ABSTRACT
Facts: The claimant, Donsland Ltd, was the creature of a Mr Raja (‘R’). He was the company’s sole director and owned two-thirds of its shares. His wife is the company secretary and owns the rest of the shares. The first defendant, Mr Nicholas van Hoogstraten (‘H’) owns or controls the two defendant companies. Mr Raja and Mr Hoogstraten had property dealings with one another. The claimant at one time owned 33 Crofton Road, London SE15; but Mr Hoogstraten maintained that it had been transferred to the second defendant company. This was disputed by Mr Raja and the dispute came to a head when he tried to collect the rent from the tenants at the property but discovered that the third defendant had already done so. When he protested to Mr Hoogstraten he alleged that Mr Hoogstraten threatened him with serious violence. Mr Raja then started these proceedings claiming possession of the property, damages and injunctions. At much the same time he started proceedings in his own name in the Chancery Division with a view to resolving similar disputes with Mr Hoogstraten about a number of properties, although 33 Crofton Road also featured in those proceedings. Little happened in these county court proceedings until Mr Hoogstraten applied to strike them out for want of prosecution. This application failed on 15 December 1998 but the district judge ordered the claimant to pay the defendants’ costs of the proceedings from 1st September 1994 to that date, and to provide security for their future costs in the sum of £7,500. The security was to be provided by 31 January 1999 pending which the proceedings were stayed; but once the security was provided the county court proceedings were to be transferred to be heard together with the Chancery proceedings. The claimant’s appeal against this order was dismissed by a circuit judge on 16 March 1999 who extended time for the provision of security to 31 March 1999. The claimant applied for permission to appeal. This court gave permission to appeal the order for costs but not the security for costs order on 19 May 1999. Up to this time the claimant had been represented in the county court proceedings by Mr Raja, although Healys had been on the record for a time after 31 July 1997 when little, if anything, happened. However, in May 1999 they were reinstructed by Mr Raja and came back formally on the record on 25 May 1999. On 2July 1999 Mr Raja was murdered by two gunmen on his front doorstep. Mr Hoogstraten is currently awaiting trial on a charge of conspiring to murder him. On 6 July 1999 Mr Hoogstraten’s solicitors applied to strike out the county court claim for failure to comply with the order for security for costs. They refused Healys’ request for an adjournment and the application was heard by the district judge on 23July 1999. Mr Raja had died intestate. Until letters of administration had been granted to his estate there was no one to appoint a new director, and therefore no one to give Healys instructions. They hoped that this could be done in about four weeks and that is no doubt why on 23July the district judge made an unless order extending the time for the provision of security to 3September 1999. But Healys’ difficulties were compounded by the fact that the police had taken possession of all Mr Raja’s papers and his body was to be taken by his family to be buried in Pakistan after which the family would be in mourning for a month. As the deadline of 3
September approached it became apparent to Healys that they would be unable to meet it because of those difficulties. On 2September they issued an application asking for time for service of the application to be abridged and that the order for security should be varied: ‘So as to provide that the sum of £7,500 is paid into court within 7 days of receipt from the first defendant of £12,500 costs
ordered to be paid by the first defendant in the High Court action ...’ Alternatively, they asked for the time for the provision of security to be extended by a further period of 28 days. The reference to the High Court proceedings is a reference to the Chancery proceedings to which I have referred, where, Mr Raja had successfully obtained an order for costs against Mr Hoogstraten. On 3rd September Healys attended before the district judge to explain their difficulties. He directed that the application should be heard on 14September and further extended the time for providing security until after that hearing. The defendants responded vigorously to this application with a statement from their solicitor, a 500-page bundle of documents, and a skeleton argument from counsel which took the point, among others, that as there was no evidence from the claimant itself as to why the previous court orders had not been complied with the application for an extension of time was misconceived. At the hearing on 14September at which the claimant was represented by Mr Fairburn, an experienced legal executive with Healys; and the defendants by Mr Reza of counsel, who appears for them today, the district judge dismissed the claimant’s application with costs and gave permission for the defendants to apply for costs against Healys. This application was made and generated much evidence and argument before the district and circuit judges. No one suggested before either judge that what Healys did before 2
September, which included the application to extend time made on 23July 1999, was done without authority. The argument was that Healys were acting without authority between 2 and 14September. This argument was accepted by the district judge on the basis that during this period there was nobody with authority to give instructions to the solicitors, so Healys had no authority to act as they did. Miss Carr, counsel for Healys, says that the judge was wrong. Her submissions are simple: the solicitors were properly instructed; their retainer did not come to an end when Mr Raja died; it included actual implied authority to take all necessary steps to take the litigation forward and certainly any steps necessary to preserve the claim. That is precisely what the solicitors attempted to do. So at the material time they were not acting without authority.
