Roberts v Price and another COURT OF APPEAL (CIVIL DIVISION) (Transcript: Smith Bernal) HEARING-DATES: 25 FEBRUARY 2000 25 FEBRUARY 2000 COUNSEL: R Walford for the Appellant; P Emerson for the Respondent PANEL: EVANS LJ, JONATHAN PARKER J JUDGMENTBY-1: EVANS LJ JUDGMENT-1: EVANS LJ: More in sorrow than in anger, I have to say that this appeal is redolent of the excesses that came to be practised in the name of the adversarial system under the former Rules of the Supreme Court which have been outlawed by the Civil Procedure Rules. I say outlawed deliberately because the courts will no longer tolerate interlocutory applications which are time-consuming and expensive and which delay rather than assist in the prompt and efficient resolution of the disputes which have made litigation necessary. The present claim is one for damages for negligence brought by Mr Gwynfor-Edwards Roberts, an architect, a former property owner and property developer. He and his wife were the owners of properties and the owners of development companies, and almost inevitably their tax affairs were always complex. In addition they were at the material time members of Lloyds, were so-called casualties of the Lloyds debacle and, as a result, their tax affairs became even more complicated than they were. In 1993 the second defendants, Bentley Jennison, a firm of accountants, became their accountants and financial advisors. Putting the matter very broadly, in 1995 the defendants advised the claimant as to steps which he might take to ameliorate his tax position. Unfortunately, by that time the Lloyds losses had caught up with him and his case is that he was then unable to take advantage of that advice. He says, however, that had that advice been given earlier, specifically in 1993, then he would have been able to take steps which would have had that result. That is, and has been throughout, the nature of his claim. The basic objection taken to it by the defendants is that he fails to show what he could have done even in 1993, having regard to the fact that the Lloyds losses had already begun to accumulate. There is undoubtedly a complication arising from the well-known system whereby Lloyds losses for a given year are not declared until three years or so later. That is by way of background. The writ was issued on 25 June 1997. Pleadings were exchanged. Witness statements were due to be exchanged on 4 December 1998, but on that date the defendants chose, rather, to issue a summons under Ord 18, r 19 to strike out the Statement of Claim. That summons is worth quoting, if only to record its language, happily now archaic. What was sought was an order that the Writ and Statement of Claim be struck out and the action be dismissed against the second defendants: "...on the grounds that what is pleaded is scandalous, frivolous, and vexatious and/or is an abuse of the process of the Court and/or under the inherent jurisdiction of the Court." The application was and has been and is now identified as an objection that the Statement of Claim fails fully to plead or to particularise the nature of the relevant part of the claim. That summons came before His Honour Judge Boggis QC in the Mercantile Court in Birmingham on 19 March 1998. The learned judge recognised that there were valid objections to the pleadings and he adjourned the matter, it seems for 12 days, so that the claimants could reformulate the relevant parts of the Statement of Claim. The resumed hearing on 31 March saw the application maintained, notwithstanding the amendments which the claimants had drafted. The learned judge dismissed the application on the ground that he was satisfied with the new form that the pleadings took. There was a further hearing on 19 April when costs and related matters were discussed. The judgment has to be commended for its extremely clear statement of the issues, in what could easily have become an unnecessarily complex statement of the financial issues involved. The learned judge achieved the opposite: a clear statement in simple language of what are undoubtedly underlying issues of some complexity. He refused permission to appeal in the following terms: "1 Matter of discretion. 2 It is my view that this case must proceed to trial so that the facts are known." Undeterred, the second defendants sought permission to appeal. The single Lord Justice, Mance LJ, indicated that he was minded to refuse permission, but nevertheless the application was renewed before the Court of Appeal on 18 October. The matter came before Peter Gibson LJ and Mance LJ and the court (Peter Gibson LJ in particular) was persuaded that at least some of the points which the second defendants sought to raise on appeal were arguable. If the claimant had been present on that occasion, then he could have made submissions as to the relevant principles of the Civil Procedure Rules which had been introduced since 19 April, and which Mr Emerson has outlined clearly and effectively in his skeleton argument for the purposes of this appeal. The gravamen of those submissions is that an application to strike out pleadings is inappropriate under the Civil Procedure Rules when the action has got so far as the exchange of witness statements and the exchange of experts reports, so that the pleadings, to quote Lord Woolf in the case of McPhilamey v Times Newspapers [1999] 3 All ER 775, [1999] EMLR 751 have: "...frequently become of only historic interest." To quote from Mr Emerson's skeleton argument: "This comment applies with great force in a case such as this when the arguments about quantum are being dealt with by experts who have exchanged substantial reports." The situation as I would see it (but I would emphasise that we have not heard full argument on this aspect of the matter) under the Civil Procedure Rules is that the pleadings have a function to serve in defining what are called the parameters of the case or the issues at the outset of the proceedings. Next come witness statements and experts reports. When that evidence has been produced and exchanged, then that evidence provides the basis for the subsequent trial of the action. The pleadings have to a large extent served their purpose by enabling the issues to be identified so that that evidence can be prepared. That is not to say that the pleadings are no more than of historical interest, because it clearly might be appropriate in a certain case to incorporate formal amendments, so that the pleadings remain a true and accurate record of the issues between the parties as they have emerged. But it does not follow from that that it is appropriate to strike out the pleadings and dismiss the action when issue has been joined on the basis of the evidence in the case as is sought to be done here. The situation by October had in fact changed considerably from what it was in April when the learned judge gave his judgment. There had been a hearing before the learned judge on 31 August at which he had established a date for the exchange of witness statements, that appears to have been in January 2000, and he had also fixed a trial date for March 2000. Experts reports had already been exchanged and it seems that that took place sequentially in May and June 1999. Those experts reports were included in the bundle that was put before the Court of Appeal in October. There is only a passing reference to them in the judgments, and even that reference indicates that any consideration which the court was to give to those experts reports would require the court to venture into the merits of the dispute on the evidence in the case, rather than seek to exercise the courts jurisdiction to strike out a pleading on the basis that the facts contained in it were true. That hypothetical basis is largely obviated by the more appropriate practice envisaged by the Rules, which is that when appropriate an issue can be identified at an early stage which, if decided contrary to the claimants at that early stage, will have the same effect as a striking out application. Unfortunately, for whatever reason, Mr Walford, counsel for the defendants, was unaware when he appeared before the Court of Appeal on 18 October that there had been further directions given on 31 August. He was unaware that there was a timetable for the exchange of witness statements. He was unaware that a date had been fixed for trial. As a result, the court was not informed of those facts. The inference to be drawn is that the trial judge was satisfied on 31 August that the matter was or would be ready for trial by March 2000. I cannot believe for one moment that if the Court of Appeal had been told that on 18 October, they would nevertheless have given permission to appeal upon this, on any view, arid dispute as to whether the pleadings are sufficient or not. It seems to me that the failure to inform the Court of Appeal of that matter was, on any view, deplorable. It was on any view material, and in accordance with well-known principles the defendants ought not to be able to take advantage of the permission that was granted on that occasion on that false or certainly insufficient basis. I, for my part, am entirely satisfied that by reason of that failure we should simply refuse to hear this appeal. As has already been indicated, we know sufficient of the grounds of the appeal for us also to be satisfied that far from there being any injustice to the defendants, it is entirely right that the appeal should be dismissed. I make it clear, however, that I would do so on the former and narrower ground. JUDGMENTBY-2: JONATHAN PARKER J JUDGMENT-2: JONATHAN PARKER J: I agree. DISPOSITION: Appeal dismissed with costs on an indemnity basis. SOLICITORS: Beachcroft Wansbroughs, Birmingham; Wallace Robinson & Morgan, Solihull