Stoke on Trent city council v John Whalley (sic)
| Jurisdiction | England & Wales |
| Judge | Lady Justice Smith,Lord Justice Wall,Lord Justice Brooke |
| Judgment Date | 31 July 2006 |
| Neutral Citation | [2006] EWCA Civ 1137 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: B3/2006/0300 |
| Date | 31 July 2006 |
[2006] EWCA Civ 1137
Lord Justice Brooke
(Vice-President, Court of Appeal, Civil Division)
Lady Justice Smith and
Lord Justice Wall
Case No: B3/2006/0300
4SQ04565
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM STOKE ON TRENT COUNTY COURT
His Honour Judge Rubery
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Neil Block QC and David Eccles (instructed by Messrs Grindleys) for the Appellant
Mr Andrew Hogarth QC and Anthony Johnston (instructed by Messrs Beswicks) for the Respondent
Introduction
This appeal raised the following question: does the court have jurisdiction to enter judgment for a claimant in reliance on an admission made by a defendant before the commencement of the action, which the defendant has subsequently withdrawn. The same point was considered by another division of the Court of Appeal (Sir Anthony Clarke MR, Brooke and May LJJ) in Sowerby v Charlton [2006] 1 WLR 568. In Sowerby, the court held that CPR rule 14.1(5), which provides that a court may give permission for a party to withdraw an admission, applied only to admissions made in the course of proceedings and not to pre-action admissions. The Court of Appeal said that the status of a pre-action admission was that it could be used only as evidence either in interlocutory proceedings or at trial but could not, of itself, found an application for summary judgment. The decision in Sowerby is binding upon us.
Following the publication of the report of that decision, this court received three applications for permission to appeal decisions of circuit judges who, before Sowerby, had each assumed (with counsel's encouragement) that CPR rule 14.1(5) enabled the court to refuse to allow a defendant to withdraw a pre-action admission and to enter judgment for the claimant.
In each case, permission to appeal was granted. It was apparent from the notices of appeal that counsel considered some further guidance from this court would be welcomed in cases where pre-action admissions were later withdrawn. All three appeals were listed to be heard together. However, two of the appeals settled. Only the appeal in Walley came before the court.
The Facts
Mr Walley was employed as a refuse collector by Stoke-on-Trent City Council (the Council) . On 28 th August 2001, he injured his knee while descending from the passenger seat of a refuse wagon. He consulted solicitors who wrote to the Council alleging that the presence of plastic refuse bags within the foot well of the vehicle had caused him to miss the step and fall to the ground.
The Council referred the case to their loss adjusters, who initially denied liability. However, on 13 th June 2003, after considering a statement by the driver of the wagon, Mr Yates, an employee of the loss adjusters, wrote to say that 'liability would not be in issue in this case'. Mr Yates had authority to make that admission. However, during the ensuing months, the loss adjusters realised that Mr Yates's work was unsatisfactory and he was dismissed. Thereafter, Mr Walley's file (among others) was reviewed and, on 12 th May 2004, solicitors instructed for the Council wrote to rescind the admission of liability.
The Proceedings
Mr Walley's solicitors issued proceedings. The Council filed a defence in which they denied liability. They alleged that Mr Walley had injured himself by jumping from the vehicle rather than climbing down. The plastic bags were stored behind the passenger seat rather than in the foot well and, in any event, there were not many of them. The Council alleged contributory negligence. Shortly after the defence was filed, the case was allocated to the multi-track. Soon after that, Mr Walley applied under CPR rule 3.4(2) to strike out the defence on the ground that it was an abuse of the process of the court or was otherwise likely to obstruct the just disposal of the proceedings. The Council cross-applied for permission to resile from their earlier admission of liability.
The Deputy District Judge's Decision
The application came before Deputy District Judge Evans on 24 th February 2005. It appears from the transcript of his judgment that the deputy district judge was referred not to CPR rule 3.4(2) but to CPR 14, which deals with admissions and, in particular to rule 14.1(5) which provides that the court may allow a party to amend or withdraw an admission. The judge was referred to and followed a line of authority including Gale v Superdrug [1996] 1 WLR 1089 and Flaviis v Pauley [2002] EWHC 2886 QB.
In Gale, the defendant had admitted liability before action but, when proceedings were begun shortly before the limitation period expired, it filed a defence denying liability. The district judge granted the plaintiff's application to strike out the defence. The judge dismissed the defendant's appeal, holding that the defendant's withdrawal of its admission had caused the plaintiff prejudice by reason of delay and disappointment. The Court of Appeal allowed the defendant's further appeal, saying that, when determining whether to strike out a defence, following the withdrawal of a pre-action admission, the court had to balance the prejudice which the defendant would suffer if deprived of his 'prima facie right' to resile, against the prejudice the plaintiff would suffer if the admission were withdrawn. The court had a general discretion and should take all the circumstances of the case into account. It was for the plaintiff to prove any prejudice she claimed to have suffered. There was no evidence of any prejudice to the plaintiff other than disappointment and, accordingly, the defence should not be struck out.
The existence of the broad discretionary power to hold a defendant to a pre-action admission or to allow him to resile from it had been assumed in High Court proceedings for many years before Gale. The power was supposedly based (somewhat doubtfully in my view) upon the effect of three 19 th century cases, cited in many successive editions of the Supreme Court Practice. Although those cases were doubtful authority for the proposition in support of which they were cited, the principle was accepted by the Court of Appeal (Roch and Swinton Thomas LJJ) in Standerwick v Royal Ordnance PLC [unreported] 6 th March 1995; transcript number 95/1888. In that case the court had to consider the scope of RSC Order 27 which governed 'Admissions' and in particular rule 3 which provided:
"Where admissions of fact or of part of a case are made by a party to a cause or matter either by his pleadings or otherwise, any other party to the cause or matter may apply to the court for such judgment or order as upon those admissions he may be entitled to, without waiting for the determination of any other question between the parties and the court may give such judgment, or make such order on the application as it thinks just."
Roch LJ, with whom Swinton Thomas LJ agreed, held that RSC Order 27 r.3 could be applied to a pre-action admission provided that, by the time the power came to be exercised, proceedings had begun and the person who had made the admission was a party. The exercise of discretion should take all the circumstances of the case into account.
In Gale, counsel on both sides agreed that, although the County Court Rules did not contain a provision equivalent to RSC Order 27 r.3, the court could and should apply the same principles as would have been applied had the case been brought in the High Court. As I have already said, the court exercised its discretion to permit the defendant to resile from its admission.
Following the introduction of the CPR, Part 14 replaced RSC Order 27. It was in different terms. The provision which appeared to be analogous to RSC Order 27 r.3 was CPR 14.1(5), which, as I have said, provides simply that the court may allow a party to amend or withdraw an admission. It is apparent from those words that rule 1(5) permits the court to exercise a broad discretion, but, of course, only in cases which fall within the scope of the rule.
The deputy district judge was referred to a post-CPR case, Flaviis v Pawley, in which Nelson J, purporting to act under the power in CPR rule 14.1(5) had exercised a general discretion and had allowed the defendant to resile from a pre-action admission of liability. However, it is apparent from the transcript that counsel had agreed that he should approach the case in that way and no one had suggested to him that rule 14.1(5) applied only to admissions made in the course of the proceedings.
Unsurprisingly, therefore, in the present case, the deputy district judge was satisfied that this was the right approach. Everyone seems to have lost sight of the fact that the claimant's application had been made under CPR rule 3.4.
The deputy district judge directed himself that he must ask first whether the Council's withdrawal of their admission had been made in good faith and whether it would be appropriate to permit the withdrawal. If it was or might be appropriate, he had to consider two further questions. These were whether the Council had a good prospect of defending the claim and finally what prejudice would be caused to the parties if he allowed the withdrawal of the admission; he had to carry out a balancing exercise.
The district judge then considered whether the admission was binding on the Council. He referred to CPR rule 14.1(5) . He reminded himself that there was no admission on the pleadings and he was dealing with a pre-action admission. He then referred to the pre-action...
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