Bawtry Timber Company Ltd v Durham County Council
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE STOCKER,LORD JUSTICE WOOLF |
| Judgment Date | 13 March 1990 |
| Judgment citation (vLex) | [1990] EWCA Civ J0313-2 |
| Docket Number | 90/0231 |
| Court | Court of Appeal (Civil Division) |
| Date | 13 March 1990 |
[1990] EWCA Civ J0313-2
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE DURHAM COUNTY COURT
(HER HONOUR JUDGE PALING)
Royal Courts of Justice
Lord Justice Stocker
Lord Justice Woolf
90/0231
MR. DOMINIC NOLAN (instructed by Messrs. Foy & Co., Doncaster) appeared for the Appellants.
MR. JONATHAN HOLMES (instructed by R. J. Humphries Esq., Solicitor to the Durham County Council) appeared for the Respondents.
This is an appeal from an order of Her Honour Judge Paling made on 31st July 1989 whereby it was ordered that the plaintiffs' action be stayed upon the application of the defendant under section 4 of the Arbitration Act 1950 and the appellant seeks an order that that application be dismissed and for costs.
The plaintiffs' claim was initiated by a default summons and particulars of claim and was for the sum of £2,629.24, the balance due for work done and goods supplied. The contract giving rise to the claim was governed by the terms of the standard J.C.T. form of contract which, by clause 31A, imported an arbitration clause pursuant to section 4(1) of the Arbitration Act 1950 and, where relevant, section 1(1) of the Act of 1975. It is not disputed that the contract did contain such a clause which would entitle the defendants to a stay if the application for a stay was made in accordance with the terms of the Arbitration Act.
Section 4(1) of the Arbitration Act 1950 reads:
"If any party to an arbitration agreement, or any person claiming through or under him, commences any legal proceedings in any court against any other party to the agreement, or any person claiming through or under him, in respect of any matter agreed to be referred, any party to those legal proceedings may at any time after appearance, and before delivering any pleadings or taking any other steps in the proceedings, apply to that court to stay the proceedings, and that court or a judge thereof, if satisfied that there is no sufficient reason why the matter should not be referred in accordance with the agreement, and that the applicant was, at the time when the proceedings were commenced, and still remains, ready and willing to do all things necessary to the proper conduct of the arbitration, may make an order staying the proceedings."
In response to the plaintiffs' default summons and particulars of claim the defendants filled in a document which appears on page 9 of the bundle. It is a document which was sent to the defendants as a matter of routine by the county court, together with a copy of the default summons and the particulars of claim. It is an official county court printed document.
Under section 3, which is headed "Defending the claim: Defence", there appears:"fill in this part of the form only if you wish to defend the claim or part of the claim. How much of the plaintiff's claim do you dispute?" In a box opposite "All of it" is a tick. Then, to the question "What are your reasons for disputing the claim?", there appears in handwriting, presumably that of the County Secretary and Solicitor or somebody in his office, these words:"The defendant will file a fully pleaded defence in due course and reserves the right to counterclaim against the plaintiff". Under section 5, the heading being "Arbitration under the Small Claims Procedure", appears the question,"Do you want the case to be dealt with by arbitration?" and the box with "Yes" beside it is ticked.
It is the submission of the plaintiff claimants that that document, filled in as it is, amounted to a pleading, or at least to a step in the action.
As a matter of history, subsequently and by consent, an order was made upon a pre-trial review which will have to be considered hereafter so far as the circumstances and terms are concerned, and by a summons dated 13th July 1989 the plaintiffs applied for a stay in accordance with the Arbitration Act. The learned judge made an order granting the stay on 31st July 1989.The order itself appears on page 4 of the bundle and is in these terms:
"Upon hearing the solicitor for the plaintiff and the solicitor for the defendant it is ordered that:-
1. All further proceedings in this action be stayed
2. The plaintiff do pay the costs of this application."
The learned judge gave a short judgment before the formal order was drawn up and her notes indicate that she said the following:
"For a stay to be granted the applicant must have taken no steps in the proceedings.
The proforma defence is no more than an appearance on the part of the defendant and was merely to parry the plaintiff's summons. It cannot be interpreted as a defence as it does not state the reasons for the defendant's disputing the plaintiff's claim."
Then she continued on a matter relevant to the order for directions:
"There must be no steps by the applicant after the appearance. The court issued a directions notice on its own initiative and a form of directions was agreed by the parties but neither party attended at the Registrar's appointment when the order for directions was made. The limit of the defendant's involvement was to agree a period of time in which they would file a defence. I do not consider this to be a step in the proceedings by the defendant."
The plaintiffs appeal against that order on three grounds. First of all, they say that the defence on page 9, the terms of which have been read, is a pleading and, accordingly, in accordance with section 40 of the Arbitration Act, a stay could not be granted. Secondly, it was said, if it was not technically a pleading, it is a step in the action and, thirdly, that, by consenting to the order for directions, the plaintiffs then took a step in the action.
The general principles applicable to this situation have been referred to in a number of cases, and in particular in the case of Austin and Whiteley Limited v. S. Bowley and Son [1913] Volume 108 of the Law Times at page 921 in which Mr. Justice Ridley said this:
"In my opinion what is intended by a step in the proceedings is some step which indicates an intention on the part of a party to the proceedings that he desires that the action should proceed and has no desire that the matter should be referred to arbitration."
Then, perhaps relevantly to the situation which has arisen in this appeal (which is, of course, a County Court appeal), Mr. Justice Avory said this:
"With that view, applying sect. 4 to the County Court, we must hold that a step which is merely taken in order to prevent a summary judgment from being signed against the defendant, and which is a mere notice that he does not intend to allow judgment to go against him by default, but intends to defend the action, is equivalent to the entering of an appearance in the High Court. Sect. 4 of the Arbitration Act 1889"
—of course, the forerunner of the Act of 1950—
"distinctly provides that an application for reference to arbitration may be made at any time after appearance and before any step is taken in the action."
It is quite clear, therefore, that those words only contemplate some step in the action after appearance has been entered.
That decision has recently been applied and approved by this court in the case of Skopos Design Group Ltd. (trading as Anker Contract Carpets) v. Homelife Nursing Ltd., reported only, so far as we are aware, in The Times of 24th March 1988, and Lord Justice May, giving the leading judgment, said this:
"The test was whether the defendant had impliedly affirmed the institution of proceedings and indicated a willingness to go to law."
That case was a matter involving a High Court form and the facts of which are not directly relevant to the instant appeal.
The appellants argue that the form of defence on page 9 (which has been read) is a pleading and that that conclusion can be drawn from its form. The heading "Defending the claim" and the terms in which the reasons are expressed, that the defendant will file a fully pleaded defence and reserves the right to counterclaim against the plaintiff, is in fact a defence, even though it may be sufficiently inadequate that, upon application, it would be struck out. The argument is that, nonetheless, though it may be...
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