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England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Fallon v Shell UK Ltd [2002] EWCA Civ 1548 (15 October 2002)
URL: http://www.bailii.org/ew/cases/EWCA/Civ/2002/1548.html
Cite as: [2002] EWCA Civ 1548
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IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT
QUEEN'S BENCH DIVISION
(MR JUSTICE BUCKLEY)
Strand London, WC2 Tuesday, 15 October 2002 |
||
B e f o r e :
____________________
| STEPHEN FRANK FALLON | Claimant/Applicant | |
| -v- | ||
| SHELL UK LIMITED | Defendant/Respondent |
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Smith Bernal Wordwave Limited
190 Fleet Street, London EC4A 2AG
Tel No: 020 7404 1400 Fax No: 020 7831 8838
(Official Shorthand Writers to the Court)
The Respondent did not appear and was not represented.
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Crown Copyright ©
- LORD JUSTICE MANTELL: Mr Stephen Frank Fallon is applying for permission to appeal an assessment of damages made by Buckley J on 14 December 2000. He does so as the assignee of Shelsaroy Limited (his company), having succeeded in establishing liability in a claim for misrepresentation against Shell (UK) Limited made in the same capacity. He is, approximately 18 months out of time. He puts the delay down, in part, to having received bad advice from his lawyers and, in addition, to wishing to present a case on his own behalf in a perfected form.
- Shelsaroy operated petrol stations. At the time with which the court is concerned, there were only two, Newbrook, on the outskirts of Bolton, Lancashire, and Salford, on the outskirts of Manchester. Prior to May 1991 Newbrook was operated by Shelsaroy as licensee. In May 1991 Shelsaroy negotiated a franchise with Shell (UK), who persuaded Shelsaroy that the prospects for trading were excellent. In fact the forecasts were grossly over optimistic. Those representations, which formed the nub of the civil action before Buckley J, were made by Shell employees. There is no question but, as the judge found, that Shell were responsible for the consequences of those misrepresentations. Whether they were made fraudulently or negligently was left in the air by the deputy judge who heard the trial on liability, but it matters not so far as the assessment of damages is concerned.
- Over the 12 months following the acquisition of the franchise, Newbrook traded at a loss and ended up in liquidation with estimated losses of £280,000. Although that is the figure which emerges from the books, it may be that that is a slight over-estimate.
- Mr Fallon took an assignment of Shelsaroy's claim from the liquidator and became the claimant in the proceedings against Shell. Buckley J's approach was to arrive at a figure for any deficit which had occurred by May 1991, which he estimated at approximately £50,000. The judge then asked himself what Mr Fallon would have lost but for the misrepresentation. He came to the conclusion that Newbrook's trading prospects were such that it would have been in liquidation in any event by December 1991. He then calculated what he considered to be the additional losses incurred by December 1991 as a result of entering into the franchise agreement. It was that figure which he seized upon as the measure of damage. In round figures it came to £40,000, with repayment of part of the cost of the franchise the figure was £43,500. The approach adopted by the learned judge can be found at paragraph 32 of the judgment.
- The submission which Mr Fallon originally made when acting on his own behalf, taken up most helpfully by Mr Kelly, a solicitor who acts pro bono, is that the approach taken by the learned judge in the assessment of damages was flawed. The submission is that the true measure would have been the difference between the position if he had not entered into the franchise and the position as it emerged, subject always to his duty to mitigate his loss.
- Although the point is taken, and well taken as it appears to me from looking at the pleadings, that there is no allegation made in the defence that there had been a failure to mitigate loss, it is said that, if that alternative and proper approach had been adopted, then the figure arrived at might have been considerably greater than £43,500 because, given the representation which had been made, promising a profitable future for Newbrook, it is by no means certain that Newbrook would have gone into liquidation in December 1991. There is nothing to say it was not an entirely appropriate measure taken by Mr Fallon who ran the company, to allow it to continue trading until the following Spring.
- I am far from saying that that is not a respectable argument. Whether or not it would justify the grant of permission to appeal is a separate question. But the problem which Mr Fallon faces is that the application for permission to appeal is approximately 18 months out of time. His explanation for that I have already indicated -- advice from counsel to the effect that there were no grounds of appeal which were likely to succeed, and advice that the judge's decision rested upon findings of fact, whereas as Mr Fallon and Mr Kelly contend it involved the misapplication of the proper approach to assessment of damages.
- I look at the chronology which has been presented. I see that Mr Fallon was convinced that the advice he was receiving was wrong as early as March 2000. It is true that thereafter he obtained legal aid to obtain junior counsel's advice. He told him that the risk of an adverse decision on costs was another factor he ought to take into account and for those reasons, in August 2001, advised against an appeal. Thereafter Mr Fallon, if he was convinced in his own mind that the advice was wrong, was perfectly able to submit his notice of application. He failed to do that until July 2002. As was conceded in argument by me, there will be very exceptional cases where long periods of time are held not to be a bar to bringing an appeal. The circumstances here are by no means exceptional in that sense.
- Accordingly, and without further reference to the possible merits of the proposed appeal, I refuse the application for an extension of time.