Willers v Joyce (No 1)
|England & Wales
|Lord Toulson,Lady Hale,Lord Kerr,Lord Wilson,Lord Clarke,Lord Mance,Lord Neuberger,Lord Sumption,Lord Reed
|20 July 2016
| UKSC 43
|20 July 2016
 UKSC 43
Lord Neuberger, President
Lady Hale, Deputy President
THE SUPREME COURT
On appeal from:
John McDonnell QC Hugo Page QC Adam Chichester-Clark
(Instructed by De Cruz Solicitors)
Bernard Livesey QC Paul Mitchell QC
(Instructed by Laytons)
Heard on 7 March 2016
( with whom Lady Hale, Lord Kerr and Lord Wilson agree)
This appeal raises the question whether the tort of malicious prosecution includes the prosecution of civil proceedings. It also raises a question about whether and in what circumstances a lower court may follow a decision of the Privy Council which has reached a different conclusion from that of the House of Lords (or the Supreme Court or Court of Appeal) on an earlier occasion. The second question is the subject of a separate judgment: .
The appeal is from a decision of Ms Amanda Tipples QC, sitting as a deputy judge of the Chancery Division, striking out a claim brought by Mr Peter Willers against Mr Albert Gubay as disclosing no cause of action known to English law. The judge was faced with conflicting views of the House of Lords in and the Privy Council in . She held that she was bound by the decision of the House of Lords but granted a "leapfrog" certificate under section 12 of the Administration of Justice Act 1969, and permission to appeal was given by this court. In excellent arguments on both sides the court was referred to a large number of authorities. In examining the case law it will be convenient to begin with the case and the case, before going back to the earlier authorities, and then to consider the policy arguments. First, it is necessary to explain in brief outline the nature of the claim.
Mr Gubay was a successful businessman. He died while this appeal was pending and his executors now act on behalf of his estate. Mr Willers was Mr Gubay's right hand man for over 20 years until he was dismissed by Mr Gubay in the summer of 2009. Among the group of companies controlled by Mr Gubay was a leisure company, Langstone Leisure Ltd ("Langstone"). Mr Willers was a director of it. Prior to Mr Willers' dismissal, Langstone pursued an action for wrongful trading against the directors of another company, Aqua Design and Play Ltd ("Aqua"), which had gone into liquidation. That action was abandoned shortly before trial in late 2009 on Mr Gubay's instructions.
In 2010 Langstone sued Mr Willers for alleged breach of contractual and fiduciary duties in causing it to incur costs in pursuing the Aqua directors. Mr Willers defended the action, and issued a third party claim for an indemnity against Mr Gubay, on the grounds that he had acted under Mr Gubay's directions in the prosecution of the Aqua claim. On 28 March 2013, two weeks before the date fixed for a five-week trial of the action, Langstone gave notice of discontinuance. On 16 April 2013 Newey J ordered Langstone to pay Mr Willers' costs on the standard basis.
It is Mr Willers' case that the claim brought against him by Langstone was part of a campaign by Mr Gubay to do him harm. It is unnecessary to set out the details pleaded by him in the present action. It is not disputed that they include all the necessary ingredients for a claim of malicious prosecution of civil proceedings, if such an action is sustainable in English law. In particular, it is sufficiently alleged that Mr Gubay was responsible for having caused the claim to be brought; that the claim was determined in Mr Willers' favour; that it was brought without reasonable cause, since Mr Gubay knew that it was he who was responsible for causing Langstone to bring the earlier wrongful trading claim; that Mr Gubay was actuated by malice in causing Langstone to sue Mr Willers; and that Mr Willers suffered damage. The heads of damage claimed are damage to his reputation, damage to health, loss of earnings and the difference between the full amount of the costs incurred by him in defending Langstone's claim (£3.9m) and the amount recovered under the costs order of Newey J (£1.7m).
Mr Gregory was a member of Portsmouth City Council. Allegations were made that he had misused, for his personal advantage, confidential information gained by him as a councillor about matters affecting local properties. Internal disciplinary proceedings resulted in findings of misconduct and his removal from various committees. The details were widely reported in the local press. Mr Gregory successfully challenged the decision by means of judicial review. He then brought an action against the council for malicious prosecution of the disciplinary proceedings. The House of Lords upheld a decision striking out his claim. The main speech was given by Lord Steyn.
It was argued by Mr Gregory that disciplinary proceedings were penal in nature and should therefore be covered by the tort of malicious prosecution in the same way as criminal proceedings. This argument was rejected. Lord Steyn observed that there was a great diversity of statutory and non-statutory disciplinary proceedings with different purposes. To leave it to the courts to decide on a case-by-case basis which disciplinary proceedings might ground the tort would be liable to plunge the law into uncertainty. In arguing that the disciplinary proceedings should be regarded as penal, counsel for Mr Gregory conceded that the tort did not extend to civil proceedings generally. Lord Steyn observed (pp 427–428) that it had never been held to be available beyond the limits of criminal proceedings and a few special cases of abuse of civil legal process, such as malicious presentation of a winding up or bankruptcy petition ( ; ), malicious obtaining of a search warrant ( ) or bench warrant ( ), or malicious process to obtain execution against property ( ). He said that although such cases appeared to be disparate, there was in a broad sense a common feature in that they potentially involved immediate and irreversible damage to the reputation of the victim. Another recognised head of actionable abuse of process was the malicious arrest of a vessel ( ) and in such cases the loss was merely financial, but Lord Steyn described them as rare. He said that the traditional explanation for not extending the tort to civil proceedings generally was that in a civil case there was no damage, since the fair name of the victim was protected by the trial and judgment. Lord Steyn acknowledged (p 432) that this theory was no longer plausible in an age when reputational harm can be caused by pre-trial publicity, but he said that it was a matter for consideration whether there might be other reasons for restricting the availability of the tort in respect of civil proceedings.
Lord Steyn concluded (p 432) that it was not necessary for the disposal of the case to express a view on the argument in favour of extending the tort to civil proceedings generally, but that it would be unsatisfactory to leave the matter in the air, and he therefore stated his opinion briefly. He accepted that there was a stronger case for extending the tort to civil proceedings generally than to disciplinary proceedings, but he said that "for essentially practical reasons" he was not persuaded that such an extension had been shown to be necessary, taking into account the protection afforded by the torts of defamation, malicious falsehood, conspiracy and misfeasance in public office.
Mr Alastair Paterson was a chartered surveyor in the Cayman Islands. He provided services as a loss adjuster and as a project manager, acting through two companies of which he was a director. In those capacities he was instructed by the insurers and owners of residential development in the Cayman Islands that had suffered hurricane damage. Mr Paterson instructed building contractors to carry out the remedial work. Acting on his advice the insurers made substantial payments to the contractors. He was close to finalising his adjustment of the insurers' liability, when the insurers' internal claim-handling was taken over by a newly appointed senior officer, Mr Frank Delessio. From their past acquaintanceship Mr Delessio had a strong dislike of Mr Paterson and a low opinion of his competence.
On studying the paperwork, Mr Delessio became concerned that there was a serious lack of documentation to support the payments which the insurers had already made on Mr Paterson's advice. He announced that he intended to drive Mr Paterson out of business and to destroy him professionally. He instructed another surveyor and loss adjuster to value the work done, but on Mr Delessio's instructions the second surveyor did not speak to Mr Paterson or the contractors. Nor did he make inquiries of the subcontractors or suppliers about costs or consult the structural engineers who had prepared the drawings. On the strength of the figures put forward by the second surveyor, Mr Delessio caused the insurers to sue Mr Paterson, his companies and the contractors, claiming damages on various bases including deceit and conspiracy to defraud. He was also instrumental in alerting the local press to the...
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