Cooke v Haynes-McManus

Permission to appeal should be refused where the proposed appeal has no real prospect of success. A claimant’s liability to a client for loss caused by breach of contract is not reduced merely because the client may have retained money in a separate relationship with building contractors. A possible benefit from that retention does not entitle the claimant to profit from it, particularly where the trial findings identify different defects and losses. An appellate court will not entertain an appeal requiring a fresh factual investigation or valuation that was not realistically undertaken at trial.

Cooke v Haynes-McManus arose from a building contract under which the claimant, a surveyor, sued for professional fees. The defendant counterclaimed for negligence and breach of contract. His Honour Judge Hedley dismissed twelve heads of claim but awarded the defendant £5,000 for defects which the claimant should have notified to the contractors, together with £2,000 interest. The claimant recovered £14,091 on his claim.

In an addendum, the judge rejected the argument that the defendant’s retention of approximately £9,480 from the contractors overlapped with the damages awarded. The claimant, appearing in person, sought permission to appeal, arguing that the retained money exceeded the value of the defects notified to the contractors. The central issue was whether the proposed appeal had a real prospect of success.

Longmore LJ delivered the first judgment. Hale LJ agreed. The application for permission to appeal was refused.

1. The relevant question was whether the claimant had a real prospect of succeeding if permission were granted. He did not.
2. The financial relationship between the defendant and the building contractors was separate from the contractual relationship between the claimant and the defendant. Even if the defendant might have obtained a benefit from retaining money which the contractors could have sought, that did not mean that the claimant could profit from the benefit or avoid responsibility for loss caused by his own breach.
3. The trial judge had found that the £5,000 damages related to defects which had not been notified and which should have been notified. The retained money related to defects which the claimant had notified. Those were different matters. The findings therefore did not establish double recovery.
4. The proposed appeal would also require an investigation into the value of the notified defects and the financial position between the defendant and the contractors. The Court of Appeal could not properly undertake that exercise. The trial judge had not been realistically invited to undertake it, and the evidence did not provide a sufficiently certain basis for doing so on appeal.

The order was: application refused.

• Court of Appeal (Civil Division) The claimant’s application for permission to appeal was refused.
• Queen’s Bench Division His Honour Judge Hedley dismissed twelve heads of counterclaim, awarded the defendant £5,000 damages and £2,000 interest on the thirteenth head, and gave judgment for the claimant for £14,091 on the fee claim, with consequential costs orders.