Gladman Commercial Properties v 1.) Fisher Hargreaves Proctor and Others
| Jurisdiction | England & Wales |
| Judge | Lord Justice Briggs,Lord Justice Ryder,Lord Justice Longmore |
| Judgment Date | 14 November 2013 |
| Neutral Citation | [2013] EWCA Civ 1466 |
| Docket Number | Case No: A3/2013/0588 |
| Court | Court of Appeal (Civil Division) |
| Date | 14 November 2013 |
[2013] EWCA Civ 1466
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT, CHANCERY DIVISION
Mr Justice Arnold
HC12DO2075
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Longmore
Lord Justice Ryder
and
Lord Justice Briggs
Case No: A3/2013/0588
Paul Chaisty QC and Wilson Horne (instructed by Knights Solicitors LLP) for the Appellant
Christopher Smith QC and Rupert Higgins (instructed by Gateley LLP) for the First Respondent and (instructed by DWF Fishburns) for the Second Respondent
Patrick Lawrence QC and Jamie Smith (instructed by DAC Beachcroft LLP) for the Third and Fourth Respondents
Introduction
This is an appeal from the Order of Arnold J made on 13 th February 2013, by which he struck out the claim of the Appellant, Gladman Commerical Properties, for damages for fraudulent or negligent misrepresentation, in connection with its aborted purchase of two adjacent properties in Dunkirk, Nottingham ("the Properties"), from the Nottinghamshire and City of Nottingham Fire Authority ("the Fire Authority") and Nottingham City Council ("the Council"). For reasons which will become apparent, I will refer to this claim as "the Second Claim". It was issued in May 2012.
The defendants to the Second Claim (and Respondents to this appeal) are two firms of chartered surveyors and two individuals, who were partners in or directors of the two firms. They are alleged to have falsely stated that the Properties were, together, suitable for redevelopment as student accommodation, in letters to the Appellant dated 7 th August 2006, and by that means to have induced the Appellant to enter into contracts to purchase them.
The basis upon which the Respondents sought to strike out the Second Claim derived almost entirely from circumstances arising from earlier proceedings by the Fire Authority against the Appellant, seeking specific performance of contracts for the purchase by the Appellant of the Properties. I will refer to those proceedings as "the First Claim". The Appellant defended the First Claim, and counter-claimed against both the Fire Authority and the Council, relying on the same misrepresentations as are sued upon in the Second Claim, but alleging that the Fire Authority and the Council were liable for them, having been made by the surveyors on their behalf.
The First Claim was issued in May 2009. It came on for a liability only trial in March 2011 before Peter Smith J. It was compromised by a settlement agreement dated 30 th September 2011 ("the Settlement Agreement"), later attached to a Tomlin Order on 5 th October 2011, during a period when the trial had been adjourned to facilitate negotiations.
In bare outline, the strike out application was made on the following four grounds:
1) That, on the Appellant's case in both claims, the Fire Authority, the Council and the Respondents were all joint tortfeasors so that by the Settlement Agreement (with the Fire Authority and the Council) the Appellant released its cause of action against all of them.
2) That, even if the Fire Authority and the Council were concurrent tortfeasors with the Respondents, nonetheless by the Settlement Agreement the Appellant received full satisfaction for all its loss, leaving no loss for which it could sue the Respondents.
3) That the Second Claim was an abuse of process, because it should have been brought with the First Claim, or at least made the subject of an application for case management directions in the First Claim, following guidelines laid down in Aldi Stores Limited v WSP Group PLC [2008] 1 WLR 748, per Thomas LJ at paragraph 31; ("the Aldi Guidelines").
4) That having regard to the sum paid to the Appellant in settlement of the First Claim, it could not plead (or at least had failed to plead) an intelligible case with a real prospect of success that it had suffered any greater loss.
The Respondents succeeded on grounds (1), (3) and (4). The judge decided that, had the parties been concurrent rather than joint tortfeasors, then the Respondents would have failed on ground (2).
The judge dealt with grounds (1) to (3) in a comprehensively detailed reserved judgment on 18 January 2013. After giving the Appellant time to attempt to amend its Particulars of Claim in the Second Claim, he dealt with ground (4) in a second reserved judgment, after a further short hearing, handed down on 13 February 2013.
The Appellant has challenged the judge's conclusions on grounds (1), (3) and (4) on this appeal. The Respondents challenged his rejection of their case on ground (2) by a respondents' notice, but in the light of a sensible concession by Mr. Paul Chaisty QC for the Appellant, namely that the Fire Authority, the Council and the Respondents were all joint rather than concurrent tortfeasors, ground (2) has fallen by the wayside.
Ground (1) raises matters of legal analysis and interpretation of the Settlement Agreement, within what should have been a fairly narrow compass, there being no dispute as to the background facts. By contrast, grounds (3) and (4) called for a different and in some respects wider review of the circumstances. We therefore considered it convenient to hear all argument on ground (1) first, which occupied the first of the two days set aside for the hearing of the appeal. Having formed a clear and unanimous view that the judge was right about ground (1), we announced our decision, with reasons to follow, at the end of the first day, and our view that, in those circumstances, it was unnecessary for the court to hear argument on the remaining points. Nonetheless Counsel were unanimous in encouraging us to hear full arguments on grounds (3) and (4), against the possibility that ground (1) might be the subject of a further appeal. We acceded with some reluctance and, in the event, oral argument on ground (3) took the whole of the second day. Counsel eventually agreed that we should decide ground (4) on the basis of the parties' written submissions (in skeleton arguments) without a further oral hearing. I shall therefore set out my conclusions and reasons on each of grounds (1), (3) and (4) separately, reflecting the way in which the matter has been dealt with in submissions.
Ground (1): Did the Settlement Agreement release the Appellant's cause of action against the Respondents?
The Essential Facts
In view of the comprehensive description of the relevant facts by the judge, it is necessary for me only to provide a bare outline.
The Properties consisted of a disused fire station owned by the Fire Authority and adjoining land owned by the Council. Recognising that both Properties would be likely to sell best as a single development site, the Fire Authority and the Council jointly retained the First and Third Respondents ("FHP" and "HEB") to market them together. The Second and Fourth Respondents, Mr. Hargreaves and Mr. Bishop, were the individuals at each firm in charge of the marketing process.
On 7 th August 2006, Mr. Bishop and Mr. Hargreaves (on behalf of HEB and FHP respectively) each wrote in substantially identical terms to the Appellant. The letters were headed "Student/Keyworker Development Site" and contained the following passages:
" DEVELOPMENT OPPORTUNITY
We have considered both a residential apartment scheme and a student accommodation scheme on this site with our clients' architects and feel that the most appropriate use for this site would be the provision of additional keyworker/student accommodation, particularly bearing in mind the presence of the Queens Medical Centre and the University opposite.
Our clients estimate that the Fire Station site alone would accommodate approximately: -
600 bedrooms
for keyworkers/students although prospective developers should produce their own scheme and discuss it with the relevant Planning Officer at the City Council
…
PRICE
Our instructions are to seek bids in respect of the combined Fire Station and Council site (1.478 acres) in excess of:
£4,000,000
(Four Million Pounds)
on a subject to planning basis."
I will refer to those letters as "the August 2006 Letters".
The Appellant claims that it was induced to bid for and then contract to purchase the Properties, by the contents of the August 2006 Letters. Contracts were exchanged on 19 September 2007, by which the Appellant agreed to buy the fire station site from the Fire Authority for £4.2 million and the Council's adjoining site for £1.8 million. The usual 10% deposits were paid on exchange.
The Appellant declined to complete either contract having, on its case, by then ascertained that there were planning problems standing in the way of the redevelopment of the Properties as student or keyworker accommodation. The Fire Authority served a notice to complete on 29 th January 2009, and the Council served its own notice to complete two days later. The First Claim was then issued by the Fire Authority on 19 th May 2009, seeking specific performance.
On 30 th July 2009 the Appellant served its defence and counterclaim, joining the Council as a Part 20 defendant. It sought rescission of the contracts, and damages, upon the basis that the parts of the August 2006 Letters quoted above contained fraudulent misrepresentations made by the Fire Authority and the Council through the Respondents as their sales agents. As amended in January 2011 the counterclaim asserted that all four of the Respondents had been jointly instructed by...
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