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68. What distinguishes these cases from the present one isthat in the case of
an equitable assignment the assignee is the true owner andthe assignor is a
bare trustee. I agree with Lord Walker that there is no realanalogy between an
equitable assignee and a beneficiary interested in anunadministered estate.
69. I would not rule out the possibility that there may becircumstances in
which justice would require that joinder of the administratorbe dispensed with.
But the mere fact that there were "specialcircumstances" justifying an action
by the beneficiary, or the fact thatnon-joinder would defeat a limitation
defence, would not be sufficient.
70. It follows that the limitation problem cannot beovercome by amendments in
separate stages so as to procure the result that theaddition of the
administrator would be necessary "for the determination ofthe original action"
for the purposes of section 35(5)(b). The argumentfor amendments in separate
stages is this. First, there would be an amendmentto change the capacity in
which Mark Roberts sues from his personal capacity toa representative capacity
under CPR 17.4(4). Second, this would have the effectthat the new claim in the
representative capacity is deemed to commence on thesame date as the original
action: section 35(1)(b); section 35(2)(a). Third,the addition of the
administrator would be necessary because the claim in theoriginal action (i.e.
the back-dated representative claim) cannot be maintainedagainst the solicitors
unless the administrator is joined: section 36(5)(b);section 36(6)(b).
71. This procedural device cannot overcome the limitationproblem, since it is
plain that, other than in the most exceptionalcircumstances such as existed in
WilliamBrandt's Sons & Co. v Dunlop Rubber Co. Ltd. , even in the case of
anequitable assignment the assignee cannot proceed to judgment without
joiningthe assignor. It would be an abuse of process for the amendments to be
made inseparate stages. As Arden LJ said (at [36]), it would be contrary to
principlefor the court to grant permission to amend the claim merely to reflect
a changeof capacity which would not enable Mark Roberts to proceed to judgment.
But, inany event, in a representative action, the administrator must be joined
at theoutset.
72. The result is that the Court of Appeal was right toconclude that this was
not a case where permission to amend to plead thederivative claim should be
given.
Special circumstances73. Consequently, the question whether the judge was
rightto decide that in any event there were no special circumstances justifying
thederivative claim (on
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which the Court of Appeal was divided)does not arise. It can therefore be dealt
with shortly.
74. The judge set out the relevant circumstances as follows:(1) When Mr Sainter
was appointed as administrator in 2000, he was still intime to bring any claim
which the estate was able in law to bring against thesolicitors; (2) at the
present time, a claim by the estate against thesolicitors is statute-barred;
(3) Mr Sainter was appointed by the court asadministrator on the application of
Mark Roberts; (4) Mark Roberts did notapply for himself to be appointed as an
administrator; (5) Mark Roberts did notprocure by way of an assignment or by
way of an assent, the vesting of theestate's cause of action against the
solicitors into himself before thelimitation period ran out; (6) if Mark
Roberts procured the vesting of theestate's cause of action in himself at the
present time then he would not beable to assert that cause of action, by reason
of limitation; (7) there was noreason to think that Mr Sainter would not have
been prepared to vest theestate's cause of action in Mark Roberts; (8) there
was no basis for anyallegation of any breach of trust against Mr Sainter; (9)
there was no conflictof duty or interest involving Mr Sainter; (10) Mr
Sainter's decision not to suethe solicitors had not been said to be open to any
criticism; (11) if John Robertshad remained the administrator then there might
at that time have been specialcircumstances arising out of the allegations
being made as to the involvementof John Roberts in the matters complained of;
(12) any special circumstanceswhich existed during the time that John Roberts
was administrator ceased toexist when Mr Sainter became administrator in
October 2000; (13) Mark Robertswas not the sole beneficiary; (14) the Court had
no specific evidence as to theattitude of Mrs Roberts' sister or the Inland
Revenue; (15) the proceedingsagainst the solicitors were far from
straightforward, although the judge didnot base his decision on any assessment
of the precise prospects of success inthose proceedings; (16) in the absence of
argument on the point, he left out ofaccount the question whether Mr Sainter as
administrator might be liable to paythe costs if a derivative action were
permitted and proceeded and failed; (17)Mark Roberts had legal services funding
to bring the present proceedings and itmight very well be the case that he had
or would obtain legal services fundingto bring a derivative claim; (18) the
court had power under CPR 17.4 to giveMark Roberts permission to amend the
present proceedings to add a derivativeclaim (if special circumstances existed)
and thereby defeat a limitationdefence.
75. The judge took the view that, although the list of"special circumstances"
was not closed and "specialcircumstances" had never been exhaustively defined,
the circumstances asto legal services funding and limitation were of a
different character fromanything contemplated in the cases as to special
circumstances. Thecircumstances in (17) and (18) were not special circumstances
which wouldjustify the court in permitting Mark Roberts to bring a derivative
claimagainst the defendants. Arden LJ (with whom Patten J agreed) seems to
havetaken the view
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that the judge was wrong (among otherreasons) because he had not given
sufficient weight to the fact that thederivative claim would enable an asset to
be realised, which otherwise couldnot be realised, and because Mark Roberts had
legal aid the estate would nothave to fund his costs.
76. If the point had arisen for decision, I (in agreementwith Pill LJ) would
have taken the view that this was a case where the judgehad a wide latitude in
evaluating what were special circumstances, that he tookall the relevant
circumstances into account, and that he conducted the enquiryin a way with
which an appellate court should not have interfered.
77. I would therefore dismiss the appeal on the ground thatthe Court of Appeal
was right to hold that the amendment to pursue a derivativeclaim was not
permitted by the CPR after the expiry of the limitation period. 78. I agree
with all my colleagues that, for the reasonsthat Pill LJ in the Court of Appeal
and Lord Collins in this court have given,the judge at first instance was fully
entitled to hold that the appellant hasfailed to show that there were special
circumstances justifying the derivativeclaim which he seeks to bring at this
late stage. Contrary to the views of themajority in the Court of Appeal, I
would hold that it would not have beenpermissible for that court to interfere
with his decision. I would dismiss theappeal on this ground because, like Lord
Clarke, I would prefer not to reach afinal conclusion on the question whether,
if special circumstances had beenmade out, the court would have had power to
give the appellant permission toamend to introduce the derivative claim.
79. I am not convinced that the rule that the administratormust be joined is
quite as absolute as Lord Collins indicates in his judgment.He has referred in
para 54 to the law of Scotland as explained in Wilson andDuncan, Trusts,
Trustees and Executors, 2nd ed (1995), para 10-13. It is stated in
thatparagraph that if the trustees refuse to sue to recover a debt due to the
trustestate, they can be forced to lend their names to the beneficiaries to
enablethem to raise the action: Blair vStirling (1894) 1 SLT 599; Brown's
Trustees v Brown (1888) 15 R 581 . There is no doubtthat this is the ordinary
rule. As Mackenzie Stuart, The Law of Trusts (1932),p 210, explains, if the
beneficiaries insist on action being taken, thetrustees must lend their name
and authority to the beneficiaries in order thatthey may have a formal title to
sue. This explanation supports the view thatLord Collins has expressed in para
62 of his judgment that joinder has asubstantive
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basis, as the beneficiary has no personalright to sue for the recovery of trust
property. This is not, as Scots lawwould see it too, simply a matter of
procedure.
80. How Scots law would see the procedural issue is, as LordRodger says, not
free from difficulty. But there are some indications as to howit deals with the
question which is of real interest in this case, which iswhether proceedings
can be raised without joining the trustees at the outset.
81. In Morrison vMorrison's Executrix 1912 SC 892, 893 the Lord Ordinary,
Lord Skerrington, said that it was certainly logicalthat no one should be
allowed to sue an action unless that right sought to beenforced had been duly
transferred to him, and that any injustice that thisrule of law might operate
was obviated by the further rule that the person whohas the beneficial interest
may compel the person who has the formal title tolend his name on receiving
security against expenses. But he went on toindicate that this was not an
absolute rule:"I am of opinion that where justice absolutely requiresit, the
action may, in spite of the legal technicalities, be allowed to proceedat the
instance of the party who has the beneficial interest."He referred, in support
of thatproposition, to a passage in Lord Herschells' speech in Rae v Meek
(1889) 14 App Cas 558 , 569, where hesaid:"The alleged duty, if it existed at
all, was to thetrustees, and not to the beneficiaries. If there has been a
breach of it, thetrustees and not the beneficiaries are the parties to sue.
There may be caseswhere, if trustees failed to call to account those who were
under liability inrespect of acts injurious to the trust estate, the
beneficiaries might compelthem to do so, or even enforce the right
themselves."82. The last six words in this quotationfrom Lord Herschell's
speech may seem a rather slender foundation on which toqualify a rule based on
a substantial point of principle. But I take them toindicate that it would be
unwise to regard this rule as one which will alwaysbe enforced. Viscount Cave
LC's observation in Performing Right Society Ltd v London Theatre of Varieties
[1924] AC 1 , 14 that there may bespecial cases where the rule that the person
with the legal right must bejoined will not be enforced provides further
support for this approach.
83. It is true, as Lord Collins points out, that in Morrison v Morrison's
Executrix Lord Skerrington went on to point out that adecree in such an action
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