Beverly Penelope Pecka (Plaintiff) v Maureen Sarah Pecka and Anr (First Defendant/Appellant) Allied Dunbar Assurance Plc and Anr (First Third Party/Respondent)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE RALPH GIBSON,LORD JUSTICE WAITE,Order |
| Judgment Date | 22 March 1994 |
| Judgment citation (vLex) | [1994] EWCA Civ J0322-4 |
| Docket Number | CCRTI 93/0938/F |
| Court | Court of Appeal (Civil Division) |
| Date | 22 March 1994 |
[1994] EWCA Civ J0322-4
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM MAYOR'S AND CITY OF LONDON COURT
(Mr. Recorder Howells)
Before: Lord Justice Ralph Gibson Lord Justice Waite
CCRTI 93/0938/F
MR. S. CRAMSIE (Instructed by Parker Groome, Northamptonshire, NN10 0PL) appeared on behalf of the Appellant
MR. P. HORROCKS (Instructed by The Legal Department, Allied Dunbar Assurance Ltd. Swindon SN1 1EL) appeared on behalf of the Respondent
Tuesday, 22 March 1994
This is an appeal by Maureen Sarah
Pecka, who is the First Defendant in proceedings in the Mayors and City of London Court, from the order of Mr. Recorder Howells made on 7 April 1993. By his order, service of the First Defendant's Third Party Notice upon Allied Dunbar Assurance Plc, the First Third Party, was set aside. I shall refer to them as "Allied Dunbar".
The First Defendant claims that she is entitled to an extension of time or that the service of the Third Party Notice should be held to be valid. I will say in advance that, in my view, this appeal should succeed.
The proceedings concern a family dispute about the proceeds of an insurance policy. Hambro Life Assurance Plc, to the rights and obligations of which company Allied Dunbar are apparently successors, issued a policy in April 1983. It was an "Adaptable Life (Joint Life First Death) Plan". The lives assured were Mr. JP Pecka and his wife, who is the First Defendant. She was some 17 years younger than her husband.
On 21 July 1983, a declaration of trust of the policy with power of appointment was executed by Mr. Pecka and the First Defendant. Elizabeth Ridges, a child of Mr. Pecka, was appointed a new trustee. She is the Second Defendant. Persons in whose favour the policy was to be held in trust including Mr. Pecka and the First Defendant and any child of such person and any person shown in Box B. In that box were listed seven persons. I understand that they are children of Mr. Pecka but it is not apparent from the papers whether the First Defendant was the mother of all or any of them.
Mr. Pecka and the First Defendant had a power of appointment under the declaration. In the action, it is the case for the First Defendant that it was the intention of Mr. Pecka and her, that in the event of the death of one of them, payment of the whole proceeds of the policy was to be made to the survivor, and, in the event of the simultaneous death of both of them, payment should be made in equal shares to the seven persons named in Box B. Further it is her case that she and Mr. Pecka instructed Major FA Stork, who was then the servant or agent of Hambro Life Assurance, that they wished to execute a declaration of trust to carry out that intention and that Major Stork orally represented to them that the declaration of trust, executed on 21 July 1983, embodied provisions to carry out their intention.
On 7 September 1988 Mr. Pecka died. In November of that year, the First Defendant and the Second Defendant signed a policy claim form and the sum assured was paid to the First Defendant. It was £17,000 odd.
On 25 January 1990, solicitors, M Phillips & Co., acting for Beverley Penelope Pecka, the Plaintiff in the action (who is one of the persons named in Box B) claimed "her share" of the proceeds of the policy from the First Defendant. The First Defendant took the letter to her solicitors. They sent a copy of it to Allied Dunbar by letter of 7 February 1990. On 17 February 1990, Major Stork, who now lives in Cyprus, wrote to the First Defendant a letter in which he confirmed, in effect, his understanding of what the intention of Mr. Pecka had been, which was in agreement with the assertions of the First Defendant.
By letter of 16 March 1990, the solicitors for the First Defendant wrote to Allied Dunbar as follows:
"We respectfully suggest you are going to be in some difficulty if the children's claim proceeds.
When the late Mr Pecka and Mrs Pecka took out the Policy, they both wanted, expected and contracted for a Policy to pay the survivor on the first death. Allied Dunbar knew that at the time. Please refer also to Major Stork's letter of 17 February 1990 … He was either an employee or agent of Allied Dunbar. It matters not which.
Can we please be clear about one single point. Has Allied Dunbar not secured an Appointment under the Trust?
Assuming the answer is 'no', if the children proceed on their alleged claim, we shall join in Allied Dunbar."
On 5 April of that year, Allied Dunbar replied as follows, sending certain documents from their legal department:
"… we would reiterate that the Company has received a duly completed Claim Form which instructed the Company to make payment to Mrs Pecka therefore a legal discharge for the policy proceeds was obtained prior to payment being made. We note your intention to join in Allied Dunbar in the event that the children proceed with their alleged claim and wish to make it clear that any such action will be vigorously defended."
The proceedings
The Plaintiff's writ was issued on 3 October 1990. She claimed to be one of the persons in Box A and claimed replacement of the sum of £14,000, together with an account of profits for the benefit of the Trust.
In May 1991, the First Defendant's Defence and counterclaim was served. It set out her case, as I have indicated it, and she claimed rectification of the declaration of trust.
The Second Defendant in January 1992, admitted the Plaintiff's claim; and claimed against the First Defendant her share of the trust fund.
On 12 August 1992, the action was transferred to the Mayor's and City of London Court. The Judge's view that the action was being conducted in a leisurely manner was thus clearly justified.
On 4 January 1993 on the application of the First Defendant, District Judge Samuels made an order as follows (it is this order which has given rise to the issues in the case). The order was that:
"There be leave to the Defendants to issue a Third Party Notices in forms filed. The Defendants do serve both Third Parties within 21 days from today. The Third Parties do file and serve defences (if so advised) within 28 days from service. The Defendants do serve both Third Parties and leave be given to serve the 1st Third Party out of the jurisdiction in Cyprus."
The order continued with directions for lists of documents, exchange of witness statements, bundles of agreed documents, and he directed that the case was to be listed for hearing in the Chancery Judges' list on 5 July 1993 with an estimate of two days.
The order was clearly muddled. Leave to serve in Cyprus was required in respect of the Second Third Party, who was Major Stork and not Allied Dunbar. Leave had in fact only been sought by the First Defendant and not by both, and on giving leave to serve out, it is usually necessary to allow an extended time for service and, of course, for service of a defence. The Third Party Notices had already been filed, as the order acknowledged. A copy of that directed to Allied Dunbar is at page 91 and is dated 14 August 1992. That has a Court stamp, but no reference to the date of grant of leave to issue. A copy of that directed to Major Stork was dated 12 August 1992.
It was the duty of the proper officer in the court office to seal the Third Party Notices and to send the sealed copies to the solicitors for the First Defendants for service by them. Sealed copies were not posted from the court office until 18 January 1993, a Monday. They were not received by the solicitors for the First Defendant until 20th or 21 January. The 21 days from the date of the District Judge's order expired on 25 January. On 26th January 1993, an unsealed copy of the Third Party Notice was served by post on Allied Dunbar by the solicitors for the First Defendant. On 5 February, a sealed copy was served on Allied Dunbar. On 3 March 1993 Allied Dunbar applied for the service of the Third Party Notice to be set aside on the ground that under the order of the District Judge of 4 January, the Third Party Notice was only valid for service until 25 January and, further, at that date, any claim against Allied Dunbar by the First Defendant was statute barred under the Limitation Act. On 31 March 1993, the First Defendant applied for time for service of the Third Party Notice to be extended. The applications came before Mr. Recorder Howells on 5th and 6 April 1993.
The evidence before Mr. Recorder Howells
The application of Allied Dunbar was supported by the affidavit of Miss PA Terry, a solicitor employed in the Legal Department of the company. Copies of the letters passing between the parties were produced. By way of argument and submission it was contended in the affidavit that:
"It was the duty of the First Defendant to serve the Notice promptly and they should not have dallied …
If difficulties in service were likely to arise the First Defendant should have applied promptly and within the period allowed by the court for an extension of time [and] … there is no satisfactory explanation of late service."
Next it was said that:
"It is significant … that the events upon which the action is based occurred as long ago as 1983 … quite apart from the issue of limitation … there was an obligation on the part of the First Defendant to proceed without delay because of the potential prejudice occasioned to [Allied Dunbar] by having to prepare a case...
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