England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CENTRAL LONDON COUNTY COURT
(DISTRICT JUDGE LIGHTMAN)

		Royal Courts of Justice Strand, London, WC2A 2LL
		6th December 2012.

Lord Justice Lloyd:

1. This is an appeal from an order of District Judge Lightman in the Central London County Court made on 9 August 2011, pursued with permission granted by Kitchin LJ at an oral hearing on three grounds which he identified, he having refused permission on the other grounds relied on by the defendant appellant.
2. The claimant, Mr Jones, is a builder. Between November 2005 and March 2006 he did some work for the defendant at a property called 141 Ellerslie Road, London SW11. He had provided an estimate for certain works to the defendant amounting to £36,600. This was not an agreed price, so what he says is that, by agreement between the parties, he embarked on the work to which his estimate related, but that was not a contract sum so his claim is for a reasonable sum, in effect on a quantum meruit basis.
3. At the beginning of April 2006, before he had completed the work, the defendant terminated the contract and brought in another builder to complete the work. The claimant's case is that this was a repudiatory breach of the contract. He rendered an invoice to the defendant on 27 April 2006 and then a revised bill on 4 May 2006 for the work which he had done, most of which was included within the itemised, or reasonably itemised, estimate, but it included some additional work which he said the defendant had requested, over and above that for which he had quoted. His revised bill was for £37,700-odd. He gave credit for £1,300 and ultimately, in the proceedings which he issued in 2010, he claimed the net sum of £36,000-odd plus £3,150 by way of damages for loss of profit on the balance of the work which he was prevented from taking on and completing, and whereby he said that he lost that amount of profit.
4. The claim form was issued on 9 June 2010. The defendant filed a Defence on 16 July 2010 and on 17 October 2010 the court ordered her to provide an Amended Defence, which she did on 13 December. A number of case management directions were given requiring the provision of further information and statements and so on, and the court made two unless orders in March 2011 as regards, first the provision of further information about the allegations in the Defence and secondly, about the filing of witness statements and expert reports. The defendant did file a witness statement and an expert report of a Mr Linnett within the time, but she did not provide the further information that was ordered and on that basis, on 31 May 2011, District Judge Jackson made an order by which he struck out the Defence and Counterclaim, which by then had been served, and gave judgment for the claimant for an amount to be assessed. He also gave directions with a view to the disposal of the matter. The claimant was to file a schedule of his claim by 14 June. The defendant was to file a counter-schedule by 28 June and he fixed a date of 9 August for the disposal hearing with an estimate of one whole day.
5. As I mentioned, at that stage the proceedings were in the Central London County Court. They had started in the Croydon County Court, and before the transfer some other case management orders had been made, including on 17 November 2010 an order made by District Judge Wright that the claimant had permission to rely on a report of Mr Whalley, an expert whose report had been served at the outset of the proceedings, and that the defendant had permission to instruct a quantity surveyor, whose report was to be served by 7 March 2011. The time for that was later extended to 14 April 2011, and as I mentioned, that is a direction that was complied with. Mr Linnett's report was served shortly before that deadline.
6. District Judge Wright's order also required that the experts should meet, should endeavour to agree matters between them and, to the extent that they could not, they should set out their disagreements in a Scott schedule. The case was later transferred from Croydon to the Central London County Court, but nothing in the fact of that transfer or, as I see it, in any later case management orders was inconsistent with those directions as regards expert evidence or either expressly or implicitly varied them or set them aside. Clearly the timetables would have been affected by what happened later, but the permission to rely on the expert witnesses still stood.
7. District Judge Jackson having made the order that I have mentioned striking out the defendant's Defence and Counterclaim, on 4 or, it may be, 7 July 2011 (it matters not which) the defendant made an application to the court for relief against the sanctions imposed by that order of District Judge Jackson. Another district judge in the Central London County Court correctly identified this as being in reality an appeal and required that the defendant should put in the correct documents for that purpose. That direction was given on 25 July. The defendant complied with that instruction and put in an Appellant's Notice at the end of July. On 31 July she also put in an application notice asking for further relief, among which was an extension of the time for her appeal, and she also sought expressly a further order, in the alternative, that the disposal of the claim which was due to take place at the hearing fixed for 9 August should include the live evidence of all witnesses of fact and expert evidence at the trial and she sought other case management directions.
8. The aspect of that application which was related to permission to appeal had, of course, to go before a circuit judge. Unfortunately, although the 9 August hearing date was mentioned in her application notice, the application was not treated as urgent in the court. Maybe there was no request or no stress on the fact that it was urgent, but all events by 9 August it had not yet got to a judge to consider. Nor did the defendant, as she could have done, apply to a district judge, separately from that application notice, either for a stay of the disposal proceedings pending the appeal or for the case management directions as regards oral evidence of the factual and expert witnesses and for that purpose, as would have been necessary, an adjournment of the 9 August hearing date.
9. Her application for permission to appeal was eventually refused by His Honour Judge Mitchell on 21 October 2011 and that is final, but that of course postdates the matters with which this appeal is concerned.
10. The effect as matters stood on 9 August, as I see it, was this: the defendant was not entitled to defend the claim as regards liability, but she could challenge the claim as regards quantum. In the circumstances that I have described, no direction had been given for the experts to attend for cross-examination. The claimant did attend and gave evidence. There were some less significant witness statements on his side, which were sought to be relied on without cross-examination. The defendant did not give evidence, although she was present at the hearing. I should say that she was at that hearing represented by Miss Wills of counsel, who had been instructed at a very late stage. The defendant had dealt or attempted to deal with matters as they arose since 31 May 2011 while acting in person.
11. In those circumstances, as it seems to me, the defendant was not entitled to dispute the following: first of all, the contract between the claimant and the defendant for the claimant to supply building services to the defendant in accordance with the estimate, for which the claimant was entitled to be paid reasonable remuneration for the work done; secondly, the fact that, at the defendant's request, the claimant had carried out additional works which were specified in the Particulars of Claim; and, thirdly, the fact that, in breach of contract, the defendant had prevented the claimant from completing the agreed works by reason of which the claimant lost what he would have been paid for the remaining work.
12. In principle, the defendant was able to put in issue questions of quantum including what work had been done, whether work had been properly done, what was the reasonable remuneration payable for it and what was the loss of profit, if any, on the work which the claimant had been prevented from doing. However, it did not help either the defendant or the court that the defendant had not complied with the direction to put in a counter-schedule. The result of that was that the court could not see from the comparison of schedule and counter-schedule what was in dispute. The need for such a schedule is obvious and well-established in relation to a building dispute. An orderly, efficient and proportionate trial is impossible unless the court can see from the start what the defendant says in response to the detailed items of the claim, that is to say what items the defendant contends that the claimant did not do among those that he alleges he did do, what items if any the defendant says that the claimant did do but not properly, and what items the defendant contends are over-valued and, if so, by how much. Such a schedule is essential for the court and it would also enable the parties to focus on the true amounts in dispute, from which compromise ought to be possible. That, therefore, was one significant absence from the state of the matter as it was presented to the district judge.
13. A significant element that was present at the trial was a DVD recording, which the claimant said that he, or rather his son, had made in his presence at the property soon after the contract was brought to an end by the defendant and which, the claimant said, showed the state of the property at that time with all the work that he had done and no work done by anyone else. This DVD was viewed by the district judge in the course of the trial and as interpolation, first of all, to the cross-examination of the claimant by Miss Wills. We have the benefit of a full transcript of the hearing and of the DVD. I have viewed part of the DVD, that is to say the first 11 minutes, until it reached a point at which it would not run any further.
14. The claimant was asked in evidence about when the recording was made. He had said in his witness statement that it was made at the stage that he was excluded from the site. His answers on this in cross-examination are not altogether clear, but the district judge took his evidence as being that it had been made when the next builders, who were called Massmans, were on site and preparing to work but before they had done any further work to the premises themselves. Thus the images showed the work which Mr Jones said he had done and not what anyone else had done. The DVD was important to the case in that the report of Mr Whalley, the claimant's expert, was based on it. Inevitably, he had not been able to see the property and, even if he had seen the property, he would not have seen it in the relevant state, because he was instructed long after the work had been completed and the property was sold on. He therefore relied on the DVD for the condition of the property and for the details of the work done, and indeed his report goes into detail as to what he perceived from an examination of the DVD of the work that the claimant had done and the result in terms of the appearance of the work in the property.
15. Mr Jones's reliance on this report was challenged by the defendant on the basis that the DVD did not only show work done by Mr Jones. It was clear from the DVD that, when it was recorded, there were other people than the claimant and his son present, and the claimant accepted without any difficulty that those others were representatives of Massmans, the subsequent builders. The claimant nevertheless contended that Massmans had not got to the stage by then of doing any work to the property and were doing no more than preparing to do the work that they later proceeded with.
16. Miss Wills cross-examined Mr Jones to the effect of putting to him that, because Massmans were already there, as he accepted, they had already started work on site and therefore the DVD did not only show work done to the property by Mr Jones. The district judge dealt with this issue in paragraphs 11 to 13 of his judgment. At the end of paragraph 12 he recorded that the claimant's evidence was that, although someone from Massmans was there when the videoing was being carried out, they were only preparing the property for further works to be done thereafter. In the first sentence of paragraph 13 the district judge referred to having looked at the DVD and, from what he had seen, he said:

"...I do not accept the assertion of Miss Wills that Massmans were already working and doing work and had done work at the time of that first part of the DVD was taken."

In paragraph 14 he said:

"Clearly something was going on in the first part of the DVD time-wise, but I am not prepared to hold, and I do not find as a fact, that works had commenced already by Massmans. That DVD does not support what Miss Wills asserts in my view. I have looked at it. That is my absolute view."

Later at paragraph 16 he said this, and I will read through to the end of the paragraph:

"I have got the evidence, such as it is, of the claimant and clearly it can be criticised in the way that Miss Wills has criticised it. But at the end of the day that is the evidence I have got and if it is the case that I accept what the claimant says about what is in the first part of the DVD (which I do) and if Mr Whalley has relied on that in coming to the conclusions that he has done, then unless there is some other reason why I should be cautious as to the works, of the observations, the analysis, the conclusions of Mr Whalley, then it seems to me that I have got to accept what Mr Whalley says. The only point, in my view, that is flagged up in all of this is: Do I have any doubts as to what has been said by Mr Jones and what he says is in the DVD? Having concluded that at the end of the day I do not, my view is that I must -- and I do -- accept what is proffered by the claimant and I do therefore accept the figure-work that is presented to me."

17. In paragraph 13 of his judgment he made the comment that what he saw in the DVD ties in with what he has seen in the report of Mr Whalley. Miss Wills submits that that proves nothing because Mr Whalley's report is explicitly based on the DVD, but, as I see the judgment, that is not the basis of his finding. He accepted Mr Jones's evidence, having seen him give that evidence under cross-examination and having seen the DVD.
18. Kitchin LJ observed that sentence in paragraph 13 and considered that it might show it to be arguable that the judge had misdirected himself in finding that the DVD was a record of the property as it was at the time when Mr Jones had been prevented from finishing his contracted work and before anyone else had started to carry on or complete the work. That is one of the three grounds on which he granted permission to appeal. In my judgment it is not made out by the defendant, because the District Judge had and relied on other evidence, namely that of the claimant, which justified his finding.
19. Miss Wills, appearing for the defendant again before us as she did before the district judge, and I suspect again instructed at a late stage before the hearing, submitted that this was not a reasonable conclusion from viewing the evidence. She pointed out that Massmans were on the site at the time and she asserted that the DVD showed one of Massmans' men stooped down near the staircase and undertaking work. That is not in the part of the DVD that I was able to view. It would have provided cross-examination material for Miss Wills in relation to the claimant, but no such question was put to him. Accordingly it does not seem to me that a point such as this, which I have to say is not obviously unequivocal in itself, can properly be relied on to show that the district judge had no evidential basis on which to make the finding that he did. Miss Wills relied on the pressure that she was put under by the district judge in putting her case. Having seen the transcript, I accept that she had to be, and that she was, tenacious, for example in insisting that the District Judge should see the DVD. She was able to cross-examine the claimant both before and after the DVD had been viewed in court. If there were parts such as she has mentioned to us within the DVD which could show that the claimant's evidence was wrong, she had the opportunity to put them to the claimant in cross-examination. Since she did not do so, it seems to me that we cannot take account of her points so made. Absent that or any other basis for saying that there was no evidence on the basis of which the judge could come to the conclusion that he did about the time when the DVD was recorded and the state, therefore, that the property was in, it seems to me that there is nothing in the first ground of appeal.
20. Having come to the conclusion that he did and which I have referred to on this point, the District Judge proceeded to consider what was left in issue. He had had reference in the course of submissions to him to Mr Linnett's report, which is critical of the claimant's claim and of Mr Whalley's report, but he had no itemised or clear statement of the defendant's position as to either what work had or had not been done or as to what, if anything, was due to the claimant for any item of work. The only evidence he had, as such, was the claimant's witness statement and his oral evidence and the two expert reports, besides some less important witness statements put in from the claimant on incidental points of fact.
21. I have already read the major part of paragraph 16 of his judgment, which sets out the essence of his reasoning in deciding that he should award to the claimant the sums claimed as regards both quantum meruit and damages for loss of profit. When the defendant applied for permission to appeal, acting as I have said at that time in person, she put forward a number of different grounds. Gross LJ considered those on the papers and refused permission to appeal entirely. At the oral hearing renewing the application the matter was considered by Kitchin LJ, as I have mentioned. He also rejected all the expressed grounds of appeal as providing no prospects of success. However, from the oral argument on the papers he discerned three points which he considered to be arguable. The first of them is the point with which I have already dealt. The second is that the judge should not have accepted Mr Whalley's report as showing that the claimant was entitled to all that he claimed for two reasons: first, because the judge paid no regard to the criticisms made in Mr Linnett's report of Mr Whalley's conclusions in his report and, secondly, because, even on the claimant's own case, the DVD recording showed that the claimant left the work on the premises in a substantially incomplete state. I will come back to that point.
22. The third point that he identified was that the judge erred in rejecting an application made to him at the hearing that the hearing should be adjourned in order that the experts could attend and be cross-examined. Kitchin LJ thought it arguable that the district judge should not have accepted Mr Whalley's evidence without the defendant having the opportunity to test it by cross-examination and therefore to adduce Mr Linnett's evidence and tender that for cross-examination as well. Thus Kitchin LJ rejected all the defendant's original grounds but gave her permission to appeal on the three new grounds and gave her permission to amend her Grounds of Appeal to raise these three points. She did put forward new Grounds of Appeal. Of these, grounds 1-5, 7-10 and 12 are entirely outside the scope of the grant of permission to appeal and I disregard them all completely. Ground 13 is close to but not quite the same as Kitchin LJ's third point. Ground 6 looks, on the face of it, somewhat like Kitchin LJ's third point, but is in fact quite different. Ground 11 is in very general terms and inadequate as formulated, but it is consistent with Kitchin LJ's first and second points. I propose to treat the appeal as being before us on the three grounds as identified by Kitchin LJ despite the defendant's failure to express them properly in the Grounds of Appeal and to limit those grounds to the permitted grounds.
23. I have put to the parties at the beginning of the hearing a formulation of the three grounds of appeal distilled from Kitchin LJ's reasoning, and that is the basis on which Miss Wills has addressed us, although she did seek to raise some additional points which I will mention later.
24. Having already explained why I would reject the first ground of appeal, I can turn to the second ground of appeal. The transcript of the hearing shows that Miss Wills told the District Judge that she relied on Mr Linnett's report but also that she did not make any detailed submissions by reference to any part of his text. She did refer to and rely on a letter sent by Mr Linnett about the dependence of Mr Whalley on the DVD. That being so, it seems to me that it is not a proper criticism of the judge's judgment to say that he did not have regard to Mr Linnett's criticisms of Mr Whalley's report. Moreover if Mr Linnett's report was to be of any value to the court in resolving the dispute, it was necessary that its effect should be presented to the court by way of the counter-schedule which was required of the defendant in the 31 May 2011 order. In the absence of any such counter-schedule, it is difficult to see what the judge was to make of Mr Linnett's report.
25. The second aspect of this point is, as it seems to me, clearly a bad one because it was not in dispute that the claimant had not done all the work that he had contracted to do. That was the basis of his claim for loss of profit. Thus, simply to show that more work was done by other contractors is beside the point. The issue for the judge was whether the claimant's claim was reasonable or not for the work that he did do and a reasonable estimation of the loss of profit on the work that he was prevented from doing. Miss Wills submits that part of the defendant's case was that such work as Mr Jones had done was badly done, but that was a case that needed to be made out by way of evidence and encapsulated in the stipulated counter-schedule. Accordingly I see no substance in the second point.
26. As for the third point, the position is this. Miss Wills applied for an adjournment at the start of the hearing because of the pending application by way of appeal against the 31 May 2011 order. The District Judge rejected that application in his first ruling. Part of his reasoning was that the permission to appeal application was way out of time and that, if there was to be a stay because of the appeal, it should have been asked for well before the hearing date. The refusal of the stay on that ground is no part of the grounds on which Kitchin LJ granted permission to appeal. His grant of permission was because of a separate application, namely to have the case adjourned for the experts to give live evidence and be cross-examined. Miss Wills did make such an application to the District Judge, as is recorded at page 17 of the transcript. It had in a sense been foreshadowed by the application notice of 31 July 2011, which I have mentioned and which, as I have explained, was at that time awaiting being dealt with at the necessary level, namely that of a circuit judge. District Judge Lightman rejected Miss Wills' application and it was not pressed. It may be that if such an application, separately from any question of permission to appeal, had been made in advance of the hearing on 9 August, which as I have mentioned was fixed as early as 31 May, and had been made to a district judge not at the last minute, then it might have been viewed favourably, though even then it seems to me that the District Judge may have been influenced in his attitude to the application by the absence of any counter-schedule from the defendant, so that which he could not see what the extent of the dispute was.
27. I can well understand that the defendant was under a great deal of pressure, acting as she was in person, but she is not someone who is entirely inexperienced in litigation. This case had been going on since 2010 and there had been previous litigation between the parties, which is of no inherent relevance to this case, in 2006 and 2007. In my judgment, given that no application of this kind was made, effectively, to the court until some time into the hearing on 9 August, it is impossible to say that the District Judge misdirected himself, in his discretion as regards case management, in refusing to grant the adjournment that was sought. I would therefore reject the third ground of appeal as well as the first and second.
28. Miss Wills gave notice in her skeleton, helpfully supplied this morning shortly before the hearing started, that she would seek permission to appeal on additional grounds if necessary, but it is far too late for her to do that. She also took objection to the lateness of the Respondent's Notice. As to whether that would be a valid objection it is unnecessary to say anything because it is unnecessary to consider the Respondent's Notice in order to dispose of the appeal. She also mentioned the question of permission to appeal against the order of His Honour Judge Mitchell made in October, but, as has I think already been made clear by the Court of Appeal Office, because that was an order refusing permission to appeal from the District Judge, it is an order against which it is not possible to bring an appeal to this court.
29. For those reasons I would dismiss this appeal.

Lord Justice Lewison:

30. I agree.

Order: Appeal dismissed