Icebird Ltd v Winegardner (The Bahamas) [2009] UKPC 24

Judicial Committee of the Privy Council

Case No Privy Council Appeal No 72 of 2007

Venue FROM THE COURT OF APPEAL OF THE COMMONWEALTH OF THE BAHAMAS - - - - - - - - - - - - - - - - -

Between

Icebird LtdAppellant

Winegardner (The Bahamas)Respondent

Before

Lord Phillips of Worth Matravers

Lord Scott of Foscote

Lord Brown of Eaton-under-Heywood

Lord Mance

Lord Neuberger of Abbotsbury

Date 2 June 2009

[1]:- Lord Phillips of Worth Matravers Lord Scott of Foscote Lord Brown of Eaton-under-Heywood Lord Mance Lord Neuberger of Abbotsbury - - - - - - - - - - - - - - - - [Delivered by Lord Scott of Foscote ] Icebird Ltd, the appellant, is the fee simple owner of Lot No. 11 in Block No. 1 of Lyford Cay Estate, New Providence. The respondent, Alicia Winegardner, is the fee simple owner of Lot 3 in Block 5 of the same Lyford Cay Estate. The appellant, as the owner of its Lot No. 11, claims the benefit of a right of way over a roadway running from its property down to the beach. The servient land forms part of the respondent's Lot 3.

[2]The appellant alleges that from about 1998 the respondent has been obstructing in various ways the appellant's right of way and, by a writ endorsed with a Statement of Claim and dated 28 July 2000, the appellant commenced proceedings against the respondent for injunctive relief, damages and other relief. The respondent entered an appearance on 28 September 2000 and served a Defence on 20 October 2000. On 7 December 2000 the appellant applied by summons for leave to amend its writ and Statement of Claim. By an Order dated 29 November 2001 (but not perfected and filed until 16 January 2002) the leave sought was granted and the appellant filed the amended Writ and Statement of Claim. Their Lordships have not been told why it took nearly a year from the issue of the application for leave to amend for the Order granting leave to be made.

[3]Thereafter nothing was done for over two years to further the prosecution of the action. The inaction came to an end on 16 February 2004 when the respondent issued a summons for an order that the Writ be struck out and the action dismissed for want of prosecution. After some further delay, referred to in an affidavit sworn on 26 January 2006 on behalf of the respondent by a partner in the firm of attorneys acting for her, the strike-out application was heard by Lyons J on 1 February 2006. The grounds relied on by the respondent, based on a continuing failure by the appellant to serve a Summons for Directions within the time prescribed by Rules of Court, were(i) inordinate and inexcusable delay by the appellant in the prosecution of the action,

(ii) serious prejudice likely to be suffered by the respondent as a result of the delay,

(iii) a substantial risk that there could no longer be a fair trial and

(iv) that the appellant's "conduct amounts to an abuse of the process of the Court and an affront to the Court's authority".

[4]Lyons J gave judgment on 7 February 2006. He characterised the delay occasioned by the appellant as "inordinate", an adjective that their Lordships think was well-justified, took the view that no satisfactory excuse for the delay had been offered, a view with which their Lordships concur, and expressed the opinion that the respondent was "severely prejudiced" by the delay because the existence of the litigation constituted a blight on the title of Lot 3. In the absence of any evidence from the respondent that the litigation had in any way obstructed or hindered any dealings with Lot 3 that she had had in mind or had caused her any other species of prejudice, their Lordships are unable to concur in this opinion. The natural worry and anxiety that may be expected to attend litigation does not, absent some very special features of which some evidence would be necessary, constitute "severe prejudice" so as to justify without more a strike-out for delay in prosecuting an action. However, Lyons J struck-out the action on the inordinate and inexcusable delay and the severe prejudice grounds. He said nothing about the fair trial or abuse of process grounds.

[5]The appellant appealed but, on 24 November 2006, the Court of Appeal by a majority (Sawyer P and Osadebay JA, Longley JA dissenting) dismissed the appeal. The majority's judgment was given by Osadebay JA, with Sawyer P concurring. Osadebay JA agreed that the appellant had been guilty of inordinate and inexcusable delay and, in this respect going further than Lyons J had gone, expressed the view that the delay constituted an abuse of the process of the court because "the appellant evinced no intention of carrying the case to trial" (para.36), He cited in support of this view Grovit v Doctor

[1997] 1 WLR 640

where the House of Lords had held that for a plaintiff to commence and to continue litigation which he had no intention to bring to a conclusion could constitute an abuse of process.

[6]Grovit v Doctor was a case in which the plaintiff had commenced a defamation action against seven defendants. Each had admitted publication but had pleaded justification as a defence. The claims against the fourth to seventh defendants had been dismissed by consent. The third defendant had gone into liquidation and was presumably no longer worth suing. The remaining two defendants, acting in person, applied for the action to be struck-out for want of prosecution. The plaintiff's delay in proceeding with the case against the remaining two defendants was, as in the present case, somewhat over two years and the judge before whom the defendants' strike-out application was heard was "quite satisfied … on the evidence that [the appellant] has had literally no interest in pursuing this litigation". He added :

"… the very existence of an action which the plaintiff has no interest in pursuing is intolerable" (see p.646 B to D). An appeal to the Court of Appeal failed and there was a further appeal to the House of Lords. Lord Woolf, whose speech was concurred in by the other members of the Appellate Committee, was satisfied that the judge and the Court of Appeal had been entitled to come to the conclusion that the plaintiff had lost interest in proceeding against the two remaining defendants (see at 647 F/G). He said (at 647 G to H) "

This conduct on the part of the appellant constituted an abuse of process. The courts exist to enable parties to have their disputes resolved. To commence and to continue litigation which you have no intention to bring to conclusion can amount to an abuse of process."

[7]Their Lordships respectfully concur in the approach taken by the House in Grovit v Doctor . There had been over two years delay when nothing had been done to prosecute the action. This was because the plaintiff had "literally no interest in actively pursuing this litigation". The deputy judge had so found on the evidence. As Lord Woolf noted, delay in prosecuting an action and abuse of process are separate and distinct grounds on which an application to strike-out the action may be made but may sometimes overlap. Want of prosecution for an inordinate and inexcusable period may justify a striking-out order but "if there is an abuse of process, it is not strictly necessary to establish want of prosecution." (647H). Where, however, there is nothing to justify a strike-out order other than a long delay for which the plaintiff can be held responsible, the requisite extent or quality of the delay necessary to justify the order ought not, in their Lordships' respectful opinion, to be reduced by categorising the delay as an abuse of process without clarity as to what it is that has transformed the delay into an abuse and, where necessary, evidential support. In Grovit v Doctor the added factor was the judge's finding, made on the evidence, that the plaintiff had lost interest in the libel proceedings he had commenced and had no intention of prosecuting them to judgment. No comparable finding had been made by Lyons J in the present case and the evidential basis for any comparable finding is not apparent to their Lordships.

[8]Birkett v James

[1978] AC 297

remains, in their Lordships' opinion, the leading authority for the approach to be taken to an application to strike-out an action for want of prosecution. The House of Lords endorsed the principles set out in the then current Supreme Court Practice, namely, that the power to strike-out should be exercised only where the court was satisfied - "… either (1) that the default has been intentional and contumelious e.g. disobedience to a peremptory order of the court or conduct amounting to an abuse of the court, or (2)(a) that there has been inordinate and inexcusable delay on the part of the plaintiff or his lawyers, and (b) that such delay will give rise to a substantial risk that it is not possible to have a fair trial of the issues in the action or is such as is likely to cause or to have caused serious prejudice to the defendants either as between themselves and the plaintiff or between them and a third party" (per Lord Diplock at 318). The present case is not one where there has been any contumelious default. It is a case where there has certainly been inordinate and inexcusable delay on the part of the appellant or its lawyers. But what else? There is no evidence of any serious prejudice to the respondent caused by the delay. Is this a case where the delay has given rise to a substantial risk that a fair trial will not be possible? This was a ground relied on in the respondent's summons and, although not the basis of the respondent's success before Lyons J or before the Court of Appeal, their Lordships think it right to consider whether this might be so.

[9]It is necessary for that purpose to identify briefly the issues in the action. The right of way relied on had been created by a Conveyance dated 18 September 1954 between the then owners of the estate, of which both the appellant's Lot 11 and the respondent's Lot 3 form part, and the appellant's predecessors-in-title to Lot 11. According to the Agreed Statement of Facts it was a right of way over "the roadways of the Lyford Cay Subdivision." The particular roadway in question ran down to the beach and was some 50 feet in width. By a Conveyance dated 8 August 1960 the respondent's Lot 3, which included the roadway above referred to, was conveyed to the respondent's predecessors-in-title. The Conveyance was expressed to be subject to the rights of way granted by, inter alia , the Conveyance of 18 September 1954.

[10]On 5 April 1968 a Deed of Release was executed by the appellant's then predecessors-in-title to Lot 11 and the respondents then predecessors-in-title to Lot 3. The Lot 11 owners, the dominant owners in relation to the right of way, released to the Lot 3 owners, the servient owners, 30 feet of the right of way, thereby reducing its width to 20 feet. In consideration for that release the servient owners covenanted that they and their successors-in-title would forthwith construct over the 20 foot right-of-way a serviceable 10 foot wide stone based road and would maintain the road in good and serviceable condition.

[11]The respondent became the owner of Lot 3 in 1988. The appellants became the owner of Lot 11 in 1997.

[12]It is common ground that the 10 foot stone based road down the 20 foot right-of-way has never been built. In the amended Statement of Claim the appellant seeks not only the removal by the respondent of the obstructions which, it is contended, impede passage along the right of way and injunctive relief for the future but, also, a mandatory order that the respondent forthwith construct the 10 foot stone based road or, alternatively, an order that the original 50 foot right of way has revived, and damages in either case for breach of covenant.

[13]The respondent's defence is, first, that the right-of-way granted by the 1954 Conveyance and varied by the 1968 Release has never been exercised by the Lot 11 owners and must be taken to have been abandoned and, second, that the causes of action sued upon did not arise within 20 years of the commencement of the action and are therefore time barred.

[14]The main issue in the action appears to their Lordships to be whether the appellant's right-of-way must be taken to have been abandoned by non-use. The execution by the parties' respective predecessors-in-title of the Deed of Release of 15 August 1968 shows that the right-of-way must have been in existence at that time. Evidence of its user or non-user since then will clearly be relevant evidence. The respondent can herself give evidence regarding the period from December 1988 and it is difficult to think that, during the period between, say, December 2001, by which time the appellant ought to have taken out a Summons for Directions, and February 2004 when the strike-out summons was issued, valuable evidence relating to the period between 1968 and 1988 that would otherwise have been available was lost. It is to be borne in mind, also, that even very long non-use of an easement is not by itself sufficient to establish extinguishment of the easement by abandonment. There must also be established an intention to abandon the easement, and whether an inference of the requisite intention can be drawn from even, say, fifty years of non-use is a moot question. At all events their Lordships can see no reason to suppose that a fair trial of this issue has been put at risk by the appellant's delay in prosecuting the action.

[15]As to the claims based upon the 1968 covenant by the then Lot 3 owner to construct the 10 foot stone based road, the claim to a mandatory injunction and damages for breach is, in their Lordships' opinion, hopeless and bound to fail. Positive covenants do not run with the land. The appellant's alternative claim to a revival of the 50 foot right of way on the ground that the consideration given for the release of the 30 feet has wholly failed appears to their Lordships highly novel. A remedy for the total failure of consideration where what is sought is, in effect, the setting-aside of a grant by deed raises a number of questions of law. Their Lordships will await with interest answers to these questions that may be forthcoming in the future but the delay relied on for the strike-out does not in the least prejudice a fair trial.

[16]Finally, there are the time-bar points. Their Lordships feel bound to say that the respondent's submissions based on the effect of the Limitation Act 1995 and its statutory predecessors appear to them to be misconceived. The appellant's claim is not a claim for the recovery of land and is not subject to the twelve year limitation period for such a claim prescribed by section 16(3) of the 1995 Act or to the twenty year period prescribed by section 1 of the Real Property Limitation Act 1874. Neither of these statutory provisions has any application to a claim for an injunction to restrain interference with an easement. If the appellant's easement is still subsisting, i.e. has not been extinguished by abandonment, interference with it is a common law nuisance. Future interference can be restrained by an injunction. Past interference can be remedied by an award of tortious damages. The limitation period applicable to a claim for tortious damages for nuisance is six years. It follows that if the appellant succeeds in its claim based on interference with its right-of-way it can expect to obtain an injunction and damages limited to the period of interference starting six years before the commencement of the action. If the present action were to be struck out, there would be nothing, bar payment of the costs of the present action, to prevent the appellant from commencing a fresh action in which the same result would be reached as if it had been the present action that had been prosecuted to judgment. The only difference would be that the period for which damages would be claimable would commence six years before the commencement of the new action.

[17]The misconceptions about the implications of the Limitation Act 1995 for the appellant's easement claim may have been attributable to a typographical error in the definition of "land" contained in the copy of section 2(1) of the 1995 Act provided to their Lordships in the Joint List of Authorities. The definition reads, so far relevant for present purposes, as follows - "'land' includes incorporeal hereditaments, rentcharges and any legal or equitable estate or interest therein .. but save as aforesaid does not include any incorporeal hereditament." The reference in the first line to "incorporeal hereditaments" may have been responsible for the belief that "land" includes easements. But the final saving words, which say that "save as aforesaid" land "does not include any incorporeal hereditaments" makes a nonsense of that reference. Their Lordships asked the Registrar of the Court of Appeal to check the definition against the language of the statute as enacted and were informed that the "reference to" in corporeal hereditaments" was an error and that the definition should read "'land' includes corporeal hereditaments …" etc. Thus read the definition makes perfect sense, makes sense of section 16(3), mirrors the language that appears in section 1 of the Real Property Limitation (No.1) Act 1833 and enables section 16(3) to produce the same result as section 15(1) of the Limitation Act 1980 (1980 c.58) the language of which is identical.

[18]A final point to make on the effect of the passage of time on the issues in the action is that the appellant's claim to reverse the 1968 release of 30 feet of the original 50 foot right of way is, if it is viable at all, probably an equitable claim to which no statutory limitation period is applicable. It would, however, as a claim to relief in equity, be subject to the defence of laches. Laches is not at present expressly pleaded in the Defence. It might, perhaps, be inferred from para.7 of the Defence but, in any event, could be added by amendment.

[19]Their Lordships can see no reason why the appellant's delay in prosecuting the action should prevent a fair trial of any of these issues.

[20]In their Lordships' opinion, therefore, this appeal should be allowed. Lyons J ought, in their Lordships' opinion, either to have made an Unless Order, directing the appellant forthwith to issue a Summons for Directions, or, alternatively, to have treated the summons before him as if it were a Summons for Directions and forthwith to have given the necessary directions for the prosecution of the action. In either event the appellant would be likely to have been ordered to bear the respondent's costs of the summons.

[21]Their Lordships will accordingly humbly advise Her Majesty that this appeal should be allowed and the Orders of Lyons J and the Court of Appeal set aside. The appellant must within 14 days issue a Summons for Directions and use its best endeavours to obtain an early hearing of the summons. Their Lordships will make the following Order Nisi as to costs(i) The appellant is to pay the respondent's costs of the summons to strike-out and of the hearing before Lyons J.

(ii) The respondent is to pay the appellant's costs of the appeal to the Court of Appeal and of this appeal. This Order Nisi will become absolute unless an application is made within 21 days for some other order as to costs to be made.

Cited in 25 later judgments

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