“STATEMENTS OF CASE PLAY A CRITICAL ROLE IN CIVIL LITIGATION WHICH SHOULD NOT BE DIMINISHED”: THE COURT OF APPEAL AND THE LEARNING ACADEMY

In November 2018 I wrote about the decision of HHJ Klein in  UK Learning Academy Ltd v The Secretary of State for Education [2018] EWHC 2915 (Comm). An appeal from that judgment has been heard, and dismissed, by the Court of Appeal.  There is importance guidance on attempting to argue a new case at trial, coupled with clear guidance about the role of statements of case in civil litigation.

I would add here that I endorse the view expressed by the judge to the parties at the trial and repeated in his judgment at [11] that the statements of case ought, at the very least, to identify the issues to be determined. In that way, the parties know the issues to which they should direct their evidence and their challenges to the evidence of the other party or parties and the issues to which they should direct their submissions on the law and the evidence. Equally importantly, it enables the judge to keep the trial within manageable bounds, so that public resources as well as the parties’ own resources are not wasted, and so that the judge knows the issues on which the proceedings, and the judgment, must concentrate. If, as he said, there was “a prevailing view that parties should not be held to their pleaded cases”, it is wrong. That is not to say that technical points may be used to prevent the just disposal of a case or that a trial judge may not permit a departure from a pleaded case where it is just to do so (although in such a case it is good practice to amend the pleading, even at trial), but the statements of case play a critical role in civil litigation which should not be diminished.”

THE CASE

The claimant was bringing an action for additional sums due as a result of (it said) a variation in a contract to provide training.   The defendant counterclaimed, stating that it was due the return of certain funds because of error rates in the claimant’s calculations.

THE JUDGMENT BELOW: THE STATEMENTS OF CASE

At first instance HHJ Klein noted that, to a large extent, both parties were pursuing cases that were unpleaded.

“The statements of case

11, The parties’ statements of case are discursive, unstructured and, in places, difficult to follow. [8] Counsel who represented the parties at trial did not draft the initial statements of case and, although they may have had some input in the amendment of those documents, understandably, those documents were used as the framework for the amendments. As I reminded the parties at the pre-trial review and at trial, the statements of case ought, at the very least, to identify the issues to be determined. I recognise that a prevailing view may be that parties should not be held to their pleaded cases but it is unhelpful if parties proceed on the basis that the statements of case do not act as a limit on the issues to be tried. I was left with the clear impression, by the conclusion of the trial, that, in many significant respects in this case, both parties, more or less, were advancing cases which were unpleaded. [9] As it appeared to me that both parties encouraged me to determine the proceedings on the basis of the cases they actually advanced at trial, that is what I propose to do. But for the very great assistance given to me by counsel, this would have been an even more difficult task that it has been”.
THE TWO FOOTNOTES
The two relevant footnotes to the judgment are interesting.
“[8] I sought to overcome this problem by requiring the parties to agree a list of issues, which they apparently did. However, this led to further dispute between the parties when it became clear that they interpreted the agreed issues differently.
[9] Indeed, in closing, Mr Fryer-Spedding encouraged me to follow the evidence wherever it might lead, whatever UKLA’s pleaded case. If that is the appropriate course, so far as UKLA’s pleaded case is concerned, as a matter of logic it ought to be the appropriate course in relation to the Defendant’s pleaded case”

THE COURT OF APPEAL JUDGMENT

The Court of Appeal judgment UK Learning Academy Ltd v Secretary of State for Education [2020] EWCA Civ 370  is interesting in that the claimant now sought to advance a different argument to that advanced at trial.  There is clear guidance on attempting to argue new points on appeal, coupled with a strong reiteration of the importance of statements of case to the civil process in the judgment of Lord Justice David Richards.

    1. UKLA’s case on appeal is significantly different from that advanced at trial.
    2. As set out in its skeleton argument for the appeal, UKLA’s principal submission was not that there had been an agreed variation to the MCV and that the respondent was estopped from relying on a failure to comply with clause 30.2. Instead, its principal case relied on an alleged promissory estoppel. It submitted that the judge had only to decide (i) whether the LSC had made a clear and unequivocal promise that the MCV would not be enforced; and, if so, (ii) whether UKLA had relied on that promise to an extent that (iii) rendered it unconscionable for the respondent now to resile from the promise or to rely on clause 30.2.
    3. UKLA submitted, correctly, that the judge had not addressed this case of promissory estoppel, but had considered estoppel only in the limited context of clause 30.2 and whether the LSC was estopped from relying on its terms. It submitted that he was in error in not dealing with this case of promissory estoppel.
    4. UKLA went on to submit that, on this basis, it was essential for the judge to review the parties’ course of dealing in order to determine whether the three requirements for promissory estoppel, summarised above, were established. UKLA set out in its skeleton argument 26 findings which it said were made by the judge covering the period from July 2008 to January 2010 and were sufficient to hold in favour of UKLA on the basis of promissory estoppel.
    5. Further, UKLA submitted that the judge gave no consideration to two further alternative cases: first, that, by continuing to teach its additional learners after March 2009, UKLA had itself made an offer to vary the Contract which the LSC had accepted by various written statements; and, second, that the statements made by the LSC in some of its post-March 2009 communications were offers which invited acceptance by conduct, namely by UKLA’s continued provision of courses to the additional learners.
    6. UKLA is correct to say that the judge did not deal with any of these ways of advancing UKLA’s case. He did not do so because none of them was advanced before him. I have earlier quoted from the judgment from which the judge’s understanding of the case put to him is very clear.
    7. It is arguable that a case of promissory estoppel was pleaded in UKLA’s amended particulars of claim in the wider terms advanced on this appeal, but it was not fully set out and it formed no part of the case as presented in UKLA’s skeleton argument for the trial. Only the more restricted estoppel, confined to preventing reliance by the respondent on clause 30.2, was relied on. As it was put in paragraph 5.23, “the estoppel inhibits D from relying on a formalities argument against C: i.e. by objecting that any variation is ineffective unless reduced to writing”.
    8. In opening the appeal, Mr Darton QC submitted that the documents and other evidence listed in his skeleton argument supported both an agreed variation to the MCV and a promissory estoppel obliging the respondent to pay sums in excess of the MCV. In the course of argument, however, Mr Darton did not pursue the wider case of promissory estoppel as sufficient in itself for the claim to succeed, but relied on an agreed variation.
    9. He submitted that the judge erred in two important respects. First, he was wrong to approach the case of an agreed variation on the basis that there must be a specific express offer and a specific express acceptance. It was possible for a variation to have been agreed in the course of dealing between the parties. Further, and in any event, he had wrongly restricted consideration of the possible offers by UKLA to the five documents listed by the judge at [238]. Mr Darton proposed to rely on the much longer list contained in his skeleton argument. Moreover, the judge should have considered the possibility that an offer was made by the LSC and accepted by UKLA. In this respect, reliance was placed on the LSC’s act in uploading details of additional learners to its computer system and on certain statements made by the LSC in communications after March 2009 as constituting offers which UKLA accepted by continuing to provide training to additional learners.
    10. Second, the judge erred by approaching too narrowly the question of an estoppel preventing the respondent from relying on clause 30.2. He was wrong to apply the guidance given by Lord Sumption in MWB v Rock Advertising at [16] and should instead have conducted a wide-ranging review of all the evidence to determine whether it was inequitable for the respondent to rely on clause 30.2, having regard to the representations made expressly or by conduct by the respondent, the reliance on them by UKLA and the resulting detriment caused to UKLA. This was not the way that this part of the case was put below. On the contrary, as mentioned above, counsel for UKLA specifically submitted that the judge should apply the guidance given by Lord Sumption.
    11. In answer to the point that the judge had limited himself to the case as put to him by UKLA, Mr Darton submitted that the judge had wrongly considered that, for a variation to have been agreed, there must have been an express offer in writing and an acceptance and that the judge had, in effect, required counsel for UKLA to concede as much. He relied on a passage from the speech of Lord Hobhouse in Grobbelaar v News Group Newspapers Ltd [2002] UKHL 40[2002] 1 WLR 3024 at [56]. We were shown nothing which would support this challenge to the judge. There are no grounds for considering that, when counsel identified the documents and other matters listed by the judge at [238] and [255] as the basis of UKLA’s case of an agreed variation of the MCV, he was being driven to making a “concession”, still less one that was legally mistaken (as was the case in Grobbelaar). We were shown a small number of pages of the transcript of the trial, but none provided any support for this challenge.
    12. I am in no doubt that the case that UKLA now wishes to advance on this appeal is a new case, both as to the alleged formation of an agreed variation to the MCV and as to estoppel, not advanced to the judge at trial.
    13. The question that therefore arises is whether UKLA should be permitted to run this new case.
    14. The circumstances in which a party will be permitted to advance a case for the first time on appeal have been considered in numerous authorities; see, for example, Pittalis v Grant [1989] QB 605 at 611 per Nourse LJ, Jones v MBNA International Bank Ltd [2000] EWCA Civ 514, Singh v Dass [2019] EWCA Civ 360 at [15] – [18] per Haddon-Cave LJ. Where the new point raises a pure point of law, not requiring any further evidence or involving any injustice to the other party, the court will usually permit it to be taken. However, the position is different where, if the new case had been run below, “evidence could have been adduced which by any possibility would prevent the point from succeeding”, or the case would have been conducted differently with regards to the evidence at the trial. The quoted words are taken from Ex parte Firth, In re Cowburn (1882) 19 Ch D 419, 429 per Sir George Jessel MR, cited with approval by Nourse LJ in Pittalis v Grant. As Snowden J said, in a judgment with which Longmore and Peter Jackson LJJ agreed, in Notting Hill Finance Ltd v Sheikh [2019] EWCA Civ 1337[2019] 4 WLR 146 at [27]:
“At one end of the spectrum are cases such as the Jones case in which there has been a full trial involving live evidence and cross-examination in the lower court, and there is an attempt to raise a new point on appeal which, had it been taken at the trial, might have changed the course of the evidence given at trial, and/or which would require further factual enquiry. In such a case, the potential prejudice to the opposing party is likely to be significant, and the policy arguments in favour of finality in litigation carry great weight. As Peter Gibson LJ said in the Jones case (at para 38), it is hard to see how it could be just to permit the new point to be taken on appeal in such circumstances; but as May LJ also observed (at para 52), there might none the less be exceptional cases in which the appeal court could properly exercise its discretion to do so.”
  1. In the present case, there had been, as I earlier remarked, an 11-day trial with numerous witnesses and a large volume of documentary evidence. It was the task of the judge, which he fully discharged, to assess the parties’ cases and to make the necessary findings of fact in the light of the totality of the relevant evidence. As has been frequently said, the trial judge is in the best position to assess the evidence not only because the judge sees and hears the witnesses but also because the judge can set the evidence on any particular issue in its overall context. This is true also of an assessment of what a particular document would convey to a reasonable reader in the position of the party who received it, having regard to all that had preceded it.
  2. There are two principal steps that UKLA invites this court to take. First, it asks the court to expand significantly the documents and other evidence for examination to determine whether the statements and conduct of the LSC amounted to an offer which was accepted by UKLA, whether expressly or by conduct. Second, if a variation to the MCV was agreed in this way, UKLA submits that the court must determine whether the respondent is estopped from relying on the lack of a written instrument signed by the parties by a very broad enquiry, involving a consideration of all the relevant salient facts, the parties’ oral statements listed in UKLA’s skeleton argument for the appeal and the entire course of the parties’ conduct. UKLA also invites this court to consider its further cases, first, that by its conduct in continuing to teach additional learners after March 2009, it made an offer which was accepted by the respondent by its written statements and, second, that statements made by the LSC after March 2009 were offers which invited acceptance by UKLA’s conduct in continuing to provide courses to the additional learners.
  3. In my judgment, the investigations necessarily involved in these new cases demonstrate why UKLA cannot be permitted to pursue them on appeal. It would be impossible fairly to assess all the evidence on which UKLA seeks to rely without in effect re-hearing the case. The few documents to which we were taken by way of illustration are by no means unequivocal and that is even more the case with oral statements and conduct. Over a number of paragraphs in his judgment, the judge carefully analysed the five documents on which UKLA relied before him to determine if any of them amounted to an offer to increase the MCV. He did so, not just by reading the words of the documents, but also by setting them in their factual context, which itself was in dispute. The same approach would have to be taken by this court in order to assess the far wider basis for its case now put forward by UKLA. This is a course which would, in practical terms, be impossible for this court to undertake.
  4. It would also, in my judgment, be contrary to the public interest in the finality of litigation and in the just and efficient disposal of civil cases for this new and greatly expanded case now to be permitted. It was the responsibility of the parties to put their full case to the court at the trial. The parties were then able to adduce all the evidence they wished which was relevant to those cases, to cross-examine witnesses accordingly and to make submissions addressed to the cases as put to the court. As the fact-finder and primary decision-maker, the trial judge was uniquely well-placed to make the findings and evaluative judgments necessary to decide the case. This is what happened in the present case. There is no reason why the whole process should be repeated, either by this court or by remitting it to the court below, just because UKLA now wishes to put its case in a significantly different way.
  5. Mr Darton submitted that the trial “went awry” because the judge thought, on the basis of clause 30.2, that there could be no agreed variation of the MCV without a document containing an offer. I can see nothing in the judgment to justify this challenge. He focused on documents because that was the case put to him by UKLA. There is no reason to suppose that, if it had also relied on oral statements or conduct, the judge would not have considered them.
  6. Mr Darton also placed some reliance on the wider ambit of UKLA’s pleaded case, which he submitted had not been abandoned by UKLA. He submitted that the judge should have addressed it. This submission disregards what the judge said in his judgment at [11], which I have set out above, and disregards that he was invited by both parties to decide the case by reference to the submissions made to him at the trial. The fact is that the judge extended considerable indulgence to both parties, in order that the case could proceed on a coherent basis which, he concluded, was not possible on the pleadings as they stood at the start of the trial. No-one objected to that course (and it is hard to see how they could) and it is too late to complain of it now.
  7. I would add here that I endorse the view expressed by the judge to the parties at the trial and repeated in his judgment at [11] that the statements of case ought, at the very least, to identify the issues to be determined. In that way, the parties know the issues to which they should direct their evidence and their challenges to the evidence of the other party or parties and the issues to which they should direct their submissions on the law and the evidence. Equally importantly, it enables the judge to keep the trial within manageable bounds, so that public resources as well as the parties’ own resources are not wasted, and so that the judge knows the issues on which the proceedings, and the judgment, must concentrate. If, as he said, there was “a prevailing view that parties should not be held to their pleaded cases”, it is wrong. That is not to say that technical points may be used to prevent the just disposal of a case or that a trial judge may not permit a departure from a pleaded case where it is just to do so (although in such a case it is good practice to amend the pleading, even at trial), but the statements of case play a critical role in civil litigation which should not be diminished.
  8. Having heard Mr Darton, and Ms Anderson QC on behalf of the respondent, we decided not to permit UKLA to run its new case on appeal. I have set out above my reasons for joining in that decision.
  9. When we announced our decision, Mr Darton said that he did not wish to make submissions challenging the findings and decisions made by the judge on the case presented to him.
  10. I would accordingly dismiss the appeal.”