Waite v Denby

In these proceedings the claimant claims damages, which he quantifies in the sum of £195,000, for fraudulent and/or negligent misrepresentation under the Misrepresentation Act 1967. On 19 September 2008 HHJ Simon Brown QC, sitting in the Birmingham Mercantile Court, ordered amongst other things that the Particulars of Claim that had been served, as well as the Defence, should be struck out. The order striking out the Defence was consequential on the striking out of the Particulars of Claim. The claimant appeals against this part of the order with the permission of Sir Richard Buxton. Both parties act in person before us, as they did in the court below.

The factual background to the litigation can be stated quite shortly. The defendant was the owner and managing director of a company called The Village Green Team Ltd. The claimant bought a 25% interest in the company for £200,000. His case is that he was induced to do so by various misrepresentations made by the defendant. The claim form was issued on 26 July 2007 and the Particulars of Claim served as a separate document in the same month. This pleading runs to 31 pages and 95 paragraphs.

On 14 September 2007 the defendant, who was then represented by solicitors, served a short holding Defence, which stated amongst other things that, until the claimant provided copies of all the documents referred to in the Particulars of Claim, she was unable “to respond with full particularity to the details of the Particulars of Claim”. She did, however, plead that on 1 October 2004 and at the time of acquiring his shareholding the claimant:

“executed documentation confirming that he had been given appropriate access to enable him fully to carry out his due diligence enquiries.”

It is the claimant’s case that this document is a forgery. There have been no fewer than four case management conferences in this litigation, all conducted by Judge Simon Brown. At each of these the claimant appeared in person. The defendant was represented by a solicitor at the first three of the conferences but she too appeared in person at the fourth. At the first case management conference, on 4 December 2007, the judge gave directions for expert evidence in relation to the document which the claimant alleged to be a forgery. At the second conference on 22 February 2008, the judge ordered the defendant to serve an Amended Defence by 11 April 2008 and gave other standard case management directions. The defendant served an Amended Defence on 12 May 2008. This document had been drafted by counsel. It runs to 54 paragraphs and 38 pages. It pleads to the detail of the Particulars of Claim. The pleading does not complain about the Particulars of Claim whether on grounds of length, prolixity or otherwise. At the third case management conference on 30 June, the judge gave retrospective leave to the defendant to serve her Amended Defence on 14 May. He also stayed the proceedings as from 30 June until further order pending the resolution of the bankruptcy proceedings that had been issued against the defendant. Although he made no order in relation to the pleadings, it seems that it was on this occasion that, for the first time, he said that the Particulars of Claim were too long, and that if the case continued after the disposal of the bankruptcy proceedings he would want the parties to identify the main points.

The fourth conference was held on 19 September. Although the judge did not deliver a formal judgment we have been provided with a transcript of the proceedings. By this time the defendant had been declared bankrupt. The judge identified three options: (1) lift the stay and proceed with the case; (2) leave the stay in place pending the completion of further investigations into the company; and (3) lift the stay and strike out the claim. The judge told the claimant that he was not content with the Particulars of Claim. They were far too long and he was minded to strike them out. He also described them as “almost unintelligible” and later in the proceedings said that they did not make “much sense”.

The two complaints can be seen as having come together in this passage in the transcript of what the judge said. This is at page 64 of the bundle that we have. He said this to Mr Waite:

“Now what do you have to say about this absolutely rambling document, which it is very difficult to see what -- the point of a claim form is that the Court needs to know, and so does the other party, what the points of your case are. Not the sort of -- loads of detail about various peripheral matters. It does not make much sense, this pleading.”

Then a little later he said:

“I am minded to strike out the document, the Particulars of Claim and then re-impose the stay, because I believe that you can then apply to lift the stay when the DTI and all the police have reported. And then you will probably find that that particular document – well, if it is one which is part of Mr. Simpson’s interim report, will probably find that there will be a lot more that has gone under the bridge and you will then be able to focus on the issues.

And what I mean is that really, I mean, a case like this I would not have expected more than five pages which says ‘She told me X. In fact the truth was Y. I have invested £190,000, I am claiming this.’ Well it may be A, B, C, D, E. But this ramble is not any help. When it comes to witness statements you do those having sort of got the documents, looking at it and then do a succinct witness statement. But the claim form anchors what documents you have, it defines what documents you have, what you put in your statement. But at the moment, I mean well -- I probably would have to spend a week trying to understand it. But that is not the way we operate.”

At an earlier stage of the discussion (see page 58 of the transcript) the judge had said this to Mr Waite:

“I am inclined to think that this case is an abuse of the process of the Court. I think that the sense that I have got of this here is that you have got a vendetta against this lady. She is bankrupt and you are still wanting to pursue the matter with a case which is pretty unintelligible, where there is on the face of the papers a due diligence. Whereas I know that you have been now called in issue as to whether or not that is a forged signature of yours. But in my view you are wasting the court’s time and resources, and it is not in the overriding objective for this case to proceed.”

If the judge had struck out the claim on the grounds that it was an abuse of process of the proceedings because the proceedings were in pursuit of a vendetta, he would in my judgment have been wrong to do so. I find it difficult to conceive of a case where it is appropriate to strike out a claim which has real prospects of success and which is properly pleaded merely because the claimant’s motive in bringing the proceedings is to pursue a vendetta against the defendant. I do not see how a claimant’s motivation can be relevant. It seems to me, however, that in the end the judge did not decide to strike out the Particulars of Claim on the grounds that the proceedings were an abuse of process. That is clear from the later passages at page 64 of the bundle to which I have already referred. Further, if the judge had intended to strike out the proceedings as an abuse of process he would have struck out the claim form as well as the Particulars of Claim and would not have said that the claimant could apply for the stay to be lifted after the DTI and policing report had been made. It was in these circumstances that the judge made the order which is challenged on this appeal. The order was that:

“1.

Stay is lifted;

2.

Particulars of Claim and Defence struck out;

3.

Stay imposed until conclusion of Insolvency Services report, where on permission to apply stay to be lifted;

4.

Costs reserved.”

The final element of the order concerns Mr Carroll and is not relevant to this appeal.

This court is always slow to interfere with case management decisions. It will only do so where the case for doing so is clearly made out. In my judgment it is clearly made out in the present case. The Particulars of Claim are undoubtedly long and I have regard to what is said in CPR 16.4(1)(a), which provides:

“The Particulars of Claim must include --

(a)

a concise statement of the facts on which the claimant relies.”

But I cannot accept the judge’s criticism that the pleading is “almost unintelligible” or that it does not “make sense”. In my view it is a carefully drafted and coherent document which pleads in detail the representations relied on and then it goes on to say, representation by representation, why each was false. It is clear that counsel who drafted the Amended Defence was of the same view. He pleaded to the detail of the Particulars of Claim. He did not say that the Particulars of Claim were unintelligible. He did not even draft a request for further information. The statement by the judge that he would probably have to spend a week trying to understand the pleading was a considerable exaggeration and should not have been made.

In considering the adequacy of the Particulars of Claim, the judge should have taken into account the fact that: (1) counsel for the defendant had been able without apparent difficulty to plead the Amended Defence; (2) the Particulars of Claim had been served in July 2007 and three case management conferences had been held in which directions had been given and no complaint made by the solicitor representing the defendant about the intelligibility or length of the Particulars of Claim; (3) the judge himself had only raised the issue of the Particulars of Claim for the first time on 30 June 2008 and then only informally; and (4) the claimant was a litigant in person. It would appear from the transcript of the discussion held on 19 September that the judge did not take account of any of these points. In my judgment it was quite inappropriate to strike out the entire Particulars of Claim. It would have been inappropriate to do so even if the claimant had had the benefit of legal representation.

If the judge had considered that the Particulars of Claim were too long, then it would have been open to him to direct the claimant to produce a summary of his allegations, possibly in a schedule form, by reference to the relevant paragraphs of the Particulars of Claim. But the claimant’s case is intrinsically complex because it relies on a substantial number of discrete misrepresentations. It was not suggested on behalf of the defendant or by the judge himself that any of the paragraphs of the pleadings should be struck out on the grounds that they had no prospects of success.

Miss Denby does not, as I understand it, challenge much, if any, of what I have just said. In particular, she concedes that the judge was wrong to strike out the Particulars of Claim on the grounds that they were unintelligible or too long. She wishes to raise a completely different point, namely that the whole claim, as particularised in the Particulars of Claim, is founded on the evidence of Mr Simpson, which she says can be demonstrated to be untrue. That suggestion was not made to the judge either on 19 September 2008 or indeed at any other time. He has never ruled on it and no application to strike out the proceedings has been made on that basis. It follows that no decision has been made on this point. As I explained to Miss Denby, in those circumstances it is not open to this court to consider those matters.

The result, in my judgment, is that this appeal must be allowed. There is no appeal against the stay that was imposed on 30 June 2008. For my part I would simply set aside paragraphs (1) to (4) of the order of 19 September 2008. That would have the consequence that the stay that was imposed on 30 June 2008 would continue to have full force and effect until any further order that may be made in the future.

I agree.