Haq v Singh and another
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE PILL,Lady Justice Arden,LADY JUSTICE ARDEN |
| Judgment Date | 25 May 2001 |
| Neutral Citation | [2001] EWCA Civ 957 |
| Court | Court of Appeal (Civil Division) |
| Date | 25 May 2001 |
[2001] EWCA Civ 957
Lord Justice Pill
Lady Justice Arden
IN THE SUPREME COURT OF JUDICATURE IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE QUEEN'S BENCH DIVISION
(HIS HONOUR JUDGE GRENFELL)
Royal Courts of Justice
Strand
London WC2
MR HUGH EVANS (Instructed by Messrs Pinsent Curtis Biddle, London, EC2M 1NR) appeared on behalf of the Appellant
MRS JANE GIRET QC (Instructed by Messrs Stewarts, London, WC2A 3LW) appeared on behalf of the Respondent
I will ask Lady Justice Arden to give the first judgment.
This is an appeal by the defendants in this action, with the limited permission of Chadwick LJ, against the order of His Honour Judge Grenfell, sitting as a Deputy Judge of the Queen's Bench Division, dated 30 January 2001.
The claimant had been adjudged bankrupt on 16 February 1988. She was discharged from bankruptcy in February 1991. Proceedings were begun in February 1993. They allege that the defendant's solicitors gave negligent advice in 1987 culminating in her bankruptcy in 1988. It is common ground that her claim for damages is a hybrid claim because it is a claim partly for damages of a personal nature, such as distress and inconvenience caused by the bankruptcy, and partly for damage to her personal property. Accordingly it is common ground that this claim vested in her trustee in bankruptcy: see Ord v Upton [2000] Ch 352.
The original defence was filed in 1993, but in August 2000 the defendants amended their defence so as to plead that she lacked capacity to bring these proceedings. This led to an assignment dated 11 December 2000 whereby the claimant's trustee in bankruptcy assigned to the claimant all his interest and right in the causes of action and related remedies being pursued in the action on the terms set out in the deed of assignment ("the assignment"). Hence a preliminary issue was formulated for determination by the judge whether the claimant had cured the defect in her standing to bring these proceedings by taking the assignment.
By his order the judge determined the preliminary issue in favour of the claimant and permitted the claimant to amend her proceedings so as to plead the assignment. Pursuant to the limited permission granted by Chadwick LJ, the sole issue before us is whether the judge was right to conclude that the effect of the amendment was to alter the capacity in which the claimant sued and was therefore within CPR 17.4(4).
CPR 17.4 provides in material part:
"(1) This rule applies where -
(a) a party applies to amend his statement of case in one of the ways mentioned in this rule; and
(b) a period of limitation has expired
(2)
(3)
(4) The court may allow an amendment to alter the capacity in which a party claims if the new capacity is one which that party had when the proceedings were started or has since acquired.
(Rule 19.4 specifies the circumstances in which the court may allow a new party to be added or substituted after the end of a relevant limitation period)."
In his judgment, the judge referred to Mulkerrins v PriceWaterhouse Coopers [2001] BPIR 106, a decision of this Court which holds that a bankrupt cannot bring proceedings in respect of a hybrid cause of action. The cause of action is vested in the trustee in bankruptcy and the trustee in bankruptcy would hold any damages on constructive trust: (1) for the bankrupt as respects any damages which did not vest in him under s.304 Insolvency Act 1985; and (2) for the creditors as to the balance.
In the course of his judgment, Jonathan Parker LJ, with whom Kennedy and Laws LJJ agreed, referred to enquiries that had been made as to whether the Official Receiver, as trustee in bankruptcy of the claimant in those proceedings, would be willing to assign the cause of action to the claimant, the former a bankrupt. The Court of Appeal expressed themselves in a way which made it clear that if there had been such an assignment, it would have cured the defect in the commencement of the proceedings. The judge relied on these observations in determining that he had jurisdiction to give permission for the amendment sought under CPR 17.4(4). He held that before the claimant obtained the assignment she had no capacity to sue and after the assignment she had capacity to sue as assignee from the trustee; hence CPR 17.4(4) applied.
Mr Evans for the appellants submits:
(1) The claimant had no title to sue before the assignment.
(2) There was no change of capacity. He relies on Robinson v Unicos Property Corporation Limited [1962] 1 WLR 520. In that case, the plaintiffs originally sued as individuals, but later took an equitable assignment and sought to amend to sue as assignees after the limitation period expired. The question was whether the plaintiffs were making a new claim. The Court of Appeal held that they were not making a new claim. Holroyd Pearce LJ, with whom Harman and Davies LJJ agreed, said in the course of his judgment:
"Nor are [the plaintiffs] suing in a different capacity. Although they now wish to claim by virtue of their right as equitable assignees to the benefits of the principal to the original contract, they still sue in their personal capacity as principals through the same agency on the contract albeit through an assignment of the benefit to them." (as 526).
(3) The passage in Mulkerrins relied on by the judge is distinguishable. It was obiter. It was not clear whether full argument had been addressed. CPR 17.4(4) could not apply in that case because limitation was not an issue. Accordingly the Court of Appeal might simply have taken the view that it was much better to allow an amendment to avoid circuity of proceedings.
( 4) CPR 17.4 is concerned with changes in capacity as where a person suing in his own right wishes to amend the statement of case so as to sue in a representative capacity, for example as an executor, administrator, or on behalf of the members of a Lloyd's syndicate.
(5) In Ingall v Moran [1944] 1 KB 160, the plaintiff purported to sue in a representative capacity as administrator of his son's estate but did not obtain letters of administration until after the expiration of the limitation period. His claim was struck out. The suggestion in the notes to the Civil Procedure 2001 at 17.4.6, that CPR 17.4(4) would now remove the difficulty in this case, was incorrect (on Mr Evans' submission) since the plaintiff had purported to sue as administrator from the outset. However, Mr Evans accepts that the true position may be that in Ingall v Moran the plaintiff should be treated as having sued in an individual capacity because he did not have a representative capacity in fact.
(6) The courts should construe CPR 17.4(4) narrowly so as to avoid abuse. If it is construed widely, a person may be able to start proceedings without any title to the relevant causes of action and then seek assignments from the people entitled to the causes of action after the expiration of the limitation period. This would be undesirable. (7) Any amendment would now be outside the limitation period and so should not be permitted, because if permitted the amendment would date back to the commencement of the proceedings, thus depriving the defendants of their limitation defence.
(8) It is no objection to the refusal of leave to amend that the defendants did not raise this point until August 2000. If they had raised it in their original defence, it is unlikely that any action would have been taken by the claimant within the limitation period.
Mrs Jane Giret QC for the respondent submits as follows: -
(i) The respondent is entitled in equity to any personal damages that may be obtained in this action; Mulkerrins v PriceWaterhouse Coopers, above.
(ii) CPR 17.4(4) is not limited to administrators and executors.
(iii) The Robinson case was dealing with the separate question of whether there was a new claim and has no bearing on the appeal in this case.
(iv) If there were to be any abuse such as is suggested by Mr Evans in his submissions, this can be addressed by the Court's discretion under CPR 17.4(4). In addition if the amendment involves the addition of a new claim, the concluding words of CPR 17.4(4) would apply.
(v) For the purposes of CPR 17.4(4), capacity to sue includes ownership of the legal title to a cause of action.
Conclusion
In my judgment, the crucial question in this case is the meaning to be attached to the word "capacity" in the context of CPR 17.4. There is no guidance in the glossary to the CPR and we have not been referred to any judicial definition. The judge refers to the concept as the proverbial "elephant". The meaning of CPR 17.4(4) was not a question considered in the Mulkerrins case, as to which I accept Mr Evans' submissions. Some guidance however can be obtained from section 35 of the Limitation Act 1980 and other parts of the CPR.
CPR 17.4 (4) is derived from section 35 of the Limitation Act 1980, which provides in material part as follows: -
"(4) Rules of court may provide for allowing a new claim to which subsection(3) above applies to be made as there mentioned, but only if the conditions specified in subsection (5) below are satisfied, and subject to any further restrictions the rules may impose.
(5)
(6)
(7) Subject to subsection (4) above, rules of court may provide for allowing a party to any action to claim relief in a new capacity in respect of a new cause of action notwithstanding that he had no title to make that claim at the date of the commencement of the action.
This subsection shall not be taken as prejudicing the power...
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