Land Securities Plc & Ors v Fladgate Fielder (A Firm) [2009] EWHC 577 (Ch)

[2009] EWHC 577 (Ch)

CLAIM NO. HC 08 C00177

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

Venue Royal Courts of Justice, Strand, London, WC2A 2LL

Date 25 th March 2009

Bernard Livesey QC

Sitting as a Judge of the Chancery Division

B E T W E E N:

Between

LAND SECURITIES PLCClaimants

LS WILTON PLAZA LIMITEDClaimants

LS PARK HOUSE LIMITEDClaimants

FLADGATE FIELDER (A FIRM)Defendant

Mr Alan Steinfeld QC and Mr Tom Leech, instructed by Barlow Lyde & Gilbert LLP, of London EC3, acted for Defendants.

Mr Christopher Nugee QC and Mr Jonathan Evans, instructed by Linklaters LLP, London EC2, acted for Claimants.

JUDGMENT

Bernard Livesey QC:

[1]This is a claim by the claimants By consent the first claimant has been released from the action. In this judgment I will generally not differentiate between the various claimants except where there is a need to do so and will generally refer to the first claimant as “LS”. to recover damages in the region of £17 million on the grounds that the defendant (“Fladgate”) has committed against them the tort of abuse of process. In short, they allege that Fladgate made an objection to an application made by the claimants for planning permission to develop two properties, for the improper and collateral purpose of seeking to procure from the claimants a collateral benefit in money or money’s worth.

[2]In this application Fladgate seeks to strike out the claim under CPR 3.4(2)(a) on the grounds that it does not disclose a reasonable cause of action and under CPR 3.4(2)(b) on the grounds of abuse of process; alternatively it seeks summary judgment pursuant to CPR Part 24 (2). Background Facts in Brief:

[3]The background facts in brief are as follows: the claimants are companies in the well-known property group. The second and third claimants are subsidiaries of the first claimant (“LS”), and are engaged in property developments at Wilton Plaza Victoria, London, SW1 (“Wilton Plaza”) and at Park House in Oxford Street, London W1 respectively.

[4]Fladgate is a firm of solicitors whose principal offices are at 25 North Row, London W1, which it owns and occupies by virtue of a lease expiring in March 2013. North Row is perversely on the south side of, and parallel to, Oxford Street and Fladgate’s premises are directly opposite the proposed development site at Park House.

[5]By the end of 2005 Fladgate’s management committee had decided to make plans for the future expansion of the firm into larger and newer premises with a longer term. On the 10th January 2006 they gave instructions to property agents to take steps to arrange the disposal of the residue of their existing lease and find those other premises.

[6]Out of the blue, on or about the 6th February 2006, Fladgate received notice that application had been made by the third claimant for the demolition of Park House and the erection of a new building comprising two basements and 10 floors above ground level; the work of demolition and reconstruction was expected to take in the region of 3 years following which fitting out was to take place.

[7]The view taken by Fladgate was that this would be “three years of hell”; that the prospect would immediately affect adversely the marketability and value of the residue of their lease and would frustrate their plans for relocation; that the dust and noise would seriously damage the amenity of those working at the firm; and that its turnover could be reduced by anything up to 25% while the work was in progress. Fladgate has made no secret of the fact that, while the redevelopment of the site might have merit (and they had no hostility in principle to the proposed scheme) they were hostile to it taking place while they were adjacent to the works.

[8]The first step Fladgate took was to arrange for a planning partner to inspect the planning file in relation to Park House at Westminster Council’s offices. He there discovered that, in addition to the application by the third claimant in relation to Park House, the second claimant had on 13th August 2005 made an application for the development of land at Wilton Plaza, which he judged to have a link or connection with the Park House application. In an email entitled “Planning Objection – Strategic Issues” dated 22nd February 2006 to the Managing Partners he explained the link, stating so far as material as follows: “What I would like to discuss in particular tomorrow is the possibility of taking judicial review proceedings in the High Court in respect of the planning application for the redevelopment of Wilton Plaza Victoria. The link between this scheme and Park House concerns the issue of affordable housing. In brief a certain percentage (usually approximately 30 per cent) of affordable housing must be provided on site in connection with any residential development. Land Securities is proposing however that no affordable housing should be provided on site at Park House. Instead LS is intending to “over-provide” affordable housing at the Wilton Plaza development and get the Council to agree that the “over-provision” represents a credit which could be used to offset the failure to provide affordable housing on other Land Securities schemes, such as Park House.

I believe that we should give serious consideration to attacking this for the following reasons:

[1]The idea of an affordable housing credit is novel and I believe that there may be reasonable grounds for challenging this in the High Court;

[2]The concept is important in connection with the proposed development of Park House. If affordable housing will have to be provided on site at Park House the profitability of the scheme will be significantly affected.

[3]The idea of the affordable housing credit is strategically important for a developer such as Land Securities who would seek to use it in connection with other schemes also.

[4]It is an early shot across the bows of Land Securities and would give a firm signal of our intentions.” I believe that we should give serious consideration to attacking this for the following reasons:

[9]The notes which he attached to the email showed that he considered possible actions including making a planning objection to both Wilton Plaza and the Park House applications; that he thought a nuisance action was unlikely to succeed but would “cause delay and cost”. On the strategic front he considered that LS would ultimately get a consent if they persisted but could face potential problems from delay and changes to the plans which would make the development less valuable for Fladgate; he therefore thought there was a “need [to] persuade LS that (1) we can cause problems they can avoid.” A decision was made to put in a holding objection to the Park House application, to work up detailed objections on selected areas and present detailed objections to LS before submitting. It was his judgment that the assisted housing credit scheme was “key to Park House development and strategically important to LS generally”. The final point stated: “Note – Don’t collaborate with other objectors – makes deal more difficult”.

[10]Fladgate took advice from Mr Lockhart-Mummery QC who expressed the confident opinion that the approach of the claimants and the planners was “extraordinary” and advised on 13th March 2006 that the formulation of the land banking policy (which is later herein referred to as the “Credit Resolution”) was unlawful in that it was a policy formulated not as a general land use strategy but to benefit exclusively one individual and was anyway an unlawful departure from the established processes for making land use policy. He advised that an application for judicial review was appropriate. The Critical Meeting:

[11]On 31st March 2006 Fladgate arranged for a meeting to take place with a representative of the claimants at Fladgate’s offices on 5th April 2006 and sent them a copy of the Opinion of Leading Counsel “relating to the proposed development at Wilton Plaza, Victoria, which is linked to the Park House Scheme … in the hope that this will lead to a positive discussion when we get together.”

[12]A meeting took place on 5th April 2006 between Messrs Cohen, Harnett and Goreing of Fladgate and Mr Hussey of LS. It lasted some 20 or 30 minutes. It is an important meeting because what was said there lies at the heart of the claimants’ allegations in this case.

[13]It is pleaded in the Particulars of Claim that Mr Cohen, after referring to the feared impact on the defendant’s business of the proposed development:a. “Stated that the proposed development at Park House looked fine;

b. Wished the claimants well with [it];

c. Indicated that the defendant wished to relocate from its current premises at North Row;

d. Stated that the Defendant’s opposition to the Second Claimant’s application for planning permission in relation to Wilton Plaza was purely a business transaction;

e. Stated that the Defendant would do anything necessary to secure a move away from its current premises, including if necessary a challenge to the proposed development of Wilton Plaza;

f. Stated that the Defendant’s purpose in challenging the grant of planning permission for the development at Wilton Plaza was to delay that development and thereby possibly delay the Park House development;

g. Stated that, … the Defendant’s other option would be to object to the application for planning permission in relation to the Park House development and to be “very difficult all of the time”;

h. Stated that he saw the applications for planning permission made by the Second and Third Claimants as the Defendant’s best opportunity to force the Claimants to the negotiating table to effect a relocation of the Defendant’s business to alternative premises;

i. Stated that if the Claimants did not put forward a proposal to the Defendant within the next few days, the Defendant would make the matter public and would issue an application for judicial review.”

[14]Witness statements served by each side from those who attended the meeting show similarities to a significant degree but some differences, mainly of emphasis. There is one seemingly significant difference: Mr Cohen says:

“I also said that the firm was anticipating three years of “hell” while the development was under construction. Mr Hussey asked me what we wanted. I remember him saying “Do you want money?” to which I replied: “Absolutely not”

. I suggested that one way out would be for Land Securities to take an assignment of our lease. I said that this would enable us to “slip away” with Land Securities’ assistance. Otherwise an alternative would be to delay the development of Park House until the end of our lease in 2013. ………… Mr Goreing asked Mr Hussey if Land Securities had any stock in W1 (which would have enabled us to swap our existing building for other premises).”

[15]Mr Hussey appears not to agree entirely with this. He says:

“My view is that the financial co-operation they sought, whilst unidentified, was intended by them to go beyond assistance in their plans to relocate, although it was presented in part in that context. …… I believe that when they discovered that Land Securities were applying for planning permission to redevelop Park House in February 2006, Fladgate Fielder saw an opportunity to use the possibility of judicial review (and other tactics as in Mr Harnett’s note) as a weapon to force us to the negotiating table, with a view to assisting them to implement their plans by financial payment. In spite of Mr Cohen’s denials, I do think they were looking for a windfall.”

He added that he was “outraged” and that “[t]his outrage is fully shared by the Board …”

[16]There are three observations I wish to make in passing. The first is that it is not pleaded that Fladgate asked for payment of money: this accords with Mr Hussey’s statement. The suggestion advanced in Mr Hussey’s statement that that was “plainly what they had in mind”, while an interesting insight into the confidence he has in his ability to read other people’s minds, is not admissible evidence and if admitted is unlikely to carry weight.

[17]Secondly, what Mr Hussey is speculating is not merely that Fladgate wanted money but that they were seeking to turn a windfall – that is to say, to shuffle onto Land Securities not the losses to which they would be put by the arrival of the development but the normal expenses to which they would be exposed from extracting themselves from an expiring lease and finding other premises. There is no evidence of this and no sign in the documents disclosed to date that this was any part of Fladgate’s thinking.

[18]Thirdly, Mr Hussey and LS appear to display an outrage threshold which is rather lower than an outsider might expect of major players in the development industry. Ultimately, however, the test which the court must apply is not whether Mr Hussey and the claimants are outraged but whether the court is affronted by what was proposed. Subsequent events:

[19]The story of subsequent events can be shortly told. Fladgate communicated with Mr Hussey either directly or through the claimant’s planning solicitors on, inter alia, 21st and 24th April and 3rd and 11th May 2006; the language of each letter held out the hope that Fladgate would not have to issue proceedings and was prepared to meet with the claimants to seek a mutually satisfactory solution.

[20]On 19th May 2006 Fladgate issued an application, settled by leading and junior counsel, for permission to apply for judicial review of the planning consent for Wilton Plaza, on the ground that the passing of the Credit Resolution was unlawful.

[21]In serving its Summary Grounds of Opposition the second claimant disputed Fladgate’s entitlement to relief on the grounds that it was “acting out of ill-will or for some other improper purpose”. It specifically referred to the meeting on 5th April in the following terms “At a meeting on 6 [sic] April 2006 representatives of the Claimant [i.e. Fladgate] met with representatives of the Interested Party [i.e. LS Wilton Plaza] in connection with the threatened proceedings. Mr. Cohen, of [Fladgate], stated that the scheme looked fine and that this was simply a business transaction in that [Fladgate] wishes to move from its current location opposite Park House and sees this as an opportunity to negotiate some financial settlement with the Interested Party.” Fladgate rejected any impropriety by letter dated 23rd June 2006.

[22]On 5th July 2006 permission to apply for judicial review was granted unconditionally by Newman, J. who stated “It seems to me that the issue as to the legality of the Credit Resolution could be determined as a preliminary issue and that it is desirable that it should be determined before the Park House planning application is determined.”

[23]The third claimant responded to this development by withdrawing from its reliance on the “Credit Resolution”. It reported to Westminster Council that it would no longer seek to use the “credit” obtained as a result of the overprovision of residential space and affordable housing at the Wilton Plaza development for the Park House development and instead would make a financial payment to the Council’s affordable housing fund; on 21st July 2006 it proposed a payment of £5,769,000 to the fund. Having withdrawn the link, fresh applications for planning consent in respect of both properties were made.

[24]On 23rd August 2006 work began on site at Wilton Plaza pursuant to the original permission but on 30th October 2006 a fresh permission was sought and later granted. On the 10th November an amended planning application in respect of Park House was granted.

[25]On 13th February 2007 the defendant signed a consent order withdrawing its claim for judicial review in relation to Wilton Plaza.

[26]On 29th March 2007 the defendant was granted permission to apply for judicial review in relation to Park House. By an application validated on 4th September 2007 the third claimant made a further application for planning permission for the development of Park House; which was granted on 10th November 2007. Work of demolition on Park House commenced in 2008.

[27]By a letter of claim dated 9th February 2007, addressed to each partner in Fladgate personally, solicitors for the claimants intimated a claim for losses in the region of £17 million on the grounds that the partners who conducted the meeting with Mr Hussey on 5th April 2006 had “demonstrated the illegitimate motivation of the judicial review – driven by financial motives – not any concern as to the Wilton Plaza planning permission”. The letter continued:

“3.3 The partners of your firm are using the judicial review proceedings for an improper purpose, namely as an instrument of extortion/coercion to seek to procure that the partnership is paid substantial sums of money to move out of its current premises…… 3.4 Your firm has admitted (verbally and in writing) that it is not concerned whether the Wilton Plaza or Park House redevelopments actually go ahead……The partnership has used court actions, as an illegitimate means to advance its personal commercial interests. Not only does this constitute unprofessional conduct (in breach of Rule 1 of the Solicitors’ Practice Rules 1990 and Rule 1.08 of the Rules and Principles of Professional Conduct relating to behaviour outside a legal practice), but it also provides our clients with a cause of action in the tort of abuse of process of legal proceedings.”

The claimants’ allegations:

[28]Based upon the above facts the claimants claim substantial damages for the tort of abuse of civil process. The allegation is pleaded in this way:

“The Defendant threatened to issue and then issued and pursued two applications for judicial review of planning permissions obtained by the second and third claimants in respect of Wilton Plaza and Park House respectively. In so doing, the defendant sought to pressurise the claimants into making financial contributions and assisting it to relocate its business from its premises opposite Park House. The defendant was not motivated by concern about the lawfulness of the planning permissions and its purpose was not to prevent the developments from taking place, but rather to force the claimants to assist it to move. That objective was beyond the scope of the judicial review proceedings and amounted to an improper and collateral advantage. That conduct by the Defendant amounts to an abuse of civil process and is tortious.”

[29]The claimants draw attention to the fact that Wilton Plaza was in any event some distance away from Fladgate’s premises [about a couple of miles] and Fladgate could have had no interest in it; also, because Fladgate had never contended that either development would result in an actionable nuisance in respect of noise and disturbance, it was therefore improper to use the judicial review proceedings to obtain protection from alleged future disturbance of its use and enjoyment of its premises in circumstances where no such protection was available in the law of nuisance or otherwise.

Fladgate’s Applications:

[30]There are three applications by Fladgate before the Court: i. the tort of abuse of process does not exist; ii. if it does exist, it does not apply where the civil process takes the form of an application for judicial review; iii. if it does exist and applies to claims for judicial review, it applies only if the application for judicial review fails and the defendant had no reasonable or probable cause for bringing that application. b. Alternatively, an application to strike out pursuant to CPR 3.4(2)(b) on the basis that this action is itself an abuse of process on the issue estoppel and Henderson v. Henderson principles; c. An application for summary judgment on the basis that the claimants have no real prospect of succeeding on the facts at trial: CPR 24.2. i. whether there exists a separate tort of abuse of process; if so, ii. whether it applies to judicial review proceedings; and, if so, iii. whether it applies only if(i) the application fails or

(ii) the defendant had no reasonable or probable cause for bringing the proceedings.

[31]Mr Alan Steinfeld QC, who appeared for Fladgate, argueda. That there is no general tort of abuse of civil process, nor any separate tort of maliciously instituting civil proceedings or instituting proceedings to obtain a collateral advantage: see Gregory v Portsmouth City Council

[2000] 1 AC 419

at 426C-428E;

b. that the tort as defined in Grainger and the cases which followed it were limited to “ancillary” process within proceedings (as was pointed out by Clarke JA in Hanrahan v Ainsworth (1990) 22 NSWLR 73 at 107-112); the ‘rule’ therefore ought more appropriately to be called “abuse of process ancillary to a principal claim for relief”; it is described in Clerk & Lindell on Torts (19th Edn) at 16-46 as “Extortion under colour of process”;

c. that there is no modern decision in which the Court has followed Grainger or awarded damages for abuse of process;

d. That there is a need to distinguish the tort of abuse of process from the power of the court to stay proceedings on the grounds that they were being advanced in abuse of process;

e. that other cases in the English courts in which the so-called tort has been considered are merely decisions on the criteria which the courts will adopt for staying proceedings for abuse of process; these cases include the case of In re Majory

[1955] Ch 600

(which also fell into the abuse of ancillary process category); Goldsmith v Sperrings Ltd

[1977] 1 WLR 478

; Williams v Spautz

(1992) 174 CLR 509

f. That it is a necessary ingredient of the tort of abuse of process that the defendant has been guilty of using some process of the Court (not the pursuit of legal proceedings per se) as an instrument of oppression or extortion in order to obtain some collateral advantage or benefit from the claimant. Negotiations to settle or compromise the proceedings (either before or after issue) are not sufficient to sustain a claim in tort even if they involve canvassing a range of potential solutions which fall outside the scope of the proceedings;

g. that what constitutes “collateral advantage” needs to be read in the light of the observations of Scarman LJ and Bridge LJ in Goldsmith v Sperrings Ltd (ibid.);

h. that in any event, in order to found an action for damages in tort, the claimant must show that the defendant obtained a collateral benefit and as a consequence he or she suffered damage (as in Grainger). The bringing of civil proceedings themselves is not recognised as damage: see Gregory at 427H and Quartz Hill Gold Mining Co v Eyre

(1883) 11 QBD 673

at 690 per Bowen LJ who stated: “The bringing of an ordinary action does not as a natural or necessary consequence involve any injury to a man's property, for this reason, that the only costs which the law recognises, and for which it will compensate him, are the costs properly incurred in the action itself. For those the successful defendant will have been already compensated, so far as the law chooses to compensate him. If the judge refuses to give him costs, it is because he does not deserve them: if he deserves them, he will get them in the original action: if he does not deserve them, he ought not to get them in a subsequent action. Therefore the broad canon is true that in the present day, and according to our present law, the bringing of an ordinary action, however maliciously, and however great the want of reasonable and probable cause, will not support a subsequent action for malicious prosecution.”

i. that judicial review proceedings are different from other forms of legal process and the tort of abuse of process does not apply to them;

j. if, however, it does, it ought to be a requirement that the claimant prove that the proceedings were brought without probable cause and that they came to an end in a dismissal of the application.

The claimants’ response in brief:

[32]The claimants oppose the applications. Mr Christopher Nugee QC, who acts for the claimants, argues that the application cannot properly be dealt with summarily both because of the issues of fact arising in the case and because of the issues of law, which are difficult and should be determined in the usual way after the facts are found. The facts need to be found with the benefit of full disclosure, oral evidence and cross-examination; and the points of law which Fladgate wishes to argue should be decided at trial in the light of the facts as so found. This is not a suitable case for the Court to attempt to short-cut the procedure by deciding what are likely to be quite difficult points of law on the basis of assumed facts.

[33]As regards the issues of fact: he points out three areas where there are disputed facts;(i) as to what was said at the meeting on 5th April 2006;

(ii) whether Mr Hussey correctly understood the defendants at the meeting to be using the threat of judicial review to attempt to drive the claimants to do a deal with them under pressure; and

(iii) whether Fladgate’s predominant purpose was to pressurise the claimants into assisting them to relocate, or to prevent the development at Park House. The claimants say that none of them can sensibly be resolved on this application. Questions of what was said at an oral meeting, and what impression was thereby given or meant to be given, are classic cases of primary fact that require oral examination of witnesses. And questions of purpose, motive or intention are quintessentially questions for a trial judge with the benefit of full disclosure and cross-examination.

[34]As regards the issues of law: here too the long-established practice of the Court is to decline to hear preliminary issues where the law is unclear (see eg Tilling v Whiteman

[1980] AC 1

, 17, 25 (“too often treacherous short cuts”) and Allen v Gulf Oil Refining

[1981] 1 AC 1001

, 1010) or in an area of developing jurisprudence as decisions as to novel points of law should be based on actual findings of fact: see Equitable Life Assurance Society v Ernst & Young

[2003] EWCA Civ 1114

at paragraph [40].

[35]As regards the tort of abuse of process: Mr Nugee QC argues that it is plain that the tort does exist. It was first recognised in the case of Grainger v Hill & Another (1838) 4 Bing. (N.C.) 211; the continued existence of the tort is recognised in all the major textbooks: see Halsbury’s Laws vol 45(2) at para 501; Clerk & Lindsell (19th Edn) at paragraph 16-45; Fleming (9th Edn) at page 687; Street (12th Edn) at page 582, Winfield (17th Edn) at paragraph 19-13. More importantly, he says, the tort has been recognised in modern times by the Court of Appeal and in both Australia and New Zealand.

[36]He argues that it does apply to judicial review; there is no reason why it should not, no reason to put judicial review into a separate category, as these proceedings can just as easily be used to apply pressure to another person and are equally susceptible to abuse: see R. (Feakins) v SSEFRA

[2003] EWCA Civ. 1546

[37]Nor is it necessary to show that the judicial review failed or lack of reasonable and probable cause: Grainger v Hill(supra) was itself authority for the proposition that neither of these elements need be proven. The point was re-stated by the Court of Appeal in Metall & Rohstoff at 469D-E. This lies at the heart of the distinction discussed in the cases between the tort and an action for malicious prosecution. First question – should the court decline to rule on the applications?

[38]In my judgment the claimants are making too much of the disputed issues of fact. In relation to the application to strike out, it is plain that I must take the allegations in the Particulars of Claim as they stand and assume that they are true. In relation to the application for summary judgment I must bear in mind three factors. The first is that I have not seen or heard the witnesses and therefore cannot make findings of fact. Secondly, the documentation which has been put before me is not as a result of a disclosure process: the documents are those which the parties have respectively chosen to put before me because they support their case on this application. Thirdly, the witness statements are from witnesses who have not been cross examined on disclosure (which has in any event not been given). Even without any suppressio veri or suggestio falsi (and I suggest neither) there could well be an element of self-serving or partisanship involved in the selection of which papers to put in evidence at this stage or in the giving of written evidence, especially as to matters difficult to rebut such as what the party’s intentions were.

[39]It is clear that the court should not conduct a mini-trial but it is not bound to accept every assertion of fact made by a party: see ED&F Man Liquid Products Ltd v Patel[2003]EWCA Civ 471 at [10]. The result is that on this application, although I can ‘take a view’, I can only reject a material allegation by the claimants if I am satisfied that it is one that can not realistically be sustained.

[40]Having been taken through the documentary and written evidence of the parties in some detail, I have come to the conclusion that there are in reality virtually no issues of fact which need to be determined before the issue of law at the heart of this application is considered. In particular, I do not believe that it matters, for the purposes of this application, whether the representations by Fladgate to Mr Hussey, and the proceedings which were instituted, were made or instituted for the purposes of getting money from the claimants’ pocket or benefits in kind of the sort which Mr Cohen described, which could be procured only at a cost to the claimants equivalent to the money which Mr Hussey surmised the claimants were being requested to provide. What appears plain is that Fladgate saw that it had a valuable negotiating position vis a vis the claimants and sought to use it to assist to get relocated and that it intended that the assistance should be at some material cost to the claimants and of financial benefit to themselves: it is fair to assume for the purposes of this application that it was this purpose which was driving their actions. It may also have had the additional intention, in the event that it did not reach satisfactory terms with the claimants, to oppose the application to delay it, but I do not have this in mind for the purposes of considering the applications.

[41]In the result, I am of the view that the need to try issues of fact is not a sound ground in this case for refusing to deal with the applications on the merits.

[42]As regards Mr Nugee’s point in relation to the law: I of course take from the speech of Lord Browne-Wilkinson in X. v Bedfordshire County Council

[1995] 2 AC 633

, and other like observations, the undesirability of making summary decisions to strike out claims where the law is unclear. As will appear, I have for this reason found myself unable to strike out the claim pursuant to the application under CPR 3.4(2)(a): see for example at paragraph 66 below. I accept that the resolution of the disputed issues of law may more easily be performed in the Court of Appeal, to which it will appear this judgment will head as soon as it has been given – which ever way I decide.

[43]However, none of this will absolve me from the duty to consider whether summary judgment should be given at this stage for any failure of the pleaded case and supporting evidence to fulfil each of those ingredients of the tort as to which, if it exists at all, it is accepted that the ingredient is an essential component. It does of course go without saying that I am able to give summary judgment only where I conclude that the party against whom it is given does not have a realistic prospect of successfully arguing the contrary case.

The Tort of Abuse of Process – the main authorities:

[44]The factual background of Grainger v Hill (1838) 4 Bing. (N.C.) 211 was a loan, made by the defendants to the plaintiff, who was the “master and proprietor of a certain smack or vessel”, in the sum of £80 on the security of the vessel and repayable in a year, the plaintiff meanwhile being entitled to retain the register of the vessel in order to pursue his voyages. After two months the defendants, “under some apprehension as to the sufficiency of their security, resolved to possess themselves of the ship’s register, and for this purpose, made an affidavit of debt, sued out a capias ad respondendum indorsed for bail … in an action of assumpsit and sent two sheriff’s officers with the writ to the plaintiff who was lying ill in bed from the effects of a wound. … the officers then told the plaintiff that they had not come to take him, but to get the ship’s register; but that if he failed to deliver the register, or to find bail, they must either take him or leave one of the officers with him. The plaintiff being unable to procure bail, and being much alarmed, gave up the register” – without which of course he could not go to sea and suffered loss.

[45]In an action for damages alleging a number of different causes of action a verdict was given for the plaintiff. The defendants moved to enter a nonsuit on two grounds, the one relevant for our purposes being a contention that the claim could not succeed without proof that the action of assumpsit had determined. The court rejected the defendant’s arguments. I set out what each member of the court stated in giving judgment: Tindal CJ. “… this is an action for abusing the process of the law, by applying it to extort property from the plaintiff, and not an action for a malicious arrest or malicious prosecution, in order to support which action the termination of the previous proceedings must be proved, and the absence of reasonable and probable cause be alleged as well as proved. In the case of a malicious arrest, the sheriff at least is instructed to pursue the exigency of the writ: here the directions given, to compel the plaintiff to yield up the register, were no part of the duty enjoined by the writ. If the course pursued by the defendants is such that there is no precedent of a similar transaction, the plaintiff’s remedy is by an action on the case, applicable to such new and special circumstances; and his complaint being that the process of the law has been abused, to effect an object not within the scope of the process, it is immaterial whether the suit which that process commenced has been determined or not, or whether or not it was founded on reasonable and probable cause.” Park J. “I am of the same opinion. … this is a case of primae impressionis, in which the defendants are charged with having abused the process of the law, in order to obtain property to which they had no colour of title; and if an action on the case be the remedy applicable to a new species of injury, the declaration and proof must be according to the particular circumstances.” Vaughan J. “…. It is an action for abusing the process of law, by employing it to extort property to which the defendants had no right: that is of itself a sufficient cause of action, without alleging that there was no reasonable or probable cause for the suit itself. …” Bosanquet J. “… This is not an action for a malicious arrest or prosecution, or for maliciously doing that which the law allows to be done: the process was enforced for an ulterior purpose; to obtain property by duress to which the defendants had no right. The action is not for maliciously putting process in force, but for maliciously abusing the process of the court.”

[46]Mr Alan Steinfeld QC for Fladgate drew my attention to the fact that the writ of capias was a writ of execution within the action on assumpsit. The writ of capias would have been obtained ex parte to enable the debtor to be arrested by the sheriff so that he did not flee the jurisdiction thereby to defeat the creditor’s remedy – it was not designed to enable the creditor to abstract property from the debtor, especially property which the creditor had no right to take under that or any other form of process. It is also relevant to note that in the assumpsit, it was the allegation of the plaintiff that the whole proceedings were instituted falsely and maliciously: he could not expect relief on this ground, however, because there had not at the time of his claim been a final determination of the assumpsit.

[47]The case was followed in Gilding v Eyre (1861) 10 C.B., N.S. 592 where the defendant had secured the issue of a regular writ of execution (capias ad respondendum) and used it to extort money which he knew had already been paid and was no longer due on the judgment. Willes J. observed that: “… his yielding (in order to obtain his liberty) to the extortion practised upon him, not by the act of the court, but by the act of the defendant, cannot deprive him of his legal remedy for the wrong he has sustained”.

[48]In Parton v Hill

(1864) 10 LT 414

the action failed because, on the one hand, it had been alleged that a writ of attachment had been obtained falsely and maliciously but the action on the debt had not been determined; on the other hand it had not been alleged that the attachment had been obtained for a collateral and improper purpose.

[49]These were the main cases where the action was brought to trial and judgment on the basis of the tort of abuse of process. In this section, however, I propose to refer to and quote from some of the authorities to which my attention was drawn which I have taken into account in reaching my conclusion. It will be apparent that in many of these cases the issue was not whether the tort had been committed but whether the action before the court could and should be stayed on the basis of an abuse by a party of the process of the court.

[50]In re Majory

[1955] Ch 600

was a case where a debtor sought a stay of the proceedings on the ground that the creditor had abused the process. He had visited the creditor’s solicitors and offered to pay the debt and all the costs which the creditor had had to incur. The creditor obtained judgment and threatened to institute bankruptcy proceedings if the payment was not made in three instalments including costs of £21 which were £8 15s more than the costs awarded in the judgment. The debtor disputed the petition on the ground that the creditor had attempted in connection with the proceedings to extort £8 15s from the debtor in excess of the sums lawfully due. Lord Evershed M.R. was not so much defining the bounds of the tort as what constituted abuse of process for the purposes of obtaining a stay of process in bankruptcy proceedings when he observed: (3) The so-called ’rule’ in bankruptcy is, in truth, no more than an application of a more general rule that court proceedings may not be used or threatened for the purpose of obtaining for the person so using or threatening them some collateral advantage to himself, and not for the purpose for which such proceedings are properly designed and exist; and a party so using or threatening proceedings will be liable to be held guilty of abusing the process of the court and therefore disqualified from invoking the powers of the court by proceedings he has abused. (4) On the other hand, having regard to what Jenkins L.J. called “the potent instrument of oppression” which bankruptcy proceedings (with their potential consequences upon property and status) provide, the court will always look strictly at the conduct of a creditor using or threatening such proceedings; and if it concludes that the creditor has used or threatened the proceedings at all oppressively, for example, in order to obtain some payment or promise from the debtor or some other collateral advantage to himself properly attributable to the use of the threat, the court will not hesitate to declare the creditor’s conduct extortionate and will not allow him to make use of the process which he has abused. The Court of Appeal in that case did not however regard the demand of the creditor to be unacceptable conduct because the demand for costs had been made prior to the issue of the petition.

[51]Goldsmith v Sperrings Ltd

[1977] 1 WLR 478

concerned the well-known dispute between Sir James Goldsmith and Private Eye. In addition to suing Private Eye and the publishers for defamation, he issued 74 writs against 37 secondary wholesale and retail distributors of the paper. Sixteen of the distributors reached settlements with the plaintiff on terms, in effect, that the actions were discontinued with no order for costs upon their undertaking to cease handling the paper. The balance of the distributors applied for an order that the actions against them should be stayed or dismissed as an abuse of the process of the court in that the plaintiff’s purpose in pursuing the actions against the distributors was said not to be to protect his reputation but the collateral purpose of destroying Private Eye by cutting off its retail outlets.

[52]Stocker J. refused a stay and the distributors appealed. The appeal was dismissed by Scarman and Bridge LJJ, Lord Denning M.R. dissenting on his different view of the facts. The judgments are of interest not merely for their support (in the speech of Lord Denning) for the existence of the tort but also for the discussion (particularly in the judgments of Scarman and Bridge LJJ) of what is meant by the term “collateral purpose” or “collateral advantage”.

[53]Lord Denning said at page 489G-H:

“In a civilised society, legal process is the machinery for keeping and doing justice. It can be used properly or it can be abused. It is used properly when it is invoked for the vindication of men’s rights or the enforcement of just claims. It is abused when it is diverted from its true course so as to serve extortion or oppression: or to exert pressure so as to achieve an improper end. When it is so abused, it is a tort, a wrong known to the law. The judges can and will intervene to stop it. They will stay the legal process, if they can before any harm is done. If they cannot stop it in time, and harm is done, they will give damages against the wrongdoer.”

And at 489C:

“On the face of it, in any particular case, the legal process may appear to be entirely proper and correct. What may make it wrongful is the purpose for which it is used. If it is done in order to exert pressure so as to achieve an end which is improper in itself, then it is a wrong known to the law. This appears distinctly from the case which founded this tort. It is Grainger v Hill …”

[54]Scarman LJ observed (at page 498F-499A): “… the question can be shortly put and answered. If Sir James Goldsmith’s purpose in initiating or pursuing his actions against the secondary distributors be to destroy “Private Eye”, namely, to use his wealth so as to suppress it, he is abusing the process of the court. Neither wealth nor power entitles a man to censor the press. If, however, his purpose be to vindicate and protect his reputation, the use of all remedies afforded him by the law for that purpose cannot be an abuse of the court’s process. … In the instant proceedings the defendants have to show that the plaintiff has an ulterior motive, seeks a collateral advantage for himself beyond what the law offers, is reaching out “to effect an object not within the scope of the process”: Grainger v Hill. In a phrase, the plaintiff’s purpose has to be shown to be not that which the law by granting a remedy offers to fulfil, but one which the law does not recognise as a legitimate use of the remedy sought: see In re Majory”.

[55]Dealing with his disagreement with the opinion of Lord Denning, Scarman LJ stated (at page 499G):

“[Lord Denning] does appear to me to attach critical importance to two matters, which, in my judgment do not bear out his conclusion. First, he observes - truly enough - that the law offers to a defamed plaintiff no more than damages and an injunction to prevent publication of the libel or similar libels. He concludes that a plaintiff who seeks, or by way of settlement is pleased to take, more than these two remedies is abusing the process of the court. The logic is superficially attractive; but the conclusion is suspect. Men go to law to redress a grievance. They may not know or understand the limits of the remedies provided by law - though no one suggests that Sir James Goldsmith’s advisers could be said to suffer from ignorance of the law. But, equally, a man, while pursuing the remedies offered by law, may negotiate to secure, by arrangement with the parties sued, terms more favourable than, or different from, what he would get in the absence of agreement. Such a negotiation, undertaken by properly advised parties, each of whom may have a legitimate interest in avoiding litigation and may be prepared to concede more than the law requires of them to achieve that end, does not necessarily mean that the plaintiff by his litigation is reaching out to secure a collateral advantage.”

[56]After quoting the dictum of Lord Evershed M.R. in In re Majory, Bridge LJ continued (at page 503D):

“For the purpose of Lord Evershed’s general rule, what is meant by a “collateral advantage”? The phrase manifestly cannot embrace every advantage sought or obtained by a litigant which it is beyond the court’s power to grant him. Actions are settled quite properly every day on terms which a court could not itself impose upon an unwilling defendant. An apology in libel, an agreement to adhere to a contract of which the court could not order specific performance, an agreement after obstruction of an existing right of way to grant an alternative right of way over the defendant’s land – these are a few obvious examples of such proper settlements. In my judgment, one can certainly go so far as to say that when a litigant sues to redress a grievance no object which he may seek to obtain can be condemned as a collateral advantage if it is reasonably related to the provision of some form of redress for that grievance. On the other hand, if is can be shown that a litigant is pursuing an ulterior purpose unrelated to the subject matter of the litigation and that, but for his ulterior purpose, he would not have commenced proceedings at all, that is an abuse of process. These two cases are plain; but there is, I think, a difficult area in between. What if a litigant with a genuine cause of action, which he would wish to pursue in any event, can be shown also to have an ulterior purpose in view as a desired by-product of the litigation? Can he on that ground be debarred from proceeding? I very much doubt it. But on the view I take of the facts in this case the question does not arise and it is neither necessary nor desirable to try to lay down a precise criterion in the abstract.”

[57]In Speed Seal Products Ltd v Paddington

[1983] 1 WLR 1327

, the Court of Appeal permitted a defendant to a claim for an injunction to amend his defence to plead “abuse of process”. The particulars alleged that the plaintiff had falsely started the action without any bona fide belief in its chance of success, that it intended to use and did use the existence of the action as a weapon to persuade the defendants’ potential customers not to deal with them and the defendants have suffered and were still suffering serious damage as a result. In relation to the amendment Fox, LJ stated at 1335H “It seems to me that if the allegations of fact pleaded in the draft counterclaim are established at trial, the decision in Grainger v. Hill provides a basis for an arguable case that there has been an actionable abuse of the process of the court. I express no view as to the strength of the defendants’ case. It is enough to say that a sufficiently arguable case has been justified to amend the defence by adding a counterclaim as asked. It will be open to the defendants to support it by such arguments as may be available, whether based on Grainger v. Hill or not.”

[58]InMetall & Rohstoff A.G. v Donaldson Lufkin & Jenrette Inc

[1990] 1 QB 391

a number of causes of action were alleged including the commission by the defendant of the tort of abuse of process; the allegation was that the defendant had adduced false evidence and submitted a false case for the purposes of sustaining his own claim and defeating his opponent’s claim. The claim was struck out on the grounds that this did not accord with the ingredients of the tort. In his judgment Slade LJ set out what he conceived to be the ingredients of the tort (at 469C-F): “…. certain features of the legal constituents of the tort as appearing from the judgments in Grainger v. Hill must be noted, namely: (1) It consists of an abuse of the process of the law "to effect an object not within the scope of the process:"…..(2) Since this is the nature of the tort, the plaintiff does not have to show that the suit in question has terminated in his favour:….(3) Neither does he have to show want of reasonable and probable cause for it:…..(4) However, a person alleging such an abuse must show that the predominant purpose of the other party in using the legal process has been one other than that for which it was designed and that as a result he had caused him damage: see Halsbury’s Laws of England 4th Ed., vol 45 (1985) para. 1318 On the particular facts of Grainger v. Hill, 4 Bing. N.C. 212, the last condition was satisfied. The process in question consisted of the swearing by the defendants of an affidavit of debt, the obtaining of a writ of capias, the sending in of two sheriff's officers with the writ to the plaintiff and the plaintiff's arrest. The purpose for which the process was originally designed was manifestly the recovery of a due debt. The purpose for which it was actually used, on the facts of that case, was the extortion of a ship's register belonging to the plaintiff to which the defendants had no right."

[59]Metall & Rohstoff was followed by, and cited in, Hanrahan v Ainsworth [1990] 22 NSWLR 73 which is notable for the judgment of Clarke JA who set out, at page 112, five propositions which he thought could be deduced from the cases, the first of which was the proposition that the tort applied only where the process which was abused was process ancillary to the main claim. He then added, at letter D: “I have confined the first proposition to ancillary process because each of the cases dealt with that type of process. While none of them dealt with principal process it is possible to conceive of a claim arising from principal proceedings, whether civil or criminal, where, for instance, a person seeks to use those proceedings as a means of extorting moneys to which he is not entitled from the defendant, but in those circumstances the loss would flow from, and the claim be based on, the attempt to extort (that is, the putting of the pending proceedings to an improper use).

[60]In Williams v Spautz [1991-2] 174 C.L.R. 509 the court was concerned with an appeal by a lecturer from the stay by the court of criminal prosecutions. He had an employment dispute with his university and had laid a number of informations against various officers of the university alleging a number of offences, including criminal conspiracy to defame and injure him without justification and by illegal means. The trial judge made a finding that the lecturer’s predominant purpose in instituting and maintaining the criminal proceedings was to exert pressure on the university to reinstate him or to agree to a favourable settlement of his claim for wrongful dismissal and stayed the actions on the grounds of abuse of process. Unsurprisingly the lecturer’s appeal was dismissed. DISCUSSION:

[61]In Gelding v Eyre (1861) 10 C.B., N.S. 592 the rule was very clearly laid down by Willes J. that “[N]o one shall be allowed to allege of a still depending suit, that it is unjust. This can only be decided by a judicial determination, or other final event of the suit in the regular course of it”.

[62]The rule lies at the heart of the requirement in cases of malicious prosecution that the claimant must prove that the prosecution was brought to a conclusion in his favour.

[63]In Gregory v Portsmouth City Council

[2000] 1 AC 419

the plaintiff sought to argue that the tort of malicious prosecution should be available just as much where he was subjected to a civil disciplinary process as it would had he been subjected to a criminal prosecution. The House of Lords refused to extend the tort to cover civil proceedings.

[64]There are however torts for maliciously and without any reasonable or probable cause procuring a plaintiff to be arrested (see Daniels v Fielding (1864) 16 M. & W. 200 and Roy v Prior

[1971] AC 470

); a plaintiff to be adjudicated bankrupt (Johnson v Emerson (1871) L.R. 6 Exch. 329); a search warrant to be issued and executed against a person (see Gibbs v Rea

[1998] AC 786

PC). And wherever it is of the essence of the tort that the process was procured maliciously and without reasonable or probable cause it is a requirement that the proceedings should have been brought to a conclusion in favour of the claimant.

[65]It remains the case, after Gregory, that there is no general tort of maliciously instituting civil proceedings. There is however the tort of abuse of process, as first formulated in the case of Grainger v Hill and in this tort it is not necessary to prove malice, nor want of reasonable and probable cause nor that the proceedings were terminated, let alone in favour of the plaintiff. Contrary to Mr Steinfeld’s submission that the tort has fallen into desuetude and no longer exists, I have concluded that the tort does still exist and, if it does not, it should be the Court of Appeal who declares this to be the case and not me.

[66]Grainger v Hill was indeed, as Mr Steinfeld stresses, a case involving the abuse of mesne or ancillary process and where the process was abused in order to extort property from the person against whom the ancillary process was directed. Indeed, it is evident that most of the cases in which the courts have determined that there has been an abuse have involved actual or threatened extortion of property, either under threat of issue, or by misuse, of writs or other process which in proper use would authorise and legitimise what would otherwise be an unlawful deprivation of liberty, seizure of property, interference with credit, status, good name and freedom; or have involved the threat of issue or use of process for the prosecution of persons for supposed criminal offences or for rendering a person bankrupt, usually for the financial benefit of the person misusing the process.

[67]Mr Steinfeld may be right in arguing that the tort should be limited to cases where ancillary, rather than originating, process is involved; he may also be right in submitting that the commission of the tort ought truly to require some element of extortion, oppression or pressure to achieve an improper object. However, some of the authorities to which my attention has been drawn Such as per Lord Denning MR in Goldsmith (supra); Fox, LJ. in Speed Seal Products(supra); Slade, LJ. in Metall & Rohstoff (supra) and Clarke JA in Hanrahan (supra). have not expressly so limited the ambit of the tort and it does not seem to me that I am the appropriate person to substitute these limitations where judges of the Court of Appeal here and in the Commonwealth have contemplated the formulation of the tort without imposing such limitations. In so far as it is arguable that the tort should not be so limited it seems to me that I cannot strike out under CPR 3.4(2)(a) or dismiss the action under CPR 24.2 for its failure to present itself factually in accordance with the limitations which Mr Steinfeld urges me to impose.

[68]I think that there is merit in Mr Steinfeld’s submissions in relation to the loss and damage recoverable in such an action. If the collateral purpose was the extortion of money or other property, the damages recoverable should be the value of the property in question and consequential losses. Fladgate argues that even if it were the case that its collateral purpose had been to attempt to extort money from the claimants, it was an attempt which failed and therefore no damages are recoverable. On the other hand, the claimants would say that if the collateral purpose was the infliction of unwarranted loss and damage on the claimant, the claimant should be entitled to recover compensation for his losses. It has not been distinctly alleged that the collateral purpose was to inflict loss (rather than secure a financial benefit), but since there has not been a detailed enquiry into the loss and damage claimed in this case and no detailed argument on the scope of recovery under the tort, it may not be appropriate to consider the issue further and would be inappropriate to found a decision on it.

[69]In my judgment Mr Steinfeld is not right in arguing that the tort cannot apply to proceedings for judicial review. It is true that such proceedings are different in a number of respects from other forms of civil legal process where the claimant brings an action against the defendant in order to enforce directly his private law rights. As was pointed out by the claimants, Fladgate does not have any private law rights arising out of the claimants’ application for planning permission or from the grant by the Council of permission. Assuming for a moment that it were the case that Fladgate’s lease became unassignable and it sustained the substantial losses about which its partners speak, the claimants would have the entitlement to proceed with the development and make such planning gain for themselves as the property market might allow with impunity and without consideration of the infliction of any losses Fladgate might sustain - which the firm would simply have to put up with and put down to being in the wrong property at the wrong time.

[70]In the planning regulatory system, however, in place of a private right of action vested in the owner of an affected property, there has been provided a system of public law remedies to provide such level of protection as the policy of the law deems to be appropriate to persons with property interests which will be affected by permission to develop neighbouring land. The system includes the setting out of a planning policy and framework and mechanisms for enabling representations from the public in general and neighbouring owners in particular to be taken into account by those who make the decision; importantly there has been provided the remedy of judicial review if it should appear that a decision adverse to either party has been made on a basis which is irrational or contrary to the provisions of the law, public policy and natural justice.

[71]Where it is a neighbouring owner who is aggrieved at the prospect of a development close to his premises, the application for judicial review is made against the public body in question “ex parte” the applicant. It is beyond doubt that an applicant is entitled to base his objections on such technical ground as he may find he is able to establish – whatever he may personally think of the merit of the point he is making. It is beyond doubt that in order to have a locus standi the applicant must have a valid interest in the planning decision in question and a good ground of appeal. The fact that a person owns neighbouring property which is likely to be affected in any way, is likely to provide him with the locus he needs to pursue such proceedings. The developer may find the need to respond to the applicant’s objections to be an inconvenient expense and a nuisance but that in my judgment is merely “sauce for the gander”. The developer’s protection from abuse lies in the fact that no application is allowed to proceed until it has passed a threshold requirement of permission as determined by the single judge.

[72]It appeared at first sight as though the claimants might be alleging that Fladgate had no interest or justification in taking issue with the planning application in relation to Park House, bearing in mind that they admitted they had nothing against the proposed development in principle. If this was so, I do not agree with the proposition. I see nothing inconsistent in the fact that Fladgate might on the one hand have been of the view that the development was an intrinsically admirable thing, but something to which they would strongly object while they were occupying premises directly opposite because of its negative impact on the firm in terms of the reduction in value of its own property and diminution in enjoyment of the premises during the works.

[73]In fact, the essence of the claimants’ main contention was based on a fairly narrow basis: that Fladgate had no business taking proceedings to overturn the permission granted for the Wilton Plaza development at Victoria, as it was some 2 miles away from their premises and the Credit Resolution can have meant little to them in principle. However, there is overwhelming evidence that the permission for Wilton Plaza, and the Credit Resolution supporting it, was an essential link in the planning application for Park House, as explained in paragraphs 8 and 10 of this judgment. It logically followed, I suggested during argument, that there was nothing more natural than that Fladgate should defend its premises by directing the attack to Wilton Plaza and the Credit Resolution in particular. Mr Nugee QC in those circumstances fell back on the argument that Fladgate was none-the-less pursuing the judicial review for a collateral purpose because the attack they made in the judicial review proceedings was against the “Credit Resolution” policy and that was a policy in which it had no high-minded intrinsic interest, their own interest being the collateral purpose of extracting benefit from the claimants.

Improper/Collateral Purpose/Collateral Advantage:

[74]At the heart of this case is the question whether Fladgate was acting for an improper collateral purpose or collateral advantage.

[75]This element of the tort has been set out in different ways by different judges in the various authorities since Grainger v Hill. It may help to set them out seriatim: For the collation of which my thanks go to Mr Jonathan Evans of counsel. Grainger v. Hill(1838) 4 Bing N.C. 212:

“to effect an object not within the scope of the process” (per Tindal CJ at 221); “for an ulterior purpose” (per Bosanquet J at 224) Varawa v Howard Smith Co Ltd [1911] HCA 46 : “for purposes foreign to the scope of the process itself” (per Griffith CJ at page 7); “for some purpose other than the attainment of the claim in the action … merely a stalking horse to coerce the defendant in some way entirely outside the ambit of the legal claim upon which the Court is asked to adjudicate” (per Isaacs J at page 26) Dowling v The Colonial Mutual Life Assurance Society Ltd[1915] HCA 56: “some collateral object extraneous to the purpose of the insolvency law” (per Griffith CJ at page 2); “foreign to the nature of the process” (per Isaacs J at page 5) In Re Majory[1955] Ch 600: “for the purpose of obtaining some collateral advantage to himself, and not for the purpose for which such proceedings are properly designed and exist” (per Evershed MR at 623-4) Goldsmith v. Sperrings Ltd[1977] 1 WLR 478: “diverted from its true course so as to serve extortion or oppression: or to exert pressure so as to achieve an improper end” (per Lord Denning MR at 489); “has an ulterior motive, seeks a collateral advantage for himself beyond what the law offers, is reaching out “to effect an object not within the scope of the process … not that which the law by granting a remedy offers to fulfil, but one which the law does not recognise as a legitimate use of the remedy sought” (per Scarman LJ at 488-9); “an ulterior purpose unrelated to the subject matter of the litigation” (per Bridge LJ at 503 American Restatement, Torts, 2d s.682 (quoted in eg Speed Seal, per Fox LJ at 1335): “primarily to accomplish a purpose for which it is not designed”

Metall & Rohstoff A.G. v. Donaldson Lufkin & Jenrette Inc

[1990] 1 QB 391

: “predominant purpose … in using the legal process [was] other than that for which it was designed” (per Slade LJ at 469F) Hanrahan v. Ainsworth(1990) 22 NSWLR 73: “using court process for an ulterior purpose, that is, for a purpose not within the scope of such process” (per Kirby P at 96C); “used to effect an object not within the scope of the process” (per Clarke JA at 112B) Williams v. Spautz

(1992) 174 CLR 509

: “for a purpose or to effect an object beyond that which the legal process offers” (per Mason CJ, Dawson, Toohey, McHugh JJ at 523); “to use them as a means of obtaining some advantage for which they are not designed or some advantage beyond what the law offers” (per Mason CJ, Dawson, Toohey, McHugh JJ at 526-7)

[76]Superficially these might appear to be very similar formulations of the same test but they are in fact rather different. Lord Denning in Goldsmith v Sperrings Ltd(“so as to serve extortion or oppression: or to exert pressure so as to achieve an improper end”) would appear to require rather more than Tindal CJ in Grainger v Hill itself (“to effect an object not within the scope of the process”) until one remembers that Grainger was itself a case of extortion and oppression and the exertion of pressure to achieve an end which was grossly improper, the end being what the court recognised as the conversion of property under compulsion. At the other end of the scale is the formulation of Bridge, LJ., (“an ulterior purpose unrelated to the subject matter of the litigation”) where the degree of relationship to the subject matter of the litigation can be to a greater or lesser degree.

[77]In Williams v Spautz (ibid.) Brennan J. referred to the cases of King v Henderson and Dowling v Colonial Mutual Life Assurance Society and observed that “The pursuit of a legitimate remedy is not converted to an abuse of process by an unworthy and ulterior motive” … and “In a given case, a distinction may have to be drawn between the purpose of the proceedings and the motive of the plaintiff in commencing or maintaining it. That distinction depends on a disparity between the plaintiff’s intention and the plaintiff’s motives. Intention relates to the result which the plaintiff desires to obtain by commencing or maintaining the proceeding; motive relates to all the considerations which move that party to commence or maintain the proceeding. The desired result is no doubt an element of the moving considerations, but it does not exhaust those considerations. ….. In a case where a plaintiff intends to obtain relief within the scope of the remedy available in a proceeding, there is no abuse of process whatever the plaintiff’s motives might be.” And after referring to Dowling(ibid.) he added “There is no impropriety of purpose (whatever may be said of motive) when a plaintiff commences or maintains a proceeding desiring to obtain a result within the scope of the remedy, even though the plaintiff has an ulterior purpose – or motive – which will be fulfilled in consequence of obtaining the legal remedy which the proceeding is intended to produce. To amount to an abuse of process, the commencement or maintenance of the proceeding must be for a purpose which does not include – at least to any substantial extent – the purpose of relief within the scope of the remedy.”

[78]It is at this point that the observations of Scarman and Bridge LJJ., set out at paragraphs 53 and 54 above, assume importance and I refer back to them. After considering those observations Brennan J. continued:

“I respectfully adopt the phrase “reasonable relationship” to formulate a test similar to (though it may not be identical with) the test propounded by Bridge L.J. in this passage. I would formulate the test in this way: if there be a reasonable relationship between the result intended by the plaintiff and the scope of the remedy available in the proceeding, there is no abuse of process. ….. For these reasons I would hold that an abuse of process occurs when the only substantial intention of a plaintiff is to obtain an advantage or other benefit, to impose a burden or to create a situation that is not reasonably related to a verdict that might be returned or an order that might be made in the proceeding.”

[79]Nor do these observations stand on their own. I have regard also to the observations of Auld LJ in R (Mount Cook Land Ltd) v Westminster CC

[2004] 2 P&CR 405

. It was a case where Mount Cook (“MC”) was the owner of a freehold building in Oxford Street and Redevco was the tenant under a 999 year lease. Redevco had applied for planning permission for a number of relatively minor physical external alterations to the building. MC objected to the application. It was motivated to do so because it had substantial property interest in the area and would have liked to acquire Redevco’s lease in order to develop the building for its own purposes. MC objected to the planning application but it was granted. MC therefore applied for permission to claim judicial review which was refused with costs: MC appealed. The application for judicial review was dismissed on the merits but the Court of Appeal went on to consider a submission that relief should be refused because of the motives of MC. At paragraph [5] of the judgment Auld LJ stated:

“It is common ground that Mount Cook has sought to bring pressure on Redevco to yield to its development ambitions by reliance on its entitlement under the lease to refuse to consent to alterations in the Building that Redevco sought to make and by objecting to various applications by Redevco for planning permission. As to the former, Redevco succeeded on December 3, 2002 in obtaining from Mr. Paul Morgan QC, sitting as a Deputy Judge of the High Court, declarations that Mount Cook’s refusals of consent were unreasonable and that Redevco was entitled to make alterations without its consent:…..On the planning front, Mount Cook has objected to at least three planning applications in respect of the Building.”

[80]Despite this common ground the Court of Appeal would not have refused relief on this ground. Auld LJ stated “[45] …I would not have refused relief in the exercise of my discretion in reliance on the motive of Mount Cook in seeking it, namely to put pressure on Redevco to sell its lease to Mount Cook rather than – or in addition to – a genuine concern about future loss of retail use in the upper parts of the Building. [46] The essential question for a decision-maker in planning matters is whether the representations one way or another, whatever the motives of those advancing them, are valid in planning terms. A collateral motive may have relevance to the reasonableness of a landlord’s refusal to consent to alterations, as Mr. Paul Morgan held in his judgment in the leasehold dispute between the parties that I have mentioned in para [5] of this judgment. But judicial review applications by would-be developers or objectors to development in planning cases are, by their very nature, driven primarily by commercial or private motive rather than a high-minded concern for the public weal. I do not say that considerations of a claimant’s motive in claiming judicial review could never be relevant to a court’s decision whether to refuse relief in its discretion, for example, where the pursuance of the motive goes far beyond the advancement of a collateral purpose so as to amount to an abuse of process. The court should, at the very least, be slow to have recourse to that species of conduct as a basis for discretionary refusal of relief. In any event it would, as Mr. Steel pointed out, be exceptional for a court to exercise discretion not to quash a decision which it found to be ultra vires……”

CONCLUSION:

[81]I have considered carefully the invitation which Fladgate has extended to me to define the ingredients and limits of the tort of abuse of process. Overall it seems to me that it is an invitation which I should not accept. That is because, although I might be persuaded that certain of the defendant’s propositions are correct, I am not in a position to say that the contrary is not on the authorities properly arguable. I have given an instance of this in paragraph 67 above.

[82]It may be true, as the claimants argue, that Fladgate were not particularly concerned about the general public interest considerations affecting the Westminster Council’s decision to adopt the Credit Resolution and that the objective of setting aside the Resolution might not have been the predominant purpose in making the application. The claimants argue from these propositions that Fladgate was therefore clearly abusing the process of judicial review because it had a collateral purpose outside the scope of the remedy afforded by the proceedings, that is to say, they wanted to use their negotiating position to obtain from the claimants a financial benefit which the proceedings could not provide. On the face of it, the argument looked at in a purely literal sense is unimpeachable.

[83]However, it does not seem to me to be realistic or appropriate to regard the remedies afforded by the judicial review process in a purely literal way for the purposes of applying them to the tort of abuse of process. Once it is recognised that the planning system provides in public law a means by which the owner of property may protect his interest in and enjoyment of that property, then it will follow that the wider protection of his property interests is within the scope of protection which judicial review is able to provide, even though the remedy it is able to give is often of very narrow and technical scope and on the face of it may appear to bear no relation to the property being protected. I have considered in paragraphs 69 to 71 above the ways in which judicial review provides such protection as the law is able to give to those affected by planning decisions. In short, when making the decision to apply for judicial review, it is enough that Fladgate is seeking to protect in some way its interest in and enjoyment of its property; it is under no obligation to have a high-minded desire to put right the workings of the affordable housing scheme or planning procedures in Westminster.

[84]The factor which in my judgment breaks down the claimants’ argument is the fact that there is an obvious connection between the Credit Resolution passed in relation to the Wilton Plaza application and the use intended to be made of it in relation to the third claimant’s application to redevelop Park House. That it was a real connection is evident from the fact that the claimants did not seek to defend the judicial review proceedings to the end but instead severed the connection by offering to make payment of some £5.769 million in lieu of affordable housing at Park House to the Westminster Affordable Housing Fund and amended both planning applications accordingly.

[85]The matters in the preceding paragraphs do to my mind greatly affect what amounts to a collateral purpose for the purposes of the application of the tort to judicial review proceedings. If, as I am satisfied is the case, a property owner is entitled to use judicial review proceedings for the protection of his interest in and enjoyment of his property, why should he not compare the diminution in the value of his interest and enjoyment of his own property, which is likely to attend the development, with the countervailing (and perhaps very substantial) development gain which the developer will enjoy from the same development? Why should it be a collateral purpose if the property owner seeks to use any negotiating position he may have to restore the value he believes he will lose by the development by getting it from the person who caused it – who happens also to be the only person who might be prepared to pay it? How can it be said that the objective set out in the proposal which Mr Cohen put to Mr Hussey on the 5th April 2006 was, in Bridge LJ’s words, “an ulterior purpose unrelated to the subject matter of the litigation”. Is such an objective not very obviously “reasonably related to the provision of some sort of redress for [Fladgate’s] grievance”?

[86]As I have pointed out in paragraph 66 above, almost all of the cases, in which the courts have determined that there has been an abuse, have involved actual or threatened extortion of property, either under threat of the issue, or by misuse, of writs or other process authorising the deprivation of liberty, the seizure of property, and the interference with credit, status, good name and personal liberty, or by the issue or threat of issue of criminal proceedings and/or bankruptcy process. It is perfectly understandable that the judges of the past would have been outraged at the thought that the court’s process, which alone would have authorised and legitimated actions which would otherwise be unlawful, should have been used improperly to achieve such ends, all of which were grossly improper ends in themselves.

[87]Mr Hussey has told us that both he and the claimants were outraged that Fladgate had proposed using its position to attempt to do a “purely business transaction” in the manner he described. As I have already mentioned, whether they were or were not outraged does not matter. In the last analysis, the claimants are entitled to rely on the tort only if the court concludes that what Fladgate did was done for a collateral purpose and was improper. And I am quite satisfied that it is unrealistic to say that what Fladgate said and did was in any way either collateral or improper.

[88]The propriety or otherwise of Fladgate’s purpose can be cross-checked by an example which adjusts only slightly the facts of the present case. Let us suppose that Park House was adjacent (rather than opposite) to Fladgate’s premises and that Fladgate, fearful that the excavation of the two basement floors would undermine their foundations, threatened to issue process to injunct the claimants – unless they did a purely business transaction of the sort which Mr Cohen proposed to Mr Hussey on 5th April 2006. In these altered circumstances, Fladgate would have a private law right to support for its foundations, rather than the public law remedies to which they are limited in real life. I do not believe that anyone would think for a moment that it would be in any way either a collateral or an improper purpose for Fladgate to seek to use its negotiating position to get a financial advantage from the claimants which would enable them to “slip away” and leave the claimants to continue the development without them. The fact that the only remedy which Fladgate has in real life is in public law does not, in my judgment, for the reasons I have already given, make for a different result.

[89]Because, in my judgment, the claimants do not have a realistic prospect of proving that Fladgate’s predominant purpose in threatening and using the judicial review proceedings was either collateral in the true sense or improper, it will follow that the claim will inevitably fail. For this reason I am satisfied that Fladgate is entitled to judgment under CPR Part 24(2). This is enough to dispose of this case, but before doing so I should deal with the final aspect of Fladgate’s application, the application to strike out the claim for abuse of process based on the Henderson v Henderson point.

[90]In short, Fladgate argues that it was incumbent on the claimants to take the point in the judicial review proceedings that Fladgate was acting in abuse of process; that the claimants did in fact take the point (see paragraph 21 above) to which Fladgate responded; that it can be presumed that Newman J. considered the submission and must have rejected it because he granted permission on paper, as I set out briefly in paragraph 22 above. Fladgate argues that there has therefore been a ruling on the issue and the claimants cannot bring these proceedings which could succeed only if the trial judge made a finding which was inconsistent with what Newman J. must have decided. Moreover, the claimants did not seek to dispute Fladgate’s entitlement to bring the other proceedings for judicial review on the grounds of abuse of process; that it was incumbent on them to do so; they have given no explanation why they did not and should not be allowed to do so now.

[91]My attention was drawn to Aldi Stores Ltd v. WSP Group

[2007] EWCA Civ. 1260

and to Johnson v Gore Wood & Co

[2002] 2 AC 1

and to Stuart v Goldberg & Linde

[2008] EWCA Civ 2

[92]I am quite persuaded that Fladgate has no basis for having the present action struck out on the further grounds of abuse of process.

[93]The fundamental reason is that the procedure in judicial review proceedings does not give a proper opportunity for the determination of contested questions of abuse of process. The point is that the permissions stage is conducted on paper for the purpose of ‘weeding out’ weak applications; the defendant to the application was Westminster Council and the claimants appeared only as a party interested. Where the allegation of abuse is raised and disputed, as it was on the paper application in the Wilton Plaza application, it is inherently unlikely that the Administrative Court will proceed to hold a trial at which evidence is taken to resolve the factual and legal issues. If then, after a consideration of the papers, the judge allows the application to proceed, the claimants have no means of applying to have the permission set aside (see CPR Part 54.13); if the judge at the hearing grants the applicant substantive relief it is not realistic to expect the claimants to appeal on the grounds that Fladgate’s behaviour was an abuse which, ex hypothesi is disputed and not resolved by the taking of oral evidence and the finding of facts.

[94]Apart from which, there is obviously no scope for the claimants to advance a counterclaim for damages in the judicial review proceedings because the procedure does not allow for public law and private law disputes to be combined in the same proceeding. Apart from this, this court, before making an order staying proceedings on the ground of abuse, will take into account any prejudice to the claimants and to Fladgate if further proceedings are or are not permitted. In this instance there would be no basis for thinking that Fladgate would suffer prejudice in any way if a claim were to be brought and, had I concluded that the claim was arguable, I would not have exercised my discretion to stay the proceedings under CPR 3.4(2)(b).

[95]However, for the reasons I have already given, there will be judgment in favour of Fladgate pursuant to CPR 24(2).