Heaton v AXA Equity & Law Life Assurance Society Plc

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeLORD JUSTICE CHADWICK,LORD JUSTICE BELDAM,LORD JUSTICE ROBERT WALKER
Judgment Date19 May 2000
Neutral Citation[2000] EWCA Civ J0519-9
Judgment citation (vLex)[2000] EWCA Civ J0519-8
Date19 May 2000
Docket NumberSLJ 2000/6139/A3,CASE NO: CHANF/1999/0793/3

[2000] EWCA Civ J0519-8

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE CHANCERY

(MR JUSTICE LADDIE)

Royal Courts of Justice

Strand

London WC2

Before

Lord Justice Beldam

Lord Justice Chadwick and

Lord Justice Robert Walker

SLJ 2000/6139/A3

Heaton & Others
Claimants/Appellants
and
Axa Equity & Law Life Assurance
Society Plc & Another
Defendants/Respondents

MR LESLIE KOSMIN QC and MR ANDREW TABACHNIK (instructed by Messrs M&S Solicitors Ltd) appeared on behalf of the Appellant

MR JONATHAN HIRST QC and MR DOMINIC CHAMBERS (instructed by Messrs Pinsent Curtis) appeared on behalf of the Respondent

Friday, 19th May 2000

LORD JUSTICE POTTER :—I agree

LORD JUSTICE CHADWICK
1

: For the reasons set out in the judgments which have been handed down we allow this appeal. Mr Kosmin, in your notice of appeal you seek two consequential orders.

2

MR KOSMIN: Indeed, my Lord. I handed it up to the court I hope your Lordships have it; a draft minutes of orders. First, paragraphs 1 to 6 has been agreed with my learned friend. May I take your Lordships through it? Paragraph 1 is self-explanatory; paragraph 2 is determination of preliminary issue in accordance with the new procedure in the notice of appeal; paragraph 3 is the same. My Lord, paragraph 4, at the invitation of my learned friend, is that the stay on the counterclaim contained in the order of Levy J is lifted so they may now proceed with their counterclaim. Paragraph 5 is on the question of costs. My learned friend I think accepts the fact that a defendant clearly shall pay the claimant's costs of and occasioned by the trial including costs of this appeal below such costs to be subject to detailed assessment on standard basis if not agreed. My Lord, paragraph 6 arises because there has been Part 36 correspondence which relates to the outcome of the actual trial, and my Lord, we are simply preserving in paragraph 6 the possibility that at the end of the trial of the action if it has to go ahead the learned judge may make an order under that provision for all the costs of the entire action on an indemnity basis. Your Lordship appreciates it depends on the outcome of the trial itself. My Lord, that merely preserves the position, so it does not affect paragraph 5, but it does give us liberty to apply to the judge because otherwise, my Lords, the costs of this application shall obviously form part of the action, albeit a separate aspect of it. It would be the possibility of indemnity costs which I cannot ask for on the normal basis would be lost. So that simply preserves for the trial judge his normal position under Part 36 in relation to the preliminary issue matters. My Lords, 7 and 8 are matters for application by my learned friend.

LORD JUSTICE CHADWICK
3

: 1 to 6 are agreed are they, Mr Chambers?

4

MR CHAMBERS: My Lord, yes, they are.

LORD JUSTICE CHADWICK
5

: Do you really need paragraph 2, Mr Kosmin?

6

MR KOSMIN: I think we do because that was the question that was posed by the Master.

LORD JUSTICE CHADWICK
7

: If it is agreed and there is no objection so be it. Paragraphs 7 and 8 are your application, Mr Chambers?

8

MR CHAMBERS: My Lord, yes, they are. So far as an application for judicial review, your Lordships of course were aware that the subject matter of this appeal concerns the compromising settlement of disputes. It is a matter we submit is of general public importance, the more since the introduction of the new Civil Procedure Rules; the emphasis is very much on settlement and compromise rather than litigating disputes. The appeal directly raise the applicability of the principles in Jameson in the House of Lords and the importance of those matters is perhaps best illustrated by the fact that there are many cases in the pipeline which have been awaiting the outcome of this appeal. So, for example, one case where Douglas Brown J has reserved judgment particularly waiting for your Lordship's judgment in this case. There is another case in Leeds involving similar issues where the judge gave permission to appeal and said that this is a developing area of law and raises particular difficulties.

9

So my Lord, we submit that it is of the utmost importance that the principles on which settlements are made are clear, and that the limitations applicable to any settlements agreements are precisely and adequately defined. So far as the particular matters in this appeal are concerned there are three to which I would specifically draw your Lordships' attention. The first is the question of the identity of damages claimed in the Target action and the Equity and Law action. If one thinks of the damages claimed in the Target action as being in a circle, then all the damages, apart from a (inaudible) number are contained within that circle so far as the Equity and Law action is concerned.

10

My Lord, the position is that your Lordships have held that some of the damages are not in that circle. When one considers that that type of damages are the same as in the circle, and the events giving rise to those damages are again founded on the same events which gave rise to the Target proceedings, one is faced with a situation where the difference is really a continuation of damages in the circle, outside the circle. And in our submission that does raise a particularly important question as to the applicability of the identity of damages so far as Jameson is concerned.

11

My Lord, the second matter is whether Jameson principles apply to concurrent co-obligants in contract. In our submission this question is left open by Jameson, obviously a very important and fundamental part of our appeal —I should say the appeal in this case. In my submission just as the House of Lords clarified the general principles in Jameson in relation to tort, so we submit they should be given the opportunity to do so in this case for the purposes of contract.

12

My Lord, the final matter I draw to your Lordships' attention is the question of approach. Lord Hope in Jameson emphasised the important public policy of finality of litigation and not overburdening the courts. This approach led to their Lordships in Jameson approaching the settlement agreement in a particular way. Our understanding of your Lordships' judgment is that your Lordships did not so much rely on public policy, and that perhaps led your Lordships to approach the settlement agreement in a different way to that which the House of Lords adopted. This in turn brings into play the distinction between what my Lord Chadwick LJ referred to as the full satisfaction question and the final settlement question.

13

This if I may respectfully say so, is the first occasion on which such a distinction has been articulated with such clarity, and it is in my submission an important question which their Lordships' House really should consider, especially so since the application of that distinction has led to the same result in this case as was reached by the Court of Appeal in Jameson. So my Lord, it is for those reasons that I would urge upon your Lordships to grant my clients permission to appeal to the House of Lords.

14

My Lord, my second application is for a stay on the assessment of costs. Your Lordships may recall from the order that the claimants applied for and were granted by Laddie J, an order staying the assessment of our costs pending the hearing of this appeal. I would in turn ask for a similar order, namely the assessment of the claimants' costs be stayed pending the outcome of Equity and Law's appeal to the House of Lords or the resolution of any petition to the House of Lords for leave to appeal.

15

If our costs had already been assessed in front of Laddie J, my Lords, I can see the force in saying well, the claimants' costs should be assessed now. But because the position today is that neither parties's costs have yet been assessed, in my submission the just position would be that no assessment take place until the final winner is declared as such, and that will only be resolved, in our submission, by the House of Lords.

LORD JUSTICE CHADWICK
16

: That is inconsistent with the policy under the CPR, is it not? Which I had understood to be that you paid as you went along. That is one of the big changes.

17

MR CHAMBERS: My Lord, yes, you do pay as you go along, but the claimants asked for an order that the costs be reassessed and restayed and my Lord that was not objected to by us. The application was made, my learned leader, Mr Hirst, said he could see the force of that Laddie J (inaudible) the order. So on the basis of the way things have proceeded to date it would in my submission be fair for us to be treated in the same way, particularly since the advantage of doing so would be, at the end of the day only to have one set of costs assessed rather than possibly two, if we were to be successful elsewhere.

LORD JUSTICE CHADWICK
18

: You do not suggest, do you, that if there were an assessment and you had to make a payment under it, you would have difficulty in recovering that?

19

MR CHAMBERS: My Lord, we are not at the moment sure what the position is in the liquidation, because your Lordship will recall that under the terms of the assignment any proceeds from the action would go, first of all to the creditors and then to the claimants. It is not clear at the moment what position has been reached; therefore I do not know if any costs were paid over where they will end up. And my Lord it is significant that my learned friends have not made any kind of application for payment on account, which I think it may have been open to them to do, but they chose not to do so. So my...

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