England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM BRISTOL COUNTY COURT
(Technology and Construction Court)
(JACOB J)

		Royal Courts of Justice Strand London WC2 Thursday 25th April 2002

25th April 2002
1. LORD JUSTICE PILL: This is an appeal by Mrs Anne Saunders against a decision of Jacob J dated 11th July 2001. The claim relates to damage to her property at 127 Tillery Street, Abertillery, Gwent as a result of the building work to the adjoining semi-detached property. It is not necessary to set out the facts in great detail, liability having belatedly been admitted. The damage to the property was done by the first defendant, who is a builder, in December of 1992, that is now approaching ten years ago.
2. The matter came before Jacob J purportedly sitting as a judge of the Technology and Construction Court. It is unfortunate that when his judgment was issued in the form of the conventional transcript it was first headed "In The Chancery Division". That was plainly a mistake and one which has been corrected.
3. Before dealing with the appeal I do first refer to an application which Mrs Saunders has made: first, to challenge the jurisdiction of Jacob J to try the matter and, second, her application that she should be permitted to reopen issues upon which permission to appeal has been refused. She has submitted an application, received by the court on 9th April 2002, which makes both those points.
4. The submission that other issues beyond that on which permission has been granted should be reopened has been based on a reference to the decision of this court in Taylor and Taylor v Lawrence and Lawrence, (transcript 4th February 2002). The point repeatedly made by Mrs Saunders in relation to her application to reopen questions is that in this jurisdiction it is Parliament which is supreme. It is submitted that the decisions taken by the court have not complied with the will of Parliament as laid down, for example, in the Law of Property Act 1925, the Building Act 1984 and the Party Wall Act 1996. It is submitted that claims relying on provisions of those statutes should now be allowed. Moreover, her application for specific performance of an obligation to rebuild the offending party wall should now be enforced.
5. In her oral submissions to the court, which support detailed written submissions, Mrs Saunders submits that she has an absolute right to have the party wall reinstated, that she did not create the problem, the problem was caused by the defendant. She was the victim and she does not understand why she should have the problem of putting matters right. She should not have to put up with the consequences of the damage which was imposed upon her by the builder in the work he did in December 1992.
6. In relation to the power of Jacob J to deal with the matter, she submits that he is not a judge of the Technology and Construction Court and had no power to try the case. The matter was assigned to the Technology and Construction Court, but because of the availability of judicial resources it was tried not by a regular judge of that court, which probably would have been a circuit judge, but was tried by a High Court judge, though not one who was a regular judge of the Technology and Construction Court. Moreover, the matter was transferred from Cardiff to Bristol. Mrs Saunders says that that was done at short notice. As a litigant in person she felt disadvantaged by the procedure that followed and by the fact that Jacob J is not a regular judge of the Technology and Construction Court.
7. This point has been the subject of considerable correspondence. There is no doubt that His Honour Judge Graham Jones, who had been handling the case, is a judge of the Technology and Construction Court. What happened is set out in a letter to Mrs Saunders from the Court Service dated 28th January 2001. I need only read one paragraph:

"With regard to the transfer of your claim to Bristol for hearing, on further investigation I understand that objection was raised to His Honour Judge Moseley QC taking the case resulting in another TCC judge needing to be sought. There was not another TCC judge available to sit in Cardiff on 11th July 2001, although it was still hoped that Judge Graham Jones sitting in Swansea might become available, allowing him to sit in Cardiff. By delaying the decision it was hoped that transfer of the case to Bristol could be avoided. Hence the delay in forwarding notification of the change of venue. The late decision to transfer the trial to Bristol for hearing by Jacob J was made by the listing officer at Cardiff Civil Justice Centre with authority given by His Honour Judge Graham Jones. However, as sated in my previous letter, the hearing notice does contain a warning that cases may be moved to another judge, possibly at a different court."

8. In my judgment, Jacob J did have power to hear the case. I refer to the Practice Direction Technology and Construction Court, which appears in Volume 2 of the White Book beginning at page 539. Paragraph 1.3 provides:

"TCC claims may be dealt with either in the High Court or, subject to paragraph 2.3 below, in a county court. Cases allocated to the TCC will, unless and until a judge of the TCC otherwise directs, be dealt with by a judge of the TCC."

9. Paragraph 2.3 deals with the limited number of county courts where proceedings must be issued and presents no barrier to what occurred in this case.
10. Judge Graham Jones did "authorise" -- and I see no material difference for this purpose in the use of that word in the information we have from the Wales and Chester Circuit Secretariat and the word "directs" in paragraph 1.23 -- Jacob J, who is of course a judge experienced in a range of technical matters, to hear the case. In my judgment Jacob J was entitled to do so.
11. I would refuse the fresh application made. I only add that it is Jacob J and not His Honour Judge Jacob QC as he was identified on today's cause list.
12. I would also refuse the application for permission to appeal on the other grounds put forward. I have referred to the recent notice in which they are made. The same points have been made at greater length, and more than once, in the documents which are before the court. The power which was recognised in Taylor and Taylor v Lawrence and Lawrence to exist is to be exercised only in rare circumstances. There is nothing whatever in this case which justifies the exercise of the power to reopen the matter. The application for permission to appeal has been properly considered and heard. The application has been rejected following all the hearings. I see no arguable case that this court would in any way interfere with, or take any further action, by reason of the fresh applications, to reopen other matters and the submissions made in support of them.
13. I turn to the question on which permission to appeal has been granted.
14. Jacob J noted the admission of liability by the respondent. He set out the facts of the case. Mrs Saunders owns a house, number 127 Tillery Street, which is semi-detached, 126 being the other and larger half of the building. In the course of work on 126 by the defendant a party wall was damaged. No repairs to that wall have been done. It is a curious feature of this case that even though substantial damages have now been awarded to Mrs Saunders, in circumstances which I will mention briefly, she has told the court that she does not intend to expend that sum in reinstating her premises. I have referred briefly to the reasons for that. They are based on her belief that it is not her responsibility, even if the money is now available, to reinstate the relevant wall.
15. The judge awarded, upon the admission of liability, the sum of £24,572 on this basis, page 4E:

"It is concluded that the total costs of taking the wall down, building another one and fortifying the roof are £24,572. That figure stands admitted. The real question before me is whether there should be any more, if so how much."

16. The claim upon which permission to appeal has been granted is that of consequential loss. The judge found that Mrs Saunders said she had suffered distress and inconvenience for the last eight years. She claimed that she would have been able to let the rooms at a high rate. A single joint expert report was provided by Mr Yapp as to the possibilities of letting the premises and other matters.
17. Mr Saunders, now sadly deceased, was alive for most of the intervening period. Mrs Saunders says that two of her children were still at home when the damage was done. We have been referred to the transcript. There is a dispute as to whether it was one child only or two children who were at home. It is clear that in the more recent years the need to provide accommodation on a regular basis for children has not arisen.
18. The judge awarded the further sum under this head of £1,000. His consideration of the claim was brief. It had been the subject of evidence, cross-examination and submission. I refer to those parts of the judgment where this point was dealt with, page 4G:

"... it is a wholly unforeseeable consequence that nobody would get the wall mended for eight years. What one would expect is the wall be mended within a reasonable period. Mrs Saunders said she did not have the money to get another builder. I know not whether that is true; it has not been fully investigated. Whether it was possible to borrow it, I do not know. She indicated at another point she would have been able to borrow money for other purposes but in the event I do not think that the consequence of Mr Williams' negligence foreseeably could include anything other than a reasonable period in which to get the wall mended or, if necessary, replaced.

It is difficult to put a time period on what that reasonable period is. Counsel for Mr Williams suggested six months. To my mind that is rather short. Bitter experience of anything to do with builders know that it takes longer than that to get anything done. So I am prepared to accept a period of one year."

19. In the next two paragraphs the judge goes on to consider the possibility of letting the rooms, the judge making no specific findings on that point. However we have to say that upon such a consideration of the evidence and the judge's reasoning as we are able to make, the prospects do not appear to have been good. The judge concluded:

"In the end, it is almost impossible to put a figure on what the loss of the rooms for a year would be worth. The figure which must be rough and ready to which I have arrived is £1,000. Accordingly, there is judgment for Mrs Saunders for the sum of £24,572 plus £1,000. The £1,000 may carry interest. I will have to hear argument about that."

20. I have to say that, with respect, I do not consider the judge's approach to this question to be a satisfactory one. He appears to have considered it only on the basis of foreseeability by the builder of what damage would result. The approach to this question was classically stated in British Westinghouse Company v Underground Railway by Viscount Haldane, Lord Chancellor, [1912] AC 673 at 689:

"The fundamental basis is thus compensation for pecuniary loss naturally flowing from the breach, but this first principle is qualified by a second, which imposes on a plaintiff the duty of taking all reasonable steps to mitigate the loss consequent on the breach, and debars him from claiming any part of the damage which is due to his neglect to take such steps."

21. The use by the Lord Chancellor of the word "duty" has been the subject of analysis in subsequent cases, such as Derbishire v Warran [1963] 1 WLR 1067 per Pearson LJ and The Solholt [1983] 1 Lloyd's Rep 605 per Sir John Donaldson MR. The conclusion is as stated in McGregor On Damages, 16th edition, paragraph 299:

"The onus of proof on the issue of mitigation is on the defendant. If he fails to show that the plaintiff ought reasonably to have taken certain mitigating steps, then the normal measure will apply."

22. In my judgment, that is the test which the judge should have applied. Foreseeability did not arise in the way in which the judge expressed it. Foreseeable damage caused to an unforeseeable degree is recoverable in the courts. When he damaged the wall the first defendant plainly could foresee that not only would Mrs Saunders suffer damage in potential repair of the wall, but also damage by way of a diminution in the use of her premises while the wall remained in disrepair. There was a burden on the defendant to establish that reasonable measures were not taken by the claimant to mitigate her loss.
23. The judge, as appears from the passage I have cited, expressly did not make findings of fact which are relevant to that exercise. One of the points raised, as the judge acknowledged, was that Mrs Saunders did not have the money to get another builder. The judge stated:

"I do not know whether that is true. It has not been fully investigated."

24. That is a question which ought to have been investigated if the defendants were to establish that Mrs Saunders had failed to take reasonable steps to mitigate her loss. There was a burden on them to persuade the judge, on a balance of probability, that Mrs Saunders' conduct in failing to have the wall repaired, and therefore no longer sustain the loss, or partial loss, of use which occurred, was unreasonable. A good deal of evidence was called, but the judge has failed to make findings of fact upon it.
25. In my judgment, his approach cannot be sustained. To say that the only issue, as if in a vacuum, what the reasonable period of time is, is to ignore the factual investigation which is necessary before concluding whether the defendant has established that Mrs Saunders failed to take reasonable steps to mitigate her loss.
26. We have heard full submissions on this subject, both from Mrs Saunders and from Mr Arensen on behalf of the defendants. They present a wholly different picture of the facts. This court is not equipped to conduct the detailed factual investigation which was a matter for the trial and was appropriate for decisions by the trial judge.
27. However, I have formed two views about the matter on the limited investigation which we are in a position to make. The first, I have already expressed, is that the judge's approach cannot stand and the approach by way of foreseeability of the defendant is a wrong approach. In the circumstances of this case the suggestion that, because the builder could only foresee that the wall would not be repaired for a period of one year, the matter is concluded on a wrong approach to the question, which was essentially one of mitigation, and whether it was established by the defendant that Mrs Saunders had failed to take reasonable steps to mitigate her loss.
28. The second point, however, is that it does seem to me extremely unlikely that a rate of loss of significantly more than a £1,000 a year is likely to be established by Mrs Saunders under this head. Upon the evidence which was available, and upon the judge's findings, as far as they go, it seems to me highly unlikely that there was a real possibility that the rooms would have been let during the relevant period and, if they were let, would be let at a figure which would provide a regular net income significantly higher than the sum awarded. If the matter is regarded simply as one of distress and inconvenience, then, conscious though we are of the undoubted distress which Mrs Saunders has suffered, and bearing in mind her sense of grievance about the way she has been treated, a figure significantly in excess of £1,000 a year seems to be very unlikely to be achieved.
29. I mention that, which I acknowledge is contrary to the general proposition that it is not for this court to conduct its own factual investigation. Trials are for the trial judge. But this court has had to considered very carefully whether, having found that the judge's approach was inappropriate, this case should be the subject of remission to the technology and construction court.
30. We must bear in mind the question of proportionality. Under the CPR it is the duty of the court to make decisions proportionate to the issues involved. That involves a consideration of whether the amount of money at stake and the amount which a successful appellant is likely to achieve justifies the expense of remission on this issue which would involve an expensive retrial and probably expert evidence. We have to consider it from the point of view of the parties, also we have to consider the public interest, whether it is appropriate that this case should be remitted so that further court time, which of course is in much demand by litigants, should be taken, having regard to the narrowness of the possible financial outcomes in this case.
31. I have come to the conclusion that we should make our own estimate of damage on the material available to us, rather than remit the question. In that regard we are accepting the submission of Mr Arensen that we should do so and rejecting the submission of Mrs Saunders who wants a further investigation in the courts. I have indicated the reasons why we do that. We do not consider that there is any real prospect of Mrs Saunders obtaining significantly more damages than the amount we have in mind.
32. In her favour I find that on the material available to us and, had the judge fully investigated the matter, there would probably not have been a finding that she failed up to the date of judgment to take reasonable steps to mitigate her loss. I consider that on the evidence the judge, had he approached the matter correctly, probably would have held that for the reasons put forward on her behalf, including her impecuniosity, however the matter was pleaded (which the judge plainly took into consideration, and in my judgment rightly so), Mrs Saunders should have damages at the rate which the judge found for the full period of eight years.
33. The court is most reluctant to remit matters of this kind to the Technology and Construction Court, having regard to the factors I have mentioned. In my judgment, the appropriate way to do justice in this case, and that of course is the overriding concern of the court, is for this court to make its own estimate of loss and to do so on the basis I have stated, namely to hold that the defendant has failed to satisfy the burden on him of showing that Mrs Saunders should have acted before judgment, but also to hold that the judge's assessment of her loss under this head at £1,000 a year was a reasonable one in the circumstances.
34. Accordingly, I would allow the appeal to the extent of substituting for the sum of £1,000 under this head the sum of £8,000. For reasons I gave earlier, I would reject the application that fresh matters should be considered by this court.
35. LORD JUSTICE CHADWICK: I agree that this appeal must be allowed for the reasons which Pill LJ has given.
36. The question which I have found more difficult is whether the court should remit the matter to the Technology Construction Court for a new trial or for the determination as a discrete issue of the period in respect of which her claim for damages for loss of use or loss of profits should be assessed; or should itself vary the order made below to substitute some other figure in the place of the £1,000 which the judge awarded under that head: see CPR 52.10(2).
37. In deciding how to exercise the powers conferred by that rule this court must seek to give effect to the overriding objective in CPR 1.1: see CPR 1.2(a). CPR 1.1(2) requires the court to deal with a case in a way which is proportionate to the amount of money involved. It requires the court to take account of the need to allot resources to other cases.
38. I am satisfied that there is no real prospect that, if this matter were remitted to the Technology and Construction Court, Mrs Saunders would increase the amount awarded to her as damages for loss of use or loss of profits beyond the total figure of £8,000, that being eight years at £1,000 per year.
39. Mr Arentsen accepts on behalf of his clients that it would be a disproportion use of the court's resources -- and disproportionate in relation to his client's proper interests -- to ask the court to send the matter back, so as to enable him to argue for some lower figure than £8,000. Mrs Saunders does not accept that her interests would not be adversely affected if she were denied the opportunity to argue for a higher figure. But, as I have said, I can see no real prospect that, if she were given that opportunity, she would attain a higher figure. So denying her that opportunity is not, on an objective consideration, to deny her anything of real value.
40. The court is not at liberty simply to give effect to Mrs Saunders' wishes to have the matter remitted to the Technology and Construction Court. It must take into account the interests of the other users of that court. That court's resources are limited. They are not to be committed to further litigation in these proceedings without good reason. There is no good reason to do so in the circumstances of this case. We can vary the order below to give Mrs Saunders the maximum amount which she has any reasonable prospect of obtaining in respect of the only element of damage which is properly in issue.
41. For those reasons, I agree with the order which Pill LJ has proposed.
42. LORD JUSTICE CLARKE: I agree that the appeal should be allowed to the extent explained by Pill LJ and Chadwick LJ, but not otherwise. I also agree that the matter should not be remitted to the Technology and Construction Court for a retrial and that the appellant's other applications should be refused for the reasons which my Lords have given.
ORDER: Appeal allowed. Costs in the sum of £500 awarded to the claimant.