Jersey Unreported Judgments

[2011]JRC211

Royal Court

(Samedi)

31 October 2011

Advocate D. S. Steenson for the Plaintiffs.

Advocate A. P. Roscouet for the First Defendant.

Advocate R. J. C. Wakeham for the Second Defendant.

judgment

the commissioner:

1.        This is an application by the second defendant for leave to issue third party proceedings. 

2.        The action as presently constituted concerns a claim by a number of owners of properties in a residential development in St Lawrence known as Les Cypres Mews, purchased from the developer between, variously, May and September 2006.  The first defendant ("Turrill") was the developer of the project.  The second defendant ("NV Bate") was a firm of consulting civil and structural engineers retained by Turrill in connection with the development. 

3.        The feature of the development of relevance to the proceedings is that it involved the excavation of part of a valley slope to the rear of the (planned) houses so as to leave a rock face which was significantly steeper than the original natural gradient of the land.  On 25^th June, 2007, there was a substantial fall of rock and debris from this rock face.  No immediate injury or damage to any of the residents or their houses occurred, but the incident was, understandably, a source of great concern to them.  Temporary steps to contain any further falls have, since then, been put in place but more extensive long-term measures are likely to be required.  The plaintiff owners claim damages from Turrill and/or from NV Bate for the costs of such remedial works, the costs of investigations and other matters.  Both defendants deny liability and point the finger of responsibility at the other. 

4.        At the heart of the dispute is the professional relationship between Turrill and NV Bate and, in particular, a letter addressed by the latter to Turrill dated 14^th February, 2006, concerning the rock face.  Because the import of that letter is the subject of hot dispute I do not, for present purposes, propose to say more about its contents than that it concluded with the words "We hope this letter adequately describes the situation as constructed, and please feel free to copy it to any interested parties as necessary."  It seems fairly clear from correspondence disclosed in the course of the proceedings that copies of this letter were indeed passed on to some at least of the plaintiff owners at one stage or another during the process of purchasing their properties, usually via lawyers acting for the parties. 

5.        Put very simply, the main contentions concerning this letter as currently pleaded are as follows:-

(i)        The plaintiff owners base their claim in negligence against NV Bate on the letter, saying that they relied on it to their detriment in that its content was misleading about the rock face. 

(ii)       NV Bate says that it is not a geotechnical expert; that it was not retained to advise on excavation of the valley side; that it was asked by Mr. Morgan, a director of Turrill, to write the letter solely for the purpose of describing the work that had been undertaken by others; that it was not told that the letter was "needed because prospective purchasers of the Properties had made enquiries of Turrill and/or Mr. Morgan regarding the structure and the stability of the Rock Face"; and that to the extent that any of the plaintiffs may have relied on such letter in deciding to purchase their property (which is not admitted) such reliance was unreasonable. 

(iii)      Turrill claim that NV Bate was retained as an expert to advise in connection with the rock face, that it acted on NV Bate's advice and recommendations, and that it had accordingly discharged its (admitted) duty of care to the plaintiffs.  Turrill's Answer, filed in December last year, says little specific about the letter of 14^th February, 2006, beyond admitting that it was obtained from NV Bate and that copies of it were provided to the several plaintiffs.  The plaintiffs' averment that Turrill intended or ought reasonably to have known that the letter would be relied on by prospective purchasers is not admitted; and it is contended by Turrill that "If the Plaintiffs as alleged relied upon the representations made by the Second Defendants [i.e. the contents of the NV Bate's letter] and chose not to undertake their own investigations the First Defendant will aver that the Plaintiffs' remedy is against the Second Defendant and not against the First Defendant".  The pleading says nothing about the circumstances in which the letter was obtained by Turrill from NV Bate or about the circumstances in which copies came to be supplied to the various plaintiffs. 

6.        Until recently NV Bate's interest and concern in the litigation was limited to defending themselves against the plaintiff owners' claims.  However, the Court now has before it an application by Advocate Wakeham on behalf of NV Bate for leave to add third party claims for damages, alternatively claims for indemnity or contribution, (i) against Mr. Leonard Morgan, a director of Turrill at the time of the development; and (ii) against Turrill.  The gist of the complaint is that Mr. Morgan and/or Turrill wrongfully used the 14^th February, 2006, letter for a purpose going beyond that for which it was written: that, in practice, the letter was used to satisfy queries from prospective purchasers regarding the rock face and its stability, and if that has resulted in NV Bate being held liable to the plaintiffs, they are entitled to indemnity or contribution from Turrill, alternatively damages.  (I say "gist" of the complaint because, as appears below, the way in which the claim is actually formulated in the draft third party claim is unsatisfactory in a number of respects.). 

7.        The application is strenuously resisted by both Advocate Roscouet representing Turrill and by Advocate Steenson on behalf of the plaintiff owners, principally on the ground that it is too late and would, if granted, result in the loss of the trial date which has, for some time, been fixed for 12^th to 16^th December this year.  Objection is also taken to the way in which the third party claims are formulated. 

8.        The principles applicable to the exercise of the Court's discretion in cases of application to make add ancillary claims are substantially the same as those governing late amendments as set out in the judgment of the Court of Appeal in Brown-v-Barclays Bank (Unreported, 4^th December 2001) supplemented by the observations of this Court in Blenheim Trust Company-v-Morgan & Ors [2003] JLR 598, para.19].  Mr Wakeham also rightly drew attention to the reference by Birt, Bailiff, in Cunningham-v-Cunningham [2009] JLR 227 to the convenient summary of relevant considerations given by Neuberger J in Charleswroth-v-Relay Roads Ltd [1999] 4 AER 397 at 401,402.  Applying those principles to the present case, it would be quite wrong in my view for the application to be granted.  The main factors that lead to this conclusion are as follows. 

Stage at which the application is made

9.        The application is on any view made relatively late in the day, as Mr Wakeham recognises.  Although there were, at the time when it was first canvassed with the court at a recent Pre-Trial Review ("PTR"), some two months still to go until the start of the trial, the events in question occurred over four years ago, the action was started in January 2010, pleadings closed long ago and the trial date has been fixed since early summer this year.  There are of course many cases in which courts have had to concern themselves with applications to amend at a much later stage; but the fact of the matter is that an application of this kind at this point - involving not just amendment of pleadings as between existing parties but also the addition of a new party - inevitably raises concerns about its impact, if granted, on the trial date.  In the words of Southwell JA, President, in Brown-v-Barclays Bank, NV Bate therefore bears a "heavy burden" of showing why its application should be granted and, to that end, what the answers are, for example, to the questions posed in that judgment. 

Why matters now sought to be pleaded were not raised at an earlier stage

10.      Mr Wakeham's submission on behalf of NV Bate that his clients have only recently found themselves in a position in which they are able, properly, to plead the claims that they now wish to advance does not, with respect, bear scrutiny.  As Mrs Roscouet for Turrill points out, it is clear from the pre-action correspondence in 2007 and 2008 that there was going to be a tussle between Turrill and NV Bate and that that principal bone of contention was going to be the 14th February, 2006, letter: the circumstances in which it came into existence and the purpose to which it was put.  And the essence of Turrill's case was always perfectly clear: as Jenners put it in their letter to Berrymans Lace Mawer (English solicitors representing NV Bate) on 13^th October, 2008, responding to a request for an explanation of the circumstances in which the letter was passed to prospective purchasers and the terms under which it was provided, "The purchasers of the properties asked my client for an assurance regarding the rock face.  My client telephoned Mr NV Bate who confirmed that a copy of his letter could be passed on to the owners."  This no doubt is precisely why, when on 16^th December, 2010, it came to serving their Answer in the subsequent action, NV Bate flagged up the possibility of third party proceedings against Mr. Morgan and/or Turrill "should this matter be progressed any further against it."  Moreover, by the time that the plaintiffs had served further and better particulars of the Order of Justice at the end of January 2011 and had supplied copies of almost all of the items of correspondence referred to in those particulars to Sinels under cover of a letter from Walkers dated 15^th March, 2011, NV Bate were in possession of almost all the primary facts on which they now rely in their draft pleading.  

11.      But there is, argues Mr Wakeham another material factor, which only emerged with the completion of discovery and inspection later in the year, as set out in paragraph 9(g) of the draft third party claim:-

"Neither the Plaintiffs nor Turrill have disclosed any documents or pleaded any material facts which suggest that Mr Morgan /Turrill told the Plaintiffs of (i) the circumstances in which he/it/they came into possession of the Letter or (ii) the limited nature of NV Bate's involvement with the works to the Rock Face or (iii) the fact that no specific reports or advice or investigations of any sort had been sought or obtained from NV Bates in relation to the stability of the Rock Face". 

But to suggest that it was an essential ingredient of NV Bate's ability to plead a case against Turrill that there was nothing in Turrill's discovery that undermined its previously stated stance in relation to the 14^th February letter is a curious proposition.  The simple truth is that nothing has changed since mid-March this year: that, despite what is said in certain passage of the submissions made on its behalf, nothing new has emerged which has made it possible for the first time for NV Bate to plead a third party claim against Mr Morgan and Turrill.  

12.      Mr Wakeham also sought, at some length to review the history of the dispute in order to present the current application in context.  The picture that he painted was essentially one in which his clients had done everything possible to advance matters by encouraging the other parties to make pre-action disclosure of documents, but had been frustrated by their unwillingness to do so, creating an air of mystery about the use to which the letter of 14^th February had been put and an expectation that more documents of potential importance were going to emerge on discovery; a picture in which NV Bate had deliberately sought to agree a timetable which included a breathing space after discovery for the amendment, if necessary of pleadings, only to see that space eroded by the other parties' delays in the provision of discovery; and a situation in which in which it was only after the completion of discovery that NV Bate was able to see things "in focus".  Although there are aspects of this portrait that are fair enough, despite Mr Wakeham's eloquence, there are others of which I am wholly unpersuaded.  The root of the problem, as Mr Steenson put it, is that NV Bate was effectively trying to conduct the litigation by correspondence and, by demanding discovery before pleadings rather than the other way about, was standing the normal litigation process on its head.  The right course, if NV Bate had wanted to pursue third party claims would have been for it to get on and plead them and then let discovery take its normal course.  In any event, it is difficult to see in what way completion of discovery really assisted NV Bate to put things in focus any more clearly than before. 

Strength of the third party case

13.      Because the strength or otherwise of the proposed third party claim will turn very much on the oral evidence of Mr Bate and Mr Morgan it would be undesirable for me to express any view on the matter at this stage beyond what is absolutely necessary for the purpose of the present application.  I therefore proceed on the basis that NV Bate would have at least a good arguable case against Mr Morgan and Turill on its proposed third party claim. 

Adjournment of trial date

14.      Mr Steenson's chief concern is that the trial date should not, under any circumstances, be lost - a plea that is entirely understandable, given the as yet unremedied state of the rock face and the length of time that this dispute has been running.  (There has, I am informed been a further fall of rock very recently and, while it appears to have been on a relatively minor scale by comparison with the fall in June 2007, it is indicative of the hazard affecting the properties in Les Cypres Mews and its residents).  Mrs Roscouet is equally concerned that there should be no adjournment.  It is plainly highly desirable that this matter should now come to trial as planned in December so that all involved may know where they stand as soon as possible.  

15.      Mr Wakeham's position, on the other hand, has moved on from the position taken by his client shortly before the PTR, when NV Bate was arguing strenuously that the case could not be ready for trial in December and that a fresh timetable leading to trial in May 2012 was required (though that submission was also informed by other considerations in addition to the need to accommodate the third party claim).  By the time of the PTR it was being suggested that granting the application need not necessarily result in adjournment of the trial, though even then this appeared to me to be more wishful than realistic, a state of affairs more or less acknowledged in the wording of paragraph 13 of Mr Wakeham's skeleton argument of 6^th October: "Although not entirely desirable, it might be possible to shoehorn the issues into [the] trial in December".  Now, on this adjourned hearing, Mr Wakeham says that, having accelerated various preparatory matters on his client's side he is confident that no adjournment would be necessary.  He also points out, and Mrs Roscouet accepts, that the issues of fact in the proposed third party proceedings are likely to coincide substantially with those in the main action; that the witnesses would probably be the same and the documentary evidence no different.  

16.      But all that takes little account of Mr Morgan's own situation as someone faced for the first time with defending a claim against him personally; a claim moreover which not only includes a serious allegation of deceit but one the precise terms of which, in important respects, is obscurely pleaded and could not be allowed to stand.  

17.      First, by way of example only, the alleged "Representation" by Mr Morgan set out in paragraph 7 of the draft Third Party Claim is confused and confusing in the way in which it runs together a number of elements and, in consequence, wholly fails unambiguously to plead any representation of fact that could form the basis of a cause of action.  Challenged about this, Mr Wakeham says that the representation is meant to be one of "intention" as to the purpose to which the letter would be put - as indicated, he says, in paragraph 8(a) of the draft claim where (in the context of the contractual claim) the word "purpose" is used.  But he accepts that that word "intention" does not appear in paragraph 7 and that the pleading would benefit from re-formulation in this respect.  But that is not an end of the point, because, on a natural reading of paragraph 7 the only "purpose" described there is contained in the words "to assist him in selling the properties" - something which is entirely uncontentious.  Secondly, in an attempt to attenuate the seriousness of the allegation, Mr Wakeham emphasises that the claim in deceit against Mr Morgan is based only on recklessness, that being the term used in the third line of paragraph 12 of his pleading.  But it is difficult to square that with the immediately following allegation (in sub-paragraph 'a') that Mr Morgan and/or Turrill failed to inform NV Bate that the content of the Representation was "untrue" - which sounds very much like an allegation of deliberate deceit.  Thirdly, it is difficult from the way in which sub-paragraph 'a' is pleaded, to be sure of the point in time to which the allegation is addressed.  Mr Steenson also, understandably, expresses surprise that, notwithstanding that some at least of these concerns about the formulation of the draft third party claim were ventilated on the occasion of the last hearing on 6^th October, nothing has been done in the meantime to address them.  Given the obscurities to which I have referred above and Mr Wakeham's acknowledgement that in one respect at least the pleading is less than satisfactory, on this ground alone it would be quite wrong - as indeed Mr Steenson submits - for the Court to grant the current application.  

18.      Nor, I think, can the position be rescued, as Mr Wakeham suggests, by giving leave for the issue of third party proceedings conditional on him making one or two minor adjustments to the pleading.  The flaws in the current document require rather more attention than that; and there can be no guarantee that any re-drafted pleading will be accepted by the other parties as sufficient without a further hearing, with further adverse consequences for the timetable.  There is also a not unimportant point of principle here: that parties to litigation faced with a late application to amend by an opponent are entitled to expect that the applicant will have formulated his proposed new averment in a way that is clear and unambiguous and should not be left to have to guess what is really intended.  

19.      In any event, once NV Bate's pleading was in order Mr Morgan would be entitled to a proper opportunity to consider his position and plead his Answer and I would not be prepared to curtail the normal period for filing his response.  Mrs Roscouet also submits, and I accept, that obliging Mr Morgan to have to deal with these matters at a time when everyone is the final stage of preparing for trial would be unsatisfactory and unfair.  

20.      All in all I do not, therefore, see that I could properly take the view that it would be practicable or fair to grant the current application without adjourning the trial date.  Nor would any adjournment be of short duration: it is unlikely that the trial could be reinstated before Easter next year. 

Balance of justice

21.      In the ordinary way it is, of course, desirable that all claims between parties arising out of a common set of facts should be determined at the same trial, which, among other things, is why the rules of court make specific provision for the issue of third party proceedings.  But occasionally, in the interests of justice, that precept has to yield to other considerations; and in my view the current case is such an instance.  It is not just desirable but imperative that the plaintiff owners' claim should proceed to trial as planned without any further delay.  And, notwithstanding the overlap between the factual issues in the main action and the proposed third party claim, it would be unfair to Mr Morgan and potentially prejudicial to the orderly conduct of the proceedings between now and the start of the trial for NV Bate's application to be granted, not least because the current formulation of the claim is on any view one to which it would be unfair to require Mr Morgan and Turrill to plead.  If this leaves NV Bate to bring separate proceedings that is a consequence for which it has only itself to blame: the third party claim was clearly one which could have been actively pursued long since. 

22.      The application is, accordingly refused. 

Authorities

Brown-v-Barclays Bank 2001/241.

Blenheim Trust Company-v-Morgan & Ors [2003] JLR 598.

Cunningham-v-Cunningham [2009] JLR 227.

Charleswroth-v-Relay Roads Ltd [1999] 4 AER 397.