MacKay & Anor v Walter Lilly & Company Ltd (Rev 1)

Permission to appeal should be refused where the proposed legal challenge cannot affect the result in light of unchallenged factual findings. This applies even where the construction issue concerns a contractual condition precedent. A claim for delay-related loss and expense will generally be presented by linking particular losses to particular delaying events. A global or rolled-up claim is permissible only in clearly defined circumstances. Permission is not justified where the trial judge has addressed both possible analytical approaches and made findings supporting the conclusion. An alleged failure to carry out a financial cross-check does not establish an arguable ground where the issue was raised at trial and addressed through competing expert evidence.

Walter Lilly and Company Limited sought permission to appeal against a judgment of Akenhead J in the Queen’s Bench Division following a lengthy construction dispute concerning delay and loss and expense arising from works at a residential development. The proposed grounds concerned the content of notices required by clause 26.1.3 of the JCT standard form contract, the treatment of the claim as global or non-global, and an alleged failure to undertake a cross-check of the sums awarded. The application was heard on an adjourned basis by the Court of Appeal. The central question was whether any of the proposed grounds had a reasonable prospect of success.

1. Permission refused. Lord Justice Aikens held that none of the three broad areas advanced disclosed an arguable ground of appeal.
2. As to the notices said to be a condition precedent to recovery of direct loss and expense, the applicant did not challenge the trial judge’s relevant factual findings. Those findings established compliance on any tenable construction of clause 26.1.3. The construction argument therefore could not affect the outcome, and permission on grounds 1 and 2 was refused.
3. Delay-related loss and expense is generally claimed by connecting particular losses with particular events. A global, or rolled-up, claim is permissible only in clearly defined circumstances. Akenhead J had addressed the legal requirements in detail, had understood the parties’ respective cases, and had made findings on both the non-global and global bases. The proposed challenge to that analysis was not reasonably arguable.
4. The trial judge’s preference for the claimant’s expert evidence, which underpinned his findings on the global-claim issue, was not challenged. Nor was there any basis for challenging the underlying findings of fact.
5. The alleged failure to perform a cross-check was not an independent arguable ground. The issue had been raised and considered at trial, including through rival cross-checks advanced by the experts.

The formal order was: Application refused.

• Queen’s Bench Division: Akenhead J gave judgment on 11 July 2012 after a lengthy trial concerning delay and loss and expense in a construction project.
• Court of Appeal (Civil Division): On 24 January 2013, Lord Justice Aikens refused the adjourned applications for permission to appeal.