Denise McFarland-Cruickshanks v England Kerr Hands Solicitors Ltd t/a England Kerr Hands

JurisdictionEngland & Wales
JudgeWorster
Judgment Date22 March 2021
Neutral Citation[2021] EWHC 525 (Comm)
Date22 March 2021
Docket NumberCase No: CC-2020-BHM-000028
CourtQueen's Bench Division (Commercial Court)

[2021] EWHC 525 (Comm)

IN THE HIGH COURT OF JUSTICE

BUSINESS AND PROPERTY COURTS IN BIRMINGHAM

CIRCUIT COMMERCIAL COURT (QBD)

The Birmingham Civil Justice Centre

The Priory Courts, 33 Bull Street, Birmingham B4 6DS

Before:

HHJ Worster

(sitting as a Judge of the High Court)

Case No: CC-2020-BHM-000028

Between:
Denise McFarland-Cruickshanks
Claimant
and
England Kerr Hands Solicitors Limited t/a England Kerr Hands
Defendant

Tim Chelmick (instructed by DWF Law LLP) for the Claimant

John Virgo (instructed by England Kerr Hands) for the Defendant

Hearing date: 28 January 2021

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.

HHJ Worster

Worster HHJ

Introduction

1

By an application dated 15 September 2020, the Claimant seeks orders striking out the Defence and Counterclaim, alternatively for summary judgment. The applications were opposed, and I heard oral argument for a day on 28 January 2021.

2

The Claimant is a barrister specialising in intellectual property law. The Defendant is a firm of solicitors, described in the Defence as a “high street solicitor's practice in Birmingham”. The claim is for the balance of fees the Claimant says are due for work she did in relation to a patent action in the IPEC (“the patent action”).

3

The Claimant and the Defendant in this claim acted for the Claimants in the patent action, who were Andrew England-Kerr (“Mr Kerr”) and Waterside Manufacturing Limited (“Waterside”). At the time Waterside was controlled by Mr Kerr, and together they held patents relating to body armour which incorporated an inflatable life jacket. The patent action arose out of a dispute they had with BCB International (“BCB”), the holder of a licence to sell the body armour in Ecuador. BCB was accused of also selling a product which infringed one or more of the patents. Mr Kerr is also a solicitor, and England Kerr Hands and Co is effectively his firm.

4

The Claim Form in this claim was issued on 13 May 2020 and claims unpaid fees said to be due and owing to the Claimant. The Claimant's billed fees totalled £53,765, of which £19,755 had been paid, leaving a balance of £34,100. A schedule of the fees billed and paid is appended to the Reply [35]. A Defence and Counterclaim verified by Mr Kerr was filed on 22 June 2020. There are two lines of defence. Firstly, that the parties had agreed that the Claimant's fees would be capped at £50,000 plus VAT. That was said to be a fundamental term of the parties' contractual arrangement, and that by claiming in excess of the cap the Claimant had breached the capping agreement. The Defendant's case was that the consequence of that breach was not only that the Claimant was not entitled to more than a total £50,000 plus VAT in fees (which would be a further £30,245 plus VAT) but that no further fees were payable at all, and the £19,755 already paid was to be repaid. The Claimant's application sought summary judgment and/or strike out on the fee capping issue. The question of whether or not there is a maximum fee of £50,000 is a question to be determined by considering the effect of the agreement made in some emails between the Claimant's clerk and Mr Kerr. Whether the Claimant lost the right to charge any fees at all by claiming in excess of the cap is essentially a matter of law.

5

The second line of defence is a set off of the sums due on the Counterclaim. The principal counterclaim is for the losses the Defendant alleges it has suffered as a result of the Claimant's breach of contract and/or negligence. The issue on this part of the application is whether the Defendant can bring a claim against the Claimant for the financial loss it suffered as a result of the Claimant's alleged breach of contract and/or negligence, or whether it should be struck out. The central issue is whether the Claimant owes the Defendant a relevant duty.

6

The third element of the application relates to the Defendant's counterclaim for an indemnity in relation to a claim from its lay client Waterside. The only evidence that Waterside make such a claim is an email from Mrs Kerr (its present Director) on 16 March 2020. The application before me was to strike out this element of the Counterclaim on the basis that no claim had yet been made by the lay client, so that there was nothing to indemnify. That appeared to be resisted in the evidence filed by the Defendant in response to the application, but the point was notably absent from Mr Virgo's skeleton argument, and in response to my inquiry at the outset of the hearing, it was confirmed that the Defendant was not in a position to seek an indemnity as matters stood. If a claim was made, then the Defendant had the usual rights of indemnity and contribution, but that was for the future. In those circumstances the current claim for an indemnity will be struck out.

7

The application was supported by the witness statement of Mr Bennett, the Claimant's solicitor, of 15 September 2020. The Defendant filed witness statements from Gordon Walker of 19 January 2021, Peter Boynton of 12 January 2021 and David Croston of 19 January 2021. Mr Walker is the Defendant's solicitor, and his witness statement sets out its case by reference to the documents and his instructions. Mr Boynton was the solicitor at the Defendant firm dealing with the patent action. His evidence is given on the basis of his personal involvement in much of what occurred, although a lot of his evidence about the fee cap is drawn from the documents and his instructions. Mr Croston is a Patent Attorney. He gives evidence in relation to the conduct of patent infringement proceedings in the IPEC. His witness statement reads like expert evidence. The Claimant objected to it but accepted that I should read it. In the event little if any reliance was placed upon it. Finally, the Claimant filed a short witness statement in reply dealing with some discrete factual issues.

8

Whilst the application bundles were extensive, there are in fact very few documents which I need to consider. I refer to them by reference to their page number.

9

The approach to an application of this sort is well established. The power of the Court to strike out a statement of claim is set out in CPR r 3.4(2). The relevant sub rule is (a):

The court may strike out a statement of case if it appears to the court—

(a) that the statement of case discloses no reasonable grounds for bringing or defending the claim;

10

In relation to the question of whether the Claimant owed the Defendant a relevant duty for the purpose of the counterclaim for loss, the Claimant's case is that no valid claim is raised as a matter of law. If that is my conclusion, then I should strike it out; Price Meats Ltd v Barclays Bank Plc [2000] 2 All E.R. (Comm) 346, Ch D.

11

Mr Virgo referred me to the need to exercise particular caution when the issues under consideration concern a developing area of law. He referred to the judgment of Lord Browne-Wilkinson in Barrett v London Borough of Enfield [2001] 2 AC 550 @ 557E-G:

In my speech in the Bedfordshire case X (Minors) v Bedfordshire County Council [1995] 2 AC 633 at pp. 740–741 with which the other members of the House agreed, I pointed out that unless it was possible to give a certain answer to the question whether the plaintiff's claim would succeed, the case was inappropriate for striking out. I further said that in an area of the law which was uncertain and developing (such as the circumstances in which a person can be held liable in negligence for the exercise of a statutory duty or power) it is not normally appropriate to strike out. In my judgment it is of great importance that such development should be on the basis of actual facts found at trial not on hypothetical facts assumed (possibly wrongly) to be true for the purpose of the strike out.

Mr Chelmick submitted that this was not a case of an uncertain and developing area of law such as that referred to by Lord Browne-Wilkinson, there was no relevant dispute as to the facts, and this court was in as good a position as any to deal with the question of whether a relevant duty arose. I agree with that submission.

12

CPR Part 24 sets out the test for summary judgment:

The court may give summary judgment against a … defendant on the whole of a claim or on a particular issue if –

(a) it considers that –

(ii) that defendant has no real prospect of successfully defending the claim or issue; and

(b) there is no other compelling reason why the case or issue should be disposed of at a trial.

13

The general principles on such an application are set out in the judgment of Lewison J (as he then was) in EasyAir Limited v. Opal Telecom Limited [2009] EWHC 339 (Ch) at [15] (emphasis added):

1. The court must consider whether the [respondent to the summary judgment application] has a “realistic” as opposed to a “fanciful” prospect of success.

2. A “realistic” [statement of case] is one that carries some degree of conviction. This means a [case] that is more than merely arguable.

3. In reaching its conclusion the court must not conduct a “mini-trial”.

4. This does not mean that the court must take at face value and without analysis everything that [the respondent] says. In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporaneous documents.

5. However, in reaching its conclusion the court must take into account not only the evidence actually...

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