Multiplex Constructions (UK) Ltd v Cleveland Bridge UK Ltd & Anor

On a renewed application for permission to appeal, a discrete issue of contractual construction may be considered separately where the written agreement can be construed without first resolving complex factual disputes. Permission is appropriate where the issue is important, sufficiently circumscribed and not unarguably decided below. By contrast, an appeal against factual findings based substantially on oral evidence after a lengthy trial may be weak and should be approached cautiously, consistently with Yorkshire Water Services Ltd v Taylor Woodrow Construction Northern Ltd [2005] EWCA Civ 894. Permission may therefore be granted on the construction issue while factual and estoppel issues are adjourned.

Multiplex Constructions (UK) Ltd and Cleveland Bridge UK Ltd were parties to a major steelwork subcontract for the rebuilding of Wembley Stadium. Following disputes about valuation, delay and repudiatory breach, they entered into a Heads of Agreement and later a Supplemental Agreement.

Jackson J determined ten preliminary issues in the Technology and Construction Court on 5 June 2006, mostly adversely to Cleveland Bridge. Cleveland Bridge renewed an application for permission to appeal on four issues, including the construction of Schedule 1(a) of the Supplemental Agreement, the effect of an entire agreement clause, the alleged oral valuation agreement and repudiatory breach.

The central legal question was whether the construction issue could be determined independently of the disputed factual question concerning the alleged valuation agreement.

1. Permission granted in part. Cleveland Bridge was given permission to appeal on issue 4, concerning the construction of the Supplemental Agreement, and on the first part of issue 7, concerning the entire agreement clause. Permission on the estoppel aspect of issue 7 was excluded because it was necessarily factual.
2. Construction issue. The meaning of Schedule 1(a), which referred to the gross valuation as at 15 February 2004, was capable of being examined independently of issue 6. The court could proceed on the basis of the parties’ two rival factual contentions about what had been agreed on 14 May 2004. Neither proposed construction was unarguably correct. The issue was important and sufficiently circumscribed to be heard economically.
3. Factual issues. The court expressed no concluded view on the proposed appeals against the valuation finding and the finding that Multiplex was not in repudiatory breach. It nevertheless gave a first impression that the findings were unlikely to be amenable to factual appeal, having regard to Yorkshire Water Services Ltd v Taylor Woodrow Construction Northern Ltd [2005] EWCA Civ 894, especially paragraphs 27 and 32, and to Thomson v Christie Manson & Woods Limited and Others [2005] EWCA Civ 555. The trial judge had heard a month of detailed oral evidence and had made credibility findings.
4. The applications concerning issues 6 and 8, and the remaining part of issue 7, were adjourned. The court intended to decide the construction issue first and then give directions about any further hearing. Smith LJ agreed.

• Court of Appeal (Civil Division). On Cleveland Bridge’s renewed application, May LJ, with Smith LJ agreeing, granted permission on issue 4 and the first part of issue 7, while adjourning the applications concerning issues 6 and 8 and the remaining part of issue 7.
• High Court of Justice, Queen’s Bench Division, Technology & Construction Court. Jackson J gave judgment on 5 June 2006 after determining ten preliminary issues, most of them adversely to Cleveland Bridge. Lord Justice Jonathan Parker had previously refused permission to appeal on the issues then pursued.