Joanne Dunhill (A Protected Party by her Litigation Friend, Paul Tasker) v Shaun Burgin (No 2)

JurisdictionEngland & Wales
JudgeMr Justice Bean
Judgment Date09 November 2012
Neutral Citation[2012] EWHC 3163 (QB)
Docket NumberCase No: BY 020529
CourtQueen's Bench Division
Date09 November 2012

[2012] EWHC 3163 (QB)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

MANCHESTER CIVIL JUSTICE CENTRE

Before :

Mr Justice Bean

Case No: BY 020529

Between:
Joanne Dunhill (A Protected Party by her Litigation Friend, Paul Tasker)
Claimant
and
Shaun Burgin
Defendant

Marc Willems (instructed by Potter Rees Limited Manchester) for the Claimant

James Rowley QC and Matthew Stockwell (instructed by Keoghs LLP Bolton) for the Defendant

Hearing dates: 3—4 October 2012

Mr Justice Bean
1

The Civil Procedure Rules provide that where a claim is made by or on behalf of a party who lacks capacity to conduct the proceedings (a child or protected party), no settlement of that claim shall be valid without the approval of the court. The issue in this case is whether the rule applies to a personal injury claim, settled at the door of the court, where at the time of the settlement the claimant was not known to lack capacity. Although the "compromise rule", as Lord Pearson described it in Dietz v Lennig Chemicals [1969] 1 AC 170, has existed for over 100 years, this question has never been authoritatively decided.

The history of this claim

2

Joanne Dunhill was injured in a traffic accident on 25 th June 1999. As she crossed the first half of a dual carriageway on foot she was struck by a motorcycle ridden by Sean Burgin. She suffered a fractured skull.

3

On 13 th May 2002 proceedings were issued on her behalf in the Barnsley County Court seeking damages limited to £50,000. There was a claim for general damages, and for special damages totalling £2,262.96. A defence was served denying liability and alleging contributory negligence. Directions were given on 3 rd September 2002 for liability to be tried before quantum.

4

The trial of liability was listed to take place before His Honour Judge Swanson at Sheffield on 7 th January 2003. Both parties were represented by counsel and solicitors and the claimant was also accompanied by a mental health advocate. A negotiated settlement was reached "in the corridor" in the sum of £12,500. This agreement was mentioned to the judge and a draft consent order handed in. The judge was not asked to approve the settlement, simply to order by consent that judgment be entered for the agreed sum and costs, with an order for detailed assessment of the claimant's Community Legal Service costs.

5

Some time later doubts emerged about the claimant's capacity. It was alleged that at the time of the compromise she had been a patient within the meaning of the Mental Health Act 1983. (The terminology has changed pursuant to the Mental Capacity Act 2005 from "patient" to "protected party", but the change does not affect the point in issue.) In December 2008 Ms Dunhill, this time acting by a litigation friend, issued proceedings in negligence against her counsel and solicitors who represented her on 7 th January 2003. That claim has been stayed and is not before me today.

6

On 11 th February 2009 the claimant, again by a litigation friend, issued an application in the original 2002 proceedings seeking a declaration that she did not have capacity at the time of the purported settlement of her claim on 7 th January 2003 and, on that basis, applying for the 2003 order to be set aside and directions given for the future conduct of the claim. The following month the case was transferred to the High Court.

7

On 19 th April 2010 a case management conference was held before Hickinbottom J. He gave a direction for the following issues to be tried as preliminary issues and heard consecutively by the same judge:—

(1) "Did the compromise and consent judgment made/entered on 7 th January 2003 in claim BY 020529 in the Barnsley County Court require court approval?"

(2) "If it did require approval, should it be approved now?"

The order recites that each of these wordings was proposed "without fettering the trial judge's ability to rephrase the preliminary issue." It also made provision for expert evidence and gave other directions with a view to a five day trial of the specified issues in early 2011. It appears that in the event only three days were allocated, namely 9 th– 11 th February 2011. By this time the potential issue of retrospective approval had fallen away. The claimant was contending that the true value of the claim on full liability exceeded £2 million; the defendant's figure, again on full liability, was approximately £800,000.

8

The defendant's skeleton argument dated 7 th February 2011 made detailed submissions on the issue of capacity. But it also raised the issue of "whether CPR Part 21 bites on cases like the present where a claimant issues proceedings in her own name, without a litigation friend, and reaches a compromise when the defendant does not know of the alleged incapacity". Mr James Rowley QC, who acted then as now for the defendant, submitted that if CPR Part 21 was inapplicable, there had been no requirement for the January 2003 compromise to be approved; and the settlement could therefore not be reopened.

9

I will call this argument the Imperial Loan point: it derives from the decision of the Court of Appeal in The Imperial Loan Company Ltd v Stone [1892] 1 QB 599 which, as the headnote records, held that:—

"Where a defendant in an action of contract sets up the defence that he was insane when the contract was made he must, in order to succeed in this defence, show that at the time of the contract his insanity was known to the plaintiff."

10

The skeleton argument was served two days before the trial of the preliminary issue on capacity was due to begin. At that stage, I am told, there was a potential dispute as to whether the defendants' representatives were on notice of Mrs Dunhill's possible incapacity. Since that could not be ascertained in the short time remaining before the trial, and since in any event the capacity issue seemed likely to (and did) occupy the three days allotted, the Imperial Loan point was not resolved at that hearing. Silber J held that the claimant did have capacity to enter into the compromise agreement embodied in the consent order of 7 th January 2003: [2011] EWHC 464 QB. He therefore dismissed the claim for a declaration: and had that decision stood, the Imperial Loan issue would have been academic. It ceased to be academic when Silber J's decision was reversed on 3 rd April 2012 by the Court of Appeal (Ward and Lewison LJJ and Sir Mark Potter) [2012] EWCA Civ 397; [2012] PIQR P15. The court granted "a declaration that the claimant did not have capacity at the time of the purported settlement on 7 January 2003". The claim was referred back to the High Court for "case management". There is no mention in the judgments of the Imperial Loan argument. The defendant applied to the Supreme Court for permission to appeal, and at the time of the hearing before me that Court's decision was awaited.

11

On 11 th July 2012 Hamblen J gave directions for the trial of the remaining preliminary issue, which "without prejudice to the potential for later refinement by the Court" was formulated as follows:—

"The Court having declared that the Claimant lacked capacity to enter into the compromise agreement of 7 th January 2003 and the Defendant declining to ask this Court to approve the compromise retrospectively, does CPR Part 21.10 have any application where the Claimant brought a claim in contravention of CPR Part 21.2 so that in the eyes of the Defendant and the Court she appeared to be asserting that she was not under a disability?"

It is common ground that if the claimant fails on that issue the present claim will be at an end; but even if she succeeds the case will have to go for trial on liability and quantum.

Masterman-Lister v Brutton and Bailey v Warren

12

The issue before me has been considered, but not decided, in two cases in the Court of Appeal. In Masterman-Lister v Brutton and Co [2003] 1 WLR 1511 there had been a trial before Wright J of the issue of whether the plaintiff had lacked capacity at the time of compromising his personal injury claim. Wright J found that he had not, and that conclusion was upheld in the Court of Appeal in a detailed judgment of Kennedy LJ. Chadwick LJ agreed, but also said, with the concurrence of Potter LJ:—

"[63]Litigation is conducted in accordance with rules of court. It is no surprise, therefore, that the Rules of the Supreme Court (RSC) have made provision, since first promulgated in the First Schedule to the Supreme Court of Judicature Act 1875, for the conduct of actions by and against persons of unsound mind. Order XVIII of those rules provided that, in all cases where persons of unsound mind not so found by inquisition might have sued or been sued before the Supreme Court of Judicature Act 1873, they might sue in any action by their next friend 'in manner practised in the Court of Chancery' before the 1873 Act and might defend any action by their guardian ad litem. The practice in the Court of Chancery before 1873 was explained in the judgment of James LJ in Beall v Smith (1873) 9 Ch App 85 at 91–92:

'The law of the Court of Chancery undoubtedly is that in certain cases where there is a person of unsound mind, not so found by inquisition, and therefore incapable of invoking the protection of the Court, that protection may in proper cases, and if and so far as may be necessary and proper, be invoked on his behalf by any person as his next friend … It is not by reason of the incompetency, but notwithstanding the incompetency, that the Court of Chancery entertains the proceedings.'

[64] The RSC 1965 were made under the power conferred by s 99(1) of the Judicature Act 1925 (now found in s 84(1) and (2) of the Supreme Court Act 1981). The power is to regulate and prescribe practice and procedure. There is no reason to think that the rule-making body intended—or had power—to alter the substantive law as to the test of mental...

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5 cases
  • Dunhill v Burgin
    • United Kingdom
    • Supreme Court
    • 12 March 2014
    ...matters appeared at the time. Hence the settlement was void, the court order should be set aside and the case should go for trial: [2012] EWHC 3163 (QB); [2012] 1 WLR 10 Between the hearing before Bean J in early October 2012 and his judgment in November 2012, this court had given the def......
  • Geraldine Nolan v Joseph Carrick and Others
    • Ireland
    • High Court
    • 25 October 2013
    ...v Brutton and Company (Nos 1 and 2) [2003] 1 WLR 1511; Fitzpatrick v KF [2008] IEHC 104, [2009] 2 IR 7; Dunhill v Burgen (No 2) [2012] EWHC 3163 (QB), [2012] 1 WLR 3739; Presho v Doohan [2009] IEHC 631, (Unrep, Murphy J, 29/4/2009) considered - Rules of the Superior Courts 1986 (SI 15/1986......
  • Joanne Dunhill (by her Litigation Friend Paul Tasker) v W. Brook & Company (A Firm)
    • United Kingdom
    • Court of Appeal (Civil Division)
    • 15 March 2018
    ...That issue was decided by Bean J in Ms Dunhill's favour with the result the settlement was held to be void and had to be set aside: [2012] EWHC 3163 (QB); [2012] 1 WLR 3739. Thereafter, the decisions of the Court of Appeal and Bean J were further litigated in the Supreme Court which dismi......
  • MAP v RAP (Consent Order: Appeal: Incapacity)
    • United Kingdom
    • Family Division
    • Invalid date
  • Request a trial to view additional results

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