Howard & Ors v Chelsea Yacht And Boat Company Ltd & Anor

A preliminary issue should be ordered only with caution. The proposed issue should ordinarily be decisive or potentially decisive, concern a question suitable for separate determination, be capable of being tried without significant delay, and offer a realistic prospect of saving costs or narrowing the trial. The court may proceed on agreed or assumed facts where that is appropriate. Case-management considerations, including duplication, delay, appeal risk, proportionality and possible amendment of the relief, are paramount. A discretionary issue concerning whether to grant a declaration of criminal liability is not strictly a point of law, although it may be sufficiently analogous where no oral evidence or cross-examination is required. The court declined to order a separate preliminary trial where the risks of delay and increased costs outweighed the possible benefits.

The claimants, owners or occupiers of houseboats at Chelsea Reach, sought declarations concerning the first defendant’s alleged breach of a River Works Licence granted by the Port of London Authority. They contended that charging premiums for certain mooring licences breached the licence and constituted an offence under the Port of London Act 1968.

At the first case-management hearing, the court considered whether to order a preliminary trial of the issue whether it should exercise its discretion to grant the declaration concerning criminal liability. The proposed issue was to be determined on assumed facts, with the remaining applications for summary judgment and strike out also requiring directions.

1. The court refused to order a preliminary trial of the issue whether the Criminal Declaration should be granted. The factors against a separate trial, particularly delay and the risk of significantly increased costs through duplication, outweighed the factors in its favour.

2. Although the proposed issue concerned the exercise of a discretion and was therefore not strictly a point of law, it was sufficiently analogous to one because the first defendant accepted that all factual matters alleged by the claimants could be assumed to be true. No oral evidence or cross-examination would then be required.

3. The court applied the guidance in McLoughlin v Jones [2001] EWCA Civ 1743, including the need for the issue to be decisive or potentially decisive, usually legal in character, capable of determination on agreed or assumed facts, and triable without significant delay while allowing for a possible appeal. The relevant factors identified in Steele v Steele [2001] CP Rep 106 were also considered.

4. The issue was not dispositive of the whole claim. If decided against the first defendant, it might have to be reconsidered at the substantive trial on facts then found. The proposed separation also carried a real risk of postponing the trial, duplication of work, appeal and amendment of the relief claimed.

5. The outstanding summary judgment and strike-out applications should not simply be adjourned to the trial judge. A party making an application is generally entitled to have it determined within a reasonable period.