England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM
THE HIGH COURT OF JUSTICE (QUEEN'S BENCH DIVISION)
(HIS HONOUR JUDGE SEYMOUR QC)

		Royal Courts of Justice Strand London, WC2A 2LL
		17 November 2015

DAME JANET SMITH:

1. This is a renewed application for permission to appeal an order of His Honour Judge Seymour QC dated 21 July 2015. Under that order, the applicants were required to pay the respondent a sum just short of £1.6 million.
2. The claim arose out of a contract between the parties made in 2012. The applicants ran a waste disposal business in Yorkshire which enabled them, among other things, to generate and sell electricity. The respondent company (an electrical supplier licensed under the Electricity Act 1989) undertook to the sell the applicants' electricity on to users through the National Grid. A meter was installed at the premises and electricity was supplied over a period of about two years. The respondent paid the applicants an agreed amount per megawatt hour for the electricity generated and the applicants paid the respondent a service charge.
3. In 2014, the respondent discovered that the meter had been wrongly set or calibrated with the result that the respondent had paid (on the face of it) for twice as much electricity as had been produced and supplied. There were discussions about the situation between the parties, but they failed to agree and, at some stage, the applicants ceased to supply electricity to the respondent. In July 2014, the respondent sued claiming repayment of sums allegedly overpaid due to the faulty calibration of the meter. That claim came to about £1.34 million. The respondent also claimed approximately £122,000 which it alleged it would owe ELEXON, the company which administers the electricity industry's Balancing and Settlement Code, to which I shall refer again. The respondent also claimed loss of profits, at that time unquantified, allegedly sustained by reason of the premature termination of the contract by the applicants. The respondent gave credit for various sums; the credit element of the claim was eventually agreed. The respondent also claimed interest on all heads of the claim.
4. The applicants filed a defence. They were, at that time, represented by a solicitor and counsel. They admitted that the meter had been wrongly calibrated and that the respondent had paid them more than it otherwise would have done. Subject to the counterclaim which followed, the applicants accepted that they were liable to make a repayment in the event (there was this proviso) that ELEXON required the respondent to pay a balancing charge. The defence alleged that there was no present liability because ELXON had not yet required the respondent to pay such a balancing charge. No admission was made as to the sum which might be payable. There was a denial of liability for the premature termination of contract. A counterclaim was pleaded, but as it was eventually abandoned, partly before and completely at the trial, I say no more about the detail.
5. There was a case management conference before Master McCloud in February 2015. The Master's order is at tab 7 of the bundle. She ordered that there should be judgment for the claimant on the claim for a sum to be determined, subject to the counterclaim. She directed that:

"Each party shall disclose to every other party the documents on which they rely, and at the same time request any specific disclosure they seek from any other party, by 4 pm on 11 March 2015."

She then gave directions for the disclosure of witness statements to be exchanged by 29 April 2015. She arranged another case management conference.

6. I have before me no record of what was said at the case management conference, but Mr Eyers, (the male applicant) has told me today that he and his wife had accepted that they owed the respondent a significant sum of money, but it was not clear how much. That, it seems to me, explains paragraph 1 of the judge's order that there is to be judgment for a sum to be determined. In other words, all issues to do with the amount of that sum were to be open for argument and decision at the hearing.
7. The master's order was not appealed. There is some dispute as to what happened in the period of four months between that order and the date of the trial. Mr Eyers has told me today that the respondent failed to provide the documents that he needed in order to prepare the evidential basis of his defence which was that the sums claimed were simply not right.
8. Mr Boardman, who has appeared throughout for the respondent told me today that disclosure was given at the right time and that there were 11 lever arch files of documents before the judge. On the other hand, Mr Eyers tells me that so dissatisfied was he with the documentation that he made an application for specific disclosure. He has shown me an application for disclosure with a list of the various documents that he claimed not to have. For some extraordinary reason, which I do not understand, it appears that that application was not dealt with before the trial. This is strange as the applicants were represented by solicitors and counsel at this stage, although Mr Eyers' relationship with his advisers does not appear to have been entirely satisfactory. Be that as it may, by the time of the trial, the applicants had disclosed no evidence. It seems to me that if he was dissatisfied with the disclosure that had been given, a witness statement to that effect explaining his position should have gone before the judge. He applied for and obtained an extension of time for disclosure of witness evidence but still did not put anything in.
9. The situation that faced the judge at the hearing was that he had nothing from the applicants at all. I have read the judgment, or at least the part of it that is put before me. It is my first experience as a judge of being shown part of a transcript on an application for permission to appeal. However, in the part that I have seen, the judge held that the applicants were liable to the respondent for the overpayment in the amount claimed and it appears from the judgment that the judge was under the impression that the amount was not arithmetically in dispute. He also found in the respondent's favour in respect of the balancing charge. It appears that the calculation of this had been the subject of evidence from the respondent's witnesses supported by documents. The judge found in favour of the respondent and ordered the applicants to pay costs on an indemnity basis.
10. The applicants seek permission to appeal the order. The grounds and skeleton argument have been drafted by Counsel who has not appeared today. These grounds suggest that the whole basis of the trial had been misconceived; the judge had wrongly assumed that Master McCloud had entered judgment for the respondent on the basis as pleaded in the Particulars of Claim. Counsel submitted (in writing as he apparently had done at trial) that the judge should have assessed damages on the basis of the applicant's admissions in his defence or, alternatively, should have adjourned the trial for the full preparation of evidence on the issues of liability. There was (said counsel) no evidence before the judge as to the disputed issues of liability. In his written argument he said nothing about the fact that his clients had put in no evidence at all and he said nothing about the inadequacy of disclosure.
11. It appears to me from the judgment that the judge did consider the applicants' arguments as advanced by Counsel. In effect this was the point pleaded in the defence that the applicants were only liable to the respondent to the extent that the respondent had been required to make payments to ELEXON, the administrator. The judge dismissed that argument as unsustainable without really explaining why, at least in the part of the judgment that I have been shown. However, a moment's thought provides the explanation, at least in part. The contract was between the applicants and the respondent. It was the respondent who had paid for the electricity and it was their money that had been overpaid. It seems to me, on the face of it, that they were entitled to recover their overpayment regardless of whatever had taken place between the respondent and its customers or the respondent and ELEXON. ELEXON's positon only became important in relation to the claim for the balancing charge.
12. In his skeleton argument, the applicants' counsel submitted that there was no evidence before the court as to how that charge had come about. In fact, I did not really understand how that charge came about until I read the submissions put in by the respondent for the purpose of this appeal. I was not shown that explanation until this morning, presumably because the court office took the view that the submissions were too long because they exceeded the three pages permitted by the rules. However, I am grateful that I have now seen it and I do now understand how the balancing charge system worked. Mr Eyers, this morning, has told me that nothing in the submissions that were put in by the respondent had taken him by surprise and he does not challenge anything said in that document.
13. My understanding now is that the respondent's witnesses gave evidence to the judge as to how the balancing charge had been calculated and how the balancing system within the electricity industry worked. I do not need to burden this judgment with an explanation of that system, in particular because Mr Eyers this morning makes no point on this issue. His submissions to me today are quite different.
14. His complaint today is that he did not receive the material that he needed on which to base his defence. He claims that the whole trial process was unfair because his application for specific disclosure was not dealt with at the right time.
15. It seems to me that it is far too late for Mr Eyers to make this complaint. He was represented at the trial and did not apparently complain about the need for disclosure. He did, through counsel, seek an adjournment of the trial but not apparently because he needed disclosure. I have found Mr Eyers' submissions rather unsatisfactory. He has put before me a very partial and limited account of what happened before and at the trial. It now appears to me that the respondent did put evidence before the judge which was, in effect, unchallenged because Mr Eyers has not put in a witness statement which dealt with the issues. I know that he says that he had not received the documents that he wanted, but it really was up to him to pursue his claim for discovery before the trial and, if still unsatisfied, to put a statement before the trial judge explaining that. If necessary he should have gone into the witness box to justify his need for the documents he claimed to need. Although represented, he did none of those things and it is now, in my opinion, too late for him to complain that he did not have the disclosure of documents that he felt that he needed.
16. It seems to me that the judge's judgment was well founded, both in law and fact, and nothing that I have read either in counsel's written submissions or heard from Mr Eyers this morning has raised any arguable ground of appeal. For those reasons, I refuse this application.
17. There is a stay imposed by Kitchin LJ, but on this decision rejecting this application, that stay expires. I do not have in my mind the precise terms of the requirements for payment, but it does not, I do not think, concern me. The stay is at an end and whatever the situation was before that stay was imposed we go back to.
18. (On hearing an application by the respondent for the costs of appearing). Mr Boardman, I am not going to grant you the costs of today. I am grateful for your attendance. I am particularly grateful for your 10 page explanation, without which I was very much in the dark as to what had gone on because of the lack of detail in the judgment. So, I am very grateful, but I am not going to grant your costs. Mr Eyers, that is it. There is no additional order for the costs of today.

Order: Application refused.