England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM NORWICH COUNTY COURT
(MR RECORDER YELTON)

		Royal Courts of Justice Strand London WC2A 2LL Wednesday, 29th November 2000

1. SIR CHRISTOPHER SLADE: There are now before the court two applications in an appeal which arises out of the sale by the claimant, Stalham Engineering Company Limited ("Stalham"), to the defendants, Michael Horner and Philip Horner trading as F and H Tractors ("the Horners") of three items of agricultural equipment. These were a tractor, a baler and a sprayer unit for the baler. The sprayer was useless as it would not fit the tractor and the bailor was in due course found by the Court of Appeal to be defective.
2. The proceedings began with the issue of a writ by Stalham for the price for the baler. That claim was not in dispute as such. The dispute arose in regard to the Horners' counterclaim. They counterclaimed for damages on the basis that the baler, tractor and sprayer had all been sold in breach of statutory warranties. The tractor and sprayer had been supplied to the Horners by Stalham on lease purchase in 1989, and the baler had been sold to them in 1991.
3. I should mention a few other dates which have been brought to our attention by counsel for Stalham. The defence and counterclaim was served on 2nd June 1992. An amended defence and counterclaim was served on 8th December 1992. There was a reply and request for further and better particulars served on 19th January 1993. The Horners served further and better particulars on 24th May 1993. Then, on 3rd January 1997 summary judgment was given to Stalham on its application for the counterclaim to be struck out. The Horners then appealed that judgment successfully and on 24th June 1997 the counterclaim was reinstated.
4. On 3rd April 1998 the action was heard at Norwich before Mr Recorder Yelton who, by a judgment of 3rd April 1998, found for Stalham for the price of the baler, that is to say £12,628.69 with interest of £1,010.30. He dismissed the counterclaim on the basis that in regard to the tractor and sprayer there was no contract between the parties but only one with the finance company, and that the condition of the baler, though it gave trouble, was not bad enough to amount to a breach of contract.
5. On 28th April 1999 the Court of Appeal allowed the Horners' appeal and ordered that there be judgment for the Horners on the counterclaim in regard to both contracts and that the matter be remitted to the Norwich County Court for the assessment of damages.
6. The hearing for the assessment of damages took place before Mr Recorder Crome. In a reserved judgment dated 14th August 2000, he assessed the damages and interest due to the Horners in the net sum of £309,361.41 and refused Stalham permission to appeal. This net sum comprised £175,506.24 damages and £147,494.54 interest with a set-off in favour of Stalham for the sum due on the claim (which had not been appealed) of £12,628.69 and £1,010.30 interest.
7. Stalham then applied to the Court of Appeal for permission to appeal and for a stay of execution. Stalham's skeleton argument in support of its proposed notice of appeal specifies 13 separate grounds. The 13th separate ground was as follows:

"The learned Recorder's award of interest was wrong in that it awarded the defendants interest over the period from 24th May 1993 when they served further and better particulars of the defence and counterclaim to the end of 1996 when the claimant successfully applied for the defence and counterclaim to be struck out, such order being reversed on appeal. During that period of three and a half years the defendants failed to prosecute with due despatch or at all and accordingly it is submitted that they are not entitled to interest."

8. On 19th September last, Kay LJ, on a consideration of Stalham's notice and accompanying documents granted permission to appeal in regard to grounds 1 to 9 but refused permission on grounds 10 to 13. He directed that the application for a stay of execution should be renewed orally with notice given to the proposed respondent. As to grounds 1 to 9 Kay LJ stated:

"I consider each of these grounds arguable or so united to other grounds as to justify consideration."

9. As to ground 13 he stated:

"This was essentially a matter for the exercise of discretion by the Recorder and I see no prospect of the court concluding that his decision was wrong."

10. Stalham now before us renews its application for a stay of execution. It further asks us to reconsider this court's refusal to give permission to appeal as to ground 13, as set out in the decision of Kay LJ. The Horners have been represented on this application by Mr Peter Jennings, who has submitted a very full skeleton argument; but in the event only the application relating to ground 13 has been the subject of argument before us.
11. As will have appeared, the contention there made is that the Recorder's award of interest was wrong in that he awarded interest over the period from 24th May 1993 when the Horners served further and better particulars of their defence and counterclaim, to the end of 1996.
12. Mr Linqvist for Stalham has submitted that it is at least arguable that the Recorder should not have awarded interest to the Horners during this long period of inactivity. He has referred us to the judgment of the Recorder on 14th August this year in which he dealt with the question of interest and he also dealt with the question of delay over one and a half pages of his judgment. The question of delay was obviously very much present to the Recorder's mind. But Mr Linqvist laid particular stress on a passage in the judgment which could possibly be read as an acceptance by him of an argument that the application for summary judgment made by Stalham on 1st January 1997 in some way contributed to the delay. He pointed out that the delay over the period from May 1993 to the end of 1996 on which he now relies preceded that application.
13. Before the introduction of the Civil Procedure Rules 1998 the court indubitably had the power at its discretion to reduce the period over which interest would ordinarily be allowed at least in the exceptional case where the parties seeking payment had been guilty of gross delay. (See Jefford v Gee [1970] 2 QBR 130 at 151F per Lord Denning MR). But it was a power very sparingly exercised. I have no doubt that this power continues to exist following the introduction of the Civil Procedure Rules. It is possible, I put it no higher, that the court, in the pursuance of the objectives of the Rules and of good case management, might now be prepared a little more readily to exercise the power in a case where it considered that the fault for the delay over a specified period could fairly be laid at the door of one party only.
14. The matter, however, must remain one for the Recorder's discretion. In my judgment the insuperable obstacle facing Stalham in any attempt to disturb his finding on the question of interest in reliance on their point relating to the delay during the period May 1993 to the end of 1996 is that the point relating to this specific period was never ventilated before the Recorder in argument on their behalf. The Recorder was not called on to address his mind to this point. If the point had been drawn to his attention, it might well be the case, as Mr Jennings pointed out, that counsel for the Horners could have referred to facts by which the delay would wholly or at least partially have been excused or explained. As his judgment made plain, the Recorder himself did not consider he had sufficient material before him to apportion blame for the apparent inordinate delay in the course of the proceedings as between one party or the other.
15. In the circumstances, I find myself compelled to agree with Kay LJ, in seeing no prospect of the court concluding that the Recorder's conclusion was wrong on the question of interest, or being prepared to interfere with the exercise of his discretion. I would, therefore, confirm his refusal of Stalham's application for permission to argue ground 13.
16. As to Stalham's application for a stay, this application has in the event been disposed of very sensibly, if I may say so, by agreement between the parties on the following terms which, for completeness, I now record. Stalham has agreed to pay £80,000 to the Horners on 20th December next, a further £20,000 on 20th March 2001, a further £20,000 on 20th June 2001. It has been agreed that £15,000 which has already been paid in court should be paid out to the Horners forthwith. It has been agreed that there should be a stay of execution in regard to the balance of the sum due until the appeal is heard. It has further been agreed that the costs of the application for a stay should be reserved.
17. Finally, again for completeness, I should perhaps mention that a sum of £20,000 has already been paid by Stalham to the Horners pursuant to an order of the court in addition to the sums to which I have already referred.
18. LORD JUSTICE WARD: I agree.
(Permission to appeal on question of interest refused; stay on the terms of the payments being made; permission to take the money out of the court and the costs reserved).