TRYING TO APPEAL FINDINGS OF FACT AND EXPERT EVIDENCE: IT IS VERY DIFFICUL – AND THE TCC IS NO DIFFERENT TO OTHER COURTS

Lord Justice Coulson used the judgment in Wheeldon Brothers Waste Ltd v Millennium Insurance Company Ltd [2018] EWCA Civ 2403 to remind (some) litigators of  some key principles in relation to appeals on findings of fact.   He emphasised that the Technology and Construction Court applies the same principles as all the other courts.  Very usefully he provides a summary which emphasises the major difficulty in attempting to appeal findings of fact.

KEY POINTS

  • The courts always proceed with extreme caution in considering appeals against findings of fact or findings based on an assessment of expert evidence.
  • The same principles that applied generally to appeals also applied to the appeals from the Technology and Construction Court.
  • Although this was a judgment refusing permission to appeal it can be referred to on the point of the criteria to be applied when seeking to appeal a judgment in the TCC.

THE CASE

The defendant insurer was seeking permission to appeal a finding that it was liable to indemnify the claimant, its insured.

OBSERVATIONS ON APPEALS: THE RELEVANT TEST

The judge stated that the application for permission gave rise to wider issues of principle. He invited oral submissions.
    1. The judge heard factual and expert evidence in a trial that lasted 5 days. In the course of a judgment produced just over a month after the end of the trial, and which ran to 148 paragraphs, the judge rejected each of the various reasons for refusing the indemnity put forward by Millennium. His judgment in favour of Wheeldon is at [2018] EWHC 834 (TCC).
    2. By an Appellant’s Notice dated 10 May 2018, Millennium sought permission to appeal that judgment. There are eight separate grounds of appeal. The application is supported by a skeleton argument that is 25 pages in length. The majority of the grounds concern the judge’s findings of fact and his assessment of the expert evidence. Having considered the application on paper, it seemed to me that it raised a wider issue of principle as to the proper scope for appeals on such matters from the TCC. I therefore adjourned the application to be heard orally. Millennium put in a further skeleton argument on the law and Wheeldon produced one composite skeleton argument dealing with the law and the eight grounds of appeal.
    3. For the reasons set out below, I do not consider that different rules apply to applications for permission to appeal from the TCC, as compared with any other part of the High Court. On the other hand, because TCC cases often involve complex and interlinked findings of fact and assessments of expert evidence, it is inevitable that wide-ranging applications for permission to appeal against such findings and assessments will rarely be successful.
2. The Applicable Principles
2.1 The Relevant Test
    1. The relevant test for permission to appeal is set out at CPR r.52.6(1):
“(1) Except where rule 52.7 applies, permission to appeal may be given only where—
(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 heard.”
    1. Prior to the CPR, different and more restrictive rules applied to findings of fact by Official Referees. Indeed, for most of the last century, appeals from any decision of fact by an Official Referee were prohibited altogether, although this prohibition was eventually qualified to exclude questions of fact relevant to fraud or breaches of professional duty. None of those rules and restrictions now apply. I agree with Mr Eklund QC that the only applicable test on an application for permission to appeal from the TCC is that set out in r.52.6(1). But I also agree with Mr Quiney QC that, from a practical perspective, that is not quite the whole story.
2.2 Appeals on Findings of Fact
    1. The general approach of an appellate court to appeals on questions of fact was memorably summarised by Lewison LJ in Fage UK Limited & Another v Chobani Limited & Another [2014] EWCA Civ 5. In paragraph 114, he said:
“Appellate courts have been repeatedly warned, by recent cases at the highest level, not to interfere with findings of fact by trial judges, unless compelled to do so. This applies not only to findings of primary fact, but also to the evaluation of those facts and to inferences to be drawn from them. The best known of these cases are: Biogen Inc v Medeva plc [1977] RPC1; Piglowska v Piglowski [1999] 1 WLR 1360Datec Electronics Holdings Ltd v United Parcels Service Ltd [2007] UKHL 23 [2007] 1 WLR 1325Re B (A Child) (Care Proceedings: Threshold Criteria) [2013] UKSC 33 [2013] 1 WLR 1911 and most recently and comprehensively McGraddie v McGraddie [2013] UKSC 58 [2013] 1 WLR 2477. These are all decisions either of the House of Lords or of the Supreme Court. The reasons for this approach are many. They include
i) The expertise of a trial judge is in determining what facts are relevant to the legal issues to be decided, and what those facts are if they are disputed.
ii) The trial is not a dress rehearsal. It is the first and last night of the show.
iii) Duplication of the trial judge’s role on appeal is a disproportionate use of the limited resources of an appellate court, and will seldom lead to a different outcome in an individual case.
iv) In making his decisions the trial judge will have regard to the whole of the sea of evidence presented to him, whereas an appellate court will only be island hopping.
v) The atmosphere of the courtroom cannot, in any event, be recreated by reference to documents (including transcripts of evidence).
vi) Thus even if it were possible to duplicate the role of the trial judge, it cannot in practice be done.”
    1. Shortly thereafter, in Henderson v Foxworth Investments Limited [2014] UKSC 41, Lord Reed said at paragraph 67:
“It follows that, in the absence of some other identifiable error, such as (without attempting an exhaustive account) a material error of law, or the making of a critical finding of fact which has no basis in the evidence, or a demonstrable misunderstanding of relevant evidence, or a demonstrable failure to consider relevant evidence, an appellate court will interfere with the findings of fact made by a trial judge only if it is satisfied that his decision cannot reasonably be explained or justified.”
    1. Although I was referred to a number of other cases dealing with the proper approach of an appellate court to appeals based on matters of fact, the only other authority to which reference should be made is Grizzly Business Ltd v Stena Drilling Ltd [2017] EWCA Civ 94. At paragraphs 39 and 40, Longmore LJ said:
“39. The parties were broadly agreed upon the relevant law in the light of the recent Supreme Court decisions of Henderson v Foxworth Investments Ltd [2014] UKSC 41[2014] 1 WLR 2600 and McGraddie v McGraddie [2013] UKSC 58[2013] 1 WLR 2477 the latter of which cited with approval Hamilton v Allied Domecq Plc [2006] SC 221, para 85. In the latter case it was said:-

“If findings of fact are unsupported by the evidence and are critical to the decision of the case, it may be incumbent on the appellate court to reverse the decision made at first instance.”…

We have also had regard to the last three reasons why appellate courts are warned not to interfere with findings of fact unless compelled to do so as enumerated by Lewison LJ in Fage UK Ltd v Chobani UK Ltd [2014] EWCA Civ 5
40. There will be (and have been) rare cases where an appellate court is compelled to set aside findings of fact made by an experienced trial judge but we are far from convinced that that is the case here. None of the challenged findings can be said to be unsupported by the evidence and the decision is certainly not one that no reasonable judge could have reached. The case was not an easy one for the judge but he grappled with all the potential difficulties of the evidence and came to a conclusion which, we feel able to say (although our own opinion is immaterial) was probably correct.”
    1. In short, to be overturned on appeal, a finding of fact must be one that no reasonable judge could have reached. In practice, that will usually occur only where there was no evidence at all to support the finding that was made, or the judge plainly misunderstood the evidence in order to arrive at the disputed finding.
2.3 Appeals on Matters of Expert Evidence
    1. A first instance judge’s assessment of, or evaluations based upon, expert evidence adduced at trial must be approached by an appellate court with similar caution. Whilst it has been said that a reconsideration of an expert’s opinion may be slightly easier than a finding of fact, because the underlying report will be in writing (see Thomson v Christie Manson & Woods Limited & Ors [2005] EWCA Civ 555), the same case also provides a salutary warning that, since the evaluation of expert evidence is likely to be bound up with a wider evaluation of matters of fact, an appellate court will still be very slow to intervene. At paragraph 141 of his judgement in Thomson, May LJ said:
“…But, even accepting that individual points such as these are amenable to judicial appellate evaluation whatever the expert opinion, no appellate court should cherry pick a few such points so as to disagree with a composite first instance decision which, in the nature of a jig-saw, depended on the interlocking of a very large number of individual pieces, each the subject of oral expert evidence which the appellate court has not heard.”
2.4 Appeals from the TCC
    1. In Virgin Management v de Morgan Group (1994) 68 BLR 26 at paragraphs 34 – 35, Sir Thomas Bingham MR said:
“Whether a ground will be regarded as having a reasonable prospect of success will of course depend on what the point is. A prospective appellant will have difficulty in showing that the test is satisfied if he is seeking to challenge:

(1) an official referee’s findings of primary fact based on his evaluation of oral evidence, not because of any peculiar immunity enjoyed by official referees but because of the weight invariably given to the trial judge’s factual conclusions unless and until they are shown to be wrong;

(2) the fine detail of an official referee’s factual investigation: while the official referee’s findings of this nature are no longer final, the Court of Appeal will not readily enter upon an enquiry of this kind;

(3) findings of fact falling within an official referee’s area of specialised expertise, particularly if the official referee has had the advantage of inspecting the site or the subject matter of the dispute in question.

We do not suggest that these are no-go areas, only that the burden on a prospective appellant in these areas will be hard to discharge.”
    1. Some of these points were picked up in two later Court of Appeal decisions. Thus, in Skanska Construction UK Limited v Egger (Barony) Limited[2002] EWCA Civ 1914, Lawrence Collins J (with whom the other judges agreed) said:
“7. The appeal by Egger and the cross-appeal by Skanska are brought with the permission of a single Lord Justice. Under the CPR appeals lie, with permission of the judge or the Court of Appeal, from decisions of the Technology and Construction Court, as they did in the period after 1988 from decisions of the Official Referees. But the decisions of the Technology and Construction Court have special characteristics which affect the readiness of the Court of Appeal to reconsider them on appeal. First, the findings of fact often fall within an area of specialist expertise, where the evidence is of a technical nature and given by experienced experts, and which is evidence of a kind which judges of the Technology and Construction Court are particularly well placed to assess. Second, the conclusions of fact will frequently involve an assessment or evaluation of a number of different factors which have to be weighed against each other, which is often a matter of degree. Third, the decisions may deal with factual minutiae not easily susceptible of reconsideration on appeal. Fourth, the judgments will frequently be written on the basis of assumed knowledge of the detail by the parties and their advisers, and will not address a wider audience, with the consequence that the underlying reasoning may not always be readily apparent or fully articulated.
8. Consequently the recent pronouncements of this Court on appeals against findings of fact apply with particular force to the decisions of the Technology and Construction Court. In particular this Court will be reluctant to interfere with a trial judge, not only on findings of primary fact based on the credibility or reliability of witnesses, but also where conclusions of fact involve an assessment of a number of different factors which have to be weighed against each other and involve an evaluation of the facts.
    1. And in Yorkshire Water Services Limited v Taylor Woodrow Construction Northern Limited [2005] EWCA Civ 894, May LJ said:
“27. I do not consider that the advent of Part 52 of the CPR has altered this court’s approach to applications for permission to appeal from factual decisions of TCC judges. The fact that permission to appeal is now needed in many cases, where formerly it was not, does not predicate a more relaxed approach than formerly in TCC cases. As Lord Bingham said, a reasonable prospect of success will depend on what the point is. But he had expressed agreement with the policy behind the pre-1988 rule stated by Waller LJ in Moody v Ellis. The policy has been somewhat relaxed, and findings of fact such as Lord Bingham described on page 35 in Virgin Managementare not no-go areas. The burden on a prospective appellant in these areas is nevertheless hard to discharge. In my view, the more complicated and technical the facts, the harder generally speaking is the burden. The reason again is obvious. The more complicated and technical the facts, the longer and more expensive would be this court’s enquiry, whether by review or re-hearing, and the more disproportionate would be the whole exercise for the parties and the court alike. Importantly, this court would have the disadvantage of not having heard any of the witnesses, including the experts, give oral evidence. I venture to think that, at the extreme, some questions of fact may be so complicated and technical that they should only be investigated in detail judicially once, provided that the resulting decision is not palpably incompetent. That would not only apply to decisions of TCC judges. The facts in the present case are quite close to any extreme. So far from being palpably incompetent, Forbes J’s factual decisions are, so far as I have been able to judge, of the highest quality. In so far as I have reached this conclusion upon no more than 5 days reading and one day of oral argument, care must be taken, as Lord Bingham said, to prevent applications for leave blossoming into dress rehearsals for a full appeal.”
    1. Mr Eklund argued that Skanska and Yorkshire Water were no longer good law and I should not follow them. He offered no basis for that conclusion. At one point during the hearing, he seemed to advance an alternative submission that both cases could be distinguished from the present case because they arose after longer trials and concerned longer judgments. Mr Quiney submitted that Skanska and Yorkshire Water remained good law and said that they dealt pragmatically with the effect of the general rules (as to the restrictions on appeals against findings of fact and/or evaluations of expert evidence) in the particular context of a detailed TCC judgment. He also said that there were questions of proportionality which separately justified the approach in Skanska and Yorkshire Water.
    2. I accept Mr Quiney’s submissions. There is no basis on which I could find that the decisions in Skanska and Yorkshire Water – both of which address the test in CPR r.52.6(1) – were no longer good law. On the contrary, not only are they binding on me, but I consider that they represent sensible guidance as to the right approach to applications for permission to appeal from a TCC judge. The fact that, doubtless in part due to the improvement in case and trial management techniques over the last 15 years, the present case was resolved by the judge after a shorter trial than occurred in Skanska or Yorkshire Water, is manifestly not a proper ground of distinction.
2.5 Summary
    1. In those circumstances, I consider that the applicable principles can be summarised as follows:
i) The CPR provides a single test for applications for permission to appeal which covers the entirety of the High Court, including the TCC (Virgin Management).
ii) Any application for permission to appeal on matters of fact or evaluations of expert evidence must surmount the high hurdle identified in Fage,Henderson, Thomson and Grizzly Business.
iii) In addition, because a judgment in the TCC is likely to involve i) detailed findings of fact in an area of specialist expertise (Virgin Management and Skanska) and/or ii) lengthy and interlocking assessments of both factual and expert evidence (Skanska and Thomson) and/or iii) factual minutiae which is difficult or impossible sensibly to reconsider on appeal (Skanska), the Court of Appeal will be reluctant to unpick such a judgment (Thomson), with the inevitable result that obtaining permission to appeal on such matters in a TCC case may be harder than in other, non-specialist types of case (Virgin Management, Skanska and Yorkshire Water).
  1. I should add that whilst, for obvious reasons, my focus has been on the TCC, I see no reason why these principles should not apply equally to appeals from any other specialist court. I note that Teva UK Ltd v Boehringer Ingelheim Pharma GmbH & Co KG [2016] EWCA Civ 1296 broadly adopts the same principles for appeals in patent cases.

THE RESULT IN THE CURRENT CASE

The judge refused permission to appeal, he observed:-

  1. I have considered a number of applications for permission to appeal in TCC cases over the last six months. Complaints about factual findings and expert evaluation, of the kinds unsuccessfully raised in the present case by Millennium, are surprisingly commonplace. It has therefore been convenient to use this judgment to re-state the relevant principles that are and will continue to be applied by the Court of Appeal to appeals on such matters from the TCC, and for that purpose only, I direct that this judgment can be referred to in other cases. I hope it provides at least some guidance to the parties in TCC litigation, and to the judges who sit doing that work around the country, and who are the first port of call for any application for permission to appeal.