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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 >> Blankley v Central Manchester and Manchester Children's University Hospitals NHS Trust  EWHC 168 (QB) (05 February 2014)
Cite as:  1 WLR 2683, 138 BMLR 30, (2014) 138 BMLR 30,  WLR 2683,  2 All ER 1104,  EWHC 168 (QB),  WLR(D) 141,  2 Costs LR 320
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QUEEN'S BENCH DIVISION
Strand, London, WC2A 2LL
B e f o r e :
Sitting with Assessors
MASTER CAMPBELL and GREG COX Esq
| DIANN BLANKLEY
(By her Litigation Friend Andrew M. G. Cusworth)
|- and -
|CENTRAL MANCHESTER AND
MANCHESTER CHILDREN'S UNIVERSITY HOSPITALS NHS TRUST
Mr M Smith (instructed by Clyde & Co LLP) for the Defendant/Respondent
Hearing dates: 5th and 6th November 2013
Crown Copyright ©
Mr Justice Phillips :
The background facts
The costs proceedings
"Where an authority given to an agent has, without his knowledge, been determined by the death or lunacy of the principal, and, subsequently, the agent has, in the belief that he was acting in pursuance thereof, made a contract or transacted some business, with another person, representing that, in so doing, he was acting on behalf of the principal, the agent is liable, as having impliedly warranted the existence of the authority which he assumed to exercise, to that other person, in respect of damage occasioned to him by reason of the non-existence of that authority."
"Yonge v Toynbee is clear authority that the loss of capacity in itself terminates the contractual arrangements, and therefore it is necessary for the Claimants to show that the process that they entered into is one that would show the retainer was maintained. "
"It is impossible not to be sympathetic to the position in which the Claimant's Solicitors find themselves. The starting point is the contractual position relating to the capacity of the Claimant and the position that arises on her losing capacity. There seems to me to be no doubt that Yonge v Toynbee remains good law, and that the relationship between a Solicitor and their client under a CFA agreement or indeed a private funding agreement, is contractual, and that Yonge v Toynbee is good authority and that the loss of capacity terminates that contractual arrangement."
The issues in the appeals
i) that supervening lack of capacity on the part of the claimant did not frustrate or otherwise terminate the CFA:
ii) that, if the CFA was frustrated, it was adopted by the receiver/deputy following his appointment;
iii) alternatively, that the claimant was liable for Linder Myers' reasonable fees because the services were necessary within the meaning of section 7 of the Mental Capacity Act 2005 which came into force on 1 October 2007 and, prior to that, within the common law concept of "necessaries";
iv) in further alternative, that the defendant was estopped by convention from denying that Linder Myers had authority to act for the claimant;
v) that in any event, Linder Myers and the deputy (on behalf of the claimant) entered a new agreement in March 2009 by executing the draft 2009 CFA, which agreement covered work done since March 2007 retrospectively.
(i) Does supervening incapacity terminate a solicitor's retainer?
".. frustration occurs whenever the law recognises that without default of either party a contractual obligation has become incapable of being performed because the circumstances in which performance is called for would render it a thing radically different from that which was undertaken by the contract. Non haec in foedera veni. It was not this that I promised to do".
"… there is no need to consider what the parties thought or how they or reasonable men in their shoes would have dealt with the new situation if they had foreseen it. The question is whether the contract which they did make is, on its true construction, wide enough to apply to the new situation: if it is not, then it is at an end."
i) The doctrine of frustration was evolved to mitigate the rigour of the common law's insistence on literal performance of absolute promises. The object of the doctrine was to give effect to the demands of justice, to achieve a just and reasonable result, to do what is reasonable and fair, as an expedient to escape from injustice where such would result from enforcement of a contract in its literal terms after a significant change in circumstances;
ii) Since the effect of frustration is to kill the contract and discharge the parties from further liability under it, the doctrine is not to be lightly invoked, must be kept within very narrow limits and ought not to be extended;
iii) Frustration brings the contract to an end forthwith, without more and automatically;
iv) The essence of frustration is that it should not be due to the act or election of the party seeking to rely on it. A frustrating event must be some outside event or extraneous change of situation;
v) A frustrating event must take place without blame or fault on the side of the party seeking to rely on it.
(ii) Did the receiver/deputy "adopt" the CFA?
"Authority shows that, once it is established that a firm of solicitors is acting for a receiving party, a presumption arises that the client is liable to pay the solicitor. The onus is on the paying party to rebut the presumption … The presumption thus arises (subject to rebuttal) where the solicitor is on the record for the client in the litigation … in order to rebut the presumption, it has to be shown that there are no circumstances in which the solicitor would be able to look to the client for payment".
(iii) Was Linder Myers entitled to be paid for supplying "necessary" services?
(1) If necessary goods or services are supplied to a person who lacks capacity to contract for the supply, he must pay a reasonable price for them.
(2) 'Necessary' means suitable to a person's condition in life and to his actual requirements at the time when the goods or services are supplied."
(iv) Estoppel by convention
(v) Was there a new conditional fee agreement in March 2009?