Mohammed Hanif v Middleweeks (A Firm)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE ROCH,LORD JUSTICE MANCE |
| Judgment Date | 19 July 2000 |
| Judgment citation (vLex) | [2000] EWCA Civ J0719-10 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | B1/2000/0322 |
| Date | 19 July 2000 |
[2000] EWCA Civ J0719-10
Lord Justice Roch
Lord Justice Mance
B1/2000/0322
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM MANCHESTER COUNTY COURT
(His Honour Judge Tetlow)
Royal Courts of Justice
Strand
London WC2
MR C GIBSON QC and MR C PHIPPS (Instructed by Messrs James Chapman & Co, Manchester M2 4NH) appeared on behalf of the Appellant
MR B HYTNER QC (Instructed by Messrs Aziz Saunders, Manchester M1 2EH) appeared on behalf of the Respondent
: I will ask Lord Justice Mance to give the first judgment.
: The appellant defendants acted formerly as the claimant respondent's solicitors in relation to a counterclaim for fire damage against insurers. Due to the appellants' negligence that counterclaim was struck out for want of prosecution, although at one stage the appellants had been optimistic that insurers would offer something of substantial value in settlement. In the present action it fell to the judge to assess the damages, if any, recoverable by the respondent from the appellants for loss of the opportunity to pursue insurers under the counterclaim which was struck out, but which ought to have been tried in 1995.
There were three points raised by insurers in their defence to the counterclaim. First, the respondent was in breach of policy condition precedent or in repudiation in failing to pay an instalment of premium. Second, the respondent had made a material misrepresentation justifying insurers' avoidance of the policy; in that he had represented that the premises, a nightclub, were open for only four nights a week whereas they were open for six nights. Third, the respondent's partner, a Mr Sheikh, deliberately set fire to the nightclub with a view to recovering the insurance monies. Logically, the second point precedes the first.
The judge assessed the respondent's prospects under the counterclaim against insurers on an action tried in 1995 in accordance with principles established in Kitchen v Royal Air Force Association [1958] 1 WLR 563, Allied Maples Group Ltd v Simmons & Simmons [1995] 1 WLR 1602, and summarised in Jackson & Powell on Professional Negligence 4th ed. paragraphs 4/224 to 4/227. In this context he concluded that if there was any substantial prospect, whether in percentage terms more or less than 50%, it was his duty to assess it and to award damages by taking that percentage of the total damages claimable from insurers.
In this case the judge considered that there was a not insubstantial prospect on each issue. He assessed the prospects on the three issues as respectively: 80% in the respondent's favour, 60% in his favour and only 25% in his favour on the third. He took as the relevant prospects of success against insurers when measuring damages against the appellants this third percentage of 25% and ordered the appellants to pay that percentage of the total damages potentially claimable.
The appellants now appeal by permission of the judge. It was suggested in their skeleton argument, but not pursued orally, that, in the light of the judge's reasons, the permission granted was limited. However, the order drawn up did not limit it in terms, nor did the order as expressed in the judge's reasons.
The first point raised is that the judge not only assessed prospects, but also found positively, that there was arson by the respondent's partner, Mr Sheikh, and that the judge should not then have gone on to assess the prospects of the respondent persuading a judge on a trial of the counterclaim that there was not arson by Mr Sheikh. Or, to put the matter the other way round, should not have gone on to assess the prospect of insurers failing to prove in 1995 what it is said that the present judge found.
This point is supported by Mr Gibson QC for the appellants by references to passages in the judge's judgment indicating a view that he was, in relation to this issue, in as good or almost as a position as any judge would have been on any trial of the original counterclaim. However, the judge said, for example, at page 1D:
"The evidence I have heard is somewhat scant and probably scantier than what would have been heard by a Judge trying the original action had such trial taken place and taken place only a few years after the material events."
Then, at page 18E-G, he referred to the evidence "incomplete as it is".
It does not seem to me that those passages really support Mr Gibson's submission. Nonetheless, it remains his submission that the judge was asked to determine as a matter of fact whether there was arson and, in Mr Gibson's submission, that is what he did.
The appellants also say in their skeleton argument that it was not suggested by the respondent at trial that any further evidence could or would be called on his side at any earlier trial against insurers in 1995. In this connection Mr Gibson referred us to passages in Lord Evershed MR's judgment in Kitchen, and in particular to a passage beginning on page 674 and continuing through to 675, where he said:
"I come last to what may be the most difficult point of all; namely, assuming that she has established negligence, has the plaintiff proved anything other than nominal damages? It is necessary to say something of the nature of the problem which (as I understand the law) the court has to solve in determining the measure of damages in such a case as this. Mr O'Connor's point is that we have now to consider the question of liability as between the plaintiff and the electricity company (or their successors) [they were the original defendants in the action which, due to the present defendant's negligence was not pursued] as though it were a distinct proceeding within the present action; and Mr O'Connor says that, if we find on balance against the plaintiff, that is to say, that she fails in her claim against the electricity board (considered a if it were a separate and existing proceeding), then it follows that her damage is no more than nominal. If that is the right approach, it must follow that in any case such as the present the result in terms of money is always for the plaintiff or nothing. I cannot, for my part, accept that as the right formulation of the problem.
If, in this kind of action, it is plain that an action could have been brought, and if it had been brought that it must have succeeded, of course the answer is easy. The damaged plaintiff then would recover the full amount of the damages lost by the failure to bring the action originally. On the other hand, if it be made clear that the plaintiff never had a cause of action, that there was no case which the plaintiff could reasonably ever have formulated, then it is equally plain that the answer is that she can get nothing save nominal damages for the solicitors' negligence. I would add, as was conceded by Mr Neil Lawson, that in such a case it is not enough for the plaintiff to say: 'Though I had no claim in law, still, I had a nuisance value which I could have so utilized as to extract something from the other side and they would have had to pay something to me in order to persuade me to go away.'
But the present case falls into neither one nor the other of the categories which I have mentioned. There may be cases where it would be quite impossible to try 'the action within the action' as Mr O'Connor asks. It may be that for one reason or another the action for negligence is not brought till, say, twenty years after the event and in the process of time the material witnesses or many of them may have died or become quite out of reach for the purpose of being called to give evidence.
In my judgment, what the court has to do (assuming that the plaintiff has established negligence) in such a case as the present, is to determine what the plaintiff has by that negligence lost. The question is, has the plaintiff lost some right of value, some chose in action of reality and substance? In such a case, it may be that its value is not easy to determine, but it is the duty of the court to determine that value as best it can."
Then Lord Evershed went on to assess the value in the case before him at two-thirds probability of success.
It is the sentences in which Lord Evershed says that "There may be cases where it would be quite impossible to try 'the action within the action'" and "It may be that for one reason or another the action for negligence is not brought till, say, twenty years after the event and in the process of time the material witnesses or many of them may have died or become quite out of reach for the purpose of being called to give evidence" upon which Mr Gibson places principal reliance. He does so, however, by inverting the sense of the sentences. In his submission, although Lord Evershed quite clearly did not consider Kitchen itself as such a case, Lord Evershed was suggesting that in cases where the considerations of delay or absence of witnesses to which he referred did not apply, then it would or might be appropriate for the trial judge to determine one way or the other what would have been the outcome of the previous trial.
I doubt, myself, whether this was what Lord Evershed meant. It seems to me that it is more likely that he was giving one set of reasons why it is that, in a case such as the present, the court only assesses prospects and awards damages on a percentage basis —unless it is overwhelmingly clear on the material before the court that the claimant was almost bound to succeed or had, conversely, only a negligible prospect of success, in which case the court may move to a 100% or...
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