Brennan v Bolt Burdon (A Firm) and Others

JurisdictionEngland & Wales
JudgeLord Justice Maurice Kay,Mr. Justice Bodey,Lord Justice Sedley
Judgment Date29 July 2004
Neutral Citation[2004] EWCA Civ 1017
Docket NumberCase No: A2/2003/2420
CourtCourt of Appeal (Civil Division)
Date29 July 2004
Between:
Margaret Brennan
Respondent/Claimant
(1) Bolt Burdon & Ors
(2) London Borough of Islington
(3) Leigh Day & Co
Appellant/Defendant

[2004] EWCA Civ 1017

Before:

Lord Justice Sedley

Lord Justice Maurice Kay and

Mr. Justice Bodey

Case No: A2/2003/2420

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE QUEEN'S BENCH DIVISION

MR JUSTICE MORLAND

Royal Courts of Justice

Strand,

London, WC2A 2LL

Philip Bartle QC (instructed by Alison Trent & Co) for the Respondent/Claimant

John Norman (instructed by Messrs Barlow Lyde & Gilbert) for the Appellant/Defendant

Lord Justice Maurice Kay
1

Miss Margaret Brennan is the tenant of a flat of which the London Borough of Islington (Islington) is the landlord. She complains that she has suffered personal injuries from carbon monoxide exposure as a result of gas escaping from a faulty boiler. The exposure is said to have occurred during two periods of time, one between 1988 and November 1995, the other between August 1996 and October 1998. Islington has an obligation to maintain and repair the boiler. On 7 June 2001 the present proceedings were issued. Islington is named as second defendant. The first and third defendants, Bolt Burdon and Leigh Day & Co., are firms of solicitors alleged to have acted negligently when representing Miss Brennan between 1993 and 1996.

2

On Saturday 6 October 2001 the claim form, particulars of claim, a schedule of damage and expert reports were delivered to the several defendants. On 8 November 2001 Bolt Burdon and Leigh Day filed applications to set aside the claim form pursuant to CPR Part 11 Rule 1 because it had not been served within four months of the date of issue in breach of CPR Part 7 Rule 5 (2) . The point sought to be taken was that, by reason of CPR Part 6 Rule 7, service was deemed to have taken place on Monday 8 October notwithstanding actual delivery on Saturday 6 October. Whereas service on the Saturday would have been within four months, service on the Monday was not. Islington did not file an application of that sort but learned of the applications of the other defendants on 22 November.

3

On 2 January 2002 Miss Recorder Plumtre made an order that the claim form had not been validly served within four months and struck out the claims against Bolt Burden and Leigh Day. In so doing she relied on the judgments of the Court of Appeal in Godwin v. Swindon Borough Council [2001] 4 All ER 641 and of McCombe J. in Anderton v. Clwyd County Council [2001] EWHC QB 161. On 7 January 2002 junior counsel then instructed on behalf of Miss Brennan orally advised her solicitor at the time against appealing the decision. Junior counsel had spoken to leading counsel who had informally opined:

"(1) Rule 6.7 of the CPR was badly drafted and…Mr. Justice McCombe had incorrectly construed the rule in Anderton v. Clwyd County Council….

(2) Lord Justice May's comments in Godwin v. Swindon Borough Council…would make it extremely difficult to get permission to appeal. Lord Justice May was regarded as the 'guru' of the CPR and there would be a small chance of getting two Court of Appeal Judges to go against him."

4

In the meantime Miss Brennan had commenced a second action against Islington and three firms of solicitors (including Leigh Day but, for limitation reasons, excluding Bolt Burdon) on 14 November 2001. On 13 February 2002 there was a hearing in Croydon County Court when Islington was seeking an extension of time for service of its defence in the second action. At this time Islington had still made no application in the first action. Whilst at the County Court in connection with the second action there was a conversation between Miss Brennan's then solicitor (Mr. Scarles) and Mr. Cohen, a solicitor employed by Islington. It is described in Mr. Scarles' witness statement as follows:

"Prior to the application…I spoke to Mr. Cohen who commented on the learned Recorder's judgment and asked if, in the circumstances, I would be willing to discontinue the first claim. I said that I was provided that it was agreed that there would be no order for costs save for a detailed assessment of the Claimant's costs. However I only agreed to this because of the learned Recorder's decision. Islington was the alleged primary wrongdoer and the question of their liability had been investigated for over ten years. It was clear to me that in view of the learned Recorder's judgment, the Claimant had no option but to discontinue the claim. If I had not agreed to Mr. Cohen's suggestion, I have no doubt that, as I have already explained, Islington would have been able to strike out the claim and obtain an order for costs. As the Claimant was legally aided, I had a duty to the Legal Services Commission and I could not allow costs to be incurred unnecessarily. My conversation with Mr. Cohen about discontinuance lasted no more than a few minutes

After the hearing, I received a letter from Mr. Cohen in which he wrote

'further to our meeting at court this morning, I understand that you wish to give notice of discontinuance of the first action against the Council and I consent to this on the basis that there will be no order for costs'

On 18 February 2002, I sent Mr. Cohen a draft consent order. On 21 February 2002 I received a signed consent order from him. On 25 February 2002 I sent this to the court but, by an oversight, I omitted to sign it. As a result, it was returned unsealed because the court refused to seal it.

On 12 March 2002, I received an e-mail from Mr. Thompson of St James Church Legal Advice Centre informing me that the Claimant did not agree to discontinue against Islington.

[I] ceased to act for the Claimant on 10 April 2002."

5

On 26 April 2002 Miss Brennan instructed Alison Trent, her present solicitor. On 3 July 2002 the Court of Appeal reversed the decision of McCombe J in Anderton v. Clwyd County Council. On 8 November 2002 Cox J gave Miss Brennan permission to appeal the order of Miss Recorder Plumtre out of time. In the light of the decision of the Court of Appeal in Anderton, Bolt Burdon conceded the appeal.

6

At some stage the action was transferred to the High Court. On 4 November 2002 an application was made on behalf of Islington to stay the first action until Miss Brennan had performed the agreement to discontinue on the basis that each party would bear its own costs or, alternatively, that the action be struck out on the basis that it had been compromised. On 11 June 2003 Deputy Master Eastman refused Islington's application but granted permission to appeal. The appeal came before Morland J who, on 30 October 2003, dismissed it.

7

There is now before this court a second tier appeal for which Lord Justice Latham gave permission on 8 December 2003, observing

"both parties acknowledge that an issue of some importance is raised by this application and the appeal has a real prospect of success."

In a nutshell, the important issue is whether the compromise of proceedings entered into by parties on the basis of a common mistake of law is void by reason of that mistake. (I shall refer to "common" mistake in circumstances in which purists might prefer "mutual" mistake because more of the references in the recent authorities have been to common mistake) . The conclusion of Morland J was that, in the light of recent developments in the jurisprudence relating to mistake of law, the compromise in this case was vitiated. His judgment contains a fuller account of the history than it is necessary to set out for the purposes of this appeal. In it, the learned judge also observes that Miss Brennan is now being advised by at least the sixth firm of solicitors whom she has consulted in this matter. He added:

"an overall view of this litigation does little credit to the legal profession."

He was specifically referring to the period ending on 26 April 2002 on which date Miss Brennan's present legal advisors entered the fray. It is not suggested that they have lacked diligence.

8

Mistake of law

For two hundred years it was an accepted principle of common law that a contract could not be vitiated by a mistake of law. In TheAmazonia [1991] Lloyd's Rep 236, 250, Dillon LJ observed:

"The rule that a contract cannot be set aside on the grounds of mistake if the mistake was a mistake of law seems to have been first enunciated in unqualified terms by Lord Ellenborough CJ in Bilbie v.Lumley (1802) 2 East 469. It has been criticised not only by Lord Denning in Andre & Cie v. Michel Blanc [1979] 2 Lloyd's Rep 427 but also…by the eminent authors of Goff and Jones on the Law of Restitution. Lord Ellenborough refers to the use of the latin tag 'ignorantia juris non excusat' by Mr. Justice Buller in Lowry v. Boirdeau (1780) 2 Doug KB 468…"

Although the principle withstood the criticism, it became subject to a number of exceptions. For example in Cooper v. Phibbs (1867) 2LR HL 149 an exception was allowed where the mistake of law was as to private rights. In TheAmazonia (above) it was held that a contract was void on the basis of a mistake as to foreign law because foreign law is treated by the English courts as a question of fact.

9

The turning point for the general principle came in Kleinwort Benson Limited v. Lincoln City Council [1999] 2 AC 349. Kleinwort Benson had made payments to a local authority under swap agreements which were thought to be legally enforceable. Subsequently, a decision of the House of Lords, Hazell v. Hammersmith and Fulham LBC [1992] 2 AC 1, established that such swap agreements were unlawful. Thereafter, Kleinwort Benson sought restitution of the payments on the basis of a mistake of law. The majority in the House Of Lords (Lords Goff...

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