England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
CIVIL DIVISION
ON APPEAL FROM THE SHEFFIELD COUNTY COURT
(His Honour Judge Cracknell)

		The Royal Courts of Justice The Strand London Friday 28 June 2002

Friday 28 June 2002

1. LORD JUSTICE BROOKE: This is a renewed application for permission to appeal by Maud & Newett Investments against a judgment of Judge Cracknell at Sheffield County Court on 22 March 2002 giving judgment for just over £33,000 to Mr Sheehan, with interest and costs against the defendants on the Part 20 claim. Earlier, in the main action, judgment had been given for the benefit of a firm called Hawsons against Mr Sheehan for the sum which he was then seeking to pass on to Maud & Newett Investments.
2. I am bound to say that I was extremely surprised when I heard from Mr Key, counsel for the applicant, that he did not know the reasons why Lord Justice Simon Brown had refused permission on paper. Indeed, he did not know that there had been a previous refusal on paper. That was not his fault; that was the fault of his solicitors, who are not present today. But where solicitors wish to trigger off CPR 52.3(4) and request a decision to be reconsidered at a hearing, and instruct counsel to appear at the hearing, it seems to me that it is incumbent on them to instruct counsel properly.
3. Lord Justice Simon Brown gave considered reasons for refusing the application on paper. He said:

"If (which I am very far from encouraging) it is proposed to renew this application, relevant transcripts (which plainly should not be one-sided selections) should be provided to the court."

4. The solicitors appear (I say "appear" because they are not here to defend themselves) to have ignored that request and to have sent Mr Key into action to try and argue the case with no transcripts and no knowledge of the reasons why this court had already refused permission.
5. Mr Key in his skeleton argument to the court below said that there was only one issue before the court: was it orally agreed between Mr Sheehan and his clients at a meeting on 9 February 2000 and/or a meeting on 11 February 2000 that his clients would indemnify Mr Sheehan for the payment of accountants' fees relating to the proposed acquisition?
6. Mr Sheehan had recently been made redundant following the takeover by another company of the company of which he was chief executive. He had stayed on for a few months and, when he parted company with them, he devised a plan to acquire some non-core companies from the new owners and to operate them. That was the plan he was discussing with Mr Maud and Mr Newett, who it is said were interested in supporting somebody in the operation of engineering companies, but were not anxious to be publicly known as associated with the proposed deal.
7. This was a very long hearing for a comparatively small claim, so far as multi-track claims are concerned. Mr Sheehan was cross-examined for four hours, and the judge made express findings of fact, having heard this cross-examination. He said:

"... the longer that Mr Sheehan was cross-examined the more convincing he became. Mr Key submitted that 'he was studied, artificial and unbelievable'. On each point I found the opposite and indeed the arguments he cites for finding Mr Sheehan unbelievable ... apply equally to the defendants."

8. That was a fairly unpromising series of findings of fact against which to mount any appeal. Mr Key tells us that at the end of this very long hearing in the county court, for a comparatively small sum of money, the issues had been refined to a certain extent and had been expanded beyond the previous issue which he set out in his skeleton argument. In this court he has sought to mount an argument that it is arguable that the judge ought to have adopted a more sophisticated approach to the evidence, ought to have found precisely what the terms of the indemnity were and ought to have found (by an application of a process of law which Mr Key has explained to us) that Mr Sheehan, instead of undertaking a direct responsibility for the fees of the firm of accountants against whom he had been promised an indemnity, ought to have said that he was acting on behalf of a shell company. Mr Key has seized on answers obtained in cross-examination and references in letters written by Mr Sheehan's solicitors indicating that perhaps Mr Sheehan, with the benefit of hindsight, thought that he should have signed the order on behalf of the shell company.
9. It is as plain as a pikestaff that no firm of accountants would have accepted instructions from a shell limited liability company. They would have insisted, if the primary agreement had been with the company, that Mr Sheehan provide them with a guarantee, and Mr Sheehan had been promised the indemnity which the judge found.
10. In all these circumstances, it appears to me, who have come fresh to the matter, that this proposed appeal is as hopeless as Lord Justice Simon Brown considered it was on paper. I am astonished that the solicitors should have instructed counsel to renew this application without the benefit of the transcripts to which Lord Justice Simon Brown drew attention. An appeal on a matter of this kind would appear to be disproportionate if one compares the costs to the amount involved. The judge made very, very firm findings of fact in favour of Mr Sheehan and adverse to Mr Maud and Mr Newett.
11. For those reasons I would refuse permission to appeal.
12. LORD JUSTICE SIMON BROWN: I agree. At the heart of Mr Key's long skeleton argument appears this assertion:

"The learned trial Judge apparently regarded the issue as being whether there was 'an oral promise to indemnify the Claimant'. However, this was not the issue; nor was it even one of the determinative issues in the action; nor had the parties agreed that this was 'the issue'."

13. That criticism, made in very strong, indeed somewhat dismissive, terms, I for my part regard as most unfortunate and ill-judged. As I pointed out in the written reasons I gave for refusing this application initially on the papers:

"As to the prospects of success [which I had already described as 'unpromising'], there is a striking correlation between the single issue defined by the judge in paragraph 1 of his judgment and that described in paragraph 29 of the applicant's skeleton argument used at trial."

14. Paragraph 29 has already been referred to in my Lord, Lord Justice Brooke's judgment and I need not repeat it.
15. This to my mind was an ill-starred application in the first place. In the light of the reasons for refusal it ought never to have been renewed, still less renewed (a) without the transcripts which I had expressly indicated should be provided upon any renewal, and (b) without counsel having been informed of the terms of the initial refusal. It is roundly dismissed.
ORDER: Application refused