Dagnell and Another v J L Freedman & Company (A Firm) and Others
| Jurisdiction | England & Wales |
| Judge | Lord Templeman,Lord Goff of Chieveley,Lord Oliver,Lord Browne-Wilkinson,Lord Mustill |
| Judgment Date | 11 March 1993 |
| Judgment citation (vLex) | [1993] UKHL J0311-2 |
| Date | 11 March 1993 |
| Court | House of Lords |
[1993] UKHL J0311-2
Lord Templeman
Lord Goff of Chieveley
Lord Oliver of Aylmerton
Lord Browne-Wilkinson
Lord Mustill
House of Lords
My Lords,
A writ ceases to be valid unless it is served within twelve months of its issue. The validity of the writ can be extended if the plaintiff shows good cause. If the limitation period applicable to the cause of action is due to expire before the end of the twelve months period the court should not, as a general rule, grant any extension. In the present case the writ was issued on the 29 September 1988, the limitation period expired on the 6 April 1989, and the court on the 11 August 1989 granted an extension of the writ until the 28 December 1989. That order should not have been made; the plaintiffs should have been left to serve before the 29 September 1989. The plaintiffs and their solicitors cannot be criticised for applying for an extension or for relying on the order for an extension although the Court of Appeal rightly set aside the order for an extension.
For the reasons to be given by my noble and learned friend, Lord Browne-Wilkinson, I too would dismiss the appeal with costs.
My Lords,
I have had the advantage of reading in draft the speech of my noble and learned friend, Lord Browne-Wilkinson. I agree with it and for the reasons he gives, I too would dismiss the appeal with costs.
My Lords,
I have had the advantage of reading in draft the speech of my noble and learned friend, Lord Browne-Wilkinson. I agree with it and for the reasons he gives, I too would dismiss the appeal with costs.
My Lords,
In this case the plaintiffs, who are trustees, applied to the Chancery Division for directions whether they should bring this action against the defendants ("the Beddoe application": In re Beddoe [1893] 1 Ch. 547). The delay caused by the Beddoe application meant that they felt unable to serve the writ in this action within 12 months of its issue. They accordingly applied for and obtained an extension of the validity of the writ. Such extension can only be granted if good reason is shown. The question is whether the making of the Beddoe application constituted or was capable of constituting such good reason.
The full facts of the case are lengthy and complicated: I will seek to limit my exposition to those facts necessary for the decision of the only issue which arises for decision by your Lordships. The plaintiffs in the action are the present trustees of the Will of C.J. Stillitz. During his life time C.J. Stillitz and his brother A.L. Stillitz were tenants in common of a freehold property, Hartsbourne Manor, Bushey Heath, ("Hartsbourne"), C.J. Stillitz being entitled to a 75 per cent share and his brother to the remaining 25 per cent share.
On 1 May 1948 the Stillitz brothers granted a lease of Hartsbourne for a term of 35 years with an option to renew for a further period of 35 years at the same rent, such option being conditional upon there being no breach of the covenants in the lease at the date of its exercise.
C.J. Stillitz died in 1966: his 75 per cent share in Hartsbourne vested in his personal representatives. The 25 per cent share of A.L. Stillitz became vested in a Mrs. Azizoff.
In January 1982 the lessees of Hartsbourne gave notice exercising the option to renew the lease. The then trustees of the Will of C.J. Stillitz and Mrs Azizoff instructed first Messrs. Trower, Still and Keeling ("Trowers") and later Messrs. J.L. Freedman and Co. ("Freedmans") to act for them as solicitors in relation to the exercise of the option.
In this action the plaintiffs claim against the former partners in Freedmans (which firm has since been dissolved) that Freedmans were negligent in failing to advise that the exercise of the option to renew could be resisted on the ground that at the time of its exercise there were subsisting breaches of the repairing covenants in the lease. In the absence of such advice, a further lease for 35 years at the same rent was granted to the lessees on 5 April 1983. It follows that the plaintiffs' claim in this action against the defendants became time-barred at the latest by 6 April 1989.
In 1986 a Mrs Taylor who was a beneficiary under the Will of C.J. Stillitz raised a complaint that the then trustees of the Will had acted in breach of trust in relation to the renewal of the lease. The trustees then instructed McKenna & Co. ("McKennas") to deal with this complaint. On 25 August 1987 Mrs Taylor started proceedings against the trustees, which proceedings were stayed on 10 March 1989 on the trustees of the will giving an undertaking to make a Beddoe application for directions whether they should sue Trowers and Freedmans for negligence.
In the meantime, McKennas had been seeking to investigate what had occurred in 1982 and 1983, their research being hampered by a number of factors the details of which I need not recount. The judge accepted that McKennas had considerable difficulty in assembling the necessary material. On 25 November 1987, when researches were far from complete, the plaintiffs issued a writ against Trowers. This writ was served on 23 November 1988 it being agreed with Trowers that the time for acknowledgement of service and for a statement of claim should be extended generally.
The writ in this action was issued on 29 September 1988 but was not immediately served. The defendants to the action were initially (1) Freedmans (2) J.M. Weider (a partner in Freedmans) and (3) Sybil Brown (the executrix of Michael Brown, a deceased partner in Freedmans). It subsequently transpired that Freedmans had been dissolved in 1986 and that Sybil Brown had herself died on 30 September 1988. Effectively the action is now brought against the second defendant, Mr. Weider, as a former partner in Freedmans and the sixth, seventh and eighth defendants who are the personal representatives of Mrs. Brown and the executors by representation of Michael Brown, a former partner in Freedmans.
The trustees of the C.J. Stillitz will trust were advised that they ought to make a Beddoe application to the court before pursuing the action against Trowers and the action against Freedmans. Shortly stated, a Beddoe application is directed to ensuring that trustees who, in defence of the trust estate, become involved in litigation with third parties are entitled to recover their costs out of the trust estate. In an action between trustees as plaintiffs and strangers to the trust as defendants, the costs of the action will be dealt with by the trial judge on the normal basis and without regard to the fact that the plaintiffs are trustees. If in such an action, trustee plaintiffs are ordered to pay the defendants' costs, the trustee plaintiffs will be personally liable so to do. If the trustees wish to be indemnified out of the trust estate against their own costs of litigation and any costs which they are ordered to pay to the other side, they must show that those costs were incurred honestly and reasonably for the benefit of the trust estate. In Re Beddoe [1893] 1 Ch. 547 the Court of Appeal held that the fact that the trustees had acted on the advice of counsel did not necessarily demonstrate that they had acted reasonably. The only absolutely certain protection is for trustees to obtain an order from the court in separate proceedings, the Beddoe application, authorising the bringing or defending of proceedings before the costs of such proceedings are incurred.
In the present case, the originating summons in the Beddoe application was not issued until 21 March 1989. In June 1989 a hearing date for the Beddoe application was fixed for 3 October 1989, i.e. after the expiry of the limitation period of six years and a few days after the validity of the writ would expire. It was not urged before either the master or the judge that the plaintiff trustees had been guilty of any improper delay in issuing the Beddoe application or fixing the date for its hearing. To meet the difficulties which had arisen, on 11 August 1989 the plaintiffs applied for and were granted by Master Gowers ex parte an extension of the validity of the writ until 28 December 1989 ("the first extension").
When the Beddoe application was heard on 3 and 5 October 1989, the plaintiffs were authorised by Master Munrow to serve the writ but not to take any further steps without the leave of the court. The trustees were directed to serve the order on all beneficiaries under the C.J. Stillitz will trust, who were given liberty to apply to set aside the order. Due to an error in the drawing of the order of the Court and the threat by a beneficiary to apply to vary the order, there was some delay but by 6 December these difficulties were cleared away and McKennas took steps to serve the writ.
At that time it was thought that Mrs. Brown, though aged, was still alive. However, when attempts were made to serve her it was discovered that she had died on 30 September 1988. It was therefore necessary for the plaintiffs to apply for and obtain an order to carry on this action against Mrs. Brown's personal representatives. It was also thought, mistakenly in the event, that there had been two further partners in Freedmans and application was made to join them. Those applications were heard and granted by Master Gowers on 8 December 1989: the master also extended the validity of the writ for another month, i.e. until 31 January 1990 ("the second extension"). There were again difficulties in drawing up the order, but the writ in this action was finally served on all...
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