Frank Otuo v David Raymond Brierley
| Jurisdiction | England & Wales |
| Judge | Lord Justice Kitchin,Lord Justice Christopher Clarke,Lord Justice Laws |
| Judgment Date | 12 November 2015 |
| Neutral Citation | [2015] EWCA Civ 1143 |
| Docket Number | Case No: A3/2014/1421 |
| Court | Court of Appeal (Civil Division) |
| Date | 12 November 2015 |
[2015] EWCA Civ 1143
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Mr Nicholas Strauss QC (sitting as a High Court Judge)
HC12D04110
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Laws
Lord Justice Kitchin
and
Lord Justice Christopher Clarke
Case No: A3/2014/1421
Mr Otuo appeared in person
Gideon Roseman (instructed by Sherwood Solicitors) for the Defendant/Appellant
Hearing date: 13 October 2015
Introduction
This is an appeal against a costs order made in these proceedings by Mr Nicholas Strauss QC, sitting as a deputy judge of the High Court, on 14 April 2014. By this order the deputy judge dismissed an application by Mr Otuo to re-amend his particulars of claim to include an allegation that Mr Brierley had defamed him, awarded Mr Brierley 80% of his costs and ordered Mr Otuo to pay to Mr Brierley £20,000 on account of those costs.
Upon this appeal, brought with permission granted by Sir Stanley Burnton, Mr Brierley contends that the deputy judge fell into error in two respects: first, he wrongly discounted the costs which he awarded to Mr Brierley by 20%; second, he erred in failing to make an order precluding Mr Otuo from pursuing the rest of his claim unless he complied with that part of the order which required him to pay the £20,000.
Background
These proceedings have a long and complex history and arise from a partnership agreement entered into by Mr Otuo and Mr Brierley in 2008 for the purpose of acquiring and managing properties in London. In early 2010 Mr Brierley became concerned that Mr Otuo was failing to account for rental receipts and make mortgage payments in respect of various partnership properties in accordance with the terms of the agreement. He received no satisfactory response to his enquiries and accordingly, in March 2010, issued proceedings against Mr Otuo in the Chancery Division of the High Court.
On 14 January 2011 Mr Brierley and Mr Otuo entered into a settlement agreement which brought the proceedings and the partnership to an end. By clause 4 of that agreement, Mr Brierley undertook to ensure payment of such sums as might be due to a number of partnership creditors identified in schedule 2 to the agreement. One of these creditors was Mr Robert Wee.
In August 2011 Mr Otuo issued these proceedings against Mr Brierley. He asserted that, in breach of the settlement agreement, Mr Brierley had failed to sell various partnership properties; had neglected to pay the partnership creditors; and had failed to indemnify him in respect of a number of payments he had made to those creditors. He accordingly sought damages and specific performance.
In his defence to the particulars of claim, Mr Brierley contended that the creditors relied upon by Mr Otuo were not truly creditors of the partnership at all; he put Mr Otuo to proof that he had paid any monies to any partnership creditors; and he denied that he was obliged by the settlement agreement to sell any properties at Mr Otuo's direction.
Thereafter Mr Otuo issued a battery of applications, a number of which resulted in costs orders against him. Our attention has been drawn in particular to the order of Mr Anthony Elleray QC, sitting as a deputy judge of the High Court, dated 24 September 2013 which required Mr Otuo to pay to Mr Brierley the sum of £30,000 on account of costs, and an order of Newey J dated 24 June 2013 which required Mr Otuo to pay Mr Brierley's costs summarily assessed in the sum of £10,000. Neither of these orders has been complied with.
In the autumn of 2013 Mr Otuo sent to Mr Brierley a number of different versions of his proposed re-amended particulars of claim. After settling upon a final version, he made an application for permission to amend which, after several adjournments, came on for a substantive hearing before Mr Nicholas Strauss QC, sitting as a deputy judge of the High Court, on 3 December 2013. Some of the proposed amendments were not controversial. Others concerned the claim for breach of the agreement and these were allowed in part. Importantly for present purposes, the proposed amendments also included two allegations that Mr Brierley had defamed Mr Otuo.
The first allegation was that Mr Brierley had contacted Mr Wee and "lied to him that [Mr Otuo] was responsible for half of the amount owed by the partnership to Mr Wee". This alleged lie was said to be evident from an email dated 12 December 2011 from Mr Wee's assistant, Mr Davidson, to Mr Otuo. The deputy judge refused to give permission for this amendment for reasons which he gave in a written judgment handed down on 28 February 2014. Specifically he held that there had been a failure to set out the precise words used; that the application was being made far outside the one year limitation period provided by s.4A of the Limitation Act 1980; and there was no basis for contending that Mr Brierley had said anything which might harm Mr Otuo's reputation or damage him in any other way.
The second and more material allegation for the purposes of this appeal concerned another conversation which was said to have taken place between Mr Brierley and Mr Wee. Mr Otuo asserted that Mr Wee had told him in the course of a telephone conversation on 28 August 2013 that Mr Brierley had said to him "that the £166,000 that was paid to [Mr Otuo] under the agreement with [Mr Brierley] was meant to be paid to [Mr Wee] and that [Mr Otuo] had kept it for [himself]".
Mr Otuo contended that this statement by Mr Brierley to Mr Wee amounted to an accusation that Mr Otuo was guilty of criminal wrongdoing and that it was therefore actionable without proof of special damage.
Mr Brierley resisted the application on the following grounds. He contended first, that the alleged statement did not necessarily mean that Mr Otuo's conduct had been dishonest and so it was not defamatory; second, that the allegation had been inadequately particularised and so permission to amend should be refused; and third, that the one year limitation period provided by s.4A of the 1980 Act had long since expired and so the allegation was bound to fail for this reason too.
For reasons which are set out in detail in the judgment of 28 February and to which I must return, the deputy judge decided it was appropriate to adjourn this aspect of the application yet again; to order Mr Brierley to provide further information about any conversation or conversations that he had had with Mr Wee between January 2011 and August 2013 in which he had used words to the effect alleged in the proposed re-amended pleading; and to give Mr Otuo permission to have a witness summons issued requiring Mr Wee to attend court to answer questions about the allegation. These directions were eventually embodied in an order dated 11 March 2014.
A witness summons was duly issued and Mr Wee attended before the deputy judge on 14 April 2014. Mr Wee was then sworn and examined by Mr Otuo. It became apparent during the course of this examination that the allegation that Mr Brierley had defamed Mr Otuo was not sustainable and so the deputy judge indicated to Mr Otuo that it was obvious that he must refuse Mr Otuo's application for permission to amend his pleading to introduce it. The deputy judge then proceeded to deal with various consequential matters, including the costs of the amendment application and, in doing so, he made the order against which Mr Brierley now appeals.
The judgments
I must now explain how the deputy judge came to make the orders that he did and the reasoning that lay behind them. For that purpose, I begin with the judgment of 28 February 2014. As I have mentioned, Mr Brierley resisted the application on three grounds. He contended first, that the alleged statement was not defamatory; second, that the allegation suffered from a fatal lack of particularity; and third, that the limitation period had expired.
As for the first issue, namely whether the alleged statement was defamatory, the deputy judge recognised that this could not be wholly separated from the issue as to the exact words spoken, but he considered that, in all the circumstances, it was least strongly arguable that the words would reasonably have been understood to mean that Mr Otuo had stolen money that should have been paid over to Mr Wee. Mr Brierley contended that the words were capable of being interpreted differently. The deputy judge accepted that was so but that was, in his judgment, no reason to refuse the amendment.
The next question was whether the pleaded allegation was sufficiently specific. Here the deputy judge recognised the general rule that a claimant must set out the exact words alleged to have been used. However, he continued, this rule, if applied too rigorously, might give rise to an injustice in a case where the claimant knows he has been defamed and has a genuine case but cannot gain access to the exact words used. The deputy judge then proceeded to consider a considerable number of authorities, including the decision of this court in Best v Charter Medical of England Ltd [2001] EWCA Civ 1588 in which it was explained that the exception to the general rule only operates where the claimant can satisfy the court that he has a good cause of action because there is credible evidence that the defendant on a particular occasion and to a particular person made a defamatory statement about him of a specified nature. Unless there is evidence that there is a good cause of action, an order for...
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