Ruttle Plant Ltd v Secretary of State for Environment Food and Rural Affairs
| Jurisdiction | England & Wales |
| Judgment Date | 30 April 2008 |
| Neutral Citation | [2008] EWHC 238 (TCC) |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 30 April 2008 |
| Docket Number | Case No: HT-07–118 |
[2008] EWHC 238 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
The Honourable Mr Justice Ramsey
Case No: HT-07–118
Andrew Spink QC, Robert-Jan Temmink and Saul Margo (instructed by Yates Barnes) for the Claimant
Jonathan Acton Davis QC and Rebecca Stubbs (instructed by Nabarro) for the Defendant
The Hon Mr Justice Ramsey :
On 4 December 2007 I handed down judgment on the application by the Defendant (“DEFRA”) to strike out these proceedings and obtain summary judgment against Ruttle Plant Limited (“Ruttle”). It is accepted by Ruttle that without some form of amendment, the overall result of that judgment was that DEFRA should succeed in that application.
When I handed down that judgment Ruttle indicated that it wished to amend the Claim Form and Particulars of Claim, essentially to seek to plead a case consistent with that judgment. I gave directions for a procedure by which such amendments would be produced and Ruttle's application for permission to amend would be considered. That procedure led to the following steps:
(1) Ruttle served a draft Amended Particulars of Claim;
(2) DEFRA served notice of objections to the amendments;
(3) Ruttle served submissions;
(4) DEFRA served submissions;
(5) Ruttle served submissions.
This led to a hearing which was held on 25 January 2008. Although no formal application had been issued, it was evident from the submissions made by Ruttle that it sought to add Farm Assist Limited (“FAL”) as a Claimant and to make other amendments to the Particulars of Claim. That was how the matter proceeded, with a letter being produced from the Liquidator of FAL (“the Liquidator”) dated 13 December 2007 indicating consent to joinder, albeit that the form of the letter was open to criticism.
I prepared a draft judgment which was sent to counsel representing the parties in advance of the handing down of the judgment on 15 February 2008. When I came to hand down the judgment, Ruttle sought to make further submissions on the question of whether I should exercise my discretion to allow FAL to be joined as Claimant. DEFRA did not object to that course and accordingly I gave directions as follows:
(1) That Ruttle would serve further submissions on the exercise of the Court's discretion to allow FAL to be joined as a Claimant;
(2) That DEFRA would respond to the submissions;
(3) That Ruttle would reply;
(4) The matter would be dealt with in writing and a further draft judgment would be handed down.
At that hearing on 15 February 2008 the question of whether the application to add FAL as a Claimant might also be treated as an application by the Liquidator to add FAL was raised by Ruttle. The possibility of a formal Application being made by the Liquidator was discussed and it was indicated that any such application would evidently be a late application which would have to be considered on its merits.
On 20 February 2008 Ruttle issued an Application Notice seeking permission to add FAL as a party. In addition, an Application Notice was also issued by the Liquidator seeking to add FAL as a party, supported by a witness statement from the Liquidator, Barry John Ward, dated 20 February 2008. Amended Claim Forms and further alternative draft Amended Particulars of Claim accompanied those applications. Although the Application Notices indicated that the applications were to be dealt with at a hearing, no party has sought to vary the previous order and, in my judgment, the matter can be dealt with in writing.
Consistent with the two Application Notices, the submissions served by Ruttle were served “on behalf of Ruttle and FAL”. DEFRA served submissions dealing with both of the applications and objected to the new application made on behalf of the Liquidator.
In those circumstances, it has been necessary to consider wider issues than those originally contemplated in the directions given on 15 February 2008. I propose to deal with the matter first by considering the original application made by Ruttle. Then I shall consider the Application Notices issued by Ruttle and the Liquidator before considering the appropriate order to be made on DEFRA's application.
The original application
Ruttle applied for permission to amend its Particulars of Claim. DEFRA opposed that application and, in particular, contended that the amendments, as drafted were objectionable on a number of grounds. I therefore first consider the various arguments raised on those original amendments.
The original amendments which Ruttle sought to make may be summarised as follows:
(1) The joinder of Farm Assist Limited (“FAL”)
By paragraph 5 of the draft amended Particulars of Claim Ruttle sought to plead: “This action is brought in the name of, on behalf of and/or in the right of FAL by [Ruttle]”.
(2) The status of Ruttle
By paragraph 61 of the draft amended Particulars of Claim Ruttle sought to plead the reasons why it remained as a Claimant.
(3) The pleading of damages
By paragraph 31 and 62 of the draft amended Particulars of Claim Ruttle sought to postpone the pleading of its claim for damages.
DEFRA objected to those amendments for the following reasons:
(1) The joinder of FAL
Whilst DEFRA accepted that FAL, itself, could bring proceedings, it submitted that these proceedings were not brought by FAL in its own right. For the reasons dealt with below DEFRA contended that Ruttle did not have the pleaded status and should not be permitted to amend. In any event DEFRA submitted that the Liquidator of FAL must consent and the consent should be filed with the Court. It was submitted that the letter of 13 December 2007 originally filed by the Liquidator was defective.
(2) The status of Ruttle.
DEFRA submitted that the Deed of Assignment did not validly assign FAL's rights to Ruttle because:
(a) The rights to commence and conduct these proceedings and the entitlement to the fruits were an element of FAL's property and could not be assigned by the Liquidator acting in his own name. FAL was not a party to the Deed of Assignment and the Liquidator had no entitlement to assign what he purported to do.
(b) Even if the Liquidator did what he purported to do, then he would have abrogated his responsibilities in relation to an asset which was vested in and remained the property of FAL, by the assignment to Ruttle, a company outside the regime of the Insolvency Act 1986. DEFRA submitted that by divesting himself of the right to control proceedings the Liquidator surrendered his fiduciary power to control proceedings commenced in the name of the FAL.
(c) Further, whilst an equitable assignment of the fruits of the action was unobjectionable, DEFRA submitted that, in purporting to assign the fruits of the action and also the right to prosecute the claim, the Liquidator had made an assignment which was champertous.
(d) Further, DEFRA submitted that the assignment to Ruttle of the ability to enforce FAL's right to payment contravened the non-assignment provision in clause 21.1 of the Contract between FAL and DEFRA.
(3) The pleading of damages
DEFRA objected to the lack of particularisation of the claim for damages and the approach taken by Ruttle.
As a preliminary matter Ruttle submitted that it was not open to DEFRA to seek to go behind my previous judgment and that this was the effect of DEFRA's challenge to the status of Ruttle.
In the earlier judgment I construed the Deed of Assignment and held that under the Deed of Assignment the Liquidator had assigned his rights to prosecute and carry on the proceedings and his rights to recover and receive the fruits of the proceedings. Further, I held that the cause of action was not assigned but remained the property of FAL, with the result that any proceedings had to be prosecuted and carried on in the name of FAL.
In construing the terms of the Deed, I did not have submissions and was not concerned with questions of whether any such assignments would be objectionable on other grounds. The issue was whether FAL's cause of action had been assigned and my findings went to the construction of the Deed. In those circumstances, I do not consider that there is anything in my earlier judgment which precludes me from dealing with the merits of the arguments which are now raised on Ruttle's application to amend.
I now turn to consider those substantive arguments.
FAL not a party to the Deed
DEFRA submitted that the purported assignment under the Deed was not effective because the Liquidator could not assign FAL's property acting in his own name. Therefore, DEFRA contended that Ruttle was not a proper party to the proceedings because the assignment by the Liquidator did not assign FAL's rights.
Ruttle submitted that a liquidator may assign an entitlement to any subsequently recovered fruits of a cause of action, pursuant to his power to sell the insolvent company's property under paragraph 6 of Schedule 4 to the Insolvency Act 1986.
It is necessary to consider these submissions in the context of the statutory position of a liquidator. The functions of a liquidator are to secure that the assets of the company are got in, realised and distributed: see s.143(1) of the Insolvency Act 1986. In order to do that a liquidator has certain powers some of which he may exercise without the sanction of either the Court or the Liquidation Committee and some which require that sanction. The powers of a liquidator include the power of sale of the property of the company and the power to bring a claim or other legal proceedings in the name and on behalf of the company: see s.167 and Schedule 4 para 4 to the Insolvency Act 1986.
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