Woolwich Plc v Daisystar Ltd & Anor

A claimant with concurrent claims against more than one obligor cannot recover more than the total loss. A payment made by a joint tortfeasor in compensation for the same loss must be credited against damages awarded against another tortfeasor. The insurance exception applies where the claimant’s own insurance policy produces the recovery. It does not apply where the payment is made by the other tortfeasor’s insurer in settlement of the tortfeasor’s liability. In deciding whether to extend time for an appeal, the court may consider the merits of the proposed grounds, together with the length and explanation of the delay. A refusal to adjourn may be upheld where the party’s procedural disadvantage results from prolonged non-compliance with case-management orders.

Mr Raja and Daisystar Ltd sought extensions of time and permission to appeal from judgments of Robert Walker J in fraud proceedings brought by the Woolwich. The defence to the counterclaim had been struck out after failures to comply with unless orders, and judgment was entered for the Woolwich following an evidential hearing.

The proposed appeal challenged the findings of fraud, the treatment of approximately £100,000 recovered in separate interpleader proceedings, the failure to credit £300,000 recovered from Davies Brown & Co, and the refusal to adjourn the trial. The central issue was whether any proposed ground had sufficient merit to justify extending time and, in particular, whether the £300,000 recovery reduced the damages.

1. Extension of time. The court considered the length and explanation of the delay, but also examined the merits of the proposed grounds. The challenge to liability had no realistic prospect of success because it sought to reopen matters excluded by the unless orders. The existence of genuine leases or conveyancing documents did not answer the established case that false particulars had induced the mortgage advances.
2. Interpleader recovery. The approximately £100,000 recovered in separate interpleader proceedings was not to be deducted from the fraud damages. Those proceedings involved different parties and had been concluded by a separate order. The sum was directed to be applied in partial satisfaction of the judgment.
3. Recovery from a joint tortfeasor. The £300,000 recovered from Davies Brown & Co concerned the same loss and had been paid in settlement of their liability as joint tortfeasors. Applying the principle in Townsend v Stone Toms & Partners (1984) 27 BLR 26, the recovery had to be credited against the damages payable by Mr Raja. The court held that the trial judge would have allowed the credit had the payment been disclosed.
4. Insurance distinction. The exception identified in Parry v Cleaver [1970] AC 1 did not apply. The payment was not made under insurance purchased by the Woolwich. It was made by Davies Brown & Co’s insurers because of the subrogated rights of the Woolwich’s insurers, and was therefore a recovery from the joint tortfeasor.
5. Adjournment and fairness. The refusal to adjourn was a proper exercise of discretion. The resulting trial was not unfair and did not breach Article 6.1. The disadvantage arose in the context of prolonged litigation and the appellants’ failure to comply with orders intended to secure a fair trial.
6. The court extended time only on the £300,000 issue, allowed the appeal to that extent, and substituted £664,242 for £1,052,749. The other applications were refused or left without order, and there was no order for costs on the appeal.

1. Chancery Division: Robert Walker J entered judgment for the Woolwich on 14 June 1995 in the fraud proceedings in the sum of £1,052,749. He had refused an adjournment on 6 June 1995.
2. Court of Appeal (Civil Division): The court extended time only on the issue of the £300,000 recovery, allowed the appeal to that extent, and substituted £664,242 for £1,052,749. The remaining applications were refused or left without order.