Party wall — Whether third surveyor appointed under London Building Acts (Amendment) Act 1939 had jurisdiction to make award determining responsibility for collapse of party wall
summons — Whether condition that defendants pay into court £350,000 before
leave to defend proper exercise of court’s discretion
The plaintiff
was the owner of 61 Endell Street, Covent Garden, London WC2, where he carried
on a timber merchant’s business, and on which stood a timber shed. The
defendants were the owners of the adjoining premises, a former mission hall,
the basement floor of which lay some 2.3m below the ground level of the timber
yard. In 1990 the defendants commenced building works to the mission hall,
including lowering the basement floor. On January 14 1991 the defendant gave
the plaintiff a notice under section 47 of the London Building Acts (Amendment)
Act 1939 of their intention to carry out work to the wall of the mission hall
on the boundary of the properties. On January 25 1991, before the expiration of
the 14 days provided by the Act for the giving of consent, the wall of the
mission hall on the boundary collapsed and seriously damaged the timber-storage
shed. Following the appointment by the parties of surveyors under the 1939 Act,
the two surveyors appointed a third surveyor. The plaintiff commenced the
present action by the issue of the writ on December 10 1991 claiming damages
for nuisance and trespass; the damages included £430,000 for the cost of rebuilding
the timber shed and loss of profits continuing at £2,660 per month. By an award
of December 10 1991 the third surveyor determined that the prime cause of the
collapse was the defendants’ work for which they were responsible. On June 15
1992 the plaintiff issued a summons for summary judgment under RSC Ord 14 and
on June 27 1992 the plaintiff sought leave to amend the statement of claim with
a pleading that by the third surveyor’s award the defendants were estopped from
denying that they were responsible for the collapse of the wall. At the hearing
of the summons Judge Hordern QC (sitting as a judge of the High Court) gave
leave to amend the statement of claim and granted the defendants leave to
defend on condition that £350,000 be paid into court within 14 days. The
defendant appealed against both orders contending that if the statement of
claim were to be amended there should be an adjournment of the Ord 14 summons.
claim is allowed, then formally the plaintiff should have taken out a fresh
summons under Ord 14 and in the circumstances an adjournment should have been
granted. However, as the defendants had had sufficient time to consider the
amendments, and had produced additional affidavit evidence, the court would
formally dismiss the defendants’ appeal against the amendment and hear the
appeal against the judge’s further order as if a fresh Ord 14 summons had been
issued.
Act the third surveyor had no jurisdiction to make the award he purported to
make because section 55 of the Act, which provides for the resolution of
disputes between adjoining owners, is limited to the resolution of disputes
between adjoining owners, is limited to the resolution of disputes between adjoining
owners as to whether one of them shall be permitted under the Act to carry out
works the subject of a notice under section 47, and if so, the terms and
conditions. Section 55 of the Act does not permit or authorise the surveyor
appointed under the Act to determine other disputes arising between the
parties. Having regard to the other causes of action relied on by the
plaintiff, the judge was correct in giving leave to defend and in saying that
he could almost give judgment for the plaintiff in justifying the condition for
a payment into court. Having regard to the likely total claim of the plaintiff,
the sum ordered as a condition for giving leave to defend cannot be said to be
wrong.
The following
cases are referred to in this report.
Dalton v Angus (1881) 6 App Cas 740; [1881] All ER Repl; 50 LJQB
689; 44 LT 844; 46 JP 132; 30 WR 191, HL
Ladd v Marshall [1954] 1 WLR 1489; [1954] 3 All ER 745, CA
Wringe
v Cohen [1940] 1 KB 229
This was an
appeal by the defendants, and a cross-appeal by the plaintiff, from orders of
Judge Hordern QC (sitting as a judge of the High Court) who, on the hearing the
plaintiff’s summons seeking leave to amend his statement of claim and for
summary judgment under RSC Ord 14, had granted the plaintiff leave to amend and
granted the defendants leave to defend on condition that they first paid into
court £350,000.
Bruce
Mauleverer QC and Mark Raeside (instructed by Beachcroft Stanleys) appeared for
the appellant/defendants; Stephen Hockman QC and Adrian Jack (instructed by
Barrett & Co, of Reading) represented the respondent/plaintiff.
Giving
judgment, GLIDEWELL LJ said: The plaintiff, Mr Woodhouse, owns and
occupies 61 Endell Street, Covent Garden, London WC2, and a yard behind that
building. At those premises he carried on business as a timber merchant,
trading as Latchfords (Endell Street). The business is long-established. Mr
Woodhouse himself has been in the business since 1953, at first as an employee,
then as a partner and latterly as sole proprietor.
The
defendants, the appellants in this court, are the owners of 68a Neal Street,
Covent Garden. This property is a former mission hall, approached only by a
narrow pedestrian passage from Neal Street, which runs parallel to Endell
Street. The north-easterly wall of the mission hall lies immediately adjacent
to the south-westerly boundary of the plaintiff’s timber yard. In the timber
yard, immediately adjacent to the wall of the mission hall, there was a storage
shed for timber. This structure consisted of five brick pillars, three
adjoining the wall of the mission hall, two at the north-easterly side, with a
monopitch roof at the same height as the roof of the mission hall.
The mission
hall had ground and first floors and a basement. The floor of the basement lay
some distance — one report says approximately 2.3m — below the ground level of
the timber yard. Thus, in practice, the wall of the mission hall, below the
ground floor of that structure, acted as a retaining wall for the timber yard
and the soil beneath it.
In the autumn
of 1990 the defendants commenced works on the mission hall, which included
lowering the floor of the basement. There is a dispute as to what stage those
works had reached, and the condition of the building, at the relevant date.
On January 14
1991 the defendants served on the plaintiff a notice under the London Building
Acts (Amendment) Act 1939, section 47, of their intention to carry out works to
the wall of the mission hall on the boundary of the properties. It is agreed
that the wall was a party wall within the definition in section 44 of the 1939
Act. The works referred to in the notice included ‘underpinning and reinforced
concrete retaining wall’. In accordance with the Act, the notice provided that
if within 14 days the plaintiff did not consent to the works, he was deemed to
have dissented. In that case a difference would have arisen between the parties
under the relevant part of the 1939 Act. The notice said that it was intended
to commence works earlier than the expiration of the 14 days by agreement. As I
have already said, the works had commenced some time previously and according
to the defendants the underpinning was substantially complete.
On January 25
1991, ie before the expiration of the 14 days under the notice, the wall of the
mission hall adjoining the timber yard collapsed. Initially there was a
suggestion that the collapse was towards the mission hall, but it now appears
that the experts are agreed that above ground level the collapse was into the
timber yard. In collapsing, the wall seriously damaged the timber-storage shed.
Both the
plaintiff and the defendants appointed surveyors to act for them in the dispute
which had arisen under the Act of 1939. The plaintiff appointed Mr Paul Cackett
[BSc] FRICS, and the defendants, Mr Andrew Halstead [BSc] ARICS. They, in turn,
appointed a third surveyor to resolve the dispute, Mr Anthony Poole, [FRICS
ACIArb]. He signed an award on December 10 1991. One of the issues in this
appeal concerns the validity of that award, to which I shall have to return.
The action
The plaintiff
issued his writ on December 10 1991. It claimed damages against the defendants
for nuisance, trespass to land, trespass to goods and negligence. The statement
of claim was served on February 5 1992. In its original form it made no
reference to the award of Mr Poole under the 1939 Act. In the particulars of
special damage, the major item was the cost of rebuilding, which was put at
some £403,000. Damages were also claimed for loss of profit of the business and
additional expenses at the rate of £2,660 per month, together with a number of
smaller items.
The defendants
filed their defence on April 14 1992. On June 15 1992 the plaintiff’s
solicitors took out a summons for judgment under RSC Ord 14, and for an order
for an interim payment, and for speedy trial of the action. The date for the
hearing of these applications was fixed before a judge for July 30 1992. On
July 27 1992 the plaintiff’s solicitors took out a summons for leave to amend
the statement of claim, which was served on the defendants’ solicitors on July
28 1992. The defendants also made an application for an order striking out
parts of an affidavit sworn by Mr Woodhouse in support of his application for
judgment under Ord 14.
The
applications were heard by Judge Hordern QC, sitting as a High Court judge, on
July 30 1992. He ordered that the plaintiff should have leave to amend his
statement of claim, with consequent leave to the defendants to amend their
defence. He refused an application by counsel for the defendants to adjourn the
hearing of the application for summary judgment under Ord 14. On that
application he granted the defendants leave to defend on condition that within
14 days they paid into court the sum of £350,000. He made no order on the
defendants’ application with regard to Mr Woodhouse’s affidavit.
The defendants
now appeal to this court against both orders made by the judge. By a subsequent
order of this court, compliance with the condition requiring payment into court
has been stayed, pending the hearing of this appeal.
The appeal
against the order for amendment of the statement of claim
The major
amendment was the addition of four paragraphs following para 10. The first
three of these paragraphs read:
10a. By an
award dated 10 December 1991, lawfully made by Anthony Poole, the third
surveyor duly appointed pursuant to the London Building Acts (Amendment) Act
1939 to resolve a difference arising between the plaintiff and the defendant
herein, namely the responsibility for the cost of rebuilding the wall and
certain related fees, it was determined:
(a) that the prime cause of the collapse pleaded
in paragraph 6 hereof was work being carried out by the defendant; and
(b) that the defendant was responsible for the
collapse of the wall as pleaded in paragraph 6 hereof; and
(c) that the defendants should pay the costs of
the plaintiff’s surveyor and of the third surveyor in the said reference.
10b. No appeal
has been made from the said award.
10c. In the
premises the defendant is estopped per rem judicatam from denying that
it is responsible for the said collapse.
Para 10d sets
out the additional costs which it is alleged have not been satisfied by the defendants.
The amendments
also include an allegation that the collapse of the wall was caused by the
defendants ‘failing timeously to service Notices under the London Building
Acts’.
At the hearing
before Judge Hordern, the defendants did not oppose the amendment as such, but
sought an adjournment if that amendment were to be granted. It was argued on
their behalf that formally the plaintiff’s solicitors, after amending their
statement of claim if leave were granted, should take out a fresh summons under
Ord 14, thus giving the defendants the opportunity to file evidence in reply to
the allegations in the amended statement of claim. Counsel for the defendants
argued that if the judge did not grant an adjournment, he should consider the
Ord 14 application only on the material before him which related to the
statement of claim in its original form.
In my
judgment, these submissions by counsel for the defendants were correct. The
judge apparently took the view that in seeking an adjournment the defendants
were merely trying to delay the resolution of the dispute. But the plaintiff,
by his amendment, was making a major change in the basis of his claim. I agree
that if such amendment were to be permitted (and there was no good reason why
it should not have been) then formally the plaintiff should have taken out a
fresh summons under Ord 14. No doubt it was permissible to waive this formality
by treating the original summons as applying to the amended statement of claim,
but if that were to be done, the defendants should have been granted an
adjournment and the opportunity to file further evidence. I appreciate that the
judge’s decision in this respect was one made in the exercise of his
discretion, but, in my view, he exercised that discretion on a wholly wrong
basis.
This raised
the question, what should we now do in this court in relation to this
appeal? By now the defendants and their
advisers have had ample time to consider the amended statement of claim. They
have filed an amended defence on August 24 1992. Moreover, the defendants seek
leave to adduce further evidence at the hearing of this appeal, namely a
further affidavit from Mr B G McCarthy, the defendants’ solicitor, sworn on
October 5 1992, to which is exhibited a further report from Mr A G Antrobus. Mr
Antrobus, whose qualifications are not stated in his report, is a member or
employee of the Brian Clancy Partnership, chartered engineers and civil and
structural engineers.
After some
discussion Mr Bruce Mauleverer QC, for the
be adduced, there would now be no disadvantage to his clients in the amendment
of the statement of claim, and thus the main appeal could proceed as if the Ord
14 summons had been issued after the amendment of pleadings.
However, Mr
Stephen Hockman QC for the plaintiff/respondent, then submitted that in
considering whether to admit the further evidence, we were obliged to apply the
principles derived from Ladd v Marshall [1954] 1 WLR 1489. In
particular, the further report from Mr Antrobus, which it is sought to adduce,
could have been available before the hearing before Judge Hordern and thus
should not be admitted in evidence.
RSC Ord 59, r
10(2) provides:
The Court of
Appeal shall have power to receive further evidence on questions of fact,
either by oral examination in court, by affidavit . . . but, in the case of an
appeal from a judgment after trial or hearing of any cause or matter on the
merits, no such further evidence (other than evidence as to matters which have
occurred after the date of the trial or hearing) shall be admitted except on
special grounds.
It is
commonplace that the principles in Ladd v Marshall define the
special grounds for admitting such further evidence.
The essential
question therefore is, the judge having granted the defendants leave to appeal
on condition of a payment into court, has there been a trial or hearing of the
action on the merits? The current
edition of the Supreme Court Practice (1993 ed) contains the following
note, numbered 59/10/8:
It was held in
Langdale v Danby [1982] 1 WLR 1123; [1982] 3 All ER 129, HL that
a judgment given under 014 (or 086) was a judgment given after a hearing on the
merits; it follows that the Ladd v Marshall conditions apply
where there is an application to adduce further evidence in an appeal against
such a judgment (Lodge Green Limited v Leitch (trading as Manx
Electronics), November 2 1982 (unrep), CA and K/S/A/S Oil Transport v
Saudi Research and Development Corporation Ltd [1984] 1 Lloyd’s Rep 5,
CA). But an order refusing summary judgment or granting conditional leave to
defend is not an order made after a hearing on the merits (see below).
In Weller v
Dunbar, January 27 1984, CA (unrep) it was held that an order setting aside
a default judgment is not a decision after a ‘hearing on the merits’ (even
though the merits are taken into account in deciding whether to set aside the
default judgment), because the hearing on the merits in the shape of the trial
of the action is yet to come. It is submitted that the same reasoning applies
where an application for summary judgment is refused, or conditional leave to
defend is granted, and therefore the Ladd v Marshall conditions
do not have to be satisfied in such cases . . .
I have set out
this reasoning because I entirely agree with it and I need add no words of my
own. It follows that the defendants do not need to show ‘special grounds’ for
the admission of the fresh evidence in this case and the Ladd v Marshall
principles do not apply.
It was for
these reasons that at this stage in the hearing we announced that we would
formally dismiss the appeal against the judge’s order allowing the amendment to
the pleadings, and would proceed to hear the main appeal as if the Ord 14
summons had been taken out after those amendments had been completed and the
further evidence had been filed.
The issues
The original
statement of claim in essence alleged three causes of action. These were:
(i) negligence;
(ii) simple nuisance;
(iii) breach of an easement of support, for which
the right of action is also in nuisance.
The amended
statement of claim pleaded that, as a result of Mr Poole’s award, the
defendants were estopped from denying that they were responsible for the
collapse of their wall. Clearly if this plea were established, the plaintiff
would be entitled to judgment on the Ord 14 summons. I therefore propose to
consider this plea as a fourth issue.
I will
therefore consider each of these issues in turn.
(i) Negligence
Proof that the
defendants, or those for whose acts they were responsible when negligent,
depends upon proof of facts which are in issue between the parties. Mr Hockman
accepts that this as a cause of action cannot be the basis of the judgment
under Ord 14.
(ii) Simple nuisance
This cause of
action is based upon the decision of this court in Wringe v Cohen [1940]
1 KB 229.
At the
commencement of his judgment, Judge Hordern said:
In my view,
without anything more, the plaintiff is clearly entitled to damages, for unless
the wall fell from some act of a stranger, act of the plaintiff himself or some
insidious cause which the defendants could not know about, then I think that Mr
Hockman is right on the authority of Wringe v Cohen [1940] 1 KB
229 and, indeed, if I may say so without disrespect to the learned judge who
decided that case, I would have thought also on pure matters of first principle
the plaintiff would obviously have been entitled to succeed.
Wringe v Cohen, like the present case, was an action between the
owners of two adjoining properties. The plaintiff was the owner of a shop which
was substantially damaged when the gable end of the adjoining house, owned by
the defendant, collapsed on to it during a storm. There was evidence that the
gable wall had been in a state of disrepair for some years. The house was let
to a tenant. There was an issue as to whether the defendant, as owner not in
occupation, was liable for the damage caused by the collapse of the gable wall
in the absence of proof that he knew or ought to have known of its state of
disrepair.
Atkinson J,
giving the judgment of the court, said at p233:
In our
judgment if, owing to want of repair, premises on a highway become dangerous
and, therefore, a nuisance, and a passer-by or an adjoining owner suffers
damage by their collapse, the occupier, or the owner if he has undertaken the
duty of repair, is answerable whether he knew or ought to have known of the
danger or not. The undertaking to repair gives the owner control of the
premises, and a right of access thereto for the purpose of maintaining them in
a safe condition. On the other hand, if the nuisance is created, not by want of
repair, but, for example, by the act of a trespasser, or by a secret and
unobservable operation of nature, such as a subsidence under or near the
foundations of the premises, neither an occupier nor an owner responsible for
repair is answerable, unless with knowledge or means of knowledge he allows the
danger to continue. In such a case he has in no sense caused the nuisance by
any act or breach of duty.
Although
Atkinson J referred to the liability of an owner or occupier of premises on a
highway, in that case it appears to have been irrelevant to the decision that
the defendant’s property was on a highway. Thus the decision appears to support
the proposition that, if the wall of the mission hall collapsed due to want of
repair, the defendants are liable in nuisance without proof that the defendants
knew or should have known of the dangerous condition of the wall, unless it can
be shown that the collapse was due either to the plaintiff’s own act, to the
act of a stranger or to some latent defect.
The decision
in Wringe v Cohen, if it does establish the proposition I have just
set out, has been much criticised. Mr Mauleverer submits that this proposition
is not good law, in the sense that it is not supported by, or consistent with,
other authorities.
Mr Hockman has
saved us from deciding this interesting but difficult point by conceding that,
as the defendants plead that in this case the collapse of their wall was caused
by the plaintiff’s own act, in order to secure a judgement under Ord 14 he has
in practice to defeat that defence by proving what he requires to prove in order
to establish nuisance by breach of an easement of support. It is therefore not
necessary for us to consider the cause of action is simple nuisance further.
It is
convenient to consider the next issue.
(iv) Estoppel by reason of the award of Mr Poole
under the London Building Acts (Amendment) Act 1939
Under section
49 of the 1939 Act if an owner of land on whom a party structure notice under
section 47 has been served does not consent in writing to the carrying out of
the work specified in the notice, he is deemed to have dissented from the
notice and ‘a difference shall be deemed to have arisen between the parties’.
Section 55 of the Act then contains a detailed procedure for settlement of such
a difference. If, as here, each party appoints a surveyor and they do not
agree, they must appoint a third surveyor.
So far as
material, section 55(i) provides:
The agreed
surveyor . . . shall settle by award any matter which before the commencement
of any work to which a Notice under this Part of this Act relates or from time
to time during the continuance of such work may be in dispute between the
building owner and the adjoining owner.
Section 55(k)
provides:
The award may
determine the right to execute and the time and manner of executing any work
and generally any other matter arising out of or incidental to the difference.
In a letter to
Mr Poole, dated April 23 1991, the plaintiff’s surveyor, Mr Cackett, said:
The dispute
concerns the responsibility of costs for reconstructing the party
of the party wall, ie damages, surveyors’ and engineers’ fees, consequential
losses and the reconstruction costs for Latchford’s including all fees etc.
Mr Poole
accepted the responsibility of determining the dispute so defined and in his
award he provided:
1. The
building owner will pay the proper cost of rebuilding the party wall . . .
2. The building
owner will pay the proper cost of reconstructing those parts of the
(plaintiff’s) premises which were damaged or collapsed as a result of the
collapse of the party wall.
Mr Mauleverer
submits that Mr Poole had no jurisdiction to make such an award under the
scheme of the 1939 Act. If that is correct, he further submits that the award
would be of no effect and thus could not estop his clients in any way.
Although
subpara (i) of section 55 requires the surveyor to settle by his award
‘any matter which . . . from time to time during the continuance of such work
may be in dispute. . .’, this must, in my view, be read in its context. The
context in particular includes the provisions of subpara (k), which
commences: ‘The award may determine the right to execute and the time and
manner of executing any work . . .’. In my judgment, the provisions of section
55 relate only to the resolution of differences between adjoining owners as to
whether one of them shall be permitted under the Act to carry out works, the subject
of a section 47 notice, and if so, the terms and conditions under which he is
permitted to carry out such work. A matter which arises during the carrying out
of the works, about which there is a dispute, must therefore be a matter which
relates to the consent for the works to be carried out, eg whether the building
owner is complying with a particular requirement in the consent. Section 55
does not permit or authorise the surveyor appointed under this part of the 1939
Act to determine other disputes arising between the parties.
It follows, in
my judgment, that under the 1939 Act Mr Poole had no jurisdiction to make the
award which he purported to make. Mr Poole’s award in this action is evidence,
but no more. That is how the judge treated it in his judgment.
(iii) Breach of the easement of support
In para 5 of
his statement of claim (which was not altered in the amendment) the plaintiff
pleads as follows:
The plaintiff
and his predecessors in title have for upwards of forty years, alternatively
twenty years, before 1 January 1987 and/or before 25 January 1991, enjoyed
support from the wall and in the premises by virtue of the Prescription Act
1837 . . . the plaintiff at all material times has enjoyed an easement of
support from the wall.
By their amended
defence, the defendants complain that this paragraph does not properly plead
the nature of the easement of support which is claimed. It has been made clear
during the hearing (if it was not clear before) that what the plaintiff claims
is that he was entitled to support from the lower part of the defendants’ wall
for the land adjoining the wall forming part of his timber yard, and for the
storage shed upon it, in its use as a shed for storing timber. In my view the
pleading sufficiently covers this case, though I agree it could be more clearly
set out in the statement of claim.
Apart from not
admitting that such an easement exists, the defence in essence is that the
collapse of the wall was caused, not by any failure on the defendants’ part to
continue to support the plaintiff’s land and building, but as a result of the
plaintiff bringing timber on his land which surcharged the land.
Mr Mauleverer
submits that, as a matter of law, an easement of support if it has been created
is for the support of the land and the building, but not for chattels, ie the
timber on the land and in the building. In my judgment this is not a correct
way to approach the issue. If an easement has been acquired by prescription, so
that a plaintiff is entitled to enjoy support for his land and building from
his neighbour’s adjoining land or building, that right is for support for the
land and building as they have been used during the period of prescription.
Only if it can be shown that the nature of the use has materially altered can
it be said that the easement does not benefit the plaintiff. We have not been
referred to any authority in which this question has been raised directly, but,
in my view, the proposition I have sought to set out is consistent with and
follows the principles to be derived from the leading authority, Dalton
v Angus (1881) 6 App Cas 740.
I consider
next Mr Mauleverer’s submission that the judge adopted a wrong approach when
considering whether he should make leave to defend conditional upon the
defendants’ bringing a substantial sum into court.
It is a
commonplace that if, on an application by a plaintiff under Ord 14 for summary
judgment, the defendant persuades the court by his evidence that there is a
triable issue, he should be given leave to defend. However, the courts are
increasingly willing to make use of the power to grant such leave only subject
to a condition requiring the defendant to pay money into court. The authorities
on the grant of conditional leave are set out in some detail in the note in the
Supreme Court Practice, 14/3-4/15, and I need not refer to them further.
In the decided
cases, different expressions have been used to describe the circumstances in
which a court is justified in imposing such a condition. The expressions most
frequently used are that the court ‘is prepared very nearly to give judgment
for the plaintiff’, or that the defence can properly be described as ‘shadowy’.
I do not detect any difference of substance between these expressions. Mr
Mauleverer submits, and I agree, that for a defence properly to be described as
‘shadowy’, the court must have doubts about the defendants’ good faith in
advancing it. But the less likely a defence is to succeed, the easier it is for
a court to infer that the defendant is seeking leave to defend for some
ulterior reason, of which delay is the most obvious. Such a reason obviously
casts doubt on the defendant’s good faith.
In his
judgment, the judge said:
It seems to
me that it is impossible for me to say on the affidavit evidence without actually
trying this matter on reading experts’ evidence, which I am certainly not
anxious to do, that there is no triable issue.
We should not,
in my view, disagree with that conclusion. It follows that I would dismiss the
plaintiff’s cross-appeal.
The judge also
said:
All those
considerations lead me to think that it matters not how one puts it, though I
think it is probably wrong to say the defence is shadowy because it is actually
quite clear. It is just that its chances of success are less than ample, shall
we say.
When, in the
authorities, judges have in the past referred to a defence being ‘shadowy’,
they have clearly, in my view, meant that it had little substance and perhaps
that for this reason it was difficult to discern whether there really was a defence.
They have not been referring to the clarity with which the defence was, or was
not, pleaded. Thus in this sentence of his judgment I believe the judge was not
using the word ‘shadowy’ in the sense in which it was used in the authorities.
Mr Mauleverer
also submits that where a defendant has shown that he will be well able to meet
any judgment which might be given, a condition of payment into court should not
be imposed on granting leave to defend. For my part I am not prepared to
accept, without further argument, that when a judge is prepared ‘very nearly to
give judgment for the plaintiff’, he should nevertheless not impose a condition
on granting leave to defend to a defendant who proves that he has ample
resources to meet a judgment, while being willing to impose such a condition on
a defendant of lesser means. However, in this case it is not necessary to
decide whether this submission is correct, because on the material before us
the defendants have not shown, to the necessary high standard, that they are at
present well able to meet any judgment which they may have to meet.
Since I agree
that the judge was correct in granting leave to defend, it is clearly
inappropriate for me to rehearse the evidence as to the reasons why the wall
collapsed. It suffices to say that, having considered that evidence, I am
satisfied that the judge was right to say that he could ‘almost give judgment
for the plaintiff’. Accordingly, I also think that he was justified in imposing
a requirement that the defendants should make a substantial payment into court
as a precondition to the grant of such leave.
I note that
the order actually made by the judge was:
If the
defendant within 14 days pays £350,000 into court he may defend the action as
to the whole of the plaintiff’s claim.
It is apparent
that he intended that if the defendants failed to comply with the condition,
they should not have leave to defend. However, in my view, the order should
also say in terms that if the defendants fail to comply with the condition, within
the specified time, the plaintiff should be entitled to sign judgment for
damages to be assessed.
Quantum
This leaves
only the question which is raised by the appeal as to whether the amount of
£350,000, which the judge required to be paid
claim for loss of profits of the business and interest, comes to approximately
£525,000. The defendants’ main ground of objection to the amount ordered to be
paid into court is that the evaluation of the rebuilding cost which forms the
major item in the plaintiff’s claim, namely some £343,000, is on their own
pleading and evidence the cost of modernisation of the major part of their
premises, not simply the cost of rebuilding the demolished building. However,
the judge heard this argument and in the end decided to order payment in of a
sum amounting to two-thirds of the plaintiff’s total claim. I cannot say, on
the material before us, that he was wrong so to order.
Conclusion
I would
therefore dismiss this appeal, and affirm the order made by the judge, save
that:
(a) the time for compliance with the provision
should be altered to enable the defendants now to comply with the condition;
and
(b) there should be added a provision entitling
the plaintiff to judgment for damages to be assessed if the defendants do not
comply with the condition in the time required by the order.
SIMON BROWN
LJ agreed and did not add anything.
Appeal
dismissed. Cross-appeal dismissed. Leave to appeal to the House of Lords
refused.
