Jaffray v Society of Lloyd's
| Jurisdiction | England & Wales |
| Judge | Lord Justice Buxton |
| Judgment Date | 20 June 2007 |
| Neutral Citation | [2007] EWCA Civ 586 |
| Docket Number | Case No: A3/2005/1159 |
| Court | Court of Appeal (Civil Division) |
| Date | 20 June 2007 |
[2007] EWCA Civ 586
Lord Justice Buxton and
Lord Justice Moore-Bick
Case No: A3/2005/1159
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
IN THE MATTER OF VARIOUS APPLICATIONS
IN THE MATTER OF JAFFRAY v THE SOCIETY OF LLOYDS
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Philip Jenkins (instructed by Messrs Grower Freeman) for the main body of Applicants; Mr Kenneth Adams spoke with the leave of the court for Mrs Heather Mary Adams; Mr Sydney Michael Butler appeared in person
Mr David Foxton QC instructed by Messrs Freshfields Bruckhaus Deringer for the Respondent
Hearing date: 6 June 2007
This is the judgment of the court.
Background
These are unusual applications in an unusual case. The applicants seek, under the jurisprudence of Taylor v Lawrence [2003] QB 528, to reopen the decision of the court in this case [2002] EWCA Civ 1101. This court dismissed an appeal from Cresswell J [2000] All ER (D) 1674 in proceedings in which these and other applicants sought remedies in deceit against Lloyds. The terms of the representations said to found that deceit are in issue in one respect in this application, and we return to the point in §§ 54 and following below. For the moment, however, it suffices to say that the claim in this case, in the respects relevant to these applications, was that in the “brochure” published by Lloyds in 1981 and later years representations were made that Lloyds operated a rigorous system of auditing that enabled reasonable estimates to be made of the outstanding liabilities of syndicates, including unreported and unknown losses, and thus proper reserves to be made against those potential losses. On the strength of such representations the applicants, including the lead claimant in the action Sir W Jaffray, became underwriting members (“names”) of Lloyds. They suffered serious financial losses by becoming liable to compensate insureds in respect of the latter's liabilities for injury caused by earlier exposure to asbestos, the existence and extent of such pending liabilities not having been identified by the Lloyds accounting system, and thus not properly reserved against.
Cresswell J held that no relevant representations had been made. He was reversed on that issue by this court, which held that representations in the terms set out above had been made. This court further held (with, as the court said at §375 of its judgment, the benefit of hindsight) that those representations had been untrue. Cresswell J also held that, even if the alleged representations had been made, the names had not proved that Lloyds did not believe the representations to be true; nor had the names proved that Lloyds had been reckless as to whether the representations were true or false. This court upheld Cresswell J on those latter issues, and therefore in the event upheld his dismissal of the claims.
The names now assert that further evidence has come to light that shows that Cresswell J was misled by Lloyds evidence at the trial as to the state of its knowledge and belief, and thus this court, which necessarily based itself on that same evidence, was similarly misled. It will be convenient to mention here that the further evidence on which reliance is placed in this application is virtually the same as the evidence that is sought to be introduced into another appeal arising out of many of the same events and involving many of the same parties, Lloyds v Henderson [2005] EWHC 850 (Comm). In those proceedings Lloyds claims against various names in respect of liabilities as a result of policies written by them, which claims the names seek to resist because of misbehaviour, including fraud, on the part of Lloyds. In that action the names have an outstanding appeal to this court against a decision of Andrew Smith J refusing them permission to amend their pleadings to allege Misfeasance in Public Office against Lloyds (the alleged acts of misfeasance closely mirroring the acts of deceit alleged in this case), which also involves an application by the Names for permission to rely on the fresh evidence. That appeal is to be heard in the last week of July. It should have been heard last November, but was adjourned because on the day before the hearing the names parted company with counsel then instructed to argue the appeal. The present, Taylor v Lawrence, application had been filed at or about the same time as the appeal in Lloyds v Henderson, but the Taylor v Lawrence application was regrettably overlooked in the court's filing system, a matter for which the court has apologised to the names and to their representatives. That is why it only comes on now. The major number of the names concerned, conveniently referred to as the UNO names, are represented by the same solicitors and counsel both in Lloyds v Henderson and in this case.
This Taylor v Lawrence application is being heard in open court, and not disposed of simply on paper as is the usual practice, because it arises in a long-standing and highly contentious dispute, and also because of its substantial links with the appeal in Lloyds v Henderson. It must by no means be thought that this process, and the elaborate exchanges to which it has given rise, creates any sort of precedent for other Taylor v Lawrence applications, which will continue to be discharged by the summary process mandated by CPR 52.17.4.
Before us the UNO names made common cause, represented by Mr Jenkins of counsel. Two applicants addressed us on their own behalf, Mrs Adams, for whom her husband spoke, and Mr Butler. In response to a direction of the court that sought to impose some order on the proceedings the UNO names had submitted a 27 page statement of their case, and also, in addition to making reference to the further evidence that has been produced in Lloyds v Henderson, submitted a further witness statement, running to 34 pages of single-spaced typing, from one of their principal witnesses, Mr Stephen Merrett. Further, on the day before the application was heard the names submitted a further substantial statement, from which it became clear that the focus of the argument had shifted somewhat since its original formulation. In reply to the names' written arguments, Lloyds submitted a 56 page document, which additionally referred to the extensive written arguments in the forthcoming appeal in Lloyds v Henderson.
In order properly to understand the issues in this application it is necessary first to say something in general terms about the jurisprudence of Taylor v Lawrence.
Taylor v Lawrence and CPR 5.17
Mr Jenkins argued that since the application was made under CPR 5.17 the court should start from, and apply, the plain wording of that rule, and in particular the reference in CPR 52.17(1)(a) to appeals being re-opened “in order to avoid real injustice”. That general rule prevailed over any previous jurisprudence that might be argued to limit the jurisdiction to any particular category of cases, for instance where the earlier decision had been obtained by fraud. Accordingly, the court should not take time with analysis of Taylor v Lawrence itself, or of the cases underlying it, but should ask itself whether this appeal should be reopened in order to avoid real injustice in a broadly discretionary, essentially palm-tree, frame of mind.
That approach is quite misconceived. The CPR, being rules of court, cannot extend the jurisdiction of the court from that which the law provides, but can only give directions as to how the existing jurisdiction should be exercised. That is very trite law, but if authority is needed for the proposition it can be found in the speech of Lord Herschell LC in British South Africa Co v Companhia de Mocambique [1893] AC 602 at p 628. And quite apart from that general rule, it is apparent from the wording of CPR 52.17(1) (which speaks of the jurisdiction not being exercised unless various conditions, including avoidance of real injustice, are fulfilled) that, as the helpful commentary in vol 1 of Civil Procedure explains, it was passed to limit, and not to extend, the operation of the supposed jurisdiction under Taylor v Lawrence.
The applicants cannot therefore avoid, any more than can this court avoid, detailed analysis of the extent of this court's jurisdiction to re-open determined appeals.
The jurisdiction to re-open determined appeals: a summary
Taylor v Lawrence concerned (alleged) misconduct by a court, in that the judge was said to have been biased. There is no authority in that case for extending the recognition of jurisdiction to re-open an appeal on grounds of bias to a case such as the present, where the allegation is not that the court misbehaved, but that the court was misled by one of the parties; and there is authority directly denying the existence of jurisdiction in the latter case both in this court ( Flower v Lloyd (1877) 6 ChD 297) and in the House of Lords ( Jonesco v Beard [1930] AC 298), it being held in both of those cases that the proper remedy is to bring a collateral action to set aside the judgment allegedly obtained by fraud.
We have not felt able to act on that conclusion in the present application, even though what is in issue is a matter of jurisdiction, first because the point was not argued; and second because in a series of cases since Taylor v Lawrence this court has assumed, without the matter being argued out, that the jurisdiction of Taylor v Lawrence does extend to cases of fraud as well as to cases of bias. However, even on...
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