Spire Healthcare Ltd v Brooke

By this action, commenced on 5 March 2015, the claimant, Spire Healthcare Limited (“Spire”) claims an indemnity or contribution from the defendant, Mr Nicholas Brooke (“Mr Brooke”) in respect of damages and costs which it, Spire, has paid to Mr Ian Jellett (“Mr Jellett”) in settlement of a personal injuries claim brought by Mr Jellett against both Spire and Mr Brooke (“the Main Action”).

On 29 April 2016 Master Kay QC ordered the trial of three preliminary issues in these proceedings as follows:

This is the Court’s judgment on those three preliminary issues. The answers to the issues are set out at paragraph 132 below.

Spire is a company responsible for the legal liabilities of the Spire hospital in Southampton. Mr Brooke is a consultant neurosurgeon. In December 2005 Mr Jellett underwent surgery by Mr Brooke at the Spire hospital at Southampton, to remove a spinal tumour. Following that surgery and following discharge from the hospital, Mr Jellett suffered a haemorrhage resulting in an epidural haematoma and was rendered tetraplegic. In the Main Action, Mr Jellett brought proceedings against Mr Brooke as first defendant and against Spire as second defendant, alleging negligence in relation both to the treatment by Mr Brooke and to the treatment by nurses at the hospital.

The trial of the main action was due to commence on 29 November 2011 with a listing of 5 to 7 days. In advance of that trial date, the Main Action was settled on the basis, broadly, that Spire agreed to pay Mr Jellett 75% of his damages to be assessed and to make an interim payment of £300,000 on account of those damages. At the same time, it was agreed that Mr Jellett’s claim against Mr Brooke would be discontinued. On 25 November 2011 a consent order (“the Consent Order”) was signed by all three parties providing that the proceedings between Mr Jellett and Spire would be stayed on the agreed terms contained in a schedule and upon Mr Jellett undertaking to file notice of discontinuance against Mr Brooke. The terms of the Consent Order and of the underlying terms of settlement are central to the issues which I have to decide. They are set out below in greater detail.

Subsequently on 24 June 2013 Mr Jellett and Spire reached agreement on the final figure for the quantum of damages. On 16 July 2013 by way of Tomlin order, it was provided that Spire agreed to pay Mr Jellett £4.65 million in full and final settlement. Subsequently Spire further agreed to pay Mr Jellett’s costs in the sum of £1.66 million.

On 5 March 2015 Spire issued, and on 16 June 2015 served, the current proceedings against Mr Brooke seeking indemnity or contribution in respect of the amounts that it has paid to Mr Jellett.

Mr Brooke now contends that Spire’s claim falls to be dismissed because (1) it has been brought outside the relevant limitation period under the 1978 Act; or (2) Spire is estopped from bringing the claim by reason of the terms of, and the circumstances surrounding, the settlement of the Main Action; or (3) the bringing of these proceedings by Spire is an abuse of process in view of the terms and circumstances surrounding the settlement of the Main Action.

In this judgment, I address first the factual background, before addressing, in turn, Issue (1) as a whole, then the relevant legal principles arising on Issues (2) and (3), and then applying those principles in turn, to each of those latter two issues.

In addition to the documentary evidence, I heard evidence from Mr Neil Rowe, who was at the relevant time, the partner at DAC Beachcroft with conduct of the proceedings on behalf of Spire, and from Mr Brooke himself. Each provided evidence by witness statement which he verified from the witness box and was then cross-examined, albeit relatively briefly. On the whole, I found Mr Rowe to be a credible and impressive witness and I accept his evidence that he has considerable experience in dealing with clinical medical negligence claims. He gave his evidence in a considered and fair manner. Mr Brooke was also a careful witness. In many cases when asked questions by counsel for Spire, his answer was that he did not recall or that he did not know. To that extent his evidence did not take matters much further.

Following advice given by Mr Brooke, on 9 December 2005 Mr Jellett was operated on by Mr Brooke in relation to a tumour compressing the spinal cord. That operation and the subsequent recuperation took place at the Spire hospital. After discharge from the hospital on 20 December 2005, on 23 December 2005, Mr Jellett suffered a haemorrhage and was unable to move or feel his limbs. He was admitted to Southampton General Hospital where an MRI scan revealed a large haematoma compressing the spinal cord. He was subsequently assessed as being a C4 sensory incomplete tetraplegic. Mr Jellett lost power and sensation in his body which he never regained. He now has severe tetraplegia and the minimal use of his right upper limb. He was confined to a wheelchair and is dependant on assistance from others for many activities of daily living.

In December 2008 Mr Jellett commenced the clinical negligence claim against Mr Brooke and against Spire. The case was centred around the post operative care given to Mr Jellett in the period between 9 and 20 December 2005. Mr Jellett alleged that Mr Brooke had been negligent in failing to give appropriate instructions to Spire’s nursing staff in relation to the risk of post operative cerebrospinal fluid (“CSF”) leak, failed himself to evaluate Mr Jellett’s wound for signs of CSF leak and failed to give appropriate advice before discharging him home. As against Spire, Mr Jellett alleged that it had failed to institute an appropriate nursing care pathway, and failed to recognise and act upon signs of a CSF leak. In essence, the case was that the nursing care was negligent and that Mr Brooke failed to supervise that nursing care.

Both parties denied liability and causation. The claim proceeded by way of split trial. Mr Brooke and Spire separately instructed experts on breach of duty but cooperated by sharing expert evidence in relation to their common defence on causation. Nevertheless in August 2011 Mr Brooke and Spire exchanged, on a without prejudice basis, their own expert witness evidence in relation to breach of duty in the context of the question of apportionment of liability between them.

In the period leading up to trial, there was a joint settlement meeting involving all three parties at a roundtable meeting on 1 November 2011 (preceded by a joint conference between Mr Brooke and Spire and their respective counsel). At that meeting Mr Jellett’s representatives indicated that his case on causation was to be put on a fundamentally different basis. After around 7 November 2011, there were no further joint negotiations involving both defendants and there was little communication between Spire and Mr Brooke’s representatives. The background and reasons for this are disputed. However what is clear is that after that meeting Mr Jellett was communicating with each of Spire and Mr Brooke separately and the representatives of Spire and Mr Brooke were not seeking to settle the case jointly.

On 11 November 2011, Mr Brooke’s solicitors, Radcliffes LeBrasseur (“Radcliffes”) wrote to Mr Jellett’s solicitors, Irwin Mitchell, making a without prejudice “drop hands” offer to settle the case. In that letter they pointed out that it was Mr Brooke’s position that he was entitled to rely upon the expertise of the nurses, that in general Mr Jellett’s case against Mr Brooke was bound to fail and that in any event there was no prospect of Mr Brooke being held liable in circumstances where Spire were held not liable. The letter enclosed a draft consent order, to be made as between only Mr Jellett and Mr Brooke, providing for the claim against Mr Brooke to be discontinued with no order as to costs. At that time, Mr Brooke’s advisers were not aware of any terms being discussed as between Mr Jellett and Spire.

In the course of bilateral discussions between those acting for Spire and those acting for Mr Jellett, Mr Jellett informed Spire of Mr Brooke’s drop hands offer to Mr Jellett, and by email dated 11 November 2011, Mr Rowe confirmed to Mr Bassani of Radcliffes that Mr Jellett’s advisers had informed him of that offer.

On 18 November 2011 settlement discussions continued between Mr Jellett and Spire. Mr. Rowe said in evidence that the terms that Mr Jellett would agree with Spire would to some extent depend on the terms he agreed entirely separately with Mr Brooke. However there was no discussion between Spire and Mr Brooke, and Spire was not party to the negotiations between the other two parties.

On the same day DAC Beachcroft made two Part 36 offers on behalf of Spire. First, they made a Part 36 offer on liability to Mr Jellett on a 75/25 basis in full and final settlement. The letter went on to say that Spire would be seeking a contribution to that 75% from Mr Brooke. Secondly, and importantly, Spire made a Part 36 offer to Mr Brooke proposing that Mr Brooke contribute 50% of Mr Jellett’s claim and 50% of the costs of that claim, and with Spire and Mr Brooke each bearing their own costs.

On the same date, Mr Jellett and Spire reached agreement to compromise Mr Jellett’s claim as against Spire, on terms that Spire agreed to pay Mr Jellett 75% of the damages to be assessed and to make an interim payment on account of his damages in the sum of £300,000 (“the interim payment”). As explained below, the agreement to make that interim payment is of central importance to Issue (1).

As regards the position between Mr Jellett and Mr Brooke, on 23 November 2011, Irwin Mitchell informed Radcliffes by email that they were instructed to accept the drop hands offer made on 11 November. They indicated that they were drawing up a consent order between all parties and would provide that shortly. In my judgment, by that email a bilateral agreement for discontinuance with no order as to costs was concluded between Mr Jellett and Mr Brooke, or at the very lowest Mr Jellett had separately agreed to discontinue his claim against Mr Brooke. Mr Rowe in his witness statement adds that on that date Spire’s legal advisers were informed by those acting for Mr Jellett of the drop hands decision – that Mr Brooke would bear his own costs but would not pay Mr Jellett’s costs. He added in his oral evidence that at that time Spire was not aware of the terms of the compromise of the liability claim as between Mr Jellett and Mr Brooke. Further it is clear that at the time of accepting Mr Brooke’s drop hands offer, Mr Jellett knew that Spire would be paying Mr Jellett’s costs of its claim against Mr Brooke.

On 24 November 2011 in correspondence, Irwin Mitchell pressed for agreement on the part of Spire as to the amount of a voluntary interim payment, failing which an application would be made to the court for an order. On 25 November 2011, Radcliffes insisted on the addition to the draft order of words recording that the notice of discontinuance be served on both defendants. Whilst Spire submits that it did not know that Mr Brooke was giving up his claim for costs, I am satisfied that Spire’s representatives knew, at the latest by the time of seeing the terms of the draft consent order, that Mr Brooke was giving up his claim for costs as against Mr Jellett (and by implication at least) that he was not seeking those costs as against Spire.

On 25 November 2011 the Consent Order was signed by all three parties. It was subsequently issued by the court on 28 November 2011. The Order provided as follows:

“Upon the Claimant having undertaken upon the making of this Order to file a Notice of Discontinuance against the First Defendant and to serve such notice on the First and Second Defendants.

And upon the Claimant and the Second Defendant having agreed terms of settlement in relation to the issue of breach of duty and causation, the said terms being set out in a Schedule signed by the Claimant’s and the Second Defendant’s solicitors dated 25 November 2011.

BY CONSENT OF ALL PARTIES

It is ordered that the issues of breach of duty and causation between the Claimant and the Second Defendant be stayed upon the said agreed terms except the purpose of enforcing those terms.

…

And it is further ordered that

1.

the claim shall be remitted to Master Yoxall for further case management directions.

2.

there shall be no order as to costs incurred by the First Defendant in defending this claim

3.

the Second Defendant shall pay the reasonable costs incurred in pursuing the issues of breach of duty and causation on behalf of the Claimant against the First and Second Defendants on the standard basis…

4.

the Schedule of the agreed terms of settlement signed by the Claimant’s and the Second Defendant’s solicitors is to remain on the court file in its sealed envelope.” (emphasis added)

The order was then signed by all three solicitors for the parties. The attached schedule, containing the confidential terms as between Mr Jellett and Spire, stated that it recorded “the terms of settlement in relation to the issues of breach of duty and causation agreed between Spire Healthcare Ltd and Ian Jellett dated 25 November 2011” and provided, inter-alia, as follows:

“Spire… agrees to pay Mr… Jellett 75% of his damages to be agreed or assessed which Mr Jellett agrees to accept in full and final settlement of his claim against Spire …

Spire… agrees to pay Mr Jellett’s solicitors by no later than 4pm on 23 December 2011 the sum of £300,000 gross (net £276,019.50 after deduction of recoverable benefits of £23,980.50), as an interim payment on account of damages, to be applied against the claim for past losses in the first instance.

Spire… agrees to submit … to the Orders for costs recited in the body of the Order to which this agreement refers

Spire… further agrees to pay Mr Jellett’s solicitors the sum of £250,000 on account of costs by no later than 4pm on 23 December 2011.” (emphasis added)

That schedule was signed by the solicitors for Mr Jellett and for Spire only.

A Notice of Discontinuance as against Mr Brooke dated 25 November 2011 was signed on behalf of Mr Jellett and served on both Mr Brooke and Spire. Thereafter the trial hearing was vacated.

Less than four weeks later, and two days before interim payments were due to be paid, on 21 December 2011, Mr Rowe wrote to Radcliffes inviting them to acknowledge receipt of Spire’s Part 36 contribution offer letter of 18 November 2011 (referred to in paragraph 18 above). Radcliffes acknowledged receipt of that letter on 13 January 2012, and then, without further chasing by DAC Beachcroft, in a letter dated 24 January 2012 expressly confirmed that that Part 36 offer was rejected. There was no reference in that letter to a suggestion that the Part 36 offer was no longer operative, nor that the issue of contribution as between Mr Brooke and Spire was not live.

Thereafter Spire proceeded to deal with Mr Jellett’s quantum claim. An order for directions, dealing with quantum and involving Spire and Mr Jellett only, was made by Master Yoxall on 26 January 2012.

On 28 June 2012 Mr Rowe wrote to Radcliffes putting Mr Brooke on notice that they were instructed to issue part 20 contribution proceedings, and invited Mr Brooke’s representatives to a round table settlement meeting to discuss contribution issues. Subsequent correspondence between DAC Beachcroft and Radcliffes ensued in July 2012 about the nature of these contribution proceedings and whether the parties were prepared to meet to discuss that issue. Radcliffes initially indicated that they did not require a formal pleading on contribution. In his witness statement (which I accept) Mr Rowe stated that they had decided not to commence contribution proceedings until the amount both of the ultimate quantum and costs had been agreed. He said that it is preferable to know the precise figures for damages and costs in order to better able to advise insurer clients.

On 24 June 2013, Mr Jellett’s quantum claim was agreed, and approved by the Court by way of consent order on 16 July 2013. Costs were finally agreed on 14 March 2014.

On 13 June 2014 it was Radcliffes who got in touch with DAC Beachcroft, to enquire about Spire’s position. Mr Rowe replied confirming that contribution proceedings were being prepared. In July and August 2014, further correspondence about the issue and service of those proceedings ensued.

On 5 March 2015 Spire issued the claim form in the current proceedings against Mr Brooke seeking contribution under the 1978 Act. Those proceedings were served on 16 June 2015.

By letter dated 2 July 2015 Radcliffes put DAC Beachcroft on notice that they relied on the interim payment as having started the limitation period running and invited DAC Beachcroft to accept that limitation had commenced in November 2011. In reply DAC Beachcroft rejected this, stating that the relevant date was 24 June 2013, the date of agreement of final quantum and referring expressly to the two authorities on section 10(4) (to which I refer in paragraph 44 below).

In his original pleaded defence to the contribution claim dated 7 August 2015, Mr Brooke refers to there being two distinct settlement agreements and denies that he was liable to Mr Jellett. It is then pleaded that Spires’ claim was statute barred by reason of the making of the interim payment. Thereafter Mr Brooke pleads in detail to the factual allegations of negligence made against him. The pleading concludes by asserting that, if he Mr Brooke is found liable, nevertheless Spire was also liable and that Mr Brooke would rely on the allegations of negligence made by Mr Jellett as against Spire in relation to the question of the amount of any contribution to be made by Mr Brooke.

Subsequently, in March of this year, Mr Brooke raised for the first time the distinct defences of estoppel and abuse of process. With the permission of Master Kay QC given on 29 April 2016, Mr Brooke’s defence was amended so as to plead, at paragraphs 1 and 2, his case on these two defences.

Section 1 of the 1978 Act provides, inter alia, as follows:

“1

Entitlement to contribution

(1)

Subject to the following provisions of this section, any person liable in respect of any damage suffered by another person may recover contribution from any other person liable in respect of the same damage (whether jointly with him or otherwise).

(2)

A person shall be entitled to recover contribution by virtue of subsection (1) above notwithstanding that he has ceased to be liable in respect of the damage in question since the time when the damage occurred, provided that he was so liable immediately before he made or was ordered or agreed to make the payment in respect of which the contribution is sought.

(3)

A person shall be liable to make contribution by virtue of subsection (1) above notwithstanding that he has ceased to be liable in respect of the damage in question since the time when the damage occurred, unless he ceased to be liable by virtue of the expiry of a period of limitation or prescription which extinguished the right on which the claim against him in respect of the damage was based.

(4)

A person who has made or agreed to make any payment in bona fide settlement or compromise of any claim made against him in respect of any damage (including a payment into court which has been accepted) shall be entitled to recover contribution in accordance with this section without regard to whether or not he himself is or ever was liable in respect of the damage, provided, however, that he would have been liable assuming that the factual basis of the claim against him could be established.

(5)

A judgment given in any action brought in any part of the United Kingdom by or on behalf of the person who suffered the damage in question against any person from whom contribution is sought under this section shall be conclusive in the proceedings for contribution as to any issue determined by that judgment in favour of the person from whom the contribution is sought.

(6)

References in this section to a person’s liability in respect of any damage are references to any such liability which has been or could be established in an action brought against him in England and Wales by or on behalf of the person who suffered the damage; but it is immaterial whether any issue arising in any such action was or would be determined (in accordance with the rules of private international law) by reference to the law of a country outside England and Wales.”

Section 3 of the 1978 Act provides:

“Proceedings against persons jointly liable for the same debt or damage

Judgment recovered against any person liable in respect of any debt or damage shall not be a bar to an action, or to the continuance of an action, against any other person who is (apart from any such bar) jointly liable with him in respect of the same debt or damage.”

As regards the contribution claim under s.1(1) of the 1978 Act in this case, I make three preliminary observations.

First, it is common ground between the parties that, by mid-November 2011 at the latest, there were in existence between Spire and Mr Brooke what have been termed “deemed contribution proceedings”. In other words, by that time the question of contribution as between Spire and Mr Brooke under s.1 of the 1978 Act had been raised and was in issue between them. It is further common ground that, had the trial of Mr Jellett’s claims gone ahead on 29 November 2011, the trial judge would have been invited to resolve, in addition to issues of liability to Mr Jellett, the issue of contribution and apportionment as between the two defendants to the Main Action. It was not necessary for formal notices under CPR Part 20 to have been issued by either defendant, for those “deemed contribution proceedings” to have been in existence.

Secondly, in Stott v West Yorkshire Road Car Company [1971] 2 QB 651, the Court of Appeal held that where a main action is settled, contribution proceedings which had already been brought, could carry on; it was not necessary to bring a new and separate action for contribution. Unlike the position here, in that case, formal contribution proceedings, by way of a third party notice under the then RSC, had been commenced prior to settlement of the main action.

Thirdly, the question then arose as to why, if in the present case there were deemed contribution proceedings, which, on Spire’s case, had not been settled, Spire had issued fresh contribution proceedings. Mr Readhead QC told the court that he had advised this be done on a “belt and braces” basis. He further submitted that Stott was authority only for the proposition that fresh contribution proceedings were not necessary, and not that they were not permitted.

The issue here is whether a voluntary interim payment on account of damages amounts to “mak[ing] or agreeing to make, [of] any payment … in compensation for the damage” within s.10(4) of the 1980 Act so as to trigger the commencement of the two year limitation period under that section.

Section 10 of the Limitation Act 1980 provides for a special two-year limitation period for contribution proceedings brought under section 1 of the 1978 Act, in the following terms:

“10

Special time limit for claiming contribution

(1)

Where under section 1 of the Civil Liability (Contribution) Act 1978 any person becomes entitled to a right to recover contribution in respect of any damage from any other person, no action to recover contribution by virtue of that right shall be brought after the expiration of two years from the date on which that right accrued.

(2)

For the purposes of this section the date on which a right to recover contribution in respect of any damage accrues to any person (referred to below in this section as “the relevant date”) shall be ascertained as provided in subsections (3) and (4) below.

(3)

If the person in question is held liable in respect of that damage—

(a)

by a judgment given in any civil proceedings; or

(b)

by an award made on any arbitration;

the relevant date shall be the date on which the judgment is given, or the date of the award (as the case may be).

For the purposes of this subsection no account shall be taken of any judgment or award given or made on appeal in so far as it varies the amount of damages awarded against the person in question.

(4)

If, in any case not within subsection (3) above, the person in question makes or agrees to make any payment to one or more persons in compensation for that damage (whether he admits any liability in respect of the damage or not), the relevant date shall be the earliest date on which the amount to be paid by him is agreed between him (or his representative) and the person (or each of the persons, as the case may be) to whom the payment is to be made.

(5)

An action to recover contribution shall be one to which sections 28, 32[, 33A] and 35 of this Act apply, but otherwise Parts II and III of this Act (except sections 34, 37 and 38) shall not apply for the purposes of this section.” (emphasis added)

By way of background, the predecessor to s.1(1) of the 1978 Act was s.6(1)(c) of the Law Reform (Married Women and Tortfeasors) Act 1935 (“the 1935 Act”). At that time, there was no special limitation period for contribution claims (equivalent to s.10 of the 1980 Act). Such a special limitation period was specifically introduced in section 4 of the Limitation Act 1963 (“the 1963 Act”). Section 4(2)(a) of the 1963 Act was the predecessor to section 10(3) and section 4(2)(b) was the predecessor to section 10(4). In particular section 4(2)(b) provided:

“(2)

For the purposes of this section the date on which the right to recover contribution in respect of any damage accrues to the tortfeasor (in this subsection referred to as “the relevant date”) shall be ascertained as follows… (a)…. (b) if, in any case not falling within the preceding paragraph, the tortfeasor admits liability in favour of one or more persons in respect of that damage, the relevant date shall be the earliest date on which the amount to be paid by him in discharge of that liability is agreed by or on behalf of the tortfeasor and that person or each of those persons, as the case may be…”

Section 10 of the 1980 Act itself was first enacted by paragraph 6 of Schedule 1 to the 1978 Act, and subsequently re-enacted in the 1980 Act.

There is no decided case where the construction of section 10(4) itself (as opposed to s.10(3)) was directly in issue, let alone one which addresses the specific issue which arises in the present case. I was referred to two cases: Aer Lingus plc v Gildacroft Ltd [2006] EWCA Civ 4 [2006] 2 All E R 290 and Chief Constable of Hampshire v Southampton City Council [2014] EWCA Civ 1541. The latter case, where the question was whether the trigger date under section 10(4) is the date of agreement on quantum or later date of agreement on costs, does not directly bear upon the issue before me.

In the Aer Lingus case, the Court of Appeal held that the “judgment” or “award” referred to in section 10(3) as setting the relevant date for the running of time for a contribution claim under the 1978 Act was a judgment or award which ascertained the quantum of the contribution claimant’s liability, and not one which merely established the existence of that liability.

In that case an employee of Aer Lingus was badly injured whilst working at Heathrow. He brought proceedings against Aer Lingus and also against the contractors and sub-contractors who had supplied the equipment which caused the injury. The employee obtained judgment on liability by consent against Aer Lingus, with damages to be assessed and soon thereafter discontinued against the two other defendants, with Aer Lingus agreeing to pay their defence costs (effectively a Sanderson order, see paragraph 107 below). Over two years later, Aer Lingus agreed the damages with the employee, and this was embodied in a further consent order. Some five months later, and for the first time, Aer Lingus commenced contribution proceedings against the two contractors. This was within two years of the final judgment on quantum, but outside the two years after the judgment on liability. The question was which of these two judgments marked the start of the two year limitation period for the contribution claims.

Rix LJ (with whom Sir Anthony Clarke MR and Moore-Bick LJ agreed) reviewed the authorities and the statutory language. As regards the authorities, at paras. 14 to 28 he conducted a detailed review of George Wimpey & Co Ltd v British Overseas Airways Corporation [1955] AC 169, a case concerning the right to contribution under s.6(1)(c) of the 1935 Act. He concluded that the views of Viscount Simonds and others in the House of Lords and the majority of the Court of Appeal supported the conclusion that the right to contribution arose not earlier than the date when both the existence and the amount of liability had been ascertained by judgment. This conclusion was further supported by the understanding of Donaldson LJ in Ronex Properties Ltd v John Laing Construction Ltd and others [1983] QB 398 and by the then current edition of Clerk & Lindsell on Torts.

At paragraphs 32 to 40, Rix LJ then turned to the language of section 10(3). After observing that there is no express reference to the ascertainment of quantum in the words “held liable … by a judgment ... or award”, he considered two particulars aspects of the language in s.10. First, (at para 34) he held that the sub-script to section 10(3), (which addresses a variation in quantum on appeal) suggested an underlying assumption that the judgment or award in s.10(3) is one which ascertains damages. This, he said, supported Aer Lingus’ case, albeit not strongly. Secondly, and importantly for present purposes, he concluded that section 10(4) provided stronger support for that case. At paragraph 35 of the judgment, Rix LJ said:

“Where there is no judgment or award, but the victim’s claim is dealt with simply by agreement, the relevant date is the earliest date on which “the amount to be paid…is agreed”, and that is so whether liability is admitted or not. If, however, the ascertainment of quantum is irrelevant, it is difficult to understand why, where settlement proceeds by agreement in the absence of judgment, the statute does not focus on the earliest date on which liability is agreed, where it is, even before the settlement sum is arrived at. It is true that a settlement sum may be agreed without any admission of liability; but equally a settlement sum may be agreed for the very reason that liability is admitted. Indeed, that not infrequently happens: a tortfeasor admits liability, for that is not in dispute, but it may take time to work out the quantum for a settlement. The respondents submit that in such a case, a judgment for damages to be assessed is normally consented to, as in these proceedings: and that the statute looks to the formality of such a judgment, rather than to the relative informality of the mere agreement. However, there need be nothing informal about an admission of liability – on the contrary; and in any event, section 10(4) is intended to operate equally whether liability is admitted or not: in other words the subsection expressly contemplates the case where liability is admitted, and even so, the admission of liability is ignored for providing the relevant date. Section 10(4) therefore suggests that the critical matter is the ascertainment by agreement of the settlement sum. Parity would therefore suggest that, where the matter is dealt with by judgment or award, the critical matter is again the ascertainment of the quantum of liability. …” (emphasis added)

In paragraph 36, after considering circumstances where sub-sections (3) and (4) overlap, he asked himself whether considerations relating to those circumstances threw any light on the issue before him, answering:

“I think they do, for sub-section (4) appears to highlight the importance of the date of the settlement sum, but this would be undermined by allowing an earlier judgment for damages to be assessed to be determinative of the relevant date”. (emphasis added)

At paragraph 41, Rix LJ drew the strands of analysis together:

“… Nevertheless the reflection of the language of the George Wimpey & Co case (“held liable”) in the 1963 Act and now in the 1980 Act, together with the reasoning of the Court of Appeal in the George Wimpey & Co case reflecting the position at common law, and the House of Lords’ understanding of that reasoning, most clearly stated by Viscount Simonds, strongly suggest to me that the correct interpretation of s.4 and now of s.10 is that time does not begin to run until the quantum of the claimant tortfeasor’s liability has been ascertained either by judgement (or award) or agreement. In my judgment that is consistent with the language of s.10. Indeed the textual and background considerations support one another towards that conclusion.” (emphasis added)

At paragraph 42, addressing underlying policy considerations, Rix LJ concluded that the special two year period might be considered a suitable compromise between competing policy considerations. Whilst a start date of quantum ascertainment might leave room for greater delay, he did not consider this to be an overriding consideration.

He concluded, at paragraph 43, that the judgment or award referred to in s.10(3) is a judgment or award which ascertains the quantum, and not merely the existence, of the tortfeasor’s liability.

On behalf of Mr Brooke, Ms O’Rourke QC submitted that the language of section 10(4) is clear. The trigger date is the date on which “the amount to be paid by him is agreed”. That phrase, in turn, refers back to the amount of “any payment… in compensation for that damage”. The key word is “any” in “any payment”. An agreed interim payment, as made in the present case, is such a payment “in compensation for that damage”. That it is intended to be covered by section 10(4) is confirmed by the use of the word “any”. If section 10(4) had been intended to cover only final quantification of damages, there would have been no need for the word “any”.

The Aer Lingus case is distinguishable. In that case there was a judgment on liability, but no payment in respect of damages had been made or agreed. Further section 10(4) was not in issue at all; it was a section 10(3) case. No support could be derived from the wording of s.4 of the 1963 Act; in particular s.10(4) of the 1980 Act is materially different from the wording of s.4(2)(b) of the 1963 Act. The removal of the words, found in s.4(2)(b), “in discharge of that liability” confirms that an interim payment (which does not discharge liability) is intended to be covered by section 10(4).

Mr Readhead QC, for Spire, submitted that under both section 10(3) and section 10(4) it was important to distinguish between (a) the circumstances in which a person becomes entitled to a right to contribution and (b) the date on which that right accrues. The first part of section 10(4) - the words “makes or agrees to make any payment to one or more persons in compensation for that damage” - defines the circumstances; it is the second part - the words “the earliest date on which the amount to be paid by him is agreed” - which is the trigger date for the commencement of limitation. The key words are not the meaning of “any” payment but rather the words “the amount to be paid by him”. The “amount to be paid by him” must mean to be paid “in compensation for the damage”; and that must be the full amount to be paid in full compensation for the damage. That was the conclusion of Rix LJ in the Aer Lingus case and one upon which Rix LJ placed heavy reliance in reaching the conclusion on the issue in that case. If Mr Brooke’s construction is correct it would alter the entire existing jurisprudence, based simply on the fact of an interim payment. All that jurisprudence points one way namely that under both subsections of section 10 it is both existence and amount of liability which defines the relevant date. Spire’s construction is to be preferred because it is consistent with the predecessor legislation as consistently understood by courts at the highest level; it is consistent with the wording of section 10(4); it is consistent with how section 10(4) was understood by the Court of Appeal in the Aer Lingus case, and it is consistent with how commentators have subsequently understood the operation of that subsection.

There is a superficial attractiveness of Ms O’Rourke’s submission that “any” means “any”. Further I accept that the specific case of an interim payment was not in issue in the Aer Lingus case and here, from the terms of the Consent Order, it is clear that the interim payment was a payment of special damages and in principle a payment (in part at least) in or towards compensation for the damage sustained by Mr Jellett. Nevertheless, I do not consider that s.10(4) covers an agreed interim payment.

First, whilst ultimately section 10(4) was not directly in issue in the Aer Lingus case, the Court of Appeal’s analysis of that subsection was essential to its conclusion on section 10(3) and, in my judgment, represents clear and high authority as to the construction of section 10(4). At paragraphs 35 and 36 Rix LJ expressed the firm view that section 10(4) is concerned with the date of agreement of the settlement sum i.e. the final overall figure, rather than agreement of sums towards a final figure. That view was a critical part of the Court’s reasoning in that case.

Secondly, there should be a parity of approach to the meaning of “the relevant date” for limitation purposes as between the case of a court judgment or arbitral award (under section 10(3) and an agreement (under section 10(4)). If, as held in Aer Lingus, section 10(3) is referring to a judgment which “ascertains the damages” then in my judgment section 10(4) is intended, by parity of reasoning, to be referring to an agreement or payment which does the same thing.

Thirdly, as to section 4(2)(b) of the 1963 Act, first it is clear that on the wording in that subsection, an interim payment would not have been covered (although of course such interim payments were not available until much later). Section 10 does substantially reproduce section 4 of the 1963 Act (as relied upon by Rix LJ in the Aer Lingus case). However I accept, as submitted by Ms O’Rourke, that in relation to agreed payments, the wording in section 10(4) is materially changed from that in section 4(2)(b), and in particular the words “in discharge of that liability” are no longer there. However there is no evidence to suggest that this change of wording in what is now section 10(4) was effected specifically in order to cover the position of an interim payment. The more likely reason for the change is that indicated in Clerk & Lindsell on Torts (21st edition) at paragraph 32-85, namely that under the 1963 Act the position where a person agreed to settle the claim, but without admission of liability, was arguably not covered by section 4(2)(b) (see in this regard Stott, supra). The change in wording was made in section 10(4) to ensure that the position was covered. There is certainly no suggestion that the change was intended to change the trigger date. Nevertheless that does not of itself mean that the revised wording does not, as a matter of construction, cover an interim payment.

Fourthly, significant light upon this issue is cast when the position of a court order for interim payment is considered. In the course of argument, the question arose as to what the position would be where, instead of an agreed interim payment, the court has made an order for interim payment pursuant to CPR 25.6, in the face of resistance from the defendant. In my judgment a court order for interim payment cannot fall within section 10(4) at all. Even if once complied with, the contribution claimant might arguably be “making… any payment… in compensation…”, on any view there could be no relevant date under this subsection because this would not be a case where “the amount to be paid by him is agreed”. It is plain that section 10(4) is concerned and concerned only with the case where a quantum payment has been agreed by the contribution claimant, and not the case where the contribution claimant is ordered by the court to make such a payment.

That leaves section 10(3). Such a court order for interim payment cannot constitute a judgment under which the contribution claimant has been “held liable in respect of that damage”: first, because an interim payment order does not amount to “being held liable” and moreover because an interim payment is in principle provisional and, until final ascertainment of quantum may be repayable; and secondly, because of the meaning ascribed to those words by the Court of Appeal in the Aer Lingus case. At the point at which the court makes an order for interim payment, it has not “ascertained the quantum of the contribution claimant’s liability”. Ms O’Rourke did not contend that a court order for interim payment would fall within subsection (3). Rather she suggested that, as regards a court ordered interim payment, there was a lacuna in the legislation.

Therefore, a court order for interim payment does not start time running under section 10 at all. It would therefore be highly anomalous if a voluntary interim payment had the contrary effect. Moreover a construction which resulted in such a disparity would discourage a defendant from making such an interim payment voluntarily and force a claimant to seek a court order instead.

Finally I observe that where limitation legislation is intended to cover the effect of a part payment, then it deals with that expressly; see for example s.29 of the 1980 Act.

In conclusion I accept that the words “the amount” in the second part of section 10(4) is a reference back to the words “any payment” in the first part. I also accept that an interim payment is very arguably a payment “in compensation for that damage” and that in fact is reflected in the terms of the Consent Order in this case where it is made clear that the interim payment was on account of damages.

However against the background of (1) the clear analysis in the Aer Lingus case that both subsections are concerned with the final quantification of damages (rather than liability) and (2) the fact that on any view a court order for interim payment falls within neither subsection and (3) the thrust of the analysis of the section itself and Aer Lingus is that the position under section 10(4) should mirror that under section 10(3) (and vice versa), I am not satisfied that the word “any” in the first part of section 10(4) can bear the meaning and consequence that a consensual interim payment is the trigger date under section 10 in circumstances where a court ordered interim payment is not.

I conclude that the date of an agreed interim payment is not a “relevant date” within the meaning of section 10(4). The relevant date is rather the date of the agreement of the final sum in quantification of the damage.

Accordingly in the present case the relevant date for the purposes of section 10(4) was 24 June 2013 (rather than 25 November 2011) and proceedings were therefore issued within the two year limitation period prescribed by section 10(4).

On issues (2) and (3) Mr Brooke’s case is put on the basis of estoppel by representation, cause of action estoppel, issue estoppel and abuse of process. These raise common or overlapping legal principles, and before turning to the contentions on these two issues separately, I first address the legal principles underlying these concepts.

I have been referred to a number of authorities as to the relevant principles in relation to estoppel: Freeman v Cooke (1840) 2 Ex 654; Whitchurch Ltd v Cavanagh [1902] AC 117; BP Exploration Co (Libya) Ltd v Hunt (No 2) [1979] 1 WLR 783; and Kim and Kim v Chasewood Park Residents Limited [2013] EWCA Civ 239. The principles can be summarised as follows.

As regards estoppel by representation, where a person, by his words or conduct, causes another to believe in the existence of a certain state of things and induces that other to act on that belief or to alter his previous position, the former is precluded from asserting against the latter that a different state of affairs existed at the same time: Freeman v. Cooke at 663. Estoppel by representation concerns representations of fact; those representations may arise from words and/or from conduct.

As regards the principle of promissory or equitable estoppel, derived from Hughes v. Metropolitan Railway Co (1877) 2 App Cas 439, the person asserting the existence of such an estoppel must establish (1) a legal relationship between the parties; (2) a representation express or implied by one party that he will not enforce strict rights against the other; and (3) reliance by the representee (whether by action or by omission to act) on the representation, which renders it inequitable, in all the circumstances, for the representor to enforce his strict rights, or at least to do so until the representee is restored to his former position: see BP Exploration v. Hunt at 810.

Strictly the distinction between estoppel by representation and promissory estoppel, is that in the former case the representation is one as to existing fact and in the latter case the representation is one as to his future conduct.

The language upon which an estoppel is founded must be precise and unambiguous. If it is open to different constructions, the language must be such as will be reasonably understood in a particular sense by the person to whom it is addressed: Whitchurch Ltd v. Cavanagh, at 145 citing the well-known case of Low v. Bouverie. If the representation is not clear and unambiguous, but rather capable of more than one construction, then it must be such as will reasonably be understood in a particular sense by the person to whom it was addressed and such that it was in fact understood in that sense by that person: see Kim and Kim, supra paras 24 to 28 (and in particular the passages there cited from Low v Bouverie, especially Kay LJ at 113) and, as applied to the facts of that case, at para 34. Thus, in a case where a representation could mean X or Y, there are two questions: did the representee in fact understand the representation to mean Y? If so, was it reasonable for the representee to have understood the representation to mean Y? Two further points emerge from Kim and Kim at para 23: first, if the representation is not clear, then the representee is not entitled to rely on what was said without further clarification. Secondly, these principles of clarity apply equally to a representation of fact and to a representation of future intention: see Kim and Kim para. 23.

In the context of settlement of claims and reservation of rights, Ms O’Rourke referred me to the cases of Morris v Wentworth-Stanley [1999] QB 1004 (CA) and Gladman Commercial Properties v Fisher Hargreaves Proctor [2013] EWHC 25 (Ch) [2013] EWCA Civ 1466. In both those cases, what was in issue in the context of reservation of rights, was the situation where a claimant sued one joint debtor or joint tortfeasor and then compromised that claim. The claimant then sued one or more of the other joint debtors or tortfeasors and the question was whether that claim could proceed (by reference to s.3 of the 1978 Act) or whether it was precluded by dint of the accord and satisfaction with the first joint debtor or tortfeasor. In both cases, it was held that an accord and satisfaction with one debtor discharged the other joint debtor unless there was an express or implied agreement that the claimant’s rights against the latter were preserved. Further s.3 of the 1978 Act which applied to the effect of a judgment (as opposed to a compromise) did not preclude the defence of accord and satisfaction: see in particular Gladman per Briggs LJ at paras. 21 to 25.

In Gladman on this issue, it was held (at para. 33) that the fact that the parties were joint, rather than concurrent, tortfeasors “made all the difference” in considering the meaning of the settlement agreement in that case; it was the crucial aspect of the contextual background to the agreement. The established legal consequence of a release of one or more joint tortfeasors is that there is a release of all of them – thus there is a need for an express reservation, because otherwise the claimant could not sue. On the other hand, in the case of concurrent tortfeasors, there is no need for an express reservation, because the claimant could otherwise sue. Further, at para. 35, it was held that there was no need for protection from contribution claims, precisely because in that case they were joint tortfeasors.

Thus, in the present case, if Spire and Mr Brooke had been joint tortfeasors, then the effect of the settlement of Mr Jellett’s claim against Spire would have meant that Mr Jellett no longer had any claim against Mr Brooke and as a result there could be no contribution claim at all; however Spire and Mr Brooke were sued as concurrent tortfeasors, settlement with one (and discontinuance with the other) would not automatically prevent Mr Brooke being sued again and thus did not without more prevent the contribution claim being brought.

As regards the concepts of cause of action estoppel, issue estoppel and abuse of process, I have been referred to the leading authorities: Johnson v Gore Wood & Co [2002] 2 AC 1 at 22C-32C; Aldi Stores Ltd v WSP Group plc [2007] EWCA Civ 1260 [2008] 1 WLR 748; Zurich Insurance Company plc v Hayward [2011] EWCA Civ 641 and the most recent analysis by Lord Sumption JSC in Virgin Atlantic Airways v Zodiac Seats UK Ltd [2014] AC 160 at paras 17-26. These authorities in turn analyse in detail the relevant previous authorities, starting with the statement of principle of Wigram V-C in Henderson v Henderson (1843) 3 Hare 100 at 115.

From these authorities, the following principles can be stated:

Regardless of this juridical basis, what emerges from Zurich Insurance is that no estoppel will arise unless the issues raised in the second action were “necessarily” compromised in the first action and that will depend upon the terms on which the first action was settled.

Estoppel creates a strict rule and its application is strictly confined. Beyond that are the flexible principles of abuse of process set out in Johnson v Gore Wood. Abuse of proceses is wider than cause of action estoppel and issue estoppel because it covers issues which could have been but were not raised in the earlier litigation – rather than causes of action and issues which were raised and determined in the earlier litigation.

In Aldi Stores Ltd, it was held that a decision on abuse of process was not an exercise of discretion, but rather an assessment of a large number of factors. The fact that there were different defendants in the later action was not a bar to the application of the abuse of process principle. Nor is the fact that the first action ended in settlement rather than judgment. Thomas LJ (at paras. 30 and 31) made comments about raising with the court in the first proceedings the possibility of pursuing other proceedings, raising other claims or against other parties, suggesting that as a matter of case management in the public interest this might be important and failure to do so might amount to abuse. The context for those observations was complex commercial litigation and the failure to raise such issues in the course of, and prior to settlement of, the first proceedings. This Aldi principle, whilst applied in subsequent cases, does not go so far as to lay down a rule of law that if a party wishes not to determine an issue in the earlier proceedings, that party must expressly raise the issue with the court or expressly reserve its right to continue that issue, otherwise it will be deemed to have settled that issue or necessarily will be found to have abused the process.

The issue here is: does the Consent Order and the settlement agreement or agreements underlying the Order, of necessity and as a matter of construction settle the deemed contribution proceedings, alternatively amount to a representation that the deemed contribution proceedings are at an end and that no further contribution proceedings will be brought?

Mr Brooke’s case is that the parties entered into a tripartite agreement which determined once and for all the contribution issues between him and Spire. Spire is estopped from proceeding with its contribution claim against him on the basis of that tripartite settlement agreement, contained in or evidenced by the Consent Order, which had the effect of apportioning liability 75% to Spire, 0% to Mr Brooke, with a 25% discount from Mr Jellett. The effect of the Consent Order was that the proceedings as a whole (including the issue of contribution as between Spire and Mr Brooke which by that time was in play) were at an end.

Ms O’Rourke QC puts this case on estoppel in two ways: estoppel by representation and res judicata.

First, her primary case is one of estoppel by representation of fact. The representation is said to arise from a combination of both words and conduct on the part of Spire. The representation made by Spire was to the effect that: “The litigation is over. We have all come to the table to deal with all the issues (including deemed contribution). We’ve had all the expert meetings and there is a trial date in 4 days time. We are now going to pull the trial because we’re satisfied that this agreement deals with all outstanding issues”. She submitted that there was a specific representation, at least impliedly, that “no further contribution proceedings will be brought”.

In support of the existence of such a representation having been made by Spire, Ms O’Rourke relies on four matters:

Mr Brooke relied on that representation, by agreeing to abort the trial in November at a time when he had incurred the costs of preparation, in agreeing to discontinue rather than obtaining judgment in his favour, and further in giving up any claim that he had in relation to his own costs.

Secondly, and alternatively, this is a case of cause of action estoppel. The original proceedings included contribution proceedings. Whilst Part 20 proceedings were not formally issued, both Spire and Mr Brooke, as co-defendants to the original claim, understood that the trial in that claim would determine their respective liabilities. That settlement and the signing of the Consent Order by all three parties has the effect of determining all proceedings (including the deemed contribution proceedings between Spire and Mr Brooke). Cause of action estoppel can arise from a consent order: see Zurich Insurance.

Thus it follows that the cause of action for contribution under s.1 of the 1978 Act had merged into the Consent Order, giving rise to cause of action estoppel.

On this issue, Mr Readhead QC submits as follows. Whether this is properly characterised as a case of estoppel by representation or a case of promissory estoppel, the first requirement is that the alleged promise or representation must be clear and unambiguous and the person making the promise or representation must intend the recipient to rely upon it: see BP v Hunt and Kim and Kim. In the present case, it is not clear what promise or representation is said to have been made by Spire to Mr Brooke by and/or as a result of the Consent Order. In particular there is nothing in the Consent Order, nor in the relevant factual background to that Order, that states or suggests that Spire would not subsequently seek to enforce its right to claim an indemnity and/or a contribution from Mr Brooke, nor that Spire intended that Mr Brooke should rely upon the Consent Order or any statement or suggestion within it as having that effect. It was open to Mr Brooke to have demanded a release from the contribution claim in negotiations with Mr Jellett and with Spire and to have required any such release to have been included as an express term of the Consent Order. This did not happen. The absence of an express reservation by Spire of any contribution claim cannot be elevated into a clear and unequivocal representation or promise and cannot give rise to an estoppel. That the Part 36 offer of 18 November 2011 had not been superceded by the Consent Order is demonstrated by the fact that subsequently in January 2012 Radcliffes wrote to DAC Beachcroft rejecting that offer. None of the matters upon which Mr Brooke seeks to rely amounts or can amount to a clear or unequivocal promise or representation by Spire, still less one which was intended to affect the legal relationship between the parties. Mr Readhead also points to the fact that at no time between the making of the Consent Order in November 2011 and March 2016 did Mr Brooke or those representing him raise any allegation of estoppel, nor indeed assert in any way that the claim for contribution had been compromised.

First, it is common ground that as at 18 November at the latest, the issue of contribution as between Spire and Mr Brooke had been raised in the proceedings and thus, that there were in existence deemed contribution proceedings. The issue is whether those deemed contribution proceedings were finally compromised as a result of the terms reflected in the Consent Order.

Secondly, in summary the Consent Order:

There is no express reference in the Consent Order to the issue of contribution between Spire and Mr Brooke. Moreover Mr Rowe’s evidence, which I accept, is that at no stage during the negotiations in November 2011, did Mr Brooke’s advisers suggest or indicate that the proposed compromise was on the basis that Spire would not subsequently claim a contribution from Mr Brooke towards sums which Spire agreed or was ordered to pay Mr Jellett. Instead Mr Brooke’s legal advisers simply remained silent.

The first indication given by Mr Brooke or his advisers that they believed that the contribution issue had been compromised in November 2011 was given, some 4½ years later in March 2016.

Thus, the effect of the Consent Order by its express terms was as follows:

In my judgment, on any view, the Consent Order does not give rise to a cause of action estoppel as regards the deemed contribution proceedings. Even if a consent order on certain terms and in some circumstances may give rise to cause of action estoppel, here, there is clearly no judgment, nor even an order, dealing with the issue of contribution between Spire and Mr Brooke.

So the issue is whether the deemed contribution proceedings have been settled either by way of agreement between Spire and Mr Brooke or by way of an estoppel (by representation or promissory) arising from Spire's word and conduct. (I address the separate issue of abuse of process under Issue (3) below).

As to whether they have been settled by agreement between Mr Brooke and Spire, Mr Brooke's own case is not put, expressly, on the basis that there was a binding contractual agreement between him and Spire to compromise the contribution issue between them. Despite an invitation to consider such a basis, and despite extensive submissions concerning the meaning and effect of the terms of the Consent Order in the context of the surrounding factual circumstances, Ms O’Rourke has not sought to contend that it was an express or implied term of the settlement agreement (whether that agreement was bipartite or tripartite) that the contribution claim had been compromised. Rather, Mr Brooke's case is put squarely on the basis of estoppel. In the light of my conclusion above, this must be a case of estoppel by representation (or perhaps promissory estoppel).

The starting point for such a case is to identify clearly and precisely the representation (or promise) that it is alleged that Spire made. Whilst at one level, it might be said (and indeed was said by Ms O'Rourke) that the representation was to the effect that "the proceedings are at an end", in order to found his case, the representation has to be more specific than that. It has to contain a representation that the deemed contribution proceedings are at an end, or put in terms of a promise, a promise that Spire would not continue nor bring contribution proceedings against Mr Brooke. In seeking to identify the representation sought to be relied upon, there is a significant difference between a representation that the proceedings in general are at an end and a representation that the contribution proceedings are at an end. In my judgment, only if the words and conduct relied upon necessarily involve a representation in the second sense, can Mr Brooke's case on estoppel succeed.

The questions then are (1) was there a clear and unequivocal representation that Spire would not continue or bring contribution proceedings; (2) if not, could Spire’s words and conduct be reasonably understood as making such a representation; and (3) did Mr Brooke in fact understand that by its words and conduct Spire had made such a representation?

The background facts relevant to consideration of these questions include the following. First by the time of the conclusion of the settlements, the issue of contribution as between Spire and Mr Brooke was clearly in play. Secondly, after about 7 November, negotiations with Mr Jellett proceeded “bilaterally” i.e. Mr Jellett negotiated separately with each of Spire and Mr Brooke. Thirdly, after about 7 November, and in the course of the crucial negotiations leading up to the Consent Order, there was little or no direct communication at all between representatives of Spire and representatives of Mr Brooke. Contrary to the way the case was put by Ms O’Rourke (see paragraph 85 above), they had not “all come to the table”. Other than the sending and receipt of the Part 36 offer letter, at no stage was there any discussion between them of the issue of contribution. In particular, any question of Mr Brooke seeking to recover, directly from Spire, his costs of defending Mr Jellett’s claim was not raised. I refer to Mr Rowe’s evidence here: see paragraph 93 above. This background of silence is important where what is sought to be inferred from conduct is a representation by Spire to Mr Brooke

A clear and unequivocal representation?

As to whether there was a clear and unequivocal representation made by Spire to Mr Brooke, there was certainly no such express representation, either contained within the terms of the Consent Order or in any other written words between the parties. Nor, in my judgment, can such clear and unequivocal representation be spelled out of the terms of the settlements reached between Mr Jellett and each of the two defendants, nor from the terms of the Consent Order. The terms of the settlements and the Consent Order are silent in relation to issues of contribution between Spire and Mr Brooke. Insofar as it is argued that such a clear and unequivocal representation can be spelled out of a number of circumstances, this is tantamount to saying that the alleged representation must, of necessity, flow from those circumstances. I address those circumstances in the next section, and conclude that they do not lead to the conclusion that Spire’s words and conduct could reasonably be understood as making such a representation. Given that conclusion, those circumstances cannot give rise to a representation that is clear and unequivocal.

A reasonable understanding of the words and conduct?

Even if there was no clear and unequivocal representation, were the words and conduct capable reasonably of being understood as a representation that the contribution proceedings were at an end?

Before addressing each of Ms O’Rourke’s four points, I consider her overarching submission that the Consent Order was, or evidenced, a “tripartite” agreement between the three parties. In my judgment, it is clear, on the facts, that Mr Jellett reached settlement separately, and “bilaterally”, with each of Spire and Mr Brooke. Indeed the two separate settlement agreements are positively asserted by Mr Brooke in his pleaded case. It is also clear that the two separate agreements were closely intertwined and that Mr Jellett at least would not have concluded one without having concluded the other. The terms of those two settlement agreements were then recorded in a single consent order reflecting the two different strands of agreement. Even if it is the case that the effect of having the single Consent Order is to create, or evidence, an overall tripartite agreement, such an appellation does not, of itself, assist in the resolution of the issue. That issue is to divine the true meaning and effect of the so-called tripartite agreement and/or the representations that are said to have arisen from it.

The first of Ms O’Rourke’s four points is Mr Jellett’s undertaking to discontinue as against Mr Brooke. In my judgment on its own this takes the matter no further. It is one of the key terms agreed bilaterally between those two parties. The fact that it was recorded in the tripartite Consent Order, and indeed that notice of discontinuance was to be served on Spire, may indicate, at its highest, that such discontinuance was a condition precedent to Spire’s obligations undertaken towards Mr Jellett. However, such a condition precedent has no bearing on issues of contribution between Spire and Mr Brooke. At most, it might support the existence of a “tripartite” agreement, but that itself takes the matter no further.

Secondly, Ms O Rourke QC relies heavily on the provisions in the Consent Order in relation to costs, and in particular the provision that Spire would pay Mr Jellett’s costs of proceeding against Mr Brooke. I accept that Mr Jellett would not have discontinued against Mr Brooke on the terms that he did (including in particular agreeing not to seek his costs from Mr Brooke) unless Mr Jellett received those costs of suing Mr Brooke from Spire. To that extent the two agreements were intertwined. (But without more that has nothing to do with contribution as between Mr Brooke and Spire). However I do not accept that Mr Brooke would not have dropped his own claim as against Mr Jellett for his own costs, unless the deemed contribution proceedings were at an end. “Consideration” for that promise was provided by Mr Jellett himself not seeking his costs from Mr Brooke. This was the essence of the “drop hands” deal. It is true that in turn Mr Jellett would not have accepted this, had Spire not agreed to pick up those costs. But again that does not touch upon the deemed contribution proceedings, unless it can be said that Spire would not have agreed to this unless the deemed contribution proceedings were at an end. But that is plainly not the case.

That leaves Ms O’Rourke’s submission that the costs which Mr Brooke gave up included a costs order in “Sanderson order” form, namely an order that Spire pay directly Mr Brooke’s costs of defending Mr Jellett’s claim, and that Mr Brooke only gave up the possibility of obtaining such an order because of the necessary representation that the deemed contribution proceedings were at an end. In this way, Spire’s conduct in participating in the Consent Order in the terms in which it was concluded could reasonably have been understood by Mr Brooke as representing that the contribution proceedings were at an end. In my judgment such a contention is not realistic. First, a Sanderson order is a particular form of order, and not one that is automatically or necessarily made in any case. To cover this situation, the court may equally make a “Bullock order”, which necessarily involves an order that the claimant is required to pay the successful defendant’s costs. But in the present case, Mr Brooke expressly abjured seeking such an order. Secondly, the possibility of such a Sanderson order was never canvassed in the discussions leading up to the settlement agreements and the Consent Order. Indeed there were no discussions directly between Mr Brooke and Spire at all. In the circumstances, to say that Mr Brooke only gave up his ability to seek a Sanderson order because he understood that there would be no contribution proceedings does not accord with the factual reality of the situation. There is no evidence that these matters were ever in the parties’ contemplation. I conclude that the provisions in the Consent Order relating to costs are not such that they could reasonably be understood as incorporating a representation by Spire to Mr Brooke that no further contribution proceedings would be brought.

The third feature relied upon by Ms O’Rourke QC is the absence, in the Consent Order or other settlement terms, of any express or implied reservation of Spire’s right to continue or bring contribution proceedings. In this regard, she placed heavy reliance on the Morris and Gladman cases. In my judgment, these cases do not assist Mr Brooke’s case. They were concerned with a very specific, and different, issue, namely the automatic effect in law of an existing compromise of a claimant’s claim against one joint debtor or tortfeasor or upon the liability to the claimant of a second joint debtor or tortfeasor, and the need for a reservation by the claimant in those circumstances to prevent the operation of that rule of law. In the present case, Mr Brooke and Spire were not joint tortfeasors; rather they were alleged to be concurrent tortfeasors i.e. distinct acts of negligence resulting in one and the same damage. Thus there is no question of Mr Jellett’s settlement with Spire having automatically discharged Mr Brooke’s liability to Mr Jellett, as explained in paragraph 76 above. Secondly, in the present case the absence of an express or implied reservation is said to support a positive answer to the anterior question of whether there has been any compromise at all (rather than the question of the legal effect of an existing compromise). However Spire is not contending, nor need it contend, positively that, in order to establish that the contribution claim has not been compromised, there has been an implied reservation of the right to continue the contribution proceedings. Whether or not there has been a compromise of the contribution claim is a prior question and that is a question of what was agreed or indeed what was represented. To say that because there was no such reservation the contribution claim must have been compromised is “to put the cart before the horse”. In general, there is no basis for the suggestion that, unless something has been expressly reserved, it must have been settled by agreement. That would be tantamount to silence amounting to a representation. Moreover, I do not consider that the observations of Thomas LJ in the Aldi case are authority for the proposition that a failure to make an express reservation gives rise to an implied compromise.

Finally, Ms O Rourke QC relies upon the act of aborting the trial itself at a time when Mr Brooke’s liability was ready to be tried. This seems to me to be, if anything, more relevant to the issue of whether Mr Brooke relied upon any representation, rather than to whether a representation, on the part of Spire, can be spelled out of such conduct. In any event I do not consider that this alone necessarily supports the conclusion that the conduct was reasonably understood as involving a representation that the contribution proceedings themselves were at an end. Whilst it is likely that, had the trial gone ahead, the judge would have considered and resolved contribution issues, it does not follow necessarily that the fact that it did not go ahead meant that those issues were reasonably understandable as having been resolved.

Accordingly I conclude that the terms of the Consent Order and the surrounding circumstances could not reasonably have been understood as meaning that the contribution proceedings were at an end, and for that reason, there was no relevant representation (or promise) to found a case of estoppel.

What did Mr Brooke understand in fact?

If my conclusion on (2) above is wrong, Mr Brooke must show that he, or those acting on his behalf did in fact understand that the contribution proceedings were at an end.

The only direct evidence from Mr Brooke on this is in his witness statement where he stated that “the proceedings against me had ended as far as I was concerned”. In my judgment, those words on their own do not clearly distinguish between understanding that the claim against him by Mr Jellett was at an end and understanding that the issue of contribution between him and Spire was at an end. In cross-examination, he was asked whether he had been ever advised by anyone acting on behalf of Spire that the proceedings were at an end. He answered “Not that I recall”. Similarly he was asked whether confirmation that the proceedings were at an end was ever sought from Spire by anyone on his behalf. He answered “Not that I am aware”. In my judgment, by those answers Mr Brooke was saying, that as far as he was concerned, these things had not happened (rather than saying that he did not recall whether or not they had happened). They establish that any belief or understanding which Mr Brooke may or may not have had that the contribution proceedings were at an end, had not been derived from anything said or done by Spire. Similarly when asked about inter-solicitor correspondence in June and July 2012 about the contribution proceedings, his answers were that, as far as he could recall, those letters had not been brought to his attention. At some stage, however, Mr Brooke must personally have become aware of the continued contribution proceedings, whether before or after issue. There was no evidence that, at the point in time when he did become aware, he reacted by saying that he believed that the contribution issue had been compromised back in November 2011.

As far as those acting for Mr Brooke are concerned, and in particular his solicitors Radcliffes, there is no evidence before the court that their understanding at the time of the entering of the Consent Order was that the contribution proceedings were at an end. Moreover, and in my view highly significantly, when DAC Beachcroft wrote to them on 21 December 2011 just three weeks after the Consent Order, inviting a response to the Part 36 offer of 18 November 2011, Radcliffes replied, first, by acknowledging receipt of that letter. Then, without being chased further, some 11 days later they expressly rejected the Part 36 offer. In my judgment, if it were the case that the effect of the Consent Order and the underlying agreed settlement reached in November 2011 had in fact been understood by Radcliffes as bringing the contribution proceedings to an end, Radcliffes would not have replied in those two letters of January 2011 in the way in which they did. Rather they would have responded by protesting about DAC Beachcroft continuing to press for a response to the Part 36 offer made earlier. I find that those acting on behalf of Mr Brooke did not in fact understand the Consent Order as including a representation that the contribution proceedings were at an end.

Indeed as pointed out by Mr Rowe in his witness statement, at no point in time thereafter and in the course of ensuing correspondence relating to the Spire’s contribution claim, did anyone on behalf of Mr Brooke even suggest that the contribution claim was not live. Rather that suggestion was raised for the first time on 18 March 2016, some 4 years later.

The position therefore is as follows: Mr Brooke’s advisers did not understand that the deemed contribution proceedings were at an end. Mr Brooke himself believed that in general the proceedings were at an end. There is no evidence that as at the end of November 2011, Mr Brooke himself specifically understood that the deemed contribution proceedings were at an end, nor indeed that he ever addressed his mind to that specific issue. Indeed he accepted that he could not have obtained such an understanding from anything said specifically by Spire, nor from anything which his own solicitors told him (because they themselves did not believe it). That leaves the terms of the settlement and Consent Order themselves as a possible source of such an understanding. But in my judgment, he did not understand those documents in that way, because at no point did he himself protest once he was aware that the contribution issue was live. I find that Mr Brooke himself did not in fact understand, at that time, that the contribution proceedings were at an end. I am not satisfied that Mr Brooke ever specifically addressed his mind to the question of contribution. It is not even clear that he was aware of it as a distinct issue. Thus, even if contrary to my conclusion in paragraph 110 above, the Consent Order and the circumstances could reasonably have been understood as a representation that the contribution issue was at an end, I find that in fact they were not so understood by Mr Brooke.

The only possible basis for Mr Brooke’s case on issue (2) is estoppel by representation (or promissory estoppel). There was no clear and unequivocal representation made by Spire that the contribution proceedings were at an end. Further, the Consent Order and the circumstances surrounding its making could not reasonably have been understood as giving rise to such a representation, nor were in fact so understood by Mr Brooke or his representatives. For this reason, Spire is not estopped from bringing its claim in these proceedings.