Chapman (TGA) Ltd v Christopher

JurisdictionEngland & Wales
JudgeLORD JUSTICE PHILLIPS,LORD JUSTICE WALLER,LORD JUSTICE MUMMERY
Judgment Date08 July 1997
Judgment citation (vLex)[1997] EWCA Civ J0708-9
Docket NumberQBENI 96/1149/E
CourtCourt of Appeal (Civil Division)
Date08 July 1997
(1) Tga Chapman Limited
(2) Benson Turner Limited
Plaintiff/Appellant
and
(1) Paul George Christopher
First Defendant
(2) Sun Alliance and London Insurance Plc
Second Defendant/Appellant

[1997] EWCA Civ J0708-9

Before:

Lord Justice Phillips

Lord Justice Waller

and

Lord Justice Mummery

QBENI 96/1149/E

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

(His Honour Judge Zucker QC)

Royal Courts of Justice

Strand

London WC2

MR W CROWTHER QC and MR G EKLUND (instructed by Messrs Wansbroughs Willey Hargrave, London WC2) appeared on behalf of the Appellant Second Defendant.

MR P SHEPHERD (instructed by Messrs Clyde & Co., London EC3) appeared on behalf of the Respondent Plaintiffs.

1

Tuesday, 8th July 1997

LORD JUSTICE PHILLIPS
2

In this action the Plaintiffs successfully sued the Defendant, Mr Christopher, for damages for negligently causing a fire which damaged their property. They recovered judgment for £1,129,212 and were awarded their costs. The Defendant had no assets, but enjoyed insurance cover against his liability, subject to a limit of £1 million, under a policy subscribed by Sun Alliance and London Insurance PLC ("the Insurers"). The Insurers had conducted Mr Christopher's defence. After judgment had been entered against Mr Christopher, the Insurers agreed to pay the Plaintiffs £1 million in full settlement of Mr Christopher's liability, but without prejudice to the Plaintiffs' right to seek an Order under section 51 of the Supreme Court Act 1981 that underwriters pay their costs of the action. In due course they sought such an order and on the 23rd May 1996 His Honour Judge Zucker Q.C., sitting as a Judge of the High Court, granted their application, explaining the basis on which he did so in a carefully reasoned judgment. The Insurers now appeal against his Order.

3

On the 20th November 1996 this Court handed down judgments in two appeals which had been tried together. Each involved applications for costs orders under Section 51 of the Supreme Court Act. In the first action, Murphy v. Young & Co's Brewery (The Times, 8th January 1997), an order for costs was sought against Sun Alliance, who had funded the Plaintiffs' costs of the action pursuant to obligations under a policy of insurance against legal expenses. The trial Judge had refused to order costs against Sun Alliance, and this Court upheld his decision. In the course of argument, the Court was referred to Judge Zucker's judgment in the present case. In the course of giving the leading judgment, I referred to the reasons given by Judge Zucker for his decision and commented:

"Having regard to these reasons it may be hard to fault the manner in which Judge Zucker exercised his discretion…"

4

That comment was made without hearing argument on the merits of Judge Zucker's decision. I have now heard such argument and must review his decision in the light of it.

5

The Facts

6

I cannot improve upon Judge Zucker's summary of the material facts which were as follows:

On 28th November 1991 a warehouse and factory premises at Wyke Mills, Huddersfield Road, Bradford, West Yorkshire, and its contents, were extensively damaged in a fire. The fire was caused by the negligence of the defendant, Paul George Christopher, who threw a lighted match which landed in an open tin of beeswax which immediately caught fire. Chapmans leased Wyke Mills from Benson Turner. Chapmans design, manufacture and supply display fittings, furniture and shopfittings. Their machinery and stock was damaged to a value of £986.696. Benson Turner had to repair the building and lost rent. The loss to them was £142,516. The Plaintiffs total joint claim was for £1,129,212.

Mr. Christopher lived at home with his mother. He had no assets. His mother had a building contents and liability policy effected through the Halifax Building Society. The liability provision covered not only Mr. Christopher's mother but Mr. Christopher as well.

By action commenced by writ issued on 21st April 1993, Chapmans and Benson Turner sought to recover the losses they had incurred from Mr. Christopher.

There were terms of the policy as follows. Under section 2, "Home Contents" paragraph 17:

"The insured is indemnified against liability at law:

For damages and/or claimants' costs in respect of accidental bodily injury (including death, disease or illness) or accidental damage to material property occurring during any period of insurance incurred….

(b) solely in a personal capacity (not as occupier or owner of any buildings or land).

The limit of indemnity for all damages and claimants' costs resulting from one original cause is £1,000,000 except where the claim is for accidental bodily injury to an employee under contract of service to the insured and arises out of and in the course of such employment in which event no limit applies. The insurers will also pay defence costs and expenses incurred with its written consent."

Under the heading "Conditions", there are the following paragraphs:

"7. The insurer may take over and conduct in the name of the policyholder or insured with complete and exclusive control the defence or settlement of any claim.

8. The insurer may also start legal action in the name of the policyholder or insured (but at its expense and for its own benefit) to recover from others compensation in respect of anything covered by the policy.

9. The policyholder or insured must give the insurer all the help and information it may need to settle or defend any claim or to start legal proceedings."

7

The leading underwriter of the policy was the Sun Alliance and London Insurance Plc (Sun Alliance). All the parties to the action were in fact nominal. Insurers had the conduct of the action on behalf of the Plaintiffs and throughout Sun Alliance had the conduct of the action on behalf of Mr. Christopher.

8

As appears from paragraphs 12 and 13 of an affidavit sworn on 5th March 1996 by Mr. Fleeson, a partner in the firm of Solicitors, who have the conduct of this action on behalf of the Plaintiffs and their insurers prior to the commencement of the action, it was the Plaintiffs' and their insurers' understanding that Mr. Christopher was unemployed, had no significant assets and little income and that the Sun Alliance policy provided the only basis upon which any recovery might be made. Mr. Fleeson had also obtained, prior to the commencement of the action, a copy of the booklet containing the terms of the insurance policy. He therefore knew the limits of the public liability indemnity.

9

The action came to trial before His Honour Judge Bush. It lasted from 7th December 1994 to 22nd December 1994. On the first day of the trial, it was admitted that Mr. Christopher had been negligent. The action was fought on the issue of contributory negligence. Judge Bush handed down his judgment on 12th May 1995. He rejected the plea of contributory negligence, found for the Plaintiffs and awarded them the damages they claimed. That is a total of £1,129,212 plus interest and costs.

10

The Law

11

Section 51(1) of the Supreme Court Act provides:

Subject to the provisions of this or any other enactment and to rules of court, the costs of and incidental to all proceedings in……

(b) the High Court….

shall be in the discretion of the court…..

(3)the Court shall have full power to determine by whom and to what extent the costs are to be paid.

12

In Aiden Shipping Co. Ltd v. Interbulk Ltd. [1986] A.C. 965 the House of Lords held, to the surprise of many, that this jurisdiction extended to ordering non-parties to pay the costs of litigation where justice so required. Since that decision the Courts have begun to formulate principles that should be applied to the exercise of this discretion. The relevant authorities are reviewed at some length in Murphy, and I do not intend to repeat that exercise in the present judgment. I shall simply set out the passage at p.528 of the judgment that lists the principles to be deduced from those decisions:

1. In Giles v Thompson [1994] 1 A.C. 142 at p.164 Lord Mustill suggested that the current test of maintenance should ask the question whether:

"there is wanton and officious intermeddling with the disputes of others in which the meddler has no interest whatever, and where the assistance he renders to one or the other party is without justification or excuse."

Where such a test is satisfied, I would expect the Court to be receptive to an application under Section 51 that the meddler pay any costs attributable to his intermeddling.

2. Where a non-party has supported an unsuccessful party on terms that place the non-party under a clear contractual obligation to indemnify the unsuccessful party against his liability to pay the costs of the successful party, it may well be appropriate to make an Order under Section 51 that the non-party pay those costs directly to the successful party. Such an Order may, for instance, save time and costs in short-circuiting the Third Party (Rights against Insurers) Act 1930. Bourne v. Coldense [1985] I.C.R. is a case where the Court might well have thought fit to make such an order had it appreciated that it had jurisdiction to do so.

3. Where a Trade Union funds unsuccessful litigation on behalf of a member the following factors, in addition to the funding itself, are likely to be present and, where they are, to make it appropriate to Order the Union to pay the successful party's costs should such an Order be necessary:

(a)an implied obligation owed by the Union to its member to do so —see 2. above.

(b)an interest on the part of the Union in supporting and being seen to support the member's claim.

(c)responsibility both for the...

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83 cases
  • Travelers Insurance Company Ltd v XYZ
    • United Kingdom
    • Supreme Court
    • 30 October 2019
    ...do disclose a sustained attempt to provide some measure of guiding principle for the exercise of this wide jurisdiction. In TGA Chapman Ltd v Christopher [1998] 1 WLR 12 the section 51 application was made because the cover was limited under the defendant's liability policy and insufficien......
  • The Owners and/or Demise Charterers of the Dredger “Kamal XXVI” and the Barge “Kamal XXIV” v The Owners of the Ship “Ariela”
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    • Queen's Bench Division (Commercial Court)
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    ...decide what the issues are and will be on this application. Mr MacDonald Eggers points to what was stated by Phillips LJ in Chapman Ltd v Christopher and another [1998] 1 WLR 13 at 20F, which I recite subject to my (underlined) amendment to his feature (4), rendered necessary by the subsequ......
  • Palmer v Palmer
    • United Kingdom
    • Court of Appeal (Civil Division)
    • 6 February 2008
    ...in two decisions of this court. They had contrasting outcomes. The first is T.G.A. Chapman Ltd and Another v. Christopher and Another [1998] 1 WLR 12 (“ Chapman”) The second is Alan Cormack and Another v. The Excess Insurance Company Limited, 16 March 2000 (“ Cormack”). The judge regarded ......
  • Martin S. Kenney Cc International Ltd Appellants v Ace Ltd Respondent to Appeal
    • Cayman Islands
    • Court of Appeal (Cayman Islands)
    • 6 May 2015
    ...v MA (UK) Ltd [1997] 1 WLR 1613. Consistently with this approach, Phillips LJ described the non-party underwriters in TGA Chapman Ltd v Christopher [1998] 1 WLR 12 as “the defendants in all but name”. Nor, indeed, is it necessary that the non-party be “the only real party” to the litigation......
  • Request a trial to view additional results
5 firm's commentaries
  • Supreme Court Rules On Non-Party Costs Order Against Insurer
    • United Kingdom
    • Mondaq UK
    • 11 November 2019
    ...should be made against Travelers. Having reviewed the existing authorities on the issue (including TGA Chapman Limited v Christopher [1998] 1 WLR 12 and Citibank NA v Excess Insurance Co Ltd [1999] Lloyd's Rep IR 122), Lord Briggs made a number of general comments concerning the application......
  • Adding Insult To Injury - Costs Orders Against Non-Party Insurers
    • Australia
    • Mondaq Australia
    • 28 November 2007
    ...where the policy limit of indemnity has been exhausted. Footnotes 1 [2006] All ER (D) 248 (Dec) 2 see also Chapman Ltd v Christopher [1998] 1 WLR 12 3 See for example section 24 of the Victorian Supreme Court Act 1986 and section 98 of the Civil Procedure Act 2005 (NSW) 4 [1999] 1 VR 80 5 R......
  • Blog: Supreme Court rules on non-party costs order against insurer
    • United Kingdom
    • JD Supra United Kingdom
    • 5 November 2019
    ...should be made against Travelers. Having reviewed the existing authorities on the issue (including TGA Chapman Limited v Christopher [1998] 1 WLR 12 and Citibank NA v Excess Insurance Co Ltd [1999] Lloyd’s Rep IR 122), Lord Briggs made a number of general comments concerning the application......
  • Supreme Court Provides Welcome Clarity On When Non-Party Costs Orders Should Be Made Against Insurers
    • United Kingdom
    • Mondaq UK
    • 11 November 2019
    ...Lord Briggs commented that he thought the two bases for liability for a section 51 SCA costs order under the Chapman Ltd v Christopher [1998] 1 WLR 12 case, namely by 'intermeddling' or becoming the 'real party', were preferable to the exceptionality test, which is an "elusive Claims within......
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