Trill v Sacher
|England & Wales
|LORD JUSTICE GLIDEWELL,LORD JUSTICE NEILL
|06 May 1992
|Judgment citation (vLex)
| EWCA Civ J0506-5
|Court of Appeal (Civil Division)
|06 May 1992
 EWCA Civ J0506-5
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(MR. P.J. COX Q.C.)
Royal Courts of Justice
Lord Justice Neill
Lord Justice Glidewell
MR. A.G. POLLOCK Q.C. and MR. J. SMOUHA (instructed by Messrs S.J. Berwin & Co.) appeared on behalf of the Appellants/ Defendants.
MR. R.D. BURKE-GAFFNEY Q.C. and MR. A. CONNERTY (instructed by Messrs Bear Wilson & Lloyd) appeared on behalf of the Respondents/Plaintiffs.
This is an appeal against a decision of Mr P J Cox QC sitting as a Deputy High Court Judge who, on 30 April 1991, dismissed an application by the defendants to dismiss this action for want of prosecution. The Deputy Judge then made consequential orders, to some of which I shall refer later.
The plaintiffs, Mr. Trill and Miss Glanville, are designers of high fashion handbags, belts and other fashion accessories. Before 1982 they had both achieved considerable success and reputation in that field. They wished to form a new company to manufacture and sell articles designed by them. For this purpose they needed financial backing. They therefore entered into discussions with the first defendant, Mrs Sacher, who was the controlling director of a company called Argohome Ltd. Mrs Sacher is the wife of the second defendant, Mr John Sacher, who is, or was at the material time, a director of Marks & Spencer Plc.
By a written agreement made on 15 July 1982 between the two plaintiffs, Mrs Sacher, Argohome Ltd, Mr Jasper Conran (a fashion designer) and his company Jasper Conran Ltd., the parties agreed to form a new company, Christopher Trill Ltd, which is now the fourth defendant. All four individuals, parties to the agreement, became directors of the new company. The company had 100 issued shares, of which 75 were issued to Argohome and 25 were agreed to be issued to the plaintiffs to be shared between them in such proportions as they should decide. The agreement was expressed to last for five years in the first instance. The plaintiffs agreed to work full-time for the company, in return for salaries and commission. Argohome agreed to provide finance by guaranteeing bank borrowing by the company, together with management services, in return for a management fee.
The company was formed and in July 1982 started to trade. Its products were shown for the first time at the London Designer Collection in October 1982.
In their Statement of Claim in this action, the plaintiffs make the following allegations about Mrs Sacher's conduct from October 1982 onwards:
a) In or about October 1982 Mrs Sacher represented to the plaintiffs that she would be unable to obtain further overdraft facilities, which was untrue. As a result Mr. Trill obtained a loan of £10,000 from his father and himself loaned this amount to the company. Mrs Sacher also loaned £10,000 to the company.
b) In May 1983 Mrs Sacher made it clear to the plaintiffs that neither she nor Argohome Ltd was prepared to invest any more in the company, which the plaintiffs allege was a breach of the agreement of 15 July 1982.
c) Also in breach of that agreement, Mrs Sacher refused to devote sufficient time to the management of the company.
It is common ground that the plaintiffs were then introduced to Mr Stanbury, the fifth defendant, a friend of Mr John Sacher. Mr Stanbury controlled the third defendant, Steinberg & Sons Ltd. Steinberg was a major supplier to Marks & Spencer.
On 8 July 1983 the plaintiffs entered into a new agreement to sell their shares in Christopher Trill Ltd to Argohome at a nominal price and to resign as directors of the company. In return it was agreed that both plaintiffs would be employed as senior designers by the third defendant, Steinberg, at a salary subject to six months notice, and would be paid compensation for loss of their offices in Christopher Trill Ltd.
The plaintiffs allege that on 25 August 1983 they were summarily dismissed from their employment with Steinberg by the fifth defendant, Mr Stanbury, and paid six months salary in lieu of notice. In addition to the allegations of breach of contract against Mrs Sacher, the plaintiffs in their statement of claim as amended allege that they entered into the agreement of 1 August 1983 as the result of an inducement held out to them by all the defendants except Christopher Trill Ltd, and that these defendants had conspired together to defraud them. The nub of the allegation is that the offers of employment by Steinberg were sham offers which Steinberg and Mr Stanbury never intended to honour or be bound by.
In the statement of claim as pleaded and indeed after amendment in May 1985, the plaintiffs claimed rescission of the agreement of 8 July 1983, an order for the return to the plaintiffs of their shares in Christopher Trill Ltd, and damages including exemplary and aggravated damages. However, this claim for damages was not quantified in any way in the statement of claim.
The progress of the action
The action got off to a speedy start. The cause of action as alleged arose on or about 8 July 1983. On 26 September 1983 the writ was issued against the first, second and third defendants. The fourth defendant was added on 3 November 1983. On 23 November 1983 the statement of claim was served.
On 5 December 1983 the defendants took out a summons to strike out the writ and statement of claim as disclosing no reasonable cause of action. This application was heard by Master Topley on 16 March 1984. He dismissed the application, gave leave to add Mr Stanbury as the fifth defendant, and extended time for service of the defence until after any appeal against his order.
The first four defendants duly appealed, and the appeal was heard on 13 June 1984 by Mustill J. He allowed it to the limited extent of striking out two paragraphs alleging fraudulent misrepresentation, but otherwise dismissed the appeal.
The defendants appealed to this court, which heard the appeal on 3 September 1984. Griffiths LJ, in a judgment with which May LJ agreed, referred to the separate causes of action alleged in the statement of claim as originally drafted, and said:
"What has been submitted by Mr Lightman is that nowhere on the face of the pleadings does that allegation, namely, "You induced us to waive all our rights under the 1982 agreement by a bogus promise of employment by Steinberg Ltd' appear clearly set out.
I am bound to agree with Mr. Lightman that this pleading is not an elegant document. It does appear to me to have shied away from setting out the real gravamen of the complaint. Nevertheless, at the end of the day, I have arrived at the same conclusion as did Mr. Justice Mustill, which is that, reading the pleading as a whole, the nature of the allegation does emerge. As Mr Lightman has said, this being a serious matter the defendants are very anxious that it should be brought to trial as quickly as possible, because of course he points out that he is arguing this case upon the basis that he must accept what appears in the statement of claim, whereas in fact it will be seriously contested.
That being so, it seems to me that it is preferable that this action should proceed on the pleading as it stands at the moment, rather than that we should take the alternative course suggested by Mr Lightman, namely, to strike out the pleading in its present form and allow Mr Godfrey to recast it, setting out, certainly with greater clarity, the true nature of the allegation that the defendants have to meet."
The appeal to this court was therefore dismissed.
Sc, a year had passed since the issue of the writ, nine months of it on the defendants' application to strike out and subsequent appeals. At least those proceedings had the effect of clarifying the plaintiffs' allegations.
On 20 May 1985 the statement of claim was amended to reflect what Griffiths LJ had said, and re-served. We have had no explanation why, after the judgment of this court, it took over eight months to make this amendment, save that during this period the plaintiffs applied for legal aid.
On 9 July 1985, on an application by the plaintiffs for judgment against the defendants for failing to serve their defences (or in the case of the fifth defendant for failing to serve notice of intention to defend), the application was dismissed. The time for service of Defence was extended to 2 July 1985, the date on which a defence and counterclaim had already been served. A timetable for further steps in the action was then laid down. This provided for service of a reply to the defence within 21 days, exchange of lists of documents within 28 days, inspection seven days thereafter, and setting down for trial within 42 days thereafter.
On 31 October 1985 legal aid was granted to the plaintiffs.
On 12 December 1985 a defence to the counterclaim was served, four months outside the period limited by the order of 9 July 1985.
On 11 February and again on 15 April 1986, further orders were made for a timetable for the remaining steps in the action. The order of 15 April 1986 provided for lists of documents by 25 April 1986, inspection seven days thereafter, and setting down within 42 days thereafter. This timetable required the action to be set down not later than 14 June 1986.
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