David Ross v Francis Joseph McGrath
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE TUCKEY,Lord Justice Clarke,LORD JUSTICE CLARKE,MR JUSTICE JACKSON |
| Judgment Date | 14 July 2004 |
| Neutral Citation | [2004] EWCA Civ 1054 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | A2/2004/0242 |
| Date | 14 July 2004 |
[2004] EWCA Civ 1054
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT
QUEEN'S BENCH DIVISION
PRESTON DISTRICT REGISTRY
(MR JUSTICE GRIGSON)
Royal Courts of Justice
The Strand
London, WC2A 2LL
Lord Justice Tuckey
Lord Justice Clarke
Mr Justice Jackson
A2/2004/0242
MR D UFF (instructed by Pannone & Partners, Manchester) appeared on behalf of the Appellant
MR J BARNARD (instructed by Ward Hadaway Solicitors, Newcastle-upon-Tyne, NE1 3DX) appeared on behalf of the Respondent
(Approved by the Court)
Wednesday, 14 July 2004
I will ask Lord Justice Clarke to give the first judgment.
LORD JUSTICE CLARKEIntroduction
This is an appeal from a determination of a preliminary issue made by Grigson J on 26 January 2004. The appeal is brought by permission of the judge.
The claim
The preliminary issue arises in an action brought by the respondent to recover sums alleged to be due from the appellant since about 1990 or 1991 when the parties had a business relationship. The sum claimed, as set out in the amended particulars of claim, amounts to £83,339.39, plus interest made up as follows: (1) £4,945 and £8,394.39, the price of building work and material supplied to the appellant between October 1990 and May 1991; (2) repayment of a loan of £40,000 made to the appellant in May 1990; and (3) repayment of a loan of £30,000 also made in May 1990.
The issue
The claim form was issued on 29 April 2002. It is common ground that since the action was commenced, more than six years after the causes of action accrued, all the claims are time-barred by reason of sections 5 and 6 of the Limitation Act 1980 ("the 1980 Act") unless a letter dated 1 May from the appellant to the respondent amounts to an acknowledgment of indebtedness within the meaning of sections 29 and 30 of the 1980 Act.
Sections 29 and 30 provide so far as relevant as follows:
"29(5)… where any right of action has accrued to recover—
(a) any debt or other liquidated pecuniary claim
and the person liable or accountable for the claim acknowledges the claim or makes any payment in respect of it shall be treated as having accrued on and not before the date of acknowledgment or payment.
(7)… a current period of limitation may be repeatedly extended under this section by further acknowledgment or payments, but a right of action, once barred by this Act, shall not be revived by any subsequent acknowledgment or payment.
30(1) To be effective for the purposes of section 29 of this Act, an acknowledgment must be in writing and signed by the person making it.
(2) For the purposes of section 29, any acknowledgment or payment—
(a) may be made by the agent of the person by whom it is required to be made under that action; and
(b) shall be made to the person, or to an agent to the person, whose title or claim is being acknowledged or, as the case may be, in respect of whose claim the payment is being made."
The letter of 1 May was in writing and was signed by the appellant and addressed to the respondent. It follows that in the case of each claim the sole question is whether by the letter the appellant, as the "person liable or accountable for the claim", "acknowledges the claim" or, more grammatically, "acknowledged the claim" within the meaning of section 29(5) of the 1980 Act. The letter reads as follows:
"WITHOUT PREJUDICE
1 May 1996
Dear Mr Ross
Further to our conversation when you asked me to confirm that I would pay you monies owed to you due to various ventures which we were involved in from 1989, I confirm that I am prepared to do this as and when the funds are available to me.
As you know, I am involved in a major dispute with the Midland Bank plc which looks likely to settle by agreement and also a dispute with the chief constable of Lancashire whereby I have already been awarded damages to be assessed.
I am also aware of our agreement dated the 3 September 1991 when I ceased to be involved in Naventi's.
In the circumstances I am happy to confirm that you suggest the following amounts are owed by me to you:
1. £4,535 for materials supplied to Clifton Drive and booked to Singleton Street.
2. £7,500 which I agreed to pay you at the same time that I paid Russell Howarth.
3. £40,000 for the property in the Isle of Man.
4. £30,000 which you paid to John Lowe.
5. £10,784 outstanding for materials supplied to Clifton Drive from October to December 1990.
Yours sincerely."
- and the letter is signed by the appellant.
The judgment
The first issue argued before the judge was whether the letter was privileged so that the respondent could not rely upon it. The appellant relied upon the fact that it was marked "without prejudice". The judge held that the letter would attract privilege only if, expressly or by implication, it contained an unequivocal offer of settlement of the claim, which it held that it did not. There is no appeal against that finding.
The second issue argued before the judge was whether by the letter the appellant had acknowledged the claim within the meaning of section 29(5) of the 1980 Act. The judge held that he did. The sole question in the appeal is whether he was correct so to hold.
The judge made a number of findings of fact, including the following. On 12 April 1991 the respondent wrote to the appellant saying that he had no alternative but to write and make the following requests for money:
"i) £4,535 for materials supplied to Clifton Drive.
ii) £7,500 which I agreed to pay you at the same time that I paid Russell Howarth.
iii) £30,000 I paid to John Lowe as half of the £60,000 which you agreed you would pay the following day if I paid your £30,000.
(iv) £40,000—the Isle of Man property.
(v) There is still £10,784 outstanding for materials supplied to Clifton Drive from October to December."
Although the judge did not refer to these paragraphs there are three further claims in which the respondent was requesting what he called "outstanding money in that letter, namely:
"vi. The deposit for Naventi's which has been 'on the way' since 10th October, 1990.
vii. A cheque for £10,000 given to me by yourself for Clawthorpe Hall….
viii. The amount of monies from membership fees should all be going to a D Ross bank account…."
The judge observed that there was no reply to that letter.
On 7 April 1992, 24 June 1992 and 13 August 1992 the respondent wrote to the appellant with particular regard to the £40,000. Again there was no response.
In April 1996 the respondent sent two draft letters to the appellant in the hope that he would sign them and thereby acknowledge his indebtedness. It was in response to these draft letters that the appellant wrote the letter of 1 May 1996.
The first draft letter sent in April 1996 was dated 3 April, and said.
"To: Frank
From: David
Re: Suggested wording
If you have any query with the same please do not hesitate to contact me.
Dear Mr Ross
I hereby agree to pay to you the money I have loaned from you as soon as I am in funds.
The amounts are as follows:
1. £4,535 for materials supplied to Clifton Drive and booked to Singleton Street.
2. £7,500 which I agreed to pay you at the same time that I paid Russell Howarth.
3. £40,000 for the property in the Isle of Man.
4. 30,000 which you paid to John Lowe.
5. £10,784 outstanding for materials supplied to Clifton Drive from October to December 1990.
Yours sincerely.
FJ McGrath."
The second draft letter was dated 24 April but the draft was sent to the appellant under cover of a fax timed at 13.35 on 29 April, which was of course only two days before the date of the letter of 1 May. The terms of the letter are identical to the terms of the draft letter of 3 April, which I have already quoted. The letter, it appears, was sent by fax to the appellant's secretary, since it contains a manuscript note to the appellant's secretary, Karen, from David (who is the respondent), which says:
"Can you get Frank to sign this as no doubt he will 'do a runner' tomorrow when I am down."
Those draft letters provide the immediate context for the letter of 1 April.
The judge held that the appellant never sought to advance any sort of set-off or counterclaim and never wrote disputing the debts. The judge said that the appellant was an experienced businessman who knew that had he acknowledged specific debts he would, as the judge put it, in effect have been putting a loaded gun into the appellant's hand. The judge thought that he was seeking to appease the respondents so as to forestall legal action, while preserving, so far as he could, his own position: hence the device of marking the letter "without prejudice".
The judge's further conclusions may be summarised as follows. The letter was in response to the draft letters to which I have referred. The letter itself contained no denial of liability, no set-off and no cross-claim. Read as a whole and in its context the letter constituted an acknowledgment of each of...
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