Canning v Network Rail
| Jurisdiction | England & Wales |
| Judge | His Honour Judge David Mitchell |
| Judgment Date | 11 April 2014 |
| Neutral Citation | [2014] EWHC 2104 (QB) |
| Court | Queen's Bench Division |
| Docket Number | Case No: TLQ/13/1055 |
| Date | 11 April 2014 |
[2014] EWHC 2104 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand
London, WC2A 2LL
His Honour Judge David Mitchell
Case No: TLQ/13/1055
Mr Sebastian Purnell (instructed by Christian Fisher Khan) appeared on behalf of the Claimant/Applicant
Mr Jonathan Watt-Pringle QC (instructed by Berryman Lace Mawer) appeared on behalf of the Defendant/Respondent
Approved Judgment
Briefly, this is an application to adduce evidence in accordance with a supplementary witness statement dated 16 January of 2014. It is the claimant who makes that application. Liability for the tragic, fatal accident is admitted 100 per cent. That is to say there is no issue about contributory negligence and the case is listed for trial on quantum only on 12 May this year with a time estimate of four days.
As I have indicated, the case involves a fatal accident which took place on 6 May of 2009 when Mrs Julia Canning was killed by a train as she crossed the track on a footpath near Little Bedwyn, Wiltshire. She leaves behind a widower, Spencer Canning, himself now 61 years of age, and three children; Cordelia, who is 29 years of age; Florence, who is 25 years of age; and Stratford, whose date of birth is not given, but who, I think, is approximately 23 years of age.
At the time of her untimely death, Mrs Canning was employed editing cookery books on a self-employed basis. In 2001 and 2002 her profit was approximately £10,000. In subsequent years it was £4,000 then £7,000. In 2005 it was £72,000 and in 2008, after two years with modest losses, it was £13,000. It is obvious, that she could increase her remuneration if she wished as she had done in 2005. Mr Canning, on the other hand, was running a very successful business as a Chartered Surveyor. In 2007 the gross profit was in excess of £833,000 and in 2008 in excess of £543,000, but by 2009 it was £205,000. Between 2004 and 2008, Mrs Canning received the same dividends as her husband from being a director of his chartered surveyor business, Asset Plus One.
The reason, it would seem, why the turnover of profit dropped quite substantially in 2009 was because coincidentally before Mrs Canning's tragic early death, Mr Canning was suspected of having cancer and had to have an operation. He had three months off work to recover and, as a result, manifestly was unable to work and lost a particularly lucrative contract. Sadly, these things do happen. The family must have been feeling very desperate because on top of mother's death they must have feared the loss of father as well. Happily, when the results became known, the part of the body affected was not malignant. It must have been an exceedingly difficult time for all the members of the Canning family.
The essence of the claimant's case is that the supplemental statement of 16 January 2014 simply sets out the fact that Mrs Canning took an active part in helping to run the company. The objection by the defendant is that the statement has arrived so late I should not admit it and reliance is placed on the recent and very well known case of Mitchell v News Group Newspapers [2014] 1 WLR 795. The main thrust of Mr Watt-Pringle's submissions (he appears on behalf of the defendant) is that the admission of that statement changes the basis of the case and the way it is pleaded. In order to look at the respective submissions it is necessary for me to quote parts of the statement and the pleadings for which I apologise if this judgment has to be considered further in another court. I quote from the passages set out by Mr Watt-Pringle in his skeleton argument. I should make it clear that whilst I am selecting these passages I have re-read the original statement of Mr Canning. He said this at paragraph 12:
"12. My average earnings used to be about £340,000, but have dipped since Julia's death to an average of £50,000. This was due to my losing business because of an illness which pre-dated Julia's death. In about February 2009, I fell ill with a serious stomach complaint. I was about to go in for an exploratory operation when Julia died. At that stage I did not realise it was serious.
13. At the time I became ill, my company, Asset Plus One, was doing well. I was acting as a consultant to The British Racing Drivers' Club who owned Silverstone, and was helping them to get a development plan agreed for the circuit. I had been doing this for four years and it was my biggest project and was well paid. As a result of the illness I took three months off work, and when I came back I was informed by the client that the consultancy had been terminated.
15. Although I have not suffered any reoccurrence of bad health I have not been successful in restoring my business to what it was. Consequently, I initially had to lay off my junior partner, Tim Robinson, in March 2010. I then had to lay off my personal assistant, Sandra Hayman, in 2011. The downturn in my business was initially due to my illness, but after I recovered I found it impossible to restore it to what it was. This has been because of a poor market, the company's limited financial liquidity and a general drop in the volume of commercial property development.
17. Hence I received no fee income for any of this work. If Julia had been alive when I had this operation and suffered the after effects, I believe she would have increased her own earnings substantially in order to compensate for the drop in my earnings and the consequent fall in our joint income, given the help we would still be providing to the children, and which I am now providing on my own."
Mr Watt-Pringle draws attention, in his oral submissions, to the fact that he refers to the use of "my company," "my junior partner" and "my personal assistant." He submits that it is quite clear from the language used that Mr Canning regarded Asset Plus One as his business.
That statement, in my judgment, is reflected in pages 3 to 5 of the Particulars of Claim. Perhaps page 4 is the kernel of the way in which the case is put, and again I quote from the passage lifted by Mr Watt-Pringle, although I make it plain I had actually underlined that very passage in the Particulars of Claim before I saw his skeleton argument. It says this:
"If the deceased had been alive when the claimant had his operation and then when he was suffering the after effects of the said complaint and the said operation, the deceased would then have increased her own earnings substantially in order to compensate for the drop in the claimant's earnings and the consequent fall in the joint income. The claimant will contend that by seeking additional work and making herself available for work from her clients, the deceased could and would have achieved earnings of say double her pre-accident annual average earnings of £67,133 gross. As a matter of probability, the claimant's earnings would have remained at an average of £50,000 gross per annum in view of the effect on him and his business and his said illness and operation."
That is the way the case is put. Mr Watt-Pringle also submits that the original statement of Mr Canning makes no suggestion that Mrs Canning made any practical contribution to the company, Asset Plus One. It would seem that the issue of her contribution to the company first arose in Mr Frenkel's forensic accountancy report, from which I quote — and it is paragraph 2.4 to which I have been referred by both counsel:
"The deceased and the claimant were both directors of this company and each owned 50 per cent of the shares in the company. Although the business was run by the claimant, the deceased contributed in various ways. She was responsible for the website; she entertained clients and accompanied the claimant to business events. She also acted as a sounding board in the decision making process. After her death, the husband took over all her shares in the company."
That report is dated 20 November 2013. The position is that the contents of that paragraph are not contained in any of the material which was supplied to either Mr Frenkel or to Mr Segal, who prepared a forensic accounting report on behalf of the defendant. Mr Segal did, in his reflections and his report, pick up on that. He was of the view that what was happening with Julia Canning being a director of the company was a perfectly acceptable and legitimate piece of tax avoidance. As a result, there was some delay in being able to complete the joint report and, as I understand it, there is still some difficulty because of the addition of what I have just quoted from paragraph 2.4. In that regard, Mr Watt-Pringle takes issue with the statement of Miss Christian, the solicitor acting on behalf of the claimant. In her statement, Miss Christian said she did not want to ask Mr Canning about the issue between himself, his wife and the company because she assumed the work had been done by Mrs Canning and it was only when Mr Segal delivered his report on 2 December of 2013 that an allegation was made that payments were made to avoid tax. Mr Watt-Pringle submits it is clear from Mr Frenkel's report from the quotation in paragraph 2 that he had quoted material not...
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...he accepted (having regard to R (Hysaj) v Secretary of State for the Home Department [2015] 1 WLR 2472 and Canning v Network Rail [2014] EWHC 2104 (QB)) that this issue “is governed by principles equivalent to those of relief from sanctions and that that is the approach you should adopt.”......