Owadally and another v Planology Ltd and others

Negligence – Summary judgment – Strike out – Respondents convicted of strict liability offences for lack of listed building consent for proposed development – Respondents bringing claim against appellants for negligence in failing to advise consent required – Appellants applying to strike out proceedings or summary judgment – Judge dismissing claims – Appellants appealing – Whether claim having no real prospect of success – Whether claim being abuse of process – Appeals dismissed The respondents wished to develop a listed residential property at 99 Star Street, London as flats. They engaged the first appellant’s planning consultancy services and the second appellant for structural engineering and party wall services. The building was stripped out and the roof removed with a view to replacement. The local authority intervened saying the work required listed building consent. A temporary roof was put up and strengthening work undertaken, pending an application for retrospective listed building consent, which works were not permitted either. Retrospective permission was refused. The respondents were convicted of strict liability offences under the Planning (Listed Buildings and Conservation Areas) Act 1990, which made it a criminal offence to “execute or cause to be executed any works for the demolition of a listed building or for its alteration or extension… unless the works are authorised”. On appeal, two of their convictions were upheld. The respondents issued county court proceedings alleging professional negligence against the appellants, contending that they had wrongly failed to advise them that listed building consent was required, and failed to advise and act competently in relation to listed building requirements. The appellants applied separately for the claim to be struck out and/or for summary judgment, contending that it had no real prospect of success; or, alternatively, was an abuse of the court’s process because the damages claimed all flowed from the respondents’ own criminal conduct and fell foul of the principle that civil causes of action could not be founded on a claimant’s own wrongdoing. The county court dismissed those applications. The appellants appealed. Held: The appeals were dismissed. (1) There was a “narrower principle” that the punishment inflicted by a criminal court was personal to the offender, and that the civil courts would not entertain an action by the offender to recover an indemnity against the consequences. Claims for damage caused by the lawful sentence of a criminal court were within the narrower principle. There was a “wider principle” which relied on a general principle that it was offensive to public notions of the fair distribution of resources that a claimant should be compensated (usually out of public funds) for the consequences of his own criminal conduct: Gray v Thames Trains [2009] AA 1339 applied. The essential rationale of the illegality doctrine was that it would be contrary to the public interest to enforce a claim if to do so would be harmful to the integrity of the legal system. In assessing whether the public interest would be harmed in that way, it was necessary to consider: (i) the underlying purpose of the prohibition which had been transgressed and whether that purpose would be enhanced by denial of the claim; (ii) any other relevant public policy on which the denial of the claim might have an impact; and (iii) whether denial of the claim would be a proportionate response to the illegality, bearing in mind that punishment was a matter for the criminal courts: Patel v Mirza [2017] AC 467 applied. In exceptional cases, a criminal act would not constitute “turpitude” (full relevant knowledge). Those might include trivial offences, or strict liability offences where the claimant was not privy to the facts making his act unlawful. There appeared to be no authority directly on the point of how the Patel considerations, as a general starting point, played out in a case of conviction for strict liability offences where the narrower rule was engaged. Those were key facts in the present case: Les Laboratoires Servier v Apotex [2015] AC 430 applied. (2) Whether strict liability cases were true exceptions to, or just the “playing out of”, the principles-based approach to the illegality defence, the guidance of the authorities was that the nature and purposeof the statutory prohibition, other relevant public or legal policy or public interest considerations, and the proportionality of depriving a claimant of a claim which was otherwise soundly pleaded in fact and law, were still relevant considerations, not necessarily excluding in “narrower principle” cases. As regards the illegality defence, there was no authority dealing directly with the factual matrix in the present case, and there was an exercise to be done in reflecting on the guidance in earlier cases and applying it thoughtfully to the full set of relevant circumstances. A full trial was the right place for justice to be done to that exercise. The illegality defence was not a simple concept conducive to mechanistic determination at a preliminary stage. The appellants’ case on illegality, considered at this early stage, appeared to be strongest in relation to the fact that this was a conviction case and attracted the narrower principle in Gray. Dicta in Apotex indicated that, even in a strict liability case where a claimant could establish lack of turpitude, they would not necessarily be able to defeat an illegality defence where the narrower principle applied. But that formulation left open at least some room for argument on the facts and a real prospect of the respondents succeeding could not at present be ruled out. (3) The county court judge was entitled, on the materials before him and bearing in mind the further evidence expected to be available in a negligence trial, to find that the respondents had a real, as opposed to fanciful, prospect of establishing they lacked turpitude. It was arguable that the respondents had a real prospect of establishing their claim was not fully met by an illegality defence, even to the extent the narrow principle was engaged.  In any event, the judge would have been entitled to consider the application of the illegality defence, a sufficiently fact-sensitive and evaluative matter, to be inappropriate for determination on an application for a terminating ruling, and that itself would have been capable of being considered a good reason for the case to continue to trial.  In all the circumstances, the judge was not wrong to let the claim and the illegality defence go forward to trial. It could not be viewed as a pointless and abusive exercise. Peter Dodge (instructed by Clyde & Co LLP) appeared for the first appellant; Nicholas Baldock (instructed by Beale & Co Solicitors) appeared for the second appellant; Richard Liddell KC and Christopher Greenwood (instructed by Brett Wilson LLP) appeared for the respondents. Eileen O’Grady, barrister Click here to read a transcript of Owadally and another v Planology Ltd and others