KG & Ors v Bryn Alyn Community (Holdings) Ltd. & Anor

Sealing an appellate order does not necessarily prevent the Court of Appeal from determining unresolved ancillary Part 36 relief. Where the court remains seized of that relief, the sealed order did not purport to decide it, and the application had been raised before sealing, the court may join affected claimants to the pending Part 36 appeal and grant corresponding orders.

The court also retains an exceptional residual appellate jurisdiction to avoid real injustice. It should be less reluctant to use that jurisdiction where it is asked to determine an ancillary matter, rather than reverse an issue already decided.

Fourteen claimants sued the first defendant. The second defendant insurer conducted the defence. Eight claimants made Part 36 offers. Connell J gave judgment for all but one claimant on 26 June 2001 and later ruled on the Part 36 consequences.

Separate appeals were brought against the merits judgment and the Part 36 ruling. On 12 February 2003 the Court of Appeal increased general damages. That meant that three additional claimants, whose offers had not previously been beaten, now beat them. The main appeal order was sealed before they formally applied to join the separate Part 36 appeal.

The issue was whether sealing the main order deprived the court of jurisdiction to join those claimants and make corresponding Part 36 orders.

1. Application granted. In a judgment of the court delivered by Waller LJ, the Court of Appeal held that the three additional claimants could be made parties to the Part 36 appeal. The court also retained jurisdiction to place them, and the fifth claimant already party to that appeal, in the same position as the other claimants who had obtained Part 36 relief.

2. The main appeal and the Part 36 appeal had been treated as separate, though connected, proceedings. Connell J had adjourned the Part 36 issues when making the merits order. The main appeal order therefore did not itself determine whether the additional claimants should receive Part 36 orders after their increased damages had caused them to beat their offers.

3. The court remained seized of ancillary questions concerning costs and interest. Before the main order was sealed, the claimants had expressly indicated that the additional claimants would seek equivalent relief. A formal application should have been made, but it would properly have resulted in their joinder to the pending Part 36 appeal and deferred determination of the precise form of relief. Sealing the main order did not preclude that course.

4. In any event, the court relied on Taylor v Lawrence [2002] 3 WLR 640. A sealed appellate order is subject to the court’s exceptional residual jurisdiction to avoid real injustice. The court considered that finality was less of an obstacle when the request concerned an unresolved ancillary matter, rather than reversal of a point already decided.

5. The second defendant was to pay the costs of the jurisdiction dispute as the unsuccessful party. However, the additional claimants’ representatives were partly responsible because they had not made a formal application after the main judgment. Indemnity costs were therefore inappropriate.

1. Court of Appeal (Civil Division): In this postscript judgment, the court held that it retained jurisdiction after sealing the main appeal order to determine the outstanding ancillary Part 36 applications: [2003] EWCA Civ 783.

2. Court of Appeal (Civil Division): On 12 February 2003, on the main appeal, the court increased general damages in the cases in which Part 36 offers had been made.

3. High Court of Justice, Queen’s Bench Division, Chester District Registry: Connell J gave judgment on 26 June 2001 for all but one of the fourteen claimants. On 29 October 2001, he determined the Part 36 issues, granting relief under Part 36.21(2) for four claimants and refusing relief under Part 36.21(3).