Arag Plc v Leighton Jones
| Jurisdiction | England & Wales |
| Judge | Keyser |
| Judgment Date | 18 December 2020 |
| Neutral Citation | [2020] EWHC 3484 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: G40CF001 |
and
[2020] EWHC 3484 (Comm)
HIS HONOUR JUDGE Keyser QC
sitting as a Judge of the High Court
Case No: G40CF001
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS IN WALES
CIRCUIT COMMERCIAL COURT (QBD)
Cardiff Civil Justice Centre
2 Park Street, Cardiff, CF10 1ET
Charlie Newington-Bridges (instructed by Berry Smith LLP) for the Claimant
Samuel Parsons (instructed by Robertsons) for the Defendant
Hearing date: 16 December 2020
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
HIS HONOUR JUDGE Keyser QC
JUDGE Keyser QC:
Introduction
This is my judgment upon the claim of the claimant, ARAG Plc, against the defendant, Mr Leighton Jones. By a previous case management order made in the county court, the district judge directed that this claim be tried by a judge of the Business and Property Courts before the Part 20 claim brought by the defendant against the third party, Newbold & Co, a firm of solicitors. The Part 20 claim has accordingly been stayed pending this judgment.
The claim is for only £20,500. However, the claimant considers that it raises issues that are of wider importance to its business. My own view is that the case does not raise any significant legal problems, although the way in which the parties have approached it has tended to give a different impression.
The trial was conducted on the basis of an agreed statement of facts and documentary evidence. I am grateful to Mr Newington-Bridges, counsel for the claimant, and Mr Parsons, counsel for the defendant, for their submissions and to their respective solicitors for the efficient preparation of the papers for trial.
The Facts
The defendant was co-tenant with Ms Gibson of a residential property. Together they brought a claim in the county court for disrepairs against their landlord, Mr Francis. He in turn counterclaimed for arrears of rent.
The third party, which was the firm of solicitors acting for the defendant and Ms Gibson, made an application for an ATE insurance policy from the claimant, which is a provider of such policies for use in litigation. The agreed basis on which this trial has proceeded is that the application for the policy was made on behalf of Ms Gibson only, not on behalf of the defendant also. The ATE policy (“the Policy”) was issued to Ms Gibson on 29 January 2015.
By an order dated 17 March 2016 (“the Order”), judgment was given on the claim for £1,290 and on the counterclaim for £3,135. The defendant and Ms Gibson were ordered to pay Mr Francis's costs in an amount to be assessed if not agreed, and to pay him £25,000 on account of those costs within 28 days. It is common ground that the liability of the defendant and Ms Gibson under the Order in respect of costs was a joint and several liability.
The third party lodged a claim upon the Policy. Mr Francis put in a bill of costs of roughly £55,000. The third party ceased to act for the defendant and Ms Gibson, and they subsequently instructed Robertsons Solicitors to act for them.
On 28 February 2019 the amount of Mr Francis's costs was agreed at £40,000. The claimant paid that sum to Mr Francis or his solicitors on 20 March 2019. On or around the same date, the claimant also paid £1,200 inclusive of VAT to a firm of costs lawyers that it had instructed to consider the bill of costs.
By proceedings commenced on 14 June 2019, the claimant now claims a contribution from the defendant of one half of the costs (£20,000) and one half of the money paid to the costs draftsman (£600 inclusive of VAT). If the claim succeeds, the defendant seeks damages equivalent to an indemnity from the third party; but I am not concerned with that claim.
The Issues
The parties agreed a list of issues. However, it seems to me that the real issues for determination come down to three, which can conveniently be taken in the following order:
1) Did the facts give to Ms Gibson a cause of action for a contribution from the defendant?
2) If so, is a claim on that cause of action barred by limitation of time?
3) If a claim for contribution is not statute-barred, is the claimant entitled to bring the claim?
I shall address those issues in turn.
Ms Gibson's cause of action for a contribution
The first issue identified by the parties in their list of issues was: Can the claimant prima facie rely on section 1 of the Civil Liability (Contribution) Act 1978? The particulars of claim made no mention of the 1978 Act. It was first mentioned in paragraph 15 of the defence, which averred that the claim was brought under section 1 of the 1978 Act and raised a plea of limitation in reliance on section 10 of the Limitation Act 1980, which applies specifically to claims under section 1 of the 1978 Act. The reply responded by averring that the claimant, having paid the costs, “was entitled to recover contribution from the defendant as he was liable in respect of the same costs pursuant to s. 1 of the Civil Liability (Contribution) Act 1978” and by relying on section 10(4) of the 1980 Act (see further below).
On seeing the papers two days before the commencement of the trial, I notified counsel of my preliminary view that the 1978 Act had nothing to do with the case and that the rights of contribution, if any, arose at common law. In the event, counsel did not seek to dissuade me from that view. In my judgment, the pleaded and agreed facts do give Ms Gibson a cause of action for a contribution from the defendant, but simply on the basis that they were joint debtors in respect of the costs liability and there was accordingly a common law right to contribution to the extent that Ms Gibson paid more than one half of the debt.
Reference to section 1 of the 1978 Act led much of the written argument up interesting but blind alleys. Before briefly stating what I regard as the correct position, I shall consider section 1 of the 1978 Act, which provides:
“(1) Subject to the following provisions of this section, any person liable in respect of any damage suffered by another person may recover contribution from any other person liable in respect of the same damage (whether jointly with him or otherwise).
(2) A person shall be entitled to recover contribution by virtue of subsection (1) above notwithstanding that he has ceased to be liable in respect of the damage in question since the time when the damage occurred, provided that he was so liable immediately before he made or was ordered or agreed to make the payment in respect of which the contribution is sought.
(3) A person shall be liable to make contribution by virtue of subsection (1) above notwithstanding that he has ceased to be liable in respect of the damage in question since the time when the damage occurred, unless he ceased to be liable by virtue of the expiry of a period of limitation or prescription which extinguished the right on which the claim against him in respect of the damage was based.
(4) A person who has made or agreed to make any payment in bona fide settlement or compromise of any claim made against him in respect of any damage (including a payment into court which has been accepted) shall be entitled to recover contribution in accordance with this section without regard to whether or not he himself is or ever was liable in respect of the damage, provided, however, that he would have been liable assuming that the factual basis of the claim against him could be established.
(5) A judgment given in any action brought in any part of the United Kingdom by or on behalf of the person who suffered the damage in question against any person from whom contribution is sought under this section shall be conclusive in the proceedings for contribution as to any issue determined by that judgment in favour of the person from whom the contribution is sought.
(6) References in this section to a person's liability in respect of any damage are references to any such liability which has been or could be established in an action brought against him in England and Wales by or on behalf of the person who suffered the damage; but it is immaterial whether any issue arising in any such action was or would be determined (in accordance with the rules of private international law) by reference to the law of a country outside England and Wales.”
Two further provisions of the 1978 Act may conveniently be mentioned here. Section 2(1) provides:
“(1) Subject to subsection (3) below, in any proceedings for contribution under section 1 above the amount of the contribution recoverable from any person shall be such as may be found by the court to be just and equitable having regard to the extent of that person's responsibility for the damage in question.”
Section 6(1) provides:
“(1) A person is liable in respect of any damage for the purposes of this Act if the person who suffered it (or anyone representing his estate or dependants) is entitled to recover compensation from him in respect of that damage (whatever the legal basis of his liability, whether tort, breach of contract, breach of trust or otherwise).”
Despite the terms of the defence, which he drafted, Mr Parsons had accurately explained in his skeleton argument why section 1 did not apply to a claim for contribution in respect of costs alone. At common law there was no general right of contribution as between joint wrongdoers: see Merryweather v Nixan (1799) 8 Durn & E 186. A statutory exception to this position was made in...
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