NEUTRAL CITATION Nos. [2002]
EWHC 1589 (Ch) and [2002] EWHC 2179 (Ch)
IN THE HIGH COURT
CHANCERY DIVISION
Wednesday, 16 July and Wednesday, 30 July 2003
BETWEEN:
-and-
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Robert Anderson
(Stephenson Harwood) for the claimant
Stuart Cakebread (Jeffrey Green Russell) for the first defendant
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16th July 2003
1. This is an application by the claimant, Westminster City Council, for summary judgment in relation to its claim against the first defendant, Dame Shirley Porter, for judgment in a sum of some 26,462,621 euros. The history of the matter, so far as relevant to that which I have to decide, can be taken from the very brief amended particulars of claim, which support the application.
2. The claimant is a local authority, to which the provisions of the Local Government Act 1972 and the Local Government Finance Act 1982, as consolidated and amended by the Audit Commission Act 1998, apply. The first defendant was formerly the leader of the claimant, and was a member of the council.
3. By a certificate or certificates issued by the appointed auditor for the claimant dated 9 May 1996, under section 20(1) of the 1982 Act it was certified that in relation to the accounts of the claimant for the years 1987-1988 to 1994-1995, the sum of 31,677,064 euros was due from the first defendant being the amount of a loss incurred or caused by her wilful misconduct.
4. Pursuant to what is now section 18(8) of the 1998 Act, a sum or other amount certified under the section to be due from any person, is payable within 14 days after the date of the issue of the certificates, or if an appeal is brought, within 14 days after the appeal is finally disposed of or abandoned or fails for non-prosecution.
5. The first defendant appealed the certificates to the Divisional Court of the Queen's Bench Division (Porter v. Magill 96 LGR 157), which in January 1998 upheld the certificates, save that the amount due thereunder was reduced to 26,462,621 euros, inclusive of interest up to and including the date of the certificates.
6. After a reversal by the Court of Appeal [2002] 2 AC 357 on 30 April 1999, the orders of the Divisional Court were restored by the House of Lords [2002] 2 AC 357 on 13 December 2001. Accordingly, the claimant asserts that the first defendant became liable under section 18(8) of the 1998 Act 14 days after 13 December 2001 to pay the sum of 26,462,621 euros.
7. The first defendant does not contest that liability, although she is currently bringing a claim before the European Court of Human Rights, designed if successful to correct the position so far as her liability is concerned, on the ground that her rights under the Convention for the Protection of Human Rights and Fundamental Freedoms, as scheduled to the Human Rights Act 1998, have been interfered with in the process by which the liability was established, and indeed on the ground that the liability itself, even if established lawfully in accordance with her rights under the Convention, represents a penalty completely disproportionate to the offence of which she was found guilty by the auditor's certificates.
8. Judgment sought today is, accordingly, of that sum of EUR 26m-odd, to which I have referred, and also with interest on that sum. There are three, possibly four, different ways in which the particulars of claim put the case against the first defendant. The actual judgment sought is a judgment in the following terms:
that there be judgment for the claimant against the first defendant on that part of its claim set out in paragraphs 1 to 9 and 10 to 12 inclusive of the amended particulars of claim in the sum of 26,462,621 euros, plus accrued interest from 9 May 1996 to date in the sum of ...
and then there is a blank for the purposes of the calculation.
9. The four distinct ways of putting the case, which are covered by those paragraphs of the amended particulars of claim, are first, to assert a liability under the statute; secondly, to plead the case as one of damages for breach of statutory duty, the breach being of the duty to pay the sum; thirdly, a claim is put on the basis that the first defendant acted in breach of trust, as a result of which the claimant suffered loss in the sum of 26,462,621 euros, namely 15,476,000 euros plus interest; and, fourthly, the claim is put on the basis that the first defendant is liable as a constructive trustee to compensate the claimant for the loss. Of those four ways of putting the case the second, breach of statutory duty, has not been argued, and neither has the fourth, namely constructive trusteeship.
10. As I have indicated, under the first method of putting the case it is admitted by the first defendant that she is liable. The controversy is as to the third method of putting the case, namely the liability on the footing that she was a trustee, and has caused the loss claimed by a breach of trust. The significance of the controversy relates to the question of interest. Under section 18(8) of the 1998 Act, she only became liable to pay the sum claimed 14 days after the final resolution of her appeals by the House of Lords, i e a date in late December 2001.
11. The claimant concedes that, if liability were put solely on that ground, there would be no jurisdiction for the court to award any interest prior to that date. Moreover, any interest awarded under section 35A of the Supreme Court Act 1981 would be simple interest. However, the claimant says that in addition to liability under the 1998 Act, the first defendant is liable as a trustee and, for that purpose, pleads in paragraph 2 of the amended particulars of claim that the first defendant was a trustee of the assets of the council for the benefit of the claimant. That pleading is picked up again in paragraph 9 where the allegation of breach of trust, based on the items of misconduct found by the auditor and upheld by the House of Lords, is set out.
12. In relation to that liability the claimant invokes the jurisdiction of the court of equity to award interest from the earlier date, i e the date of the certificates, 9 May 1996, and, as an afterthought in the course of argument, by asserting a claim that the court should order that some, or all, of the interest should be compounded.
13. For the defendant, Mr Cakebread has submitted that there is no jurisdiction for the court to hold the first defendant liable as a trustee. In summary, his submission is that section 18 of the 1998 Act provides an exhaustive code for the determination of the liability of a member or officer of a council for the loss, and that the detailed provisions for appeals by necessary implication exclude the jurisdiction which the court might otherwise have.
14. This is an attractive submission and one which has a good deal of intuitive merit to it. The boundaries between public and private law are in this jurisdiction frequently blurred. It seems odd, however, that Parliament, having enacted the code which it has and, in particular, having now lighted on wilful misconduct as the touchstone of liability in contrast to earlier legislation which employed a wider concept, should have left untouched the wider jurisdiction, which undoubtedly existed in the early nineteenth century, whereby a corporate local authority could sue its own members for abuse of their powers.
15. I have not been addressed in any detail at all on the history of the development of that jurisdiction. But it appears from the few authorities to which have been referred or to which I have been taken, that the jurisdiction was originally based on the concept of the corporation's property being held on trust, and indeed held on a charitable trust. That appears perhaps most clearly from Attorney General v. Aspinall (1837) 2 Myl & Cr 613, which was a decision based on the then recently enacted Municipal Corporations Act 1835 (5 & 6 Will 4, c 76), section 92 of which directed, in relation to the funds of the corporation, that the new council should, after defraying certain expenses, apply the surplus under its direction "for the public benefit of the inhabitants and the improvement of the borough".
16. In relation to that Lord Cottenham LC said, at pp 622-623:
In my opinion, section 92 did not require the aid of the others, and particularly section 97; but, taking them all together, I cannot doubt that a clear trust was created, by this Act, for public, and therefore, in the legal sense of the term, charitable purposes, of all the property belonging to the corporation at the time of the passing of the Act; and that the corporation in its former state, holding, as it did, the corporate property until the election of the new council and treasurer, were in the situation of trustees for these purposes, subject to the restrictions specifically imposed by the Act, and subject to the general obligations and duties of persons in whom such property is vested.
17. On that basis it was held that the information brought by the Attorney General in relation to an alleged misappropriation of funds was competent.
18. That decision was referred to with approval by the House of Lords in Parr v. Attorney General (1842) 8 Cl & Fin 409, to which I was taken. In that case, which concerned a different Act but one in similar terms, Lord Lyndhurst LC's judgment is reported, at p 431: "I believe, Mr Solicitor General, we are all of the opinion that this is a public trust; that these funds are held by the corporation, subject to a trust, so as to give a court of equity jurisdiction over the subject matter ..."
19. And Lord Campbell to like effect said, at pp 431-432:
Before the Municipal Corporations Regulation Act passed, certainly the corporation property was not subject to any trust: the corporations might do with it whatever they chose; and generally speaking, no relief could be obtained either at law or in equity for any misapplication of that property. The Municipal Corporations Act creates a trust for corporation purposes; first, for certain specified purposes, and then, when those are answered, for other general purposes, for the benefit of the town. Then this being trust property, there is nothing in the Act of Parliament to take away the jurisdiction, which the Court of Chancery would otherwise have over it, or to take away the right which the subject would otherwise have to relief in a court of equity, in case of any misapplication of trust property.
20. Lord Cottenham said, at pp 432-433:
The case having been disposed of by the two noble and learned Lords who have now given their opinions, I will only say that, after attending to all that has been urged at the bar, I have heard nothing that could alter the opinion, which I formed in the Court of Chancery, after a very mature consideration of all the allegations and information, upon which the question must necessarily depend. It having been established in the case Attorney General v. Aspinall - which I believe has not been brought here by appeal, and which has been followed by other cases in the Court of Chancery - that a borough fund is constituted a trust fund by this Act of Parliament, the question then is, whether the information states a breach of trust, of improper dealing with that which is held by the corporation for public purposes, and therefore in that sense to be considered a trust fund, and subject to the jurisdiction of the Court of Chancery, for the purposes of preventing breaches of trust and abuses of that sort of confidence, whether reposed in individuals or corporations.
21. Having examined the information he found that the relevant allegations were made.
22. Those two authorities clearly proceed on the basis either that the relevant Acts created a trust fund in the true sense, or at any rate in a sufficient sense to enable the Attorney General to bring proceedings by way of information, either in his own right or by way of relator proceedings.
23. The jurisdiction was, however, described in a different way, and in my judgment put on a wider basis, in Attorney General v. Wilson (1840) Cr & Ph 1. In that case the question arose whether a corporation itself could sue its members for breach of trust. The relevant passage in the judgment of Lord Cottenham LC is in the following terms, at pp 23-24:
But it was said that such relief cannot be given in a suit in which the corporation are plaintiffs, because the acts complained of were acts of the corporation, and a cestui que trust cannot complain of a breach of trust to which he was a party. This objection was ingeniously argued, but it has no foundation to support it. What the present plaintiffs, the corporation, complain of, is, that certain persons, members of the corporation at a former time, fraudulently and illegally used the power and authority of the corporation for the purpose of depriving it of property to which it was by law entitled. Is it to be said that the corporation is therefore without remedy? It is true that, in future, all such property being in trust for the benefit of the public, the Attorney General may assert the right of the public in an information; but if, before the Act passed, a corporation might, in a proper case, institute a suit for the purpose of setting aside transactions fraudulent against it, though carried into effect in the name of the corporation, that right cannot be affected by the Attorney General having also a power to complain of a transaction. In the great majority of suits instituted in this court, for the purposes of rescinding transactions, it is the act of the plaintiff himself which he seeks to rescind; he says, 'the act was mine, but it arose from the fraud or other misconduct of those who then had the management of my affairs'. Why may not the corporation upon the same ground have the same relief? Why are they alone to be denied the exercise of this the most important jurisdiction of this court? Certainly not because their affairs do not require it. The true way of viewing this is to consider the members of the governing body of the corporation as its agents, bound to exercise its functions for the purposes for which they were given, and to protect its interests and property; and if such agents exercise those functions for the purposes of injuring its interests and alienating its property, shall the corporation be estopped in this court from complaining because the act done was ostensibly an act of the corporation.
24. He then went on to say, at pp 24-25, having considered authorities on the question:
I am of the opinion that this is the principle to be acted upon, independently of the provisions of section 97; and it is to be observed that that section had an object which does not apply to the present case. That object was to enable the corporation to call in question acts which might have been done before the passing of the Act, and after 5 June; and which, therefore, might be strictly legal in themselves; whereas, in this case, the acts called in question were after the passing of the Act, and therefore, from the beginning, illegal; the deeds of 30 May, though intended for a bad purpose, being inoperative. I am the more induced to make this distinction, because some observations of mine in Attorney General v. Aspinall (1837) 2 Myl & Cr 613, 621 were referred to, as supporting the argument that the corporation in this case could not be heard to impeach its own acts; whereas those observations were, in terms, in that passage, confined to acts between 5 June and the passing of the Act, and therefore have no application whatever to the present case.
25. A somewhat more extensive citation from Attorney General v. Wilson was made by Lord Bingham of Cornhill in his speech in the House of Lords in Porter v. Magill [2002] 2 AC 357, 464-465, para 19, under the heading: "If the wilful misconduct of a councilor is found to have caused loss to a local authority the councilor is liable to make good such loss to the council." He said, at p 464, para 19:
This is the rule now laid down in section 20(1) of the 1982 Act. But it is not a new rule. A similar provision was expressed in section 247(7) of the Public Health Act 1875 (38 & 39 Vict, c 55), section 228(1)(d) of the Local Government Act 1933 and in section 161(4) of the Local Government Act 1972 (although in the two earlier sections the reference was to 'negligence or misconduct' and not to 'wilful misconduct'). Even before these statutory provisions the law had been declared in clear terms. One such statement may be found in Attorney General v. Wilson (1840) Cr & Ph 1, 23-27, where Lord Cottenham LC said ...
and he then makes the more extensive citation to which I have referred, above, in paragraph 23.
26. It does not seem to me that it can be said that the analysis of Lord Cottenham LC in Attorney General v. Wilson Cr & Ph 1 is necessarily excluded by the statutory machinery for auditor's certification and so forth, which is to be found in section 18 of the 1998 Act, and was to be found in the predecessors of that section to which Lord Bingham referred. I have not been taken to the history of the origins of the introduction by Parliament of the machinery for auditor's certification, which is now to be found in section 18 of the 1998 Act, but perhaps the obvious point to make is that the modern machinery for auditing and certification of, inter alia, loss, which I am told by counsel can be traced back to the Public Health Act 1875 (38& 39 Vict c 55), was intended to supply an answer to the Roman's question, "Quis custodiet ipsos custodes?" (Who will guard the guards themselves?) It provides an outside check on the exercise by the corporation of its powers, and goes further in enabling individual ratepayers to invoke the process. Nothing about that concept necessarily excludes the right of the corporation itself to sue its own members for breach of duty where it is in a position to establish such a breach of duty has occurred, and that it has occasioned loss.
27. Accordingly, while the language of the particulars of claim is in my judgment inaccurate in describing the first defendant as a trustee of the assets of the claimant, the claimant is in a position, both to plead and to prove a breach by the first defendant of a duty owed by her to it, and to claim for loss as a result.
28. However, the remedy available to the claimant pursuing that course of action is not the same remedy as it is pursuing when it seeks payment of the sum, which has become due under section 18(8) of the 1998 Act. Nor it seems to me is the loss, which is being asserted, necessarily the same loss, which has been certified by the auditor in his certificates. In the normal case the assertion by the claimant of what for want of a better word may be described as its equitable cause of action, would result in an order that there be an inquiry as to what loss was suffered by the claimant, and an order that the claimant make good the loss found due on the taking of that inquiry with interest.
29. It is conceded that the loss for this purpose is not the full 26m-odd euros. That figure already included a substantial element of interest calculated by the auditor. That may or may not be interest calculated as the court of equity would have calculated it. I have not been taken to the detailed calculations of interest made by the auditor.
30. The important point, it seems to me, is that the former remedy being sought is a different one, and that if the claimant wishes to rely on its trust remedy, it must elect either to rely on the trust remedy or to rely on the statutory remedy. It cannot have a judgment which mixes the two up.
31. Accordingly, in my judgment, unless the claimant wishes to seek an order of the kind I have mentioned, namely an inquiry as to loss (in relation to which, on the taking of the inquiry there may well be a considerable degree of agreement, given the history of the matter) and inquiry as to what interest should be paid in respect of the loss, then the claimant must restrict itself to the statutory remedy.
32. The second question of principle, which I have to determine in relation to the summary judgment, is whether to accede to the application, which is made by the first defendant, that there should be a stay on the enforcement of the judgment, pending the determination of her application to the European Court of Human Rights. That application is made on the basis that, first of all, the court has an untrammeled power to stay execution of its judgments. Reliance in that respect was placed on the provisions of CPR r 3.1(2)(f), but the statutory recognition of the court's power is I think to be found in section 49(3) of the Supreme Court Act 1981.
33. The application for a stay is made on the basis of three grounds: first, that failure to stay the execution runs the serious risk of what are described as further breaches of the first defendant's Convention rights; secondly, that it is wrong in principle to execute a judgment against the first defendant, when the United Kingdom government's Treaty obligations provide for her individual right to apply to the Court of Human Rights for final determination of her Convention rights, and thirdly, the age and circumstances of the first defendant.
34. The argument that a failure to stay execution runs the serious risk of further breaches of the first defendant's Convention rights to some extent holds itself up by its own boot straps. It assumes for this purpose that the Court of Human Rights may declare that, or will declare that, her Convention rights have been breached, either by the actions of the auditor, or by the effect of the legislation, or by the English courts, and that, in consequence, any action of the English courts to enforce, or to allow the enforcement of its own order will necessarily involve a further breach of her Convention rights.
35. There are a number of difficulties about this argument. In the first place it is relevant to note that the question of the compliance with the Convention of the processes as a result of which the first defendant has been held liable, has been the subject of detailed consideration by all the courts which have considered her appeal, or in the case of the House of Lords the claimant's appeal, and are dealt with in particular in the speech of Lord Hope of Craighead in the House of Lords. While her complaint to the Court of Human Rights goes in some respects wider than the matters which were addressed by the English courts in considering her appeal, the only respect in which it is significantly wider, to which I have had my attention drawn, is the proposition that the effect of the legislation is to impose upon her what is in effect a disproportionate penalty.
36. That, it seems to me, is not a complaint which, on the face of it, should have much prospect of success, since the basis of her liability is not a penal one, but one of compensation for loss caused by her wilful misconduct in public office. Standing the findings of the loss and her wilful misconduct it is difficult to see how the complaint can be said to have any substance.
37. The other difficulty about the submission is one of law. A very similar point was considered by Evans-Lombe J in Locabail (UK) v. Waldorf Investment Corpn (No 4) [2000] HRLR 623. That was a case in which the defendant, Mrs Emmanuel, sought to argue for a stay of execution of an order, which had been made by the district judge and confirmed by the Court of Appeal, for possession of the house in which she lived. At the time at which the argument took place the Human Rights Act 1998 was not in force, but her argument was that she proposed to make a complaint to the European Court of Human Rights and that if that court found in her favour, and did so after the coming into force of the 1998 Act, then execution of the judgment of the deputy judge would be unlawful.
38. In answer to that argument Evans-Lombe J said, at p 628:
I am unable to accept these submissions. I do not accept that, if Mrs Emmanuel succeeds in the European Court of Human Rights, the result will be to render the judgment of the deputy judge unlawful. The Court of Human Rights is not constituted a further court of appeal from the courts of this country. By section 2(1)(a) of the Human Rights Act 1998, our courts are bound to take into account the judgments of the Court of Human Rights in arriving at their own decisions as to the applicability of the Convention for the Protection of Human Rights and Fundamental Freedoms. Mrs Emmanuel's proceedings in the Court of Human Rights will be against the United Kingdom for failing to provide a court to decide her case which conformed to her rights as defined by article 6(1). The Court of Human Rights will not determine what equitable rights (if any) Mrs Emmanuel has in the two properties in question. Those issues were determined by the deputy judge and his decision has been effectively affirmed by the Court of Appeal so as to make it final. A favourable decision of the Court of Human Rights in favour of Mrs Emmanuel will have no effect on that judgment. It will remain finally determinative of the property rights between the claimants and Mrs Emmanuel for the purposes of our domestic law. The only way in which that judgment could be set aside, short of proceedings to have it declared void on other grounds such as fraud, would be by special legislation. It is highly unlikely that Parliament would concern itself to interfere in the property rights of the parties to these proceedings.
39. So here, subject to any appeal from it, my judgment today will remain determinative of the obligations of the first defendant to the claimant. The fact that the first defendant may make a successful claim to the Court of Human Rights against the United Kingdom government will have no effect on that judgment. It would only, as it seems to me, be if this court could be presented with a real probability of the enactment of legislation by the United Kingdom Parliament, which would reverse the effects of my judgment today, that I should begin to consider the question of whether it would be right with that prospect in mind to stay enforcement in the meantime. However, nothing that has been urged on the first defendant's behalf persuades me that any such prospect exists.
40. Reliance was placed on the decision of Sedley J in Sparks v. Harland [1997] 1 WLR 143. That, however, was not a case in which the judge was considering whether or not to stay execution of a judgment having regard to a pending application in the Court of Human Rights. There the court was concerned with the question of whether or not a statute-barred action should be struck out or stayed, both of which were options clearly open to the court under the provisions of the relevant Rules of the Supreme Court at the time. The court in the exercise of its discretion, and taking account of the admittedly thin (and in the event non-existent) possibility that the Court of Human Rights would uphold the complaint, opted in favour of a stay. I find that of no assistance to the question which I have to determine.
41. More difficult are two cases which have recently been decided in the Privy Council, and which are relied on by the first defendant in this case, which have concerned the question of the grant of stays of execution in capital cases, coming in the one case from Trinidad and Tobago, and in another case from Jamaica. There the context was one where execution in the literal capital sense was to take place. In each case the appellants had filed petitions, as they were entitled to do, to the Inter-American Commission on Human Rights. It was contended that were such petitions to be heard and favourably determined, that would be a matter which the executive in the respective jurisdictions would have to take into account in deciding whether to proceed with the executions. The cases are Thomas v. Baptiste [2000] 2 AC 1 and Lewis v. Attorney General of Jamaica [2001] 2 AC 50.
42. I have to confess that, like the minority in each of those decisions, I have had some difficulty with the reasoning. Without, I hope, unduly oversimplifying it, the reasoning, at least as it appears from Thomas v. Baptiste [2000] 2 AC 1, was that the existence on the international law plane of the right of individual petition to the Inter-American Commission on Human Rights amounted to a right, in the domestic sense, for the individual to make that petition, and thus formed a part of the "due process of law" which the constitution of Trinidad and Tobago granted him.
43. Transposing that into the context of the Convention for the Protection of Human Rights and Fundamental Freedoms, the argument would have to be, and I think was, that ever since the recognition by the United Kingdom government of the right of individual petition, which happened I think in 1965, the right of individual petition has been part of the law of the land in the sense that it is now something, as a result of the enactment of the 1998 Act, that the first defendant is entitled to rely on as part of the equivalent due process provisions in the Convention, namely article 6. That provides that in the determination of his civil rights and obligations, or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time, by an independent and impartial tribunal established by law.
44. As to that, nothing in the wording of article 6 is precisely equivalent to the due process guarantee in the Trinidad and Tobago constitution, or in the equivalent provisions held to have similar effect in Lewis v. Attorney General of Jamaica [2001] 2 AC 50. The proposition that the English courts, in deciding whether to enforce their own judgments or to allow enforcement of their own judgments, have to have regard to what the Court of Human Rights may ultimately say as a result of a petition to that court about the circumstances in which liabilities have been established by those judgments, seems to me entirely inconsistent with the only judicial observation on the point that has been drawn to my attention, namely that of Evans-Lombe J in Locabail (UK) v. Waldorf Investment Corpn (No 4) [2000] HRLR 623. That observation seems to me entirely consistent with principle, namely that the Court of Human Rights is not, and has not been constituted by Parliament as, a court of appeal from this jurisdiction.
45. In those circumstances, while I have, as indicated, had some difficulty with the reasoning in the Privy Council cases to which I have been referred, I am not persuaded that that reasoning is applicable to the situation with which I have to deal. They do not, in my judgment, provide any basis upon which to order the stay which is sought.
46. So far as the age and circumstances of the first defendant are concerned, the essential point made for these present purposes is simply that the first defendant is now 71 years old, and that the size of the liability established, or sought to be enforced, is massively in excess of anything, which she could either afford, or could possibly have had in mind when committing the misconduct of which she has been found guilty. Those considerations do not, it seems to me, provide a sound basis upon which to stay the execution of the judgment. Accordingly, I would dismiss the application for a stay.
30th July 2003
1. Having decided, for the reasons given in the short judgment given earlier today, that I should hear further argument on the question of whether the claimant should be put to election, I now give judgment consequent upon that argument.
2. In essence the submission for the claimant is that it is not necessary for a claimant to elect whether the remedies to which it is entitled are cumulative as opposed to alternative, and in that connection I have been referred in particular to the discussion of the matter which appears in the opinion of Lord Nicholls of Birkenhead in Personal Representatives of Tang Man Sit v. Capacious Investments Ltd [1996] AC 514.
3. Mr Anderson, on behalf of the claimant, has submitted that the true case of election only arises when a claimant must choose between a compensatory remedy and a restitutionary remedy. So far as the label of the latter is concerned, I would myself avoid the reference to a restitutionary remedy, since the pond called restitution is of uncertain limits and surrounded by a variety of anglers using different tackle; and wrong use of the word can have the effect of a brick causing ripples to occur in unexpected directions. But if, by that phrase, is understood a remedy which, as opposed to compensating the claimant for loss, is one which obliges the defendant to disgorge benefits, then I accept that that provides an example of an alternative remedy which will give rise to the need for a claimant to elect, although it seems to me that it is only one of a number of possible such examples known to the law.
4. The short question in this case is whether the trust remedy and the remedy in debt consequent on the auditor's certificates are alternative remedies which give rise to the need for an election. Mr Cakebread, on behalf of the first defendant, has submitted that there is simply no authority for the proposition that a claimant in the position of Westminster City Council is entitled to do anything other than elect, if it wishes to pursue both remedies. He further submits that it would be wrong to allow the claimant any postponement of its duty to elect.
5. The claimant, for its part, is anxious not to find itself in a position where it has elected for the trust remedy. That is a remedy which prima facie gives it more, since while the capital sum recoverable under the trust remedy is less than that certified by the auditor (being a sum of some EUR 22.5m-odd) the court in relation to the trust remedy has power to award interest from the date at which that loss crystallised, whereas under the auditor's certificates the court has power only to award interest from 28 December 2001. The concern of the claimant, therefore, is that if it elects for the trust remedy but it is hereafter held by the Court of Appeal that my judgment is wrong and that there is no trust remedy, it will be found to have abandoned its remedy based on the auditor's certificates.
6. I am bound to say that it seems to me that in that eventuality, there would be no question of the claimant having abandoned its remedy based on the auditor's certificates. All it would have done would have been to purport to elect between one remedy which does exist, and another which does not exist, and I would think it most unlikely that any court would in those circumstances seek to hold it to its purported election. Be that as it may, and I do not decide the point, that is not conceded by Mr Cakebread on behalf of the first defendant. That then is essentially the concern which lies behind the claimant's desire that I should revise my judgment.
7. Having considered the authorities cited by Mr Anderson, and in particular the Tang Man Sit case [1996] AC 514 to which I have referred, it seems to me that I was wrong to say in my earlier judgment that this was a case which gave rise to the need for the claimant to elect between its remedies. The claims here are claims in respect of the same essential loss based on the same conduct giving rise to that loss, and the basic principles of compensation applicable to each of the claims is the same. Accordingly, the position is that the claimant is entitled to a judgment based on the auditor's certificates and is also entitled to a judgment, almost certain to be larger, based on the breach of trust claim, and that it is clear that that cumulative entitlement does not entitle the claimant to recover anything more than the higher of the two sums. That being so, there seems to me to be no reason in principle why the court's order should not reflect that entitlement. I can see no injustice to the first defendant, assuming I am right as to the existence of the trust claim, in her being subject to a judgment which renders her liable to pay the higher of the two sums, and essentially that is because the causes of action are cumulative and not alternative.
8. Mr Cakebread, on her behalf, has submitted that as what he describes as "a matter of logic and good order", there cannot be a judgment under which she is made liable in that manner. Of course, in the perhaps more typical case of a claimant having causes of action in, say, contract, tort and, to add a complication, breach of trust, a kind of action which is by no means uncommon, what the claimant will usually get at the end of the day is a judgment in an identified money sum, that money sum having been arrived at as the result of a judgment of the success of one or more of those causes of action and arrived at by taking care that there is no double recovery. In that way, the money judgment at the end of the day answers Mr Cakebread's appeal to the need for good order in respect of the court's orders.
9. It seems to me in principle, subject to the question of quantification, there is no reason why such a course should not be followed in the present case, so that the judgment might, having made declarations as to the bases of liability, then simply order the payment of what would, together with interest, be cumulatively the larger sum. That is not, however, the form of the order which has been put before me by the claimant. What that draft provides for is, first, a judgment on the trust claim in the principal sum of 22.5m-odd euros together with interest thereon to yesterday's date in the further sum of 15,700,000-odd euros; secondly, that there be judgment for the claimant against the first defendant in respect of its claim arising from the auditor's certificates, namely, in a principal sum of 26,462,000-odd euros including interest to 31 March 1995, together with interest from 28 December 2001 to 29 July 2002 in the further sum of 1,241,205 euros and then, thirdly, a provision for the avoidance of doubt, that the judgment set out in paragraphs 1 and 2 above, provides compensation in respect of the same loss and the claimant may not recover any sum from the first defendant in excess of 38,318,310 euros inclusive of interest to 29 July 2002 in the aggregate.
10. Subject to argument about the figures for interest, on which I have made as yet no determination as to the applicable rates in relation to the trust claim, it appears to me that while I am not aware of any precedent for this form of order, there is nothing in principle objectionable about it. Accordingly, I would for those reasons retract what I said in my judgment of 16 July 2002 about the need for the claimant to elect, and would propose to make an order, again subject to argument about the precise figures, in the form which the claimant now puts before me.
Judgment for claimant for breach of duty in sum of 22,573,356 euros, together with 14,393,186 euros interest thereon to 29 July 2002.
Judgment for claimant under auditor's certificate in sum of 26,462,621 euros together with 1,241,205 euros interest thereon from 28 December 2001 to 29 July 2002.
Claimant not required to elect between judgments but not to recover in aggregate any sum in excess of 36,966,542 euros, inclusive of interest to 29 July 2002.