THE DANGERS OF MAKING ORDERS FOR SPLIT TRIALS: DECISION AT TRIAL SET ASIDE DUE TO A SERIOUS PROCEDURAL IRREGULARITY
The judgment of Mr Justice Murray today in Sharn Panesar Ltd v Pistachios In The Park Ltd & Anor  EWHC 194 (QB) illustrates some of the dangers of holding a trial on a preliminary issue. In this case a trial of preliminary trial was ordered at the instigation of a deputy district judge. Neither party instigated the application split trial (and neither supported that decision on appeal).
“the siren song of agreeing or ordering preliminary issues should normally be resisted”
The claimants bring an action alleging misrepresentation in the taking up of a franchise operation. A deputy district judge made an order that there be a trial on preliminary issues on what was said.
10.1. What information was provided to the Second Claimant:
10.1.1. At the meeting at the Harvester on 26 September 2011; and
10.1.2. At the opening of the Second Claimant’s sister'[s] café?
10.2. Was Mr Whitton the Second Claimant’s agent?
10.3. Is Mr Whitton’s knowledge to be imputed to the Claimants?
10.4. What information was provided, by the Defendants, to Mr Whitton?”
The preliminary trial was listed for three days. A full trial on all the issues would have taken five days.
The trial judge made certain findings of fact. The claimants appealed on the grounds that those findings went beyond the preliminary issues and the trial was unjust due to a serious procedural irregularity.
THE FINDINGS ON APPEAL: THERE HAD BEEN A SERIOUS PROCEDURAL IRREGULARITY
I accept the principal submission of the appellants that the trial before the Judge was unjust due to a serious procedural irregularity, namely, that the Judge made apparently binding findings of fact on factual issues in relation to which there had not been a proper hearing. I also accept the submission that it is impossible to be sufficiently confident that the Judge’s findings on the Preliminary Issues were not materially influenced by his Other Findings. In light of that, the appellants, and this Court, cannot be confident that the appellants had a fair hearing in relation to the Preliminary Issues. In my view, therefore, the Order must be quashed, and the matter must be remitted for a trial of all the issues before a different judge of the County Court.
As for Mr Sawtell’s contention that factual findings are accumulative and that findings are built on findings, I do not disagree in principle, but those factors in this case, for the most part, cut the other way. It is impossible, in my view, to be sufficiently confident that the Judge’s proper factual findings within the scope of the Preliminary Issues can be safely isolated and severed from the totality of his fact-finding exercise.
Given the basis on which I have decided this appeal, it is not necessary for me to consider whether any of the Judge’s factual findings was “plainly wrong”. I am simply deciding that the trial before him was unjust, for the reasons I have given. It is also not necessary for me to work out precisely which of his factual findings are within scope of the Preliminary Issues were otherwise fairly reached and which were Other Findings unfairly reached. The respondents have conceded that there were some. The examples of Other Findings given by Ms Alleyne for the most part, if not entirely, fall outside the proper scope of the Preliminary Issues.
Also, Ms Alleyne had submitted that one part of the Judge’s analysis was wrong in law, in that he had applied the wrong legal test in relation to the question of deceit, which lies at the heart of the appellants’ claim. I have not needed to express a view on this contention, given the basis of the decision I have reached. As to whether any of his factual findings were irrational or perverse, it is not necessary for me to make a specific finding to that effect. I have indicated where I consider the unfairness to lie and that I am satisfied that the appeal must be allowed on the basis that the Order is unjust due to a serious procedural or other irregularity within CPR r 52.21(3) for the reasons I have given. The unfairness cannot be safely cured, in my view, simply by varying the Order in the way proposed by the respondents.
THE DANGERS OF TRIALS ON PRELIMINARY ISSUES
Earlier in the judgment there is a recap of those cases where the courts have warned of the dangers of ordering split trials.
As I have already noted, Ms Alleyne had criticised the decision of DDJ Wood to order of his own motion that there be a trial of preliminary issues in this case, and I note that Mr Sawtell had not sought to defend that decision. Ms Alleyne drew my attention to the discussion in the White Book (2019 edition) at para 3.1.10 of the decision of Neuberger J in Steele v Steele  CP Rep 106 (Ch), in which Neuberger J set out ten legal principles that should be applied when considering whether or not to have a separate trial of one or more preliminary issues. Neuberger J set out, as his sixth factor to take into account when considering whether or not to order the determination of a preliminary issue, the following, namely:
“… whether the determination of a preliminary issue may unreasonably fetter either or both parties or, indeed, the court, in achieving a just result which is, of course, at the end of the day what is required of the court at the trial.”
Ms Alleyne also referred to the judgment of Lord Neuberger MR in Rossetti Marketing Ltd v Diamond Sofa Co Ltd  EWCA Civ 1021,  Bus LR (CA), where the Master of the Rolls commented at  as follows:
“[This appeal] represents yet another cautionary tale about the dangers of preliminary issues. In particular, it demonstrates that (i) while often attractive prospectively, the siren song of agreeing or ordering preliminary issues should normally be resisted, (ii) if there are none the less to be preliminary issues, it is vital that the issues themselves, and the agreed facts or assumptions on which they are based, are simply, clearly and precisely formulated, and (iii) once formulated, the issues should be answered in a clear and precise way.”
The judge stated “I observe that this case appears to “yet another cautionary tale about the dangers of preliminary issues”, in the words of the Master of the Rolls in Rossetti Marketing.”