Morris v Wentworth-Stanley
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE MANTELL,LORD JUSTICE POTTER: |
| Judgment Date | 04 September 1998 |
| Judgment citation (vLex) | [1998] EWCA Civ J0904-6 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | CCRTI 98/0468/2 |
| Date | 04 September 1998 |
[1998] EWCA Civ J0904-6
Lord Justice Potter
Lord Justice Mantell
CCRTI 98/0468/2
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM HARLOW COUNTY COURT
(HIS HONOUR JUDGE PATRICK O'BRIEN)
Royal Courts of Justice
Strand
London WC2
MR D FOSKETT QC with MR N WOOD (Instructed by Messrs Nockolds, Hertfordshire, CM21 9AR) appeared on behalf of the Appellant
MR J MUNBY QC with MR R DEACON (Instructed by Messrs Alexander Johnson, London E14 9RG) appeared on behalf of the Respondent
Friday, 4 September 1998
Judgment:
INTRODUCTION
This is an appeal against the order of His Honour Judge O'Brien made on 1st April 1998 whereby, on the application of the defendant dated 7th December 1997, he struck out the plaintiff's action for damages against the defendant as an abuse of the process of the court and ordered that the plaintiff pay the defendant's costs of the action. At the same time, the judge gave leave to appeal.
THE FACTS
The brief history of the matter is as follows. In 1990 the plaintiff entered into a written contracting agreement with Oliver Wentworth-Stanley ("Oliver"), his brother Charles and the defendant to carry out works on land at Stonards and Redericks Farms, at which farming businesses were carried on by the three of them in partnership. The defendant was Charles's wife. She was a "sleeping partner" who played no active role in the partnership. Work was done and invoiced over a period and, in September 1992, when substantial sums were outstanding, Oliver gave notice of termination of the contracting agreement, which the plaintiff treated as a repudiation.
In July 1992 (prior to termination) the plaintiff issued a writ ("the first action") in the name of his company Morris Farms Limited against "The Stonards Farm Partnership", subsequently amended to become an action between the plaintiff suing personally and Oliver "trading as Stonards Farm Partnership" (see further below). The claim was for some £12,000 and interest alleged to be due for works done up to that time. Oliver counterclaimed under the name of the Stonards Farm Partnership for damages for breach of contract and negligent advice.
Following receipt of the notice of termination, the plaintiff commenced a further action ("the second action") by writ dated 23rd February 1993 against Oliver, Charles and the defendant, "trading as Stonards Farm Partnership" in which he claimed a further £48,000 debt and/or damages, again with interest. By letter dated 15th April 1993, Oliver's solicitors wrote to the plaintiff's solicitors acknowledging service on his behalf, informing them that Charles had died in August 1991 and the partnership with the defendant had been dissolved on 31st December 1991. It was suggested that, before Oliver's solicitors went to the expense of seeking instructions from the personal representatives of Charles and from Sonia, the plaintiff might wish to amend the writ to delete their names as defendants. The plaintiff subsequently amended the claim in the first action to sue Oliver "trading as Stonards Farm Partnership" and in the second action to delete all reference to Charles and Sonia. In July 1993, Oliver again counterclaimed on behalf of the Partnership.
Later, the first action and the second action were consolidated and came on for trial before Judge O'Brien on 23rd October 1995, the defendant being Oliver "trading as Stonards Farm Partnership". The hearing lasted four days and was still unconcluded by 26th October 1995 when it was adjourned.
Over the next few days, a settlement was negotiated against the background that Oliver was in financial difficulties. Oliver agreed to pay approximately 75% of the claim, inclusive of interest and to abandon the counterclaim. He also agreed to pay the plaintiff's costs.
On 13th November 1995, Judge O'Brien made an order giving judgment by consent in the terms of a minute previously agreed and signed by counsel for the parties pursuant to the compromise between them. The relevant parts of the consent judgment read as follows:
"(1) That judgment be entered for the plaintiff on his consolidated claims in the sum of £60,000 (inclusive of interest..) payable as to £30,000 on first day of December 1995 and as to the balance (inclusive of interest …) on the 1st day of February 1996;
(2) That the consolidated counterclaims of the defendant be dismissed."
There was also an order that the defendant pay the plaintiff's costs to be taxed if not agreed and that the sum of £12,850 paid into court by the defendant be paid out forthwith to the plaintiff's solicitors in part satisfaction.
Following judgment in those terms, and having reviewed his financial position, Oliver decided, or was advised, that he was not in a position to pay the sum which he had agreed to pay. He was advised that he should contemplate entering into an individual voluntary arrangement under the Insolvency Act 1986. By letter dated 28th November 1995 from Sheila Harding, a financial consultant acting for Oliver and his son William, the suggestion was made to the plaintiff's solicitors that William would be prepared to pay a lesser sum (£40,000) on different terms in settlement of Oliver's liability. On 30th January 1996, the plaintiff's solicitors replied:
"that our client is willing to accept the lump sum payment of £45,000 in full and final settlement of the Judgment … to which your client.. submitted on 26th October 1995 …"
By letter dated 31 January 1996 Sheila Harding confirmed that the payment of £45,000 would be made and:
"Our agreement that this amount is to be apportioned …. £22,500 for the judgment and debt together with a further £22,500 to cover costs in the action.. in addition to the sum of £12,850 that has been paid into court in respect of the judgment debt … this is in full and final settlement."
We have been informed that the plaintiff's solicitors state that they did not receive that letter till they were sent a copy of it several weeks later. Whether or not that is the case, the sum of £45,000 was duly paid.
Subsequently, by letter of 17th July 1996, the plaintiff's solicitors wrote to Sheila Harding stating that, whereas the plaintiff had received the sum of £45,000 in full and final settlement of Oliver's liability that did not preclude them from now pursuing both the defendant and the executors of Charles as being partners jointly liable with Oliver under the contracting agreement with the plaintiff.
The plaintiff's solicitors subsequently asserted by letter of 6th November 1996 that their letter confirming the terms of the settlement:
"was worded carefully with Counsel's Advice so that our client could apportion the £45,000 Lump Sum Payment as to costs if he wished as we knew then that we would be pursuing Sonia … for any monies that were not recovered from [Oliver].."
They did not suggest then, and have not suggested since, that they ever made clear to Oliver, or his counsel, at the time of the original compromise, or to Oliver or William (via Sheila Harding) in relation to the later settlement by William, that they nursed the intention to pursue the defendant in respect of any of the sums or damages the subject of the original action. They asserted that, in claiming against the defendant, they relied on sections 3 and 6(1) of the Civil Liability (Contribution) Act 1978 to the effect that judgment recovered against any person liable in respect of any debt or damages is not a bar to an action against any other person jointly liable with them in respect of the same debt.
On 21st August 1996 the plaintiff brought these proceedings against the defendant seeking against her similar relief to that claimed in the earlier consolidated actions save that the claim for the net balance of the invoices was reduced from £43,572.64 to £37,108.42 following credit of £6,464.22, which was the amount still remaining available from the £45,000 paid by William after the plaintiff's solicitors had appropriated the bulk of that payment in discharge of their own solicitor and client costs.
By her defence and counterclaim, the defendant pleaded that the compromise evidenced by the consent order in the consolidated actions against Oliver had the effect of releasing her also from any further liability for the sums outstanding, on the principle that the discharge of one joint debtor by accord and satisfaction releases all, there having been no express or implied reservation by the plaintiff of his right to proceed against the defendant as a joint debtor at the time of the release. It was also pleaded that, the history of the matter, namely the joinder and subsequent deletion of the plaintiff in the earlier proceedings in respect of the partnership debt and the subsequent settlement agreement with William in discharge of Oliver's liability under the judgment, all without reservation of the right to sue the defendant, rendered the present proceedings an abuse of process.
Those pleaded defences were ordered to be the subject of a preliminary issue, which the Judge determined in favour of the defendant in a judgment which is the subject of this appeal.
THE JUDGE'S DECISION
Briefly stated, the Judge held that the principle that an accord and satisfaction with one debtor in respect of a joint debt releases his co-debtor(s) from liability was applicable in this case. He accepted the submission of counsel for the defendant that the mere fact that the agreement between the parties in the second action was subsequently...
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