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England and Wales Court of Appeal (Civil Division) Decisions |
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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Cohen v Kingsley Napley & Anor [2006] EWCA Civ 66 (10 February 2006) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2006/66.html Cite as: [2006] EWCA Civ 66 |
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COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE,
QUEEN'S BENCH DIVISION
THE HONOURABLE MR JUSTICE TUGENDHAT
Strand, London, WC2A 2LL |
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B e f o r e :
LORD JUSTICE SEDLEY
and
LORD JUSTICE SCOTT BAKER
____________________
JOSSELYNE COHEN |
Appellant |
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- and - |
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KINGSLEY NAPLEY & ANR |
Respondents |
____________________
Smith Bernal WordWave Limited
190 Fleet Street, London EC4A 2AG
Tel No: 020 7421 4040 Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
MR I GATT QC (Solicitor Advocate) for the Respondent
____________________
Crown Copyright ©
Lord Justice Pill :
"2. That retainer in turn related to proceedings in which a firm of architects referred to as KNM had sued for their fees. The defendants were Mr Cohen, together with a firm of accountants of which he had been senior partner and a company called Ryhald in which Mr Cohen had been interested. Mr Cohen had counterclaimed against KNM. KNM had started that action in February 1992, and the counterclaim was served on April 16, 1992. KNM had been retained to carry out work on two projects. These were referred to respectively as the St John's Wood project and the French project. KNM had ceased work in 1991.
3. KN deny that they have been negligent, but the issues before me relate not to that, but to whether these proceedings are statute barred. That issue in turn depends on whether the counterclaim against KNM had any prospect of success by the time KN were acting in the period December 1995 to November 21, 1996.
4. The claimant sues on her own behalf and as assignee of her husband. He was bankrupt. His trustee in bankruptcy has been joined but has taken no part in the matters to which this judgment relates."
The fees claimed by KNM were in the region of £23,000. The counterclaim was for about £1.8million
"There are three matters before the Court: the application of KN for the striking out of the claim on the ground that the claimant's Particulars of Claim disclose no reasonable grounds for bringing the claim, or summary judgment under Pt 24 on the ground that the claimant has no real prospect of succeeding on her Claim; the application of the claimant for permission to amend the Particulars of Claim dated April 19, 2005; and the adjourned Case Management Conference, if the matter proceeds. It is also accepted by both parties that KN apply to strike out those paragraphs of the Reply alleging deliberate concealment on the part of Mr Osborn [of the respondent firm]. The issue in this application covers substantially the same ground as the claimant's application for permission to amend the Particulars of Claim."
As the judge noted, central to the issues was the submission of the respondents that if any relevant damage was suffered before 21 November 1996, the claim is statute barred.
"Judgment is entered for the First Defendant [KN] in relation to all the claims made in the Particulars of Claim other than the claim relating to the First Defendant's alleged negligence and/or breach of contract in relation to the alleged basement counterclaim."
"However the defendants' failure to issue a summons for directions or, if one were to treat the summons issued in 1997 as tantamount to such a summons (since as a matter of practice all appropriate directions would have been given on it, whether or not specifically sought), the failure to do so promptly after 30 July constitute, both individually and collectively, a contumelious disregard of the rules such as to amount to an affront to the court and to its rules. In my judgment the conduct of defendants' case has from 1991 been carried on with the intention that the interests of Mr Cohen should take precedence over compliance with the rules of court and thus with a calculated disregard for them: see, for example, the early failure to comply with the court's order of 9 September and Mr Cohen's deliberate failure to disclose in the list of documents served in June 1993 the existence of the assignment executed in 1991 as admitted in his solicitors' letter of 11 April 1994, as well as the key failures. A person in the position of the third defendant in mounting and maintaining a claim for the furtherance of his own commercial interests may do so only within the rules of court. Whatever misfortunes Mr Cohen may have suffered, e.g. in his encounters with the Legal Aid Board, they do not excuse the failures relied on by the plaintiff. There was no reason why a summons for directions should not have been issued in 1994. Mr Cohen's difficulties in funding the action would have been heard sympathetically and probably directions would then have been given permitting the suspension of the prosecution of the counterclaim for a little while. There was certainly no reason why a summons for directions (or even a summons for only specific orders) should not have been issued immediately after 30 July 1997, as contemplated by the notice of intention to proceed.
For these reasons, on the plaintiff's consent to the dismissal of its action, the counterclaim of all the defendants will be dismissed."
"On these facts there is no arguable basis for saying that the claims would not have been struck out if the summons for strike out had been heard in early 1997. And for the same reasons, any protective writ issued in respect of the pleaded claims would also have been struck out".
Thus, the judge concluded, "the claims pleaded in the counterclaim against KNM had no value by 21 November 1996".
"It would be wrong to assess the value of the claim by reference to what, with hindsight, can be seen to be a wrong view of the law. It would also be wrong to investigate what KNM might have done as a matter of fact, because that was influenced by the prevailing view of the law. In any event, a claim should not be valued on the footing that a defendant might mistakenly think it had a value when as a matter of law it did not. However, if the facts would have been materially different had an application to strike out the counterclaim come before the court just before November 21, 1996, then it is those facts which are relevant in determining the value of the claim."
The finding that it would be wrong to investigate as a matter of fact what KNM would have done was restated at paragraph 35:
"For the purpose of assessing the value of the claim just before November 21 1996, it is to be assumed that a notice of intention to proceed would have been issued at about that time, and that the application to strike out would have been issued shortly after, say December 1996 or January 1997."
"But often, when an action has gone to sleep for years, the actual application to strike is not made until years after it might successfully have been done. In such cases it seems to me that the damage is caused when there has been such inexcusable and inordinate delay or non-compliance with rules such that the court would have struck out the action and pursuant to CPR, Part 3.4, because the chose in action has so diminished in value to be of no real value."
a) in response to a notice from the Court Service dated 15 November 1995 that KNM's claim would be listed before the judge to show cause why it should not be struck out, KNM's solicitors wrote on 24 November referring to the lack of progress but stating: "We trust that this explains the position and look forward to hearing from you with confirmation that the matter will not be struck out". KNM wished to preserve their claim and there is at present nothing to suggest any change of attitude by KNM in the course of 1996.
b) KNM's retainer by the claimant ended on about 28 March 1991. In a letter to the Legal Aid Board in July 1997, their solicitors referred to time for the counterclaim having expired "at the very latest, by 28 March 1997." KNM may not have been advised to apply to strike out until at least after that date, by which time the action could have proceeded.
c) KNM adopted a cautious attitude throughout. When notice of intention to proceed was served in June 1997, they did not apply to strike out. Their solicitors corresponded with the legal aid board as to whether the claimant should have legal aid but it was only eight months later that the application to strike out was made.
d) While the law as to striking out, it is accepted, had not changed between early 1997 and early 1998, it may have been perceived, on behalf of KNM, to have been more tolerant at the earlier date. I do not myself see much force in this point.
e) While their conduct is not in issue on the present application, KN have seen fit to deny (amended defence paragraph 32(c)) that a reasonably competent solicitor "would have understood there to have been a need to advise as to the risk of the action being struck out as an abuse of the court's process".
Section 32 of the 1980 Act
Result
Lord Justice Sedley:
Lord Justice Scott Baker: