Home Information Cases Abbey National Plc v John Perry & Co (2001)

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Abbey National Plc v John Perry & Co (2001)

Summary

An order allowing an amendment to statements of claim did not give rise to a new cause of action and was accordingly upheld.

Facts

Appeal from the order of Rimer J, sitting as the designated judge of the Abbey National Managed List, dated 14 February 2001, allowing Abbey National permission to amend its statements of case against the first, third, fourth and twenty-second defendants ('the defendants'). Since 1995 Abbey National had brought many claims against solicitors who acted for it in connection with loans made between 1988 and 1991. Of those that remained to be determined there were 35 claims in the Managed Case List. To be in the Managed Case List a claim must have been defended by a solicitor who was being indemnified by the Solicitors' Indemnity Fund and had been the subject of a limitation defence. In many but not all of the cases in the Managed List, the features of the transaction and the complaint made by Abbey National against the defendant solicitors were as described in Nationwide Building Society v Balmer Radmore (1999) Times, March 01, 1999 and, as to specific issues, at Nationwide Building Society v Balmer Radmore (1999) Times, March 01, 1999 and Nationwide Building Society v Thimbleby & Co (1999) EGCS 34. In the present cases Abbey National applied to Rimer J for permission to amend many of its statements of case. Abbey National pleaded that the solicitor held the advance money on a constructive trust. In many cases, where that claim was made, the defendant solicitor denied it and alleged that the trust was a bare trust. The original pleading essentially claimed that "at all times after the receipt by the defendant of the ... mortgage advance ... the defendant ... was and remained a constructive trustee of Abbey National in respect of the sum advanced ... to hold the ... sum to the benefit of Abbey National until such time as that sum was to be applied in accordance with Abbey National's wishes and instructions failing which the defendant was under an obligation to return the same". Essentially, Abbey National was seeking to amend its pleaded cases to remove the word "constructive". The judge concluded that the amendment was such as to plead a new cause of action but found that, as a matter of impression, the new cause of action was substantially based upon the same facts and allowed the amendments. The defendants appealed, seeking to uphold the judge's findings that the amendments gave rise to a new cause of action, but that it was not on the same or substantially the same facts. The defendants argued that the proposed amendments gave rise to a new claim which depended on a new allegation as to the limits of the defendants' authority as trustees to deal with trust monies. The defendants argued that the proposed amendments alleged a true trust that was not merely the trust usually imposed as a result of a solicitor's receipt of mortgage advances, but a special trust which imposed special obligations upon the defendants and limited their authority to part with the advances. Accordingly, the defendants argued that a new cause of action was proposed and, alternatively, although the factual background was the same in that the claims arose out of the same transaction, that was not sufficient. By its Respondent's Notice Abbey National argued that the amendment did not give rise to a new cause of action because it was essentially a matter of withdrawing the word "constructive", or alternatively, Abbey National supported the judge's conclusions.

Held

(1) The amendment to the statements of case sought by Abbey National did not plead a new cause of action. The labelling of the trust as constructive rather than implied was a matter of substance (see Abbey National v Frost (1999) 1 WLR 1080). Whether the defendants received and held the sums advanced to be applied on Abbey National's instructions amounted to a constructive or implied trust was a matter of semantics. (2) The essence of the pleading was that the defendants held the sums advanced as trustees until the sum was applied in accordance with Abbey National's instructions, failing which, the defendants were to return the advanced sums. That was not altered by the amendment. (3) On the facts alleged (applying Target v Redferns (1996) AC 421; Bristol & West v Mothew (1998) Ch 1; In re Vandervell's Trusts (No.2) (1974) Ch 269); and Frost (supra) it was impossible to say that the amendment of the term constructive trust to implied trust imposed a new cause of action (Darlington Building Society v O'Rourke James Scourfield & McCarthy (1999) PNLR 365 followed). The factual situation was essentially the same.

Appeal dismissed.

Court of Appeal
Aldous LJ, Chadwick LJ, Sir Murray Stuart-Smith
Judgment date
24 October 2001
References

LTL 24/10/2001 : [2001] EWCA Civ 1630