Marsh v Sofaer & Anor [2003] EWHC 3334 (Ch)

Case No HC02C00594[2003] EWHC 3334 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Venue Royal Courts of JusticeDate Thursday, 4th December 2003
Strand
London WC2
B E F O R E:
THE VICE CHANCELLOR
Between
MARSH(CLAIMANT)-v-
Between
SOFAER & ANOTHER(DEFENDANTS)
Tape Transcript of Smith Bernal Wordwave Limited190 Fleet Street London EC4A 2AGTel No: 020 7404 1400 Fax No: 020 7831 8838(Official Shorthand Writers to the Court)
MR J CALLMAN appeared for CLAIMANTMR H JACKSON appeared for DEFENDANTS
J U D G M E N TThursday, 4th December 2003
[1]THE VICE CHANCELLOR: This is an application by the defendants, a firm of solicitors and the individual Partner concerned, for an order under Rule 3.4(2)(a) and/or (b) and Rule 24.2(a)(i) to strike out or by summary judgment to dismiss a claim made against them so far as it relates to personal injuries in consequence of the conviction of the claimant on criminal charges, as alleged in paragraphs 22 to 25 of the particulars of claim.[2]The circumstances in which the claim and this application arises are briefly as follows. The claimant was born on 15th July 1956. The evidence suggests that she is and has since birth been of very limited intellectual ability, with a natural and inborn IQ of 65.[3]In 1978, she began to work for a man called Mr Ben Goder and she became involved in his business of Ciel Travel Limited, which was incorporated in September 1979. She started to cohabit with him in the summer of 1980 and subsequently gave birth to three children.[4]Between January 1983 and 31st August 1986, she was concerned in some degree with the management of the company to which I have referred, Ciel Travel Limited, and a company subsequently incorporated by Mr Goder called Ravina Transport Limited.[5]Mr Goder died on 10th July 1986 intestate. The consequence was that his estate went to his widow and children by his marriage, rather than to the claimant and the three children she had had as an unmarried woman by Mr Goder.[6]On 22nd July 1986, she retained the defendants to advise her in relation to her rights in respect of Mr Goder's estate and certain properties that he had bought in conjunction with her during the course of his lifetime.[7]On 16th June 1987, she issued an originating summons, supported by an affidavit made by her on 15th June 1987, seeking declarations as to her beneficial interest in certain properties and for maintenance for herself and her children out of the estate of Mr Goder. The affidavit to which I have referred was prepared by the defendants on the instructions of the claimant.[8]Before that matter came on for trial, there was a criminal prosecution of the claimant, which took place between the 2nd and 25th February 1988 at Wood Green Crown Court. The claimant was prosecuted on six charges of carrying on the business of a company for a fraudulent purpose.[9]In those proceedings, she was represented by solicitors and counsel instructed on her behalf. It is apparent that her evidence took some four days. As is obvious, she pleaded not guilty, but she was found guilty on 25th February 1988 on three counts out of the six. She was sentenced to nine months' imprisonment and disqualified from acting as a director of a company for 12 years.[10]On 19th June 1989, a consent order was approved by Thorpe J sitting in the Family Division by way of compromise of the Inheritance Family Provision Act proceedings commenced by the claimant in June 1987.[11]The consequences of that order were that the wife and one of the legitimate daughters renounced letters of administration in favour of the claimant. She undertook to make certain payments to the widow, to transfer a property to her and gave certain undertakings to the court with regard to the payment of other debts of Mr Goder.[12]In summary, she claims in the proceedings subsequently launched that this took place against the advice of the defendants, which in the circumstances was negligent and gave rise to her undertaking a number of liabilities which she could not pay and from which all her subsequent problems originated.[13]The retainer of the defendants terminated on 24th November 1992 when she instructed another firm, to whom, on her instructions, the defendants transmitted all the papers.[14]The claim in this action was issued on 5th March 2002. The particulars of claim specified the circumstances of the claimant, who has now had a Receiver appointed by order of the Court of Protection dated 18th February 2000, and a litigation friend by an order made on 3rd March 2003.[15]It sets out in the opening paragraphs the history to which I have made reference and in paragraph 4 alleges the retainer she had given to the defendants in these terms.[16]She alleges that on or around 22nd July 1986, she instructed the defendants, the first defendant having been known to her and having been introduced to her by a mutual friend and:
"... retained for reward the Second Defendant firm (who acted at all material times in respect of this retainer principally by way of the First Defendant) to ..."
[17]Then are set out the four separate matters to which it is alleged the retainer extended. They are as follows: "a. advise in respect of the provision for the Claimant out of the estate of Ben Goder; and/or b. advise in respect of all matters arising out of or in connection with the assets and liabilities of Ben Goder; and/or c. advise in respect of all matters arising out of or in connection with the estate of Ben Goder as and when they arose; and/or d. advise the Claimant generally as to her financial position during the course of the time he advised her, and to act in effect as her 'man of affairs'".[18]At paragrapher 5, the pleader asserts express or alternatively implied terms of that retainer as including the following, and I read subparagraphs (c) to (g), which are in the following terms:
"c. To consider at all times whether the Claimant had mental capacity to give instructions; and/or d. if in doubt as to the Claimant's mental capacity to give instructions, to seek the opinion of the Claimant's doctor or some other suitable doctor as to the capacity of the Claimant; and/or e. if the Claimant did not have mental capacity to give instructions then to treat the retainer as determined and to take reasonable steps to protect the Claimant's interests; and/or f. in the event that to the Defendants' knowledge the Claimant was proposing to instruct other solicitors to act for her, to inform those other solicitors as to the mental capacity of the Claimant or of their concern as to that capacity; and/or g. in the event that to the Defendants' knowledge the Claimant was proposing to instruct other solicitors to defend her in criminal proceedings, to inform those other solicitors as to the mental capacity of the Claimant or of their concern as to that capacity ..."
[19]There are then set out a number of allegations with which I am not concerned with regard to certain dealings with various properties before and after the death of Mr Goder.[20]At paragraph 9, the claimant alleges this: "The First Defendant was fully aware of the position set out in the preceding paragraph as he was involved in taking instructions as to, and the amendment and preparation of, the affidavit of the Claimant sworn on 15th January 1987 which contained (inter alia) the information pleaded in the preceding paragraph".[21]That, as I take it, is an affirmative allegation that the affidavit drafted by the first defendant and deposed to by the claimant did indeed represent her true instructions and it is of some interest and relevance to note the extent of the detail as to financial transactions and other matters to which she condescends.[22]At all events, passing over the intervening paragraphs, which do not concern me at this stage, I turn to paragraph 22. In that paragraph and the succeeding paragraphs, it is alleged as follows: "22. Further or alternatively, the Claimant was indicted by way of 5 indictments ... The Defendants knew of the said indictments and the fact that other solicitors were to defend the Claimant in respect thereof. The Claimant was tried and convicted upon three of the indictments and sentenced to 9 months imprisonment, 3 months to be served immediately and the remainder to be held in suspense. The Claimant served 6 weeks in prison...[23]In the performance of its retainer and/or its duty in tort, the Defendants acted in breach of the terms thereof and/or negligently. In each instance the failure was that of the First Defendant, liability for which failure falls also upon the Second Defendant". Then there is a heading described as "Particulars of Breach Resulting in Personal Injury", which reads as follows: "a. given the substantial and regular contact between the First Defendant and the Claimant, the First Defendant (and through him the Second Defendant) was aware of or ought to have been aware of the Claimant's lack of mental capacity; and/or b. the Defendants failed to act as a responsible solicitor if he had doubts as to the capacity of the Claimant and seek medical opinion as to the same; and/or c. the Defendants failed to indicate to the solicitors acting for the Claimant of the criminal trial any concern as to the mental capacity of the Claimant.[24]Had the Defendants informed those solicitors acting for the Claimant in the criminal trial of her lack of capacity or at least of their concerns as to the same (as they ought properly to have done, given the substantial and regular contact between the First Defendant and the Claimant) then the following would (or would have been likely) to have occurred:a. a medical opinion would have been sought; andb. it is likely that such an opinion would have shared the views of Dr Pariente and Dr Schapira [both consultant psychiatrists) whose reports are annexed at Annex 2 hereto, namley that the Claimant was not fit to plead; andc. it is likely that the Court would have ordered that she be acquitted and/or given an absolute discharge (and that she would not therefore on either basis have served a prison sentence).[25]In the premises, the Claimant has suffered pain, injury, loss and damage caused by or contributed to by the negligence and/or breach of duty of the Defendants".[24]Then there are set out particulars of injuries andof damages.[25]During the course of the hearing, counsel proffered a proposed amendment of paragraph 24(c) so that the consequence now alleged is that it is likely that the court would have ordered that she be admitted to such hospital as shall be specified by the Secretary of State on or before a date two months from the date of the order, or acquitted, and/or be given an absolute discharge, and she would not therefore on any of these bases have served a prison sentence.[26]The case for the defendants is simply this. They claim that the allegation in paragraph 5(g), which I have read, of a duty to communicate their knowledge of any want of capacity on the part of the claimant to the solicitors acting for her in criminal proceedings is novel, unsupported by authority and wrong in law.[27]They point out that the allegation is that there is a duty to speak -- the one solicitor to the other -- notwithstanding the fact that, according to their submission, all the information conveyed by a client to a solicitor is confidential and privileged and that such confidence extends as well to the conclusions which the solicitor forms on the basis of the material that is communicated to him, as with the communications themselves.[28]Counsel on behalf of the defendants submitted that the defendants were fully entitled to assume that the solicitor acting in the criminal proceedings was competent and would therefore make up his own mind as to the capacity or otherwise of the claimant to plead and that there was no duty on the part of the defendants in this case to oversee the work of those other solicitors.[29]Further, he submits that the claim that is made in respect of the criminal proceedings and the consequences conflict with what has been called the "principle of Hunter", that is to say the decision of the House of Lords in Hunter v The Chief Constable of the West Midlands [1982] AC 529, as amplified in the more recent decision of the House of Lords in Hall v Simons [2000] 1 AC 615.[30]He submits that to allow the claimants to pursue this part of their claim would amount to a collateral attack on the subsisting conviction of the claimant. He points out that the offences for which she was charged of and which she was convicted involved a mental element of trading for a fraudulent purpose and says that it would be quite inconsistent with a conviction on that charge for it to be asserted and proved in civil proceedings that she was not indeed in a position to plead.[31]This is disputed by counsel for the claimants. He starts off, correctly, by reminding me of the jurisdiction I have at this stage to strike out or dismiss his client's claim. As I have indicated, the jurisdiction relied on by the defendants is that arising under 3.4(2). That enables the court to 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; and (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".[32]The notes to that rule in Volume 1 of the 2003 Civil Procedure state at the foot of page 78: "However, it is not appropriate to strike out a claim in an area of developing jurisprudence since in such areas decisions as to novel points of law should be based on actual findings of fact".[33]The reference given is Farah v British Airways PLC, The Times, 26th January 2001.[34]The other provision on which reliance is placed is Rule 24.2, which enables the court to give summary judgment against a claimant or defendant on the whole of the claim or on a particular issue if: "(a) It considers that: (i) the claimant has no real prospect of succeeding on the claim or issue".[35]The phrase "no real prospect" has been construed by the Court of Appeal as meaning a prospect of success which is to be contrasted with a claim which is merely frivolous.[36]In this connection, counsel referred me to the case of Farah v British Airways, to which the note makes reference. The decision is that of the Court of Appeal on 6th December 1999 and is an appeal against an order of His Honour Judge Riddel, dated 23rd June 1999.[37]It is by no means clear from the report of the case put before me and the dates that I have just given that in fact the decision of the Court of Appeal in this case was on an application of the Civil Procedure Rules, rather than the Rules of the Supreme Court, which were superseded on 26th April 1999.[38]At all events, counsel relies on paragraph 41 of the judgment of Chadwick LJ, where he said:
"The question raised on this appeal is whether the court can be certain at this preliminary stage in the action that - whatever, within the reasonable bounds of the claimant's pleaded case, the actual circumstances in which the incorrect and inaccurate information was provided might be held to be after a trial - the question of law raised in the action would be answered in the negative."
[39]It might at first sight be considered that the requirement that the court should be certain of something at a preliminary stage is imposing too high a threshold, when compared with the requirement for a real prospect of success set out in Rule 3.4(2), but I do not think I need dwell on any possible differences that may arise.[40]Counsel for the claimant, dealing with the question of duty, referred me to passages recorded in the most recent edition of Guidance to Solicitors, issued by the Law Society, to suggest that there was, now at least, not necessarily an obligation but a power in a solicitor who is concerned as to the mental capacity of his client to discuss the matter with the client's relations and, if necessary, to make some communication or application to the Court of Protection under its now new name.[41]That is as may be, but it does not cover the circumstances with which this case is concerned. So far as that is concerned, counsel submitted that the information in question, namely as alleged that the claimant was unable to look after her own affairs, was not itself confidential at all. If it was, it was not confidential between two solicitors acting for the same client; but even so, if it was, the court should readily imply a licence for one solicitor to communicate the relevant information to the second.[42]For my part, I do not accept any of those submissions. It seems to me to be beyond doubt that communications by a client to her solicitor are confidential because they are communications made in confidence to a legal adviser pursuant to the retainer from the client to the solicitor.[43]It must follow that the conclusions reached by a solicitor from the information so communicated are as confidential as the information itself. It cannot be right that a solicitor, on receiving instructions from his client, should then be entitled to go and tell anybody who cared to listen either his opinion of the client's veracity or on the merits of the client's case.[44]It is, I should have thought, plain beyond argument that the solicitor's conclusions in relation to information communicated by the client pursuant to the retainer are as confidential as the communications themselves.[45]I pass then to the second limb of the argument: is it a breach of the duty of confidence for the solicitor, in this case with a retainer in relation to civil proceedings for maintenance under the Inheritance Family Provision Act, and for advice in relation to the affairs and assets of Mr Ben Goder and his estate, to communicate the views of the solicitor under that retainer to the solicitor under a retainer to conduct the defence to the criminal proceedings which took place in February of 1988?[46]It seems to me to be, again, self-evident that, without the consent of the client, it is not open to a solicitor under one retainer to communicate, without the knowledge and approval of his client, either what he has been told by the client or his opinion on the client's veracity or the merits of her case to the solicitor involved under another retainer for a different purpose.[47]It may be that the client would be perfectly happy that that should be done and, if asked, would have given permission. Equally, it is not difficult to envisage circumstances in which a client would not wish information or opinions formed by a solicitor under one retainer to communicate that information or opinion to solicitors engaged under another.[48]Again, it seems to me beyond argument that the mere fact that two solicitors are employed in relation to different matters by the same client of itself enables the one to communicate confidential information to the other.[49]I pass then to the third limb of counsel's argument, namely whether it can be implied in the circumstances of the case that the claimant's permission for such a communication had been or would be granted.[50]It is clear from the dictum of Millet LJ in the Mortgage Express v Bowerman, to which I was referred, that the duty of confidence may of course be relaxed by the client. Such relaxation is most often provided expressly, but it is also possible for a relaxation to be implied from the actions of the client.[51]There are no actions here of the claimant which could by any stretch of the imagination lead to a relaxation of the duty of confidence owed to her by the defendants. What there is is evidence that she was of limited intellectual capacity and probably unable to manage her own affairs.[52]But if that is proved, it gives rise to the conundrum that, by the same standard, she was unable to give the relaxation of the duty of confidence on which counsel is necessarily seeking to rely.[53]The mere fact that a client may or may not be of sufficient mental capacity may justify an application to the Court of Protection, but it cannot justify a further or wider breach of confidence by communicating confidential information to others who have not been authorised to receive it.[54]It was suggested by counsel that in any event this was a field of developing jurisprudence, such as is referred to in the note to the White Book which I have read. I do not accept that. It seems to me that there is no developing jurisprudence at all. It is quite plain that a solicitor's duty of confidence is absolute unless there is some relaxation recognised by the law or provided by the client.[55]There is none here, even arguably recognised by the law, and there is nothing on which a relaxation by the client could be implied.[56]I reach the conclusion, therefore, that the claim is defective in relying on a duty on the part of the defendants to inform the second solicitor. If there is no such duty, it follows that none of the consequences, whatever consequence might be visited on the solicitor in the criminal proceedings, could possibly be laid at the door of the defendants of this case.[57]Accordingly, I will strike out the offending paragraphs on that ground alone.[58]In those circumstances, it is not strictly necessary to deal with the alternative point, namely whether the claim, if it proceeded, would amount to a collateral attack of a conviction in a court of competent jurisdiction.[59]As counsel pointed out -- the approval of the judgment of Ralph Gibson LJ in the Walpole case is merely to the effect that such a collateral attack may amount to an abuse of process, but it does not necessarily do so.[60]As counsel for the claimant has pointed out, it is not being suggested that the conviction was necessarily wrong on what actually happened in the court, merely that there should not have been a trial at all if suitable steps had been taken to bring to the notice and attention of those concerned the inability of the claimant to plead.[61]I say all this because I have to assume for present purposes that the allegations are correct. There must be a considerable question mark over that assumption, given that counsel involved in the criminal trial and the judge, if the claimant is right, failed to spot the point which it is said that Mr Sofaer should have seen and should have communicated to the solicitors involved in the criminal proceedings.[62]Accordingly, I do not think it appropriate to say anything more about that point, but I will grant the relief sought on the first point, namely the absence of any duty in law.

Cited in 2 later judgments