Skanska Construction Ltd v Egger (Barony) Ltd

Permission to appeal may be granted under Rule 52.3(6) either because the appeal has a real prospect of success or because another compelling reason makes a hearing appropriate. The second limb may be satisfied where the issue is financially important, the first-instance conclusion is facially surprising, and the arguments merit consideration by the full court, even though the real-prospect limb is difficult to establish. Granting permission does not determine the merits.

The defendant sought permission to appeal from preliminary rulings of the Technology and Construction Court dated 25 May 2001. The court had construed clause 22(2)(a) of a construction contract as requiring insurance against loss or damage arising from anything for which the contractor was responsible, whether negligent or otherwise. The defendant argued that this interpretation produced remarkable consequences. The central issue was whether the proposed appeal met the permission threshold.

Permission granted unanimously.

1. Applicable threshold. Under Rule 52.3(6), permission to appeal may be granted where the appeal has a real prospect of success or where there is some other compelling reason why it should be heard. The two grounds are alternative.
2. Underlying issue. The proposed appeal concerned the meaning of clause 22(2)(a), which required insurance against loss or damage from whatever cause for which the contractor was responsible. The first-instance judge had construed the words literally, so that the insurance obligation extended to loss or damage caused by the contractor whether or not the contractor was negligent.
3. Compelling reason. Lord Justice Kay considered that the first-instance decision might ultimately be correct, but held that the arguments concerning its potentially remarkable consequences deserved consideration by the full court. Lord Justice May agreed. Although he considered that the real-prospect limb alone would present difficulty, he found another compelling reason because the case involved substantial sums, was important to the parties, and the result appeared surprising on its face.
4. Disposition. Permission to appeal was granted. Costs were costs in the appeal. The respondent was directed to file written submissions within 21 days, and the case was directed to the Short Warned List.

• Court of Appeal (Civil Division): On 29 October 2001, permission to appeal was granted under [2001] EWCA Civ 1654.
• High Court of Justice, Queen’s Bench Division, Technology and Construction Court: His Honour Judge Richard Havery QC decided two preliminary issues in favour of the claimant on 25 May 2001.