Virani Limited v Manuel Revert y Cia SA

Permission to appeal out of time may be granted where the proposed appeal relies on fresh evidence, but the evidence must bear materially on the decision challenged. Evidence affecting only the later assessment of damages cannot justify permission to appeal a liability judgment. A contract for the supply of a quantity of goods is not necessarily a contract for identified goods held by the seller; later evidence about resale goods does not of itself invalidate the contract. Unpleaded allegations of mistake or misrepresentation should not be introduced for the first time on a permission application. On an appeal limited to review, permission is inappropriate where the trial judge's factual inferences and contractual findings were open to him. A contracting officer may have ostensible authority despite an undisclosed internal limit, and sample approval may objectively concern quality rather than market demand.

An English company claimed that a Spanish company had repudiated a conditional contract for the sale of cloth. The High Court, after a liability trial before His Honour Judge Kershaw QC sitting as a High Court judge, found in favour of the claimant on 1 March 2001 and directed that damages be assessed separately.

The defendant sought permission to appeal. Permission had previously been refused on the papers, and the defendant failed to renew the application within the relevant seven-day period. It later applied for a renewed application, relying principally on fresh evidence suggesting that cloth sold by the claimant to an Italian company two years later was of a different type. It also sought to revive its original factual grounds and raise unpleaded arguments based on mistake or misrepresentation. The central issues were whether permission and an extension of time should be granted.

Park J gave the judgment, with which Mance LJ agreed. The Court refused the renewed application for permission to appeal and the associated application concerning time. The order was: applications refused.

1. Fresh evidence. The court accepted that it had power to grant permission to appeal out of time on the basis of new evidence. The evidence concerning the cloth later sold to Carillo might be important to the assessment of damages. It did not materially affect the liability findings, which concerned: the formation of a conditional contract in March 1998; satisfaction of the condition by approval of a sample; and repudiatory breach in October or November 1998. The new evidence could therefore be deployed at the damages stage without permission to appeal the liability judgment.
2. Nature of the contract. The contract found by the judge was for the supply of a quantity of cloth. It was not a contract for delivery of specific cloth already held by the claimant in its warehouse. Even if the later evidence suggested that the claimant did not possess the relevant cloth at the time, that did not invalidate the contract or undermine the finding of liability.
3. Unpleaded arguments. The proposed case based on mistake or misrepresentation had not been pleaded and was raised for the first time at the hearing. It was wholly unformulated. The court declined to grant permission on that basis, while not excluding the possibility of a properly formulated future application.
4. Original grounds and delay. The application was substantially out of time and followed a failure to renew the earlier paper application within seven days. In those circumstances, very convincing merits were required. An appeal would generally involve review of the decision below rather than a rehearing. The judge's inferences on contract formation, authority and the contractual condition were findings which it was open to him to make.
5. Authority and approval. Mr Soriano's position as a director and purchasing manager, together with the evidence of his dealings with the claimant's agent, supported ostensible authority to contract. An undisclosed internal limitation on his authority did not affect the claimant's reliance. The requirement for approval of a larger sample was objectively a requirement concerning quality. Quality having been accepted, a change in market demand did not prevent the condition from being satisfied or negate the binding order.

• Court of Appeal (Civil Division): On 15 January 2002, the court refused the renewed applications. The decision is reported at [2002] EWCA Civ 107.
• Court of Appeal (Civil Division): Mance LJ had previously refused permission to appeal on the papers on 10 May 2001. The defendant did not renew that application within the seven-day period.
• High Court, Queen's Bench Division: His Honour Judge Kershaw QC, sitting as a High Court judge, found the defendant liable for breach of contract in a judgment delivered on 1 March 2001. Damages were directed to be assessed separately.