DR Current Awareness - 16 February 2012

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All the latest news including reminders that Part 36 offers must be correctly made to avoid trouble.

1 NEWS
Jackson changes delayed until April 2013.  The Law Society welcomed the Government's decision to defer civil litigation reforms.  These major changes to ‘no win no fee’ arrangements are part of the Legal Aid, Sentencing and Punishment of Offenders Bill (LASPO).  Source:  The Law Society press release (31.01.12).
Supreme Court tweets its proceedings.  Tweeting (and other forms of live text-based communication) has been allowed in the Supreme Court since February 2011.  Now, the court itself is tweeting.  It is apparently the first Supreme Court in the world to do so.  The court's tweets will be sent from @UKSupremeCourt.
Lord Reed joins Supreme Court, as highest court joins Twitter.  Source: Supreme Court Press Notice (06.02.12).
Overhaul of court system.  Kenneth Clarke, Justice Secretary, has announced new measures which aim to simplify the court system. These include plans to modernise and streamline the County Court system which in turn will free up the High Court to only deal with complex cases. See MoJ press release (09.02.12).
MoJ online tool showing length of time to trial in county courts.  The Ministry of Justice (MoJ) has published a new online tool on the Open Justice website that allows the public to view the length of time to trial for cases in the county courts (see Open Justice: The truth about civil cases).  The tool provides statistics for individual County Courts, as well as the national average for England and Wales, allowing the public to make comparisons between different areas.  Data is taken from the most recent quarterly court statistics published in January 2012 by the MoJ (see Justice: Court statistics (quarterly)).  Source: MoJ press release ‘New online tool in transparency drive’ (24.01.12).

CASE HEADINGS IN THIS ISSUE

 2.1 Appeals 2.7 Enforcement 2.13 Professional Negligence
 2.2 Arbitration 2.8 Family 2.14 Property
 2.3 Construction 2.9 Insolvency 2.15 Torts
 2.4 Contracts 2.10 Intellectual Property 2.16 Will and Trust Disputes
 2.5 Costs 2.11 Practice 
 2.6 Costs - Part 36 2.12 Procedure 


2.1 APPEALS
Court of Appeal grants permission to appeal RTA cases because original judgments may have been tainted by fraud.  Purushothaman v Malik & Ors [2011] EWCA Civ 1734 (CA) (Judgment 01.12.12).  The Court of Appeal has granted permission to appeal, long out of time, in four road traffic accident cases where new evidence, arising from an investigation of credit hire rates used as expert evidence, suggested fraud had occurred.  The appellants therefore had a reasonable prospect of success in demonstrating that there were fatal flaws in the expert evidence.  The court did not consider that the appellants or others should have investigated and obtained the new evidence at the time of the trials.  Therefore, the court considered that the test for fresh evidence in Ladd v Marshall [1954] EWCA Civ 1 was satisfied.  See BAILII judgment.
2.2 ARBITRATION
Concurrent jurisdiction to consider issue estoppel.  Nomihold Securities Inc v Mobile Telesystems Finance SA [2012] EWHC 130 (Comm) (QBD) (Judgment 02.02.12).  The court had jurisdiction to grant injunctive relief restraining an arbitration on the basis that the matters referred to arbitration had already been determined in previous arbitral proceedings.  It was further held that the fact that the arbitral tribunal had power to rule on the re-arbitration issues did not mean that the court proceedings seeking injunctive relief should be stayed.  In this respect, the court and the tribunal enjoyed concurrent or overlapping jurisdiction.  The case demonstrates that, where concurrent powers exist, the court will nevertheless be able to intervene, if appropriate, as part of its supervisory jurisdiction.  Source: PLC (08.02.12).  See BAILII judgment.
Court’s power to enter judgment under s.66. West Tankers Inc v Allianz SpA & Anor [2012] EWCA Civ 27 (CA) (Judgment 24.01.12).  The English Court of Appeal has confirmed that the court has power to enter judgment in terms of a declaratory award under section 66 of the Arbitration Act 1996 (AA 1996).  See BAILII judgment.  Previously mentioned in Bulletin (12.04.11).
2.3 CONSTRUCTION
Mistake in sub-contract document: solicitors' retainer with client.  Shepherd Construction Ltd v Pinsent Masons LLP [2012] EWHC 43 (TCC) (QBD) (Judgment 19.01.12).  See Professional Negligence.
Effect of contractual limitation clause.  Inframatrix Investments Ltd v Dean Construction Ltd [2012] EWCA Civ 64 (CA) (Judgment 03.02.12).  See Contracts.
2.4 CONTRACTS
Effect of contractual limitation clause.  Inframatrix Investments Ltd v Dean Construction Ltd [2012] EWCA Civ 64 (CA) (Judgment 03.02.12).  A claim for damages for breaches of a construction contract was barred by a contractual limitation clause. The contract provided that no action could be brought by the principal after the expiry of a one-year period from when the contractor last performed services.  The contractor had last performed services, by completing snagging items, over a year before the claim was brought, and the conduct of subsequent without prejudice negotiations, including an on-site meeting, did not amount to the performance of services under the contract.  See BAILII judgment.
2.5 COSTS
Costs management pilot scheme (TCC and Mercantile Courts). The body monitoring this pilot has released its first interim report (see Costs Management Pilot: Interim Report (03.02.12)).  Practitioners are invited to respond by questionnaire.
Dealing with a judgment given in the wrong currency, and the correct date for conversion.  (1) Porton Capital Technology Funds (2) Porton Capital Inc (3) Ploughshare Innovations Ltd v (1) 3M UK Holdings Ltd (2) 3M Co (2012) (QBD) (Judgment 03.02.12).  See Procedure.
It's the winner that matters.  Villa Agencies SPF Ltd v Kestrel Travel Consultancy Ltd (2012) (CA) (Judgment 17.01.12).  Where a claimant had partially succeeded in its claim, the correct starting point for the purposes of making a costs order was that the claimant had been the successful party, notwithstanding that the defendant had substantially succeeded in its counterclaim.
'….but who is the winner? Thomas Brown Estates Ltd v Hunters Partners Ltd (formerly Countrywide Franchising Ltd) [2012] EWHC 30 (QBD) (Judgment 17.01.12).  This case involved an unsuccessful claim for declarations on rights under a franchise agreement.  Who was liable for costs?
The starting point is that costs orders should reflect the overall justice of the case. The successful party must be determined by reference to the litigation as a whole, as an exercise of common sense.  HLB Kidsons v Lloyds Underwriters [2007] EWHC 2699 (Comm).  In the current case the Judge emphasised the need for a realistic and commercially sensible approach.  Although the claimant had not obtained the declarations sought, to conclude that the defendant was, therefore, the successful party would "ignore the realities" of the case.
The claimant had secured exactly what it wanted (continued use of a trade name). Arguably, this was better than obtaining the declarations. This result was not a consequence of a court order or by agreement, but it was nonetheless the "direct result of the litigation process". The unconditional surrender by the defendant would have been inconceivable without the proceedings. Therefore, the claimant should be regarded as the successful party, as a matter of common sense and commercial reality. There were no circumstances justifying a departure from the usual rule that the unsuccessful party (here, the defendant) should bear the costs in this case. See BAILII judgment.
2.6 COSTS – PART 36
Failure to comply with prescriptive requirements of Part 36.2 was fatal.  Thewlis v Groupama Insurance Company Ltd [2012] EWHC 3 (TCC) (QBD) (Judgment 05.01.12).  In this case, failure to state that an offer was "intended to have the consequences of Part 36", as required by r.36.2(6), meant the offer was not an effective Part 36 offer, even though the offer was "made pursuant to Part 36 of the CPR and remains open for acceptance for a period of 21 days, from your receipt of this offer letter, thereafter it can only be accepted if we agree the liability for costs or the Court gives permission".  This pre-April 2007 wording (written in September 2008) was not enough.  The Judge followed earlier authorities (Huntley v Simmonds [2009] EWHC 406 (QBD) and Carillion JM Ltd v Phi Group Ltd [2011] EWHC 1581 (TCC), which held that the failure to comply with CPR 36.2 was fatal, and he saw no reason not to follow that approach.  Note that he took this view despite the CA's guidance in C v D [2011] EWCA Civ 646, which indicated that wherever possible, Part 36 offers should be construed so as to give them effect.  He distinguished C v D on the basis that an offer must otherwise comply with the form required by Part 36.  The offer in this case did not.  In addition, C v D was concerned with the interpretation of the offer whereas the authorities which he applied referred to non-compliance with r.36.2, with which he was concerned in this case. See BAILII judgment.
Whether circumstances of late acceptance of Part 36 offer justified departure from usual position on costs under r.36.10(5).  PGF II SA v (1) OMFS CO (2) Bank of Scotland Plc [2012] EWHC 83 (TCC) (QBD) (Judgment 27.01.12.  Where a CPR Pt 36 offer was accepted after expiry of the relevant period, the court used its discretion to assess what the fairness of the situation demanded and decided, contrary to the default position under r.36.10(5), that there should be no order as to costs from the expiry date onwards.  See BAILII judgment.
2.7 ENFORCEMENT
National standards for enforcement agents introduced.
  The Ministry of Justice (MoJ) has introduced national standards for enforcement agents, setting out the minimum standards of behaviour expected of bailiffs and bailiff firms, with effect from 13 January 2012.  The standards are not binding, and do not affect existing local arrangements, but set out the minimum standard expected from all in the enforcement industry.  See MoJ: National Standards for Enforcement Agents (January 2012).
2.8 FAMILY
Experts in family matters.
  RE: M (A Child) (2012) WL 14675 (CA) (Judgment 19.01.12).  The Court of Appeal emphasised that an applicant seeking permission to appeal, or an appellant who had been granted permission to appeal, in a family case needed the court's permission to instruct a fresh expert. When seeking to instruct a fresh expert from some other jurisdiction, the matters requiring explanation included why a United Kingdom expert had not been used, what efforts had been made to identify UK experts, and the financial implications of instructing an overseas expert.
Non-disclosure and conduct justified reopening ancillary relief award and order for costs.  Michele Ann Hutchings-Whelan v Paul Allan Hutchings [2012] EWCA Civ 38 (CA) (Judgment 26.01.12). Where ancillary relief proceedings had been re-opened following a husband's failure to make full disclosure of all his assets prior to the financial dispute with his wife being compromised, the judge had been entitled to award the wife an additional lump sum as representing a fair award in the circumstances. The difficulties in calculating a fair award originated from the husband's own conduct, and it was impossible for the husband to complain that the judge had seriously exceeded the generous ambit of discretion open to him.  See BAILII judgment.
The Family Justice Modernisation Programme: First update from Mr Justice Ryder.  Mr Justice Ryder appointed as Judge in Charge of the Modernisation of Family Justice, gives his first update on the programme. He aims to have agreed proposals for the modernisation of family justice by the end of July 2012, when his appointment ends, and to have a plan for their implementation.  Key workstreams include: governance, judicial and inter-disciplinary training, a unified family court, judicial leadership and case management.  View report (January 2012).  See second update (February 2012) recently published.
Article:  Presence v residence.  Are we edging towards a single, universally applicable, ‘test’ of habitual residence.  Source:  New Law Journal (13.01.12).
Article: Shorting on the marriage market: How hedge fund managers gamble on bitter divorce battles.  Investors are gambling on bitter divorce battles between women and their rich husbands in return for a share of the spoils, it has emerged.  Venture capitalists, hedge funds and high-end lenders are putting up money to women who want to fight their husbands in court.  In return, the investors take a chunk of the court payouts.  Source:  This is MONEY.co.uk (15.01.12).
Article:  Clear intentions.  A review of Jones v Kernott.  Source:  Family Law Journal (February 2012) at: 4439162.  See also Bulletin (10.11.11).
Article:  Different rules.  Cohabitants not caught by Jones v Kernott.  Source:  Family Law Journal (February 2012).
Article:  Be prepared. – Setting out best practice when drafting cohabitation agreements (Jones v Kernott).  Source: Family Law Journal (February 2012).
Article:  Affording the unaffordable.  Analysing the impact of FG v MBW [2011] EWHC 1729 (Fam) (Judgment 07.10.11) and whether a non-resident parent’s capital is now at risk of funding periodical payments in Schedule 1 cases.  Source: Family Law Journal (February 2012).
2.9 INSOLVENCY
Administrators not required to disclose valuations following pre-pack sale.  Maltby Holdings Ltd v Spratt & Anor [2012] EWHC 4 (ChD) (Judgment 05.01.12).  The High Court refused to order that administrators, who had completed a pre-packaged (pre-pack) sale of a company's assets, give pre-action disclosure of certain documents relating to the value of the assets sold.  Source: PLC (11.01.12).  See BAILII judgment.
Urgent administration application made without notice was valid.  SB Corporate Solutions Ltd v Prescott & Anor [2011] EWHC B25 (ChD) (Judgment 22.12.11).  This judgment indicates that, in exceptional circumstances, the court can make an administration order even though the insolvent company has not received notice of the administration application.  For urgent applications in the context of corporate insolvency proceedings, the CPR provisions will apply.  See BAILII judgment.
2.10 INTELLECTUAL PROPERTY
Copyright infringement on website.  Hoffman v Drug Abuse Resistance Education (UK) Ltd [2012] EWPCC 2 (Patents County Court) (Judgment 19.01.12).  The Patents County Court has ruled on liability and damages in a case involving use of 19 photographs on a charity's website without the photographer's consent.  Source:  PLC (26.01.12).  See BAILII judgment.
2.11 PRACTICE
Solicitors' innocence in mortgage fraud not enought to entitle them to relief under s.61 Trustee Act 1925.
  Lloyds TSB Bank Plc v Markandan & Uddin (A Firm) [2012] EWCA Civ 65 (CA) (Judgment 09.02.12).  A firm of solicitors, which was the victim of a fraud when acting on behalf of a mortgage lender on the sale and purchase of a property, had committed a breach of trust when it transferred a mortgage advance to the vendors' purported solicitors without receiving the requisite documentation or a solicitor's undertaking.  See BAILII judgment.
2.12 PROCEDURE
Service:  CA confirms the courts have power to order alternative service outside the jurisdiction but the method must be valid under local law.  Abela & Ors v Baadarani [2011] EWCA Civ 1571 (CA) (Judgment 15.12.11).  In a number of 2011 cases, the courts were asked to consider whether there is jurisdiction to order alternative service out of the jurisdiction under CPR 6. The trend of the case law indicated that the courts regarded themselves as having that power. The Court of Appeal has now expressly stated that there is power to order alternative service out of the jurisdiction under CPR 6, but that it is an exorbitant power which should only be exercised in exceptional cases. Longmore LJ stressed that, except perhaps where there were adequate safeguards, the power to order retrospective alternative service out of the jurisdiction should only be exercised where the relevant method of service was good under local law.
On the facts of the present case, the court overturned a retrospective order for alternative service on the defendant's lawyer in Lebanon because the Lebanese lawyer had no authority to accept service and, accordingly, service was not valid under local law.
Source: PLC (11.01.12).  See BAILII judgment.
The Civil Procedure (Amendment No 4) Rules 2011.  The 58th update to the CPR will come into force on 19 March 2012.
The relevant amendments mainly relate to:
• the centralisation of administrative functions for County Court money claims. All these claims will be issued in the Northampton County Court. The National Civil Business Centre will act as its administrative office, managing claims up to the filing of completed allocation questionnaires.
• Amendment to CPR 26.3 to provide that the court will no longer despatch allocation questionnaires automatically, unless the party is unrepresented.  For represented parties, the court will serve a notice identifying the appropriate allocation questionnaire to be filed, the date by which it must be filed and the court to which it must be sent.
• Extension of the PD51B automatic orders pilot to 30 September 2012.
See also Civil Procedure (Amendment No.4) Rules 2011 (SI 2011/3103).
Setting aside default judgments. Latmar Holdings Corp v Media Focus Ltd & 10 Ors (2012) (QBD) (Judgment 10.02.12). Even though the defendants were unable to meet the threshold under CPR r.13.3(1)(a) to have default judgments against them set aside, the court exercised its discretion to set aside the default judgments under CPR r.13.3(1)(b) where the defence on the merits was not hopeless, the allegations were serious, the amounts involved were large, and there had not been a long and inordinate delay in applying to have the default judgments set aside.
Dealing with a judgment given in the wrong currency, and the correct date for conversion.  (1) Porton Capital Technology Funds (2) Porton Capital Inc (3) Ploughshare Innovations Ltd v (1) 3M UK Holdings Ltd (2) 3M Co (2012) (QBD) (Judgment 03.02.12).  A judgment expressed in US dollars was nonetheless payable in pounds sterling where the contract was in sterling, the particulars of claim were in sterling, and the claimant did not abandon its claim for payment in sterling during the course of trial. The currency would be converted as of the date payment would have been received had the contract been performed.
2.13 PROFESSIONAL NEGLIGENCE
Is expert evidence always needed to claim professional negligence? ACD (Landscape Architects) Ltd v Overall & Anor [2012] EWHC 100 (TCC) (QBD) (Judgment 27.01.12).  Although expert evidence is usually required to support a claim of professional negligence, the High Court has indicated that it should not be regarded as essential in all cases.  A party pleading professional negligence may serve a statement of case containing a statement of truth without having first obtained expert evidence. Otaining expert evidence at a very early stage may be disproportionate in terms of costs.  Source PLC ( 07.02.12).  See BAILII judgment.
Mistake in sub-contract document: solicitors' retainer with client.  Shepherd Construction Ltd v Pinsent Masons LLP [2012] EWHC 43 (TCC) (QBD) (Judgment 19.01.12).  The Technology and Construction Court (TCC) has struck out parts of a contractor's claim against its solicitors which related to a mistake in a construction sub-contract that meant the contractor could not rely on a pay-when-paid clause after its employer became insolvent. That claim reached the Court of Appeal in 2010 (William Hare Ltd v Shepherd Construction Ltd [2010] EWHC Civ 283).  In this case, the contractor alleged that because of the dealings between the contractor and its solicitors over many years, the parties had entered into a sole contract or overarching retainer, which obliged the solicitors to keep past advice under review. The TCC held that the allegation did not have a realistic prospect of success.  The judgment includes an obiter note of caution for construction practitioners to not construe their instructions too narrowly, and to keep in mind the immediate knock-on effect on their work. For example, if a solicitor recommends a particular change to a construction standard form contract, it might need to make clear that its previous work on another standard form should also be reviewed.  For all practitioners, the judgment includes a welcome comment that simply by accepting repeat instructions, and engaging in commonplace marketing activities, the solicitor and its client do not create an overarching retainer to keep past advice under review. For in-house lawyers, this is a reminder that you may need to specifically request reviews of past work or documents when relying on advice from your solicitors.  Source:  PLC (24.01.12).  See BAILII judgment.
2.14 PROPERTY
Relevance of competition law to 1954 Act proceedings.  Humber Oil Terminals Trustee Ltd v Associated British Ports [2012] EWCA Civ 36 (CA) (Judgment 27.01.12).  In an action seeking the grant of new tenancies for an oil terminal site, the tenant's amended particulars of claim, raising issues of competition law founded on the TFEU art.102 and the Competition Act 1998 s.18 on the basis that the landlord was abusing its dominant position by seeking excessive rents, had rightly been struck out. Whilst it was not the case that competition claims would always be irrelevant to proceedings for a new lease under the Landlord and Tenant Act 1954 which were defended on the ground of opposition in s.30(1)(g), it was appropriate to strike out allegations which were not currently relevant or had been inadequately pleaded.  See BAILII judgment.
Availability of injunctive relief where tree root nuisance has yet to cause actual damage.  London Borough of Islington v Elliott & Anor [2012] EWCA Civ 56 (CA) (Judgment 01.02.12).  The Court of Appeal has considered how imminent and likely the occurrence of physical damage resulting from tree roots has to be before the court should intervene by granting an injunction on a quia timet basis.  Source PLC (08.02.12).  See BAILII judgment.
Did a Pallant v Morgan equity or proprietary estoppel arise where one party overlooked a break clause?  Crossco No.4 Unlimited & Ors v Jolan Limited & Ors [2011] EWCA Civ 1619 (CA) (Judgment 21.12.11). The Court of Appeal has considered whether a Pallant v Morgan equity or proprietary estoppel arose where one party had overlooked the presence of a break clause in its lease. It dismissed the appeal and held that there had been no unconscionable behaviour by the landlord as it reasonably believed that the tenant had read the lease and was aware of the landlord's break clause.
The judgment contains a detailed analysis of the jurisprudential basis for a Pallant v Morgan equity which may be of more interest to academic lawyers than practitioners. However, it may also indicate an inclination on the part of the courts to restrict the number of situations in which common intention constructive trusts will be found. This would be consistent with the stricter approach being taken in relation to proprietary estoppel.  Source: PLC (10.01.12).  See BAILII judgment.
Whether circumstances of late acceptance of Part 36 offer justified departure from usual position on costs under r.36.10(5).  PGF II SA v (1) OMFS CO (2) Bank of Scotland Plc [2012] EWHC 83 (TCC) (QBD) (Judgment 27.01.12).  See Part 36.
2.15 TORTS
Vicarious liability.  Richard Weddall v Barchester Healthcare Ltd : Wallbank v Wallbank Fox Designs Ltd [2012] EWCA Civ 25 (CA) (Judgment 24.01.12).  There had been a sufficiently close connection between a junior employee's spontaneous assault of a senior employee when reacting to instructions, and the purpose of his employment, to hold the employer vicariously liable for his actions.  See BAILII judgment.
2.16 WILL AND TRUST DISPUTES
Italian Will did not impliedly revoke earlier English Will.  Perdoni & Anor v Curati [2011] EWHC 3442 (ChD) (Judgment 20.12.11). The High Court has decided that an Italian will did not impliedly revoke an earlier English Will under English law, which applied because the testator was domiciled in England when he made the Italian Will. If Italian law had applied, the Italian Will would have revoked the English Will.  Source:  PLC (16.01.12).  See BAILII judgment.
Disclosure of trust documents.  North Shore Ventures Ltd v Anstead Holdings Inc [2012] EWCA Civ 11 (CA) (Judgment 18.01.12).  Where the court could infer that there was some understanding or arrangement between judgment debtors and trustees by which the latter were to shelter the assets of the former, it was entitled to regard documents in the physical possession of the trustees relating to the administration of the trust as documents in the control of the judgment debtors for the purposes of CPR r.31.8 and r.71.2(6).  See BAILII judgment.
Article:  Clear intentions.  A review of Jones v Kernott.  See Family.
Article:  Different rules.  Cohabitants not caught by Jones v Kernott.  See Family.

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