Rosengrens Tann Ltd v Ayres (t/a Ace Safe Company)

At the permission stage, an appeal is arguable where the trial judgment may contain material gaps in reasoning or may have decided liability on a basis that was not pleaded or argued. That remains so even if the lower court may ultimately have reached the correct result. A proposed appeal should not become a vehicle for merely rearguing factual findings. A short delay in delivering a reserved judgment does not, by itself, amount to a denial of justice. Where a trial judge rejects the pleaded misrepresentation case but bases liability on unpleaded statutory implied terms, that departure is a proper ground for appellate scrutiny.

A seller claimed payment for safes sold to the defendant, who counterclaimed for losses alleging that the safes were defective. After a four-day trial, Mr Recorder Lincoln Crawford found no warranty or misrepresentation but held that terms implied by sections 13 and 14 of the Sale of Goods Act 1979 had been breached. Quantum was reserved. The claimant sought permission to appeal, arguing that the recorder had relied on expert evidence and a drawing not forming part of the pleaded case, overlooked onward sales, and addressed liability on unpleaded statutory grounds. The central question was whether these matters made the proposed appeal arguable. Delay in delivering the reserved judgment was also raised.

1. Permission granted. Sedley LJ gave the first judgment and Potter LJ agreed. The court granted permission to appeal and permission to amend the grounds. It made no final determination of liability, causation, recoverability or quantum.
2. Sedley LJ considered that the proposed appeal was arguable because the recorder’s reasoning might contain material lacunae and might have departed from the pleaded cases. The matters relied on included the assessment of expert evidence, the sales history, the use of a manufacturer’s drawing as the benchmark, and the effect of onward sales on loss and causation.
3. The court would not formally restrict the grounds of appeal, but would not be interested in an attempt merely to reargue findings of fact. Sedley LJ rejected delay as a ground: the eight-week interval between the hearing and delivery of the reserved judgment did not, without more, amount to a denial of justice.
4. Potter LJ identified a further substantial issue. The pleaded case was principally that the safes had been misrepresented as equivalent to European grades II and IV, together with an alleged implied contractual term. The recorder rejected misrepresentation but appeared to base liability on breaches of sections 13 and 14(2) of the Sale of Goods Act 1979, although those statutory provisions and any sale by description had not been pleaded.
5. That apparent substitution of an unpleaded basis of liability, together with the difficulty in understanding from the judgment why the claimant had succeeded or failed, made appellate scrutiny appropriate.

• Court of Appeal (Civil Division): On 9 February 2001, permission to appeal and permission to amend the grounds were granted. The merits of the appeal were not determined.
• Central London County Court: Mr Recorder Lincoln Crawford delivered a reserved judgment on 16 June 2000 after a four-day trial, determining liability while reserving quantum.