Laws and Others and The Society of Lloyds
| Jurisdiction | England & Wales |
| Judge | Lord Justice Waller |
| Judgment Date | 19 December 2003 |
| Neutral Citation | [2003] EWCA Civ 1887 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A3/2003/1251/A3/2003/1328A3/2003/1487/A3/2003/1496 A3/2003/1607/A3/2003/1609 A3/2003/1611/A3/2003/1616 A3/2003/1617/A3/2003/1618 A3/2003/1619/A3/2003/1620 A3/2003/1487(A) |
| Date | 19 December 2003 |
[2003] EWCA Civ 1887
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
MR JUSTICE COOKE
Royal Courts of Justice
Strand,
London, WC2A 2LL
Lord Justice Waller
Lord Justice Chadwick and
Lord Justice Clarke
Case No: A3/2003/1251/A3/2003/1328A3/2003/1487/A3/2003/1496
A3/2003/1498A3/2003/1580
A3/2003/1607/A3/2003/1609
A3/2003/1611/A3/2003/1616
A3/2003/1617/A3/2003/1618
A3/2003/1619/A3/2003/1620
A3/2003/1487(A)
Bernard Weatherill QC, Gordon Nardell (instructed by More Fisher Brown and Grower Freeman) for the Appellants (UNO Names only)
Charles Aldous QC, David Anderson QC, DavId Foxton (instructed by Freshfields Bruckhaus Deringer solicitors) for the Respondent
Bernard Weatherill QC, Gordon Nardell (instructed by More Fisher Brown and Grower Greeman solicitors) for the Appellants (UNO Names only)
Charles Aldous QC, David Anderson QC, David Foxton (instructed by Freshfields Bruckhaus Deringer solicitors) for the Respondent
Mr S M Butler, Mrs C J Mackenzie Smith, Mr Doll-Steinberg for Mrs Doll-Steinberg, Mrs A G Strong, Mrs E A Reisz and Mr Wilson (for himself and his wife) in person
Introduction
This is a further chapter in the Lloyd's Litigation. Certain Names who did not accept R&R have been pursued by Lloyd's for the Equitas premium, and have responded with claims against Lloyd's. In a judgment in the Commercial Court in Jaffray v The Society of Lloyd's Cresswell J spelt out the full background. By that judgment he held that Lloyd's made no representations to the Names, and in addition held that even if they had, the representations were not fraudulent. This court on appeal held that Lloyd's had made representations in brochures issued annually but confirmed that Lloyd's had not been fraudulent. Following that decision the Names, relying on the representations held by this court to have been made, applied to amend their pleadings to allege negligent misrepresentation or misrepresentation contrary to section 2 of the Misrepresentation Act 1967 ("the 1967 Act"). That application, as it was always recognised it would, faced resistance from Lloyd's, both by reference to section 14(3) of the Lloyd's Act 1982 ("the Lloyd's Act") in relation to Names who commenced their underwriting after the coming into force of the Lloyd's Act, and in relation to all Names by reference to the Limitation Act 1980 ("the 1980 Act").
As at October 1996 (the date of commencement of the Jaffray proceedings) the Names, following decisions in other cases, had accepted that section 14 of the Lloyd's Act would defeat any claims other than a claim in fraud. We append a copy of that section to this judgment. Putting it shortly for the moment, two key issues arose. (1) Could post Lloyd's Act Names rely on the coming into force of the Human Rights Act 1998 ("the HRA") and section 3 of that Act, in order to place a construction on section 14 of the Lloyd's Act which would allow for a claim in damages for negligent misrepresentation or misrepresentation under the 1967 Act? (2) Was there any way in which the Names could overcome the limitation defences that would be raised by Lloyd's?
Cooke J heard the applications to amend over 11 days. He held that section 3 of the HRA could not be relied on so as to provide a basis for arguing that a different construction should be placed on section 14 of the Lloyd's Act. He held that the date of the coming into force of the Lloyd's Act was July 1982 (not January 1983 as alleged by the Names). He held therefore that claims both in negligence and under the 1967 Act of any name commencing underwriting after July 1982 would be defeated under section 14 of the Lloyd's Act and were thus doomed to failure. He held in any event that, in relation to Names who had not previously alleged any negligent misrepresentation but only fraud after the Lloyd's Act came into force, the proposed amendment did not arise out of the same or substantially the same facts.
The judge said that Names who (as in the Sir William Jaffray pleading) had previously pleaded negligent misrepresentations in brochures prior to the coming into the force of the Lloyd's Act, and who were now seeking to amend to allege representations in the form found by the Court of Appeal, were pleading causes of action arising out of the same facts or substantially the same facts within the meaning of section 35(5) of the 1980 Act. He found however that on any view by virtue of section 14B of the 1980 Act there was a longstop of 15 years and thus no name could rely on a representation occurring more than 15 years before the commencement of proceedings to which they attributed damage. He held therefore that there was a potential window for certain Names who could demonstrate that they relied on a representation in a brochure within 15 years prior to the commencement of the relevant proceedings (October 1981 in relation to the proceedings against Sir William Jaffray and others sued at the same time as Sir William Jaffray, and a little later for all others) and commenced underwriting before July 1982.
He held that in any event these Names should only be allowed to amend their pleadings if they could demonstrate that they did not have the requisite knowledge under section 14A of the 1980 Act more than three years prior to the commencement of the relevant proceedings. He required further particularisation. There is to be a further adjudication by Cooke J in January 2004 on the question of knowledge and on the question as to which Names who commenced underwriting prior to July 1982 could arguably come within the window.
The overall effect of his decision was that some 36 Names who had commenced their underwriting at Lloyd's before July 1982 would have the opportunity of establishing that they fell within a window commencing 15 years prior to the commencement of the relevant proceedings (i.e. 11th October 1981 for those sued at the same time as Sir William Jaffray, and later for all others), and July 1982, (the date of the coming into force of section 14 of the Lloyd's Act).
The Names applied for permission to appeal the decision of Cooke J. Waller LJ ordered that the matter be adjourned for an oral hearing with appeal to follow if permission were granted. This court heard argument over a period of seven days. It announced its decision on the Human Rights issue, and the date of the Lloyd's Act issue at the conclusion of the oral arguments and prior to the commencement of the Bankruptcy Appeal.
This is the judgment of the court, to which all have contributed, giving reasons for the decisions already announced and dealing with the other issues which were argued.
Principles to be applied in relation to the granting of permission to appeal
Permission to appeal may be granted on one of two grounds: either on the basis that there is a reasonable prospect of success (the arguability basis) or on the basis that there is some other compelling reason why permission should be granted (the other compelling basis). As already indicated we heard argument over some seven days. Three of those days involved arguments on the Human Rights issue. As we indicated when we announced our decision on that aspect, although we formed the view that it was not in fact arguable that the HRA could have the effect contended for by the Names, we felt it right to recognise that full argument had been allowed by granting permission to appeal on the otherwise compelling basis. The HRA point is key. It is furthermore a point where testing arguability needed fuller argument and longer consideration than what we might call the norm. It was a point on which we heard argument on both sides. Having regard to the unique nature of this litigation, we formed the view that it was right to grant permission to appeal on the other compelling reason basis and to treat the hearing as the appeal. There are other points where it is right to recognise their arguability, and permission to appeal will be given on that basis. There are yet other points (on which we did not need to trouble those acting for Lloyd's) on which we shall refuse permission to appeal.
Principles on leave to amend
There was ultimately little dispute as to the principles. Peter Gibson LJ said this in Cobbold v London Borough of Greenwich August 9 th 1999 CA:
"The overriding objective is that the court should deal with cases justly. That includes so far as practicable ensuring that each case is dealt with not only expeditiously but also fairly. Amendments in general ought to be allowed so that the real dispute between the parties can be adjudicated upon, provided that any prejudice to the other party or parties caused by the amendment can be compensated for in costs and the public interest in the efficient administration of justice is not significantly harmed."
The correct approach is accepted to be the same as that which a court would have to an application for a summary judgment. The test is whether the case which the Names seek to put forward has a reasonable prospect of succeeding or whether there is some other compelling reason why there should be a trial. On a summary application it is not right to conduct a mini-trial. It is important to recognise that the more complex the case the less likely it will be that the case can be disposed of summarily: Lord Hope in Three Rivers DC v Bank of England [2001] UKHL 16, [2001] 2All ER 513 paragraph 95. There is a distinction between those cases where there are issues of fact, those cases where the facts should be found before...
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