Society of Lloyd's v Henderson and Others
| Jurisdiction | England & Wales |
| Judge | THE HON. MR JUSTICE ANDREW SMITH |
| Judgment Date | 11 May 2005 |
| Neutral Citation | [2005] EWHC 850 (Comm) |
| Docket Number | Case No: 1996 Folio No. 2032 and Others Case No: 2002 FOLIO 893 Case No: 2003 FOLIO 831 Case No: 2004 FOLIO 513 Case No. 1996 Folio 2032 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 11 May 2005 |
[2005] EWHC 850 (Comm)
The Hon. Mr Justice andrew Smith
Case No: 1996 Folio No. 2032 and Others
Case No: 2002 FOLIO 833
Case No: 2002 FOLIO 893
Case No: 2003 FOLIO 831
Case No: 2004 FOLIO 513
Case No. 1996 Folio 2032
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Mr. David Foxton, instructed with Ms Jessica Mance on the Lowe applications, (instructed by Freshfields Bruckhaus Deringer on the Henderson applications and the Stockwell applications, and by Lloyd's Legal Services on the Lowe applications) for Lloyd's
Mr. Craig Barlow (instructed) by Messrs Grower Freeman
for the UNO Names.
Mrs. Heather Adams, Mr. Alexander Burns, Mr. S M Butler, Mr. R H Carter, Mr. J.P. Johnstone and Mrs. Elizabeth Reisz—in person:
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Mr. Justice Andrew Smith:
These applications are made in litigation between the Society of Lloyd's ("Lloyd's") and "Names" who are or were underwriting members of Lloyd's. The central issue is whether the Names should be permitted to assert claims against Lloyd's alleging misfeasance in public office.
The first group of applications, to which I shall refer as "the Henderson applications", are to introduce a pleading in the form of a draft amended defence and counterclaim in proceedings between Lloyd's and John Trevor Howard Henderson. These are made in the long-running litigation in which Lloyd's v Jaffray was tried in 2000.
Secondly, there are three applications ("the Stockwell applications") brought by Lloyd's for summary judgment made against Ms Philadelphia Stockwell and the estates of Oliver Buckley and David Northey Richardson. The respondents to these applications accept, through their counsel, that in principle Lloyd's is entitled to summary judgment unless they are permitted to amend their pleading in order to pursue a claim for misfeasance in public office. I therefore decide in this judgment whether they should be permitted to do so, and I have deferred further consideration of Lloyd's applications until after I have delivered this judgment.
Thirdly, proceedings against Lloyd's have been brought by the three names, Mr. Raymond Douglas Lowe, Dr Alan Geraint Simpson and Mr. Kevin John Lloyd James, asserting a claim for relief for misfeasance in public office. They seek to amend their Points of Claim, and Lloyd's has applied to have their pleadings struck out or for summary judgment on the grounds that the particulars of claim disclose no reasonable grounds for the claim, or that they are an abuse of process, or that the claim is so weak that the Names have no reasonable prospect of success and there is no reason for the trial. The Names accept that unless their application for permission to amend succeeds, they cannot resist Lloyd's application to strike out the claim. I shall refer to these applications as the "Lowe applications".
Lloyd's is represented by Mr. David Foxton, who is instructed with Ms Jessica Mance in the Lowe applications. All but six of the Names are members of the United Names Organisation ("UNO") and are represented by Mr. Craig Barlow, who is instructed by Messrs Grower Freeman. The other six Names are Mrs. Heather Adams, Mr. Alexander Burns, Mr. Sydney Michael Butler, Mr. R H Carter, Mr. Jeffray Paull Johnstone, and Mrs. Elizabeth Anne Reisz. Mr. Butler, Mr. Carter and Mrs. Reisz represented themselves at the hearing before me. Mrs. Adams' husband spoke on her behalf. Mrs. Reisz spoke on behalf of Mr. Johnston. Mr. Burns initially represented himself but on the last day of the hearing Mrs. Reisz represented him.
The Henderson applications
The applications made by the UNO names for permission to amend their pleadings are in these terms: for permission to "plead misfeasance in public office on the basis of the attached witness statement because it is just and equitable for such permission to be given". The witness statement referred to a draft amended defence and counter-claim running to 143 pages and 312 paragraphs. On 9 February 2005 Messrs Grower Freeman served another draft pleading with 210 pages and 409 paragraphs. Mr. Barlow made it clear that the UNO Names seek permission to amend their pleadings in accordance with the latter draft, and they do not seek permission to rely upon the draft pleading originally referred to in their applications.
The Names who were not legally represented apply for permission to amend their pleadings to plead misfeasance in public office on the grounds that "Equity requires that such permission be given and equity is a basic principal of English law introduced to temper too rigid interpretations of the law". Mr Carter has served a draft pleading in which, among other things, he "adopts the arguments put forward by the lead litigant(s) in this case, except insofar as that may involve specific reliance on the Human Rights Act or to European Law". None of the other applicants who are not legally represented has served a draft pleading setting out the terms of the proposed amendment, but none of them suggested in submissions to me that a claim for misfeasance in public office could be pleaded in terms significantly different from the pleading of the UNO Names or so as to avoid objections to it which have been advanced by Lloyd's.
The UNO Names have served in support of their applications a witness statement dated 4 March 2005 and made by Mr. Ian Hay Davison, a former chief executive of Lloyd's. Mrs. Adams relies in support of her application upon five affidavits sworn in proceedings in the Supreme Court of New York between Aldrich and Marsh & McLennan Cos Inc. and ors by Mr. Roger Krapfl, Mr. Walter Curtner, Mr. Robin Jackson, Ms Elizabeth Luessenhop and Mr. RHM Outhwaite. Mr. Carter also relies upon the affidavits of Mr. Curtner, Mr. Jackson and Mr. Outhwaite. However, in view of how the issues between the parties developed, this evidence is not of great importance to the questions that I have to decide.
Misfeasance in public office
The tort of misfeasance in public office was considered in detail in Three Rivers DC v Bank of England (No 3) [2003] 2 AC 1, and Mr. Barlow also referred me to the judgment of Hale LJ in Ammoo-Gottfried v Legal Aid Board (unrep) 1 December 2000, in which she said this (at para 27):
"Reading the recent cases, one has the sense that all the judges that have wrestled with this problem [of defining the tort] have felt that they know what they are trying to describe-and do so seeking analogies from their own areas of the law-but recognise the difficulty of formulating propositions which would encapsulate that principle without including other actions by public officers which may cause just as much damage, be just as susceptible to judicial review, but do not (in the present state of the law) give rise to a claim for damages. What in my view they are trying to describe is the exercise of power by a public official, not for the purpose for which it was given, but for some ulterior or impermissible purpose, knowing or being reckless as to whether it will damage the plaintiff".
In the Three Rivers DC case, Lord Steyn (loc cit at p191B et seq) identified the following six "ingredients" or "requirements" of the tort.
i) The defendant is a public officer.
ii) Power as a public officer is exercised either by the defendant himself or by someone for whom he is vicariously liable.
iii) Either (i) the defendant, or officer for whom the defendant is vicariously liable, acts out of targeted malice, in the sense of a specific intention to injure a person or persons, or (ii) the "public officer acts knowing that he has no power to do the act complained of and that the act will probably injure the plaintiff" (loc cit at p.191E/F). The latter alternative (which is an ingredient of what I shall call the "second" form of the tort) involves bad faith in as much as the public officer does not have "an honest belief that his act is lawful" (per Lord Steyn at p.191F) and it suffices if "the public officer acted with a state of mind of reckless indifference to the illegality of his act" (at p.193C/D) and about the consequences of his act (at p.196B/C).
iv) The claimant has a sufficient interest to have legal standing to sue.
v) There is damage caused by the wrongful act.
vi) That damage is not too remote to be recoverable.
I emphasise the third ingredient, the intentional or subjectively reckless nature of the tort. I have cited from Lord Steyn's speech. Similarly, Lord Hutton (at page 227F) said that "dishonesty is a necessary ingredient of the tort, and it is clear from the authorities that in this context that dishonesty means acting in bad faith". Lord Millet said (at p.235B/C) that the tort is an "intentional" tort that "cannot be committed negligently or inadvertently", and that "the core concept is abuse of power. This in turn involves other concepts, such as dishonesty, bad faith, and improper purpose. These expressions were often used interchangeably; in some contexts one will be more appropriate, in other contexts another....
To continue reading
Request your trial
-
Society of Lloyd's v Henderson and Others
...The proceedings before this court were originally concerned, and concerned only, with an appeal from various rulings of Andrew Smith J, [2005] EWHC 850. The first and most substantial group of applications are the Henderson applications, made in the case of Lloyd's v Jaffray already describ......
-
Jaffray v Society of Lloyd's
...be introduced into another appeal arising out of many of the same events and involving many of the same parties, Lloyds v Henderson [2005] EWHC 850 (Comm). In those proceedings Lloyds claims against various names in respect of liabilities as a result of policies written by them, which claim......
-
Southwark LBC v Dennett
...office, but he submits that he was wrong to find that unnamed and unspecified officials of Southwark acted in bad faith. In Society of Lloyds v Henderson [2007] WL 2817792, Buxton LJ emphasised that for misfeasance in public office the public officer must act dishonestly or in bad faith in ......
-
Harris and Others v Society of Lloyd's
...as an exhibit to a statement of Mr. Stephen Merrett and put before the Court of Appeal in the preparations for the hearing of the appeal in Henderson. It was also deployed by the names in the Taylor v Lawrence application in the Court of Appeal in June 2007. It would appear that Mr Merrett ......