Ronex Properties Ltd v John Laing Construction Ltd

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeLORD JUSTICE DONALDSON,SIR SEBAG SHAW,LORD JUSTICE STEPHENSON
Judgment Date22 Jul 1982
Judgment citation (vLex)[1982] EWCA Civ J0722-4
Docket Number82/0338

[1982] EWCA Civ J0722-4

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

OFFICIAL REFEREES' BUSINESS

(HIS HONOUR JUDGE NEWEY Q.C.)

Royal Courts of Justice

Before:

Lord Justice Stephenson

Lord Justice Donaldson

(not present at reading of judgment)

and

Sir Sebag Shaw

82/0338

1978 R No. 1479

Between:
Ronex Properties Limited
Plaintiffs
and
John Laing Construction Limited
First Defendants

and

Alan James Palmer and Michael John Mcloughlin (Administrators of the estate of Derek Stephenson, deceased)
Second Defendants (Respondents)

and

Clarke Nicholls and Marcel
Third Party (Appellants)

MR. W. CROWTHER Q.C. and MR. T. LAMB (instructed by Messrs. Beale & Co., Solicitors London SW1P 3 DF) appeared on behalf of the Third Party (Appellant).

MR. RICHARD FERNYHOUGH (instructed by Messrs. Hewitt Woolacott & Chown, Solicitors London EC4N 5AU) appeared on behalf of the Second Defendants (Respondents).

MR. T. FORBES of Counsel, held a watching brief on behalf of the Plaintiffs.

1

LORD JUSTICE DONALDSON (Judgment read by Sir Sebag Shaw): The late Mr. Derek Stephenson was an architect. Before his death he had the misfortune to be sued by Ronex Properties Ltd. who alleged that he had been negligent in the design of "Heron House", Bothwell Street, Glasgow. Ronex also sued the contractors, John Laing Construction Ltd. Mr. Stephenson thereupon issued a third party notice against Clarke, Nicholls & Marcel, consulting engineers. He then died. Herein lies the problem. It is said by the third parties that, owing to a lacuna in the law, Mr. Stephenson's death, occurring when it did, destroyed any rights which he might have had against them. The issue is whether they are right. The form in which it arises is an application to strike out the third party notice upon the ground that it discloses no reasonable cause of action. His Honour Judge John Newey, Q.C. refused the application and the third parties now appeal.

2

The relevant facts were these. The building was completed in 1972. It was built by Laings to designs prepared by the architects, Derek Stephenson & Partners, who were assisted by Clarke, Nicholls & Marcel. Ronex claim that the building has leaked since its completion and continues to do so despite certain remedial work carried out in 1974 by Laings, advised by Stephensons. Ronex issued a writ in May 1978 naming Laings and Stephensons as defendants and claiming damages for breach of contract and for negligence. It was served in May 1979 and a statement of claim was delivered in June 1979. On 14th September 1979, and before serving a defence on Ronex, Stephensons exercised their right under Rules of the Supreme Court, 0.16 r.l, to issue without leave a third party notice addressed to Clarkes.

3

This claimed an indemnity or contribution in respect of the plaintiffs' claim and the costs of the action both at common law and under section 6 of the Law Reform (Married Women and Tortfeasors) Act, 1935. The grounds alleged were breach of contract and/or negligence. Stephenson's defence to Ronex's claim was served 3 days later, on 17th September 1979.

4

There was then a hiatus caused in part by an attempt to have the dispute referred to arbitration. However, on 17th June, 1980, Stephensons served the third party notice on Clarkes. Thereupon Clarkes became parties to the action "with the same rights in respect of his defence against any claim made against him in the notice and otherwise as if he had been duly sued in the ordinary way by the defendant by whom the notice is issued" (Rules of the Supreme Court 0.16, r.l(3)).

5

Mr. Stephenson died on 17th August 1980. By Rules of the Supreme Court 0. 15, r.7 "Where a party to an action dies or becomes bankrupt, but the cause of action survives, the action shall not abate by reason of his death or bankruptcy" and in such a case the rule empowers the court to make orders for the proceedings to be carried on by personal representatives of the deceased party. At the time of his death Mr. Stephenson was the sole partner of Derek Stephenson & Partners and was not bankrupt. His estate was, however, insolvent and this produced further delay. However, in April 1981 Mr. Palmer and Mr. McLoughlin took out Letters of Administration to Mr. Stephenson's estate and on 15th May 1981 Ronex obtained an order that the action be carried on against Laings as first defendants and Messrs. Palmer and McLoughlin as second defendants in their capacity as Administrators of the estate of the late Mr. Stephenson. This order did not in terms extend to the third party proceedings, and on 25th September 1981, Messrs. Palmer and McLoughlin obtained an order that the third party proceedings be carried on as between them and Clarkes. At some stage the proceedings were transferred to the Official Referee's Court and allocated to His Honour Judge John Newey.

6

Thus far the proceedings were unremarkable, albeit leisurely even by construction industry standards. However, on 13th August 1981, before the carry-on order had been made in relation to the third party proceedings, the third parties had issued a summons in those proceedings. In it they sought an order (1) dismissing the third party proceedings for want of prosecution and entering judgment for the third parties against Stephensons; or, alternatively, (2) striking out the third party notice upon the ground that it disclosed no cause of action since (a) any right to recover contribution under section 6 of the Law Reform (Married Women and Tortfeasors) Act, 1935, had been extinguished by the death of Mr. Stephenson; and (b) the alleged causes of action in contract and tort were barred by section 2 of the Limitation Act, 1939, at the time of the issue of the third party proceedings. The learned judge dismissed both applications on 2nd November 1981.

7

Clarke, Nicholls & Marcel accept the learned judge's decision in so far as he refused to dismiss the third party proceedings for want of prosecution. However, they appeal against his refusal to strike out on the grounds that the third party notice discloses no cause of action. No third party statement of claim has yet been delivered and accordingly the claim is still indicated in only the broadest terms. The third party notice could embrace (a) a claim for damages for breach of contract; (b) a claim for damages for negligence (that is to say, breach of a duty of care owed by the third parties to Stephensons); and (c) a claim to contribution under the 1935 Act. Mr. Crowther, Q.C., who has appeared for the third parties, says that the claim in negligence is so widely stated at this stage that it is difficult to submit that no arguable claim could be formulated. However, he makes no such concession in relation to the other two heads, breach of contract and contribution. The appeal has proceeded on the sensible basis that if it succeeds, the order which the third parties will seek must preserve such limited rights as the personal representatives of Mr. Stephenson may have to claim damages for negligence from the third parties. In these circumstances, the argument resolved itself into two separate compartments, namely "limitation" and " actio personalis moritur cum persona".

8

Limitation.

9

Under Rules of the Supreme Court 0.18,r.l9, the power to strike out any pleading or the endorsement of any writ in the action or anything contained therein is exercisable on the ground that:

(a) it discloses no reasonable cause of action or defence, as the case may be; or

(b) it is scandalous, frivolous, or vexatious; or

(c) it may prejudice, embarrass or delay the fair trial of the action; or

10

(d) it is otherwise an abuse of the process of the court. In the case of an application under (a) above, which is the present case, no evidence is admissible.

11

Authority apart, I would have thought that it was absurd to contend that a writ or third party notice could be struck out as disclosing no cause of action, merely because the defendant may have a defence under the Limitation Acts. Whilst it is possible to have a contractual provision whereby the effluxion of time eliminates a cause of action and there are some provisions of foreign law which can have that effect, it is trite law that the English Limitation Acts bar the remedy and not the right; and furthermore that they do not even have this effect unless and until pleaded. Even when pleaded, they are subject to various exceptions, such as acknowledgment of a debt or concealed fraud which can be raised by way of reply. Concealed fraud has, we are told, been pleaded by the plaintiffs in this case as against the defendants, but whether the personal representatives will or can adopt a similar attitude vis-a-vis the third parties can only really emerge if ever they get to the stage of delivering a reply in the third party proceedings. Accordingly, authority apart, I would have...

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