Mr and Mrs Harrison v Halliwell Landau

JurisdictionEngland & Wales
JudgeHis Honour Judge Eccles Q.C.
Judgment Date24 May 2004
Neutral Citation[2004] EWHC 1316 (QB)
CourtQueen's Bench Division
Docket NumberCase No: HQ02X02251/52
Date24 May 2004

[2004] EWHC 1316 (QB)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

Before:

His Honour Judge Eccles Q.c.

(sitting As A Judge Of The High Court)

Case No: HQ02X02251/52

Between
Mr And Mrs Harrison
Claimants
and
Halliwell Landau
Defendant

Mr and Mrs Harrison in person for the Claimants

Mr Pryor (instructed by Halliwell Landau) for the Defendant

Hearing dates : 20, 21, 22, 23, 26, 27, 28, 29 April 2004

APPROVED JUDGMENT

His Honour Judge Eccles Q.C.

Introduction

1

In April 1999 Mr Harrison and Mrs Harrison retained Messrs Halliwell Landau, a well known firm of solicitors, to represent them in an action in which they were being sued by a firm of accountants, Messrs Haslam Tunstall. The action was eventually settled in June 2000 on terms contained in a Tomlin order, but not before the retainer had been terminated in circumstances of some acrimony. Halliwell Landau issued proceedings in late 2000 against Mr Harrison and Mrs Harrison in order to recover their outstanding fees. Mr Harrison and Mrs Harrison alleged that Halliwell Landau had been negligent and on that basis defended the action and issued a Part 20 claim.

2

On 25 July 2001 Mr Harrison and Mrs Harrison compromised the action on the second day of the trial and agreed another Tomlin order under which they consented to pay the sum of £60,000 in instalments, the whole sum becoming due in default of payment of any instalment. Nothing was paid, the whole sum fell due, and Halliwell Landau sought to enforce the debt by presenting petitions for bankruptcy. Mr Harrison and Mrs Harrison countered by indicating that they wished to apply to set aside the consent order and the petitions were stayed pending the issue of a claim by them with a view to achieving that objective.

3

In this action Mr Harrison and Mrs Harrison now submit that the consent order should be set aside, that the original action by Halliwell Landau against them should revive, and that they should have the opportunity of raising a number of fresh allegations of negligence as well as seeking an adjudication of those allegations that fell away on the making of the consent order in 2001.

4

It is not perhaps surprising given the financial circumstances of Mr Harrison and Mrs Harrison that they have represented themselves in these proceedings, although I have permitted Mrs Harrison's son, Mr Alistair Harrison, to address the court on her behalf and to ask questions. He has done so courteously and has not taken any improper advantage of the indulgence offered to him despite the emotion engendered by the grievance his mother bears towards Halliwell Landau. I should say as well, that although I have certain findings to make about Mr Harrison, he has conducted himself as an advocate in his own cause with equal courtesy and with some accomplishment.

5

In order to decide whether or not the consent order should be set aside the parties have put before the court a dozen or more lever arch files containing the documents relevant to the three actions, namely (i) the Haslam Tunstall action; (ii) the Halliwell Landau recovery or fees action, as it has been called; and (iii) the instant action to set aside the consent order. Fortunately, it has not been necessary to consider the majority of those documents as the parties have helpfully narrowed the issues and have agreed that the question of the form in which the original recovery action should be resumed must inevitably await the outcome of the decision on the consent order. Nonetheless, the hearing has occupied nearly eight days of court time, and it is necessary to refer to the history of the litigation in some detail in order to identify and evaluate the significance of the points made by Mr Harrison and Mrs Harrison.

The Haslam Tunstall action

6

For some years Mr Harrison and Mrs Harrison were partners in Harrison Management Services, a consultancy offering forensic accounting services to solicitors and accountants. Mr Harrison was the active partner in the business whereas Mrs Harrison took no part in its daily activities. In about 1997 Mr Harrison entered into an agreement on behalf of himself and his wife with Haslam Tunstall, the essential nature of which was to provide that Mr Harrison would introduce forensic accountancy work to Haslam Tunstall from solicitors engaged in litigation and other contacts. It may be that Mr Harrison provided some other services as well. In return Haslam Tunstall would share a proportion of the fees payable either by the lay client or the Legal Aid board, as it was then, and would make payments to Mr Harrison in advance of the receipt of fees from those sources, and in some cases in anticipation of future work.

7

The relationship in due course broke down amid a welter of allegations and counter-allegations of bad faith and misconduct. The agreement was terminated on 9 March 1999 when Mr Harrison was excluded from Haslam Tunstall's offices and there was a dispute as to whether it had been lawfully brought to an end or unlawfully repudiated. Haslam Tunstall sued for the recovery of over £180,000 in advance payments and claimed damages for misrepresentation. Mr Harrison and Mrs Harrison defended the action and counterclaimed for losses alleged to have arisen as a consequence of the premature determination of the agreement.

8

The details of the claims and counterclaims are not germane to the action I have been trying save in one respect. Haslam Tunstall alleged that a sum of £7,500 had been advanced to Mr Harrison in respect of a prospective engagement to assist a client who was to provide Haslam Tunstall with a "letter of intent". If the potential client failed to provide a letter of intent by a particular date the sum of £7,500 became "refundable". The parties agreed that by the date the overall agreement had been brought to an end no such letter had been forthcoming, and so a discrete issue arose as to whether Mr Harrison and Mrs Harrison had any defence to that part of the claim, whatever the merits might be in relation to the much larger balance of the claims being pursued by Haslam Tunstall.

9

Halliwell Landau were retained by Mr Harrison and Mrs Harrison to represent them in the action, and they in turn instructed Mr Dagnall of counsel in about May 1999. Mr Thomas, the Head of Commercial Litigation, was the partner who undertook to represent Mr Harrison and Mrs Harrison in accordance with the terms of a retainer letter dated 1 April 1999, and Mr Nicholson, an associate solicitor, was instructed by Mr Thomas to assist him.

10

Pleadings were drafted and conferences arranged. Mr Harrison says that Mr Thomas of Halliwell Landau advised him that the claims of Haslam Tunstall were "garbage", but a more conventional letter of advice was written on 3 September 1999 in the light of an application by Haslam Tunstall for summary judgment. The advice was that the application would probably not succeed, but that there was an "area of weakness" in relation to the £7500 claim. If Haslam Tunstall's action went to trial it was later estimated that the hearing might well last several weeks, and at a subsequent Case Management Conference Halliwell Landau's fees including disbursements were estimated at £164,500 plus VAT. The outcome of the Part 24 proceedings was therefore of considerable importance to the parties, and the events surrounding them have been subjected to minute examination in this action.

11

So far as Halliwell Landau's fees were concerned Mr Harrison agreed to pay £1,500 per month on account, and indeed he did make some payments. These were, however, limited to £3,259.72. Nonetheless, despite Mr Harrison's failure to maintain the payments on account Halliwell Landau continued to act and to prepare fully for the summary judgment hearing. Indeed Mr Thomas told me that the firm worked in the evenings and at weekends when it was necessary to do so.

12

On 25 October 1999 Mr Terry, counsel for Haslam Tunstall, prepared a document he called "Outline Submissions" in which he set out his arguments as to why there should be judgment forthwith on the main claim of £186,363 plus interest. Essentially he argued that it was a debt claim which should succeed regardless of the merits of the Part 20 claim. Alternatively, Haslam Tunstall should succeed on the limited claim for £7,500 on the basis that a letter of intent had never been provided.

13

On 26 October 1999 Mr Terry handed a copy of his outline submissions to Mr Dagnall at court and the Part 24 hearing took place before District Judge Needham. Mr Harrison was at court to hear Mr Terry's submissions and Mr Dagnall's response to them. Mrs Harrison was not present. Halliwell Landau, it is accepted, did not contact her to explain the details of the arguments on both sides, but left it to Mr Harrison to keep her informed and to relay back to her solicitors any views she might wish to express. Mr Thomas told me in evidence that Mr Harrison held himself out as representing the partnership, and in my view it was perfectly reasonable for him and Mr Nicholson to have carried out their retainer on that basis unless and until either Mr Harrison or Mrs Harrison instructed them to the contrary. Mr Thomas told me, and I accept his evidence on this point, that he and Mr Dagnall considered whether there was any conflict between the partners and concluded that on the material available to them they had a common rather than potentially opposing interests.

14

After a lengthy argument the District Judge made an order for summary judgment in relation to the claim for £7,500 alone, leaving the balance of Haslam Tunstall's claims to go to trial. The District Judge rejected Mr Dagnall's submission that it was implied that Mr Harrison could provide a letter of intent at any time until a demand for repayment was made, and that Haslam Tunstall had...

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