[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]
	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> KLH Developments Ltd v John Akins (Development) Ltd & Anor [2000] EWCA Civ 378 (21 July 2000) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2000/378.html Cite as: [2000] EWCA Civ 378

[New search] [Printable RTF version] [Help]

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CONSTRUCTION & TECHNOLOGY COURT
(JUDGE TAYLOR)

		Royal Courts of Justice Strand London WC2 Friday, 21st July 2000

Friday, 21st July 2000

1. LORD JUSTICE SWINTON THOMAS: This is an application for permission to appeal, with the appeal to follow if permission is granted, from two orders made in the course of proceedings by his Honour Judge Taylor on 31st January and 23rd February of this year in the Construction & Technology Court. The judge thereby ordered that the claimant, KLH, and the defendant by counter-claim, David Horton, be permitted to pursue a particular defence (to which I shall refer in a moment) in their reply and defence to counter-claim without amending the pleadings. That part of the order, the subject matter of the application, was made on 31st January. The order made by Judge Taylor on 23rd February was a refusal of an application to join another party to the proceedings, Yeadon Consultant Design Limited, as to which yet again I shall have to refer.
2. Mr. Lofthouse, for reasons which are sensible and clear, did not proceed with the application for leave to appeal against the latter order -- that is, the order of 23rd February -- because, in the context of what has now transpired, that has become irrelevant. It has been superseded by events.
3. KLH Developments Limited, as their name would suggest, are developers. By a contract dated 23rd September 1997 they were engaged by the defendant John Akins (Development) Limited to carry out works at a 72-bedroom hotel in Wakefield Road, Brighouse at a contract price of about £2 million. Work had commenced, but on 5th January 1998, Mr. Akins, on behalf of the defendant, instructed the claimant to stop work. The claimant brought these proceedings to recover sums alleged to be due for work done pursuant to the contract.
4. The defendant joined Mr. David Horton, who is an architect, to the proceedings. Akins alleged various breaches of contract and also made allegations in relation to Horton, including an allegation that Horton was in breach of his duty to exercise skill, care and diligence in relation to his work as an architect and planning supervisor of the works. The defendants relied further on representations which they allege to be false or to have been made negligently.
5. The trial was initially fixed to take place before a judge in the Construction & Technology Court in July 1999. In the context of the issue that arises for this court to resolve, that date is an important one. It was discovered, either on the day when the case was fixed for trial or shortly before that date, that insufficient time had been allowed for the hearing with the result that the parties agreed that there should be an adjournment of that date. It was adjourned until 6th March 2000, some nine months or so after the July 1999 date.
6. One of the issues that arose between the parties was in relation to alleged structural defects in the building. Mr. Yeadon of Yeadon Consultant Design Limited was engaged to design the structural design of the hotel and KLH wish to allege that Yeadon Consultant Design Limited were solely responsible for the structural design. A question arose as to whether Yeadon was retained by Akins, by KLH or by Horton, and whether, if so, Yeadon was solely responsible for structural design defects. This was an important issue which, if made out, would provide a defence to a very substantial part of the counter-claim of Akins.
7. Mr. Lofthouse has told us that the issue in relation to Yeadon was dealt with at the trial substantially as a matter of law or construction of the documents, and that little if any evidence was called in relation to that issue. The allegation that Yeadon was solely responsible for the structural design defects and that KLH bore no responsibility for them was not explicitly or directly pleaded in KLH's defence to the counter-claim.
8. In Mr. Lofthouse's skeleton argument, he succinctly sets out the issue that arises. He heads it "Summary of grounds of appeal" and then says this:

"As set out below, Akins contend that, when finally and formally advanced, KLH's amendment application was too late and could cause (as has transpired) unfair prejudice to Akins. Indeed, the Judge found that it would have been difficult for KLH to succeed had the application been made at the original trial date and there is no good or sufficient reason for a different conclusion if the application is eventually heard only 5 weeks before the adjourned trial date for a 20 day trial. Akins repeatedly requested KLH to make the application should they seek to advance the defence and the delay was the fault of KLH alone."

9. It had been the contention of KLH and Mr. Horton that it was unnecessary that the matters relied upon by them should be pleaded, and that because the matters were matters of law they were not required to be pleaded; and secondly (and perhaps more relevantly in the light of the conclusion reached by Judge Taylor) that Akins had had sufficient notice of the point that was raised.
10. It was in those circumstances that the application was made to Judge Taylor on 31st January. He concluded and directed that no amendment was required for the defendant's and the defendant by counter-claim's pleading to plead the effect of clause 2.5.1 of the contract between the parties, the same being a matter of law and sufficient notice having been given of the intention to take the point.
11. The two orders which we have had to consider are, as I have said, orders made on 31st January and 23rd February. It is in my judgment of relevance to consider what happened thereafter. The trial commenced on 6th March and there have been since then 16 hearing days. The judge then adjourned and, as I understand it, directed that the parties' final submissions should be put before him in writing. That has been done by counsel, and the judge has reserved judgment, and will give it on some future date. The appellants did not apply for leave to appeal the order of 31st January until 25th February, only some ten days or so before the trial date which had been fixed; and they did not apply for leave to appeal the order of 23rd February until 22nd March, by which time, of course, the trial was well under way.
12. In my view, in a preliminary issue such as this it is incumbent upon the party who wishes to appeal to bring the matter expeditiously before the Court of Appeal so that the trial judge will know exactly what the position is at the time when he commences his trial. It would have been perfectly practicable for a hearing on a preliminary matter such as this in relation to the order made on 31st January to have been heard substantially before 6th March, it being a short point, and everybody would then have known where they were.
13. Mr. Lofthouse submits that in fact the later hearing (that is, the hearing today) will have no practical effect if we come to a conclusion in his favour. I have some doubts about the validity of that submission and, as I say, in my judgment the application ought to have come on prior to the start of this trial. However, that is not the central basis upon which I would come to a conclusion in this case.
14. Mr. Lofthouse has very properly conceded that in making the order that he did on 31st January Judge Taylor was exercising a discretion. As I said some time ago, the trial was originally planned to commence in July 1999. For the purposes of that trial, counsel for the claimants had prepared an opening address and it was clear that it was the contention of the claimants at that time, obviously if permitted to do so by the judge, to rely on the contention that any failure in respect of structural design was the fault of Yeadon. From that time onwards, it seems to me that the defendants clearly had notice that the claimant intended to rely on that contention. They (that is, the claimant) took the view that it was not necessary specifically to plead that contention because it was a matter of law. Akins took the view that if the contention was to be relied upon it should be pleaded.
15. Mr. Lofthouse submits with some force that the rules require that the issues that arise in a case should be properly pleaded in the pleadings. He says it would be quite wrong for a party to be required to be alive to all issues that might arise but are not pleaded and to expend costs which might be wasted as a result. That submission, as a matter of generality, is of course quite right. A case must be properly pleaded. Judge Taylor was not, as I see the position, saying anything which was contrary to that general proposition. All that Judge Taylor was saying in this case was that, on the facts that he was considering, a formal pleading of that allegation was, as at 31st January of this year, unnecessary because by that time the defendant had plainly had notice of the contention that was being made by the claimants.
16. Judge Taylor was exercising a discretion. He was exercising his case management functions and, having considered all the documentation and the submissions that were made to him, he came to the conclusion that an amendment to the pleadings was unnecessary. As I have related, he has now spent some 16 days trying this case. He was entitled to come to his view that the defendant knew, as from July 1999, that this point was to be taken and was to be argued, and had given notice to that effect.
17. In my judgment, it is in truth impossible to go behind a decision of that nature, made by the trial judge who has charge of the proceedings, and I would accordingly refuse permission to appeal.
18. SIR CHRISTOPHER SLADE: I agree, and only wish to add a few observations of my own.
19. By their application dated 2nd December 1999, KLH applied for an order, among other things:

"2.1 That no amendment is required to the Claimant/ Defendant's by Counterclaim pleadings to plead the effect of clause 2.5.1 of the contract between the parties the same being a matter of law;...

2.3 In the alternative to direction 2.1 above permission be given to re-amend the Amended Reply and Amended Defence to Amended Defence and Counterclaim as per the draft attached herewith."

20. The judge in dealing with this application in his judgment referred to two alternative submissions by the claimant as follows:

"Counsel for the claimant submits that there is no need to plead Clause 2.5.1, but in any event the defendant has had notice of this point and if leave to amend is required then it ought to be granted."

21. He then referred to the submissions put in opposition by Mr. Lofthouse on behalf of the defendant:

"Mr. Lofthouse argues that it is a fundamental point which ought to be pleaded and also the application should fail because of its lateness. He submits the matter is insufficiently particularised and also will be a matter of prejudice because consideration will need to be given to bring Part 20 proceedings against Dr. Yeadon. He submits that it might well be necessary for any proceedings against Yeadon Consultant Design Ltd., and/or his estate to be heard at the same time."

22. There were thus two alternative submissions made by Mr. Lofthouse - that the point ought to have been pleaded and that the application should in any event fail because of its lateness.
23. The judge dealt with the two alternative submissions by Mr. Lofthouse as follows:

"I do not find this an altogether easy point. It is a matter of construction of contracts between the parties. Under the old rules of pleading, I accept it is not necessary to plead matters of law. How far this principle applies to the new rules is not entirely clear as the new rules themselves given no guidance or to matters of law, but I have to consider the overriding objective in dealing with the case. I have to consider the ways which are proportionate to the money involved, importance in the case and the complexity of the issues, financial side of each party and ensuring it is dealt with expeditiously and fairly.

"It seems to me that fundamentally it is a question of whether the defendant has been put on adequate notice that KLH/Horton wishes to take this issue. There may have been problems with this issue in July, however we are now six months down the line and it has been made abundantly clear that it is the intention of Horton to deal with this point at trial. The claimant does not think it should be pleaded. It is quite clear the claimant's solicitors made it clear of their intention to raise this issue at trial. The consequence of this may have to be considered at trial. However it is not necessary for the claimant to plead the matter. Simply to amend the pleadings would simply be an addition and in those circumstances I do not think the matter should be pleaded. Therefore the stance the claimant took is correct."

24. As regards Mr. Lofthouse's submission that the application should fail because of its lateness, the judge was clearly right in saying that it had been made abundantly clear that it was the intention of Horton to deal with the point at trial. This point had been made in correspondence beginning in July, and in subsequent correspondence, and there could have been no doubt, I think, on the part of the defendants that this was the intention of the claimants.
25. In those circumstances, I think that the exercise of the judge's discretion in regard to that point of delay could not possibly be successfully attacked.
26. The remaining question was whether the judge should have required amendment of the pleadings or directed that no amendment to the pleadings was necessary. As regards that point, I think it is perhaps worth bearing in mind that if the pleadings were to be amended the amendment would be of a very short nature, as is apparent from the draft amended reply and amended defence to the amended defence and counter-claim which is with our papers.
27. In my judgment, the exercise of the judge's discretion in this respect, namely by his decision that no amendment was necessary, is one that could not be successfully attacked in the event of an appeal being pursued.
28. For these short reasons and the further reasons given by Lord Justice Swinton Thomas, with which I fully agree, I too would refuse the permission to appeal sought in the present case.
ORDER: Leave to appeal refused; applicant to pay respondents' costs in the sum of £2,500 on summary assessment of costs. (ORDER NOT PART OF APPROVED JUDGMENT)