible to extract it from that of liability.
4. At the present hearing, but not, unfortunately, at the trial of liability, I was referred to The Trademark Licensing Co. Ltd., Lonsdale Sports Ltd v Leofelis [2012] EWCA Civ 985 where I note Lloyd LJ's observation at [39]:
'In my experience, at any rate in a breach of contract case where there are likely to be serious issues as to the basis on which the damages payable are to be calculated, where a party has been held liable for breach of contract at a liability trial, it is a good idea for the judge who hears the liability trial to determine the basis on which damages should be payable, though not of course the details of amounts, just as it is right for such a trial to cover any live issues as to causation.'
5. It may be that one of the reasons why it was possible to separate the issue of causation from the preliminary issue was because the defendant and Pannone thought that they were dealing with repudiatory anticipatory breach only. On that basis it might be logical to decide the issue of whether there was a breach through anticipatory termination and, if so, whether it was accepted. Where a claim for non-termination damages is being pursued there is less point in separating liability from causation entirely and the court ought to decide whether the breach prevented the claimants from being able to obtain planning permission.
11. On 20 February 2013, with an eye to this hearing, the claimants applied to amend their particulars of claim. The defendant and Pannone indicated that they would oppose. On 8 April 2013, Pannone, supported by the defendant, applied for summary judgment dismissing or striking out that part of the claim formulating the damages sought, namely [9] and [10]. That application was supported by a witness statement from Andrew Blair of Clyde & Co. LLP, Pannone's solicitors. I think it is fair to say that this witness statement does not adduce any fresh evidence but merely draws together evidence that was before the court on the trial of liability in convenient form.
26. I should deal with certain technical matters relating to the summary judgment application first. It is true that the application has been brought late in the day after the first leg of the preliminary issue has been tried, but that is accounted for by the way in which this point about non-termination damages has arisen. I accept that I have jurisdiction: see The Trademark Licensing Co. Ltd v Leofelis (above). Mr. Pymont has not adduced evidence going to causation so I have only heard one side of the case. It is said that he has had that opportunity; the claimants have not complied with CPR 24.5 and served evidence in response to Mr. Blair at least seven days before the summary judgment hearing.
27. By CPR 24.4 the respondent should be given at least 14 days' notice of the issues which it is proposed that the court will decide at the hearing. However Mr. Pymont was given the opportunity to ask for an adjournment but made it clear that he did not want to do so as he was alleging that the application fell to be dismissed in any event.
28. Nevertheless Mr. Pymont puts his marker down to say that the claimants have been left with inadequate time to prepare detailed evidence in answer to the evidence led by Mr. Blair, let alone to serve it at least seven days before the hearing. The basis for the application is the allegation that the claimants will not be able to advance a factual basis for the damages they claim. The rationale of Master Teverson's order was to leave matters of causation over and in such circumstances, says Mr. Pymont, it was incumbent on the defendant and Pannone to give the claimants full notice of any claim to short-circuit matters. However Mr. Pymont fixed his colours firmly to the mast of saying that Mr. Blair's evidence went largely to the events which actually happened which are, in his contention, largely irrelevant.
"51. Although I can and indeed should decide matters that are fully argued before me it does not seem to me that it is appropriate or fair to do so in present circumstances. The issue of causation and measure of damages should I believe be argued as another free-standing preliminary issue before any hearing on quantum. As Lloyd LJ said, this involves a determination of the basis on which damages should be payable although not the details of the amounts. The defendant and Pannone now know what the argument is but it should be properly presented either with points of claim and defence on the issue or, at any rate, with a list of agreed issues. The claim is for a sum in excess of £50 million and it is proportionate to deal with it in this way rather than simply to uphold or dismiss it without full opportunity given to both sides to argue it. I bear in mind Mr. Pymont's stricture that owing to the terms of Master Teverson's order he has not had the opportunity to address the evidence relevant to his case on causation. He also relies on the observation of Mummery LJ in Doncaster Pharmaceuticals Group Ltd v The Bolton Pharmaceutical Company 100 Ltd [2006] EWCA Civ 661 that summary judgment is inappropriate where,
' even though there is no obvious conflict of fact at the time of the application, reasonable grounds exist for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the case.'
53. I suspect that in order to support his assertion that the claim for damages for non-termination breach was already adequately pleaded Mr. Pymont made as few amendments to the existing pleading as possible. However, it seems to me that now that it has been made plain that the claimants' claim in respect of the same loss whether or not they terminated the airspace agreements the pleading is adequate for purpose. Mr. Pymont will be held to that pleading when it comes to causation and its inadequacies, if any, can be relied on in due course. All the arguments, including those already deployed before me, can therefore be adduced on causation and the basis on which damages is payable.
55. It follows that I also propose to dismiss the claim for summary judgment. The test is whether the claimants have any reasonable prospect of success. The test is not the balance of probabilities. After a day and a half of difficult legal argument, I am not prepared to hold that the claimants have no reasonable prospect of success but the claimants must decide for themselves whether to garner all the expert evidence that they say they need."
"44. On the basis that the defendant is entitled to look at what actually happened to see if the condition attached to the airspace agreements of obtaining planning permission could in the events which have actually happened have been performed, Mr. Pymont relied on three specific reasons why planning permission was not obtained. All of such reasons were, he says, caused by the defendant's breach. First, he said that the claimants' joint venture partners in relation to three of the sites (three connected companies all with 'Weybridge' in their names who had taken upon themselves the obligation to obtain planning permission and whose funding was crucial to the development) pulled out as soon as they heard of the transfers. Mr. Lynch of the claimants said in a witness statement that Weybridge ceased to do any further work under the joint venture agreements, 'because it found out that [the defendant] had sold its interests'.
45. However there is no arguable case to this effect. The joint venture agreements were made after the transfers and Mr. Lynch agreed under cross-examination that Weybridge was aware of the transfers from the outset. Mr. Lynch then said that Weybridge pulled out when it found out that 'there were problems coming to the surface with the new owners of the site'. The problems he referred to were difficulty in obtaining access to the Blue Star and Forty Avenue sites which were not of course subject to the joint venture agreements at all. In any event the option periods for the joint venture sites as extended lapsed on 24 January 2006, 24 January 2006 and the 30 December 2005 respectively and no applications for planning permission were made at all in relation to any of them, so that the airspace agreements lapsed on expiry of the relevant option periods. Denial of access in relation to Blue Star and Forty Avenue took place on 25 November 2005 although the required steps to obtain access (formal request from the defendant) had not been taken and the claimants' representative Mr. Paul Lynch (Mr. Lynch's son) did not press the matter in any event. An e-mail dated 2 December 2005 shows that the real reason why Weybridge did not pursue any application for planning permission was their commercial view of the risk inherent in the applications themselves. I referred to this point in my judgment.
46. Secondly, Mr. Pymont relied on the denial of access itself. However, this too is a hopeless allegation on the facts. For a start, the claimants' agents made a mistake about the final option dates so that they were too late in any event to obtain the required surveys before obtaining planning permission. The final date for doing so was 4 November whereas they thought it was 25 November. Secondly, even on the basis of 25 November, the claimants' agents drew attention to the supposed urgency of that date but Mr. Paul Lynch did not respond or press for access. In any event it is hard to see how denial of access could be a breach arising from the transfer of the sites as opposed to a free-standing breach.
47. Mr. Pymont's third point was that planning permission was not obtained for the Clerkenwell site because of complaints by Azure that it had not received a copy of the planning application which caused delay. However, the reason no notice was given to Azure was nothing to do with the transfer to Azure. The claimants knew of the transfer and the fact that Azure had to be notified but, as Mr. Lynch accepted under cross-examination, the reason notice was not given was because of the claimants' mistake. In any event, the reason the claimants lost Clerkenwell was simply that although they knew that they could preserve the airspace agreements by launching an application against non-determination before the deadline they failed to do so, either as a result of their own choice or because of a mistake regarding the deadline date.
48. Mr. Blair's evidence in support of summary judgment goes into considerable detail, taking each site independently, as to the lack of merit in the claimants' claim, alleging that they have no realistic prospect of establishing that the loss of the benefit of the airspace agreements was caused by the defendant's breach.
49. I agree that, taking into account what actually happened, all the airspace agreements lapsed for reasons unconnected with the breach consisting of transfer without reservation of a right by Texaco to perform. However, all this is predicated on the failure of Mr. Pymont's argument as to how damages should be assessed on a non-termination breach."
i) Contrary to the Claimants' claim that they had lost an opportunity to make profits by performing the Airspace Agreements which should be valued as at the date of the breach, the Claimants had not lost any opportunity since they made every attempt to realise their opportunity and had failed on grounds which had nothing to do with Texaco's breach. Accordingly, damages should be assessed in the light of what had actually happened, rather than as at date of the breach and ignoring what had happened subsequently. On that basis, the Claimants had suffered no loss.ii) The Claimants' attempt to contend that they would have had a real prospect of obtaining planning permission if Texaco had not breached the Airspace Agreements was an abuse of process, because it was an impermissible attempt to re-litigate matters which had already been decided against them in the first and second judgments.
iii) The Claimants' alternative claim for wasted expenditure failed for essentially the same reasons.
"My immediate reaction is that the claimants' assertion is an unattractive one. In circumstances in which they deliberately kept the airspace agreements alive, waiting to see what would happen, it seems unmeritorious for the claimants to pursue the point that their loss was suffered on 21 June 2005. They seek to adduce expert evidence to ascertain what might hypothetically have happened as to planning permission looked at from 21 June 2005 when what actually happened is in evidence and I have made findings about it. The claimants' case now is that they lost an opportunity, or a chance, which must be valued as at the date of breach while I have found that they did not lose any opportunity since they made every attempt to realise their opportunity and failed on grounds which had nothing to do with Texaco's breach. I held that the claimants, in affirming the contract, took into account as a conscious strategy the possibility that either Texaco would in practice perform through leaning on Azure or, if it did not, that the claimants would be in a better position to claim damages at the end of the day if they obtained planning permission."
"42. In any event, it seems to me that it would be an abuse of process to try and re-run arguments already made in the same action (albeit at different hearings on different issues) when I have felt able to make findings based on the evidence which I heard and the documents I saw. To my mind there are many instances in which the claimants seek to do this on the facts, relating to their ability to obtain planning permission. For example in relation to the Clerkenwell site (on which Mr. Pymont relies, presumably as the high point of his case) Mr. Lynch suggested in evidence that the application for planning permission might have been submitted earlier but for difficulties in notifying Azure. I held in my first judgment that the failure to notify Azure was the claimants' fault; see [90]. In April, the claimants tried to run the same point and I again rejected it, holding that loss of the airspace agreement was unconnected with the breach: see [47] and [49] of my second judgment. The point is raised yet again, more elaborately, in [19] of the claimants' points of claim, but in my judgment it is not open to them to have another bite of the cherry and (as he says he intends to) for Mr. Pymont to adduce further evidence as this would be an abuse of the processes of the court.
What happened was in consequence of the breach and cannot be determinative of what would have happened if Texaco had not been in breach
43. In the points of claim Mr. Pymont goes through each of the sites, attempting to demonstrate how, if things had been different, there is an arguable case that the claimants would have obtained planning permission.
44. Mr. Pymont relies on Mr. Dixon's assurances that the claimants' position was protected notwithstanding the transfers, saying that if the claimants had not been misled by Mr. Dixon and had been apprised of the true position things would have been different. I cannot see how he can so rely in the face of Mr. Lynch's evidence and my finding that the claimants knew the material facts regarding the breach. On one hypothesis the claimants took the assurances as meaning that notwithstanding the absence of a right at law to perform, nevertheless Texaco would be able to lean on its assignees to perform, in which case the claimants consciously elected to proceed with their attempts to obtain planning permission in the hope that Texaco would be able to perform. Alternatively, the claimants took the assurances to mean that they were legally protected, in which case there would have been no difference between the world in which there had been a breach and a world in which there had not. There would have been no difference irrespective of the breach. I cannot see how Mr. Dixon's assurances were part and parcel of subsequent events dependent on the breach.
45. Secondly, the claimants in the points of claim allege that the claimants believe that Texaco would extend time limits in the airspace agreements. Again, I do not see how subsequent events can be said to have been affected by the breach. In the world where there had been no breach the claimants would have acted in the same way. In any event, all the documentation shows that the claimants were conscious of the deadlines for planning permission and tried to meet them. They did not ask for any extension of time. I note that it is fundamental to Mr. Pymont's case that the assessment of damages is to be carried out by reference to the parties' legal rights and obligations and not by reference to expectations that they might act so as to confer gratuitous benefits. Finally, it is trite law that where there has been a breach, although the guilty party must be assumed to have acted so as not to commit the breach, it is also assumed that he acts in the manner most favourable to himself. Accordingly, Texaco would have assigned the sites, but making sure that its assignees were legally bound. In such circumstances it is obvious that the assignees would not have permitted Texaco to extend time limits in the relaxed way suggested.
46. It seems to me that Mr. Pymont's argument is just an attempt to reargue old ground and is an abuse of process. I am satisfied by Mr. Ayliffe's responses in Pannone's points of defence to the allegations made in relation to each site but I do not need to go over them. It is plain that the claimants were aware of the need to abide by the contractual deadlines and in any event they elected to affirm the contracts."
The present proceedings
i) loss of the opportunity to terminate the Airspace Agreements and to bring a claim for damages for loss of the chance of securing planning permission and developing the sites for profit, alternatively for the expenditure wasted prior to the termination of the Agreements (paragraph 62(1));ii) wasted expenditure incurred in continuing to perform the Agreements after 21 June 2005 (paragraph 62(2));
iii) costs incurred in attempting to mitigate the loss suffered by bringing the claim against Texaco (paragraph 63).
Assessment of damages for professional negligence
i) The overriding principle in any claim for contractual damages is that they are compensatory. The damages should represent the value of the contractual benefit of which the claimant has been deprived by the breach of contract.ii) Prima facie damages are to be assessed as at the date of breach without regard to subsequent events.
iii) It is possible to depart from that rule where it is necessary to ensure that the claimant is not over-compensated or under-compensated having regard to events which have occurred since the date of breach, in particular where matters which were contingencies at the date of breach have become established facts subsequently.
iv) One way of departing from the rule where this is necessary is to assess the damages as at a later date. Another approach is to assess damages as at the date of breach, but in the light of subsequent events.
The Defendants' application to strike out
The law
"(a) A collateral attack on an earlier decision of a court of competent jurisdiction may be but is not necessarily an abuse of process of the court
(b) If the earlier decision is that of a court exercising a criminal jurisdiction then, because of the terms of sections 11 to 13 of the Civil Evidence Act 1968, the conviction will be conclusive in the case of later defamation proceedings but will constitute prima facie evidence only in the case of other civil proceedings. (It is not necessary for us to express any view as to whether the evidence to displace such presumption must satisfy the test formulated by Lord Cairns LC in Phosphate Sewage Co Ltd v Molleson 4 App Cas 801, 814, cf the cases referred to in paragraphs 32, 33 and 35 above.)
(c) If the earlier decision is that of a court exercising a civil jurisdiction then it is binding on the parties to that action and their privies in any later civil proceedings.
(d) If the parties to the later civil proceedings were not parties or privies of those who were parties to the earlier proceedings then it will only be an abuse of process of the court to challenge the factual findings and conclusions of a judge or jury in the earlier action if (i) it would be manifestly unfair to a party to the later proceedings that the same issues should be relitigated or (ii) to permit such a re-litigation would bring the administration of justice into disrepute."
"My Lords, the only way in which that could possibly be admitted would be if the litigant were prepared to say, I will show you that this is a fact which entirely changes the aspect of the case, and I will show you further that it was not, and could not by reasonable diligence have been, ascertained by me before."
I note that all the cases in which this test had been applied which were discussed by Morritt V-C were cases in which the earlier proceedings were proceedings in which the relevant party had been convicted of a criminal offence. Furthermore, it does not appear to me that Morritt V-C treated this test as applicable where the earlier proceedings were civil proceedings which did not involve the same parties (or their privies) as the later proceedings.
"Bringing the administration of justice into disrepute
25. I therefore conclude that it would bring the administration of justice into disrepute if Mr Laing were to be permitted in the second claim to advance exactly the same case as was tried and rejected by H.H. Judge Thornton. If H.H. Judge Thornton's judgment was to be disturbed, the proper course was to appeal, rather than seek to have it in effect reversed by a court not of superior but of concurrent jurisdiction hearing the second claim. That the second claim is in substance an attempt to reverse H.H. Judge Thornton is important in the context of wider principles of finality of judgments. In Hunter, at 545D, Lord Diplock said that the proper course to upset the decision of a court of first instance was by way of appeal. Where, wholly exceptionally, a collateral, first instance, action can be brought it has to be based on new evidence, that must be such as entirely changes the aspect of the case: see per Earl Cairns L.C. in Phosphate Sewage v Molleson (1879) 4 App Cas 801 at 814. The second claim in our case not merely falls short of that standard, but relies on no new evidence at all.
26. It is however argued that all of that is irrelevant, or at least not conclusive, where the second claim is, unlike the claim in Phosphate Sewage, not between the same parties. The appellant relied on, and Langley J. was impressed by, observations by Lord Hoffmann in Hall v Simons [2002] 1 AC 615 at 705H, on the status of claims of abuse of process in negligence actions against solicitors involved in earlier proceedings:
'I see no objection on grounds of public interest to a claim that a civil case was lost because of the negligence of the advocate, merely because the case went to a full trial. In such a case the plaintiff accepts that the decision is res judicata and binding upon him. He claims, however, that if the right arguments had been used or evidence called, it would have been decided differently.'
In the present case, Mr Laing perforce accepts that the decision of H.H. Judge Thornton is binding on him. The obligation to Mr Watson placed on him by that judgment is the loss that he seeks to recover in the second claim against TW. That judgment against him was only obtained by Mr Watson because of the negligence of Mr Kelly. Accordingly, the second claim does not seek to reverse the decision of H.H. Judge Thornton, but rather seeks to recover from TW the cost to Mr Laing of that decision.
27. I of course agree that it will not necessarily, or perhaps usually, be a valid objection to a claim for solicitors' negligence in or about litigation that the claim asserts matters different from those decided in that litigation. That is so not only of cases where the solicitors have made what might be called administrative errors that have prevented the earlier proceedings from being properly pursued or their outcome challenged by the proper means (e.g. Walpole v Partridge & Wilson [1994] A.C. 106); but also where errors in assembling the evidence or understanding the law are alleged to have led to an incorrect result, as was the case in Hall v Simons itself. But the present case is significantly different from those just mentioned. The difference is that, as shown in [19] above, in order to succeed in the new claim Mr Laing has to demonstrate not only that the decision of H.H. Judge Thornton was wrong, but also that it was wrong because it wrongly assessed the very matters that are relied on in support of the new claim. That is an abusive relitigation of H.H. Judge Thornton's decision not by appeal but in collateral proceedings, and in substance if not strictly in form falls foul of the Phosphate Sewage rule.
Unfairness
30. TW claimed that it would in any event be manifestly unfair to them to permit Mr Laing to reopen the issue between himself and Mr Watson. Mr Watson had claimed privilege for various documents that might assist the case; and Mr Watson himself had indicated that he would not attend a further trial. I doubt whether there are any other documents that could make a substantial addition to what is already before the court, but the absence of Mr Watson from the trial of the new claim is significant. H.H. Judge Thornton based his conclusions largely on his acceptance of the evidence of Mr Watson, which the trial court in the new claim will be deprived of. I am not entirely certain that this issue, taken on its own, would demonstrate manifest unfairness to TW; but what it does very firmly underline is that the new claim will indeed be a re-run of the first case, in both of which proceedings Mr Watson, for exactly the same reasons in each case, is a central witness.
31. On the other side of the coin it was argued that it was unfair to Mr Laing, and possibly improper on the part of TW, that when Mr Kelly, a partner in TW, supported the case that Mr Laing seeks to put in the new claim TW should, as it was put, seek to shield themselves from that claim by relying on the judgment of H.H. Judge Thornton. There might be something in that complaint if Mr Kelly's evidence had not been available to H.H. Judge Thornton, who had a clear view of the role that Mr Kelly had played. The limited assistance that Mr Kelly gave to Mr Laing's case, and the fact, found by H.H. Judge Thornton, that he was unaware of a central issue between Mr Watson and Mr Laing, Mr Watson's first agreement, shows that it is not improper for unfair for TW to rely on the findings of H.H. Judge Thornton."
"36. I should explain why I conclude that the challenge is impermissible. Allegations of negligence during the course of litigation, against solicitors or advocates, will normally involve an attempt by a claimant to demonstrate that the previous conclusion of the court would have been different, absent negligence on the part of the lawyer. In many cases it will, indeed, be necessary to do so in order to prove causation and loss. The paradigm is the loss of a case due to negligent advocacy. But to bring such proceedings for negligence does not bring the administration of justice in to disrepute; Hall v Simons teaches to the contrary.
37. But such cases differ from the instant appeal in two important respects. Firstly, in the normal run of case, the impugned conduct of the lawyer is independent of the factual conclusions of the court; those conclusions are only relevant to prove causation and loss. His case does not, in reality, involve any challenge to the findings or conclusion of the court. He merely contends that, in the light of the negligence of which he now complains, the court's conclusions would have been different. But this not so in the present case. As Buxton L.J. has demonstrated , the claimant cannot establish that his adviser's drafting of the agreements was negligent without challenging the judge's findings as to credibility and fact.
38. Secondly, generally in actions against legal advisers arising out of litigation, the losing party's allegations of negligence could not have been advanced in the case which he lost. They arise only after the case is concluded. But in the present case, the claimant had every opportunity during the course of the trial to raise, as he would have it, the inadequate drafting. "
Application to the present case
The Defendants' application for summary judgment
Principles applicable to summary judgment applications
"As Ms Anderson QC rightly reminded me, the court must be careful before giving summary judgment on a claim. The correct approach on applications by defendants is, in my judgment, as follows:
i) The court must consider whether the claimant has a 'realistic' as opposed to a 'fanciful' prospect of success: Swain v Hillman [2001] 2 All ER 91;
ii) A 'realistic' claim is one that carries some degree of conviction. This means a claim that is more than merely arguable: ED & F Man Liquid Products v Patel [2003] EWCA Civ 472 at [8].
iii) In reaching its conclusion the court must not conduct a 'mini-trial': Swain v Hillman.
iv) This does not mean that the court must take at face value and without analysis everything that a claimant says in his statements before the court. In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporaneous documents: ED & F Man Liquid Products v Patel at [10].
v) However, in reaching its conclusion the court must take into account not only the evidence actually placed before it on the application for summary judgment, but also the evidence that can reasonably be expected to be available at trial: Royal Brompton Hospital NHS Trust v Hammond (No 5) [2001] EWCA Civ 550.
vi) Although a case may turn out at trial not to be really complicated, it does not follow that it should be decided without the fuller investigation into the facts at trial than is possible or permissible on summary judgment. Thus the court should hesitate about making a final decision without a trial, even where there is no obvious conflict of fact at the time of the application, where reasonable grounds exist for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the case: Doncaster Pharmaceuticals Group Ltd v Bolton Pharmaceutical Co 100 Ltd [2007] FSR 63.
vii) On the other hand it is not uncommon for an application under Part 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it. The reason is quite simple: if the respondent's case is bad in law, he will in truth have no real prospect of succeeding on his claim or successfully defending the claim against him, as the case may be. Similarly, if the applicant's case is bad in law, the sooner that is determined, the better. If it is possible to show by evidence that although material in the form of documents or oral evidence that would put the documents in another light is not currently before the court, such material is likely to exist and can be expected to be available at trial, it would be wrong to give summary judgment because there would be a real, as opposed to a fanciful, prospect of success. However, it is not enough simply to argue that the case should be allowed to go to trial because something may turn up which would have a bearing on the question of construction: ICI Chemicals & Polymers Ltd v TTE Training Ltd [2007] EWCA Civ 725."
The rule in Hollington v Hewthorn
Is there a real prospect of success?
"at the request and cost of the Developer support the Developer in making and pursuing a Planning Application and/or an Appeal and/or Proceedings".
He submitted that, if Azure had been adequately bound by Texaco, Azure would have been subject to a duty to cooperate with the Claimants and therefore would not have been able to rely upon not being notified of the application to delay the decision.
"If a Planning Application is refused by the Local Planning Authority then the Developer shall (provided that Planning Counsel has advised that such an appeal has more than a 50% chance of being successful) at its own expense as soon as practicable lodge an appeal with the Secretary of State and prosecute the Appeal with all reasonable speed and diligence."
Counsel submitted that the correct interpretation of this clause was that the Claimants were obliged to file an appeal if planning counsel advised that it had a greater than 50% chance of success, but not prevented from doing so if the prospects were lower.
Conclusions
Postscript