Peal Furniture Company Ltd v Adrian Share (Interiors) Ltd
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE SHAW,LORD JUSTICE MEGAW |
| Judgment Date | 14 December 1976 |
| Judgment citation (vLex) | [1976] EWCA Civ J1214-6 |
| Court | Court of Appeal (Civil Division) |
| Date | 14 December 1976 |
[1976] EWCA Civ J1214-6
In The Supreme Court of Judicature
The Court of Appeal
(Civil Division)
(From: Mr. Justice Reeve in Chambers - Newcastle-upon-Type
(Revised)
Lord Justice Megaw
Lord Justice Roskill and
Lord Justice Shaw
Mr. PETER BAKER, Q.C. and Mr. M. HEYWOOD (Instructed by Messrs. Church Adams Tatham & Co., Agents for Messrs. Smith Roddam & Co., Bishop Auckland, Co. Durham) appeared on behalf of the Appellants(Plaintiffs).
Mr. SPENCER MAURICE (instructed by Messrs. Nicholson, Martin & Wilkinson, Newcastle-upon-Tyne) appeared on behalf of the Respondents (Defendants).
(without calling upon Counsel for the Respondents)
I shall ask Lord Justice Shaw to deliver the first judgment.
This is an appeal, by leave of Mr. Justice Reeve, from an order made by him on the 13th October of this year, whereby he allowed an appeal from an order made by the registrar of the Durham District Registry on the 26th July of this year, refusing the defendants leave to withdraw a notice of payment in. That notice had been given as long ago as the 3rd November of last year. The circumstances in which it came to be made were these. In the early summer of 1975 the plaintiffs undertook to do certain work of shopfitting and construction at premises which the defendants contemplated opening in Sunderland. The work started at. the beginning of June. Towards the end of July, the work was substantially completed and the plaintiffs began to press for payment. But certain differences had arisen between the parties in relation to labour charges, overtime, and the like. Furthermore, towards the end of August a number of boards which had been affixed as part of the process of shopfitting had buckled. The result was that the premises were not usable for the time being. The defendants accordingly required the plaintiffs to send their workmen back in order to make good the defects. There is some difference as to how long that took and what it entailed. The defendants claimed, as will appear later, that the opening of their shop premises was delayed by something like three weeks as a result of this bad workmanship and breach of contract on the part of the plaintiffs.
On the 19th September the plaintiffs rendered to the defendants their invoice for something over £13,000, That not having been paid by the 24th September a writ was issued on that day, endorsed with the plaintiffs' claim. Matters moved expeditiously after that. Onthe 13th October a defence and counterclaim were filed, and the defendants set up certain Items by way of defence and also by way of counterclaim. They asked at the same time for further and better particulars of the statement of claim.
On the 3rd November there was a notice of payment in, which was made on the following day in the amount of £3,967.41. That was clearly intended as a precise calculation of what was due from the defendants. At that time, notwithstanding the counterclaim then raised by the defendants, there would clearly have been a substantial balance due to the plaintiffs in respect of their claim.
On the 20th November there was a reply and defence to counterclaim. It was accompanied, not by further and better particulars of the statement of claim, but by an assertion that the defendants were entitled to no better particulars than they had already. There was also a request for further and better particulars of the defence and counterclaim.
The time for taking out the money paid in expired on the 24th November. But the plaintiffs made no move in that direction. On the 12th January of this year there was an order for directions; and that was followed by further and better particulars of the defence and counterclaim being given on the 20th January.
Then there came about what was the critical stage in this history. A receiver and manager of the defendant company was appointed, pursuant to powers given to the bankers of the defendants under a debenture which was created as long ago as 1936. It conferred upon the debenture-holders, the bank, a fixed and floating charge over the general assets and undertaking of the company.
On the 29th June the directions which had been given in January were varied in respect of Inspection and the lists of documents. At the same time there was an application by the defendants for leave to withdraw their notice of payment in. But as it was notthen supported by any evidence the application was stood over. The next step was that on the 26th July leave was given to amend the defence and the counterclaim as to the amount of the special damage which was being counterclaimed. Until then, the amount had been assessed at £4,500, and now leave was sought and obtained to amend that figure by increasing it to £12,000.
The application for leave to withdraw the notice of payment in came again before the registrar of the Durham District Registry on the 26th July, this time supported by material affirmed to by the receiver and manager of the company, who was ft member of a very eminent firm of chartered accountants. Their views upon matters of financial status and structure of any business would be regarded with respect anywhere. The registrar refused leave to withdraw the notice of payment in. A week or so afterwards an amended defence and counterclaim was filed.
It was in that state of things that the appeal came before Mr. Justice Reeve, the defendants asserting that the learned registrar had been wrong to refuse, in the circumstances then obtaining, leave to withdraw the notice of payment in. Prom the notes of the hearing before the judge, with which this Court has been provided, it would appear that reliance was there placed by the defendants on the case of Cairney v. Back (1906) 2 King's Bench 746, on the basis that the claim of a receiver and manager ought to prevail over an unsecured creditor; whereas the plaintiffs relied upon the judgment of Lord Goddard in Cumper v. Pothecary (1941) 2 All England Reports 516, the judgment in question beginning at page 522.
Mr. Baker, who appears for the appellants, has urged in this Court that the discretion which the court has to allow a notice of payment in to be withdrawn is not an absolute discretion in the sense that a judge may take the view that the notice may be withdrawn in any circumstances which appear to him to justify such acourse but that there must be, as was said in Cumper v. Pothecary, some "further evidence which puts a wholly different complexion on the case". Perhaps it is as well to read the whole of the passage from the judgment of Lord Goddard, Chief Justice He said this: "Indeed we think it desirable to say that it must not be thought that a defendant who has paid a sum into court is entitled as of right to-resile from that step. He must, in our opinion, show that there are good reasons for his application — for instance, the discovery of further evidence which puts a wholly different complexion on the case" —- then he cites Frazer & Haws Ltd. v. Burns and Williams v. Boag and goes on to say —- "or a change in the legal outlook brought about by a new judicial decision, as in the present case, and there may be others…."
The Rules under which payments in may be made and, in certain circumstances, withdrawn are now to be found in Order 22 Rules 1 and 3 of the Rules of the Supreme Court. Rule 1...
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