Stevenson (t/a Tower Forestry) (A Firm) v Environmental Consultants Ltd

On a renewed application for permission to appeal, the court may adjourn where there is a material concern that the first-instance judge misunderstood the issues agreed for trial. The proposed respondents should have an opportunity to address that concern. Before permission is granted on a damages issue, the applicant should provide prima facie evidence of additional loss said to flow from the alleged breach. A causation argument may remain unarguable where the alleged breach and later loss are separated by a substantial period.

The applicant sought an oral renewal of an application for permission to appeal after permission had been refused on the papers. In proceedings concerning survey work, the respondent claimed fees and the applicant counterclaimed for losses said to arise from defective work, including remedial costs, lost profits and indemnity liabilities. The county court judge reduced the respondent’s fee to reflect survey defects but did not award the further losses claimed. The applicant argued that the judge had misunderstood an agreement to defer assessment of damages and had failed to determine the claim accordingly. The central issue was whether permission should be granted, refused, or adjourned pending submissions from the proposed respondents and evidence of the alleged loss.

1. The renewed application for permission to appeal was adjourned. The court was sufficiently concerned that the county court judge might have misunderstood the agreed scope of the trial, particularly the intended opportunity to prove losses at a later hearing after breach had been established.
2. Permission was not granted immediately because the proposed respondents had not been heard on whether the applicant had lost the alleged procedural opportunity. They also needed an opportunity to address whether the judge had actually found a breach capable of founding a damages claim.
3. Before permission could be granted, the applicant was required to provide prima facie evidence of additional remedial costs and possible loss of profits attributable to the alleged breach. Any expert evidence was to be reworked, if necessary, in light of the judge’s findings about the survey defects.
4. The court maintained its earlier view on the causation issue. The 16-month interval between completion of the survey and termination of the separate contract provided a sufficient basis for the judge to conclude that the causation argument was not reasonably arguable.
5. On the indemnity issue, the judge had in fact concluded that the applicant was not entitled to an indemnity, and was entitled to reach that conclusion. That issue arose only if permission was granted on the causation point.
6. The respondents were to be notified and given the additional information within 28 days. The application was not to be listed before 35 days and was to be heard by a two-judge court for two hours. If permission were granted, the appeal hearing should follow immediately. Costs were reserved.

• Court of Appeal (Civil Division): Lord Justice Pill adjourned the renewed application for permission to appeal for 35 days and directed a two-judge hearing.
• Liverpool County Court (Judge James): The judge reduced the fee payable for defective survey work and rejected or did not award the further losses and indemnity sought.