A SPLIT TRIAL ON A PRELIMINARY ISSUE: ANOTHER CAUTIONARY TALE

A post earlier this month looked at the dangers of a court ordering a trial on a preliminary issue on a point of law.  Similar concerns were raised by Mr Justice Edwards-Stuart in Water Lilly Co Ltd -v- Clin [2016] EWHC 357 (TCC).  The judge questioned the usefulness of holding a split trial where there was no finding on key facts. (For good measure there are observations on the doubtful utility of bundles and witness statements and evidence).

“Quite apart from anything else, the size or quality of the drawings in the bundles in many cases did not permit detailed examination (for example, notes and revision dates were not always legible).”

“Another and really more fundamental difficulty lies in the attempt to determine issues of principle without having established the underlying facts… The result is that this judgment may prove to be of limited assistance to the parties.”

THE CASE

The claimant builder and defendant property owner were in dispute about the terms of a building development. The court ordered a preliminary trial on 9 preliminary issues relating to the construction of the contract.

THE WITNESS EVIDENCE

There was a (perhaps not unusual) flurry of witness evidence before the trial. Not much of it was useful.
“The course of the hearing
  1. At the hearing each side called evidence. Walter Lilly called Mr Andrew Postlethwaite, its construction director. Mr Clin called Mr Satish Patel, a director or partner of Mr Clin’’s architects. Their witness statements were exchanged on 7 December 2015. However, on 8 January 2016 Mr Patel produced a supplemental witness statement in response to the statement by Mr Postlethwaite, which then led to a further statement by Mr Postlethwaite dated 13 January 2016, some three working days before the hearing. This provoked a third witness statement from Mr Patel, which was served the day before the hearing, 18 January 2016. This state of affairs was highly unsatisfactory and gave rise to indignant protests by each side at the conduct of the other.
  2. I have to confess that I did not really understand how this evidence was relevant to the preliminary issues. Mr Postlethwaite said, as I would have expected him to say, that Walter Lilly took RBKC’’s letter of 17 July 2013 very seriously. I would have been astonished if he had said anything else. He said that Walter Lilly understood that the effect of the letter was telling Walter Lilly to stop the demolition work.
  3. Mr Patel was cross examined at some length about inconsistencies in various drawings, which he accepted there were, but again I did not really understand the relevance of this to the preliminary issues. Quite apart from anything else, the size or quality of the drawings in the bundles in many cases did not permit detailed examination (for example, notes and revision dates were not always legible).”

THE JUDGMENT

The judge made findings in relation to the implied terms of the contract. However his main concern was that the judgment would be of little practical use.
  1. I have to confess that I had some misgivings when I made the order of 18 December 2015. However, I was prepared to assume that the parties probably knew what would best advance the litigation. With the benefit of hindsight I consider that the order may not have been a wise one.
  2. I think part of the difficulty is that the parties have been working on the basis that one or other side’’s approach must be right. That, I think, was a mistake. Rightly or wrongly, I have concluded that the correct formulation of the implied term is not one for which either side contended. This has meant that some of the other issues do not permit of a ready answer. I have done my best to deal with this by explaining my approach to the problem and then setting out the reasons for my conclusions.
  3. Another and really more fundamental difficulty lies in the attempt to determine issues of principle without having established the underlying facts: in particular, in precisely what respects the work shown on the site plans fell outside the existing conservation area consent (if indeed it did). I have generally assumed that it was work within the scope of the Employer’’s Requirements for which the responsibility for applying for the necessary consent rested on Mr Clin, but in the absence of detailed findings of fact this has not been established. The result is that this judgment may prove to be of limited assistance to the parties.”

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