Appealing to better judgment

News / / Appealing to better judgment

The unsuccessful application for permission to appeal was filed by Millennium Insurance Company Limited (Millennium) Millenium were the insurers of a waste processing plant, owned by Wheeldon Brothers Waste Limited (Wheeldon), which had been damaged by fire Wheeldon sought a declaration that it was entitled to be indemnified by Millenium under its insurance, which Millenium refused on the basis of Wheeldon's alleged breaches of a number of the policy's conditions precedent It was found at first instance that the fire was caused by the failure of the bearing on a conveyor, which had caused a build-up of combustible waste material in the bearing housing This waste material ignited and the fire spread to the roof It was held at first instance that Wheeldon was entitled to an indemnityMillenium sought permission to appeal on eight grounds, the majority of which concerned the judge's finding of facts at first instance, relating to various conditions precedent to liabilityGiven the issue which arose as to the proper scope of appeals from the TCC, Lord Justice Coulson first considered the legal test to be applied before addressing the grounds of appealThe Legal TestThe test for permission to appeal is contained in Civil Procedure Rule 52 Part 6(1)Except where rule 527 applies, permission to appeal may be given only wheremdash(a) the court considers that the appeal would have a real prospect of success or(b) there is some other compelling reason for the appeal to be heardCoulson LJ noted that this rule does not prohibit appeals against findings of fact made by the judge at first instance It has however been established by case law that appellate courts should not interfere with the findings of fact or evaluations of expert evidence made at first instance, except in exceptional circumstances There are many reasons for this rule Some relate to evidence the trial judge will have the full evidence before her, and will have the opportunity to hear cross-examination of factual and expert witnesses Other reasons relate to proportionality and costs it would be disproportionate to duplicate the trial judge's role on appeal, and the courts are keen to deter parties from treating the first instance hearing as a dress rehearsal for an inevitable appealAn appeal court will therefore only overturn a finding of fact where no reasonable judge could have come to that conclusion In practice that will only occur where the judge reaches a finding of fact without considering any evidence at all, or ignores a piece of relevant evidence However, where a judge has weighed up the evidence and come to a reasoned conclusion, an appeal court will not overturn that finding of fact Coulson LJ observed that applications for permission to appeal from the TCC are even less likely to succeed This is simply a product of the complexity of the facts in TCC matters In such matters, it would be even more disproportionate to conduct a complete re-review of the evidence, and the oral evidence of the witnesses and experts (which cannot be re-heard) may have been key to the judge's factual findingsThe Grounds of AppealHaving outlined the legal test, Coulson LJ evaluated Millennium's eight grounds of appeal, all of which related to findings of fact by the trial judge The application therefore had a high hurdle to pass in order for the appeal to have a real prospect of success The grounds concerned the following conditions precedent to liability(i)nbspnbsp Risk Requirement 4, which required Wheeldon not to store combustible materials within six metres of fixed plant or machinery(ii)nbsp WA6, which obliged Wheeldon to maintain all machinery in efficient working order and to keep records of said maintenance and(iii) WA7, which obliged Wheeldon to operate a good system of housekeeping and cleaning including records of the sameThe first, second, third, and seventh grounds of appeal all related to Risk Requirement 4 Millennium alleged that the trial judge had erred in finding that(i)nbspnbsp storage implied a degree of permanence and does not encompass an object being temporarily placed or dropped in an area (Ground 1 and Ground 3)(ii)nbsp a steel barrier in Area F was sufficient segregation to satisfy Risk Requirement 4 (Ground 2) and(iii) nbsptrommel fines (glass, stone and soil residue) were not combustible materials (Ground 7)Coulson LJ dismissed these grounds in short order The trial judge had considered expert evidence and had relied on the ordinary meaning of words in interpreting Risk Requirement 4 The fourth ground related to WA7 Millennium alleged that a good system of housekeeping and cleaning was not in place However, the trial judge had considered witness, documentary and CCTV evidence, including the daily and weekly cleaning records Again, the trial judge's finding was not one that no reasonable judge could have reached Millennium also alleged on the fourth ground that the records required were not sufficiently technical or thorough This submission was rejected on the basis that the insurance policy did not set out any requirement for a specific form of recordThe fifth and sixth grounds related to WA6 Millennium alleged that the records which were kept (daily and weekly checklists supported by a works diary) were insufficiently formal to satisfy the requirement This was rejected again because the policy did not require a specific form of record It was also alleged that the maintenance history of the bearing in question (having failed a number of times in the past, each time requiring repair work) demonstrated a failure to maintain the equipment However, the trial judge had rejected this argument on the basis of expert evidence from Millennium's own expert Once again, these findings were nowhere near the kind of unreasonable conclusions which would open the door to an appeal The eighth and final ground related to co-insurance It was described by Lord Justice Coulson as a puzzling ground of appeal, since while Millenium alleged that the judge was wrong to say that the co-insurance clause did not apply, the only criticised paragraph of the judgment seemed to deal with a different topic This ground was also rejected At the application hearing, Millennium attempted to run a new argument on this issue, however, the judge considered it far too late to be introducing new arguments which had not been pleaded at first instance, and accordingly this argument was also rejectedConclusionsThis is an interesting judgment which aims to firmly restate the relevant principles which will continue to be applied by the Court of Appeal to appeals on such matters from the TCC There are two main lessons to be learnt from this judgment1nbspnbspThe first is that the first instance hearing is not a dress rehearsal The courts are likely to be increasingly strict in considering permission to appeal against findings of fact by a trial judge, especially in factually complex or technical matters Coulson LJ was highly critical of Millennium in his judgment, referring to their arguments as a shopping list of issues 2nbspnbspThe second is that conditions relating to record keeping must specify the form of record to be kept if the insurer intends to withhold cover on the basis that the records are insufficiently technical Without such a provision, the insurer will be unable to rely on this ground with any certainty

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