Stewart v Engel and another
| Jurisdiction | England & Wales |
| Judgment Date | 17 May 2000 |
| Judgment citation (vLex) | [2000] EWCA Civ J0517-3 |
| Docket Number | Case No: QBCMI 2000/0032/A3 |
| Court | Court of Appeal (Civil Division) |
| Date | 17 May 2000 |
[2000] EWCA Civ J0517-3
Lord Justice Roch
Lord Justice Clarke and
Sir Christopher Slade
Case No: QBCMI 2000/0032/A3
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM QBD (Bristol Mercantile Court)
HH Judge Jack QC sitting as a Judge of the High Court
Royal Courts of Justice
Strand, London, WC2A 2LL
Simon Salzedo (instructed by Messrs CMS Cameron McKenna for the Appellants)
Anthony Mann QC (instructed by Messrs Clarke Willmott & Clarke for the Respondent)
The two defendants in these proceedings appeal, with the permission of the Judge, from an order of His Honour Judge Jack QC made in the Bristol Mercantile Court on 10th December 1999, by which he gave the respondent claimant permission to amend her statement of claim. He made this order some days after he had delivered a judgment finally dismissing her action and had made an order accordingly, though that order had not yet been perfected. Perhaps the most important questions raised in the appeal are whether having regard to the Civil Procedure Rules 1998 ("the CPR"), he had the jurisdiction to make the second Order and, if so, how his discretion should have been exercised.
The first defendant ("the liquidator") is a partner in the second defendant firm. In 1992 he was liquidator to Mosaic Management Consulting Group Limited ("Mosaic"). On 8th December 1992, Mosaic, acting by the liquidator, the liquidator himself and the claimant executed an Agreement and Assignment ("the Agreement"). The Agreement recited that by an earlier agreement Mosaic had appointed the claimant as consultant in the field of applied industrial psychology, inter alia, to design and develop a series of new products to be used in the fields of performance appraisal, staff selection, personnel assessment and development. It further recited that the ownership of such products and all the intellectual property rights therein were vested in Mosaic. The final recital (F) stated :
"The Liquidator acting on behalf of the Company has agreed with the Purchaser for the sale of the Assessment Library materials which were part of the products referred to in recitals A and B above including copyright in such materials to the Purchaser upon the terms and conditions herein contained"
Clause 1 defined "The Assessment Library" as meaning "the Assessment and Development Centre Materials Library " being a set of pre-designed exercises which are designed for use in assessment centres and development centres".
Clause 2.1, so far as relevant, read as follows:
"In consideration of the sum of ……….(£5000) now paid by the Purchaser to the Company (receipt of which the Company acknowledges) the Company acting by the Liquidator hereby assigns to the Purchaser the copyright and all other rights of a like nature conferred under the laws of the United Kingdom and all other countries of the world in and to the materials comprising the Assessment Library absolutely….."
Clause 3 provided:
"The Liquidator has entered into this Agreement as agent for and on behalf of the Company and shall incur no personal liability whatsoever….."
The Agreement by its express terms thus comprised only a sale of intellectual property and no sale of physical property. It is the claimant's case that some paper copies of material in the Assessment Library (" the Copies") were taken away from Mosaic by a third party, Mr Murray, who was a competitor of the claimant and had purchased certain other materials from Mosaic by an agreement concluded with the liquidator at about the same time.
There followed a dispute about the ownership of the Copies. This was ultimately resolved on 26th April 1993 by the Copies being handed to the claimant. She says that she suffered substantial loss and damage, quantified in the region of £500,000, because the copies were in the hands of a competitor for some four months and their ostensible uniqueness was thereby compromised, so as to destroy their practical, and thence their real, value.
The claimant threatened proceedings soon after return of the Copies, but did not issue them until 30th September 1998, some five and a half years later and shortly before the expiration of the limitation period. By that time she had obtained legal aid. Her claim as set out in her statement of claim was for damages for negligence and breach of contract.
On 9th July 1999 the appellants applied for summary judgment under Part 24 of the CPR on the basis that the liquidator did not incur personal liability under the Agreement and owed no duty to the claimant for the type of loss suffered.
The Part 24 application was heard at Bristol by His Honour Judge Jack QC. The claimant's counsel told him that legal aid had been approved for leading counsel but expressly declined to ask for an adjournment. During the hearing, the Judge asked whether a claim in conversion had been considered by the claimant's legal advisers. Her counsel, however, without ruling out the possibility of a subsequent application for permission to amend her pleading, so as to include this additional cause of action, expressed the view that such a claim would face difficulties because only physical goods, not copyrights, were capable of being the subject of a claim in conversion.
The Judge reserved his judgment on the Part 24 application.
On 14th September 1999, the parties' solicitors received a draft of the Judge's proposed judgment. In it, he explicitly repeated his previous implicit invitation to the claimant's legal advisers to apply for leave to amend her statement of claim. His conclusion was expressed thus:—
"Dr Stewart's advisers may wish to consider whether she can recover any of the loss she alleges by means of a claim in conversion as I have outlined. But the claim as it is at present formulated is bound to fail."
In this draft judgment, the Judge thus stated his conclusion that the claimant's claims based on breach of contract and negligence were demurrable, but left open the question whether she might succeed in avoiding summary judgment against her by an application to amend her statement of claim, so as to include a claim in conversion.
The claimant's legal advisers did not accept this invitation. They made no application to amend her statement of claim between the receipt of this draft judgment and 24th September 1999, the date fixed for its formal handing down.
At the hearing on 24th September 1999, before beginning to discuss the terms which his formal order should contain, the Judge asked the claimant's counsel:—
"Can I get clear with you whether you are pursuing the idea of a claim in conversion?"
This question was answered by an unqualified "No". The Judge accordingly directed that the first provision of his order should be:
"Action be dismissed as against both defendants"
Towards the end of the colloquy on that day, 24th September, the Judge observed:
"Then I think I should add at the end of the judgment just something recording the fact that after delivery of the judgment I was told that the claimant did not wish to pursue a claim in conversion. Then the thing is complete rather than floating around."
The final version of the Judge's judgment received by the parties' solicitors on 29th September 1999 contained a newly added, last sentence to this effect.
Following receipt of the final version of the judgment, the claimant, who, as already stated, had obtained legal aid for consulting leading counsel before the hearing of 9th July 1999, availed herself of that legal aid. On 22nd October 1999, having received his advice, she applied for permission to amend her statement of claim to plead a claim for conversion of the Copies in substitution for the claims in negligence and breach of contract. It is common ground that by that date any new claim in conversion would have been statute-barred.
Also on 22nd October 1999, the order made by the Judge on 24th September was sent to the court by the appellant's solicitors for stamping and issue. There was then correspondence as to whether it should be issued. The Judge resolved that matter by directing that pending the hearing of the claimant's application the order should not be issued. If it had been issued, the Judge would on any footing have had no further jurisdiction in the matter and the claimant's only way forward would have been by way of appeal.
The claimant's application to amend was heard by the Judge on 5th November 1999, when it was made clear on behalf of the claimant that the only explanation for her change of course was that the advice of newly instructed leading counsel differed from the advice previously given to her. The Judge reserved judgment. A draft of his judgment was received by the parties' solicitors on 29th November 1999 and handed down on 10th December 1999. The Judge gave the claimant permission to amend her pleading as sought, but ordered her to pay the appellants' costs of her application and gave them permission to appeal. There has been no appeal from his judgment of 24th September 1999.
The issues.
Mr Salzedo for the appellants has in substance made four principal submissions in support of their appeal from the Judge's order of 10th December 1999:-
(A) First, the Judge, having delivered the final version of his judgment on 24th September 1999 and having made an order dismissing the action accordingly, had exhausted all his functions to perform and had no jurisdiction to reopen the matter by giving the claimant permission to amend her pleading: "("Issue (A)")"
(B)...
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