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Cite as: [2013] EWCA Civ 142

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		Neutral Citation Number: [2013] EWCA Civ 142
		Case No: A1/2012/1961 & A

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM QUEEN'S BENCH DIVISION
(MR JUSTICE AKENHEAD)

Royal Courts of Justice
Strand, London, WC2A 2LL

24th January 2013

B e f o r e :

LORD JUSTICE AIKENS
____________________

Between:

	MACKAY AND ANOTHER	Appellant
	- and -
	WALTER LILLY AND COMPANY LIMITED	Respondents

____________________

(DAR Transcript of
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A Merrill Communications Company
165 Fleet Street, London EC4A 2DY
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Official Shorthand Writers to the Court)

____________________

Mr Paul Darling QC and Mr David Sears QC (instructed by Nabarro LLP) appeared on behalf of the Appellant.
Mr Sean Brannigan QC and Ms Anneliese Day QC (instructed by Messrs Stephenson Harwood) appeared on behalf of the Respondents.
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HTML VERSION OF JUDGMENT
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Lord Justice Aikens:

This is an adjourned application for permission to appeal, which is made on behalf of the defendants in the action, who were respectively the contractor and the guarantor in respect of a building project which was undertaken by Walter Lilly and Co Limited, who were the claimants in the action. The judgement which it is sought to appeal is that of Akenhead J, who is a specialist TCC judge, indeed he is in charge of the TCC. The judgment is dated 11 July 2012. That judgment followed a hearing which lasted some 16 days before the judge in March, April and May of 2012. The judgment itself runs, I think, to 660 paragraphs and is some 200 pages long, or just short of that.

The litigation concerned a building project at 3 Boltons Place in Chelsea. Originally there was one project to build three luxury houses in Boltons Place. The total contract sum for the three properties was something just over £15 million. Subsequently that project was effectively divided into three separate projects. The litigation concerned what became known as Plot C, which was to be a house lived in by Mr Mackay, the first defendant in the action.

The project underwent considerable delays and the nature of the issues in the claim were, effectively: 1) was the contractor entitled to have account taken of that delay in terms of contractual allowance for it; and 2) what sums could be recovered in respect of that delay. The judge noted at paragraph 2 of his judgment that there were 32,000 pages of documentation, that there had been nine factual witnesses and eight experts at the trial hearing, and that there were 33 bundles of expert evidence, which themselves ran to a total of 11,000 pages. The judge also remarked:

"It seems that the parties have expended between about £9 million and £10 million by way of costs, which is obviously disproportionate to what is in dispute."

The total amount that the judge awarded having dealt with all issues was in the region, including interest, of something over £2 million.

Despite the fact that this is a judgment of 660 paragraphs and despite the fact that it is the considered judgment of a specialist judge in a specialist tribunal after a long and elaborate trial, it is submitted on behalf of the applicants that the judge erred and that there is a reasonable prospect of success in the Court of Appeal in respect of three broad issues on appeal. I decided that the easiest way to deal with this application for permission to appeal, given the length of the judgment, the complexity of the underlying factual issues and the somewhat technical nature of the points raised, was to invite the parties to make short oral submissions in relation to the application. I have been much assisted today by the submissions of Mr Darling QC on behalf of the applicants and Mr Brannigan QC on behalf of the respondents.

Mr Darling submits that the first area in which the judge made errors was essentially one of law. The standard form of contract used in this case was a JCT Standard Form of Building Contract 1998 Edition Private without Quantities Incorporating Amendments 1, 2, 3, 4 and 5 as modified in certain respects. The question is: what precisely is needed to be contained in notices to be given under Clause 26 of that form of contract. These are notices that have to be given as a condition precedent to the contractors' entitlement to payment of any direct loss and expenses caused by matters materially affecting the regular process of the works under the contract.

The particular clause with which the first issue is concerned is Clause 26.1.3, which I do not need to read out. The complaint is that at paragraph 465 of his judgment the judge misconstrued what is required to be given by way of notices. It is submitted that if the argument that is advanced by the applicants is correct, then, given that the nature of this clause is a condition precedent to entitlement and that there must be strict compliance with its terms, that is, as Mr Darling put it aptly, a "knockout blow" to the whole of the claim and it is a point which is reasonably arguable.

In response Mr Brannigan submits that, first, it cannot be said that the judge's construction is obviously wrong; but in any event there were findings of fact by the judge which make it clear that on any construction, given his findings of fact, the requirements have been satisfied. Mr Brannigan says that there are nine separate findings of fact in the judgment, particularly in paragraph 464 and paragraph 467 and 470, and accordingly, even if there were room for arguments on construction, which he does not accept in any event, it would not get the applicants anywhere.

I have come to the conclusion that Mr Brannigan is right on this. Mr Darling did not attempt to attack any of the findings of fact; indeed, it would be very difficult, if not impossible, for him to do so. I am not satisfied, given those findings of fact that have been made by the judge and which are not attacked, that even if there were room for argument on the issue of construction (as to which I have very serious doubts in any event), that it would avail the applicants in any respect.

Accordingly, I refuse permission in respect of grounds 1 and 2.

The next group of grounds, that is to say grounds 3 to 8 inclusive of the grounds of appeal, concern what has been described compendiously as the "global claims or non-global claims" issue. It is clear that, generally speaking, when there is a claim for the type of expenses that have been claimed in this action, they have to be claimed, as it were, individually, setting particular claims alongside particular events. However, in certain circumstances there can be what is known as a "global claim", or what I think in one of the cases is termed a "rolled up award". That type of approach however is only permissible in certain clearly defined circumstances. The submission on behalf of the applicants is that the judge erred in this case by virtue of his approach. First, it is said that the judge apparently held that the claim was not a "global claim" despite the fact that both parties had accepted that it was. Secondly, it is said that, even if that is not right, the judge failed to deal with the matter in the correct way if it were to be treated as a global claim. In this respect I think that Mr Darling made attacks on the analysis of the judge on the law as to what is required in respect of a "global claim", but he also made attacks on what the judge found in relation to the claim if it were to be treated as a "global claim" at all.

Those are in very broad terms, what is covered by grounds 3 to 8.

Mr Brannigan submitted that, on the contrary, it is quite clear from paragraph 491 of the judgment that the judge made it plain that this was not a "global claim" and the judge gave his reasons for that. Secondly, Mr Brannigan submitted that even if he were wrong about that and the judge treated it as a "global claim", he made all the relevant findings of fact which, Mr Brannigan submits, did satisfy all the requirements that he needed as a matter of law to enable this claim to be put forward on a "global claim" basis.

I am satisfied that it is not reasonably arguable that the judge erred in his analysis of the law as to what is required in respect of a global claim. That is set out in some detail at various subparagraphs of paragraph 486 and at 487. I am also satisfied that it is not reasonably arguable that the judge misunderstood the way that the parties were putting their cases. I am equally not satisfied that there is any arguable point as to the basis on which a "global claim" can be put forward. This was dealt with in some considerable detail by the judge. He made findings of fact as to the claim if it was not to be treated on a "global basis" and he equally made findings of fact if it were to be treated on a "global basis". As Mr Brannigan correctly pointed out, the findings of fact themselves are not appealed. They were all matters which were dealt with in the pleadings in something called overview documents; they are not now in dispute and nothing was put forward that was beyond those documents.

It is also fair to point out that the judge took a very clear view as to the respective merits of the two experts involved and he very much preferred the evidence of the claimant's expert as against that of the expert of the defendants, the applicants today. That assessment is not challenged by Mr Darling, again entirely correctly, and that assessment underpins all of the judge's findings in this area.

The third and final basis upon which the appeal is mounted is really something which is semi-dependent upon the second group of grounds. It is said that the judge failed to make a so called "cross-check" when making his assessment of what the contractor was entitled to and therefore awarded far more than he should have done if he had undertaken a proper cross-check to see whether or not the sums being awarded were in fact realistically the sums that were additional expenses and so forth, due to the delays.

I am not satisfied that is arguable as a separate ground of appeal. In any event, I am satisfied that this was an issue that was quite plainly raised and dealt with by the parties during the course of the trial, and the judge went into the issue of so-called rival cross-checks that were put forward by the experts.

Therefore I have come to the conclusion that, despite the characteristically attractive way that Mr Darling puts the points, in essence there is really nothing in any of the three areas on which permission to appeal is sought. I therefore refuse the applications.

Order: Application refused