Holbeck Hall Hotel Ltd and Another v Scarborough Borough Council
| Jurisdiction | England & Wales |
| Judgment Date | 22 February 2000 |
| Neutral Citation | [2000] EWCA Civ J0222-5 |
| Judgment citation (vLex) | [2000] EWCA Civ J0222-6 |
| Docket Number | No QBENF 1998/0902/A2,Case No: QBENF 98/0902/A2 |
| Court | Court of Appeal (Civil Division) |
| Date | 22 February 2000 |
[2000] EWCA Civ J0222-5
Lord Justice Stuart-smith
Lord Justice Schiemann
Lord Justice Tuckey
No QBENF 1998/0902/A2
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM ORDER OF HIS HONOUR JUDGE HICKS QC
(Sitting as an Official Referee)
Royal Courts of Justice
Strand
London WC2
MR T STOW QC and MR P DARLING QC (Instructed by Messrs Hammond Suddards of Leeds) appeared on behalf of the Appellant
MR CHRISTOPHER SYMONS QC and MR P REED (Instructed by Messrs Kennedys of London) appeared on behalf of the Respondent
NB Because of lack of documents quotations have not been checked
May it please your Lordships, I ask for the costs of the appeal and the costs of the action below; that is the first of the three applications which will concern your Lordships this morning. I do not know whether you wish to deal with them individually or together.
: I do not think that there will be very much resistance to that.
There is not, but there is in relation to my friend's second issue, the costs of GEN, the third party.
: Yes.
Would your Lordships prefer to deal with the application my learned friend has for leave to take the matter to the House of Lords?
: No. We will deal with that at the end. Let us deal with the question of costs.
I submitted a document this morning for which I apologise. I was abroad on Friday when your Lordships produced the judgment. The convenient course may be if I sit down while your Lordships read that briefly, and I will expand upon it. ( Pause) To expand upon that, may I invite your Lordships to go to the appeal bundle at page 70 which is the re-amended statement of claim. It is behind tab 7, page 70.
: Is that the core bundle?
Yes, it is. In paragraphs 10 to 15 the learned pleader sets out the duty of care: the report at paragraph 10, the commission of GEN at paragraph 11, a summary of the GEN report at paragraph 12. At paragraph 13 there are numerous examples of large scale slope movements; steepness of the slope in 13b. At paragraph 14:
"In the premises the defendant was aware or ought reasonably to have appreciated that there was a danger of further slippage with the result that support had been (?) withdrawn and steps reasonably could have been taken."
Paragraph 15, further, in the alternative, alleged a duty of care to take reasonable care to prevent subsidence and withdrawal of support.
Added by re-amendment —but, in my submission, implicit in the case throughout —in the third un-numbered paragraph of the particulars the GEN report is relied upon to establish the history of slips and the duty of care by reason of the GEN report in the 7th line.
In paragraph 18 of the statement of claim (on page 73) there are allegations of breach. Taking (b) first, it is an allegation of failure to follow the recommendations in the GEN report which is added by amendment, but -
"(c) the defendant failed to conduct further investigations. The first and second plaintiffs will contend that it was not (?) investigated by means of bore holes, trial pits,"
etc, etc.
That is then amplified in further and better particulars (page 83),
the particulars of the statement of claim. At (d) —this is in answer to a request of each and every step that it is said the defendant should have taken to prevent further slippage. It quotes paragraph 5.5 of the GEN report:
"In the premises the defendant was advised by GEN that other slope movements in the immediate vicinity of the site were possible and that further, much larger slippage could occur."
What we say is that in the light of that and in the light of the wording of the GEN report, which your Lordships may recall was held to be negligent and insufficient by the judge in the GEN action,the learned judge held that "it may be prudent", was plainly insufficient to put us on notice.
Scarborough submit that it was entirely reasonable and appropriate to join —effectively by third party and to treat it as a third party action —GEN in circumstances where the nature of the plaintiffs' case led to that conclusion. We say that the appropriate test is to decide whether the joinder was appropriate at the time that it was made, and the fact that ultimately the judge found against us on that claim for other reasons ought not to preclude the people who started this action from being responsible for its costs. We say that the costs of the GEN action were costs of the entirety of the action, and that the reason we incurred those costs was because, acting reasonably at the time the action commenced, we elected to join GEN. Had the action against us not been started, we would not have been faced with the position of having to consider whether to join GEN. On that basis I ask for costs of that action to be paid by my learned friend's clients, the claimant. It is dealt with in ground 13 of the notice of appeal.
I ought, as a matter of form, to draw your Lordships' attention to the fact that there is an error in that because it refers to the costs of GEN. What it ought to say is "the costs of that action".
: You had to pay the costs.
Yes. I had to pay my own costs of the action and pay GEN's costs. We have paid them. They have been taxed and paid, agreed and paid may be more accurate. The notice of appeal refers to GEN's costs. That is an infelicitous expression because it is costs of that action which obviously includes our own costs, so the application is put slightly more widely than in the notice of appeal which is, perhaps with hindsight, not too …..
: Which paragraph?
It is paragraph 13, my Lord. Where it says "to pay the costs of GEN Northern Limited" it should say "the costs of that action" because that would include our costs of it. If your Lordships rule against me ——and obviously my friend's clients will say that the costs we have incurred have to be discounted to reflect our costs of pursuing GEN. The notice of appeal ought to make that clear, and I apologise for the fact that it does not.
Unless I can assist your Lordships further, that is what I say on that application.
My friend's application is opposed. Mr Symons has been abroad on holiday. He had hoped to be here but the traffic at Gatwick Airport prevents him. It is opposed. If I may briefly set out the main reasons. First, the action by Scarborough Borough Council against GEN was a separate action commenced some five months after the action between Holbeck and Scarborough. The third party claim was in contract and in negligence, claiming a contribution. A claim in contract was admitted at the beginning of the trial as being statute barred. Scarborough abandoned the majority of its original pleaded breaches against the third party GEN before judgment, and, on the thirteenth day of trial, changed its case radically to plead what it described as negative reliance and negative breach. What it meant by that was simply that there was an insufficiently clear warning in the GEN report.
Most importantly, GEN's report was not read or, if it was read, it was not followed by Scarborough. That is important because it was within the sole knowledge and province of Scarborough when it started to commence the action against GEN.
: He made no finding.
He said, "I did not have to make a finding", but in fact it was not a finding. We cannot say whether it was read or not. Whether it was read or not, it was not followed. We do not know whether it was read or not because the judge did not make a finding. There is copious reference in the judgment to that effect. Whether it was read or not is, in a sense, immaterial. If it was not followed it is as if it was not read. The only people who had that knowledge was Scarborough. Their case was fatally flawed from the beginning. If they had not followed the recommendations what possible basis was there for suggesting that GEN was ever going to be liable. There is no appeal from any of those findings. The nub of my submission is that the decision to join GEN, in circumstances where the report was either not read or if it was read was not followed, is irrational or at least unreasonable and did not arise as anything in Holbeck's claim.
My friend has drawn attention to the way Holbeck pleaded its case. What must be remembered is that Holbeck, until the incident had occurred, had no knowledge of the GEN report. It acquired the GEN report after the incident and pleaded that as something that either they were aware of or of which they ought to have been aware. It could not know whether Scarborough had actually implemented anything. That was within the sole province of Scarborough. That had nothing to do, so I say, with Holbeck and nothing to do with this case. Whether they had read it or not —in fact your Lordship's judgment dealt with "ought to have known" —was irrelevant in those circumstances. But it was relevant as to whether to join in GEN. Those were the core grounds.
What I say in detail is this. In relation to the pleadings, the writ was actually issued in the Holbeck action in May 1995. Scarborough did not issue its writ in the GEN action until about October of that year. It was not until the early part of the following year that the actions were consolidated. At the outset the breach of contract claim allegation was withdrawn. In Holbeck's opening we describe the claim made by Scarborough against GEN as hopeless. I maintain that submission today....
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