ON APPEAL FROM THE QUEEN'S BENCH DIVISION
MR JUSTICE DAVID STEEL
2008 FOLIO 177
Strand, London, WC2A 2LL
B e f o r e :
R ANTHONY MAY
LORD JUSTICE RIX
LORD JUSTICE HOOPER
| NICHOLAS G JONES
|- and -
|(1) ENVIRONCOM LIMITED
(2) ENVIRONCOM ENGLAND LIMITED
|Defendants / Appellants
|- and -
|MS PLC (trading as MILES SMITH INSURANCE BROKERS)
||Third Party /Respondent
Mr Alistair Schaff QC and Mr Andrew Hunter (instructed by CMS Cameron McKenna LLP) for the Respondent
Hearing dates : 25th May 2011
Crown Copyright ©
Lord Justice Rix :
"In short I do not regard it as made out that there was any realistic chance of the fire risk improvements that Environcom asserts might have been offered to underwriters would in fact have been proposed to underwriters let alone in due time."
The generation of the "no fire" point
"Environcom does not and could not have advanced the case that Miles Smith's breach of duty caused the September fire i.e. it does not contend that if Miles Smith had advised it properly, insurers would have insisted on risk management measures which would in turn have prevented the fire from occurring at all. Such a case would be legally unsustainable as it is not within the scope of a broker's duty to prevent fires and loss of this type is consequently too remote: The Achilleas  1 AC 61 (HL)."
"My Lord, it's conceptually difficult, I accept, but I say that Aneco is a complete answer to the point my learned friend makes. Had my learned friend pleaded this point, then we would have said that in fact if he was right that plasma guns caused the loss, caused the fire, then we were entitled to claim from him the damages that flowed from that fire up to the limit of what the insurance indemnity was."
In other words, Miles Smith's liability was still anchored on their negligent failure to secure proper cover.
"106. One final point remains. Even if there was a chance of obtaining cover, Miles Smith contend that, because by definition it was a precondition of renewal that there be no deployment of plasma cutters and no throughput of pentane fridges, the September fire would not have occurred. Indeed I am not sure that Environcom argued to the contrary. Certainly there was no disclosure of any investigation by Environcom nor any evidence called to deal with the issue.
107. In my judgment, as a matter of probability, this view must be right…
f) Little is available as regards the September 2007 fire. But in their presentation to obtain insurance cover for their new recycling operation, Environcom's brokers confirmed that it was probably (albeit not conclusively) attributable to a plasma cutter, a view shared by the loss adjusters.
108. It follows that, if Environcom is correct in its analysis, even if cover would have been obtained, it would not have been called upon as no loss by fire would have been sustained. Yet the whole basis of Environcom's claim is that, but for the breach of retainer by Miles Smith, Environcom's claim against underwriters would not have been impaired. The claim was not pleaded in any alternative way.
109. This is a further obstacle to Environcom's claim. In my judgment, even if pleaded, the loss claimed is not of the kind or type which Miles Smith ought fairly to be taken to accept liability: see The Achilleas  1 AC 61. Even taking the issue of remoteness by reference to more traditional lines, I would not be persuaded that the loss sustained was within the reasonable contemplation of the parties as likely to result from the breach of retainer. Put another way, if no fire would have occurred, it follows that the loss sustained by Environcom was not caused by Miles Smith. The fire and consequential loss was attributable to Environcom's failure to identify and enforce fire precautions by way of changes in the whole working process without which the process was effectively uninsurable."
The draft amendment
"in seeking such insurance, [Environcom] would have ceased the use of plasma guns on refrigerators and/or would have ceased the throughput of hydrocarbon (pentane) refrigerators on the shredding line. Had the use of plasma guns and/or the throughput of hydrocarbon refrigerators ceased, the fire on 16 September 2007 would not have happened. Alternatively, but for [Miles Smith's] breach of duty, there was a very good chance that it would not have happened."
"My Lords, I think that a point such as this, not taken at the trial, and presented for the first time in the Court of Appeal, ought to be most jealously scrutinised. The conduct of a cause at the trial is governed by, and the questions asked of the witnesses are directed to, the points then suggested. And it is obvious that no care is exercised in the elucidation of facts not material to them.
It appears to me that under these circumstances a Court of Appeal ought only to decide in favour of an appellant on a ground there put forward for the first time, if it be satisfied beyond doubt, first, that it has before it all the facts bearing upon the new contention, as completely as would have been the case if the controversy had arisen at the trial; and next, that no satisfactory explanation had been afforded them when in the witness box."
"52. Civil trials are conducted on the basis that the court decides the factual and legal issues which the parties bring before the court. Normally each party should bring before the court the whole relevant case that he wishes to advance. He may choose to confine his claim or defence to some only of the theoretical ways in which the case may be put. If he does so, the court will decide the issues which are raised and normally will not decide issues which are not raised. Normally a party cannot raise in subsequent proceedings claims or issues which could and should have been raised in the first proceedings. Equally a party cannot, in my judgment, normally seek to appeal a trial judge's decision on the basis that a claim, which could have been brought before the trial judge, but was not, would have succeeded if it had been so brought. The justice of this as a general principle is, in my view, obvious. It is not merely a matter of efficiency, expediency and cost, but of substantial justice. Parties to litigation are entitled to know where they stand. The parties are entitled, and the court requires, to know what the issues are. Upon this depends a variety of decisions, including, by the parties, what evidence to call, how much effort and money it is appropriate to invest in the case, and generally how to conduct the case; and, by the court, what case management and administrative decisions and directions to make and give, and the substantive decisions in the case itself. Litigation should be resolved once and for all, and it is not, generally speaking, just if a party who successfully contested a case advanced on one basis should be expected to face on appeal, not a challenge to the original decision, but a new case advanced on a different basis. There may be exceptional cases in which the court would not apply the general principle which I have expressed. But in my view this is not such a case."
Lord Justice Hooper :
Sir Anthony May :