Action by estate agents dismissed for want of prosecution–Appeal from decision of Vice-Chancellor of the County Palatine of Lancaster–Agents sought declaration that a contract made in 1972 for the sale of land by the vendors, their principals, contained a stipulation that the agents were to have sole selling rights in respect of any houses to be erected on that land–Plaintiffs’ writ issued in 1972–Defence pleaded that prospective purchasers had withdrawn the offer on which plaintiffs’ claim was founded–Various steps in action taken at long intervals, including a gap of nearly 2½ years between January 1976 and June 1978–Plaintiffs now stated that, whether or not original action was dismissed for want of prosecution, they intended to issue a fresh writ–Original claim was for declaration only–They now wished to add a claim for damages as houses had been sold in breach of alleged stipulation giving them sole selling rights–Court of Appeal refer to disadvantages of two separate actions arising out of substantially the same subject-matter proceeding simultaneously–Delay in present action was ‘grave, inordinate and inexcusable’–Vice-Chancellor’s decision dismissing it for want of prosecution upheld–Birkett v James distinguished
This was an
appeal from an order made by Judge Blackett-Ord, Vice-Chancellor of the County
Palatine of Lancaster, dismissing for want of prosecution an action started by
the plaintiffs, Oyston Estate Agency Ltd, in the Blackpool District Registry against
the defendants, GCT Construction Ltd. The action arose out of certain
negotiations in 1972 concerning land in Kirkham in the County of Lancaster.
L J Porter
(instructed by Baden, Barnes, Nabb & Co, of Blackpool) appeared on behalf
of the appellants; P V St J Chambers (instructed by Stephenson, Harwood &
Tatham) represented the respondents.
Giving
judgment, MEGAW LJ said: This is an appeal from an order made by
Vice-Chancellor Blackett-Ord on November 2 1979 in an action in the Chancery
Division, started in the Blackpool District Registry. The learned
Vice-Chancellor ordered that the action should be dismissed for want of
prosecution. The plaintiffs appeal, asking that this court should set aside
that order and allow the action to proceed.
The plaintiffs
in the action are Oyston Estate Agency Ltd and the defendants are GCT
Construction Ltd. The action arose out of events which took place in the month
of March 1972; that is now nearly eight years ago. The statement of claim was
delivered following a writ issued by the plaintiffs on September 18 1972. In it
the plaintiffs say that they are estate agents carrying on business in
north-west Lancashire. In the month of March 1972 a gentleman called Owen
Oyston, who is a director of the plaintiff company, was in negotiation with
another gentleman, called Derek Barnes, who was acting on behalf of the
defendants. The negotiations concerned the sale of certain lands, in Kirkham in
the County of Lancaster, by principals of the plaintiffs, not named in the
statement of claim, to the defendants. It is alleged that, during the course of
the negotiations, Mr Oyston told Mr Barnes orally that contracts for the sale
of the lands would not be entered into by the plaintiffs’ principals, the
prospective vendors of the lands, unless the defendant company agreed to grant,
not to the prospective vendors but to the plaintiffs, sole selling rights in
respect of any houses to be erected upon the land, after it had been sold. It
is alleged that that stipulation was made by Mr Oyston with the prior knowledge
and approval of the plaintiffs’ principals, whoever they were. If it were not
with the prior approval of the plaintiffs’ principals it would, of course, be
subject to criticism. It is then alleged that, on March 9 1972, Mr Barnes, on
behalf of the defendants, executed an agreement to buy the lands and also an
agreement which conferred on the plaintiffs sole selling rights in respect of
any dwelling-house to be erected on the lands. Then it is said that, on March
10, the following day, an agreement for the sale of the lands themselves was
executed on behalf of the plaintiffs’ principals, whoever they were, and the
part of the agreement so executed was posted that day by registered post to the
defendants. It is alleged that with the posting of that part of the agreement
the agreement came into full force and effect and that, because of the
stipulations made by Mr Oyston during the negotiations, the sole selling rights
for any buildings erected on those lands thus sold would, by contract, belong
to the plaintiffs. Paragraph 6 of the statement of claim asserts ‘The
defendants now deny that the agreement conferring sole selling rights on the
plaintiffs in respect of any dwelling-house to be erected on the said lands had
come into effect.’ The prayer is as
follows: ‘(1) A declaration that the said sole selling rights agreement is now
a valid and binding contract. (2) Costs. (3) Further or other relief.’ So the substance of that claim was a claim
for a declaration that it was a valid and binding contract, which included
provision for the plaintiffs, who in other respects were acting as agents in
making the contract, to have rights to sell any buildings erected on the lands
sold.
By the
defence, it is asserted–I summarise the defence as it was pleaded–that at about
10.30 am on March 10 1972 Mr Blackburn, a solicitor who was acting on behalf of
the defendants, telephoned Mr Oyston and orally withdrew the defendants’ offer
to enter into the proposed agreements. It is said that, at about 10.45 on the
same day, Mr Blackburn also telephoned the solicitors acting for the plaintiffs
and the proposed vendors and informed them of the withdrawal. It is alleged
that the agreement for the sale of the land was not posted by or on behalf of
the plaintiffs until after the defendants’ offer to enter into the contract had
been withdrawn and that, therefore, there was no contract. In other words, it
is asserted that there was an offer by the defendants but that that offer was
withdrawn before it was accepted and, on the ordinary principles of the law of
contract, there was, therefore, no contract.
What happened
thereafter is conveniently summarised in the judgment of the Vice-Chancellor.
The writ was served on
served on November 1 1972. There was a reply on August 23 1973–that is, nearly
a year later. Then there was a summons to dismiss for want of prosecution,
which, in the circumstances, I do not think matters. It was dismissed. Then the
defendants sent an amended defence to the plaintiffs in August 1974. In June
1975 a receiver was appointed in respect of the defendants’ business and the
plaintiffs were duly notified a few days later. A summons for directions was
heard and an order for directions given on June 13 1975. That order provided
that the plaintiffs should deliver their list of documents within 14 days, and
that the defendants should do the same; that there should be an inspection
within seven days; and that the action should be tried at Preston, its
estimated length being five hours, and that it should be set down within 56
days.
The learned
Vice-Chancellor says, ‘The action proceeded with reasonable expedition.’ Some might regard that as a somewhat generous
view of events up to the middle of 1975, but that is the view he took. ‘By the
middle of 1975 an order had been made for discovery. One side had served their
list ‘–that was the plaintiffs–‘ the other ‘–the defendants–‘ had not, when the
defendant company went into receivership.’
Then the judge refers to a letter from one of the joint receivers, who
had been appointed for the defendant company, to the solicitors acting for the
plaintiffs, telling them of the receivership and indicating (to put it broadly)
that there was not very much chance of the plaintiffs getting very much out of
their action, even supposing their action succeeded.
The plaintiffs
set down the action for trial on August 7 1975. After that, nothing happened
until January 30 1976, when a firm of solicitors, Stephenson Harwood &
Tatham, acting for the receiver, wrote to the plaintiffs’ solicitors the letter
which is before us, asking for further documents. The letter indicated that the
plaintiffs’ solicitors would be aware that their clients were in the position
of unsecured creditors for the whole amount of their costs. The letter
contained this sentence: ‘The receiver instructs us that he is prepared to
agree for the action to be discontinued on the basis that each party pays its
own costs incurred to date.’ The solicitors,
Stephenson Harwood & Tatham, were not on the record for the defendant
company. The receiver had not formally adopted the action, but he was, as the
Vice-Chancellor says, the man in control.
The next
letter referring to the action was a long time later, nearly 2 1/2 years. On
June 29 1978 the plaintiffs’ solicitors swung into action with a letter in
which they said that they had heard no more since January 1976 and so they
understood that there was presumably no division of assets in which their client
company could join. They said they were under pressure from the High Court
Registry, because the action had been set down in the middle of 1975 and the
court were anxious to know what was happening about it. So the plaintiffs’
solicitors asked for confirmation of the position with regard to any
possibility of recovery.
That letter
apparently was not received or was somehow lost. It was not answered by
Stephenson Harwood & Tatham. A reminder was sent by the plaintiffs’
solicitors on November 17 of the same year, setting out the effect of their
previous letter of June. That drew a reply from Stephenson Harwood saying that
they had not received the letter of June 29 and answering what they were now
told was in that letter. They said, ‘The situation outlined in our letter of
January 30 1976 still applies, and the receiver would still be agreeable to
dealing with this matter on the basis that the action be discontinued with each
side paying its own costs. We trust this assists you in relation to the listing
of the action.’
That was
November 1978. There was silence until May 31 1979. The plaintiffs’ solicitors
then purported to give notice that they were resuming the carrying on of the
action and that they were going to take out an application for further documents
to be submitted to them. In fact that was procedurally in error, because they
had to give one month’s notice of their intention to proceed further with the
action, as nothing had been done in it for more than a year. That error was
subsequently corrected.
So the matter
went on, and on July 23 1979 the receiver of the defendant company decided to
adopt the case and Stephenson Harwood went on the record as solicitors for the
defendant company. On the same day the defendants notified the plaintiffs of their
intention to apply to dismiss the action for want of prosecution. That was the
application which came before the learned Vice-Chancellor, in which he gave his
decision from which this appeal is brought. The learned Vice-Chancellor decided
that the action should be dismissed and made the order accordingly.
That decision
of his is attacked in this court by Mr Porter, on behalf of the plaintiffs, on
two grounds. The first ground is that the learned judge erred in taking the
view, as he must, by implication, have done in order to arrive at the
conclusion that he did, that the delay which had occurred was not merely (to
use the well-known words) inordinate but was also inexcusable. Mr Porter
contends that the judge was in error in holding that the delay here was
inexcusable. Having regard to the guidance given by Lord Diplock in the second
paragraph of his speech in Birkett v James [1978] AC 297 at p
317, I take the view that that point cannot succeed. I see no reason to suppose
that the learned judge exercised his discretion in any way wrongly or failed to
take into account any material consideration in respect of the question whether
the delay was inexcusable. That the defendants would be prejudiced was held by
the learned Vice-Chancellor and I do not think that that finding is challenged
in this court, and in any event it seems to me it was plainly justified. So the
first ground of attack fails.
The second
ground of attack was that, having regard to the House of Lords decision in Birkett
v James, the learned Vice-Chancellor had arrived at a wrong decision in
law. I will read the relevant paragraph from the Vice-Chancellor’s judgment. He
says:
It is said
that if the action is dismissed, nevertheless it will be open to the plaintiffs
to issue a fresh writ because the limitation period has not run. I do not
accept that the limitation period has not run. If it has not run, as was
pointed out, I think it would be because there was no relevant prejudice, and
it would seem that the action could not be struck out until the plaintiffs in
effect thought fit to put forward a claim. But I have to bear in mind that the
action is one for a declaration only, which is equitable relief subject to the
doctrine of laches. It is very relevant that this dispute goes right back to 1972
and that in 1978 the plaintiffs regarded the action as dead. I think that it is
reasonable for the defendants to take the view that it would be impossible to
obtain satisfactory oral evidence of events so long ago, particularly in view
of the history of GCT Construction and Mr Barnes since that date. I hold that
the defendants are likely to suffer serious prejudice by the delay and I think
it is right that the action should be struck out for want of prosecution.
What is said
here, on behalf of the plaintiffs, to put it in summary form, is that, if this
present action were indeed dismissed for want of prosecution, they would be
entitled to issue a fresh writ and they intend to issue a fresh writ. Indeed,
it was intimated that that would be done, whether or not the present appeal
succeeds. The purpose of the fresh writ is that the present statement of claim
does not contain any claim for damages. It is a claim merely for a declaration
that there is a contract. The defendants deny that there is a contract. It
emerges from what we are told in this court that they would also be likely to
put forward the defence, as an alternative, that, if there were, indeed, a
contract that was binding when it was made they (the defendants), within a day
or two, unequivocally repudiated that contract. If there were a contract, that
would be a wrongful repudiation, but if that repudiation had been accepted by
the plaintiffs–and the defendants say that, in those circumstances, it had been
accepted–then the cause of action, and the only cause of action, which the
plaintiffs would have would be a cause of action for a breach of contract which
occurred, once and for all, of a date in March 1972; and any fresh writ
claiming damages for that breach of
Limitations as being in respect of a cause of action which had accrued more
than six years before the issue of the hypothetical fresh writ.
The further
writ which the plaintiffs desire to issue, whether or not the present action is
dismissed, is one in which they would be claiming damages. They say that there
was a contract and they say that they had not suffered any damage at the date
when they issued the original writ and, therefore, they could not put in a
claim for damages in that writ or statement of claim. The damage occurred, they
say, only when, in breach of contract, houses having been erected, they were
sold other than by a commission coming to the plaintiff company. They say that
has occurred since the date when they issued the writ in the action now in
question and that they cannot amend that writ or that statement of claim to
include this after-accrued loss. Therefore, they would be issuing a fresh writ
in which they would claim the making of the contract, breach of contract and
damages.
If the present
action is not dismissed, that means that there will be running
contemporaneously two legal proceedings between the same parties. In both of
them the first issue will be; was there a contract made or not? That is precisely the same issue in each of
the two intended actions. It may be that the defendants could, as Mr Porter,
for the plaintiffs, suggests, have amended or could now amend their defence in
the current action so as to plead, in the alternative, that, if there were a
contract, the plaintiffs had accepted a wrongful repudiation of it by the
defendants. But whether that is so or not, that is something they would be
entitled to raise in the new action which the plaintiffs propose to put
forward. Also there would arise in the new action the question whether or not
there had been a breach of contract, if contract there were and it remained
unrepudiated, and what the damages would be.
In giving this
judgment, of course, I am expressing no view whatever as to what is likely to
be the result, ultimately, of any of the issues here involved. That is not the
question. I am only looking to see what the issues are or would be. The broad
result is that, if this present action is not dismissed, as the learned
Vice-Chancellor held that it should be, there would be these two proceedings
running contemporaneously. To my mind, this would be something which would, at
any rate, be close to an abuse of the process of the court. If it is something
that can be remedied without injustice, the remedy without injustice seems to
be perfectly clear. It is that which the learned Vice-Chancellor arrived at,
namely, to dismiss the present action. The result, apart from the question of
costs, would be in no way, as far as I can see, prejudicial to the plaintiffs.
There has here been this grave delay, inordinate and inexcusable. In my
judgment, the facts which I have disclosed take this case outside any rule or
principle laid down in Birkett v James.
Birkett v James also is not applicable here for another reason. The
claim in the present action is a claim solely for a declaration. That is a
discretionary remedy and the court exercises very great care before it grants
such a remedy. One basis on which it would refuse such a remedy is
laches–delay. Here the remedy is a discretionary one. In Birkett v James,
if the action there in question had been struck out for want of prosecution,
the statutory limitation of six years, which applied in that case, not having
run, there would have been nothing to prevent the plaintiffs from issuing a new
writ on the next day. That would have been a new writ claiming precisely the
same relief as had been claimed in the first action. Here the relief which is
sought to be claimed in the proposed new action is one which is materially
different from the discretionary remedy which is being sought in the present
action.
In my
judgment, there can be no doubt, in all the circumstances, that the learned
Vice-Chancellor was right in the order which he made. I am glad to think that
the order which he made corresponds with commonsense as well as with the law. I
would dismiss the appeal.
Agreeing,
LAWTON LJ said: When the plaintiffs issued their writ on September 18 1972 they
thought they had a contract with the defendants which gave them a selling
agency in respect of houses which the defendants intended to build on some
land. The defendants had not started to build any houses at the date of the
issue of the writ. So it follows that the only possible remedy at that time
which the plaintiffs could have was a declaration. But if the plaintiffs are
right in their submission that they did have a contract with the defendants, by
December 5 1972 the defendants had already started to break that contract; in
other words, they had made themselves liable for damages to the plaintiffs.
Unless the plaintiffs are an unusual body, it was damages which they wanted.
From December 5 1972 onwards, from time to time, the defendants sold houses,
some 50 or so by 1975. All those sales, if the plaintiffs are right in their
submissions, were in breach of contract and each sale would have attracted some
damages. It follows, therefore, that by 1975 the claim for a declaration was useless;
it was not going to do the plaintiffs any good at all. But instead of getting
on with the claim for a declaration, there was the inordinate and inexcusable
delay found by the learned Vice-Chancellor.
So we have
this situation: a claim for discretionary relief, which had already been
started; a claim for damages arising out of, substantially, the same
subject-matter, which had not been started but which we were told by the
plaintiffs they now intend to start. The result would be two actions dealing with,
broadly, the same subject-matter.
It is in this
connection that I invite attention to a note in the Annual Practice,
under Order 15, rule 16, note 2A: ‘Where specific relief, other than a
declaration, is not claimed, the jurisdiction to make a binding declaration of
right should be exercised with great caution; and a declaration ought not to be
made upon a preliminary point in an action brought for that purpose, where the
substantive relief must be claimed in another action.’ That is this case.
In those
circumstances, it seems to me that the Vice-Chancellor was right in dismissing
the claim for a declaration. I, too, would dismiss the appeal.
Also agreeing,
ORMROD LJ said: The original action for a declaration, for reasons which my
Lords have given, was a perfectly sensible claim at the time the writ was
issued. It has ceased to be a sensible form of relief, because the plaintiffs
now, if they are right, have a substantive claim for damages. Birkett v James
has no application to this case. In that case, immediately after the court had
dismissed his first action for want of prosecution, the plaintiff was in a
position to issue a new writ claiming precisely the same relief; in this case,
he is not in that position; the relief claimed in the second action would be
substantive.
One only has
to look at the case and test it in this way: if the equitable relief claimed,
instead of being a claim for a declaration, had been a claim for an injunction
(assuming it would be possible to formulate one), it is inconceivable that any
court, eight years later, would listen to such a stale claim for an injunction.
Similarly, in my view, the court should not entertain an action for a
declaration after such a long time.
For these
reasons, and for those given by my Lords, I too would dismiss the appeal.
The appeal
was dismissed with costs.
