Kotonou v Reeves
| Jurisdiction | England & Wales |
| Judge | Mr Justice Mann |
| Judgment Date | 30 October 2015 |
| Neutral Citation | [2015] EWHC 4301 (Ch) |
| Date | 30 October 2015 |
| Docket Number | Case No: HC-2015-001269 |
| Court | Chancery Division |
[2015] EWHC 4301 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
The High Court of Justice
7 Rolls Buildings
Fetter Lane
London
EC4A 1NL
Mr Justice Mann
Case No: HC-2015-001269
Mr David Sears QC (instructed by Crown Office Chambers) appeared on behalf of the Claimant
Mr Alexander Hall-Taylor (instructed by Bond Dickinson LLP) appeared on behalf of the Defendant
Approved Judgment
This hearing is the determination of preliminary questions arising in this professional negligence action. The claimants in this action were represented by Mr David Sears QC and the defendant by Mr Alexander Hall-Taylor. Their submissions in this case were commendably brief and this application, despite a couple of hiccups, was conducted with commendable efficiency.
The action that is brought in this case is an action brought by two claimants whose status will appear in due course, against two apparent defendants, Mr Andrew John Reeves and J F Reeves & Co, Solicitors. The second defendant was effectively the firm or trading name of Mr Reeves and I can hereafter treat the defendants as being one and the same, which indeed in law I believe them to have been, and I shall refer to Mr Reeves. The claimants are husband and wife, Mr and Mrs Kotonou.
The background to the action is as follows. Mr Kotonou was involved, somewhat historically now, with a series of companies. I do not need to identify those companies. At some point in his shareholding he sought to buy some shares, or a remaining shareholding and subsidiary company, from a Mr Bullen.
As a result of events which took place, now some time ago, Mr Bullen acquired information about the future of the company in which he had shares as a result of which he was able to ask for more money than had originally been debated. That led to what was said to be various claims made by Mr Kotonou and/or some of the companies from whom Mr Kotonou took assignments. The names of the company and the assignments will appear in due course when I recite a further assignment which is germane to the issues that I have to decide. Suffice it to say for these purposes that Mr Kotonou took assignments of the benefit of various choses in action arising in general terms out of the events which I have described, from the liquidators or insolvency practitioners of the companies in question, and thereby acquired in his own name some choses in action. One of those assignments has, as I understand it, never come to light in the present proceedings or in the previous proceedings, but the other has. Nothing turns on their particular terms for the purposes of today.
On 19 January 2007 Mr Kotonou himself made another assignment. He assigned or purported to assign on various events the benefits that he had from the assignments which he had himself taken. I will come in due course to the form of that assignment, because its form is key to some of the questions that I have to decide. That assignment was said by Mr Kotonou to be an immediate and absolute assignment to his wife whilst reserving the right to control the assignments to himself.
In an action whose commencement date I am uncertain about, Mr Kotonou in his own name sought to enforce the rights of which he had taken an assignment under the two previous assignments to which I have referred. He asserted them against Mr Bullen, who was the person who was going to sell him shares. I do not know whether there were other defendants, but that does not matter. I can call that action the Bullen action. Despite the fact that either before or after it was commenced, I am not sure which, he had entered into the assignment of the benefit of those causes of action to his wife, he did not disclose the existence of the assignment in the Bullen action. He did not disclose it to his solicitor in that action, who was Mr Reeves. I assume it was not pleaded, though the first assignments must have been. If the assignment is valid in the terms and with the effect that Mr Kotonou contends, then Mrs Kotonou should have been or should have become the claimant in the Bullen action. She did not do so and Mr Kotonou remained the claimant.
The Bullen action was due to go for trial on 12 November 2007. As I have indicated, Mr Reeves was instructed by Mr Kotonou to act in that action and it is in relation to the conduct of that action, that the present professional negligence action arises.
By a notice dated 24 April 2007 bearing a date stamp of 26 April 2007, the court gave notice that the payment of the trial fee was now due. It was £500 and the notice contained the following wording:
“If the court does not receive payment (made payable to “HMCS”) or an application for exemption or remission of the fee within 14 days, the claim or counterclaim may be struck out.”
Thus the trial became due.
Mr Reeves sent one or more emails to Mr Kotonou asking for monies to pay that trial fee. There is still a dispute between Mr Kotonou and Mr Reeves, as to whether or not Mr Reeves needed more money, because Mr Kotonou says he had paid monies on account of various matters and enough monies were being held by Mr Reeves to enable him to pay that £500 trial fee. That is not a question that I need to resolve for the purposes of this application, but it is an important part of the background. Be that as it may, Mr Reeves did not pay that trial fee. He never paid the trial fee.
On 5 November 2007 the parties to that action, that is to say Mr Kotonou as claimant and the Bullen defendants as defendant, made a joint request to the court to adjourn the trial. It is plain that neither side were ready. It is equally plain that each side blamed the other, and in particular that the defendant blamed the claimant for failing to do that which the claimant needed to do in order to have the case ready for trial. It was nowhere near ready for trial. Discovery was not complete and witness statements had not been exchanged.
On 7 November 2007, HH Judge Marshall QC, not knowing about the non-payment of the trial fee, adjourned the trial date and gave directions for the matter to come before a judge before a further trial was to be fixed. Plainly she thought that the matter needed some supervision.
Two days later on 9 November 2007, HH Judge Latham, presumably in ignorance of the previous order made by HH Judge Marshall QC, made an order striking out the claim for want of payment of the trial fee. His order was to the effect that it was declared that the claim was automatically struck out for failing to pay the trial fee and paragraph 2 of the order provided that any application for relief from sanctions under the order must be made by application notice to be filed and served with evidence relied on under CPR 3.9.
Accordingly, the future of the action needed an application for relief from sanction to be made under CPR 3.9. It is quite plain that Mr Reeves appreciated this. Various email traffic took place from which that is apparent and in which he asked Mr Kotonou, inter alia, for funds relating to it, and other email traffic demonstrates Mr Kotonou reminded him that the application needed to be made. I shall come to the detail of that so far as relevant in due course.
Be that as it may, Mr Reeves did not start even drafting an application until September 2008 and did not issue it until 5 February 2009. When it was issued the application sought a half hour appointment. It was obvious to the court that that was insufficient time and the hearing date was vacated. A two hour hearing date was fixed, but that was vacated again when it became apparent that even two hours was not going to be sufficient.
On 3 June 2010 the matter came before Judge Marshall for a final hearing. She dismissed the application. She held it was too late and, again as will appear later in this judgment, placed heavy reliance on the impossibility then of a fair trial. The action therefore stood struck out. Mr Kotonou was ordered to pay the costs of the application. He was already liable to pay the costs of the action which stood struck out. Those costs liabilities led to Mr Kotonou's bankruptcy in September 2011 when the Bullen defendants used them as the basis of a bankruptcy petition which succeeded.
In that way Mr Kotonou lost the action which he had previously been maintaining. Eventually, on 26 February 2014, Mr Kotonou commenced the present action, which is a professional negligence action centred around the failure to pay the trial fee and the failure to make a sufficiently timeous application to recall the striking out of the action. In due course his claim attracted a Limitation Act defence. It was said that the causes of action accrued more than six years before the commencement of the action. That defence in due course attracted a reply in which s.32 of the Limitation Act was relied on so far as necessary.
All that has given rise to the preliminary questions which I am invited to decide. They were specified in an order of Deputy Master Bird on 18 February 2015. Those issues appearing at paragraph 3 of his order were as follows.
“The following preliminary issues will be tried between the Claimants and the Defendants:
(a) Whether the claim is statute barred save in respect of the costs incurred or paid away in the application for relief from sanctions and whether the claim is in any event statute barred for other reasons
(b) Whether the assignment to the Second Claimant said to be made by the First Claimant of the benefit of this claim:
(1) Is legally enforceable or effect anr/or
(2) Is not effective to...
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Canada Square Operations Ltd v Potter
...of duty … requires that [the defendant] be shown to have been aware at the time that what he was doing was a breach of duty”. Another is Kotonou v Reeves [2015] EWHC 4301 (Ch), where similar observations were made. Rose LJ commented at para 91 in relation to these latter two cases that the......
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Canada Square Operations Ltd v Potter
...1 WLR 29; [1973] 1 All ER 206, CAKitchen v Royal Air Force Association [1958] 1 WLR 563; [1958] 2 All ER 241, CAKotonou v Reeves [2015] EWHC 4301 (Ch)Ladd v Marshall [1954] 1 WLR 1489; [1954] 3 All ER 745, CALowsley v Forbes (trading as LE Design Services) [1999] 1 AC 329; [1998] 3 WLR 501;......