Wright Hassall LLP v Morris

Where proceedings are brought against an individual office-holder described as acting as an administrator, that description does not convert the defendant into the company or exclude personal liability. A court may enter judgment only against a party to the proceedings. If the company has not been joined or substituted as defendant, an order cannot impose liability on it. An agent may in some circumstances be personally liable on a contract made for a disclosed principal. A claimant is not required to plead expressly that personal liability is alleged merely because the defendant is described as administrator.

Wright Hassall LLP obtained an order from Judge Brown QC for judgment on its claim, with damages to be assessed under section 70 of the Solicitors Act 1974. The proceedings had been issued against Duncan Morris, described as administrator of Marketbalance Limited and Phoenix Insurance Management Limited. The companies were never joined as parties.

On a later application concerning payment in the companies’ administrations, His Honour Judge Cooke held that the earlier order imposed liability on the companies and not on Mr Morris personally. The appeal concerned the proper effect of Judge Brown’s order and whether the description of Mr Morris as administrator excluded personal liability.

1. Appeal allowed. The order of His Honour Judge Cooke could not stand because it purported to impose liability on the two companies, which had never been parties to the proceedings.
2. A court can enter judgment only against a party before it. The only defendant in the proceedings before Judge Brown was Mr Morris, described as administrator of the companies. The companies had not been joined or substituted, and therefore the judgment could not have been entered against them.
3. The earlier judgment was based on the contractual terms against the person who had signed the conditional fee agreements and was the sole party before the court. Since judgment was entered rather than the claim being dismissed, the order imposed liability on Mr Morris personally. There had been no appeal against that order.
4. The description of an individual as administrator does not necessarily mean that he is sued only as agent and not personally. An agent may sometimes be personally liable on a contract entered into for a disclosed principal. The court rejected the suggestion that a claimant had to plead expressly that personal liability was alleged. Paragraphs 8.1 and 8.2 of PD 16 did not impose that requirement.
5. The court did not need to determine the alternative arguments concerning common assumption between the parties. The order of Judge Brown QC therefore remained effective as a personal judgment against Mr Morris.

• Court of Appeal (Civil Division): The appeal from the order of His Honour Judge Cooke made on 19 January 2012 was allowed. The court held that Judge Brown QC’s order imposed liability on Duncan Morris personally.
• Earlier proceedings: Judge Simon Brown QC, sitting in the Mercantile Court at Birmingham, had ordered judgment on the claimant’s claim, with damages to be assessed under section 70 of the Solicitors Act 1974.