Stalham Engineering Limited v Horner & Anor

The court retains a discretion to reduce the period for which interest is awarded, including after the introduction of the Civil Procedure Rules 1998. The power is exceptional and was traditionally exercised sparingly, although case-management objectives may justify more ready use where one party is fairly responsible for specified delay. An appellate court should not interfere where the issue was not argued before the first-instance judge, who lacked the opportunity to assess any explanation or apportion responsibility. Nor should it interfere with the exercise of the lower court’s discretion absent a proper basis for concluding that it was wrong.

Stalham appealed from the assessment of damages by Mr Recorder Crome following earlier Court of Appeal proceedings concerning defects in agricultural equipment sold to the respondents. The Recorder awarded the respondents a net sum including interest and refused permission to appeal.

Kay LJ granted permission on several grounds but refused it on the challenge to interest for delay between May 1993 and the end of 1996. Stalham renewed its application for permission on that ground and sought a stay of execution. The central issue was whether the Court of Appeal should revisit the refusal of permission or interfere with the Recorder’s discretionary award of interest.

1. Permission to appeal refused. The Court of Appeal agreed with Kay LJ that there was no prospect of concluding that the Recorder’s decision on interest was wrong.
2. Before the introduction of the Civil Procedure Rules 1998, the court had power, in exceptional cases involving gross delay by the party seeking payment, to reduce the period for which interest would ordinarily be allowed. That power continued after the Rules came into force. It might be exercised somewhat more readily where the objectives of the Rules and sound case management made it fair to attribute specified delay to one party. The power nevertheless remained discretionary and sparingly exercised.
3. Stalham’s proposed challenge could not succeed because the particular period of delay had not been argued before the Recorder. He had not been asked to determine responsibility for that period, and the respondents might have produced evidence explaining or excusing the delay. The Recorder had stated that he lacked sufficient material to apportion blame for the apparent inordinate delay.
4. The application for a stay was disposed of by agreement. Stalham was to make staged payments, money paid into court was to be released to the respondents, execution of the balance was stayed until the appeal, and costs of the stay application were reserved.

• Norwich County Court: Mr Recorder Crome assessed damages and interest in a reserved judgment dated 14 August 2000 and refused permission to appeal.
• Court of Appeal (Civil Division): Kay LJ refused permission on the interest ground. The present court confirmed that refusal and recorded agreed terms for a stay of execution.