Dales Holiday Cottages Ltd v Ludlam

Personal liability under a contract depends on whether the individual made himself liable, not merely on whether he may have acted as agent for an undisclosed principal. A trading name that is not a separate legal identity does not identify a company or prevent personal liability. A later undertaking to pay may support that conclusion but is not conclusive. On a second-tier appeal, permission should be refused where the proposed appeal has no real prospect of success and raises neither a point of importance nor any other compelling reason for the Court of Appeal to hear it.

The claimants operated a holiday letting agency for cottages owned by companies associated with the applicant. After a dispute concerning the cottages, Mr Ludlam instructed the claimants to cancel bookings and notify existing customers that the premises had closed. The claimants sought payment for carrying out those instructions.

A District Judge entered summary judgment against Mr Ludlam for £7,997, plus interest and costs. Judge Orrell refused permission to appeal out of time, considering that the appeal had no real prospect of success. Mr Ludlam applied to the Court of Appeal, arguing that Cream of Cottages Limited, rather than he personally, was liable and that a solicitor’s undertaking had not admitted liability. The central issues were whether Mr Ludlam had contracted personally and whether permission should be granted.

Application dismissed. Lord Justice Tuckey refused permission to appeal.

1. The relevant agreement was the arrangement recorded in Mr Ludlam’s letter instructing the claimants to cancel bookings. He signed for and on behalf of Country Byways, but the letter identified no limited company. Country Byways was not a separate legal identity; it was a trading name used to describe the personal interest in the venture. Mr Ludlam therefore made himself personally liable on the contract.
2. Whether Mr Ludlam had in fact acted as agent for one of his companies as an undisclosed principal did not determine the issue. The question was whether he had assumed personal liability on the contract. The subsequent undertaking by his solicitors supported that conclusion, although it was not conclusive and did not, for that reason alone, amount to a complete admission of liability.
3. The Court of Appeal agreed with the conclusion below that the claim had no real prospect of successful defence, although for different reasons. The application was a second-tier appeal. It raised no point of importance and disclosed no other compelling reason for the Court of Appeal to hear it.
4. Granting permission merely to provide a hearing which would inevitably result in the applicant losing would serve no useful purpose. Permission was refused and the application was dismissed.

• Court of Appeal (Civil Division): refused permission to appeal and dismissed the application.
• Derby County Court, Judge Orrell: refused permission to appeal out of time because the proposed appeal had no real prospect of success.
• Derby County Court, District Judge: granted summary judgment against Mr Ludlam for £7,997, plus interest and costs.