Pickthall v Hill Dickinson LLP
| Jurisdiction | England & Wales |
| Judge | Lord Justice Rimer,Mr Justice Mann |
| Judgment Date | 11 June 2009 |
| Neutral Citation | [2009] EWCA Civ 178,[2009] EWCA Civ 543 |
| Docket Number | Case No: A3/2008/2557 |
| Court | Court of Appeal (Civil Division) |
| Date | 11 June 2009 |
[2009] EWCA Civ 178
Lord Justice Rimer
Case No: A3/2008/2557
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION, LIVERPOOL DISTRICT REGISTRY
(HIS HONOUR JUDGE WAKSMAN QC)
Mr O Ticciati (instructed by Messrs Beale & Co) appeared on behalf of the Applicants.
THE RESPONDENT DID NOT APPEAR AND WAS NOT REPRESENTED.
Lord Justice Rimer:
By this renewed application for permission to appeal, the applicants wish to ask the full court to consider a procedural situation arising in the following circumstances.
The claimant, Mr Pickthall, retained the defendant solicitors, Hill Dickinson LLP, to act for him on a share sale agreement. The agreement went wrong, he suffered financial damage and was adjudicated bankrupt. Any cause of action in breach of contract or negligence that he may have had against the solicitors vested in his trustee in bankruptcy. He was in due course discharged from his bankruptcy, following which the cause of action remained vested in the Official Receiver. Mr Pickthall wished to sue the solicitors, but so long as his cause of action remained so vested he had no title to do so. Only the Official Receiver did. Mr Pickthall's problem became acute with the approach of 6 February 2007 because on that day the claim he wanted to pursue was destined to become statute-barred, as he recognised. In a bid to meet that difficulty he issued his claim form against the solicitors on 5 February 2007. He was then incapable of pleading a sustainable cause of action against the solicitors because he did not have one, as he knew. Nor did he attempt to plead one.
On one view, as the solicitors assert, his claim was an abuse of the process and ought to have been struck out. One inference is that Mr Pickthall was sensitive to that because his instructions were that the claim form should not be served until the expiry of the four months in which it was required to be served. I presume the reason for that was that he hoped in the meantime to obtain an assignment of his cause of action from the Official Receiver, which he could then rely upon. Because of some mistake by the court, the claim form was in fact served fairly soon after it was issued, but when that mistake was pointed out to the court, District Judge Sykes on 8 March 2007 made an order upon the court's own motion staying the claim until 8 July 2007.
In the meantime, on 20 June 2007 the Official Receiver assigned the statue-barred cause of action to Mr Pickthall. Mr Pickthall then pleaded that assignment in particulars of claim that he served on the solicitors on 20 July 2007. In a contested application by the applicants' solicitors about the propriety of the proceedings, His Honour Judge Waksman QC, sitting as a judge of the Chancery Division, held that the claim was statue-barred as at the date of the assignment, but that it should nevertheless not be struck out as having been or as being an abuse of the process. He also held that it was necessary for Mr Pickthall to amend the claim form so as to assert the assignment that was subsequently made, an amendment which the judge permitted. The effect of his order was to permit the claim to proceed to trial.
The solicitors wish to challenge the justice of that order. Their first ground of appeal is that the proceedings when issued were an abuse of the process and so were liable to be and should now be struck out. The only reason why they became arguably respectable is because the judge allowed Mr Pickthall to bolster them with the benefit of the subsequent assignment of a statute-barred cause of action, which was allowed to feed the unsustainable claim that he had earlier issued. In substance, the complaint is that by his unilateral action Mr Pickthall had, if the judge's decision was right, given himself the benefit of an extension of the statutory limitation period.
The second, related ground of appeal that the applicants wish to pursue is that it was, they say, anyway wrong for the judge to permit the amendment that he did. They say that he was wrong not to apply an obiter dictum of my own in virtually identical circumstances in Smith v Henniker-Major & Co [2002] BCC 544, at 558. That case went to the Court of Appeal (see [2003] Ch 182), which upheld my decision by a majority. The dissenting judgment was that of Robert Walker LJ, whose judgment also included some obiter observations, with which the majority agreed, on the amendment question.
There appears to have been argument in the court below as to the correct effect of what Robert Walker LJ was saying, but at least one reading of it is that whilst he agreed with my obiter observations that I would have refused to permit the amendment, he would have done so for different reasons, being reasons not applicable in the present case (see [2003] Ch. 182, paragraphs [83] and [84]). Mr Ticciati, who appears for the applicants on this application, does not accept that is necessarily the correct interpretation of Robert Walker LJ's observations, but at any rate it does not appear to me that he was giving any clear endorsement to my own obiter reasoning.
For the reasons just given, I am not surprised that Judge Waksman did not apply my obiter dictum in Smith. I hope it will not be regarded as in any way disrespectful to this court's obiter observations in Smith if I say that I do not now read what I said in that case over seven years ago with any regret. But whilst I am disposed to give permission on the amendment ground as well as on the abuse of process ground, I also make clear that I am, however, certainly not doing so on the basis that my dictum provides the solution to this second ground of appeal. In my view this second ground is essentially bound up with the first and it is sensible that both grounds should be dealt with together.
Whilst Arden LJ took a different view on the papers, I regard the point that the applicants wish to raise as raising a potentially important question of principle that deserves the consideration of the full court. I accordingly give permission to appeal as asked.
Order: Application granted
[2009] EWCA Civ 543
Before: Lord Justice Laws
Lord Justice Thomas
And
Mr Justice Mann
Case No: A3/2008/2557
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CHANCERY DIVISION
LIVERPOOL DISTRICT REGISTRY
HIS HONOUR JUDGE WAKSMAN Q.C.
MR. O. TICCIATI (instructed by Messrs. Beale & Co) for the Appellants.
MR. W. FLENLEY (instructed by Messrs. Black Norman) for the Respondent.
Hearing date: 15 th May 2009
Mr Justice Mann :
Introduction
This is an appeal from a decision of HH Judge Waksman QC sitting in the Liverpool District Registry of the Chancery Division and dated 13 th October 2008. It raises the question of the extent to which it is an abuse of the process for a claimant to commence proceedings without having the relevant cause of action vested in him, and whether it would be right to allow him to amend his pleadings to plead a subsequent assignment of that cause of action when that assignment took place outside the relevant limitation period.
The facts
The facts are within a narrow compass, and most relevant facts were agreed at the hearing before the judge below and before us. They are as follows.
At the beginning of 2001 Mr Pickthall had a substantial shareholding in a company called The Phone People Plc (“the company”) which operated a number of retail mobile phone outlets. He agreed to sell his interest, and on 6 th February 2001 entered into a written sale agreement. He instructed solicitors to act for him. Those solicitors were the first defendant (“Hill Dickinson”), and the partner acting was the second defendant. It is unnecessary to distinguish between those defendants for the purposes of this appeal. The details of the agreement do not matter either. It is sufficient to note that the consideration, which was about £2.7m in aggregate, was payable in various ways, including by way of the discharge of various loans on which Mr Pickthall was liable.
One month later, on 6 th March, the company petitioned for an administration order on the grounds that it could not pay its debts, and an order was made on 15 th or 19 th March. Within a very short time the administrators had commenced proceedings against Mr Pickthall, attacking various assignments of warranties made by the company to Mr Pickthall, the discharge of loans and other asset transfers. Those proceedings ended with a judgment against Mr Pickthall for some £642,000 odd plus interest. According to the judgment of HH Judge Waksman, he was apparently found to have been in breach of fiduciary duty, guilty of unlawful financial assistance and to have participated in transactions at an undervalue, all as a result of the sale agreement and its associated transactions.
On 6 th October 2001 Mr Pickthall was adjudicated bankrupt on his own petition. He would normally have been discharged in October 2004, but apparently the discharge was...
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