Heather v Griffiths

The Court of Appeal treated the scope of the slip rule as arguable where a corrected order reduced damages to account for a prior settlement. Permission could therefore be granted against both the original and corrected orders, with both appeals dealt with together. Applying the overriding objective, the court set aside both orders and remitted the claim so the lower court could determine whether the claimant’s loss exceeded the settlement. The lower court could revisit earlier factual findings if persuaded that there was good reason to do so.

The claimant alleged breach of a 1994 agreement to establish a packaging business. The agreement provided for his employment and the allotment of shares in Nene Packaging Ltd. Liability was decided in his favour after the defendant failed to attend the liability hearing. A subsequent application to set aside that judgment was refused.

At the quantum hearing, the county court awarded £6,758 plus interest for lost salary but made no award for the shares. The judge later corrected the order under the slip rule because he had failed to deduct a £15,000 settlement already received from another defendant. The claimant sought permission to appeal against both orders, challenging the use of the slip rule and the assessment of his loss. The central issues were whether the correction was within CPR 40.12 and how the settlement should affect the final damages.

1. Permission and disposition. Permission to appeal against both the 2 October and 9 October 2003 orders was granted. The appeals were treated as before the court and allowed. Both orders were set aside and the proceedings were remitted to Northampton County Court for re-hearing.
2. Slip rule. It was impossible to say that the challenge to the correction under CPR 40.12 had no real prospect of success. The true ambit of that power had recently been considered in Bristol-Myers Squibb Company v Baker Norton Pharmaceuticals Inc [2001] EWCA Civ 414 and Markos v Goodfellow [2002] EWCA Civ 1542. The issue was one on which the decision might go either way. The court did not finally determine the scope of the power at the permission stage.
3. Settlement credit. The original order plainly failed to take account of the £15,000 already paid by the co-defendant. On an appeal against that order, the court would have power, at the defendant’s request and probably of its own motion, to correct the error.
4. Remittal. Applying the overriding objective in Civil Procedure Rules 1998 CPR 1.1, the appropriate course was to allow the county court to decide the real question: whether the claimant’s loss exceeded £15,000 and, if so, by how much. The county court could revisit the earlier findings of fact if persuaded that there was good reason, but could decline to do so otherwise.
5. Ancillary directions. Costs of the application were made costs in the proceedings, to be dealt with by the county court at the final conclusion. Transcripts were to be provided to both parties and the county court at public expense.

1. Court of Appeal (Civil Division): Permission to appeal against both orders was granted. The appeals were allowed, the orders were set aside, and the proceedings were remitted to Northampton County Court for re-hearing.
2. Northampton County Court: HHJ Metcalf awarded £6,758 plus interest for lost salary on 2 October 2003, made no award for the shares, and subsequently corrected the order on 9 October 2003 under the slip rule by deducting the £15,000 settlement.
3. Earlier proceedings: Liability had been decided in the claimant’s favour in May 2002. The defendant’s application to set aside that judgment was refused in May 2003, and an appeal against that refusal was dismissed in June 2003.