England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
LIVERPOOL DISTRICT REGISTRY
TECHNOLOGY AND CONSTRUCTION COURT
(His Honour Judge MacKay)

		Royal Courts of Justice Strand London WC2 Tuesday 31st July, 2001

1. LORD JUSTICE SEDLEY: This is the renewal upon notice of an application for permission to appeal. If the appeal is permitted and is successful it may result in a new trial. It arises in an action for damages for negligence heard in the Technology and Construction Court in Liverpool by His Honour Judge MacKay, in which judgment was given on 4th May 2001.
2. The claimant, the New Zealand Dairy Farming Company, claimed that a mastitis outbreak in the dairy herd on one of its farms in 1995-1996 was caused by defective milking machines marketed by the defendant company and installed by it in 1991. The judge concluded, in short, that the equipment did not have a propensity to cause mastitis, and that in any event it had not done so in the present case. It was much likelier, in his judgment, that the farm's elderly equipment and poor management were responsible. Were this wrong, and were the defendants responsible, the claimant would not have been guilty of any contributory negligence. In that event, however, the claim might in the judge's view be time-barred, having been brought more than six years from the installation and more than three years from the probable date of knowledge.
3. Finally, the judge took the view that in any event the claimed losses were for the most part not substantiated. Although he came to no contingent figure, it is suggested by the defendant before us today that his reasoning would yield the sum of about £15,000 sterling, NZ$50,000.
4. When he delivered his judgment, having circulated it in advance, the judge was shown by counsel for the claimants the decision of this court in Flannery v Halifax Estate Agencies Ltd [1999] BLR 107. (I will return to what Flannery says later in this judgment. I should mention, however, that it is now further reported at [2000] 1 WLR 377.) In response to being shown Flannery, the judge gave a short addendum to his judgment which cannot be said, and has not been said by Mr McDonald for the defendants, to fill the gaps, such as they were, in his original judgment.
5. The claimants now contend, first, that the finding on limitation is conditional and ambiguous; secondly that the judge rejected their expert evidence and preferred the defendant's without giving any proper or intelligible reasons for doing so; thirdly, that this error removed an essential foundation for his conclusion that the equipment did not cause the outbreak of mastitis; and fourthly, and in consequence, that despite the judge's other findings of fact, all of them in the defendant's favour, a retrial is going to be necessary.
6. The limitation issue was problematic because it was going to arise only if the judge were otherwise in the claimant's favour on liability. I am content to accept - and I think that the defendants are too for present purposes - that there is only an indeterminate or contingent finding on limitation in the judgment, so that if this were the sole ground on which the claim failed, the issue would have to be redetermined. In what follows, therefore, I shall assume that there is no time-bar in operation. But if a retrial were to occur, it would be a live issue.
7. When I read the papers in this proposed appeal it seemed to me - and I said so in my written reasons - that the judge had arguably fallen into the error of simply stating that he preferred one expert to another without explaining why. I will not read out the material pages of the judgment, but it is not an unfair summary, I think, to say that in the crucial passages around the middle of his judgment the judge proceeds by either expressing a bald preference for one expert's evidence or opinion over the other's, or stating that he accepts the defendant's counsel's contention about the expert evidence.
8. Mr McDonald, who appears for the defendants at the court's invitation on this renewed application, submits that in each instance the reader can go to the defendant's final written submissions or to the expert's written reports and see the successful submission there set out in full. He does not go so far, very wisely, as to submit that this is a complete answer. But accepting that there may be arguable flaws in the judgment, he submits that there is no realistic prospect of the claimant establishing that these flaws are fatal.
9. I am not at all sure about this. It ought to be visible in principle from the judgment, however succinctly it is expressed, why it is that the judge has preferred one expert's evidence and one party's case to the other's. But I do accept that the judge had before him, and without doubt had in mind, tenable reasons for preferring the defendant's to the claimant's expert evidence. I accept too that if one goes to the reports and written arguments one can find the material there.
10. Before I turn to the question whether this is a sufficient answer for present purposes, I need to mention the relatively modest sum to which it looks as if quantum in this case has shrunk. I am not satisfied that the kind of proportionality between damages and costs to which the first of the Civil Procedure Rules refers is intended to cut down the basic principle that wrongs should be remedied. The essential objective of the Civil Procedure Rules is to ensure that the expenditure of time, effort and cost should be proportionate to the amounts at stake. That is a slightly different reasoning process.
11. The real question here, it seems to me, is whether the lacunae in the judgment are sufficiently immaterial to enable the judgment to be sustained. The judge's fact-findings are practically all of them adverse to the claimant. It is said by the defendant's counsel that they render any insufficiency in his explanation of his view of the expert evidence marginal.
12. Putting the fact-findings again in very short form, they are most importantly these. First, from 1991 to 1995 there had been no significant incidents of mastitis, nor of the hyperkeratosis which the claimant's expert considered to be a precipitating factor caused by the defendant's equipment on the farm in question.
13. Second, on a neighbouring farm of the claimant's, where the defendant's equipment had not been installed there had been mastitis outbreaks during these years. The claimant's main witness Mr Withers had, in the judge's view, attempted to keep this information from the court.
14. Third, whether or not the outbreak at the other farm had been the source of the 1995 outbreak on the farm in question, it certainly afforded powerful evidence that such outbreaks were not necessarily connected with the defendant's equipment.
15. Fourth, the claimant's explanation that it was only good farm management which had kept the disease at bay in those years did not stand up in the face of the judge's finding that the farm had not been well managed in the intervening years.
16. Fifth, the claimant's alternative explanation that it was an increase in milk yield which has precipitated the 1995 outbreak and explained the long interval did not, in the judge's view, fit the facts.
17. If these findings were properly made, and given the contextual fact that mastitis is known to be an endemic problem of dairy herds, the claim was going to fail.
18. Mr Bartley-Jones QC argues, however, for the claimant, that what the judge has done is in effect reason from these facts to a preference for the defendant's over the claimant's expert evidence. Had he gone about it differently and (as Mr Bartley-Jones would submit) rightly, an objective appraisal of the competing expert evidence might have led the judge to prefer the claimant's. Had that happened, he would have been driven to go on to interpret the facts which I have summarised very differently in the light of the expert evidence.
19. These are, no doubt, very big ifs. The reality may be that, for reasons which are not perhaps spelt out but can be discerned, the judge accepted the opinion of the defendant's expert that the outbreak had nothing to do with the equipment. Certainly if there had been no expert evidence his fact-findings alone would almost certainly have produced the same conclusion by inference. But if one assumes a trial at which not only is the claimant's expert evidence found convincing but the surrounding facts are found not to undermine his opinion, then the proposed appeal would have a realistic prospect of success.
20. It has to take a compelling case to rob a party of the fruits of such fact-finding as the judge made in this case. But Mr Bartley-Jones' key contention is that CPR 52.11(3)(b) oblige this court to take cognisance of what is, in his submission, a serious irregularity productive of real injustice. The subrule reads:

"The appeal court will allow an appeal where the decision of the lower court was-

(a) wrong; or

(b) unjust

because of a serious procedural or other irregularity in the proceedings of the lower court."

21. He relies upon the Flannery decision, to which I have referred, where among the critical reasons given by Henry LJ for allowing the appeal in a case where the judge had simply expressed a preference for one expert over the other was:

"... we do not know why he preferred the defendants' experts."

22. In Flannery, however, the expert evidence was decisive. In the present case Mr McDonald argues that it was not decisive. It was the factual evidence which was, in his contention, decisive and the expert evidence which simply, in the judge's judgment, failed to displace the inferences which otherwise fell to be drawn.
23. The two most salient facts in the present case - namely that there was no mastitis from 1991 to 1995 on the material farm, but that there had been an outbreak on a neighbouring farm where there was no Ambic equipment - if taken alone were eloquent of the likelihood that Mr Hillerton, the defendant's expert, was right and Mr Bromwell, the claimant's expert, was wrong in his science and his opinion. In that event, the expert evidence could without doubt be said to be anything but decisive. The decisive element would be the two key facts I have mentioned.
24. However, both of these key facts were contested, and contested precisely upon the basis of expert testimony. The claimant's case was that the mastitis was or may have been present in sub-clinical form on the material farm in the intervening years and that the outbreak on the other farm, being environmental and not machine-induced, was irrelevant to the case.
25. Among other reasons why it was said by the claimant's expert to be environmental was that it was treatable on the neighbouring farm, whereas on the material farm it had proved untreatable. Here the claimant relied in part on the evidence of somatic cell counts. The judge said of these:

"I am unconvinced that the somatic cell count indicates a machine induced situation which only exploded in 1995. The evidence suggests to me that the other farm not only had mastitis but in all probability an environmental mastitis. We are concerned with the contention the appearance of which indicates that the machine is at fault. It is much more likely, in my view, that the mastitis suffered in 1995 was brought about by environmental conditions."

26. In a helpful written argument Mr McDonald, for the defendant, says that the reason why this matter was so cursorily dealt with in the judgment was that it was not pleaded by the claimant that the two outbreaks were unconnected and that the parties had had to deal with it as the trial progressed. But if the claimant's expert evidence was right, there had been no need to plead the issue and nothing to plead to in that connection; for it was the claimant's case that the neighbouring farm and the mastitis outbreak on it had nothing to do with what happened on the material farm.
27. In those circumstances, it seems to me that Mr Bartley-Jones is entitled to point to the want of any analytical consideration of the evidence of the claimant's expert, Mr Bromwell, as a material gap in the reasoning of the judgment.
28. So it seems to me in the end arguable that the judge's failure to reason out his central conclusion that the 1995 mastitis outbreak was most probably environmental in origin is not only a serious flaw, but by no means an isolated flaw in the judgment. If he was to reject the suggestion that the somatic cell count pointed to machine-induced mastitis, the claimant can, I think, say with some legitimacy that it is entitled to know why, and to say the same about the several other places where the judge expresses himself entirely referentially.
29. While therefore the claimants may still have a long and difficult row to hoe, I have been persuaded that the arguable deficiencies in the judgment give them a realistic prospect of oversetting it. Once this point is reached, for the reasons I have given I am not prepared to say that the daunting and expensive possibility of a retrial, attended by a further argument on limitation, and all in pursuit of a relatively modest sum of money, would justify us in withholding permission to appeal.
30. Accordingly, for these reasons, I, for my part, would grant such permission.
31. LADY JUSTICE ARDEN: I agree. I would repeat that there seem to me to be many difficulties in the way of this appeal. But since I have not been able to identify any basis on which it can be said with certainty that the conclusion would have been the same notwithstanding the deficiencies in the expert evidence on which the applicant relies, in my judgment permission to appeal should be given.
32. However, I would add that I hope very much that the parties will reflect on the wisdom of further litigation in this matter, given the relatively small amount at dispute, and in particular I hope that they will consider availing themselves of the court's cost-free services for alternative dispute resolution.
ORDER: Application for permission to appeal granted; costs of this application to be costs in the appeal. (Order not form of approved judgment)