B2/2000/2957

Neutral Citation Number: [2001] EWCA Civ 1586
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM NORWICH COUNTY COURT
(His Honour Judge Crome)
							Royal Courts of Justice
							Strand
							London WC2

							Thursday, 18th October 2001
B e f o r e:

LORD JUSTICE ROBERT WALKER
LORD JUSTICE KEENE
SIR CHRISTOPHER SLADE

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STALHAM ENGINEERING LIMITED

Claimant/Appellant
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(1) MICHAEL HORNER
(2) PHILIP HORNER
(trading as F & H Contractors)
Defendants/Respondents
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(Computer Aided Transcript of the Palantype Notes of
Smith Bernal Reporting Limited, 190 Fleet Street,
London EC4A 2AG
Tel: 0171 421 4040
Official Shorthand Writers to the Court)
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MR DEREK SWEETING QC and MR ANDREW LINDQUIST (Instructed by Canada House Partnership, Canada House, 4 Grammar School road, North Walsham, Norfolk NR 28 9JJ) appeared on behalf of the Appellant.

MR TIMOTHY LAMB QC and MR PETER JENNINGS (Instructed by Robert Stevens & Co, Griffin House, 3 Cathedral Street, Norwich NR1 1LU) appeared on behalf of the Respondents.
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J U D G M E N T
Thursday, 18th October 2001
1.	LORD JUSTICE ROBERT WALKER: The court has to rule on what grounds of appeal are open to the appellant, Stalham Engineering Company (which I will call “Stalham”). In order to show how the point has arisen it will be necessary for me to explain in a little detail the background (which has many unsatisfactory features) to this appeal. 
2.	On 28th February 1992 Stalham issued a writ for a sum of rather more than £12,000, being the price of an agricultural baler which that company had sold to a firm of agricultural contractors consisting of Mr Michael Horner and Mr Phillip Horner and their other partners, trading as F & H Contractors (whom I will call “Horner”). 
3.	By 8th December 1992 Horner had put in an amended defence and counterclaim, contending that not only the baler, but also an agricultural tractor of a relatively novel design and a sprayer to be mounted on the tractor, had been unserviceable and in breach of statutory warranty and making a counterclaim for a sum far exceeding the amount for which Stalham had originally sued. In 1997 Stalham obtained summary judgment on its claim and had the counterclaim struck out. However, later that year, Horner succeeded on appeal and the counterclaim was reinstated. The litigation had therefore by that stage been on foot for some five years. 
4.	On 3rd April 1998 Mr Recorder Yelton in the Norwich County Court gave judgment for Stalham on the claim and counterclaim. But on 28th April 1999 this court (in the persons of Swinton-Thomas LJ and Hale LJ) allowed Horner's appeal and remitted the matter to the county court for the assessment of damages payable to Horner on its successful counterclaim. The court directed that a schedule and a counter schedule of damage should be served in order to clarify the issues on the further hearing that would be necessary in the county court. There were further interlocutory applications in the county court to which I need not refer. 
5.	The hearing for the assessment of damages took place on 3rd to 5th July 2000 before Mr Recorder Crone. He produced a draft judgment on 21st July 2000, which was the subject of further argument and substantial changes which should have been, but were not in every case, embodied in the final judgment which became available on 1st September 2000. 
6.	On 7th September 2000 Stalham (which had been ordered to pay a substantial sum in damages and interest on damages, much of it in respect of loss of profit) put in a notice of appeal and a skeleton argument in support of an application for permission to appeal, permission having been refused by the judge. The skeleton argument ran to 13 paragraphs. The Notice of Appeal ran to 11 paragraphs. Those details are important because on 19th September 2000 Kay LJ, having considered the application on paper, granted permission in respect of grounds 1-9 and refused permission on grounds 10-13, giving reasons for his refusal of permission on grounds 10-13 from which it is quite apparent that he was referring to the 13 paragraph skeleton argument and not to the 11 paragraph Notice of Appeal.
7.	On 21st September the solicitors for Stalham promptly made a request to this court for reconsideration in open court of the refusal of permission on ground 13 alone. On 29th November 2000 this court (in the persons of Ward LJ and Sir Christopher Slade) refused the renewed application for the grant of permission on ground 13, a quite discrete ground relating to the judge's discretion to award interest. 
8.	At the same time this court gave a case management direction, that is that Stalham should file a further skeleton stating 
“what aspects of this claim are under challenge and why and what amounts are involved”. 
9.	That further skeleton was to be put in by 31st January 2001. Whether or not an extension of time was obtained, I do not know. What is apparent is that on 14th March 2001 Stalham's advisers produced a schedule which was admittedly not a full skeleton. The schedule stated that a full skeleton would be submitted in due course. It was apparent from the schedule that Stalham was contending that the proper damages for the deficiencies in the baler should be a sum of £7,783 and that damages for the deficiencies of the tractor and sprayer should (since, it was said, there was no sufficient evidence of any loss of profit) be assessed on a wasted costs basis and on that basis should amount to £25,429. It is apparent not only that that schedule was not a schedule which complied adequately with the directions given by this court on 29th November, but also that the refusal of permission for the grounds of appeal in paragraphs 10 and 11 of the original skeleton argument before Kay LJ was simply being ignored. 
10.	On 8th August 2001, that is a little over three months ago, junior counsel for Horner, Mr Jennings, put in a lengthy skeleton argument, pointing out that no full skeleton had been produced on behalf of Stalham and stating that Mr Jennings, as draftsman of that skeleton, would attempt to answer all the points on which permission to appeal had been granted but not those on which permission had not been granted. 
11.	The matter then comes forward until 16th October, that is the day before yesterday, when there reached the Civil Appeals Office an undated skeleton argument signed by Mr Derek Sweeting QC to which was appended a supplemental skeleton argument seeking to extend the grounds of appeal, in particular so as to include ground 10 in the skeleton argument in support of the application for permission to appeal. 
12.	I should add that ground 10 relates to the judge's award of substantial damages in respect of contracts for further spraying work which Horner contended would have been obtained in extension of its existing work load had the new tractor and spraying equipment have worked properly and up to its full potential. The damages which would be challenged under paragraph 10, if it were permitted, are by far the largest single item of damages in the case. 
13.	Mr Sweeting has this morning put forward a skilful and attractive argument seeking to persuade the court that even at this late stage the interests of justice require that this ground of appeal, which he says Horner is prepared to meet, should be considered by the court. I should add that Mr Sweeting has only quite recently been instructed in this matter, and it is apparent that no personal blame attaches to him for the deficiencies in the way this appeal has reached the court. 
14.	The question whether this court has power to extend the scope of an appeal beyond what has already been considered both on paper and at a further hearing in open court, is a matter of considerable importance on which different views have been expressed. There is an important decision of the Vice Chancellor in the case of Fieldman v Markovich, 4th July 2001, which bears on this matter. What happened in Fieldman v Markovich was that a Circuit Judge refused permission at the end of a hearing of a landlord and tenant case. Application was then made on paper to a High Court Judge of the Chancery Division, who refused the application on paper. The application was then renewed to the same High Court Judge in open court and he granted it on one limited ground. The Vice Chancellor held that at the hearing of the appeal he had no jurisdiction to extend those grounds. 
15.	Mr Tim Lamb QC (appearing today for Horner) fairly acknowledges that even if Fieldman v Markovich bound this court, which it does not, the point may possibly be distinguishable in that in Fieldman v Markovich the disputed ground of appeal had been expressly refused in open court. That was not what happened here. When Stalham came to this court in November 2000 they sought to extend the grounds of appeal only on paragraph 13.
16.	The question of jurisdiction is one of considerable importance, and I would be slow to decide it as a matter of principle if it were unnecessary to do so. Mr Lamb has indeed not asked us to do so, but has submitted that even if the court has power in the exercise of its flexible case management powers to permit the grounds of appeal to be extended, this is not a case in which that discretion should be exercised. I am persuaded that that is the right approach for us to take. Mr Lamb has pointed out that until as late as Tuesday of this week his clients thought that they were facing an appeal directed to a fairly limited quantum. The admission of ground 10 would vastly change (by a factor of about two) the amount which was at stake. 
17.	Mr Sweeting rightly refers to the overriding objective and the need to do justice. That, of course, means doing justice to both sides. I recognise that the consequence of shutting out ground 10 may be to shut out a ground of appeal which would have had some prospect of success and which is of great importance to his clients. It would be a tough sanction for this court to impose. Nevertheless, in the light of all the circumstances of this case as I have described them -- and I do not propose to go over them again -- it seems to me that it is a case in which a tough sanction would not be disproportionate and is needed in order not to impose undue hardship on the respondent to the appeal.
18.	I would therefore refuse the application to extend the grounds.
19.	LORD JUSTICE KEENE: I agree. Assuming, but not deciding, that this court has jurisdiction to extend the grounds of appeal beyond those for which permission has already been granted, I would as a matter of discretion decline to allow such an extension. I have three reasons for that. First, the Civil Procedure Rules envisage any request for an oral reconsideration of a refusal of permission being made promptly. That is inherent in the CPR rule 52.3.5, and it is also clear that the Practice Direction to rule 52 at paragraph 4-18 requires an applicant to indicate that he wishes to raise, at the full appeal hearing, issues for which he has not got permission “as soon as practicable after notification of the court's order”. That simply has not happened here. There has been very substantial delay of over one year before such clear notification. Secondly, no explanation for the delay has been provided to the court. One can only proceed on the basis that there is no explanation or excuse available. Thirdly, the matter is made more stark because there was actually an oral hearing on some of the grounds of appeal on which a refusal had been issued, but the grounds now sought to be argued were not raised on that occasion. 
20.	There has to be finality in litigation and indeed in the scope of litigation. I conclude, for those reasons and for those given by my Lord, Robert Walker LJ, that it would not be in the interests of justice to extend the grounds of appeal beyond those for which permission already exists.
21.	SIR CHRISTOPHER SLADE: I also agree that the application should be refused for the reasons given by my Lords. I would merely add two observations. 
22.	Ground 9 of the 13 grounds of appeal quite clearly relates simply to damages in respect of contracts previously held by the defendants. Ground 10 equally clearly relates simply to contracts in respect of work not yet obtained, that is to say in respect of future contracts. The inference which I would have drawn at the time when the application for extended permission to appeal came before Ward LJ and myself was that there had been a deliberate decision by the appellant's legal advisers not to pursue the attack on the award insofar as it had given damages in respect of work not yet obtained, that is to say in respect of ground 10. 
23.	The second comment I would make, however, is that ground 10 would, in any event, have ceased to be relevant if the appellants were to succeed in persuading us in reliance on ground 1-6 that the Recorder should have assessed damages on the basis of wasted expenditure rather than alleged loss of profit. 
Order: As above. Appeal withdrawn.
(Order does not form part of approved judgment)