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	England and Wales High Court (Queen's Bench Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Queen's Bench Division) Decisions >> Ministry of Defence v Blythe [2013] EWHC 1422 (QB) (02 May 2013) URL: http://www.bailii.org/ew/cases/EWHC/QB/2013/1422.html Cite as: [2013] EWHC 1422 (QB)

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IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		Royal Courts of Justice Strand London WC2A 2LL
		2 May 2013

THE DEPUTY JUDGE:

1. On 13 February 1990 a Master, whose initial I do not recognise, approved an order that was then sealed two days later, on 15 February, by which the plaintiff, as he was then known, then represented by solicitors called Gasters, was awarded an immediate award of damages for pleural plaques, an asbestos induced illness, then, but not now, considered to be an actionable injury. It was a provisional award under a relatively new jurisdiction introduced in the High Court by section 32A of the Supreme Court Act 1981, as it was then known, now the Superior Court Act. It named so-called comeback conditions excluded from consideration in the quantum of the award and there is no dispute that the claimant has not now developed any of them, at least as far as yet can be established. Paragraph 2 of the order read:

"The Plaintiff has leave to apply for further damages within 20 years of the date of this Order if he develops one or more [of] the diseases specified in paragraph 1 the Plaintiff to be at liberty to apply for such time to be extended."

2. There is no dispute that on 2 August 2012 the claimant, as he had now become, lodged a notice of application (therefore outside the 20-year period specified) for an extension of time in which he could exercise the right to apply for further damages if any of the expressed conditions did develop. That was resisted by the defendant appellant and the matter came before Master Eastman on 5 November 2012. He granted the application. The appellant filed notice of appeal seeking permission on 26 November 2012. Males J refused the application for permission to appeal, on 6 February 2013. His stated reasons were:

"The order dated 15 February 1990 expressly provided that the claimant was at liberty to apply for the 20 year period within which an application for further damages might be made to be extended. It did not limit that liberty to an application made within the 20 year period. Accordingly, and contrary to the appellant's grounds of appeal, this is not a case where the parties agreed or the court ordered that there could be no extension or that any application had to be made within the 20 year period. There is therefore no question of the court having been asked to vary its order to override the parties' contract. Rather the application for an extension was contemplated and permitted from the outset. Thus, and whether regarded as a matter of contract or the exercise of the court's powers under the applicable rules (now the CPR), the court had a discretion to extend the time. The master's exercise of that discretion was within the permissible range of decisions open to him."

3. The appellant renewed the application at an oral hearing and Silber J granted permission on 22 February 2013 and, as appears from the transcript of that hearing, he gave no reasons, but was not required to either, and so the matter comes before me today. There is no dispute, and the appellant submits, that this case was first concluded under and therefore subject to the old Rules of the Supreme Court. The material provisions were order 37, rule 8 and rule 10. So far as is material to this appeal, rule 8 subparagraphs (2) and (3) provided as follows:

"An order for an award of provisional damages shall specify the disease or type of deterioration in respect of which an application may be made at a future date, and shall also, unless the Court otherwise determines, specify the period within which such application may be made.

"The Court may, on the application of the plaintiff made within the period, if any, specified in paragraph (2), by order extend that period if it thinks it just to do so, and the plaintiff may make more than one such application."

4. Order 37, rule 9 deals with acceptance of offers to submit to a provisional award and order 37, rule 10 provided at subparagraph 2 that no application for further damages may be made after the expiration of the period, if any, specified under rule 8(2) or such period as extended under rule 8(3). Those rules when they were brought into force, representing as they did the first occasion upon which the law departed from the common law tradition until then that all damages for prospective losses had to be awarded in a single lump sum at the time of the trial of the single cause of action, were amplified therefore by a practice direction issued by the Lord Chief Justice, then Lord Lane, sitting at the time with Skinner J and Macpherson J. The Practice Direction (Provisional Damages Procedure) [1985] 1 WLR 961, differentiated between provisional damage awards after trial proceedings and provisional damages orders without trial. The latter is dealt with in section (b) of the Practice Direction, the material parts of which read as follows:

"(b) Orders Without Trial. Section 32A of the Supreme Court Act 1981 requires that immediate damages and provisional damages must be the subjects of awards by the court if they are to be enforced [I emphasise the words 'if they are to be enforced'] under that section. Accordingly the following practice shall be followed in relation to settlements under that section.

"10. Applications shall be made by summons for leave to enter judgment by consent in the terms of a draft annexed to the summons. If the plaintiff is under a disability, the approval of the court should be asked for in the summons and recited in the draft judgment.

"11. The draft shall contain the particulars in paragraphs 1 to 3 hereof. It should also contain a direction as to the documents to be placed on the case file. These will normally be (a) a copy of the order made on the summons, (b) a copy of the judgment, (c) pleadings, if any, (d) an agreed statement of the facts, (e) agreed medical reports. The contents of the case file shall be scheduled to the order and to the judgment. The terms of the order and judgment shall be subject to the court's approval.

"12. The plaintiff's solicitor shall (1) prepare the case file, which shall be secure and clearly marked, (2) draw up the order and judgment and place copies on the case file, (3) lodge the case file in the office in which the action is proceeding, where it shall be preserved as though it were the pleadings of an action disposed of by trial, (4) forward a copy of the judgment as directed in paragraph 8(2) hereof." [Quotation unchecked.]

5. There are then certain duties placed on Central Office here in London for the filing of the case file. Neither parties, according at least to the evidence and materials that I have been provided with for the purposes of this appeal, have sought of the Court Office a copy of the case file. I took it upon myself yesterday to inquire whether it could be traced, but hardly surprisingly in the limited time available it has been impossible to trace it, if it still exists, but insofar as the practice direction clearly states that it should be retained by the court, that court file somewhere does exist and in it would be included the agreed statement of facts. But I do not have the benefit of any of that material today. The claimant's instructing solicitor, doing the best that she can in the circumstances, has found the original order, has found an offer letter that may have contributed towards the making of the original order and has been able to trace a copy at least of the claimant's medical evidence obtained at the time and for the purposes of obtaining the provisional damages award, but none of the other material that would have been included in the retained case file has been traced or is available.
6. Mr Heppinstall, who appears for the appellant and did so below, submits then and now that the dominant feature in relations between the parties is what he calls "a contract embodied in a consent order compromising" the claim and this, he submits, was a contract by which each party of full age and capacity, and with the benefit of legal advice, "contractually obtained the certainty of being free from any further liability after 20 years, should no application be made during that time to extend the period". I take those quotes from his skeleton argument for the purposes of this appeal and he repeats those submissions in orally developing that skeleton before me today. If that is so, he goes on to submit that this court has either no jurisdiction, or as he submits it would be, to vary the terms of the contract, or alternatively only very limited jurisdiction which the court should not exercise. All of those arguments were rejected by Master Eastman, the material parts of whose judgment said this:

"It should be remembered (and I think it is accepted by all parties) that, when this original order was made under the old RSC 37, a finite period of time was required to be included in an order made pursuant to that rule, and a conventional time, if not the actual regulated time, was twenty years. So this is, I would respectfully suggest, an entirely conventional order of its time.

"Rule 37.8, particularly Rule 37.8(3) [the brackets do not appear in the transcript and indeed there are some transcription errors as to numbers which I will correct in the passage I am now reciting, returning to the quotation] of the old RSC, is not replicated in the new CPR Rules which are pertinent to this situation. The old Rule 37.8(3) required any application for an extension to be made within the period of the order. The new relevant rules (Rule 4.1.2 and the general Rule 3.1.2) have no such requirement in them nor indeed does the rule applying for an actual application for further damages, namely, Rule 4.1.3. Rule 4.1.3, indeed, anticipates the possibility of an extension to the original time because it says:

"'The claimant may not make an application for further damages after the end of the period specified in rule 4.1.2 or such period as extended by the court.'

"Mr Brace urges on me that, in spite of the fact that this order is to all intents and purposes a contract between parties, I have a discretion to extend the period of time should I choose to do so. He cites passages in Pannone LLP v Ardvark Digital Limited [2011] EWCA Civ 803 in which Lord Justice Tomlinson … [and I omit the words in parentheses] refers to the possibility of the court having a discretion in respect of consent orders because Mr Heppinstall says: 'Well, this is a consent order and that is a contract in its own right and the court should be slow to interfere with it.'

"Mr Heppinstall has, very helpfully, taken me through a number of passages within that judgment which draw distinctions between consent orders which are of an entirely procedural nature, and ones that are effectively procedural accommodations, and ones which are effectively concluded settlements of substantive disputes of which, he says, this is one.

"Mr Heppinstall argues that, in the absence of anything positive in the rules which allows me to exercise such discretion as I have under CPR 3.1.2(a) to extend time after the expiration of the time to comply with an order [I think there is omitted the word 'that'] has expired, I should not exercise my discretion. I have to say I find that quite difficult to swallow.

"Part 4.1.2 sets out the basic rule as it is now. Part 4.1.3 talks about making an application for further damages and anticipates, as I have already indicated, that the period for doing so may be extended by the court. What governs then the powers to extend the period? The short answer, it seems to me, is quite simply Part 3.1.2. In the absence of anything else it does, Part 3.1.2(a) says:

"'Except where these Rules [and I emphasise those two words] provide otherwise, the court may:

(a) extend or shorten the time for compliance with any rule, practice direction or court order (even if an application for extension is made after the time for compliance has expired.'

"That seems to me to be precisely the rule that governs this case. Therefore, it seems to me I do clearly have a discretion.

"The question then arises: Should I exercise that discretion? In short, if I do not this claimant is left remediless. In his written submissions, but not pursued in oral argument (I think wisely) Mr Heppinstall referred to the possibility of a claim against the insurers of the former solicitors for agreeing a twenty year limit in the first place. That argument, to my mind, does not get off the ground. As I have already indicated, what they did was what was totally conventional at the time (ie there was a requirement to fix a finite period for applications for further damages) and the convention was, in the absence of any agreement for a lesser time, that the maximum was twenty years, so that argument does not get off the ground.

"Do I have a discretion? That takes me back to the Pannone case. Mr Heppinstall says what I am being asked to interfere with here is the concluded settlement of a substantive dispute and not a procedural accommodation in relation to case management. I actually think these circumstances are a bit of a hybrid. Taken on one view, yes, it is of course a concluded settlement of a substantive dispute. But the way in which it was done was, to my mind, a procedural accommodation of the way in which these things were dealt with at the time. Even in cases of concluded settlements of substantive disputes, I note that at the end of paragraph 27 of his judgment, Tomlinson LJ refers to the fact that there is a possibility of the court exercising its discretion 'in the light of change to circumstances'.

"It seems to me that this change in the law (ie creating open ended lifetime provisional damage claims as opposed to finite ones) is a change in circumstances. As I have already indicated, what was done at the time was an agreement which I see as capable of being characterised, at least in part, as a procedural accommodation.

"In the light of the fact that, should this gentleman be so unfortunate as to develop one of these three conditions, if I were not to allow this application, he will be left without a remedy through no fault of anybody and that cannot be appropriate in the interests of justice. Therefore, I have a discretion and I should exercise it. Therefore, the application will be allowed."

7. The grounds of appeal at paragraph 5 summarise why it is submitted that the Master was wrong, and does so in the following terms:

"In so finding, the Master erred, in that:

(a) There was no power or jurisdiction to set aside and/or vary the Consent Order and Contract.

(b) Alternatively, there were no proper grounds to set aside and/or vary the Consent Order and Contract.

(c) Alternatively, the terms of the Consent Order and Contract did not permit any extension of the 20 year period or did not permit any such extension after the expiry of that period.

(d) Further and/or alternatively, the Civil Procedure Rules did not permit any interference with or variation of the Consent Order and Contract or alternatively, they did not permit any extension of the 20 year period or did not permit any such extension after the expiry of that period.

(e) Alternatively, the Master erred in the exercise of his discretion, exceeding the generous ambit within which reasonable disagreement is possible:

i The Master exercised his discretion more than 2 years after the 20 year period had expired and in circumstances in which the Respondent had provided no good reason for the delay in making the application and in circumstances in which he had not contracted any of the listed conditions.

ii The Master gave insufficient weight to the fact that both parties had obtained benefits from the bargain struck in the Consent Order and Contract: The Respondent obtained immediate damages and a right to claim further damages within 20 years without having to prove his claim at trial and the Respondent obtained a final limit to its liability as a public body after 20 years. There was no good reason to interfere with that bargain."

8. The first reference in that final sentence to respondent I think should have read "appellant", but subject to that those were the grounds of appeal. In his skeleton argument, amplified in oral submission, he submits that save and to the extent as was agreed as a matter of contract and set out in the provisional damages order, the claimant has a single cause of action for which the immediate award was made and no further entitlement arises. He cites the decision of the House of Lords in Rothwell v Chemical and Insulating Company Limited, [2008] 1 AC 281, and in particular the speech of Lord Hoffmann between paragraphs 12 and 16, but no authority is really required for that trite proposition, which I accept. He submits that the claimant "imposed the 20 year period upon himself in the bargain that he struck" and that "he imposed upon himself the inability to obtain further damages after the 20 year period unless he applied to extend that period, during that period."
9. Those passages are quoted from his skeleton argument and adopted by him in the course of his oral submissions. He continues also to maintain that there is a contract of compromise of substantive legal rights with which the court either cannot or should not interfere. He also submits that CPR part 3.1.2(a) has no application either, firstly, because it cannot be used to reopen final orders, whether made at trial or by consent respectively, because of the decisions of the Court of Appeal in Tibbles v SIG Plc [2012] EWCA Civ 518 or Roult v North West Strategic Health Authority [2009] EWCA Civ 444, or, secondly, because, if there was a discretion to do so, the exercise of it in this case fell so far outside the generous ambit of what a Master could reasonably do that it ought to be set aside. Mr Brace, who appears for the respondent and did below, submits to the contrary on every point.
10. The first question, it seems to me, is: what was the contract and what is the evidence about it? Reference is made to the offer letter of the defendant's then solicitors dated 23 August 1989. That is not couched in terms of the claimant imposing upon himself the inability to obtain further damages after the 20-year period because there is in that letter no mention of the permission to apply to extend. That letter is an offer. Insofar as the order departs from it by granting liberty to apply to extend, the inference to be drawn is that the offer was either rejected or there was a counter offer in the terms encapsulated in the order which was accepted, hence the consent, and that is so, in my judgment, whether that was because of the Rules of the Supreme Court or because of the voluntary concession of the defendant. The only evidence of the contract therefore is not the offer letter, that does not permit of the construction favoured by Mr Heppinstall, but rather the order which, in my judgment, also does not permit of that construction. To the contrary, the order envisaged a limitation of time on an application for further damages, but also envisaged an application to extend which was not limited in time at all.
11. Mr Heppinstall conceded in submissions orally before me that had an application been made within the 20-year period, the defendant would have consented to it. That seems to me to accept that it was never the intention of the parties to have the 20-year finality contended for in his skeleton argument but that that was only a desire of the court reflected in the rules pursuant to which the order was made. Alternatively to that, the practice direction, recognising, in my judgment correctly, that awards of immediate provisional damages could only be enforced if a court order was made, it was envisaged that the court order would assume primacy over the alleged terms of any contract. Indeed the defendant gave consent to the court order, including the permission to apply to extend, without any apparent limitations to time.
12. I am not persuaded that order 37, rule 8's restrictive effect as now contended for continues to apply either. CPR part 51, PD A, in my judgment, applies because these proceedings were commenced before 26 April 1999. Paragraph 11 provides:

"Where a new step is to be taken in any existing proceedings on or after 26 April 1999, it is to be taken under the CPR."

13. In my judgment, the current application, or indeed any application after that date, whether for an extension of time or for further damages, is and would be a further step in existing proceedings and so the new CPR applies, not the old Rules of the Supreme Court. There is no dispute that, whereas the old Rules of the Supreme Court specifically excluded application for an extension after the time for applying for further damages had expired, the new CPR is not so constrained in CPR part 4.1. Moreover, in those circumstances, since the CPR do not provide otherwise, CPR part 3.1.2, including therefore (a), must apply.
14. In the yet further alternative I am not persuaded that paragraph 2 of the order was in the sense contended for, the real contract, attracting the guidance of Tomlinson LJ in Pannone LLP v Ardvark Digital Limited [2011] EWCA Civ 803. In my judgment, the real contract was paragraph 1, namely the immediate award and the excluded conditions. Paragraph 2, in my judgment, was the procedural accommodation of that real contract, which procedural accommodation was provided for by procedural rules, that is the Rules of the Supreme Court and the Practice Direction, which are not rules about the substantive rights and remedies that the parties were otherwise free to negotiate. The substantive contract was in paragraph 1 and it envisaged a continuing cause of action which was then, in my judgment, to be subject to case management and that case management was to be found in the balance of the order and in particular in paragraph 2. Even if therefore there was something in the argument that there was a contractual term of time limitation, which I have rejected for the reasons I have already given, it would be subject to the power to vary and the change in the law between the Rules of the Supreme Court and the Civil Procedure Rules, in my judgment, would afford grounds to consider that variation.
15. I do not accept that Part 3.1.2(a) has no application. It applies except where the rules provide otherwise. Part 4.1.2, unlike its predecessor, RSC order 37, does not provide otherwise. Moreover, in my judgment, 3.1.2(a) applies to any court order and not just to case management orders, although I should repeat that in my judgment paragraph 2 was a procedural or case management order.
16. In the final alternative, insofar as these findings are questions of fact or judgment for the Master, he was entitled to find as he did and could not be said to have been wrong to do so, that is, to find that this aspect of the original order was case management rather than substantive, and he cannot be said to have been wrong to make that finding simply because as a matter of construction or judgment another Master or judge might have come to a different view on another day.
17. It therefore comes ultimately down to whether the Master should have exercised his discretion to extend the time in which to apply for further damages. His findings that this was the usual sort of order made in 1990 and as such that there could in truth be no claim in negligence for having agreed it, and therefore that if the application were not granted the claimant, were he to develop one the excluded conditions, would be without remedy in respect of a breach of duty for which liability is not in issue (as I suspect would have been confirmed in the statement of agreed facts that ought to have been filed and preserved but which, as I have said, I have not seen), all are relevant factors and are not said to be wrong or perverse findings. They afford grounds on which the Master could decide to exercise his discretion, and this Master did so. He did not fail to take into account relevant matters and there are no irrelevant matters that he took into account. He was not setting aside the substantive order in the case, as occurred in Roult, nor was he retrospectively varying the terms and regulatory effect of an allocation decision, as occurred in Tibbles, both of which cases therefore are distinguishable and of no assistance to me in the determination of this appeal.
18. He exercised his case management discretion. He was entitled to do so. He gave extensive reasons. They were not, in my judgment, perverse. That is sufficient for me to dismiss this appeal, but it would be wrong for me not to record that I would have exercised my discretion in the same way, for the same and the additional reasons that I have given, and that reinforces my judgment that this appeal should be dismissed.