Cattley v Pollard
| Jurisdiction | England & Wales |
| Judge | Mr Richard Sheldon QC,(sitting as a deputy Judge of the High Court) |
| Judgment Date | 07 December 2006 |
| Neutral Citation | [2006] EWHC 3130 (Ch) |
| Docket Number | Case Nos: HC03C02361 and HC05C03Q97 |
| Court | Chancery Division |
| Date | 07 December 2006 |
[2006] EWHC 3130 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand. London. WC2A 2LL
Mr Richard Sheldon QC
(Sitting as a Deputy Judge of the High Court)
Case Nos: HC03C02361 and HC05C03Q97
Nigel Godsmark QC (instructed by Nelsons) for the Claimants
David Halpern QC (instructed by Max Engel & Co) for the Defendant, Linda Jane Pollard
Hearing dates : 30, 31 October and 1 November 2006
Introduction
This is the trial of preliminary issues concerning limitation as ordered to be tried by Master Bragge on 17 March 2006 and 10 October 2006. The issues I have to decide raise questions of law as to the scope of ss. 21(l)(a) and 21(3) of the Limitation Act 1980 (“the 1980 Act”) and questions of fact concerning the application of s. 32 of the 1980 Act and of the equitable doctrine of laches.
Background
The background facts, which are not now disputed, are as follows.
Mr Guy Pollard (“Mr Pollard”) was a solicitor. He was a partner in the firm of Parker Groom until about 1994. He then practised as a sole practitioner until about April 1995 under the trading name Parker Pollard. From about April 1995 until about June 1996 he was a partner in the firm of Parker Greenfield Whiston (“PGW”). Thereafter, after a short period in practice as a sole practitioner, he was a partner in the firm of Pollard & Lawrence from 1 December 1996 until 1 August 1997.
Mrs. Linda Jane Pollard (formerly Clarke) (“Mrs Pollard”) was the personal secretary and girlfriend of Mr Pollard. They were married on 17 July 1999.
On 11 June 1987, Robert Henry Shearer (“Mr Shearer”) made his last known Will and Testament (“the Will”). Mr Pollard was Mr Shearer's nephew.
Under the terms of the Will, Mr Shearer appointed Mr Pollard and Mr Pollard's partners at the time of his death in the firm of Parker Groome as the Executors and Trustees of his Will.
Amongst other provisions, the Will provided that, after specific pecuniary legacies, the residue of Mr Shearer's estate be held on trust as to specified portions such that his nephews and nieces each had a life interest in the income from a portion of the estate and thereafter that portion was held upon trust for the surviving children of the nephew or niece in question who attained eighteen years of age.
Mr Shearer died on 30 August 1987. Mr Pollard and a partner in Parker Groome, Mr John Comely Wood, became Executors and Trustees of Mr Shearer's estate (“the Estate”). The administration of the Estate was undertaken by Mr Pollard.
Between 31 December 1987 and the end of 1996 Mr Pollard misappropriated some £317,000 of the assets in the Estate. I should emphasise that this is now no longer disputed: however as will appear below this allegation was disputed by Mr Pollard for some time. Of the total amounts misappropriated, the following are of particular relevance in these proceedings:
The Danish monies and the Warrender monies
i) £224,585.78 held to the credit of an account in the name of Mr Shearer at Copenhagen Handelsbanken (“the Danish monies”) was fraudulently transferred to the credit of Bourne Ltd, a company registered in the Isle of Man, at the request of Mr Pollard using a Power of Attorney granted to him by Mr Shearer prior to the latter's death.
ii) The shares in Bourne Ltd had been transferred to Mr Pollard by Mr Shearer before he made his Will with the intention that the shares be held by Mr Pollard on trust for Mr Shearer and, following his death, on trust for the beneficiaries under the terms of the Will.
iii) The Danish monies were transferred to Bourne Ltd's account at Barclays Bank plc in the Isle of Man which held other funds acquired from the Estate. Of the total sum of £504,861.77 held by Bourne Ltd between 30 August 1987 and January 1990, £155,188.19 was stolen by Mr Pollard from the Estate.
iv) Of that sum of £155,188.19, between 27 November 1989 and 10 January 1990 Mr Pollard deposited £110,687.52 at accounts in the name of Warrender Ltd at Barclays Bank plc, Isle of Man, until about July 1996 when £89,839.72 was transferred out to the personal benefit of Mr Pollard. Between 26 March 1990 and 4 July 1996 a further £46,437.23 was paid to Mr Pollard or for his benefit representing interest that had accumulated on the accounts of Warrender Ltd. Accordingly, the total monies stolen from the Estate which passed through the accounts of Warrender Ltd totalled about £157,000 (“the Warrender monies”).
v) Warrender Ltd was a company registered in the Isle of Man formed on behalf of Mr and Mrs Pollard in late 1989. Mr and Mrs Pollard were the sole directors and each 50% shareholders. The only monies ever credited to Warrender Ltd's bank accounts were the Warrender monies.
Geldock Rd
vi) In addition, in May 1988 Mr Pollard stole from the Estate sums of £11,000, £20,000 and £50,300 (a total of £81,300) which were used towards the purchase in his own name of 14, Geldock Road, Little Billing, Northamptonshire (“14 Geldock Rd”)—Mrs Pollard moved into the property with Mr Pollard. On 20 April 1995, Mr Pollard transferred 14 Geldock Rd into the joint names of himself and Mrs Pollard (then Linda Jane Clarke). On about 9 October 2002, Mr Pollard (whilst he was in prison following the criminal convictions to which I refer below) transferred 14 Geldock Rd into the sole name of Mrs Pollard. That is where she still resides.
Criminal proceedings
In March 2001, Mr Pollard was charged by the police. On 20 May 2002, at the Crown Court sitting in Birmingham, following a trial lasting 5 weeks, Mr Pollard was found guilty on 23 counts of theft, attempted theft and false accounting. He was sentenced to a term of imprisonment. Eight of those counts related to the misappropriations from the Estate which I have set out earlier in this judgment.
The First Proceedings
On 27 February 1998, Mr Frank David George Cattley (“Mr Cattley”) was appointed trustee of the Estate. Mr Liam O'Malley (“Mr O'Malley”) was appointed as trustee on 28 October 2002. They are the claimants in the two sets of proceedings with which I am concerned.
On 27 June 2003, proceedings were commenced by the trustees against Mr Pollard, the firms of which Mr Pollard was a partner at the relevant time, his (innocent) former partners and Mrs Pollard (“the First Proceedings”). The claims were for replacement of £317,457, compensation, alternatively damages arising from Mr Pollard's fraudulent breaches of trust.
Summary judgment was entered against Mr Pollard on 12 January 2004 in the principal sum of £317,457. A compromise was reached with all the other Defendants other than Mrs Pollard in October 2004.
On 10 February 2005, the claimants applied for further permission to amend the Particulars of Claim (the Particulars of Claim already having been re-re-amended). By his order made on 26 August 2005, Master Bragge dismissed the application but gave permission to the claimants to appeal. He dismissed the application on the grounds that the proposed amendments arguably raised new causes of action which were time barred.
The claimants did not initially seek to appeal Master Bragge's order: instead they issued a new set of proceedings (see below). On 9 June 2006, the claimants applied for permission to appeal out of time against Master Bragge's order. That application is one of the matters with which I have had to deal and I refer to it further below.
The Second Proceedings
The claimants commenced new proceedings against Mrs Pollard alone on 7 November 2005 (“the Second Proceedings”). The claim is said on the claim form to be for payment of specified sums or for damages or equitable compensation:
“arising from [Mrs Pollard's] dishonest part, and her knowing assistance, in the fraudulent breaches of trust by [Mr Pollard] from which she benefited and her own breaches of duty as a constructive trustee (or such duties as arise as if she is to be treated as a constructive trustee) which has caused loss and damage to the Estate..”
The Particulars of Claim in the Second Proceedings plead, in paragraph 4, the fraudulent breaches of trust by Mr Pollard relating to the Danish monies, the Warrender monies and 14 Geldock Rd (which I have summarised earlier in this judgment). Mr Pollard's fraudulent breaches of trust are admitted by Mrs Pollard in her Amended Defence.
Paragraph 5 of the Particulars of Claim sets out further the case in respect of the Warrender monies. This paragraph is also admitted by Mrs Pollard in her Amended Defence.
Paragraph 6 of the Particulars of Claim sets out further the case in respect of 14 Geldock Rd. This paragraph is also admitted by Mrs Pollard in her Amended Defence save for the following pleas in Paragraphs 6.5 and 6.6 of the Particulars of Claim which are denied:
It is the Claimants' case that insofar as [Mrs Pollard] has any legal or beneficial interest in 14 Geldock Road, she is a constructive trustee (or to be treated as such) in respect of all monies used in the purchase of 14 Geldock Road insofar as that money derived from the payments (totalling £81,300) made by Mr Pollard from monies stolen from the Estate.
As a constructive trustee (or treated as such), the Defendant owes and owed the Estate and the beneficiaries fiduciary duties including the duty to safeguard all assets of the Estate.
In paragraph 7 of the Particulars of Claim, Mr Pollard's criminal convictions are pleaded.
Paragraph 8 of the Particulars of Claim is headed “The case against the Defendant”. Paragraphs 8.1 and 8.2...
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