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Case No: CCRTI 2000/0040/B1
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM STAFFORD COUNTY COURT
(HH Judge Rubery)
Royal Courts of Justice
Strand, London, WC2A 2LL
Thursday 18th May 2000
B e f o r e :
LORD JUSTICE PETER GIBSON
LORD JUSTICE BROOKE
and
LORD JUSTICE ROBERT WALKER
- - - - - - - - - - - - - - - - - - - - -
|
PAULINE
HANNIGAN
|
Claimant/
Appellant
|
|
-
and -
|
|
|
ANDREW
COOKE HANNIGAN
RAYMOND ROYCROFT
(sued in their capacity as executors of the estate of John James Hannigan)
SARA HANNIGAN
NICHOLAS HANNIGAN (a child)
ELIZABETH HANNIGAN
|
Defendants/
Respondents
|
- - - - - - - - - - - - - - - - - - - - -
(Transcript of the Handed Down Judgment of
Smith Bernal Reporting Limited, 180 Fleet Street
London EC4A 2HD
Tel No: 0171 421 4040, Fax No: 0171 831 8838
Official Shorthand Writers to the Court)
- - - - - - - - - - - - - - - - - - - - -
Stephen J Murray (instructed by Nowell, Meller & Nowell for the
Appellant)
Robert Hornby (instructed by Moss and Poulson for the Second
Respondent)
- - - - - - - - - - - - - - - - - - - - -
Judgment
As Approved by the Court
Crown Copyright ©
LORD JUSTICE BROOKE:
1. This is an appeal by the claimant Pauline Hannigan (whom I will call "Mrs
Hannigan") from an order of Judge Rubery in the Stafford County Court on 15th
December 1999 when he dismissed her appeal against an order of District Judge
Rowley on 25th August 1999 striking out these proceedings. The appeal, as the
judge appreciated when he granted permission to appeal, raises a point of
general importance under the Civil Procedure Rules.
2. Mrs Hannigan's husband John James Hannigan died on 13th May 1998. The
Executors of his will, who are the first two defendants, are his brother Andrew
and Mr Raymond Roycroft. Mrs Hannigan married her husband in October 1983. It
was the second marriage for both of them. Her children by her first marriage
are all grown up and independent now, as is her husband's daughter Sara
Hannigan who is the third defendant. The other two defendants are her
husband's 93-year-old mother Elizabeth Hannigan and Sara Hannigan's son
Nicholas who is 12 years old.
3. Mrs Hannigan has given an account of her marriage in a witness statement.
In short, her husband and she each had assets of their own when they married.
His house was more valuable than hers but she had greater savings. In 1985
they jointly bought a property called Severn Trow, which they ran as a bed and
breakfast establishment from 1987 onwards. Mrs Hannigan developed and extended
that business, as she had previous experience in the hotel trade, while her
husband organised most of the expensive repairs which had to be carried out
between 1985 and 1989, and then helped with running repairs and some of the
minor cooking. He had only been able to work for about six weeks after they
married, because he then had a number of heart attacks. He received invalidity
benefit (which later became incapacity benefit) from June 1984 onwards, and a
state retirement pension from October 1996 onwards.
4. When her husband died, the value of Severn Trow as a house and business was
about £180,000. They now owned it jointly as tenants in common, subject
to a small mortgage. It was their main asset. Mrs Hannigan relies on the
small income from the business to keep her, and she intends to remain there
until she is no longer capable of running the business.
5. Under the terms of her husband's will she was obliged to pay his executors
£10,000 (which she realised from her personal savings) in order to be
permitted to have the exclusive use of his share of Severn Trow on condition
she paid all the expenses repair and insurance of the house. The executors
were also directed to grant her an option enabling her to buy her husband's 50%
share of Severn Trow at a value to be determined at the date of his death,
after being given credit for the £10,000 she had already paid. This
apart, she was bequeathed her husband's personal chattels, and she was given
the status of one of a number of beneficiaries of a discretionary trust in
relation to the residue of the estate, the other beneficiaries being her
husband's mother, daughter and grandson and three local charities.
6. Mrs Hannigan is worried about the future and does not feel that her husband
made reasonable financial provision for her out of his estate. She therefore
instructed Mr Michael Durrell, who is a partner in a firm of solicitors in
Stafford called Nowell Meller & Nowell, to take the necessary steps to make
a claim for her for greater provision out of the estate. Under Section 4 of
the Inheritance (Provision for Family and Dependants) Act 1975 an application
for an order under Section 2 of that Act "shall not, except with the permission
of the court, be made after the end of the period of six months from the date
on which representation with respect to the estate of the deceased is first
taken out". A grant of probate to Mr Hannigan's executors was made on 11th
December 1998, so that the six month primary limitation period expired on 11th
June 1999.
7. Mr Durrell has explained that the issue of the claim was delayed as a result
of ongoing correspondence between the parties both before and after the time
when he was first instructed. He instructed counsel to settle the necessary
proceedings, and when counsel sent the papers back to him she advised that the
proceedings should be issued on Form N208. Counsel was of course referring to
the standard Claim Form to be used in proceedings under the new Civil Procedure
Rules which came into force on 26th April 1999. Unfortunately Mr Durrell
misunderstood this advice and used the 1998 edition of the County Court
Practice, in which Form N208 is a form of Petition in use under the old County
Court Rules which had just been superseded.
8. The proceedings were issued in this form on 10th June 1999. They set out
succinctly the nature of Mrs Hannigan's claim and the order she was seeking
under Section 1 of the 1975 Act. They stated that Part 8 of the Civil
Procedure Rules applied to the claim, and that the claimant relied on the
evidence contained in her witness statement filed with the claim. The petition
was accompanied by a four-page witness statement and three exhibits (copies of
the grant of probate, and of the will, and a schedule of assets).
9. The executors' solicitor was Mr Keiran Bond, of Moss and Poulson, a firm of
solicitors practising in Shrewsbury. On 26th July 1999 he applied for an order
pursuant to CPR 3.4(2)(c) that the Statement of Case should be struck out
because there had been a failure to comply with the rules and practice
directions. He filed a witness statement in support of his application in
which he gave nine reasons for asserting that the documents served on his
clients were defective. With a single exception, to which I need not refer, it
is accepted by Mrs Hannigan and her solicitors that all these complaints were
justified. In summary, Mr Bond complained of the following matters:
(1) The claim was issued on the wrong form: it should have been a Part 8 claim
form.
(2) The statement of case was not verified by a statement of truth.
(3) There was a failure to include the Royal Coat of Arms.
(4) The first defendant Andrew Cooke Hannigan was incorrectly named Andrew
Cooke.
(5) Mrs Hannigan's witness statement was signed in the name of her firm rather
than by her personally: if her legal representative was entitled to sign it on
her behalf, he should have signed in his own name.
(6) Her witness statement did not have the requisite legend in the top right
hand corner.
(7) Her witness statement failed to have marginal notes or a 3.5cm margin.
(8) The exhibit to her witness statement failed to have the requisite legend in
the top right hand corner, or a front page setting out a list of the documents
and the dates of all the exhibits. It also failed to have the documents
paginated.
(9) There was a failure to serve on the defendants an acknowledgment of service
form.
10. When the application came before District Judge Rowley on 25th August 1999
counsel appeared for Mrs Hannigan and for the two executors, and two of the
three other defendants appeared in person to support the executors'
application. No evidence was filed on behalf of Mrs Hannigan.
11. In his judgment the district judge was extremely critical of Mrs Hannigan's
solicitors. He said that the defendants' central objection was the failure
quite simply to comply with Part 8 of the Civil Procedure Rules. He commented
that preparation for the introduction of these rules had occupied judges and
practitioners for upwards of two years, and that this was the biggest change in
our civil procedure for 150 years.
12. He said that Form N208 of the old County Court Rules had been used for a
reason he did not quite understand. On page 139 of the 1998 County Court
Practice this form of petition was said to be "virtually unknown in the county
court" except for the cases mentioned on that page. He acknowledged that the
petition contained a statement that Part 8 of the Civil Procedure Rules applied
to the claim.
13. In giving his ruling he said that he bore in mind the strict six-month
limitation period applicable to cases under the 1975 Act. He found that there
was a proceeding before the court, which had been "wrongly and quirkily
instituted by Petition". He accepted that the court had power under the Civil
Procedure Rules to allow amendments to a statement of case, but he was
satisfied that on the proper construction of CPR 2.3 the petition used in this
case was not to be equated with a statement of case as defined in that rule.
He added that if he was wrong about that, he would refuse to exercise his
discretion to allow any amendment in view of the fundamental flaw in the
proceedings.
14. On 6th September 1999 Mrs Hannigan appealed against this order. She also
applied to the circuit judge for an order under CPR 3.9 seeking relief from the
sanction imposed by the district judge and an order granting her leave to
reinstate and amend and serve her statment of case or petition and witness
statement as necessary in accordance with the CPR. This application was
supported by a witness statement signed by Mr Durrell in which he explained how
the mistake had come to be made. He also set out arguments, with reference to
CPR 3.9, why relief from the strike-out sanction should be granted.
15. At the hearing before the judge counsel appeared for the second defendant.
Mr Andrew Hannigan, the deceased's brother, who is the first defendant, had now
instructed a different firm of solicitors in Shrewsbury. This firm had written
to the court explaining that their client neither opposed nor supported his
sister-in-law's application. Since he was neutral, they had sought and
obtained permission to be excused attendance at the hearing.
16. In his judgment Judge Rubery, who is the designated civil judge for the
local area, was as critical of Mr Durrell's firm as the district judge had
been. He said it was incumbent on Mr Durrell to be aware of the change in the
procedural regime that took place on 26th April 1999, and he appeared to accept
counsel's submission that it was no excuse to use an out of date County Court
Practice. He said he had been reminded that there was not just one error in
the issue of the proceedings, but numerous errors. He added that it appeared
to be common ground between counsel that Mrs Hannigan might not be able to
obtain an extension of time for making her claim under the 1975 Act if the
present proceedings were struck out.
17. The judge then considered in turn the nine specific factors mentioned in
CPR 3.9(1). He made no adverse findings under (1)(b), (c), (e) or (g): under
(f) the relevant failures were obviously caused by Mrs Hannigan's legal
representative. As to (1)(h) and (i), he said he did not minimise the effect
that a refusal of relief would have on Mrs Hannigan, although he had no
specific details of the financial hardship she would suffer. It had been
accepted that the executors would not suffer prejudice in the accepted sense of
the word.
18. After considering these matters, he said that clearly Mrs Hannigan would be
affected by the decision he had to make, as would others who were present in
chambers that day. He ended his judgment in these terms:
"I highlight that, because it is a difficult decision for this court to make.
The court does not shirk from difficult decisions if they have to be made and I
regret to say that I have to make the decision to refuse the relief sought by
the appellant. It may sound pompous when I say this and I do not mean it to
be, but the Civil Procedure Rules were drawn to ensure that civil litigation
was brought up to a higher degree of efficiency than possibly pertained before.
Much publicity was given widely to the forthcoming rules. Much time and money
was spent by the Lord Chancellor's Department and by courts endeavouring to
educate judges, staff and the profession as to the forthcoming rules. Despite
all that, and I do not mean to be unkind when I say this, it appears that for
whatever reason the importance of the new rules and adherence to them had not
reached Mrs Hannigan's legal representative. It is no excuse, in my opinion,
to use an out of date form. It is no excuse to allow the numerous errors, as
detailed in Mr Bond's statement, to occur in the way that they did. It was not
simply using the wrong form N208. I could possibly condone that. But the
whole form that the application was drawn in was wrong even pre-26th April. I
do not - I am open to correction of course - interpret Civil Procedure Rule
3.10 as giving me, in effect an appellate court, the power to rectify such
omissions which I consider to be serious simply by saying let us accept those
and get on with it. It is tempting, I know, but in my view, and some would say
this possibly as a designated civil judge with a duty to see that the rules are
complied with, I think they must be complied with. Discretion will be
exercised where appropriate, but there is too much wrong with these proceedings
to exercise a discretion in the appellant' favour."
19. Although the point was in issue before the district judge, who held that he
had no jurisdiction to permit an amendment because the document filed with the
court was not a statement of case within the meaning of CPR 2.3(1), it is now
common ground that Judge Rubery had the power under CPR 3.9 and 3.10 to grant
relief from the district judge's order and to make an order remedying the error
made by Mrs Hannigan's solicitor. The issue we have to decide on this appeal
is whether he was plainly wrong in the manner he exercised his discretion, or
whether his decision fell within the wide ambit of the discretion afforded to
him by the Civil Procedure Rules so that this court should not interfere with
it. It is accepted that he correctly considered each of the factors enumerated
in CPR 3.9(1) before making his decision. It is also accepted on this appeal
that the critical factors in this case are those that appear under (a), (d) and
(i) of that list:
(a) the interests of the administration of justice;
(d) whether there is a good explanation for the failure;
(i) the effect which the granting of relief would have on each party.
20. There is another matter about which there cannot be any dispute, although
it did not feature in either of the judgments in the court below. The "quirky"
petition was filed at the Stafford County Court and sealed by that court on
10th June 1999 and it contained all the information the defendants needed in
order to be able to understand what was being claimed. They were told that
Part 8 of the Civil Procedure Rules applied to the claim, and they were also
told that the claimant relied on the evidence contained in her witness
statement filed with the claim. In other words, all the complaints being made
by the defendants' solicitor were claims about form, not about substance. Mr
Hornby, who appeared for the second defendant, accepted that this was the
case.
21. Under the old rules the battle between form and substance was fought out in
a trilogy of cases in the 1960s and eventually the view of Lord Denning MR that
substance should triumph over form prevailed, aided and abetted by a
rule-change in 1965.
22. Although we must avoid, so far as possible, the temptation of going back to
cases decided under the old procedural regimes as an aid to the interpretation
of the new regime, it is instructive to look at the issues which were the
subject of controversy at that time.
23. In Pontin v Wood [1962] 1 QB 594 a writ had been issued just before
the expiration of the relevant limitation period in a defective form in that it
was endorsed merely with the words "the plaintiffs' claim is for damages for
personal injuries". The judge in chambers held that the writ was a nullity
which had not been cured by a proper statement of claim served within the
limitation period. This court reversed him holding that the writ was not a
nullity. It was merely defective and could be cured by the subsequent delivery
of a proper statement of claim, albeit delivered after the expiry of the
limitation period. Holroyd Pearce LJ, giving the leading judgment, described
how in the procedural reforms which came into effect in 1875 the court had been
deliberately freeing itself from the technicalities which had marred civil
procedure in earlier times. He quoted at p 609 an extra-curial observation by
Bowen LJ in 1887:
"It may be asserted without fear of contradiction that it is not possible in
the year 1887 for an honest litigant in Her Majesty's Supreme Court to be
defeated by any mere technicality, any slip, any mistaken step, in his
litigation."
24. In re Pritchard [1963] 1 Ch 502 was a case in which an originating
summons seeking relief similar to that claimed by Mrs Hannigan in the present
proceedings, was accepted and sealed in a local district registry. It ought to
have been sealed in the Central Office of the Royal Courts of Justice.
Wilberforce J held that the originating summons was a nullity and that all
steps taken under it were void, and this court, by a majority, (Upjohn and
Danckwerts LJJ, Lord Denning MR vigorously dissenting), upheld his decision,
holding that RSC Order 70 Rule 1 gave the court no power to cure proceedings
which were a nullity.
25. In the revised version of the Rules of the Supreme Court, introduced in
1965, the new Order 2 Rule 1(i) provided that:
"Where, in beginning or purporting to begin any proceedings or at any stage in
the course of or in connection with any proceedings, there has, by reason of
anything done or left undone, been a failure to comply with the requirements of
these rules, whether in respect of time, place, manner, form or content or in
any other respect, the failure shall be treated as an irregularity and shall
not nullify the proceedings, any step taken in the proceedings, or any
document, judgment or order therein."
26. In the third case in the trilogy, Harkness v Bell's Asbestos and
Engineering Ltd [1967] 2 QB 729, the plaintiff's solicitors made an
application to a district registrar for leave of the court for the purposes of
the Limitation Act 1963 when they ought to have made the application to a judge
in chambers. The district registrar ordered that Section 2(1) of the
Limitation Act 1939 should not afford a defence to the proposed action for
damages, and a writ was duly issued. A judge in chambers held that this order
was a nullity, and made no order. A different judge in chambers dismissed an
application to rectify the order and have it treated as valid. This court
unanimously allowed the plaintiff's appeal from the order of the second judge.
Diplock LJ began his judgment at p 736 in these terms:
"Thomas William Harkness, retired boiler-lagger, if he had followed, as I have
no doubt he has, the intricacies of the interlocutory proceedings in the case,
must have thought that `the law is an ass'. I am not sure that this judgment
will change his opinion, but at any rate he will not feel it is such an unjust
ass as he must have felt before. It was to remedy just this kind of injustice
that the new RSC Ord 2 r 1 was made."
27. Mrs Hannigan's opinion of the present proceedings is not on record, but I
imagine that it is little different from that attributed to Mr Harkness.
28. Lord Denning MR said at p 735A-B that the new rule should be construed
widely and generously to give effect to its manifest intentions:
"I think that any application to the court, however informal, is a
`proceeding'. There were `proceedings' in being at the very moment that the
plaintiff made his affidavit and his solicitor lodged it with the court."
29. Diplock LJ (at p 736D) and Russell LJ (at p 737C) expressly agreed with him
on this point.
30. It could not possibly be argued, nor did Mr Hornby attempt to argue, that
it was the intention of the makers of the Civil Procedure Rules to return to
the arid technicalities which had existed before the 1965 rule change. Indeed,
in Chapter 12 of his final report on Access to Justice (July 1996) Lord Woolf
reiterated his view that the complexity of the present rules of court could be
seen as an obstacle to justice, and he instanced in this context the four
different ways of starting proceedings in the high court, together with another
four in the county court, with further variations within these categories.
31. In order to remedy this mischief the Civil Procedure Rules introduced the
principle of using a single standard claim form for all types of civil
proceedings. From 26th April 1999 proceedings of every type are started when
the court issues a claim form at the request of a claimant (CPR 7.1): the date
entered on the form by the court is the date when the form is issued (CPR 7.2).
The staff at the Stafford County Court should never have permitted proceedings
to be issued on the form adopted by Mr Durrell in this case, but it must be
remembered that these events occurred in the early weeks of the new procedures,
when mistakes of this kind were always likely to be made from time to time.
32. Because the questions raised in the proceedings were not likely to involve
a substantial dispute of fact, counsel had correctly advised that the Part 8
procedure should be used (see CPR 8.1(2)(a)). It has not been suggested that
the claimant's solicitors did not set out all the information required of a
claimant using the Part 8 procedure (see CPR 8.2) or that the written evidence
on which she intended to rely was not filed with the form which was used as a
claim form or served on the defendant with that document (see CPR 8.5(1) and
(2)). The problem was the technical one that her solicitors did not use CPR
practice form N208 (the Part 8 claim form) to start the claim contrary to
paragraph 3.1 of the first Practice Direction supplementing CPR Part 7, and
that they also made the other technical mistakes listed earlier in this
judgment.
33. I am in no doubt that the manner in which the judge exercised his
discretion was seriously flawed, because he wholly failed to take into account
the fact that in these proceedings, sealed by the county court within the
relevant limitation period, the defendants were given all the information they
required in order to be able to understand what order Mrs Hannigan was seeking
from the court and why she was seeking it. He concentrated exclusively on all
the technical mistakes Mr Durrell had made - the lack of a Coat of Arms, the
lack of a 3.5cm margin, the absence of the requisite legend in the top right
hand corner of the documents and so on - and in so doing, in my judgment, lost
sight of the wood for the trees. The sanction he imposed was also a quite
disproportionate response to the procedural irregularities he was
considering.
34. In these circumstances it appears to me that this court is not merely
entitled, but bound, to exercise its discretion afresh.
35. Although Mrs Hannigan was seeking an order from the judge seeking relief
from the sanction imposed by the district judge, she had a right of appeal by
way of a rehearing against the district judge's order, and in my judgment the
matter fell technically within CPR 3.10 rather than CPR 3.9, because the
sanction did not flow automatically from any rule, practice direction or court
order, other than the order which was being appealed. I use the word
"technically" because I have no doubt that in deciding whether or not to make
an order to remedy the relevant errors in circumstances like these, the court
should take into account each of the factors listed in CPR 3.9(1), so far as
they are relevant, as well as any other relevant circumstance. Mr Hornby
agreed with this analysis.
36. Of course the proceedings should have been started on CPR form N208, as
opposed to CCR Form N208, and Mr Durrell ought not to have made all the other
mistakes which were attributable to his culpable lack of familiarity with the
new rules. Moreover the judge was quite correct when he said that the Civil
Procedure Rules were drawn to ensure that civil litigation was brought up to a
higher degree of efficiency. But one must not lose sight of the fact that the
overriding objective of the new procedural code is to enable the court to deal
with cases justly, and this means the achievement of justice as between the
litigants whose dispute it is the court's duty to resolve. In taking into
account the interests of the administration of justice, the factor which
appears to me to be of paramount importance in this case is that the defendants
and their solicitors knew exactly what was being claimed and why it was being
claimed when the quirky petition was served on them. The interests of the
administration of justice would have been much better served if the defendants'
solicitors had simply pointed out all the mistakes that had been made in these
very early days of the new rules and Mrs Hannigan's solicitor had corrected
them all quickly and agreed to indemnify both parties for all the expense
unnecessarily caused by his incompetence. CPR 1.3 provides that the parties
are required to help the court to further the overriding objective, and the
overriding objective is not furthered by arid squabbles about technicalities
such as have disfigured this litigation and eaten into the quite slender
resources available to the parties.
37. Mr Hornby submitted that things were not quite as simple as this, because
his clients wished to resist this claim, and there was a potentially valuable
limitation point available to them if they succeeded in striking out the
proceedings on their chosen ground. I can well understand this attitude,
particularly in the early days of the new regime, when it was not widely
appreciated that the old turf wars between solicitors over technicalities were
being superseded by a new climate in which the emphasis was the achievement of
justice at a cost which was not disproportionate to the matters involved in the
dispute. The strategy adopted by the defendants has, however, sadly led to the
incurring of expense in ancillary litigation over technicalities which is out
of all proportion in relation to what is really in dispute in this case.
38. If we do not make an order directing the correction of all these errors and
we leave the judge's order to stand, in my judgment the result would be the
antithesis of justice. Mrs Hannigan's claim would be struck out in its infancy
without any investigation into its merits and the defendants would receive a
completely unjustified windfall simply because of a number of technical
mistakes made by a solicitor in the very early days of a new procedural regime.
In reaching my conclusion, I have taken into consideration each of the matters
listed in CPR 3.9(1) as well as the other relevant circumstances of the case.
The only matters which appear to be appropriately taken into account in the
defendants' favour are the sheer number of technical mistakes and the fact that
Mrs Hannigan's solicitor had no good reason for making them. As against these
matters the scales are in my judgment tipped overwhelmingly in Mrs Hannigan's
favour by the interests of the administration of justice and the fact that to
strike out her claim in these circumstances is a totally disproportionate
response to the errors that were made.
39. Nothing in this judgment must be taken as giving any kind of green light to
sloppy and inefficient practices in solicitors' offices. There are a number of
different devices now available for making the courts uncomfortable places for
sloppy and inefficient lawyers. But they should not be extended to the denial
of justice to the lawyers' clients when it would be unjust to deny them
justice.
40. I would therefore allow this appeal.
LORD JUSTICE ROBERT WALKER:
41. I agree
LORD JUSTICE PETER GIBSON:
42. Although we are differing from the judge in the exercise of his discretion,
I am in such complete agreement with the judgment of my Lord, Brooke LJ that
there is nothing which I can usefully add.
Order: Appeal allowed. Claimant's costs to be paid by second
defendant to be indemnified out of the estate remaining after any depletion to
be reserved until after the hearing of the claimants case.
(Order does not form part of the approved judgment)
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