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You are here: BAILII >> Databases >> United Kingdom Supreme Court >> Fairclough Homes Ltd v Summers [2012] UKSC 26 (27 June 2012) URL: http://www.bailii.org/uk/cases/UKSC/2012/26.html Cite as: [2012] WLR 2004, [2012] 4 Costs LR 760, [2012] UKSC 26, [2013] Lloyd's Rep IR 159, [2012] 4 All ER 317, [2012] 1 WLR 2004 |
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Trinity Term
[2012] UKSC 26
On appeal from: [2010] EWCA Civ 1300
JUDGMENT
Fairclough Homes Limited (Appellant) v Summers (Respondent)
before
Lord Hope, Deputy President
Lord Kerr
Lord Clarke
Lord Dyson
Lord Reed
JUDGMENT GIVEN ON
27 June 2012
Heard on 18 and 19 April 2012
Appellant William Norris QC James Todd Sadie Crapper (Instructed by Berrymans Lace Mawer LLP) |
Respondent Craig Sephton QC Hugh Davies (Instructed by SAS Daniels LLP) |
LORD CLARKE, DELIVERING THE JUDGMENT OF THE COURT
Introduction
The facts and judgment at first instance
"54. Having rehearsed the evidence at some length it is time to come to some conclusions. Firstly as to the nature and extent of the disability caused by the injury. There is no doubt that the Claimant suffered a fracture of the right scaphoid and a serious ankle fracture which required at least two operations for an arthrodesis. The schedule of loss prepared on 9th December 2008 and signed with a statement of truth by the Claimant maintained the Claimant was at that date still in constant pain taking pain killers, needing to use crutches outside and to wear an ankle brace at all times. Standing and sitting was limited due to pain; he was still suffering psychiatrically from the effects of the accident. He had not worked since the accident and was unlikely to do so for the foreseeable future. In the light of the surveillance evidence the subsequent two schedules opted for a sum of £30,000 instead of the original £47,500 put forward for general damages. Further the loss of earnings in the second schedule of the 19th June 2009 ran up to 13th October 2008 only, in effect accepting that the orthopaedic experts' conclusion as to the Claimant's fitness for work was correct. That said the Claimant by his evidence does not accept that that is correct and that position was maintained from the witness box.
55. I am prepared to accept that the Claimant's ankle injury was sufficiently serious as to require the first arthrodesis; further that the first operation failed necessitating the second one. Although I accept in the light of subsequent events that the second operation also failed to create complete fusion, the result of that second operation was to render the Claimant asymptomatic to all intents and purposes as is disclosed by the surveillance videos from October 2007 onwards. I can accept as Messrs O'Connor and Hodgkinson conclude that the Claimant would not be fit for heavy work and would find walking over uneven ground uncomfortable but those are the only outstanding disabilities. I can also accept their conclusion that the Claimant would have been weight bearing without crutches within six months of the second operation i.e. by March 2007. Since the Claimant was clearly fit for work in early October 2007 I conclude that the Claimant was fit for work some months earlier than that and capable of getting a job including a job as a site supervisor as he had pre-accident, that not being heavy work. I conclude that the time when the Claimant was fit and should have got back to work as being at the end of June 2007. I accept that he would not have been able to work before then. There is no evidence that the ankle even though not properly fused was likely to give rise to problems in the future.
56. Although the Claimant was not fit for work between the date of the accident and the end of June 2007, in my judgment, I do not conclude he was in that period as housebound and incapable of activity as the Claimant maintains. The recorded incident of June 2003 of the Claimant, upset at being told that the effects of the injury might be permanent, going out to the pub to drown his sorrows demonstrates greater agility than the Claimant maintains and sounds more probable than the Claimant's now explanation that it all happened at home. It is rather similar to the Claimant's curious denial of having been convicted of an offence.
57. I have also concluded that the psychiatric problems alluded to by the psychiatrist were genuine initially and were materially contributed to by the effects of the accident. I agree with the conclusion of Dr Wood with which Dr Thomas does not appear to disagree that such problems had settled to all intents and purposes by about June 2007. It is interesting that that conclusion was come to in ignorance of what the surveillance evidence showed. That ties in nicely with my conclusion as to when the Claimant was able to resume and should have resumed work.
58. Those conclusions must mean that I reject what the Claimant said to his treating doctors and the medical experts as to ongoing symptoms in and after March 2007. I do so because;
(a) What is seen on the video tapes is absolutely inconsistent with such disabilities; it is also absolutely inconsistent with what is contained in the DWP application form.
(b) The Claimant's explanation that when he was being filmed he was taking strong pain killers in order to force himself with the object of getting back into work is just not credible in particular when he is seen on two separate occasions going to and from two separate medical experts' consulting rooms without crutches when leaving and returning home and with crutches when entering and leaving the doctors premises.
(c) The Claimant's wife's diary belies any such protestation of ongoing symptoms.
59. The evidence before me is sufficiently cogent to sustain a claim of fraud not only applying the civil standard of being satisfied on the balance of probabilities but also on the criminal standard of being satisfied beyond reasonable doubt insofar as that standard is materially different when allegations of fraud are made. In my judgment the Claimant has deliberately lied to the medical men and to the Department of Work and Pensions on the application form when he said he had ongoing symptoms after March 2007. The Claimant was clearly able to work without difficulty or pain when filmed in October 2007 driving and loading a van with kitchen fitting components and again in 2009 when filmed with the mobile food van. His wife's diary confirms he was working at various other times. I can only infer he was working for reward; the diary confirms such a conclusion; the explanations of helping out for free, of pushing himself and of learning the business of a mobile food van with a view to purchase is deliberate falsehood and an attempt to explain away what cannot be explained away. Messrs O'Connor and Hodgkinson's final opinion already referred to is in my judgment absolutely right. I am not able to say on what days the Claimant was gainfully employed but that matters not. He was fit for work and able to get work and was in a position to do so, as I have found, since the end of June 2007.
60. I am also satisfied that the Claimant was able to do cooking, washing and other housework and most activities involving DIY and decorating by March 2007 when Mr Hodgkinson considered the Claimant no longer needed crutches. Any residual disability as regards DIY and decorating would have ceased by the end of June 2007. He was certainly fit enough to play football by early 2009.
61. It is urged upon me that the third arthrodesis is attributable to the accident. In my judgment it is not. It is attributable to the lies he told Mr Dalal that he was in continuous horrible pain; there can be no doubt that if he had told Mr Dalal the truth namely that he was to all intents and purposes better the surgeon would never have advised him to undergo a further procedure. The Claimant has got stuck with his own lie; had he told the truth he would be admitting this claim is grossly exaggerated and that he has been claiming benefits under false pretences; this he is not prepared to do as is evidenced by his testimony before me, false as I find, that he is still in pain and needing to use crutches."
"Despite the Defendant's pleas to the contrary the Defendant had the means of assessing the true value of the Claimant's claim so soon as they got the video evidence in October 2007 and by obtaining as they did further medical advice from Mr Hodgkinson. The Defendant was not deflected from ascertaining the true position by the Claimant's continued lies. They saw through them. The Claimant was living in a fools' paradise until January 2009. Thereafter his continued denials of recovery fooled no one; it is difficult to tell why he did so; it may be he could not bring himself to own up in part because of the action of the Department of Work and Pensions in investigating his benefit fraud and the Defendant's insurers reporting the Claimant's dishonesty to the police; that is speculation since I do not know when the Claimant became aware of such investigations or complaints."
The Court of Appeal
Jurisdiction
"The court may strike out a statement of case if it appears to the court -
a) that the statement of case discloses no reasonable grounds for bringing or defending the claim;
(b) that the statement of case is an abuse of the court's process or is otherwise likely to obstruct the just disposal of the proceedings; or
(c) that there has been a failure to comply with a rule, practice direction or court order."
Attention was also drawn, both to the overriding objective stated in CPR 1.1 and 1.2 that the court must deal with cases justly, and to the court's general powers of case management in CPR 3.1(2), which includes a power in CPR 3.1(2)(m) to "take any other step or make any other order for the purpose of managing the case and furthering the overriding objective".
"Where, as in this case, there has been a full trial, the proper course for the judge is to give judgment on the issues which have been tried. To have struck out the claims of the first and third claimants would have been to invoke a case management power not for a legitimate case management purpose (in other words, for the purpose of achieving a just and expeditious determination of the parties' rights, or avoiding an unjust determination where a party's conduct had made a safe determination impossible), but for the very different purpose of depriving those parties of their legal right to damages by way of punishment for their complicity in the second claimant's fraudulent claim, which in my judgment he had no power to do. It was open to him to impose costs sanctions on the first and third claimants, which he did, but that is a different matter."
The principles in Ul-Haq v Shah were restated by the Court of Appeal in Widlake v BAA.
i) The court had power to strike out a claim for want of prosecution, not only in cases of inordinate and inexcusable delay which caused prejudice to the defendant, but also where the court was satisfied that the default was "intentional and contumelious, eg disobedience to a peremptory order of the court or conduct amounting to an abuse of the process of the court": Birkett v James [1978] AC 297 per Lord Diplock at p 318F-G. In the latter case it was not necessary to show that a fair trial was not possible or that there was prejudice to the defendant. See also, for example, Arbuthnot Latham Bank Ltd v Trafalgar Holdings Ltd [1998] 1 WLR 1426, per Lord Woolf MR (with whom Waller and Robert Walker LJJ agreed) at p 1436H.
ii) In a classic, much followed, statement in Hunter v Chief Constable of the West Midlands Police [1982] AC 529 Lord Diplock described the court's power to deal with abuse of process thus at p 536C:
"This is a case about abuse of the process of the High Court. It concerns the inherent power which any court of justice must possess to prevent misuse of its procedure in a way which, although not inconsistent with the literal application of its procedural rules, would nevertheless be manifestly unfair to a party to litigation before it, or would otherwise bring the administration of justice into disrepute among right-thinking people. The circumstances in which abuse of process can arise are very varied. … It would, in my view, be most unwise if this House were to use this occasion to say anything that might be taken as limiting to fixed categories the kinds of circumstances in which the court has a duty (I disavow the word discretion) to exercise this salutary power."
iii) The court had power to strike out a claim on the ground of abuse of process, even though the effect of doing so would be to extinguish substantive rights. It follows from the conclusion in Birkett v James that the court could strike out a claim as an abuse of process for intentional and contumelious conduct amounting to an abuse of the process of the court without the necessity to show prejudice that the fact that a strike out might extinguish substantive rights is not a bar to such an order.
iv) Although it appears clear that in the vast majority of cases in which the court struck out a claim it did so at an interlocutory stage and not after a trial or trials on liability and quantum, the cases show that the power to strike out remained even after a trial in an appropriate case. The relevant authorities, such as they are, were considered by Colman J in National Westminster Bank plc v Rabobank Nederland [2006] EWHC 2959 (Comm), where he summarised the position thus in paras 27 and 28:
"27. In my judgment, there can be no doubt that the court does have jurisdiction to strike out a claim or any severable part of a claim of its own volition whether immediately before or during the course of a trial. This is clear from the combined effect of CPR 1.4, 3.3 and 3.4 as well as 3PD 1.2, and by reason of its inherent jurisdiction.
28. However, the occasion to exercise this jurisdiction after the start of the trial is likely to be very rare. The normal course will be for all applications to strike out a claim or part of a claim on the merits to be made under CPR 3.4 or 24.2 and determined well in advance of the trial."
v) We agree with Colman J. His conclusions are consistent with Glasgow Navigation Co v Iron Ore Co [1910] AC 293, Webster v Bakewell RDC (1916) 115 LT 678, Harrow LBC v Johnstone [1997] 1 WLR 459, Bentley v Jones Harris & Co [2001] EWCA Civ 1724 per Latham LJ at para 75 and The Royal Brompton Hospital NHST v Hammond [2001] EWCA Civ 550; [2001] Lloyd's Rep PN 526, per Clarke LJ at paras 104 – 109, especially at para 107.
"72. We accept that, in theory, it would have been open to the judge, even at the conclusion of the hearing, to find that Mr Masood had forged documents and given fraudulent evidence, to hold that he had thereby forfeited the right to have the claims determined and to refuse to adjudicate upon them. We say 'in theory' because it must be a very rare case where, at the end of a trial, it would be appropriate for a judge to strike out a case rather than dismiss it in a judgment on the merits in the usual way.
73. One of the objects to be achieved by striking out a claim is to stop the proceedings and prevent the further waste of precious resources on proceedings which the claimant has forfeited the right to have determined. Once the proceedings have run their course, it is too late to further that important objective. Once that stage has been achieved, it is difficult see what purpose is served by the judge striking out the claim (with reasons) rather than making findings and determining the issues in the usual way. If he finds that the claim is based on forgeries and fraudulent evidence, he will presumably dismiss the claim and make appropriate orders for costs. In a bad case, he can refer the papers to the relevant authorities for them to consider whether to prosecute for a criminal offence: we understand that this was done in the present case."
The European Convention on Human Rights
The exercise of the power
"Moreover, it should not be forgotten that one of the great virtues of the CPR is that, by providing more flexible remedies for breaches of rules as well as a stricter regulatory environment, the courts are given the powers and the opportunities to make the sanction fit the breach. That is the teaching of one of the most important early decisions on the CPR to be found in Biguzzi v Rank Leisure plc."
The draconian step of striking a claim out is always a last resort, a fortiori where to do so would deprive the claimant of a substantive right to which the court had held that he was entitled after a fair trial. It is very difficult indeed to think of circumstances in which such a conclusion would be proportionate. Such circumstances might, however, include a case where there had been a massive attempt to deceive the court but the award of damages would be very small.
"2. For many years the courts have sought to underline how serious false and lying claims are to the administration of justice. False claims undermine a system whereby those who are injured as a result of the fault of their employer or a defendant can receive just compensation.
3. They undermine that system in a number of serious ways. They impose upon those liable for such claims the burden of analysis, the burden of searching out those claims which are justified and those claims which are unjustified. They impose a burden upon honest claimants and honest claims, when in response to those claims, understandably those who are liable are required to discern those which are deserving and those which are not.
4. Quite apart from that effect on those involved in such litigation is the effect upon the court. Our system of adversarial justice depends upon openness, upon transparency and above all upon honesty. The system is seriously damaged by lying claims. It is in those circumstances that the courts have on numerous occasions sought to emphasise how serious it is for someone to make a false claim, either in relation to liability or in relation to claims for compensation as a result of liability.
5. Those who make such false claims if caught should expect to go to prison. There is no other way to underline the gravity of the conduct. There is no other way to deter those who may be tempted to make such claims, and there is no other way to improve the administration of justice.
6. The public and advisors must be aware that, however easy it is to make false claims, either in relation to liability or in relation to compensation, if found out the consequences for those tempted to do so will be disastrous. They are almost inevitably in the future going to lead to sentences of imprisonment, which will have the knock-on effect that the lives of those tempted to behave in that way, of both themselves and their families, are likely to be ruined.
7. But the prevalence of such temptation and of those who succumb to that temptation is such that nothing else but such severe condemnation is likely to suffice."
Application to the facts
CONCLUSION