In Re: of the rules of court (Legal Practitioners) No. 3 of 1926;In Re: of Mr. William Allan an Advocate of the Supreme Court (C.C. 343/1930) [1930] EACA 90 (1 January 1930)

## ORIGINAL CIVIL.

## Before STEPHENS, J.

IN THE MATTER of the Rules of Court (Legal Practitioners) No. 3 of 1926

and

IN THE MATTER of MR. WILLIAM ALLAN, an Advocate of the Supreme Court.

## C. C. $343/1930$ .

Rules of Court (Legal Practitioners) No. 3 of 1926-application, at the instance of the Attorney General, for a Rule to issue to an Advocate of the Supreme Court calling upon him to show cause why he should not be suspended or struck off the roll on the ground that being defendant in a civil suit, in which an allegation of breach of trust had been made, he allowed Judgment to be given against him by default, and thereby impliedly admitted the truth of the said allegation.

## Liability of the Crown to pay costs.

Held: -That by allowing judgment to go by default the defendant is not estopped from denying an allegation of breach of trust in the<br>plaint. He can only be held to admit that the amount sued for was due from him to the plaintiff.

Further held that on the discharge of the Rule the Advocate is not entitled to costs from the Crown.

Solicitor-General for applicant.

Schwartze for respondent.

RULING.—An application was made to me in Chambers on 9th October at the instance of the Attorney-General for an Order that a Rule might issue to William Allan, an Advocate of the Supreme Court, calling upon him to show cause why he should not be suspended or struck of the roll of advocates on the ground $_{\rm{that}-}$

being a defendant in Civil Suit No. 133 of 1929 of the Mombasa District Registry, in which an allegation of breach of trust by the defendant was made in the pleadings, he failed to enter an appearance in the said suit and judgment was entered against him by default on the 24th March, 1929, and he thereby impliedly admitted the truth of the said allegation.

Mr. Schwartze, counsel for Mr. Allan, submitted that there was no case to answer because the mere fact that defendant had let judgment go by default did not amount to an admission of the truth of every statement made in the plaint. All Mr. Allan admitted was that the sum sued for was due from him.

Mr. Schwartze referred to the case of Stephens v. Allan (1921, 8, E. A. L. R., p. 211), but before I deal with that case I should like to refer to the case of Ripley $v$ . Arthur & Co. (1902. 86 L. T. 735) which was an appeal from Mr. Justice Farnell, and which came before WILLIAMS and STIRLING, L. JJ. In that case the plaintiff brought an action against the defendant firm, of which S. was the sole partner, for an injunction to restrain them from passing off goods alleged to be a colourable imitation of those of the plaintiff's manufacture. S. made default in pleading, and the injunction was granted in due course. Later it appeared that similar goods to those complained of were being put upon the market by M. for whom S. was acting as agent for sale. Thereupon a motion was made for attachment of S. for breach of the injunction. No direct evidence was forthcoming, but the case was rested on admissions by S. (which the Court held to be insufficient) and on the fact that he, having allowed judgment to go against him by default, was estopped from denying that the goods complained of were an imitation of those of the plaintiff's manufacture. It was held by FARNELL, J., that in these circumstances an attachment could not issue. The plaintiff appealed. It was held (WILLIAMS, L. J., dissentiente) that the decision of FARNELL, J., was right and that the appeal failed. The difference between the Judges Williams and Stirling was a very minor one. WILLIAMS, L. J., says:-

"Now when you tell a long story in your pleadings, whether it is a statement of claim or statement of defence, it is very difficult to say how much is evidence and how much is part of the statement of claim or defence as the case may be. But be that as it may, in my judgment an admission by default in pleading never admits anything beyond a minimum which is necessary to carry the judgment. If you have got a statement of claim which covers several subjects of complaint, and you have got judgment for the plaintiff, the result of the rule that I have just mentioned, of the admission not covering more than a minimum, is that you necessarily may have to go to evidence to identify what was in truth and in fact the subject-matter in respect of which the plaintiff succeeded." On the main issue there was no difference between Williams and Stirling, L. J. J.

In Howlett v. Tarte (1861; 31, L. J. C. P., 146) it was held that a defendant, by allowing judgment to go against him by default in an action to which he has a good defence, is not estopped from pleading such defence in a subsequent action against him by the same plaintiff, if such defence be not inconsistent with any traversible averment in the former action. Therefore where, in the first action, in which judgment by default was so obtained, the declaration was for non-payment of rent which had accrued due under an agreement to grant a lease, and the plaintiff, in a subsequent action, sued the same defendant for further rent under the same agreement, the defendant was

held not to be estopped from pleading in such last action that a yearly tenancy had, by agreement between the parties, been substituted for the defendant's interest under the agreement declared on, and that such yearly tenancy had been duly put an end to before the accruing of the plaintiff's cause of action.

In Stephens & Co. v. Allan (1921, 8, E. A. L. R., p. 211) the respondent (a solicitor) and his partner issued a plaint against the appellants' firm, claiming payment of a sum of $\mathbb{R}$ 4,149 for professional services rendered to the appellants. In the defence to the case, the appellant picked out certain items in respect of which he admitted that he was liable, brought forward certain claims for payments made to the company for costs, as the result of abortive litigation, paid into Court a sum of $\mathbb{R}$ 772 made up in respect of matters for which he admitted liability, as to the balance of the claim said that the respondent's services had been of no value owing to his negligence. The respondent sent a notice to the Registrar in these terms: -" Take notice that the plaintiffs accept the sum of & 772.50 paid into Court by defendant in full satisfaction of their claim." The appellants subsequently instituted the procedings out of which this appeal arose claiming that the respondent had been guilty of negligence in permitting an agreement to be acted upon without seeing that it was under the seal of the company, and claiming a large sum as damages consequent upon that neglect. The appellants throughout consistently but unsuccessfully contended that so far as negligence was concerned it was not open to the respondent to dispute it, the fact that he had taken the money out of Court in the circumstances mentioned being alleged to constitute a complete estoppel upon the question. Their Lordships in the Privy Council said:-

"We are unable to take that view. There is no doubt that estoppel can be proved by a judgment given by consent as by a judgment given after opposition. In either case the estoppel consists of the establishment by order of the Court either by an agreed statement by the parties or by the adjudication of the Court upon the controversy being fully heard. In the present case all that happened was this. In a general claim for a large sum of money due in respect of professional services a defence was put forward explaining why the defendant refused to accept liability for a sum in excess of $\mathbb{R}$ 772, and that sum was paid into Court in satisfaction of the entire claim. The plaintiff accepted the sum in such satisfaction, but he never accepted it in any form that contained an admission that he had been negligent or that he accepted the calculations by which the defendant had arrived at the amount. So far as the plaintiff was concerned all to which he was bound to look was whether the money in Court was the sum that he was prepared to take in satisfaction of his claim, and he might have been influenced by many circumstances in making that decision. The matter

can, in their Lordship's opinion, be made more clear if it be remembered that it would have been open to the defendant to have pleaded alternatively with regard to the items that he disputed. If taking out a sum paid in under those circumstances be regarded as constituting an estoppel of the grounds of the defence which the defendant has put forward, it would follow that the plaintiff would be estopped from denying alternative defences which might perhaps be even inconsistent with themselves. In their Lordships' opinion the acceptance of the amount under the words of the Rule as satisfaction in full of the plaintiff's claim did not amount to an admission of the grounds of defence set up by the defendant, and the defendant is consequently not estopped from raising in the present proceedings the plea that he was guilty of no negligence at all."

The cases of Ripley v. Arthur & Co., and Howlett v. Tarte above referred to are more on all fours with the present case. because in both cases no defence was filed, and judgment went by default, whereas in $Stephens v$ . Allan a defence was filed alleging negligence. In the two former cases it was held that although judgment was given by default, yet the defendant could not be held to admit the truth of every allegation in the plaint, and in the latter case, when the defendant charged the plaintiff with negligence the plaintiff was not estopped from denying negligence although he had accepted a smaller sum than he had claimed in full satisfaction.

It seems to me beyond all doubt that the respondent Allan by allowing judgment to go by default cannot be estopped from denying the allegation of breach of trust in the plaint. He can only be held to admit that the amount sued for was due from him to the plaintiff. I therefore order the Rule to be discharged.

RULING (on the question of costs).—Mr. Schwartze on behalf of Mr. Allan asked for costs against the Crown.

At common law the King and any person suing to his use (a phrase which does not include relators) neither pays nor receives costs: " for besides that he is not included under the general words of these statutes (i.e., statutes as to costs), as it is his prerogative not to pay them to a subject, so it is beneath his dignity to receive them " (3, Bla. Com. 410). In L. A. v. Hamilton (1852), 1 Macq., 46, 55, LORD BROUGHAM observed: "I am exceedingly sorry that, according to an inflexible rule, we cannot give costs as against the Crown." And in $L. A. v.$ Lord Dunglas, (1842), 9 Ch. & F., 173, 212, LORD COTTENHAM said: "The Attorney-General in this country and the Lord Advocate in Scotland, equally represent the Crown, and are not liable for costs."

The common law principle above enunciated has been modified by several statutes. The chief and most comprehensive of them is the Crown Suits Act, 1855. This statute provides