Whalley v PF Developments & Anor

Special damage should ordinarily be pleaded expressly. However, a damages inquiry following judgment in default is not invariably confined to the original pleading. Where court-directed evidence gives the defendant clear notice of the heads of loss, the defendant responds to them, and no unfairness or prejudice arises, a formal pleading defect should not prevent consideration of the claim. The court should not determine the issue on an unargued pleading point, particularly after the parties have addressed the merits.

The claimants brought proceedings concerning trespass to land and obtained judgment in default for a sum to be assessed. After an inquiry, Warrington County Court awarded £1,352.35 for fencing costs and removal of fences, but excluded claims for borrowing interest, council tax and lost profit because those heads of loss had not been expressly pleaded.

The claimants appealed, seeking reassessment or remission. The central issue was whether the unpleaded claims could be considered where the court had directed sequential evidence, the claimants had explained the heads of loss in that evidence, and the respondents had answered them without claiming surprise or prejudice.

Appeal allowed. The court held that the county court had wrongly excluded three heads of loss on a pleading point that had not been clearly raised or argued.

1. As a matter of formal pleading, the claims for borrowing interest, council tax and lost profit were special damage and required express pleading. That principle was supported by the guidance in Perestrello E Companhia Limitada v United Paint Co Ltd [1969] 1 WLR 570, 579–580.
2. The formal pleading rule did not establish that the scope of an inquiry into damages following judgment in default was invariably limited to the original pleading. Modern procedure permits adequate notice to be given through court-directed evidence where the procedural mechanics are fair. Under Civil Procedure Rules 1998 Part 12.7, directions are given when judgment is entered for an amount to be assessed. In this case, the directions for sequential witness statements meant that the claimants’ second statement effectively set out their case on loss.
3. The respondents had received full notice of the claims for nearly five months, had served evidence in response, and had addressed the heads of loss on their merits. They were not taken by surprise or disadvantaged. The judge had also misunderstood the directions as requiring simultaneous evidence.
4. Lord Justice Rimer considered that the judge had decided the case on an effectively unargued point. Lord Justice Lewison agreed, emphasising that the witness statement was to stand as a statement of loss. Lord Justice Mummery agreed with both judgments. The appeal was allowed, with submissions invited on the form of the resulting order.

• Court of Appeal (Civil Division): The appeal was allowed on 14 February 2013. The court held that the county court had wrongly excluded additional heads of loss on an unargued pleading point where the respondents had adequate notice and suffered no prejudice. [2013] EWCA Civ 306
• Warrington County Court: Following judgment in default for a sum to be assessed, District Judge Gilham awarded £1,352.35 and costs on 1 May 2012. The judge allowed recovery for fencing costs and removal of fences but rejected claims for borrowing interest, council tax and lost profit as unpleaded special damage.