Supreme Court

Willers v Joyce and another

[2016] UKSC 43; [2016] WLR (D) 401

2016 March 7; July 20

Lord Neuberger of Abbotsbury PSC, Baroness Hale of Richmond DPSC, Lord Mance, Lord Kerr of Tonaghmore, Lord Clarke of Stone-cum-Ebony, Lord Wilson, Lord Sumption, Lord Reed, Lord Toulson JJSC

Tort — Cause of action — Malicious prosecution — Action brought against company director in respect of breaches of contractual and fiduciary duties — Claim withdrawn before trial — Company director claiming damages for malicious prosecution of civil proceedings — Whether tort of malicious prosecution of civil proceedings existing in English law

Facts

The claimant was employed by the original defendant, G, from 1986 until his dismissal in 2009. During the course of his employment he acted as a director of a number of companies established and controlled by G, carrying out G’s instructions and implementing his decisions. As director of one such company, L Co, the claimant, on G’s instructions, brought a claim for wrongful trading against a company which went into liquidation. That action was abandoned shortly before trial on G’s instructions. In 2010 L Co began proceedings against the claimant for alleged breaches as a director of his contractual and fiduciary duties in causing it to incur the costs of pursuing the earlier claim. The claimant defended the action and issued a third party claim against G for an indemnity. In 2013, shortly before trial, the claim was discontinued and L Co was ordered to pay the claimant’s costs on the standard basis. The claimant began proceedings against G for malicious prosecution on the ground that L Co’s claim had been brought without reasonable cause, determined in the claimant’s favour and actuated by malice, and that the claimant had suffered damage to his reputation, health and earnings, as well as loss occasioned by the excess of his legal expenses in defending the action over the amount recovered under the costs order. On G’s application to strike out the claim, the judge held that, having regard to conflicting decisions of the House of Lords and the Privy Council, she was bound to follow the decisions of the former and accordingly struck out the claim as unknown to English law. She also issued a “leapfrog” certificate under section 12 of the Administration of Justice Act 1969 to enable the claimant to apply to the Supreme Court for permission to appeal to seek determination of whether such a claim was available to him. The Supreme Court granted the claimant permission to appeal. While the appeal was pending G died and the executors of his will were substituted as defendants. On the claimant’s appeal —

Held

Held, allowing the appeal (Lord Neuberger of Abbotsbury PSC, Lord Mance, Lord Sumption, Lord Reed JJSC dissenting), that it was unjust for a person to suffer injury as a result of the malicious prosecution of legal proceedings for which there was no reasonable ground and not to be compensated for the injury intentionally caused by the person responsible for it; that the essential, and separate, ingredients of the tort of malicious prosecution were that the injury was suffered in consequence of the malicious use of legal proceedings brought without a reasonable basis; that “malice” signified the deliberate misuse of the court’s process; that those elements applied as much to the bringing of civil proceedings as to criminal proceedings; that the historic case law provided some support for the existence of a remedy where a claimant had suffered provable loss as a result of civil proceedings brought against him maliciously and without proper justification; that there was no good reason for limiting the breadth of the remedy so as to exclude civil proceedings; that the countervailing factors raised against extension to civil proceedings were insufficient to counter the conclusion that malicious prosecution was a tort which applied to civil just as to criminal proceedings; that, further, since the claim for excess of legal expenses could not be characterised as abusive, such a claim was also available to the claimant; and that, accordingly, the whole claim would proceed to trial (post, paras 25–32, 39–41, 43, 54–60, 62–67, 79, 81, 86–87, 90–91).

Cases Considered

Glinski v McIver [1962] AC 726, HL(E) and Crawford Adjusters (Cayman) Ltd v Sagicor General Insurance (Cayman) Ltd [2014] AC 366, PC applied.

Gregory v Portsmouth City Council [2000] 1 AC 419, HL(E) not followed.

Appellate History

Decision of Ms Amanda Tipples QC, sitting as a deputy judge of the Chancery Division [2015] EWHC 1315 (Ch), reversed.

Appearances

John McDonnell QC, Hugo Page QC and Adam Chichester-Clark (instructed by De Cruz) for the claimant.

Bernard Livesey QC and Paul Mitchell QC (instructed by Laytons) for the defendants.

Reported by: Diana Procter, Barrister

© 2016. The Incorporated Council of Law Reporting for England and Wales.