Barratt Manchester Ltd v Bolton Metropolitan Borough Council

JurisdictionEngland & Wales
JudgeLORD JUSTICE MILLETT,SIR BRIAN NEILL,LORD JUSTICE KENNEDY
Judgment Date16 October 1997
Judgment citation (vLex)[1997] EWCA Civ J1016-1
Date16 October 1997
CourtCourt of Appeal (Civil Division)
Docket NumberNo CHANI 97/0029/B

[1997] EWCA Civ J1016-1

IN THE SUPREME COURT OF JUDICATURE

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM ORDER OF HIS HONOUR JUDGE GILLILAND QC

Royal Courts of Justice

Strand

London WC2

Before:

Lord Justice Kennedy

Lord Justice Millett

Sir Brian Neill

No CHANI 97/0029/B

Barratt Manchester Ltd
and
Bolton Metropolitan Borough Council

and

Attorney-General

MR A W H CHARLES (Instructed by Treasury Solicitor) appeared on behalf of the Appellant

MR P SMITH QC and MR A SINGER (Instructed by Field Cunningham & Co of Manchester) appeared on behalf of the Respondent

LORD JUSTICE MILLETT
1

This is an appeal from the judgment of His Honour Judge Gilliland QC dated 12th August 1996 dismissing the application of the Attorney-General (the "Attorney") to strike out an inquiry as to damages for want of prosecution or as abuse of the process of the court. Waller L.J. and I granted leave to appeal on 13 February, 1997. At the end of last term we indicated that we would dismiss the appeal and give our reasons later. This I now do.

2

The facts

3

The present case has a long and tortuous history. There is little point in repeating it at length here. Those who seek greater detail can discover it set out with admirable clarity in the judgment below. I shall content myself with a brief summary.

4

The proceedings arise out of plans to develop a plot of land near Bolton in Lancashire. The Plaintiff ("Barratt") is a part of well-known national house building group of companies. In 1985 it obtained planning permission to build 475 houses on a site called Birtenshaw Farm ( the "Site"). The Site was subject to a restrictive covenant granted in 1934 to the local authority then responsible for the area. The covenant, which was registered as a Class D (ii) land charge (the "Charge") against the original covenantor, required the land to be retained in perpetuity as a private open space for the benefit and amenity of the district. In order to enable the Site to be developed it was necessary to have the Charge vacated.

5

At the request of a local resident, the Attorney started relator proceedings against Barratt and the First Defendant, Bolton Metropolitan Borough Council (the "Council"), which was the statutory successor of the original covenantee and was agreeable in principle to the vacation of the Charge. By these proceedings the Attorney sought a declaration that the covenant was valid and enforceable and an injunction restraining breach. Barratt in turn started the present action in October 1989 against the Council seeking cancellation of the Charge. Both cases were heard by Scott J., who gave judgment in each instance in favour of Barratt and (in the present action) ordered that the registration of the Charge be vacated.

6

The Council decided to appeal the decision in the present action. The Judge granted a stay of his order to vacate the Charge on condition that the Council gave a cross-undertaking in damages, which it did on 9th April 1990. The Attorney also appealed in his proceedings but did not seek a stay of the order, being content to rely on the stay granted to the Council. Both appeals were dismissed by the Court of Appeal on 19th June 1991, and the stay then expired. The Court of Appeal directed that there should be an inquiry as to damages under the cross-undertaking. The Council's cross-undertaking thus covered the period from 9th April 1990 to 19th June 1991, and the inquiry in respect of its cross-undertaking will be limited to an investigation into what losses have been suffered by Barratt which are attributable to the maintenance of the registration of the Charge during that period.

7

The Council decided not to appeal the present action further. The Attorney, however, wished to appeal his own proceedings to the House of Lords. He was advised that the restrictive covenant would be circumvented and his appeal frustrated if the Charge were vacated in accordance with the judgment of the Court of Appeal in the present action, the Site sold to a bona fide purchaser for value and the sale completed before the Charge could be re-registered following a successful appeal. Accordingly the Attorney sought and on 18th. September 1991 obtained from the Court of Appeal an order joining him as Second Defendant to the present action so that he might appeal it to the House of Lords. At the same time he was granted a stay of the Court of Appeal's order vacating the registration of the Charge pending his appeal. As might be expected, however, the Court of Appeal only granted the stay on condition that the Attorney gave a cross-undertaking in damages. He undertook:—

"to abide by any order of the Court as to damages in case it should hereafter be of the opinion that the Plaintiff should have sustained any from and after 18th September 1991 by reason of the delay in vacation of the Class D (ii) Land Charge that the Attorney General ought to pay."

8

On 17th February, 1992, the House of Lords refused the Attorney leave to appeal in both actions. The temporary stay granted by the Court of Appeal then expired, and Barratt was at last able to have Charge vacated. The Attorney's cross-undertaking as to damages thus covered the period from 18th September 1991 to 17th February, 1992.

9

In March 1992 the Plaintiff's solicitors applied to the Court of Appeal for an order for an inquiry as to the damages which might be recoverable from the Attorney pursuant to his cross-undertaking. An order for such an inquiry was finally made by consent on 9th August 1993. Subsequently (in July 1994) the inquiry, together with a similar inquiry under the Council's cross-undertaking, was transferred to the Judge to be heard by him as official referee's business.

10

Barratt claims that if the new stay had not been granted on 18th September 1991 it would have started to build and market houses on the Site at or about that time. It claims damages against the Attorney under two heads: (i) the cost of the deferment of the receipt of revenue from house sales and (ii) additional site costs. These claims were originally estimated at £562,430 and £15,085 respectively. The case against the Attorney raises two main questions: (i) what (if any) delay in starting the development and marketing of the Site was caused by the existence of the stay from 18th September 1991 to 17th February 1992? and (ii) if any such delay was caused, what loss was sustained thereby by Barratt for which the Attorney ought to pay compensation?

11

The course of the inquiry has not run smoothly. Detailed directions were given by the Judge in November 1994. He ordered Barratt to serve Points of Claim on the Attorney by 17th March 1995 together with the report of a quantity surveyor particularising the damages claimed. The directions were not complied with and on 14th June 1995 the Judge was obliged to make an order requiring Barratt to serve its Points of Claim and quantity surveyor's report by 14th. July on pain of having the inquiry struck out if it did not. Barratt served the documents at the last moment, but the Judge was satisfied that they failed to set out the material facts relied on or to identify the causal connection between the relevant facts and the heads of damage claimed. This led Barratt to seek an extension of time and leave to substitute a report from Coopers & Lybrand supporting a higher quantification of its claim.

12

Coopers & Lybrand calculated the losses sustained by Barratt differently from the way in which its quantity surveyor had previously calculated them. The effect of the new calculations was nearly to treble the total claims to more than £1.6 million. The Judge gave Barratt leave to substitute the report but his order was sealed only in mid-January 1996 and Coopers & Lybrand's report was not available in its final form until 2nd May 1996. In the meantime, on 1st April 1996, the Treasury Solicitor had written at length expressing his concern at Barratt's failure to progress the inquiry and raising the possibility of an application to strike it out. On 2nd May 1996 the Attorney applied to dismiss the inquiry for want of prosecution. By then more than five years had passed since the Appellate Committee of the House of Lords had dismissed the Attorney's application for leave to appeal; and more than three years had passed since Barratt had obtained the order for the inquiry.

13

The Judgment below

14

In the court below it was not suggested that the inquiry as to damages was itself an abuse of the process of the court. The issue was whether all further proceedings in the inquiry should be dismissed for want of prosecution. The Judge held that the well known principles established in Birkett v James [1978] A.C. 297 were, subject to some modification, applicable to the case. He found that Barratt was guilty of four periods of inordinate and inexcusable delay. These were as follows:—

(i) seven months, from December 1993 to July 1994 (failure to take out a summons for directions or actively to pursue the inquiry);

(ii) two months, in September and October 1994 (failure to obtain directions);

(iii) nine months, from mid-March to mid-December 1995 (failure to serve proper Points of Claim in compliance with the direction made in November 1994); and

(iv) two months, in March and April 1996 (delay in providing Coopers & Lybrand's report).

15

Both Barratt and the Attorney now accept the Judge's findings on inordinate and inexcusable delay. The present appeal is thus concerned solely with the element of prejudice.

16

Barratt claims that the continued maintenance of the registration of the Charge delayed the development of the Site for some two years, and that if work had proceeded in 1990 or 1991 it would have done so at the same pace as it...

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