Metroinvest Ansalt v Commercial Union Assurance Company Ltd

JurisdictionEngland & Wales
Judgment Date02 November 1984
Judgment citation (vLex)[1984] EWCA Civ J1102-1
CourtCourt of Appeal (Civil Division)
Docket Number84/0403
Date02 November 1984
Metroinvest Ansalt
First Plaintiffs (Appellants)
John Evan Hardy Saywell
John Allan Ernest Smith (Trustees of Miss Lewis)
Second Plaintiffs (Appellants)
Commercial Union Assurance Company
Defendants (Respondents)

[1984] EWCA Civ J1102-1


Lord Justice Cumming-Bruce


Lord Justice Slade


1982 M No. 2262







Royal Courts of Justice

MR. BRUCE REYNOLDS (instructed by Messrs. Chethams, Solicitors, London WC2N 6EG) appeared on behalf of the Plaintiffs (Appellants)

MR. CRAWFORD LINDSEY (instructed by Messrs. Herbert Smith & Co, Solicitors, London EC4M 5SD) appeared on behalf of the Defendants (Respondents)


This is an appeal by plaintiffs in an action from the judgment and order of Mr. Recorder Collins sitting as Deputy Official Referree, made on 21st May 1984, when he ordered that the sum of £23,500 then standing in court to the credit of the action be paid out to the defendants' solicitors forthwith. The order sought from this court is that that judgment and order may be reversed and that the sum may be paid by the defendants to the plaintiffs' solicitors forthwith, with consequential orders as to costs.


The proceedings before the learned deputy official referee and before this court raise two questions on the construction and effect of Rules of the Supreme Court O.2.


The facts may be concisely summarised as follows: On 30th June 1982 the plaintiffs issued the writ endorsed with a statement of claim, which they served a few days later upon the defendants. By their writ they claimed under a contract of insurance either the sum of £77,000 representing the loss on a fire policy, or alternatively damages; the claim was founded on the allegation that property of the plaintiffs at 44 High Street, Hounslow had been destroyed by fire, which gave rise to their contractual rights. In the statement of claim they pleaded the value of the property prior to the fire of £95,000; the site value after the fire was £10,000, so that the resulting loss was £85,000 and they claim £77,000 as their right under the policy, that being a sum less than the loss they had suffered.


The defendants pleaded a defence. By that pleading they put forward no affirmative case and on 21st January 1984, on an application for judgment under O.14 on liability, an order was made by consent: Judgment for plaintiffs on liability; damages to be assessed with interest, and the assessment was transferred to the Official Referee.


Also in January 1984 the plaintiffs disclosed to the defendant an expert report which they had received, which explained the calculations pleaded in the statement of claim. That report set out the opinion of the chartered surveyors upon whom the plaintiffs were relying. It set out their appreciation of the value of the premises and their approach to the capitalization of the loss. This they arrived at by quantifying the rental value of the premises in proper condition at £8,500 per annum, which they multiplied up, less allowance for the repairs necessary to put the premises into the state in which that market rent would be obtained. That resulted in a deduction of £11,000; so the capital value that they put forward was £95,000; and as the site value was regarded as £10,000 the claim pleaded in the statement of claim was thus explained. So in January the plaintiffs gave the defendants that explanation of the foundation of their claim for loss and damage.


On 15th April 1984 directions were given for the interlocutory preparation of the assessment of damages by the Official Referee. The order was: Mutual discovery by list, to be completed on or before 1st May 1983, with inspection thereafter. The hearing date was fixed as 21st May 1984. After a year's delay on 17th April 1984 His Honour Judge Newey ordered plaintiff's lists by 27th April 1984 and in default he ordered that the plaintiffs' claim should be struck out. On 26th April the plaintiffs served their list, and without awaiting inspection, on the next day, 27th April, the defendants paid into court in satisfaction of the plaintiffs' claims the sum of £23,500. The explanation of the date of payment into court was that that was the latest date on which the payment into court, if accepted, would be effective in relation to costs for the purposes of the trial fixed to begin on 21st May.


On 1st May inspection took place, and on 18th May His Honour Sir William Stabb, on the application of the defendants, made an order that the plaintiffs should serve a supplemental list of documents in two categories which were specified in the order:

"All correspondence passing between the plaintiffs their servants or agents and the planning department of the London Borough of Hounslow concerning applications for development at 44 High Street Hounslow", and documents relevant thereto


and also

"All correspondence passing between the second plaintiffs agent, Messrs. White Druce & Brown and the London Borough of Hounslow on the subject of the rating valuation of (the property). Such List to be served by 10 a.m. on Tuesday 22nd May 1984"—that is to say, the second day of the prospective trial.


At 4.19 p.m. on 18th May the plaintiffs gave notice to the defendants of acceptance of the money in court. The letter, which was addressed to the defendants' solicitors, is headed " Metroinvest Ansalt v. Commercial Union" and it reads:

"We write to inform you that we have today accepted the payment into court. Kindly accept this letter as appropriate notice".


It is to be observed that that notice does not comply with the provisions of O. 22 r.3, because by sub-rule (1) of that rule, where money is paid into court, then, within 21 days after receipt of notice of payment but before the trial, the plaintiff may, where they money was paid in respect of the cause of action, accept the money in satisfaction of that cause of action by giving notice in Form 24 in Appendix A to every defendant to the action. Form 24 is prescribed to be in the following form: Heading as in the action; then:

"Take notice that the plaintiff accepts the sum of £paid in by the defendant in satisfaction of the cause of action in respect of which it was paid in and in respect of which the plaintiff claims against the defendant. Dated the day of".


It is immediately apparent, and is not in contest, that the notice that the plaintiffs gave on 18th May did not comply with the form prescribed by the rules.


On the same day, 18th May, the defendants decided that they had been alerted, by information they had received from a scrutiny of documents in the possession of the district surveyor, that the value of the property immediately preceding the fire was significantly less, or might be significantly less, than the value attributed to the premises in the letters written to the plaintiffs by their chartered surveyors in January, a copy of which had been sent to the defendants. On the evidence before the judge there was ample material, if he decided to accept it, leading to the inference that the defendants would never have dreamed of paying £23,500 into court if they had known the views of the District Surveyor.


The matter goes much further. On the material in evidence before the learned Deputy Official Referee there was abundant evidence to show that if the documents which were listed belatedly in the supplemental list of the plaintiffs and thereafter inspected by the defendants had been listed in accordance with the original order for directions relating to discovery made by Sir William Stabb, it was most unlikely that the defendants would have decided to take the course that they did take when they paid £23,500 into court on 27th April 1984.


I think that summarises the relevant facts, with one fact of importance which has to be added. It was not contended before the Deputy Official Referee, and it has not been submitted to us, that the defendants were prejudiced by the fact that the notice of acceptance of payment into court that they received failed to comply with Form 24.


On this appeal Mr. Reynolds, on behalf of the appellant, has made two submissions upon the construction and effect of O.2 of the Rules of the Supreme Court. His first submission is this: That the failure to give a notice strictly complying with the form prescribed in Form 24 was an irregularity, and on a proper construction of the provisions of O.2 an irregular step in an action, or an irregular thing done in an action, is valid inter partes unless and until it is set aside. At 4.19 p.m., when the plaintiffs gave notice to the defendants of acceptance, the solicitors for the defendants informed them that they did not regard it as a good notice of acceptance. So on 21st May both parties appeared before the Deputy Official Referee each seeking an order that they be permitted to take the money out of court. The plaintiffs admitted that their notice of acceptance had been irregular in form, but submitted that it was valid on 18th May because it had not been set aside, and until it was set aside it was, inter partes, for all purposes a valid notice of acceptance.


So I come to the terms of O.2 rules 1 and 2 which I quote:

"l.-(l) Where, in beginning or purporting to begin any proceedings or at any stage in the course of or in connection with any proceedings, there has, by reason of any thing done or left undone, been a failure to comply with the requirements of these rules, whether in respect...

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1 books & journal articles
    • Singapore
    • Singapore Academy of Law Journal No. 1992, December 1992
    • 1 December 1992
    ...The court ruled that this was nonetheless effective service in view of the fact that the tenant actually received the notice. 103 [1985] 1 W.L.R. 513 at 521F. 104 [1967] 2 Q.B. 729 at 735. 105 [1989] 3 M.L.J. 385. 106 [1974] 8 S.A.S.R. 451. 107 supra. 108 [1978] 1 N.S.W.L.R. 463; (1978) 3 A......

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