Cape Distribution Ltd v Cape Intermediate Holdings Plc
| Jurisdiction | England & Wales |
| Judge | The Hon. Mr. Justice Picken |
| Judgment Date | 19 July 2016 |
| Neutral Citation | [2016] EWHC 1786 (QB) |
| Docket Number | Case No: HQ12X01829 |
| Court | Queen's Bench Division |
| Date | 19 July 2016 |
[2016] EWHC 1786 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
The Honourable Mr. Justice Picken
Case No: HQ12X01829
Michael Kent QC and Jason Evans-Tovey (instructed by Berrymans Lace Mawer LLP) for the Claimant/Part 20 Defendant
Leigh-Ann Mulcahy QC, Ben LynchandMartin Ouwehand (instructed by Nabarro LLP) for the Defendant/Part 20 Claimant
Hearing dates: 27, 28, 29 and 30 June 2016
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Introduction
This judgment follows my earlier judgment dealing with certain preliminary issues which I handed down on 17 May 2016 and whose neutral citation number is [2016] EWHC 1119 (QB) (the 'Preliminary Issues Judgment'). In that judgment, which appears on the BAILII website, I set out at [1] to [4], in summary terms, the relevant background and then, at [17] to [38] I went on to set out the facts which had been agreed for the purposes of the Preliminary Issues trial. In the circumstances, I do not repeat these matters in this judgment. In addition, I adopt the same descriptions and abbreviations in this judgment as I did in the Preliminary Issues Judgment.
The matters with which this further judgment is concerned were identified in paragraph 8 of the order which I made on 31 May 2016, when dealing with certain consequential matters in the wake of the Preliminary Issues Judgment. They are:
(1) The meaning and effect of section 7(3)(a) of the Civil Liability (Contribution) Act 1978 (the '1978 Act') on CIH's counterclaims (the '1978 Act Issue').
(2) Whether the Preliminary Issues Judgment precludes Aviva from pursuing indemnities not only in cases of employees exposed to asbestos after 25 November 1964, which was the date of the Endorsement, but also in cases of 'straddlers', namely employees who were exposed to asbestos before 25 November 1964 and also after to some extent as well (the 'Straddlers Issue').
(3) The dates on which the limitation periods start to run for CDL's claims based on the contractual indemnities and when such claims should be treated as having been made, and so whether any of CDL's claims are time-barred (the 'Limitation Issue').
As will shortly appear, in the event, the 1978 Act Issue was not contentious. The Straddlers Issue and the Limitation Issue, however, remained controversial and were the subject of detailed argument. In addition, a point arose during the latter stages of the hearing which concerns the applicability of CPR 17.2. I address this matter also in this judgment.
I propose to adopt the same approach as I did in relation to the Preliminary Issues Judgment (see [41]), and so to focus on the main points, in circumstances where very many authorities (approaching 70) were cited to me and where I received no fewer than ten sets of written submissions (amounting to just over 200 pages) before, during and after the hearing. If I do not specifically address a particular point, therefore, it does not mean that I have omitted to consider it.
The 1978 Act Issue
The 1978 Act Issue was raised by Mr Kent QC, on CDL's and Aviva's behalf, during the course of the Preliminary Issues trial. It was not, however, a matter which was raised in Mr Kent QC's and Mr Evans-Tovey's written submissions leading into that trial. Nor was it a point which was made in CDL's Defence to CIH's Counterclaim. Nor was it a matter which was identified as one of the Preliminary Issues. Mr Fenwick QC, on CIH's behalf, took the position that I should not, therefore, address the issue at that stage. As explained in the Preliminary Issues Judgment at [43], I agreed with Mr Fenwick QC about this.
The parties subsequently agreed that the matter should be determined by me ahead of the main trial, which is due to take place early next year, along with the other issues identified in the previous paragraph. It is for this reason that on 31 May 2016 I directed that the 1978 Act Issue should be determined along with the Straddlers Issue and the Limitation Issue. As I have indicated, in the event, however, there is agreement between the parties as to the meaning and effect of section 7(3)(a) of the 1978 Act and so as to the 1978 Act Issue. It is agreed, specifically, that, in the light of the Preliminary Issues Judgment coupled with section 7(3)(a), CIH is precluded from claiming a contribution against CDL pursuant to section 1 of the 1978 Act in respect of CIH's counterclaims which are based on CDL's own negligence and joint liability in tort to the third party claimants who have claimed against CIH in respect of the "same damage". I propose, in these circumstances, nonetheless to deal with the 1978 Act Issue not merely for completeness but since it is an issue which I have directed should be determined and so, in my view, it is appropriate that it is properly addressed.
I set out section 7(3) in the Preliminary Issues Judgment at [42]. For convenience, however, I do so again below:
"The right to recover contribution in accordance with section 1 above supersedes any right, other than an express contractual right, to recover contribution (as distinct from indemnity) otherwise than under this Act in corresponding circumstances,; but nothing in this Act shall affect —
(a) any express or implied contractual or other right to indemnity; or
(b) any express contractual provision regulating or excluding contribution;
which would be enforceable apart from this Act (or render enforceable any agreement for indemnity or contribution which would not be enforceable apart from this Act)."
The issue, in short, is whether, in circumstances where I have decided in the Preliminary Issues Judgment that CDL is entitled to contractual indemnities from CIH under the Sale Agreement, CIH is precluded from bringing its counterclaims against CDL by reason of section 7(3)(a). Specifically, in its Re-Re-Re-Amended Defence to Counterclaim, served after the Preliminary Issues Judgment, CDL contended as follows in paragraph 23:
"In light of the court's conclusion on the trial of preliminary issues contained in a judgment handed down on 17 May 2016 that the claimant is entitled to an indemnity in respect of the claims which are the subject matter of the claims and counterclaims herein and by virtue of section 7(3)(a) of the 1978 Act the claimant denies that the defendant is entitled to contribution pursuant to section 1 of the 1978 Act alternatively any such counterclaims fail for circuity of action and/or it would not be just and equitable in the light of entitlement to such indemnity for the claimant to be required to make any contribution towards any claims paid in satisfaction of judgments entered or settlements agreed within two years prior to the date of service of the Counterclaim herein or at all where such claims were made by former employees of the claimant or their estates and dependents for damages for asbestos related illness due to asbestos exposure, or for any other any bodily injury or disease, arising out of employees' employment by the Claimant at the Uxbridge works. The Claimant makes the same qualification to the submission as is made (mutatis mutandis) by the defendant in paragraph 23(d) of its Defence herein."
The reference in this paragraph to "the court's conclusion on the trial of the preliminary issues … that the claimant is entitled to an indemnity" is a reference to the answers which I gave in the Preliminary Issues Judgment to Preliminary Issues 3(a) and 3(b), namely:
"In relation to Clause 5 of the Agreement and it being admitted that by Clause 5 CDL and CIH agreed that CDL would account and be entitled to be indemnified against all debts, liabilities and obligations incurred carrying the business until the completion of the sale:
(a) is CDL entitled to such indemnity in respect of CDL's own breaches of duty as agent?
(b) alternatively, is CIH entitled in principle to claim damages from CDL in respect of CDL's own breaches of duty?"
My answer to Preliminary Issue 3(a) was 'yes', whilst my answer to Preliminary Issue 3(b) was 'no'. The paragraphs in which I dealt with Preliminary Issue 3(a) in the Preliminary Issue Judgment are [87] to [98], whereas I addressed Preliminary Issue 3(b) rather more shortly in a single paragraph ([99]).
At the Preliminary Issues trial, Mr Kent QC explained that the predecessor to the 1978 Act was the Law Reform (Married Women and Tortfeasors) Act 1935. He referred, in particular, to section 6(1)(c) of that Act which was in the following terms:
"Where damage is suffered by any person as a result of a tort …—
…
(c) any tort-feasor liable in respect of that damage may recover contribution from any other tort-feasor who is, or would if sued have been, liable in respect of the same damage, whether as a joint tort-feasor or otherwise, so, however, that no person shall be entitled to recover contribution under this section from any person entitled to be indemnified by him in respect of the liability in respect of which the contribution is sought."
Mr Kent QC submitted that if the 1935 Act were applicable, which it is common ground it is not in the present case (see section 10(2) of the 1978 Act and Lampitt v Poole [1991] 2 QB 545), then, given CDL's entitlement to a contractual indemnity from CIH under the Sale Agreement, that was, as he put it, " the end of it".
In their written submissions for the purposes of the hearing which has resulted in this judgment Mr Kent QC and Mr...
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