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Complexity is not appealing

LAW - Permission to appeal in highly complicated and technical cases is unlikely to be granted unless the judge was clearly wrong or beyond his jurisdiction. Catriona Dodsworth reports

CONSTRUCTION cases, by their very nature, can be incredibly complex so it is not surprising that applications for permission to appeal arise frequently. But the decision in the recent case of Yorkshire Water Services v Taylor Woodrow Construction Northern and Others means that applications for permission to appeal in highly complicated cases may be a little bit harder to secure.

In July the Court of Appeal handed down judgment on an application by Yorkshire Water for permission to appeal in its case against Taylor Woodrow.

The decision provides useful guidance on how the courts will deal with applications for permission to appeal in complicated cases, particularly from the Technology and Construction Court.

The case concerned the Knostrop Sewage Treatment Works in Leeds. Yorkshire Water engaged Taylor Woodrow to provide a 'sequential batch reactor' as part of its improvement works at Knostrop. Taylor Woodrow in turn engaged process contractor Biwater to provide the plant and Biwater engaged specialist subcontractor Elga to design, make and supply the SBR.

The plant passed take over tests in November 1999 but soon afterwards it started playing up, with the result that Biwater personnel had to be on hand to help in its operation throughout most of 2000. The main contract required performance tests but those tests were never undertaken.

The relationship between Yorkshire Water and Bi water deteriorated to the point where, in late 2000, Biwater left the site. The performance of the plant under the sole operation of Yorkshire Water then began to deteriorate.

Yorkshire Water embarked upon expensive remedial works and claimed approximately £12 million from Taylor Woodrow in respect of those works. That claim was then passed down the contractual chain. Taylor Woodrow, Biwater and Elga counterclaimed for outstanding sums, loss and expense, extensions of time and entitlement to a final certificate.

Much of the case revolved around whether or not the SBR would have passed the performance tests, why it had difficulties in performing during certain periods and Yorkshire Water's entitlement to recover sums under the contract. But this was an immensely technical and complicated case and it was this complexity that the Court of Appeal had to surmount. Indeed, the court described the original judgment of Judge Forbes in the Technology and Construction Court as 'the interlocking pieces of a highly complicated jigsaw' and said: 'Understanding the jargon is an effor t in itself.'

Judge Forbes had dismissed Yorkshire Water's claims and upheld substantially all of Taylor Woodrow, Biwater and Elga's claims. Yorkshire Water sought permission to appeal on virtually all of the significant findings of fact and law.

Usually, this is a paper exercise, by which the appellant sets out the arguments upon which it will rely. Normally only if the paper application fails will there be a hearing and only then does the respondent have the chance to state its case. But such was the complexity of this judgment that the Court of Appeal bypassed the paper application and in June went straight to a hearing before Judges May, Parker and Gibson.

Their decision provides a salutary lesson to any party considering an appeal in a complicated case.

The appeal court judges went so far as to say that a cynic might take the view that to reopen a highly complicated case on which a very experienced and competent technical judge had taken 13 months to produce a 'masterpiece' of a judgment was a compelling reason why permission to appeal should be refused. They concluded: 'The cynic would not be far from the mark.' The judges also observed that, as a general rule, the more complicated and technical the facts of a case, the harder it should be to obtain permission to appeal. This is because the task of reconsidering the case would become dispropor tionately time-consuming and expensive for the parties and the court. The judges also noted that in such cases an appeal court is at the disadvantage of not having heard any of the witnesses, including the experts, give oral evidence.

Indeed, some questions of fact may be so complicated that they should only be investigated in detail by the court at first instance (in this case, the TCC) provided that the resulting decision is not 'palpably incompetent'. The judges made it clear that this applied to all cases and not just to decisions of TCC judges.

Developing their theme, the judges made it clear that an appellant must establish that a relevant finding of fact is plainly wrong or that the judge had overstepped the boundaries of interpretation. Having said that, they agreed 'there is no doubt another point of view' but the important point was that 'the judge rejected it, being fully ent itled ? to do so'.

All this suggests that where the judge has to choose between conclusions A and B, and is reasonably entitled on the evidence to reach either conclusion, a higher court should not interfere. It is only where the trial judge came to conclusion A when conclusion B was the only one reasonably open to him that his judgment should be challenged.

This case was of the highest complexity and, given the quality of the judgment, it was inappropriate to grant permission to appeal. Permission was refused and is likely to be refused in similar cases.