Marie Anne Nihill (A Minor) (Plaintiff v Alan Nihill and Others (Defendants
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE DUNN,LORD JUSTICE SLADE |
| Judgment Date | 22 June 1983 |
| Judgment citation (vLex) | [1983] EWCA Civ J0622-3 |
| Docket Number | 83/0276 |
| Court | Court of Appeal (Civil Division) |
| Date | 22 June 1983 |
[1983] EWCA Civ J0622-3
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
(MR. PAUL BAKER QC, SITTING AS A DEPUTY HIGH COURT JUDGE)
Royal Courts of Justice
Lord Justice Dunn
and
Lord Justice Slade
83/0276
1982 N No. 1122
MR. D. HALPERN (instructed by Messrs. Landau Cohen, Solicitors, Edgware) appeared on behalf of the Plaintiff (Appellant)
MR. A. STEINFELD (instructed by Messrs. Durrant Piesse, Solicitors, London EC2V 6ER) appeared on behalf of the Third Defendant (Respondent)
I have asked Lord Justice Slade to give the first judgment.
This is an appeal from an order made on 17th February 1983 by Mr. Paul Baker QC, as he then was, sitting as a Deputy High Court judge of the Chancery Division. By this order he struck out a statement of claim in an action, as against the third defendant in that action, and in the exercise of his discretion refused the plaintiff leave to amend the statement of claim so as to supplement the allegations contained in the original pleading, and also so as to raise an additional claim against that defendant.
The claim in the action arises out of the will of the late Mary Beatrice Nihill. The plaintiff, Marie Anne Nihill, who is a minor, is her grandchild; she sues by her mother and next friend, Anne Nihill. There are three defendants to the proceedings. The first defendant is the son of the testatrix, whose name is Alan Nihill; the second defendant, William Thomas Nihill, is the widower of the testatrix; the third defendant is a bank, Barclays Bank PLC.
By her will of 5th April 1978 the testatrix appointed the first and second defendants as her executors and trustees. She left all her personal property and chattels, including jewellery, and a legacy of £1,250 to the plaintiff; legacies of £1,000 to each of the first and second defendants, and the residue of her property to her executors and trustees upon trust for the plaintiff when she should attain the age of 25 years, with powers of advancement for the education and benefit of the plaintiff.
The testatrix died on 1st January 1980. Probate of her will was granted to the first two defendants on 8th May 1980. The net value of the estate, as sworn for probate, was £9,365.
On 7th June 1982 the plaintiff by her next friend issued a writ against the three defendants, claiming relief against all of them in respect of alleged breaches of trust. A statement of claim was in due course delivered. In paragraphs 1 to 3 the plaintiff pleaded the matters of history to which I have already referred. The remaining paragraphs of the body of the statement of claim read as follows:
"4. The First and Second Defendants have refused or failed to give the Plaintiff her legacy of £1,250 or the major part of the Deceased's personal property. The Plaintiff should have received inter alia a diamond ring, a gold chain, a gold bracelet, a cross and chain and four watches. The Plaintiff is unable to give further particulars before discovery herein.
"5. The First and Second Named Defendants have wasted the Deceased's Estate in that the sum of £5,250 or thereabouts was paid into an account in the name of the Trustees of Marie Anne Nihill Numbered 81338250 with the Third Defendant at 53–55 Maida Vale, London W.9. The First and Second Named Defendants have refused or failed to account for the balance of the Estate.
"6. Wrongfully and in fraudulent breach of trust the First or Second Named Defendants or both, have withdrawn £2,250 or thereabouts from the said Bank Account and not applied the same for the benefit of the Plaintiff. The Plaintiff is unable to give further particulars before discovery herein.
"7. In or about January 1982 the Plaintiff, and her next friend Anne Nihill saw an Under-Manager of the Third Named Defendant at 53/55 Maida Vale. She gave him the names of herself, the Deceased and the First and Second Named Defendants and told him that she had not received any monies out of the Deceased's Estate. The Plaintiff is unable to give further particulars of this conversation before discovery herin.
"8. In the premises the Third Named Defendant by its employee was given actual or constructive notice of the aforesaid fraudulent breach of trust and is therefore liable as constructive Trustee to account to the Plaintiff for all monies drawn out of the said Bank Account after the date of the said conversation".
Then by paragraph 1 of the prayer to this pleading, relief was sought against the first and second defendants in a form which the pleader thought appropriate to cover the alleged fraudulent breaches of trust by these two defendants; they consisted of orders for enquiries, payment, accounts and so forth. Then, in paragraph 2 of the prayer, there was sought against the bank an injunction restraining it from parting with any sums standing to the credit of the relevant bank account, and an enquiry. Paragraph 3 sought against each of the defendants damages, further or other relief and costs.
On 23rd December 1982 the bank issued a summons asking for an order striking out the pleading as against the bank, as disclosing, as against it, no reasonable cause of action. The relief was sought under Rules of the Supreme Court O. 18 r.19 and/or the inherent jurisdiction of the court.
On 27th January 1983 Chief Master Heward refused the bank the order sought, but I understand that he suggested that the plaintiff's advisers might consider certain amendments to the pleading advisable. The bank then appealed from the Chief Master's order and the appeal was heard by the judge on 17th February 1983. Certain proposed amendments of the pleading were put before him, which included an entirely new claim for negligence against the bank. I understand that the first the bank and its advisers had heard of the suggestion that any such claim was going to be put forward was the evening before the hearing. The judge considered that the existing pleading was demurrable as against the bank. He accordingly struck it out and also refused leave to amend it in the manner sought.
Mr. Halpern, on behalf of the plaintiff, has accepted before this court that the judge was right in concluding that the pleading in its original form was demurrable as against the bank. But in my opinion the pleading, in so far as it alleged a fraudulent breach of trust, was demurrable against all three defendants. I think I should explain why I have reached this conclusion, because it may help also to explain my conclusions in regard to the proposed amendments.
The first allegation of so-called fraudulent breach of trust is to be found in paragraph 6 of this original pleading, which I have already read. The judge described this as a "somewhat economical" pleading in respect of that very serious allegation. In my opinion this description is too generous to the pleader.
O. 18 r.12(l) of the Rules of the Supreme Court provides as follows:
"Subject to paragraph (2) every pleading must contain the necessary particulars of any claim, defence or other matter pleaded including, without prejudice to the generality of the foregoing words—
(a) particulars of any misrepresentation, fraud, breach of trust, wilful default or undue influence on which the party pleading relies; and
(b) where a party pleading alleges any condition of the mind of any person, whether any disorder or disability of mind or any malice, fraudulent intention or other condition of mind except knowledge, particulars of the facts on which the party relies".
Paragraph (2) of r.12 has no relevance for present purposes.
Paragraph (1) of r.12 embodies the general principle illustrated by the cases set out in the Notes to Rules of the Supreme Court 0. 18 r.12 in the Supreme Court Practice, 1982, that fraudulent conduct, which is a charge of a serious nature, must be distinctly alleged. In my opinion, in the present case, paragraph 6 of the original pleading contains no particulars sufficient to found an allegation of a fraudulent breach of trust, and the pleader himself said that the plaintiff is not presently in a position to give the relevant particulars. As the judge himself pointed out, the withdrawal of the £2,250 from the bank account would not in itself have been a breach of trust; nor would the failure to apply the same for the benefit of the plaintiff. As the judge rightly put it,
"the plaintiff, being a minor, is entitled to nothing immediately. She is not entitled to have that legacy paid out to her, and her other interests are contingent, so that she is only entitled at this stage to have discretionary powers of maintenance and advancement exercised in her favour in the discretion of the trustees".
If one disregards the words in paragraph 6, "wrongfully and in fraudulent breach of trust", the allegations in that paragraph are not inconsistent with entirely honest conduct on the part of the first and second defendants. They might, for example, have withdrawn the monies from the bank account for the purpose of paying trust expenses, or for the purpose of investment. In my opinion the allegations cannot be elevated to a good plea of fraudulent breach of trust merely by prefacing them with the words "wrongfully and in fraudulent breach of trust". On the face of it, paragraph 6 is not a merely defective pleading which can be cured by the delivery of the appropriate particulars, because the pleader says that he does not have them. In my view it is not proper to allege fraud...
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