Leonard (Cyril) & Company v Simo Securities Trust Ltd
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE RUSSELL,LORD JUSTICE SACHS,LORD JUSTICE STAMP |
| Judgment Date | 12 October 1971 |
| Judgment citation (vLex) | [1971] EWCA Civ J1012-5 |
| Court | Court of Appeal (Civil Division) |
| Date | 12 October 1971 |
[1971] EWCA Civ J1012-5
In The Supreme Court of Judicature
Court of Appeal
(On appeal from Order of Mr. Justice Plowman)
Lord Justice Russell
Lord Justice Sachs
Lord Justice Stamp
MR. B. ANNS, instructed by Messrs. Linklaters & Paines appeared for the Appellants (Defendants).
MR. N. C. H, BROWNE-WILKINSON, instructed by Messrs. Stephenson, Harwood & Tatham, appeared for the Respondents (Plaintiffs).
This appeal arises in an action for alleged wrongful determination of the plaintiff company's contractual position as managing agents for the 42 property owning companies who are a group consisting of the first named defendant, a holding company, and 41 other defendants who are either 100 percent or to a lesser degree subsidiaries of the first defendant.
The nature of the action may perhaps best be summarized by reference to the pleadings. In the statement of claim, by paragraph 2, it is said that for many years the plaintiffs acted as managing agents for the properties of the group consisting of the defendant companies, latterly on terms approved by the Board of the first defendant in January 1968.
Paragraph 3 asserts that an agreement is contained in correspondence in February 1970 that the plaintiffs would render management and other services to the group on the following terms: first of all, that the managership was only to be determinable on 12 months' notice; the plaintiff was to be the sole agent in respect of all sales and lettings of the properties of the group, to be remunerated in accordance with the Chartered Surveyors Scale; and that other professional work with respect to properties managed by the plaintiff was to be performed on terms previously agreed. Then it dealt with the question of after-acquired properties of the group and entitlement to charge fees in respect of such after-acquired properties, by way of commission on gross rents at rates specified in schedules.
Then by paragraph 4 it was alleged that wrongfully and in breach of contract the first defendant on behalf of the group in April 1970 alleged that the agreement of February 1970 was not binding on the group, and by paragraph 5 it was asserted that by letter of the 18th Hay 1970, from the first defendants' solicitors to the plaintiffs' solicitors, the first defendant wrongfully and in breach of the agreement of February 1970 gave notice terminating forthwith the said agreement and any other agreement subsisting between the group and the plaintiff. There is a claim for damages for breach of contract.
When you come to the defence it is admitted that the plaintiffs were retained as managing agents for reward by the defendants for many years until May 1970. In paragraph 3 it says that the terms "were Casual terms upon which estate agents managed property (save that various additional or substituted terms were agreed between the parties from time to time) and in particular the plaintiffs agreed to exercise due care, skill and diligence in the managing of the defendants' properties". Subject to that they denied entering into any agreement as alleged in paragraph 3 of the statement of claim. They admit the letters but they deny they were in breach of any agreement.
Then in paragraph 7 they say: "If which is denied there was an agreement as alleged in paragraph 3 of the statement of claim the defendants were entitled to terminate the same by reason of the failure of the plaintiffs to exercise due care, skill and diligence in the managing of the defendants' properties.
Then what are called particulars are set out in six sub-paragraphs. I may summaries them as follows: first,failure the plaintiff to collect on the defendants behalf monies due to them in respect of rent, maintenance charges, insurance premiums and the like; secondly, failure regularly or at all to inspect the defendants' profits; thirdly, failure to carry out or have carried out sufficiently any necessary repairs, renewals, or general maintenance of the defendants, properties; fourthly, failure to ensure that leases which they negotiated on behalf of the defendants contained the normal tenants covenants, provided for the payment of rent at the market rate, contained rent revision clauses and were so drawn that management expenses incurred by the defendants would be as low as possible; fifthly, they failed to ensure that shops with residential accommodation above were let to one and the same tenants; and sixthly and finally, they failed to enforce on behalf of the defendants various tenant's covenants in respect of which the tenants were in breach.
The pleading goes on to say: "The defendants are unable to provide full and proper particulars of the foregoing until either the plaintiffs return to the defendants all files of documents relating to the defendants' properties, or until after discovery herein".
It is common ground that at some stage in the proceedings the plaintiff is entitled to particulars of those allegations of mismanagement. The defendants say that many particulars can in fact now be given, but the defendants assert that the proper stage for giving such particulars has not been reached: that there should first be, which there has not been yet, a summons for directions and an order for discovery.
Mr. Justice Plowman, from whom the appeal lies, considered that the defendants ought at this stage to give such particulars as they can, I would think this is right in a case where there is such a total lack of relevant detail, although, ordinarly speaking, the proper occasion for an order for particulars is not before the summons for directions, I would think it right that such an order should be made in this case and the fact that this may lead thereafter to the coming into existence of several documents or more than one document containing particulars of the alleged breaches is not I think any real disadvantage, because it will be perfectly easy later to amalgamate the whole into one document. I myself would be anxious not to encourage a pleading such as the present which on the surface merely alleges mismanagement and then in perfectly general terms states almost every act or omission which could be embraced in mismanagement without condescending on any occasion to detail. Nor am I persuaded to take the other view by the fact that the plaintiffs are continuing to assert in respect of unpaid charges a lien on the defendants' documents relating to their properties and the management thereof, as it appears that inspection of those documents in the hands of the plaintiffs has been afforded to the defendants.
I should perhaps interject here for a fuller understanding of the whole matter this fact: the first defendant is or was a public quoted company which was subject to a take-over bid. The two senior partners or senior directors in the plaintiff company, who are estate agents, had been previously directors of all or some, including the first defendant, of the defendant companies up to the time of the take-over.
Going back to the matter now in dispute, the plaintiff asked for and obtained an order not merely in general terms that the defendant should give the best particulars of their allegations which at present they could, but asked for and obtained an order in a limited form. She form of order for which they asked and which Mr. Justice Plowman ordered is this: "Of the allegation that the defendants were entitled to terminate the agreement by reason of the failure of the plaintiffs to exercise due care, skill and diligence, specifying all such failures of the plaintiffs known to the defendants at the date of such termination and relied upon by the defendants as entitling them to terminate the agreement, stating in relation to each such failure (a) the property in question, (b) all facts and matters relied upon as constituting such failure", That limited form is irrelevant except upon the basis of a legal contention which is advanced by the plaintiff which the learned judge declined to rule upon The plaintiff said that the law Is that a party may not prematurely terminate a contract such as the contract alleged in this case unless grounds known to the party at the time of the determination justify that determination The party, it is said, may not rely for this purpose on facts discovered by it after the determination that would either alone or together with the previously known facts justify a premature determination.
In my view this question of law ought to be decided now. As I understand it, both parties would...
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