Collier v Kramer

J U D G M E N T

1. LORD JUSTICE CLARKE: I will ask Lord Justice Mance to give the first judgment.

2. LORD JUSTICE MANCE: This is an appeal from a refusal by Mr Justice Lewison to allow an amendment to join further parties to an action by Mr Michael Collier against solicitors, Blount Petrie Kramer. But it is also by way of sequel to an action between Mr Collier and his daughter, Diane Collier, which was decided in this court on 30 July 2002 under citation number [2002] EWCA 1095. That action was brought by Diane Collier in autumn 1999 to establish her right to valuable premises at 146 Clapham High Street, which she claimed had been the subject of a "generous gift" by her father to her. This alleged gift was made in two stages. First, she was given a 20-year lease in 1986, ostensibly at a rent of £5,000 per annum which was probably never paid. It contained an option to purchase the freehold for £100,000. Second, in 1993, the option was exercised largely with monies advanced to her by her father.

3. Mr Collier, in contrast, maintained that he had only enabled her to acquire the legal title to the property on the basis that she would hold the beneficial interest on trust for him and that the motivation for the whole arrangement was a perceived advantage in relation to inheritance tax. A similar factual situation applied and the like issue arose in relation to other premises, the Empire Bingo Club. These had been compulsorily purchased by the local council for £275,000 in December 1997 and Mr Collier sought to recover the proceeds from Miss Collier.

4. Neither side's case on the facts was accepted. The majority in this court considered that there were no "generous gifts", that the daughter had agreed, orally, to hold both properties on trust but that the whole arrangement had been a successful scheme to defraud creditors. All three members of the court held that, on this basis, Mr Collier was precluded on public policy grounds from asserting any oral agreement to hold the premises on trust. Subject to other untried issues, Miss Collier was therefore entitled to the premises and their proceeds as against her father.

5. In the present action the defendants are solicitors who acted for Mr Collier until around the end of 1997. The individual partner dealing with Mr Collier's affairs was Mr David Isaacs. Mr Collier repeats, as against the solicitors, his assertions that the whole arrangement had an innocent purpose. Further, he says that Mr Isaacs advised him that the exercise of the options in 1993 involved the use of a legitimate "loophole". He claimed, inter alia, that Mr Isaacs was negligent in failing to advise him to secure the execution of a deed of trust to record his intended beneficial interest; and/or in advising him that none was necessary; and/or in failing to advise him that the arrangement was illegitimate and that he might not be able to enforce any rights under it. He also asserts that Mr Isaacs acted in breach of fiduciary duty and/or fraudulently in failing to account to him for the proceeds of the Empire, and in falsely asserting on behalf of Miss Collier that the premises belonged to her.

6. Having failed against Miss Collier in the previous action, Mr Collier now wishes to add to the existing proceedings a claim in conspiracy against Mr Isaacs individually, Miss Collier and his former wife, Julie Collier. The draft amended particulars of claim, for which leave to amend was sought before Mr Justice Lewison, asserted in paragraph 32A that the conspiracy was "to take steps in concert to injure [Mr Collier] and/or his interest and in particular to destroy his business plan for the Clapham property", and that it was conducted by asserting from December 1997 that there was no intention and/or agreement that the properties were held in trust, but that they were held by Miss Collier absolutely and by prosecuting Miss Collier's claim for the properties against Mr Collier.

7. The application came before the judge at a late stage in the present action. It was issued on 24 October 2003 and decided on 28 November 2003 against the background of a trial date fixed for April 2004. Mr Phillips QC, representing Mr Collier on this appeal, submits that, if the judge had granted permission to join the additional parties in November 2003, then the April 2004 trial date could have been held. In these circumstances we should not, he submits, be deterred from overruling the judge even though that will now involve an adjournment of a trial date. If this submission had any force, it has however lost it, in my view, in circumstances where, as will appear, the application to join the proposed new defendants is now put on a completely different basis to that advanced below. Further, the fact that this revised basis is only now advanced, means that new limitation issues arise as to whether it involves a new cause of action that arose more than six years ago and, if so, whether permission could be obtained to introduce that new claim under CPR 17.4(2) on the ground that "it arises out of the same or substantially the same facts as a claim" already made in this action, or whether that question is open to argument so that Mr Collier should be left to pursue the new claim in fresh proceedings, if he can.

8. We are told that, since the judge refused permission to amend, Mr Collier has in fact issued separate proceedings against the three new proposed defendants with a view to avoiding any limitation problems. We have not seen any claim form or other documentation in relation to those proceedings, although it seems unlikely that they encompassed the revised case which, as it will appear, was advanced before us (see below). We are not concerned with them, in any event, and their existence does not bear directly on any issue that we have to decide.

9. The judge, understandably, saw a number of difficulties about the application even though he was viewing it only in the light of submissions by Mr Collier and the solicitors. He could not accept that to bring an action through the courts was capable of amounting to illegality or unlawfulness for the purposes of tort of conspiracy. He thought that Mr Collier's loss pre-dated the alleged conspiracy in so far as it arose when he parted with legal title to the properties. He considered that the proposed conspiracy could only be proved by proving, and indirectly enforcing, the trust in circumstances where the court has already held that Mr Collier cannot rely upon it. Finally, he thought that any conspiracy claim could and should have been brought in the previous proceedings, that there was a risk of inconsistent findings if it was to be allowed to proceed and that it would not be appropriate to allow it to proceed against some, but not all, of the alleged conspirators.

10. The notice of appeal, for which leave was given by the single judge, pursued the appellant's case on each of these points. It stated that Mr Collier's fundamental objection was to:

"the (dishonest) asserting of the absence of a trust (by all three proposed Defendants); the dishonest (but successful) pursuit (and swearing of dishonest evidence in that pursuit) by Diane Collier of proceedings to defeat the trust agreement; and the help and encouragement of David Isaacs and Julie Collier of that pursuit (including by the swearing of evidence)".

11. Reliance was also placed on alleged dishonest representations by Mr Isaacs to the Telford District Registry in May 1998 and in a statement in the previous action begun in autumn 1999, and on:

"the encouragement of Diane Collier by Julie Collier in the course she was following (amongst other things in breach of her duty as an employee to Mr Collier."

It appears that Julie Collier was employed by Mr Collier as financial controller until 1998.

12. The Respondents' Notice pointed, in response, to an aspect of causation not directly identified by the judge. Even if it could otherwise be actionable, any conspiracy to give false evidence, by denying the existence of a trust, cannot have been causative because His Honour Judge Rich and the majority in this court held that an oral trust had been agreed. Even if Diane Collier had done no more than rely on her legal title and put Mr Collier to proof of any enforceable right, he would have been unable to prove any because he would have had to adduce evidence of the purpose of any trust, which His Honour Judge Rich and the majority in this court held to have been unlawful. Although Mr Collier continues on paper to deny that the purpose of the Trust was unlawful, it has never been suggested that there was any conspiracy involving Mr Isaacs, Miss Collier, Mrs Collier or anyone to deceive the court and injure Mr Collier by putting forward a false and unlawful purpose in order to defeat his case.

13. Before His Honour Judge Rich, it appears to have been common ground that Mr Collier could succeed, as he did, even if his purpose was unlawful. Only on appeal did Miss Collier argue the opposite. Despite Mr Collier's vigorous assertions in his present pleadings and in a witness statement of 20 November 2003, Mr Phillips did not seek to persuade us that Mr Collier had any real prospect in the present action of obtaining any different or more favourable findings as to the true motivation behind the whole arrangement which was initiated by the leases in 1986 and pursued by the exercise of the options in 1993.

14. Faced with the point just identified, Mr Collier's case at the hearing of this appeal changed radically. Mr Phillips abandoned any case of conspiracy based on the unlawful denial of Mr Collier's beneficial interest, or based on the provision on false evidence or anything else done in the prior action. He produced over the midday adjournment a revision of paragraph 32A of the draft amended pleading. In form, this adds to the existing allegation, that the conspiracy consisted in asserting from December 1997 that there was no intention and/or agreement that the properties were held on trust, a further or alternative allegation that it consisted of:

"counselling and/or procuring [Miss Collier] to deny the Claimant the use and enjoyment of the properties and/or the ability to treat the properties as his own."

15. In reality, in view of Mr Phillips' abandonment of any case based on denial of a trust, this new allegation supersedes the previous allegation. A new sentence now also appears at the end of the paragraph alleging that, in acting as they did, all three proposed defendants:

"unlawfully combined together in the following ways, namely--

(1) the breach by [Mr Isaacs] of the duties that he owed the Claimant in his capacity as the Claimant's solicitor/former solicitor:

(2) the breach by [Mrs Collier] of the duty of trust and confidence that she owed the Claimant in the capacity of her employment as his financial controller."

16. It is clear from this formulation, and Mr Phillips expressly confirmed in the course of his submissions, that it is not suggested that the conspiracy involved Miss Collier herself doing anything unlawful. Further, the revised case is strictly limited to the form of conspiracy which exists when parties combine to do a lawful act by unlawful means. It is not pleaded, and there has been no suggestion despite the discussion of the possibility during submissions before us, that there was a conspiracy to injure by lawful means; that is a conspiracy where the predominant purpose was to injure Mr Collier. One reason for this is, no doubt, that it would be impossible to advance any such suggestion in relation to Miss Collier. Her predominant purpose was and is clearly to have and enjoy the very valuable proceeds in Clapham and the proceeds of the Empire of which she is in each case the legal owner.

17. A number of further points arise on the revised draft. First, the new allegations are, as I have said, entirely unparticularised. Bearing in mind that the revised case is quite different from any advanced below or in the Notice of Appeal, Mr Soole QC, for the respondents, was justified in raising certain points regarding its factual improbability.

18. It is clear that Mr Collier already regarded the respondents as acting only as Miss Collier's solicitors by 4 December 1997, and that Mrs Collier ceased to be employed by Mr Collier or his companies in 1998, whereas Miss Collier's action against Mr Collier was only begun in autumn 1999. The link between the alleged conspiracy and Miss Collier's change of attitude is far from clear. That is, however, to my mind the least of the problems faced by the revised case.

19. Second, the revised case seeks to avoid the problems about reliance on an unlawful trust by basing Mr Collier's claim on the factual position which he enjoyed prior to late 1997, and by comparing that with the factual situation which he enjoys, or will enjoy, on the assumption that Mr Collier succeeds in evicting him from the premises. In short, it seeks to attribute the whole of Mr Collier's loss (including any loss which he may suffer if he loses the action with his daughter) to Miss Collier's change of attitude towards Mr Collier, and to measure it in terms of loss of factual advantages rather than by reference to any comparison between his legal position with and without any enforceable trust. Miss Collier's pursuit of the previous action against Mr Collier is, on this basis, simply to be viewed as a consequence of her change of attitude. The idea that Miss Collier could be party to a conspiracy to injure her father by changing her own attitude towards him, is to my mind even stranger on its face than the former suggestion that she could be a party to injure by denying his beneficial legal interest.

20. Thirdly, and still more fundamentally, even if there was any breach of duty by Mr Isaacs as solicitor or former solicitor, or by Mrs Collier as an employee, there is nothing whatever to show or establish that there was any conspiracy between all three proposed defendants to injure Mr Collier by way of any such breach of breaches of duty. If there was any plan to injure him at all, it must have been, as far as Miss Collier was concerned, to rely on her legal title to deprive him of the use and enjoyment or proceeds of the properties. There is nothing in the draft pleading, or in common sense, to suggest that, as far as she was concerned, that plan required either Mr Isaacs or Mrs Collier to commit any breach of duty to anyone. Hence, no doubt, the fact that the complaint as pleaded is that Mr Isaacs and Mrs Collier cancelled and/or procured Miss Collier to deny Mr Collier the use and enjoyment of the properties. I have already pointed out the difficulty of understanding the suggestion of a conspiracy consisting in two parties counselling or procuring another alleged conspirator to act.

21. Ignoring this problem, and assuming that Miss Isaacs and Mr Collier did counsel or procure Miss Collier to change her attitude to Mr Collier, it is possible to conceive that one or both of them thereby committed a breach of duty towards Mr Collier as his solicitor, or former solicitor, or as his employee. However, any such breach can have been no more than personal and incidental. I interpose that there has been no attempt to add a simple claim for damages for breach of duty as against either Mr Isaacs or Miss Collier in this regard.

22. At to conspiracy, I do not read the revised pleading as making any allegation that Miss Collier planned with them for them to breach their duties in any respect. The proposed addition at the end of the paragraph of an allegation of unlawful combination consisting of breaches of duty by Mr Isaacs and Mrs Collier, is notably lacking in any such statement or in any particulars which could involve Miss Collier in any such plan. Further, there is no reason why denial of the use or enjoyment of properties as distinct from denial of a trust and a pursuit of legal action on that false basis, which is the case which Mr Phillips has abandoned, should lead Miss Collier to combine with Mr Isaacs or Mrs Collier to use means involving breach by the latter of any duties.

23. The whole premise of Mr Phillips' revised case is that title is irrelevant and that what matters is factual use and enjoyment. On that basis Miss Collier could, by virtue of her legal title, evict Mr Collier without asking anyone else for assistance, let alone relying on anyone else to breach their duties to Mr Collier. In these circumstances I find the revised case, as it is presently presented, wholly unpersuasive and certainly not one which I would be prepared to permit at this late stage.

24. We observed during the course of submissions that Mr Isaacs was, as partner in the respondents, anyway a party to the existing action. We asked whether there was some reason for taking the unusual and, on its face, inappropriate course of trying to join him a second time. We were informed that a revised claim was intended to lie against the respondents as a firm just as much as the existing claims and that Mr Isaacs was the only individual in the firm whose conduct was relied upon in relation to both existing and the revised claims.

25. On this basis Mr Phillips accepted that Mr Collier's application regarding Mr Isaacs ought to be to amend, as against the respondents, to add the proposed allegation of conspiracy. However, if the proposed allegation appears to lack any substantial prospect, as I consider, then that amendment ought also to be refused. It is in the circumstances strictly unnecessary to consider the submissions raised on abuse of process.

26. Mr Collier's witness statement of 20 November 2003 discloses a wish to challenge almost the whole factual basis established by the previous judgments in the action between him and his daughter. As against Miss Collier, that would clearly have been abusive. I am less confident that it would be right to refuse permission to amend in relation to Mr Isaacs and Mrs Collier on the grounds either that this would lead to a risk of inconsistent findings or that it would simply be wrong to allow an amendment in relation to some alleged conspirators.

27. The present proceedings anyway involve a risk of inconsistent findings since Mr Collier is already advancing in them as against the solicitors a factual case contrary to that found in his previous action with his daughter. The fact that the solicitors and Mrs Collier were not parties to the previous litigation may make it inevitable that they are in some degree exposed to separate litigation on issues covered as between Mr and Miss Collier by this court's judgments in the litigation between Mr and Miss Collier.

28. What is presently material is not whether it would have been abusive to pursue the original case addressed in Mr Collier's statement, but whether the revised case could and should have been advanced in the litigation between Mr and Miss Collier, and whether it would be abusive to allow a fresh claim relating to it to be included in the present action.

29. There is material from which it could be concluded that Mr Collier was aware of the conspiracy which he alleges during the prior litigation; (see, for example, his witness statement 20 November 2003, paragraph 12, and his witness statement of 2001 in the proceedings with his daughter, paragraph 33). In view of my conclusions about the revised case's lack of intrinsic merit, I find it somewhat artificial and difficult to attempt to answer the question whether the revised claim for conspiracy should have been pursued in the previous litigation if it was to be pursued at all.

30. The argument against such a view is that bringing any conspiracy claim in the prior action would have involved additional parties and was unnecessary until it became apparent, in the context of an appeal against His Honour Judge Rich's judgment, that Mr Collier would or might fail on grounds of public policy to enforce the trust which otherwise existed in his favour, by which time it was too late to introduce any conspiracy claim into those proceedings.

31. My conclusion that the revised amendment should be refused is reinforced by the potential limitation problems which I have identified. If the alleged conspiracy is put as occurring prior to or in December 1997, or at any time prior to March 1998, as it appears may be the case, then the revised case may well constitute a new claim advanced more than six years after the cause of the action arose, and not arising out of the same, or substantially the same, facts as any existing case. Since there is at least doubt on that score, that is a further reason for not allowing the proposed amendment and for leaving Mr Collier to pursue further proceedings, if he can do so within the limitation period and without abuse. I would therefore dismiss this appeal.

32. LORD JUSTICE JACOB: I agree.

33. LORD JUSTICE CLARKE: I also agree.

Order: Appeal dismissed. The application to amend the Particulars of Claim as shown in green in the document before this court be refused. Appellant to pay the respondent's costs summarily assessed in the sum of £20,000 inc VAT. Leave to appeal to the House of Lords refused.