Excelsior Commercial & Industrial Holdings Ltd v Salisbury Hammer Aspden & Johnson (A Firm) & Ors

Permission to appeal requires a real prospect of success or some other compelling reason. An appeal against a trial judge’s evaluation of facts or inferences faces a high threshold, particularly after a substantial witness trial. The Court of Appeal should exercise caution before disturbing such findings. Intervention may nevertheless be justified where the judgment contains a striking failure to address a material point, or a glaring error or omission. Whether a claimant would have renegotiated, withdrawn from, or continued with a transaction after receiving information withheld through negligence is ordinarily an evaluative question arising from the whole factual background.

Excelsior acquired shares in a company whose principal asset was a fire-damaged mill. The trial judge found that the defendant solicitors had negligently failed to establish that the mill was fully insured for reinstatement, but awarded only nominal damages because Excelsior would have proceeded with the purchase despite knowing the true position.

Excelsior sought permission to appeal, arguing that the judge had drawn the wrong inference about whether the purchaser would have renegotiated or withdrawn, and had assessed loss by reference to a later insurance settlement. The application was heard by the Court of Appeal on the question whether the proposed appeal had a real prospect of success or another compelling basis.

1. Application dismissed. The statutory-style permission threshold required a real prospect of success on appeal or some other compelling reason. That threshold was not met.
2. The central issue was whether Mr Smith would have renegotiated the price, abandoned the transaction, or continued with it if he had known that the mill was materially underinsured. That issue was principally one of fact and evaluation, not a short question of law.
3. The judge had considered the relevant evidence and competing submissions. He was entitled to assess Mr Smith’s credibility, including the inconsistency between his earlier instruction that he would renegotiate and his trial evidence that he would walk away. He was also entitled to conclude that insurance was important but not essential to the transaction, and that Mr Smith would have continued with the deal.
4. The appellate caution applicable to findings of fact and inferences was reinforced by Pride Valley Foods Ltd v Hall & Partners [2001] EWCA Civ 1001, which identified a striking failure to address a material matter as a feature capable of justifying intervention. No comparable failure, glaring error, or omission appeared here. The principles concerning appellate restraint, including those cited from Piglowska v Piglowski [1999] 3 All ER 632, supported that approach.
5. Because the finding that the transaction would have proceeded was decisive, it was unnecessary to determine separately whether the later insurance settlement provided evidence of the value of the mill and insurance at the purchase date. The application for permission to appeal was dismissed.

• Court of Appeal (Civil Division): Excelsior sought permission to appeal from the judgment of His Honour Judge Bradbury dated 18 July 2001. The application was dismissed.
• High Court of Justice, Queen’s Bench Division: The defendant solicitors were found negligent, but only nominal damages were awarded because the claimant would have proceeded with the transaction and was held to have suffered no recoverable loss.