Onyeari v Churchil
| Jurisdiction | England & Wales |
| Judge | Mr Justice Freedman |
| Judgment Date | 08 March 2024 |
| Neutral Citation | [2024] EWHC 531 (KB) |
| Court | King's Bench Division |
| Docket Number | Case No: QA-2020-000157 |
[2024] EWHC 531 (KB)
Mr Justice Freedman
Case No: QA-2020-000157
Case No: KB-2022-004071
IN THE HIGH COURT OF JUSTICE
KING'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Onyeari appeared in person for himself in the 2020 action 000147 and for himself and the Company in the 2022 action number 004071 (The solicitor for Mr Onyeari in the 2020 action and for the Defendants in the 2022 action are Charles Hill & Co)
Mr Jason Evans-Tovey (instructed by DWF Law LLP) for the Interested Party in the 2020 action 000147 and for the Claimant in the 2022 action number 004071
Hearing dates: 17 and 18 October 2023
Post-hearing submissions: 26 October 2023 and 1 November 2023
Judgment handed down in draft: 12 February 2024
Approved Judgment
This judgment was handed down remotely at 12 noon on 8 March 2024 by circulation to the parties or their representatives by e-mail and by release to the National Archives.
| Subject | Paragraph numbers |
| I Introduction | 1 – 9 |
| II Background | 10 – 13 |
| III Post-judgment matters | 14 – 26 |
| IV The application for permission to appeal | 27 – 62 |
| V Application to set aside the Tomlin Order | 63 – 80 |
| VI The amendment application | 81 – 101 |
| VII The Part 8 claim: (a) The contractual provisions | 102 – 114 |
| VIII Identification of the issues | 102 |
| Issue (i) Is the Part 8 claim an abuse of process? | 115 – 118 |
| Issue (ii) Is the Part 8 claim proprietary or personal? | 119 – 121 |
| Issue (iii) Should an order be made to assign the claim from the Company to the Underwriters? | 122–127 |
| Issue (iv) Has there been a breach of contract by the Company? | 128 – 137 |
| Issue (v) Has there been an inducement of breach of contract by Mr Onyeari? | 138 – 150 |
| Issue (vi) Is Mr Onyeari exempt from subrogation under General Condition 8? | 151 – 169 |
| Issue (vii) Remedy of Underwriters against the Company and Mr Onyeari? | 170 – 180 |
| Issue (viii) Conclusion, disposal and the way ahead | 181 – 182 |
I Introduction
On 5 November 2018, Mr Onyeari brought a claim against Churchil Limited (“the Company”), alleging negligence and/or breach of statutory duty. Mr Onyeari alleged that:
(i) on 28 September 2015, he knocked over a drink and fell trying to prevent the spillage (or he fell due to the spillage) and injured his left knee and bruised his head on a wall;
(ii) on 9 November 2015, a scar on the back of his head caused by that fall was cut by the headrest of his own office chair.
When the case was reported to the Underwriters, in what would be described as an “extraordinary” document, liability was admitted on behalf of the Company by a document dated 25 July 2018 through Mr Chinonye, a director of the Company, who would be found to be acting under the controlling mind of the Company: see the judgment striking out the claim at [29].
By its defence, the Company stated that Mr Onyeari was the controlling mind of the Company; he was the person who was solely responsible for his injuries (if anyone was at fault). It was said that the claim was circular and contrary to public policy, since Mr Onyeari was relying on his own failings to make his claim and then to recover money under a third-party insurance policy: see Defence [4–5].
There was an application to strike out under CPR 3.4(2) and, in the alternative, a claim for summary judgment under CPR 24. The matter was heard by HH Judge Lethem, who in a judgment given on 2 June 2020, struck out the claim under CPR 3.4(2)(a) and (b). The Judge said that if he had not struck out the claim, he would have ordered summary judgment.
The strike out was on the basis that Mr Onyeari was the controlling mind of the Company and that the action was seeking to hold the Company liable for the failings of Mr Onyeari. Mr Onyeari was a shareholder of the Company and at all material times he was the principal director of the Company and its controlling mind. A part of the reasons for the Judge to reach the decision which he did was the case of Brumder v Motornet Service & Repairs Ltd [2013] EWCA Civ 195; [2013] 1 WLR 2783 (“ Brumder”).
On 24 July 2020, HHJ Lethem made various consequential orders including a direction for payment of the costs of the action, to be the subject of detailed assessment if not agreed, save for a particular head of costs. He ordered a payment on account of costs of £20,000. He determined and certified that the claim was totally without merit. DWF wrote to Mr Onyeari to the effect that the outlay of costs had been in the region of £75,000.
Since then, Mr Onyeari has taken steps to seek to avoid having to pay such costs including:
(i) the Company purporting to change its legal representation away from the solicitors appointed by insurers;
(ii) the Company passing a resolution dated 6 August 2020;
(iii) Mr Onyeari seeking to appeal the orders of HH Judge Lethem;
(iv) the Company causing Calver J to grant a Tomlin Order discharging the costs liability;
(v) the Company seeking unless orders in respect of detailed assessments.
The appeal came before Picken J in April 2023. On that occasion, it was determined that all matters (including the appeal) should be addressed together, and further directions were given. Before this Court, there have been considered a number of applications as follows:
(i) Permission Application: Mr Onyeari's application dated 19 August 2020 for an extension of time for a Notice of Appeal and for permission to appeal the orders of HHJ Lethem.
(ii) Set Aside Application: the interested parties' (Underwriters') application dated 14 July 2021 (sealed on 26 October 2021) to set aside the Tomlin Order made by Calver J on paper and without a hearing dated 28 June 2021.
(iii) Amendment Application: Underwriters' application dated 17 March 2023 to tidy-up by amendment the Interested Parties' (Underwriters') Part 8 claim.
(iv) Part 8 Claim: Underwriters' Part 8 claim for various declarations as to their rights under an employer's liability insurance policy and specific performance and/or damages.
The case has generated a vast amount of paperwork and arguments. There were issues, with numerous files for the above applications, files of authorties and over 100 pages of written submissions. There were two full days of argument. Although Mr Onyeari made submissions for at least a court day, the Court made an order allowing him to supplement certain aspects of his submissions which led to further skeleton arguments (although briefer of Mr Onyeari dated 26 October 2023 and of Mr Evans-Tovey dated 1 November 2023). I shall refer to them as the post-hearing submissions.
II Background
Returning to the personal injury claim against the Company for negligence and/or breach of statutory, the Underwriters say that the reality is that Mr Onyeari's intention was to recover financial compensation against a combined policy of insurance (“the Policy”) providing, amongst other things, employer's liability cover.
Exercising their rights under that Policy, the Underwriters instructed DWF Law LLP (“DWF”) to act on behalf of the Company in defence of Mr Onyeari's claim in the County Court. One consequence was that, with Underwriters' written consent, legal costs and expenses were incurred on the Company's behalf defending Mr Onyeari's claim.
On 2 June 2020, HHJ Lethem struck out Mr Onyeari's claim pursuant to CPR 3.4(2) and ordered:
“4. [Mr Onyeari] shall pay the Defendants' costs of the claim, to be summarily assessed at the next hearing”.
The next hearing took place on 24 July 2020 when HHJ Lethem made various consequential orders including a direction for payment of the costs of the action to be paid by Mr Onyeari to the Company, to be the subject of detailed assessment if not agreed, save for a particular head of costs. An order was made for a payment on account of costs of £20,000. DWF wrote to Mr Onyeari to the effect that the outlay of costs had been in the region of £75,000.
III Post judgment matters
(a) Resolution of the Company of 6 August 2020
On 29 July 2020, Mr Chinonye was appointed a director of the Company. On 6 August 2020, a resolution was passed by the Company in the following terms:
“The legal representatives of the Company and the Insurer bring this matter to an end at no legal costs to Mr Onyeari, and THAT any such costs be covered through the Company's legal expenses insurance held with the Insurer.
The Company has the benefit of legal expenses insurance and hereby instructs the Insurer to settle the legal expenses with the legal representatives and bring this matter to an end.
In the light of the money the Company owes Mr Onyeari his liability for the Company's debt takes this into account and also takes account of the fact that he is a shareholder and director of the Company
The Company reserves the right to publish this resolution and make it available for the public.”
The Underwriters draw attention to the following matters, namely:
(i) this resolution...
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