Hinchcliffe & Anor v Smith & Ors

Where a proposed appeal challenges an assessment of damages and accepts that the trial judge applied no wrong legal principle, permission requires a real prospect of showing that the assessment was so high as to be plainly wrong. Damages assessment involves judgments of fact and degree which may not be capable of precise calculation. A trial judge may accept expert evidence overall without accepting every part of it uncritically. An appellate court should not interfere where the judge considered relevant factors, excluded irrelevant matters and reached figures supported by the evidence. In conspiracy claims, the assessment may address the claimants’ total loss, including asset value and loss of future earnings.

The appellants, defendants at trial, challenged an order of the High Court of Justice, Chancery Division, made by HHJ Hazel Marshall QC on 14 December 2011. The order awarded £1.4 million damages for conspiracy. The appellants argued that the assessment lacked evidential support, relied excessively on the claimants’ expert accounting evidence, failed to address concessions and relevant matters, and involved double counting. They also abandoned a challenge to the refusal of an adjournment. Permission had previously been refused on paper by Lewison LJ. The central issue was whether the proposed appeal had a real prospect of establishing that the assessment was unsupported or plainly wrong.

The Court of Appeal unanimously dismissed the renewed application for permission to appeal. Mummery LJ gave the reasons, with which Pitchford LJ agreed.

1. The appellants accepted that the trial judge had not acted on a wrong legal principle. They therefore had to show that the assessment of damages was so high as to be plainly wrong and that the proposed appeal consequently had a real prospect of success.
2. The assessment required judgments of fact and degree which were not capable of precise calculation. The absence of expert accounting evidence from the defendants made the task more difficult, but it did not prevent the judge from evaluating the evidence before her.
3. The judge was entitled to treat the claimants’ expert as reliable overall without accepting all his evidence or treating it uncritically. She was also entitled to use the purchase price of the assets as a starting point, while assessing the total loss caused by the conspiracy, including asset loss and loss of future earnings.
4. The complaints concerning insolvency, asset valuation, the absence of a professional valuation and alleged double counting did not provide reasonably arguable grounds for overturning the assessment. The judge had taken relevant factors into account and left irrelevant factors out of account.
5. The claimants’ costs of complying with the directions for the renewed application were summarily assessed at £5,190 and ordered to be paid by the defendants.

• Court of Appeal (Civil Division): In [2012] EWCA Civ 696, the renewed application for permission to appeal was dismissed on the ground that the proposed appeal had no real prospect of success.
• High Court of Justice, Chancery Division: HHJ Hazel Marshall QC awarded £1.4 million damages for conspiracy by order dated 14 December 2011.
• Permission stage: Lewison LJ refused permission on the papers on 30 March 2012 and directed a renewed application on notice to the proposed respondents.