Sowerby v Charlton

This is an appeal by the defendant from an order of Judge Playford QC, sitting as a High Court judge in the Queen’s Bench Division on 25^th February 2005, whereby he dismissed an appeal against an order of Master Tennant dated 20^th December 2004. Master Tennant, for his part, had struck out paragraphs 4 and 8 of the Defence in this action and directed that judgment be entered for the claimant on liability. He also directed that the issue of contributory negligence should be tried as a preliminary issue and gave timetabled directions for the trial of that issue. Because the Master did not give a reasoned judgment, the judge conducted the appeal by way of a re-hearing. At the end of the hearing of the appeal, we said we would be dismissing it, for reasons to be given later. These are our reasons.

This action arises out of the catastrophic personal injuries the claimant suffered on the evening of 26^th April 2003 when she was visiting a property in Richborne Terrace, Vauxhall, in South London. The front door of the property is at a higher level than the pavement, and one has to go up eight stone steps to the platform outside the front door. There is a handrail on the left hand side of the steps but not on the right. To the right hand side of the front steps are steps leading down to a basement flat. On each side of the front steps there is a very low stone pediment, about one and a half to two inches high.

On the evening in question the claimant appears to have fallen over the edge of the platform outside the front door a distance of at least eight feet onto the hard surface (or the stone steps) below. She was rendered paraplegic as a consequence of her accident.

On 23^rd October 2003 her solicitors wrote a letter of claim. The defendant’s insurers responded on 12^th November, seeking details of the claim. They then passed the matter to their solicitors. After an exchange of correspondence, the claimant’s solicitors sought a decision on liability, to which the defendant’s solicitors responded to the effect that their insurance clients were awaiting their reinsurers’ view on primary liability. Eventually, on 10^th May 2004 the defendant’s solicitors stated in a “without prejudice” letter:

“Having investigated this claim the Defendant is prepared to admit a breach of duty.”

They then made a proposal for settlement of the contributory negligence issue.

The claimant’s solicitors responded on 13^th May 2004, asking that the position in relation to liability be confirmed in open correspondence, and seeking a substantial interim payment. In a later letter they rejected the settlement proposal and asked that the breach of duty be openly admitted. On 30^th June the defendant’s solicitors re-dated their letter of 10^th May and re-sent it to the claimant’s solicitors, this time as an open letter.

Proceedings were then started, and the defence was filed and served on 24^th September 2004. Primary liability was put in issue. It is now accepted on the defendant’s side that the decision to admit liability had been an informed one, taken by solicitors who advised their insurance client after taking into account the views of the reinsurers. The defendant, however, withdrew the admission after junior counsel had given certain advice.

The matter then came before Master Tennant on 20^th December on an application by the claimant to strike out these paragraphs of the defence. Master Tennant granted this application, and the judge upheld his decision on the first appeal. In granting permission for this second appeal Rix LJ commented that the scope of CPR 14.1 raised an important point of practice on which there was no CPR authority and some debate at first instance.

The question we have to decide arises in this way. In the closing years of the pre-CPR procedural regime this court held that the language of RSC Order 27 rule 3 (which referred to an “admission of fact...made by a party...either by his pleadings or otherwise”) was capable of embracing admissions made before the relevant action was started. Although we now have an entirely new procedural code, which blends features of the former High Court and county court regimes and possesses many new features, this court has never had the opportunity of stating authoritatively whether the language of the successor rule, CPR 14.1, is capable of being interpreted in the same way. This has led to a good deal of uncertainty in the lower courts.

In Biguzzi v Rank Leisure plc [1999] 1 WLR 1926 Lord Woolf MR stressed the fact at p 1932E that the Civil Procedure Rules were a new procedural code. At p 1934G he said that earlier authorities were no longer generally of any relevance once the CPR applied. He commended the judge in that case for declining to look back to the old rules in order to interpret the new rules, and for doubting whether any of the old authorities could assist him in interpreting the CPR (see pp 1930G-1931B and p 1934 D-G). We should therefore go straight to the provisions of the new procedural regime. If the answer to the issue identified in para 8 above is clear, we will not be helped by considering the pre-CPR case-law.

Under the new regime some provision is made for pre-action activity, and its underlying philosophy is to promote the settlement of disputes without the need to institute legal proceedings. Thus Parliament has widened the scope for applying to the court for compulsory pre-action disclosure of documents (see Supreme Court Act 1981 s 33 and County Courts Act 1984 s 52), and the new arrangements for pre-action protocols are intended to further the exchange of information in an orderly way so that each side can appraise the strengths and weaknesses of their position in a sensible way before deciding whether litigation is inevitable. Although there is no legal entitlement to recover the costs of pre-action negotiations, CPR Part 8 provides an entirely new procedure for instituting “costs-only” proceedings when the parties agree to settle a claim but cannot reach agreement about costs. Similarly, CPR 3.1(4) and (5) give teeth to the pre-action protocols by enabling the court (after an action has been brought) to take into account any failure to comply with a pre-action protocol in any case-management orders it may make.

But these provisions, welcome as they are, cannot disguise the fact that the CPR are principally concerned with the regulation of cases after an action is started. They do away with the old language of a “cause or matter” and speak of a “case”. There is a definition of the phrase “statement of case” in CPR 2.3(1). Its primary meaning is “a claim form, particulars of claim where these are not included in a claim form, defence, Part 20 claim, or reply to defence”. “Particulars of claim” must be verified by a statement of truth (CPR 22.1(1)(a)), and when they are served, they must be accompanied by a “response pack” containing three forms – a form for defending the claim, a form for admitting the claim and a form for acknowledging service (CPR 7.8 (1)). This new rule represents an amalgam of former High Court and county court procedure.

CPR 9.2 provides that when particulars of claim are served on a defendant, the defendant may file or serve an admission in accordance with Part 14, or file a defence in accordance with Part 15 (or do both, if he admits only part of the claim). Alternatively he may file an acknowledgement of service in accordance with Part 10 (which in turn provides that he may file an acknowledgement of service if he is unable to file a defence within the period specified in CPR 15.4 or if he wishes to dispute the court’s jurisdiction: see CPR 10.1 (3)).

CPR Part 11 prescribes the procedure for disputing the court’s jurisdiction; CPR Part 12 is concerned with the procedure for default judgments; and CPR Part 13 contains the procedure for setting aside or varying default judgments. This survey of Parts 9-13 contains the backdrop against which CPR Part 14 (“Admissions”) is set. CPR 14.1 provides:

“(1)

A party may admit the truth of the whole or any part of another party’s case

(2)

He may do this by giving notice in writing (such as in a statement of case or by letter.”

CPR 14.1(3) permits a defendant to make admissions of various kinds where the only remedy which the claimant is seeking is the payment of a sum of money. It foreshadows the more detailed provisions of CPR 14.4 to 14.7. CPR 14.1(4) gives the claimant a right to enter judgment when any such admission is made, save in certain clearly identified circumstances. Finally, CPR 14.1(5) provides:

“(5)

The court may allow a party to amend or withdraw an admission.”

CPR 14.2 prescribes the period within which an admission relating to a money claim must be made if the claimant is to be prevented from obtaining a default judgment. CPR 14.3 is concerned with a judgment on an admission which is not entered as of right. It provides:

“(1)

Where a party makes an admission under rule 14.1(2) (admission by notice in writing), any other party may apply for judgment on the admission.

(2)

Judgment shall be such judgment as it appears to the court that the applicant is entitled to on the admission.”

It is unnecessary to refer in any detail to the remainder of CPR Part 14 or to its Practice Direction. They are mainly concerned with the procedure for making admissions in response to money claims, and for the way in which judgment may be entered as of right (on the claimant’s application) once such an admission has been made. These provisions enable a vast amount of court business to be conducted without any need for judicial involvement, culminating in the entry of judgments that pave the way to enforcement procedure. A member of court staff (or a suitably programmed computer) can study the entry in the relevant box on Form N9A or N9C (which are sent to the defendant with the Response Pack, depending on the nature of the claim) and permit judgment to be entered as of right accordingly.

The procedure which regulates the conduct of a defendant who wishes to defend all or part of a claim is contained in CPR Part 15 and its Practice Direction, and CPR Part 16 contains general provisions relating to “statements of case”. In particular, CPR 16.5(1) provides:

“(1)

In his defence, the defendant must state –

(a)

which of the allegations in the particulars of claim he denies;

(b)

which allegations he is unable to admit or deny, but which he requires the claimant to prove; and

(c)

which allegations he admits.”

Needless to say an admission, depending on its content, may open the way for judgment to be entered on the admission under CPR Part 14.

This new regulatory scheme has been so carefully crafted that in our judgment the rule-makers cannot have intended a pre-action admission of liability to be embraced by the words “A party may admit the truth of the whole or any part of another party’s case” in CPR 14.1. In the same way as an admission of guilt to a police officer cannot in itself be equated with an admission of guilt when a charge is brought in court (so as to dispense with the need for the charge to be put formally to the defendant in court), an admission of liability before an action is brought cannot be equated with an admission of “the truth of the whole or any part of another party’s case”. That party’s “case” will not have been formulated until the claim form or the particulars of claim are prepared (see para 11 above), and it would not ordinarily be meaningful to describe someone as a party until legal proceedings have been commenced. It would have been very easy for the rule-makers to have made it clear that admissions of liability made before an action was started were also included in the language of CPR 14.1, and the simplicity of the procedures for admissions leading to judgments on money claims that are set out in CPR 14.4 to 14.7 would be made very much more complicated if an admission that might give rise to a judgment being entered as of right could also be gleaned from possibly fast-moving pre-action correspondence about an accumulating debt.

We were fortified in our conclusion that CPR Part 14 was never intended to embrace pre-action admissions of liability by the fact that the parties who agreed the terms of the Pre-Action Protocol for Personal Injury Claims clearly did not believe it had this effect. When it was originally published in January 1999, para 2.3 stated:

“This protocol is primarily designed for those road traffic, tripping and slipping and accident at work cases which include an element of personal injury with a value of less than £15,000 which are likely to be allocated to the fast track. This is because time will be of the essence, after proceedings are issued, especially for the defendant, if a case is to be ready for trial within 30 weeks of allocation. Also, proportionality of work and costs to the value of what is in dispute is particularly important in lower value claims.”

The first part of Section 3 of the Protocol is concerned with the letter of claim and the response. Para 3.7 prescribes that the defendant or his insurer is to reply at the end of a period for investigating the claim which should not exceed three months, and in that reply they should state whether liability is denied and, if so, give reasons for their denial of liability. Para 3.9 provides:

“Where liability is admitted, the presumption is that the defendant will be bound by this admission for all claims with a total value of up to £15,000. Where the claimant’s investigation indicates that the value of the claim has increased to more than £15,000 since the letter of claim, the claimant should notify the defendant as soon as possible.”

It is clear that the Protocol did not intend any such presumption to apply to pre-action admissions of liability in multi-track claims. Indeed, it expressly recognises (at para 2.9) that matters may come to light as a result of investigation after the defendant has responded, and that letters of claim and responses are not intended to have the same status as a statement of case in proceedings.

It follows that the judge was wrong when he held that CPR Part 14 applied to pre-litigation admissions. This is not, however, the end of this appeal, because Mr Lynagh QC, who appeared for the appellant, conceded that if this court were satisfied that a complete denial of any primary liability had no real prospect of success, it could properly uphold the judgment on liability, albeit by a different route (for which see para 32 below).

We turn therefore to the facts of the case as disclosed in the witness statements served by the parties which were illuminated by a number of coloured photographs.

The defendant, Mrs Charlton, has owned the freehold of 10 Richborne Terrace since 1968. She has always retained the basement flat for her own use and for the use of her family. She converted the property into four self-contained flats soon after she acquired it. Nobody advised her to add another handrail to the front steps either at that time or at any time thereafter. In about 1980 she installed a flight of external steps down from the terrace in front of the basement flat window to a new front door, thus giving herself independent access to the flat. The wall directly in front of the basement flat window was taken back at this time, but this work had no effect on the height of the drop from the steps leading up to the main front door to the level of the basement flat.

Although Mrs Charlton installed a second handrail after the claimant’s accident, she had never received any complaint or request from any tenant for such a handrail and had never had any reason to consider that one was at all necessary. In the late 1980s she had arranged for the front steps to be renovated, principally because of her concern for the welfare of an elderly couple who had lived at the property. She always saw them using the handrail when they went up the front steps. She says that her property is now one of the only ones in the street with such handrails (also probably throughout London) as most of the others have either one much simpler handrail or no handrails. Indeed, she says that the street that runs parallel has very similar properties, some of which have handrails on both sides, but a lot on one side or not at all.

She was living in her home in France when the accident happened. Her daughter was living in the basement flat with her brother. They came home at about midnight and heard a great deal of loud music and voices coming from the ground floor flat. It was not unusual for a party to be going on there, especially on a Friday night. Her daughter went to bed at about 1 a.m. without noticing anything untoward. She did not learn about Ms Sowerby’s accident until some time later.

Ms Sowerby was a friend of the occupants of the ground floor flat. She and her boyfriend had met up with two Australian friends for a drink after work in the Bank area, and she thereafter visited another public house in the Vauxhall area, a tapas bar, and a third public house before finishing up in the ground floor flat at 10 Richborne Terrace where she had another drink. People had joined the group and left it during the course of the evening, and when the accident happened there were just five of them left. The three young men had just returned from buying cigarettes and she and the young woman who lived in the ground floor flat were just locking up before they all went on to the flat which Ms Sowerby occupied. She maintains that she had probably had five or six drinks, but that she was not drunk: “As a normal 28 year old woman I would consider that this was an unexceptional Friday evening for me”. Her friends all corroborate her account of the evening. Hospital notes describe her as intoxicated.

There will clearly be a very live issue on contributory negligence. The question we have to determine was whether there is any real prospect of the defendant warding off any finding of primary liability for the accident. Although all these cases fall to be decided on their own facts we have been shown two judgments by very experienced first instance judges who were concerned to determine liability following similar accidents. In Haworth v Findlay (unreported, 3^rd May 2000) Mr Walter Aylen QC, sitting as a deputy High Court judge, held a house owner liable when a tenant of the property had a similar accident late at night after having had a few drinks. That judge was influenced by the consideration that the potential consequences of a fall in that area were extremely serious, and that reasonably serious measures should have been taken by a reasonable occupier to obviate the risk.

In Lips v Older [2004] EWHC 1686 (QB) Mackay J was concerned with a similar case involving a fall by a 42 year old man (who was known by his landlord to be an alcoholic) into the basement area of a house in Hove. He held the house owner one-third liable. He was influenced by the consideration that it was foreseeable that any of the tenants, who were largely single students, would return to the premises in drink, and that the installation of a simple handrail on one side was an inexpensive and reasonable precaution. It is fair to say that he found this a finely balanced case and there were features of it, not present in the present case, that militated against the landlord.

The present case, too, would be finely balanced. But in all the circumstances we regard it as inconceivable that any High Court judge would fail to find the defendant at least partly liable. There is not only the fact that when confronted with a very large damages claim her insurers, their reinsurers, and their very experienced solicitors accepted liability after having had plenty of opportunity to investigate the circumstances of the accident. There is also the fact that parties given by the occupiers of the ground floor flat were known to be not infrequent events, with the reasonably foreseeable consequence that people might leave the flat the worse for wear for drink, with an unguarded eight foot drop onto a very hard surface on their left hand side.

A further relevant consideration is the fact that Judge Playford QC, who also has vast experience of personal injuries litigation, expressed the view that he thought that the claimant would succeed in this case on primary liability. It seemed to him that the danger of a fall was an obvious hazard that could be remedied at very little expense by anyone who chose to apply their mind to the danger.

In all the circumstances we considered that there was no real prospect of the defendants resisting a finding of primary liability. Summary judgment might therefore be entered against her on this issue, and since Mr Lynagh was not disposed to raise any procedural objections, it seemed to us appropriate to allow the Master’s order to stand without overloading the matter with unnecessary procedural complexities.

In these circumstances it is not necessary to express a definitive view on the arguments that were addressed to us on the basis that a pre-action admission did come within the regulatory scheme prescribed by CPR Part 14. But it may be helpful if we say three things. The first is that for CPR purposes no reliance should now be placed on the unreported oral judgments of this court (Roch and Swinton Thomas LJJ) in Standerwick v Royal Ordnance Plc (CAT 6^th March 1996). Although they represented binding authority on the meaning of RSC Order 27 rule 3, for the reasons given above they do not assist in construing CPR 14.1

The second is that the judgments in this court in Gale v Superdrug Stores Ltd [1996] 1 WLR 1089 and particularly the judgments of the majority, should now be approached with caution because they were concerned with the effect of a regulatory regime which was abolished on 26^th April 1999. In particular there were features of pre-CPR practice, as faithfully described by Millett LJ, which would no longer be acceptable practice today.

Finally, the unreported judgment of Sumner J in Braybrook v Basildon & Thurrock University NHS Trust (7^th October 2004) appears to us to offer valuable guidance (at para 45) on the way in which a court should exercise its discretion when determining whether or not to permit the withdrawal of an admission that was made after an action was commenced. After referring to a number of earlier cases he said:

“45.

From these cases and the CPR I draw the following principles.

1.

In exercising its discretion the court will consider all the circumstances of the case and seek to give effect to the overriding objective.

2.

Amongst the matters to be considered will be:

(a)

the reasons and justification for the application which must be made in good faith;

(b)

the balance of prejudice to the parties;

(c)

whether any party has been the author of any prejudice they may suffer;

(d)

the prospects of success of any issue arising from the withdrawal of an admission;

(e)

the public interest, in avoiding where possible satellite litigation, disproportionate use of court resources and the impact of any strategic manoeuvring.

3.

The nearer any application is to a final hearing the less chance of success it will have even if the party making the application can establish clear prejudice. This may be decisive if the application is shortly before the hearing.”

Above all, the exercise of any discretion will always depend on the facts of the particular case before the court. The words “will consider all the circumstances of the case” have particular resonance in this context.

For the reasons given in this judgment this appeal was dismissed.