Harrison & Anor v Halliwell Landau (A Firm)

LORD JUSTICE NEUBERGER: This is an application for permission to appeal brought by Mr Harrison on behalf of himself and his wife against a decision of His Honour Judge Eccles QC, sitting as a judge of the High Court, given on 24th May 2004. The judgment, which runs to over 50 pages, was in relation to an application by Mr and Mrs Harrison to set aside a consent order which they had entered into in proceedings between them and solicitors formerly acting for them, Halliwell Landau.

As reading the exceptionally careful, full and conscientious judgment of Judge Eccles will show, the facts are quite complicated. In their essentials they are as follows. Mr and Mrs Harrison entered into an agreement with a firm of accountants called Haslam Tunstall ("Haslam"). That agreement ended in March 1999 and Haslam sued the Harrisons for nearly £200,000. The Harrisons retained Halliwell Landau. There was a hearing before the District Judge at which Haslam recovered the comparatively small sum of £7,500 and the Harrisons were awarded 95% of their costs.

Haslam appealed the costs order. A week before the hearing of the appeal was due, counsel instructed by Halliwell Landau for the Harrisons put in a skeleton argument indicating that they wished to appeal the award of £7,500. The action between Haslam and the Harrisons was settled in Tomlin order form. Although it is an oversimplification to put it this way, the Harrisons and Halliwell Landau then fell out. It is right to record that matters were more complicated than that in terms of the relationship between them, but I think that brief statement will do for the purposes of today's application.

Proceedings were brought by Halliwell Landau against the Harrisons for recovery of their fees, and the Harrisons counterclaimed that Halliwell Landau had been negligent. Eventually, those proceedings were compromised by a settlement. But that was only after the matter had come before Mr Christopher Moger QC for the hearing of the claim and counterclaim, and after Mr Dagnall, counsel who had appeared for and advised the Harrisons and Halliwell Landau in connection with the proceedings brought by Haslam, had produced a large box of documents at the direction of Mr Moger, Mr Dagnall having been advised, probably erroneously, by the Bar Council that he should not give any such disclosure.

The Harrisons then sought to set aside the consent order. They took a sufficiently optimistic view to apply for summary judgment, but Gage J refused it. Accordingly, there was a hearing which lasted eight days in front of Judge Eccles which was heard in April 2004, and which resulted in his judgment on 24th May 2004 when he refused to set aside the judgment, i.e. the Harrisons failed.

The judge rejected their argument based on duress. In those circumstances he had to consider their argument based on non-disclosure of documents. The learned judge rightly (and I do not think this is disputed) concluded that in order for the Harrisons to succeed they would have to show (a) that documents had not been disclosed which should have been disclosed by Halliwell Landau, and (b) those documents would have had a material effect on the outcome.

The two documents on which the case concentrated were, first, an outline submission and, second, a skeleton argument prepared by Mr Terry, counsel for Haslam, relating to the Harrisons' cross-appeal relating to the £7,500. I do not need to concern myself with the outline submission because Mr Harrison -- whose submissions both in writing and orally have been admirably clear and concise -- concentrates his case on the skeleton argument.

As I see it, three reasons were advanced by Halliwell Landau as to why the non-production of the skeleton argument could not assist Mr and Mrs Harrison. Approaching it backwards in one sense, and in the opposite order from the judge, the first was that the document was not material. The judge found against the Harrisons on that. The second was that the document was not in principle subject to a duty to disclose. The judge found in favour of the Harrisons on that issue in relation to the skeleton argument (see paragraph 145 of the judgment) and I say no more about it. Thirdly, and however, he held that although there was a duty to disclose in principle, it was not a duty which on the facts had been breached (see paragraph 139 of the judgment and the paragraphs leading up to it).

So far as the first issue, materiality, is concerned, Mr Harrison has satisfied me that there is a real prospect of his persuading this court that the judge was wrong, despite the care with which the judge expressed himself. Mr Harrison's case is that the skeleton argument of Mr Terry would have revealed the fact that Haslam would be taking the point that any cross-appeal was way out of time and that therefore Halliwell Landau were negligent in having delayed in appealing.

There may be other reasons for rejecting that argument, other than that identified by the judge. Therefore it may be that the judge could be said to have been right for different reasons, even if he was wrong in the reason he had for rejecting that contention. The reason the judge rejected that contention was that, as Haslam's appeal was governed by the Rules of the Supreme Court, it was not necessary under those rules for there to be any notice of cross-appeal by or on behalf of the Harrisons. He came to that conclusion on the basis of the reasoning of the Court of Appeal, and in particular the judgment of Robert Walker LJ, in the unreported case of Shade v Compton Partnership, 22nd July 1999. Although I do not have the numbered pages of the transcript, the relevant passages are on pages 6 and 7 of the Smith Bernal report for Lawtel, pages 112 and 113 of the bundle.

Although the judge was quite possibly right in this connection, it seems to me arguable that a cross-appeal was necessary. First, the appeal by Haslam was on costs only and it might be said therefore to be very different from where the main part of the order was under appeal, as in the cases considered by Robert Walker LJ. In those cases the whole judgment was before the appellate court. Whereas in this case, on the appeal, only the costs order was. Second, as Robert Walker LJ himself pointed out, the cases he had to consider were all concerned with summary judgment and it may be that different rules applies for summary judgment as opposed to other cases.

In those circumstances, contrary to the impression I had to came into court (and that is a tribute to Mr Harrison's arguments), I would say that there is a real prospect of his establishing that, if there was a breach, it amounted to a material non-disclosure. I am far from saying that he would succeed in establishing that, but I think that there is enough in the point to conclude that, unless on the issue to which I now turn, he has no real prospect of succeeding and establishing that the judge was wrong, he ought to have permission to appeal.

The other ground, as I have indicated, upon which the judge rejected the Harrisons' case and which logically, and in the judgment, comes first, is encapsulated in paragraph 139, where the judge said this:

The judge then added:

The judge, having carefully considered each of those arguments in paragraphs 120-138 of his judgment, found that there was no duty to disclose despite each of those three arguments. Regrettably from Mr and Mrs Harrison's point of view, I do not think there is any realistic prospect of establishing that the judge was wrong in those conclusions.

Mr Harrison has not suggested that the judge was wrong in his view that there was no duty to disclose the skeleton argument on 10th December 1999 when it was served. That is of course a duty between solicitor and client, not as between litigants. I have considered whether there is a prospect, because it would be quite unfair on Mr Harrison not to consider this, of establishing that the judge was wrong in the view he expresses in paragraphs 121-124 of his judgment. I am quite satisfied that the conclusion the judge reached, both as a matter of law and on the particular facts of the case, was unassailable.

In relation to the second ground, which is the duty to disclose because the document had been in the possession of Halliwell Landau, the judge quite clearly found that the document had been in the possession of Halliwell Landau (see paragraph 28), but only for a short period (see paragraph 126).

Mr Harrison suggested that it is very suspicious that Halliwell Landau said that they had the skeleton argument for such a short time, and that the judge was too ready to accept it as correct. He advanced arguments in that connection based on the date that the skeleton argument and the various other documents were received. The judge properly considered the honesty and reliability of the witnesses, as one would expect, in his very careful judgment. That is perhaps best demonstrated by paragraph 77 of the judgment, where the judge describes Mr Dagnall, Mr Nicholson and Mr Thomas as palpably honest:

I appreciate that Mr Harrison may well have very different views of some of those witnesses, but they are plainly views to which the judge was entitled to come. It therefore makes it to my mind impossible to suggest, in the absence of clear, cogent new evidence which could not have been produced at trial (see Ladd v Marshall [1954] 1 WLR 1489), that the judge was not entitled to come to the conclusion that he did, namely that the skeleton argument had been in the possession of Halliwell Landau only for a very short period of time.

In those circumstances, in considering whether there was a breach by Halliwell Landau of their duty to disclose under CPR 31, in particular CPR 31.8, the judge was in my view entitled, indeed bound, to proceed on the facts that he found and, in light of those facts, was entitled to come to the conclusion he did. As he rightly said in paragraph 128, Halliwell Landau were not "exempt from the duty to disclose ... simply because they were not aware of them at the time standard disclosure occurred". He also was right in my view to conclude that the documents were in principle disclosable.

However, fatally to Mr Harrison's contention on the second aspect of non-disclosure, namely the normal disclosure process, is the judge's finding at paragraph 130:

I ought to mention briefly that I am not sure whether Mr Harrison was saying that, reading CPR 31.6, 31.7 and 31.8 together, there is an absolute duty, not subject to reasonable search under CPR 31.7, to disclose documents which are or have been under a litigant's control. I think it is quite clear that CPR 31.8 is intended to extend CPR 31.6. Therefore the ambit of CPR 31.8, just like the ambit of CPR 31.6, is cut down by CPR 31.7.

The final and third way in which it might have been said that there was a failure to disclose was following the delivery of the box of documents by Mr Dagnall to the court at Mr Moger's direction. The judge dealt with that at paragraphs 131-138 of the judgment. In my view, the very unusual facts of that aspect of the case make it particularly difficult to say that the judge reached the wrong conclusion in holding that Halliwell Landau were not in breach at that point because the judge's conclusion was particularly fact-sensitive.

But even putting that point on one side, in making the findings in paragraphs 132 to 136, it seems to me that the judge was plainly right in the conclusion that he reached. He made a finding of fact in paragraph 138, namely that in the rather unusual circumstances Halliwell Landau had made a reasonable search of the box. It seems to me that was a finding which it would be impossible for an appellate court to interfere with unless there were some very clear facts to call that conclusion into question. I have to say that I do not think there are.

In those circumstances, as I say regrettably from Mr and Mrs Harrison's point of view, I am satisfied that there is no prospect of this full and carefully reasoned decision being successfully appealed. In those circumstances, it is plainly my duty to refuse permission to appeal and I therefore do so.