Barclays Bank Plc v Miller and Another; Frank, third party
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE STAUGHTON,LORD JUSTICE BUTLER-SLOSS |
| Judgment Date | 18 January 1990 |
| Judgment citation (vLex) | [1990] EWCA Civ J0118-3 |
| Docket Number | 90/0017 |
| Date | 18 January 1990 |
| Court | Court of Appeal (Civil Division) |
[1990] EWCA Civ J0118-3
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(MR. JUSTICE McKINNON)
Royal Courts of Justice
The Master of the Rolls
(Lord Donaldson)
Lord Justice Butler-Sloss
Lord Justice Staughton
90/0017
and
MR. STUART ISAACS (instructed by Messrs. Emsley Collins, Leeds) appeared for the Appellants (Defendants).
MR. MICHAEL MALONE (instructed by Messrs. Pearlman Grazin & Co., Leeds) appeared for the Respondent (Third Party).
I will ask Lord Justice Staughton to deliver the first judgment.
On 4th November 1983 Barclays Bank PLC (whom I shall call "the bank") commenced an action against Mr. and Mrs. Miller. The claim was in two parts. First, the bank claimed the principal sum of £129,826 upon a guarantee by Mr. and Mrs. Miller of the liability of Dynabyte (UK/Europe) International Limited. Secondly, there were claims totalling £140,700 in respect of personal liabilities of Mr. and Mrs. Miller to the bank. In each case there was a claim for interest.
It commonly happens in the case of actions on a personal guarantee that a number of defences are pleaded, and this case was no exception. There was also a counterclaim. That was on 11th January 1984. At about the same time a third party notice was issued and served on behalf of Mr. and Mrs. Miller against Mr. Colin Frank. I shall have to consider in a little detail the terms of that notice later. In a word it alleged that Mr. Frank was obliged to indemnify Mr. and Mrs. Miller against any liability which they might be under to the bank.
The action took a leisurely course. Eventually, on 25th January 1988, Mr. Justice Michael Davies made a consent order that the bank be at liberty to enter judgment against Mr. Miller for £180,000 and against Mrs. Miller for £140,000. It was also ordered that Mr. and Mrs. Miller be at liberty to discontinue their counterclaim. That was done a few days later on 4th February 1988. I have described this as a consent order because it was made by consent of the bank and Mr. and Mrs. Miller. There is no reason to suppose that Mr. Frank consented to it, or even knew about it. We have been told that the judgment against Mr. and Mrs. Miller nearly two years ago has not yet been honoured.
Meanwhile, nothing whatever had happened in the third party proceedings since notice of intention to defend had been served on behalf of Mr. Frank in February 1984. Over four years after that date, in May 1988, notice of intention to proceed was served on behalf of Mr. and Mrs. Miller. That was promptly met by an application to dismiss the third party proceedings for want of prosecution. On 18th November Master Topley acceded to the application. He ordered that the third party notice be struck out and the third party proceedings be dismissed. There was an appeal against that order, which was dismissed by Mr. Justice McKinnon on 13th March 1989. Mr. and Mrs. Miller now appeal to this court by leave of Mr. Justice Schiemann granted on 30th June 1989.
It is apparent from the judgment of Mr. Justice McKinnon that there was no issue before him but that Mr. and Mrs. Miller had been guilty of inordinate and inexcusable delay and that there had been prejudice to Mr. Frank. Although it seemed at one time that that might be an issue in this court in the light of a skeleton argument prepared by another member of the Bar, Mr. Isaacs has realistically disclaimed any intention to raise such matters here.
Thus the sole problem before the judge was whether the claim in the third party proceedings was time barred. If it was not, then in the ordinary way there would be no point in dismissing the third party proceedings for want of prosecution because fresh proceedings could promptly be started. (See Birkett v. James [1978] A.C. 297.) The position would be different if the claim was dismissed for conduct which was contumelious or an abuse of the process of the court. In such a case it would by no means follow that a plaintiff (or in this case the defendants) would immediately be able to start proceedings again. (See the Supreme Court Practice, paragraph 25/1/7.)
Mr. Justice McKinnon did hold that the claim in the third party notice would be time barred if fresh proceedings were started at the time either when the action was before him or when it had been before the master. He held that the cause of action had arisen as long ago as July 1981 and, accordingly, became time barred in July 1987 but for the third party proceedings. That decision was on the one point that he had to decide, and was the only subject of complaint in the notice of appeal to this court and in the argument of Mr. Isaacs. The judge was at pains to say that he expressed no view on any fresh proceedings that Mr. and Mrs. Miller might thereafter start save, naturally enough, in relation to the point which he had decided.
I now turn to the third party notice, which sets out further important facts which are not disputed for the purposes of this appeal, if indeed they are capable of being disputed at all; and it also shows how the claim was put in the third party proceedings. It reads:
"The Defendants dispute the Plaintiffs' claim on the grounds appearing in their Defence and Counterclaim. However, in the event of the Defendants being held liable to the Plaintiffs in respect of the above sums, the Defendants claim and are entitled to be indemnified by you, the Third Party, against the Plaintiffs' claim for the above sums and the costs of this action
on the grounds that
1. By a guarantee in writing dated 10th December 1979 you, jointly and severally with the Defendants and Major Alan H. Sedgwick, guaranteed the payment or discharge and undertook, upon demand in writing made on you, to pay or discharge to the Plaintiffs all monies and liabilities which should for the time being be due owing or incurred by Dynabyte (UK/Europe) International Limited ('Dynabyte') to the Plaintiffs upon the terms set out in the guarantee.
2. At a meeting of Dynabyte held at their registered office on 12th December 1979 and attended by the First Defendant (on behalf of himself and the Second Defendant), Major Sedgwick, you the Third Party and Mr. P. Harrison, the accountant to Dynabyte, it was agreed that the directors and shareholders of Dynabyte would contribute to any liability to the Plaintiffs under the guarantee in the same proportion as their respective proportion of the issued share capital of Dynabyte as at the date of any demand by the Plaintiffs upon them.
3. Major Sedgwick ceased to be a director and shareholder of Dynabyte on or about 28th May 1980 and the Defendants ceased to be directors and shareholders on 15th June 1980 alternatively 1st July 1980. At all material times thereafter you were the sole director and shareholder of Dynabyte, having bought the shareholding of Major Sedgwick (through a company called Sequoia Farms Limited) on or about 28th May 1980 and that of the Defendants on or about 1st July 1980.
4. By letters of demand dated 8th July 1981 the Plaintiffs demanded from the Defendants the...
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