England and Wales High Court (Queen's Bench Division) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		09/10/2007

Mr Justice Jack :

1. On 11 May 2007 I handed down judgment in an action for professional negligence brought by the claimants against their advisers in connection with the leasing of land to Bournemouth International Airport for the parking of cars. I found that negligence was established, although not to the extent alleged by the claimants. I did not decide what the claimants were entitled to by way of a money sum as damages, but at the request of the parties made during the trial left that to be determined subsequently. I was asked, however, to make some findings relating to damages and did so. By a request dated 23 July 2007 I am asked to reconsider an aspect of my findings with a view to increasing the turnover rent which I held should have been negotiated from the 10 per cent in the judgment to 20 per cent. If I accede to the request, it would appear approximately to double the claimants' damages. As an alternative I am asked to revisit my refusal of permission to the claimants to appeal on that issue.
2. I refer to my judgment for the events giving rise to the action, the issues between the parties and my findings. I will refer to those involved as I did there. It is enough for the present purpose to state as follows. I found that Mr Ashworth, a consultant employed by the defendants, Strutt & Parker, had been negligent in connection with the negotiation of two leases, the 2002 lease and the 2003 lease. I acquitted him of negligence in respect of the 2000 lease. I held that he should have negotiated with BIA for a turnover rent in the 2002 lease, namely a rent which was a proportion of the income to BIA from the car park after expenses including capital expenses. I held that, if he had done so, the probability was that he would have achieved a figure of 10 per cent in addition to a fixed sum of £9,000 per annum (Field A, Field B - pro rata). I held that, if this had been achieved, the same would have been adopted in the 2003 lease. The 2002 lease covered fields called 'A' and 'B'. The 2003 lease covered Field C. I thus had to decide what would have happened in a negotiation between BIA and Mr Ashworth which did not occur. I had no help from the parties because it was the case of the claimants that BIA would have agreed a split - as it was called - of 80 per cent to the Estate, which I regarded as wholly unrealistic, and it was the case of Strutt & Parker that BIA would not have agreed a turnover rent at all : see paragraph 137 of the judgment. In paragraph 152 I set out a number of factors relating to the positions of BIA and the Estate, first those which favoured BIA not ceding a turnover rent or not ceding a high turnover rent, and second those which favoured the Estate achieving a turnover rent with a higher percentage. In paragraph 156 I stated that I thought that in any negotiation for a turn over rent the starting point for BIA would be to assess what the proposed rent would cost them. In paragraph 157 I referred to the figures for car park income produced in 2006 by Strutt & Parker's expert, Ms Congdon. I stated that I was looking for something which would give me an order of size rather than precise figures, and I used her figures to get an idea of what rent splits of 1, 5, 10, 15 and 20 per cent might have provided. In paragraph 158 I referred in particular to one aspect of the costs which BIA would incur if it did not reach agreement with BIA, namely bussing costs. In paragraphs 159 and 160 I referred to particular features of the parties' positions. I paragraph 161 I stated that, if Mr Ashworth had stood out for a modest turnover rent, both sides were in positions where they could not allow the negotiation to fail. In paragraph 162 I concluded that the chances of BIA refusing a turnover rent altogether were so low that I should ignore the possibility. Paragraph 163 was in these terms:

"In the negotiation BIA would have sought to concede as low a percentage of turnover as possible. While neither side could afford to allow the negotiation to fail, BIA was in the stronger position and this would have been reflected in the outcome. I have concluded that the figure which the parties are most likely to have agreed upon in the circumstances is 10 per cent. If Mr Ashworth had achieved that, he would have fulfilled his duty to the Estate."

3. I am asked to reconsider the figure of 10 per cent by reason of three matters. First, Ms Congdon's figures included vat, which should be taken out to get actual earnings. Second, her figures included income from Field C from 2008. Third, in cross-examination Ms Congdon agreed that her figures over-stated income by a percentage, the amount of which remained in dispute.
4. The history of the action which is relevant to the present application is as follows. I must first refer to the dispute as to the measure of damage. The claimants claim as damages the difference between the rents that they would have received if leases had contained turnover rents, and the actual rents. This basis was not challenged until Strutt &

Parker's written argument provided for the trial and exchanged shortly before. It was there submitted that the correct measure was the difference in the capital value of the leases, negligent and non-negligent, actual and hypothetical, at the breach dates. There was no evidence from either party as to capital values. In my judgment I held that the capital value at breach date basis was correct. The draft judgment was sent by e-mail to counsel on 30 April 2007. Because of the request that I should leave over the quantum of damage but nonetheless decide some issues relating to damages, by an e-mail of 2 May counsel were asked to satisfy themselves that the judgment dealt with all matters which it was intended should be dealt with at that stage, also that it accurately recorded the submissions made and on occasion not made. The claimants responded to this on 9 May raising various matters and in consequence I added paragraphs to the judgment dealing with two further topics - paragraphs 200 and 201. The judgment was handed down on 11 May. Immediately following the handing down I heard submissions as to appeals, the further conduct of the action and costs. I was asked by both parties to postpone all matters relating to appeals until after the conclusion of the damages hearing. I made various orders. During the course of submissions I appreciated that in section N of the judgment dealing with various matters relevant to damages I had failed to state that my conclusions were relevant only to the basis of damages for which the claimants had contended, and not to the breach date basis for which Strutt & Parker contended. Having informed counsel of my intention, and without objection, I subsequently added a new paragraph to the judgment, 201A, to deal with this. I decided that the claimants' application for an interim payment should be heard on 22 May. On 15 May I handed down a ruling that I would assess damages on both bases so the position would be covered in the event of a successful appeal on the measure of damage. On 22 May I adjourned the hearing of the interim payment application by reason of the service of further evidence on behalf of the claimants. I subsequently decided that due to problems with my own availability it should be heard by another judge. It was heard by Mr Justice Langstaff in June. I do not know the outcome. At the conclusion of the hearing on 22 May I was asked by Mr Speaight to grant the claimants permission to appeal on three grounds: the measure of damages, the finding of 10 per cent as the likely turnover rent, and the status of the Airport road. I granted permission on the first, but refused it on the second and third.

5. An order to reflect what had occurred on 11 May was agreed between counsel and in accordance with CPR 40.2(2)(6) was submitted to the Court Office and sealed (that is, stamped) on 30 May. The preamble of the order referred to the trial and the handing down of the judgment, and then paragraph 1 provided:

"1. There be a trial on the outstanding aspects of quantum needed to assess the damages to be paid by the First Defendants to the Claimants, such trial to be reserved to Mr Justice Jack."

6. A further order was agreed between counsel to reflect what had occurred on 22 May, and this was submitted to the Court Office and sealed on the same day as the first order, 30 May. Paragraphs 10, 11 and 12 of the order recorded my grant and refusals of permission to the claimants to appeal on the issues I have mentioned.
7. On 4 July 2007 the claimants issued an application notice asking that they be permitted to change two of their experts. They also served on 6 July a document dated 5 July and titled 'Claimants' request for clarification of the judgment of Mr Justice Jack'. It raised a number of questions which were or might be relevant to the assessment of damages. Paragraph 46 stated that the claimants had it in mind to make an application at the assessment of damages in October for a revision to the judgment in respect of the percentage split for the turnover rent or alternatively for reconsideration of the grant of permission to appeal on the percentage split. The application and the request came before me in Birmingham during the afternoon of 13 July. I granted the application as to experts. I gave such limited assistance to the parties as I could in relation to the matters raised for clarification, on the basis that it should not be binding and either party could require that any matter be argued. Mr Lamb objected on behalf of Strutt & Parker to any application for reconsideration of the judgment, because it might change the basis on which damages were to be assessed.
8. The document titled 'Claimants' request for reconsideration of the judgment or of permission to appeal' is dated 23 July 2007. It begins 'In the course of further recent work on this case the Claimants have noticed a feature of Mr Justice Jack's judgment which they consider ought to be drawn to his attention.' It goes on to raise the three matters which I have mentioned in paragraph 3.
9. It is well-established by a number of recent cases as well as others of greater age that where a judgment has been delivered, either orally or by handing down, the judge may in appropriate circumstances alter it at any time prior to an order giving effect to the judgment. Once there is such an order the judge is functus officio and the only way forward for a dissatisfied party is to appeal. I have referred to 'appropriate circumstances'. It has sometimes been said that the circumstances must be exceptional. More recently it has been suggested that it is better to state that strong reasons must exist before the jurisdiction will be exercised. The need for some stringent limitation is that the parties to litigation should ordinarily be able to treat a delivered judgment as final, and be free from the risk that a dissatisfied party may re-open his arguments before the judge. As a matter of policy it is also appropriate for the same reason that there should be a bar to the exercise of the jurisdiction, which

bar takes the form of an order giving effect to the judgment, even if the technical reason for that bar is that the judge is functus officio.

In in re Barrell Enterprises [1973] 1 WLR 19 the Court of Appeal refused to re-open an appeal even though the order of the court had not been drawn up. In giving the judgment of the court Russell LJ stated at page 23:

"Now that the matter has been looked into we are of the opinion that there were in this case no grounds on which the argument on the appeal could properly be reopened. When oral judgments have been given, either in a court of first instance or on appeal, the successful party ought save in most exceptional circumstances to be able to assume that the judgment is a valid and effective one. The cases to which we were referred in which judgments in civil courts have been varied after delivery (apart from the correction of slips) were all cases in which some most unusual element was present."

10. In Pittalis v Sherefettin [1986] QB 868 the judge had had to determine as part of a dispute between a landlord and tenant whether the tenant should have an extension of time in which to serve a notice of arbitration. He delivered a judgment holding that the tenant should not and giving judgment for the landlord for arrears of rent and possession in default of payment. The next day the court wrote to the parties saying that judgment had not been entered and contrary to his judgment the judge now proposed to grant the application for an extension. Following a further hearing the judge delivered a second judgment granting the application for an extension of time. In giving judgment on the appeal Fox LJ stated at page 879:

"In the present case, the judge recalled the order the day after he had made it. It is not suggested that the landlords in any way, in proper reliance on the order, acted to their detriment. We are dealing with a case where the judge, practically as soon as he gave the judgment, decided that he was wrong. As a matter of the sensible administration of justice and fairness between parties, it seems to me proper in the circumstances that the judge should be at liberty to recall his order. The position can properly be called exceptional."

At page 882 Dillon LJ stated:

"It is indeed exceptional for a judge who has pronounced an order in court to be completely satisfied, before the order has been drawn up, registered or perfected, that the order was wrong. That happened, however, in the present case, and accordingly the judge was entitled, taking the view he did, to recall his earlier order."

11. The jurisdiction was further examined by Neuberger J in Charlesworth v Relay Roads Ltd [2000] 1 WLR 230 in the context of a request to amend pleadings and admit further evidence after judgment but before an order had been drawn up, which he granted. In Stewart v Engel [2000] 1 WLR 2268 the Court of Appeal held that the jurisdiction was not removed by anything in the CPR, but, by a majority, that it had been wrongly exercised in the circumstances to allow a renewed application to amend. The court reviewed a number of the authorities. A further example of the jurisdiction being exercised is Spice Girls v Aprilia World Service BV, 20 July 2000, Arden J, unreported, where the there was a misunderstanding as to whether one party was making a concession. In Compagnie Noga v Abacha [2001] 3 All ER 513 a reserved judgment had been handed down when the unsuccessful party sought reconsideration of the judgment on the ground that the decision was flawed because it misapplied authority relating to the parole evidence rule. In the course of his judgment (at first instance), Rix LJ stated:

"42. Of course, the reference to exceptional circumstances is not a statutory definition and the ultimate interests involved, whether before or after the introduction of the CPR, are the interests of justice. On the one hand the court is concerned with finality, and the very proper consideration that too wide a discretion would open the floodgates to attempts to ask the court to reconsider its decision in a large number and variety of cases, rather than to take the course of appealing to a higher court. On the other hand, there is a proper concern that the courts should not be held by their own decisions in a straitjacket pending the formality of the drawing up of an order. .....

43. Provided the formula of 'exceptional circumstances' is not turned into a straitjacket of its own, and the interests of justice as laid down in the overriding principle are held closely to mind, I do not think that the proper balance will be lost. Clearly, it cannot be in every case that a litigant should be entitled to ask the judge to think again. Therefore, on one ground or another, the case must raise considerations, in the interests of justice, which are out of the ordinary, extraordinary, or exceptional. An exceptional case does not have to be uniquely special. 'Strong reasons' is perhaps an acceptable alternative to 'exceptional circumstances'. It will necessarily be in an exceptional case that strong reasons are shown for reconsideration.'

He went on to conclude that to reconsider his judgment on the grounds suggested would not answer the interests of justice but would subvert the appeal process.

12. The jurisdiction was further considered by the Court of Appeal in Robinson v Fernsby [2003] EWCA Civ 1820, and the authorities were reviewed. The context was a claim under the Inheritance (Provision for Family and Dependants) Act 1975. After the judge had sent a draft judgment to the parties' lawyers counsel for the respondent wrote to the judge suggesting that he had omitted to apply part of the test provided by the Act. Following further submissions the judge delivered a second judgment in favour of the respondent instead of the claimant. In the course of his judgment May LJ stated:

"94. Once a judgement has been handed down or given, there are obvious reasons why the court should hesitate long and hard before making a material alteration to it. These reasons have been rehearsed in the cases to which I have referred and I need not elaborate them further. The cases also acknowledge that there may very occasionally be circumstances in which a judge not only can, but should make a material alteration in the interests of justice. There may for instance be a palpable error in the judgment and an alteration would save the parties the expense of an appeal. On the other hand, reopening contentious matters or permitting one or more of the parties to add to their case or make a new case should rarely be allowed. Any attempt to do this is likely to receive summary rejection in most cases. It will only very rarely be appropriate for parties to attempt to do so. This necessarily means that the court would only be persuaded to do so in exceptional circumstances, but that expression by itself is no more than a relatively uninformative label. It is not profitable to debate what it means in isolation from the facts of a particular case."

He went on to state that while it was only a label he preferred Rix LJ's 'strong reasons' to 'exceptional circumstances'. He held that the judge having been persuaded that his initial view was wrong he was positively obliged to alter it. Peter Gibson LJ stated:

"120. With one possible qualification it is in my judgment incontrovertible that until the order of a judge has been sealed he retains the ability to recall the order he has made even if he has given reasons for that order by a judgment handed down or orally delivered. That was established in two decisions of this court: Millensted v Grosvenor House (Park Lane) Ltd. [1937] 1 KB 717 and Pittalis v Sherefettin [1986] QB 869. Such judicial tergiversation is in general not to be encouraged, but circumstances may arise in which it is necessary for a judge to have the courage to recall his order. If, as in Millensted and Pittalis, the judge realises that he has made an error, how can he be true to his judicial oath other than by correcting that error so long as it lies within his power to do so? No doubt that will happen only in exceptional circumstances, but I have serious misgivings about elevating that correct description of the circumstances when that occurs as exceptional into some sort of criterion for what is required for the recalling of an order before it is sealed. The possible qualification to which I have referred is where the judgment handed down or delivered has reasonably been relied on by a party who has altered his position irretrievably in consequence. In such a case the interests of justice may require the judge not to resile from that judgment even if the order has not been sealed. But that is not this case, where it is not suggested that the claimant had altered her position as a result of the draft judgment."

13. It was implicit in Mr Speaight's submissions on behalf of the claimants that, unless the court has jurisdiction to reconsider the figure of 10 per cent and I could properly be persuaded to do so, my finding that 10 per cent was the figure which would have most likely agreed on was binding between the parties as res judicata, subject of course to a successful appeal. Mr Speaight accepted on behalf of the claimants that if an order had been perfected giving general effect to the judgment of 11 May the court had no jurisdiction to reconsider the judgment. There was no dispute either that the only existing order to be examined for this purpose was the order sealed on 30 May in consequence of the sitting on 11 May. That order was perfected, issued or made when it received the seal of the Court as required by CPR 42(2)(b). The seal (or stamp) signifies the approval and authority of the court. Until then the order was simply a draft. There was no dispute between the parties thus far.
14. Mr Lamb submitted on behalf of the Strutt & Parker that the stamped order was an absolute bar to any reconsideration of the judgment. He relied on paragraph 1 of the order, which I have quoted in paragraph 5. He accepted that, until the order was sealed, it would have been open to me to reconsider the judgment if circumstances arose in which it was appropriate to do so.
15. Mr Speaight submitted that paragraph 1 of the order did no more than carry the implication that Strutt & Parker were liable for something. He submitted that for the order to be a bar it would have had to have contained a declaration to the effect that Strutt & Parker were liable to the claimants on the basis that, if Strutt & Parker had acted without negligence, leases with 10 per cent turnover rents would have been obtained.
16. In my judgment there are two answers to Mr Speaight's submission. The first is that, when it is read in the context of the reference at the start of the order to the judgment handed down, paragraph 1 provides that aspects of the amount of damages not determined by the judgment will be determined by a subsequent trial, and so provides by necessary implication that the issues as to liability and some issues as to damages have been determined by the judgment and are binding between the parties. It was evidently seen as unnecessary to have a declaration or declarations and rightly so. Likewise it would have been possible for there to have been an order that there be judgment for damages to be assessed in accordance with the judgment: but that too was unnecessary. The second and closely allied reason is that the order was clearly intended to draw a line under the proceedings to date and to provide for the future. Thus, as between the claimants & Strutt & Parker, in addition to paragraph 1 paragraph 6 dealt with appeals and paragraphs 7 to 9 dealt with the claimants' application for an interim payment and a payment on account of costs. The order should therefore be treated as a bar for the purpose of the court's jurisdiction to reconsider any matter determined by the judgment.
17. If I am wrong in holding that the order is a bar, the question would be whether in the circumstances it would be appropriate to exercise the jurisdiction. I am clear that it would not be.
18. I am invited to reconsider what was a complex exercise in balancing factors which were relevant to hypothetical negotiations, in order to conclude what the outcome would most likely have been. Among a number of factors, one was what BIA might have thought it would cost them to cede a particular turnover rent to BIA. Another was how BIA might have seen the costs of alternative parking. In my judgment I attempted to address both on such inadequate materials as I had. The claimants' submissions seek to show that looking at such arithmetic as I was able to do, the figures should be adjusted to take account of the three matters they have referred to, VAT, Field C and discount, with a consequential increase to the figure for the split likely to be agreed on. That misunderstands the nature of the exercise I embarked on in that part of the judgment. It was very far from an arithmetical exercise. In writing that part of the judgment I had to try to put myself into the shoes of the parties and bearing in mind what I knew of all of the various factors affecting them, decide what Mr Ashworth might have achieved if he had not been negligent. As the judgment sets out, there were other highly important factors, which cannot be reflected in arithmetic. It is far from clear to me that I should have reached a different conclusion to that which I did.
19. A further factor is that is now 5 months since I wrote the section of the judgment in question. I then had a familiarity with the witness evidence and the documents which I have lost. I would not be in a position to repeat the exercise which I carried out then without much re-reading, and I could never fully regain my recollection and impression of the relevant witnesses' evidence.
20. I should also say a little, not I think in the circumstances more than a little, about the three points which the claimants raise. First, VAT. The figures in Ms Congdon's table included vat. I had known that. I do not know whether I considered whether I should reduce her figures to remove it. If I had considered it, I would have expected that I would have concluded that I should do so. So it is possible that I overlooked the point, as apparently did those who checked the draft judgment on the claimants' side. It does not make a large difference to the figures in what even for Ms Congdon was, as she stated, a broad and rough approximation. Second, Field C. Ms Congdon's table brought in the income from Field C starting in 2008. That is apparent from the table although it is not spelt out. She brought it in because she was assessing total car park income for the Estate's land. As I recollect, it was well understood that this was what she was doing. However, at the start of paragraph 157 of the judgment I stated that Ms Congdon's table provided figures for income for "Fields A and B (called by her Car Park 1)". Again, this was not picked by anyone when the judgment was considered in draft. The 2002 lease related to Fields A and B. Field C covered by the 2003 lease. If BIA had been assessing car park income at the time of the negotiation of the 2002 lease, BIA would most likely have appreciated that Fields A and B would become insufficient and could well have considered the addition of further land, Field C, on the same basis. If so, it was right for me to include Field C and to use Ms Congdon's figures as I did because BIA would have been interested in the cumulative effect of agreeing a turnover rent. On this basis it was right to include the earnings of Field C. Third, discount. Ms Congdon's report was dated 23 November 2006. I do not know when in 2006 (or possibly earlier) she prepared the table in question. It was shown in her oral evidence that it over-stated car park income for certain years for which actual figures were by then available. It was suggested that a percentage reduction, called "discount", should be applied to her figures to adjust for this. There was a dispute, which I was not asked at that stage to resolve, as to how large the discount should be. As I was looking to find some guide to what BIA might have thought as to likely car park income and so as to the cost of a turnover rent when the 2002 lease was being negotiated, I took Ms Congdon's first calculation as a poor best guide. To take into account later adjustments made in the light of later figures would have been inappropriate.
21. In my view it accords with the authorities that a judge should only exercise his jurisdiction to reconsider a judgment where it is clear to him without prolonged enquiry that he reached the wrong conclusion. For the reasons I have briefly indicated I am not satisfied that my treatment of Ms Congdon's figures was seriously erroneous, let alone that my finding of 10 per cent was wrong.
22. I conclude there that whether that finding of 10 percent was right is not something which I have jurisdiction to consider, but, if I had jurisdiction, it is not a jurisdiction which in the circumstances I should exercise. As it was in Compagnie Noga, it is an issue for the Court of Appeal.
23. As I have stated, on 22 May 2007 I was asked for, and refused, permission to the claimants to appeal against the 10 per cent finding. That refusal was incorporated into paragraph 11 of the order agreed between counsel following the hearing and sealed by the Court Office on 30 May. Mr Speaight submitted that the paragraph was to be read in the context of what took place on 11 May and so his new points enabled him to make a fresh application. Alternatively he asked for a generous interpretation of the slip rule. In my view the position is wholly clear, and I have no jurisdiction now to consider any fresh application. If permission is to be granted, it must be by the Court of Appeal.
24. Following the conclusion of submissions as to reconsideration, I dealt with various matters of case management relating to the damages hearing now fixed for 29 October. It was suggested that I reserved a decision as to the costs pending my decision as to reconsideration. Some of the case management matters should have been capable of agreement or at any rate should not have added to the costs of the hearing. Nonetheless about an hour and a half was spent on these matters. The most contentious matter was the provision by Ms Congdon of figures to support some new tables. The claimants succeeded on that. The claimants were also successful on a short point concerning an expert instructed on behalf of Strutt & Parker, Mr West. I have concluded that in the circumstances it will do justice between the parties if Strutt & Parker pay the claimants one half of their costs, namely £4,130.