Aldersgate Estates Ltd v HAM Construction Ltd

A preliminary issue should be ordered only where it offers a real procedural advantage. The court must consider whether it may dispose of all or a substantial part of the proceedings, reduce preparation or trial costs, improve settlement prospects, and be determined shortly on sufficiently agreed facts. The court must also consider delay, additional evidence, possible amendments, procedural unfairness, and whether the issue may affect other parties. The factors identified in Steele v Steele are useful but not exhaustive. Pragmatism, timing and the parties’ agreement are relevant. A late application that would require adjournment, create a risk of further pleadings and produce little or no saving should normally be refused.

Aldersgate Estates Ltd brought a £4.5 million claim against HAM Construction Ltd and Robinson Consulting Ltd arising from damage to a retained façade during redevelopment works. Robinson applied shortly before the fixed trial for a preliminary issue concerning whether Aldersgate’s substantial claim for diminution in market value fell within Robinson’s duty of care and whether the loss was too remote.

The application was opposed by Aldersgate. HAM took a neutral position. The issue was whether the proposed preliminary determination would produce sufficient procedural or commercial benefit to justify separating it from the liability and quantum trial.

1. Application dismissed. Robinson was ordered to pay two-thirds of Aldersgate’s costs of the application, summarily assessed at £9,000, payable within 14 days.
2. The court considered the guidance in SCA Packaging Ltd v Boyle, including the requirement for a succinct knock-out point, and the ten-factor checklist in Steele v Steele. Those factors were useful but not exhaustive. The court could take account of case-specific considerations and should adopt a pragmatic approach.
3. Relevant considerations included whether the issue would dispose of the proceedings or a significant element, reduce costs or trial time, improve settlement prospects, be decided on agreed or assumed facts, require evidence, cause delay, fetter a just determination, prompt amendments, or affect other parties. The timing of the application and any agreement between the parties were also material.
4. A major quantum issue could in principle be determined preliminarily, but this would be unusual. The comparison with Earl’s Terrace Properties Ltd v Nilsson Design Ltd did not assist Robinson because that application had been agreed by all parties, whereas this one was opposed and made at a late stage.
5. The application was made months after the issue had been apparent, after the first case management conference and after detailed loss information had been provided. It could not be accommodated without probably adjourning the trial by about seven months. If Robinson succeeded, the liability issues and other financial claims would remain, so little or no trial time would be saved. Further evidence and amendments to the pleadings were also likely.
6. The proposed issue was therefore not the short, decisive point contemplated by SCA Packaging Ltd v Boyle. The speculative possibility of settlement did not justify the cost and delay of a separate hearing.