Rsm Bentley Jennison (A Firm) and Others v Ayton
| Jurisdiction | England & Wales |
| Judge | Lord Justice Underhill,Dame Janet Smith,Lord Dyson Mr |
| Judgment Date | 03 November 2015 |
| Neutral Citation | [2015] EWCA Civ 1120 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A2/2014/0997 |
| Date | 03 November 2015 |
[2015] EWCA Civ 1120
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM Queen's Bench Division
His Honour Judge Robert Owen QC
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Dyson
(Master of the Rolls)
Lord Justice Underhill
and
Dame Janet Smith
Case No: A2/2014/0997
Ian Croxford QC (instructed by Clyde & Co LLP) for the Appellants
Charles Douthwaite (instructed by Bolt Burdon Kemp) for the Respondent
Hearing date: 6 October 2015
Approved Judgment
The nature of the issue raised by this appeal requires me to say very little about the underlying claim. On 19 December 2009 the Claimant (the Respondent before us) made an investment of £150,000 in what he understood to be an oil transaction. All or some of the Defendants (the Appellants) — I need not distinguish between them for present purposes — acted as intermediaries. He says that the transaction was in fact a sham and that he only recovered £50,000 from his investment. He says that representations made by the Defendants to induce him to make the investment were fraudulent or negligent.
On 4 October 2011 the Claimant's solicitors, Bolt Burdon Kemp ("BBK"), sent a pre-action protocol letter to "RSM Tenon" (for present purposes I can treat that as being all the Defendants) giving notice of a claim against them. The letter called on them "to compensate [the Claimant] for his loss of £100,025 plus interest and his legal costs". The £100,000 represented the lost investment and the £25 a CHAPS fee associated with it.
On 26 April 2012, the Defendants' solicitors, Clyde & Co, wrote to BBK as follows:
"We refer to your Letter of Claim dated 4 October 2011. We enclose a cheque in the sum of £103,576.56, which has been made out to your client. This amount represents the amount claimed by your client plus interest calculated at the Bank of England base rate plus 1% from 19 December 2009 to 30 April 2012.
This payment is made for commercial reasons and as gesture of goodwill to your client, and is accordingly made without any admission of liability on RSM Tenon's part."
BBK declined to accept that offer, and returned the cheque, on the basis that it represented "inadequate compensation to our client". They did not specify in what respect it was inadequate, but they told Clyde & Co on the telephone that the Claimant wanted a payment in respect of his legal costs. It is fair to say that those costs may have been quite extensive since the pre-action protocol letter went into a good deal of detail.
On 20 September 2012 the Claimant commenced proceedings against the Defendants in the High Court. The "brief details of claim" on the Claim Form claimed damages on the basis of a variety of causes of action, together with equitable or statutory interest. The value of the claim was said to be "in excess of £100,000 and not exceeding £150,000".
The facts relied on in the Particulars of Claim and the loss said to have been incurred were the same as stated in the pre-action protocol letter save that, in addition to the £100,025 initially claimed, there were further claims pleaded, at paragraphs 33 and 35 respectively, in respect of:
(a) various incidental expenses amounting to £1,587.50 — "the paragraph 33 claim"; and
(b) an amount estimated at "approximately £37,000" said to have been lost on a hire purchase transaction for a car which the Claimant says he entered into in April 2010 on the faith of assurances from the Defendants that repayment of the investment and part of the profits was imminent — "the paragraph 35 claim".
The prayer for relief is simply for "(1) damages and (2) equitable interest or interest pursuant to section 35A of the Supreme Court Act 1981".
The Defence was served on 5 November 2012. Paragraphs 3–6 read as follows:
"3. On or about 26 April 2012 in response to that claim, whilst denying liability, the Defendants tendered by way of a good and valuable cheque the sum of £103,576.57, being the principal sum of £100,025.00 plus interest thereon in full and final settlement of the Claimant's claim as then advanced. The Defendants remain willing to pay such sum and accordingly have paid it into Court as required by CPR Pt 37.2. In the premises the Defendants are entitled to and do rely upon the defence of tender before claim in respect of that part of the claim made herein.
4. Further, had the Claimant advanced his claim for the sums now set out in Paragraph 33 of the Particulars of Claim then, notwithstanding that the Defendants would have denied liability, they would have tendered a sum sufficient to include those sums and interest thereon also and if not accepted would also now have paid it into Court, pursuant to CPR 37.2. Accordingly such defence of tender before claim would also have obtained in respect of that part of the Claimant's claim herein.
5. For the reasons pleaded at Paragraph 37 herein the allegations in Paragraph 35 of the Particulars of Claim disclose no reasonable cause of action and should be struck out.
6. In the premises of Paragraphs 1–4 herein the claims now made herein which are additional to those advanced in the said Protocol are a colourable attempt to deprive the Defendants of a defence of tender before claim, and this action is an abuse of process in that its primary purpose is to advance the claim for costs of this action to the advantage of the Claimant's solicitors and ATE insurers."
The pleading goes on to respond to the substance of the claim, but I need give no details here.
I should at this stage spell out the effect of those paragraphs of the Defence:
(1) At paragraph 3 the Defendants plead the long-established common law defence of "tender before action" (now, in the terminology of the Civil Procedure Rules, "tender before claim") as regards the sum of £100,025. Rule 37.2 requires a defendant asserting such a claim to pay into court the amount said to have been tendered, and the Defendants plead that they have done so.
(2) Paragraphs 4–6 are a response to the fact that the Claimant had pleaded the two additional items of loss identified at para. 6 above. The Defendants' broad point is, as pleaded at paragraph 6, that the addition of those items was a mere device to avoid the consequence of them having tendered the full amount claimed in the pre-action protocol letter and was accordingly an abuse. More specifically, however, they plead (paragraph 4) that they would have tendered the additional £1,587.50 if it had been included in the original claim and (paragraph 5) that the paragraph 35 claim was hopeless.
Consistently with those contentions, the Defendants on 18 February 2013 issued an application seeking an order that the claim be struck out, or that summary judgment be given against the Claimant, in whole or in part. The application was supported by a witness statement from a partner in Clyde & Co., Mr Roberts, which exhibited the correspondence in relation to the pre-action protocol letter and advanced the contentions pleaded at paragraphs 3–6 of the Defence.
That application was heard by Master Eastman on 11 October 2013. The arguments before him can be sufficiently summarised as follows:
(1) Tender before claim. Mr Ian Croxford QC for the Defendants submitted that they had an unarguable defence of tender in respect of the £100,025, as pleaded at paragraph 4 of the Defence. Mr Charles Douthwaite for the Claimant contended that that defence was as a matter of law only available where the claim was for a liquidated sum. Mr Croxford acknowledged that that was the case at common law, but he said that the position had been changed by the Civil Procedure Rules so that the defence was now also available as an answer to a claim for damages.
(2) Paragraphs 33 and 35. Mr Croxford advanced the points summarised at para. 8 (2) above. For reasons which will appear, I need not set out Mr Douthwaite's response.
The Master dismissed the application. He accepted Mr Douthwaite's submission that the defence of tender before claim was not available in the case of a claim for unliquidated damages and held that the position had not been altered by the Civil Procedure Rules. He also said that there was room for argument about the calculation of interest incorporated in the tender. He declined to strike out paragraphs 33 and 35 of the Particulars of Claim (though he described the paragraph 35 claim as only "distantly arguable").
The Defendants appealed. The appeal was heard by His Honour Judge Robert Owen QC, sitting as a High Court Judge, on 6 March 2014. He dismissed the appeal on essentially the same grounds as the...
To continue reading
Request your trial
-
Wong Yau Sui v Moral Accord Ltd And Another
...the defence in unliquidated claims was inconsistent with the English Court of Appeal’s decision in Ayton v RSM Bentley Jennison & ors [2016] 1 WLR 1281, leave ought to be granted so that the Court of Appeal could consider and clarify the legal position of the (2) I failed to interpret secti......
-
Wong Yau Sui v Moral Accord Ltd And Another
...however, has recently been ruled to have failed, unanimously by the English Court of Appeal in Ayton v RSM Bentley Jennison and others [2016] 1 WLR 1281. The reason for that ruling was that because the defence of tender is a substantive defence but not a procedural defence, the scope of thi......