URS Corporation Limited v BDW Trading Limited

A pending appeal should not be treated as academic where substantive grounds may remain relevant and a statutory limitation issue remains live. At an interlocutory hearing, a single Lord Justice should avoid deciding substantive matters that might constrain the forthcoming appeal. Permission to appeal may be granted under CPR r 52.6(1)(b) where there is another compelling reason, including close interdependence with an existing appeal, potential detriment caused by amendments, and novel statutory issues requiring appellate guidance. Related appeals may properly be directed to be heard together where their issues cannot sensibly be disentangled.

Developers brought negligence claims against structural engineers concerning alleged defects in residential buildings. Fraser J determined preliminary issues substantially in the developers’ favour, holding that the causes of action accrued no later than practical completion and that the losses were in principle recoverable: [2021] EWHC 2796 (TCC). The engineers appealed.

After the Building Safety Act 2022 came into force, the developers amended their pleadings to add claims under the Defective Premises Act 1972 and the Civil Liability (Contribution) Act 1978. The amendments were allowed by the deputy High Court judge, including in the decision reported at [2022] EWHC 2966 (TCC). Before the first appeal was heard, the Court of Appeal considered whether it had become academic and whether permission should be granted for a second appeal concerning the amendments.

The Court of Appeal, in a judgment of Lord Justice Coulson, determined both applications.

1. The first appeal was not academic. It was not appropriate for a single Lord Justice at an interlocutory hearing to decide substantive matters that might be relevant to the forthcoming appeal. Grounds 1 and 2 might remain material, depending on the arguments at the substantive hearing. Ground 3 also raised a freestanding issue concerning the scope and application of section 135 of the Building Safety Act 2022. The answer to the first question was therefore no.
2. Permission under CPR r 52.6(1)(a). The Court declined at that stage to decide whether the appellants had a real prospect of success. The arguments concerning the amendments and the possible operation of section 135(6) were sufficiently complex that a premature ruling might constrain the parties’ arguments at the substantive appeal.
3. Compelling reason under CPR r 52.6(1)(b). There were three separate compelling reasons for the second appeal to be heard. First, the issues in the two appeals were closely entwined and could not sensibly be disentangled. Secondly, allowing the amendments might prejudice the appellants’ position under section 135(6), including because the amendments might relate back to commencement; it was safer to allow the appellants to develop their arguments without relying on an unwritten concession. Thirdly, the appeals raised novel issues under section 135, on which appellate guidance might be helpful.
4. Permission to appeal the amendment decisions was granted. The second appeal was directed to be heard alongside the first appeal. The Court also gave procedural directions requiring comprehensive skeleton arguments, an agreed timetable and co-operation between the parties.

1. Court of Appeal (Civil Division): on applications, held that the first appeal was not academic and granted permission for a second appeal concerning the amendments, to be heard with the first appeal.
2. High Court, Technology and Construction Court: the deputy High Court judge allowed amendments to the pleadings in [2022] EWHC 2966 (TCC) and in a further ruling dated 14 December 2022.
3. High Court, Technology and Construction Court: Fraser J determined preliminary issues substantially in favour of the developers in [2021] EWHC 2796 (TCC), including the accrual of the causes of action and the recoverability in principle of the alleged losses.