YOU CAN’T RAISE A TOTALLY NEW POINT ON APPEAL: COURT OF APPEAL DOES NOT ALLOW A MAJOR CHANGE OF CASE

In  London Borough of Brent v Johnson [2022] EWCA Civ 28 the Court of Appeal set out the difficulties for a party that wishes to take a fundamentally new or different point on appeal.  This gives rise to major difficulties that the appellants did not overcome in this case.

“It is not usually profitable for the appeal court to speculate as to what other questions might have been asked of those who did give evidence, or what other evidence might have been adduced from other witnesses, or by way of other documents, if it had been made clear, at least before the evidence was called, that the point now sought to be relied on was a plank in the defence on which the judge had to rule”

THE CASE

The appellants had failed at trial in an argument that a building, a former bus depot, converted to community use, was held on trust for them.  They appealed and, after obtaining permission to appeal, filed an amended skeleton argument.  The appellants then attempted to argue the matter on a new basis that had not been before the trial judge.

THE COURT OF APPEAL JUDGMENT ON THE NEW BASIS UPON WHICH THE CASE WAS PUT

The Court of Appeal held that it was not open to the appellants to put their appeal on the revised basis. This was not an argument that had been pleaded and it had not been raised before the trial judge.

1. 1. On 5 March 2021 Rose LJ granted permission to appeal on the grounds set out in the grounds of appeal, on the understanding that there was no challenge to the judge’s findings of primary fact.

1. 1. Mr Johnson’s skeleton argument originally sought to argue that Brent’s initial acquisition of the property was as trustee upon charitable trusts. But that argument was abandoned in the replacement skeleton argument of 13 August 2021, because it was perceived to be weak. The sole argument he sought to rely on in the replacement skeleton argument was the contention that by reason of the contributions raised by the Appellants from charities and other sources, which were then expended on the Phase 2 works after Brent had acquired the property free from any trust, Brent thereafter held the legal title in part for its own benefit and in part on charitable trusts for the benefit of the community. Mr Furness QC (who did not appear below) presented that case on his behalf.

1. 1. Brent’s procedural objection to that argument was that it fundamentally changed the way the case was put at trial.

Change of case on appeal

1. 1. The mere fact that permission to appeal has been given does not preclude Brent from advancing its procedural objection: Mullarkey v Broad [2009] EWCA Civ 2 at [29].

1. 1. In Singh v Dass [2019] EWCA Civ 360 Haddon-Cave LJ set out the principles which this court applies in deciding whether a new point may be advanced on appeal:

“[16] First, an appellate court will be cautious about allowing a new point to be raised on appeal that was not raised before the first instance court.

[17] Second, an appellate court will not, generally, permit a new point to be raised on appeal if that point is such that either (a) it would necessitate new evidence or (b), had it been run below, it would have resulted in the trial being conducted differently with regards to the evidence at the trial…

[18] Third, even where the point might be considered a ‘pure point of law’, the appellate court will only allow it to be raised if three criteria are satisfied: (a) the other party has had adequate time to deal with the point; (b) the other party has not acted to his detriment on the faith of the earlier omission to raise it; and (c) the other party can be adequately protected in costs.”

1. 1. In Notting Hill Finance Ltd v Sheikh [2019] EWCA Civ 1337, [2019] 4 WLR 146 Snowden LJ (then sitting in this court as Snowden J) amplified these criteria. He pointed out that there was a spectrum of cases, at one end of which is a 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 inquiry. At the other end of the spectrum are cases where the point sought to be taken on appeal is a pure point of law which can be run on the basis of the facts as found by the judge in the lower court. This case is plainly at the first end of the spectrum where there has been a nine-day trial, with both sides represented by counsel, involving live evidence and cross-examination, and a defence that had gone through multiple iterations, not to mention extensive disclosure.

1. 1. It is, to my mind, clear that the point sought to be argued was not pleaded by way of defence. In Prudential Assurance Co Ltd v HMRC [2016] EWCA Civ 376, [2017] 1 WLR 4031 in the judgment of this court (Lewison, Christopher Clarke and Sales LJJ) it was stated at [20]:

“Our procedural system is and remains an adversarial one. It is for the parties (subject to the control of the court) to define the issues on which the court is invited to adjudicate. This function is the purpose of statements of case. The setting out of a party’s case in a statement of case enables the other party to know what points are in issue, what documents to disclose, what evidence to call and how to prepare for trial. It is inimical to a fair hearing that a party should be exposed to issues and arguments of which he has had no fair warning. If a party wishes to raise a new point, he should do so by amending a statement of case.”

1. 1. The judgment continued:

“[23] In our procedural law a trial is intended to be the final resolution of all matters in dispute between the parties. Although a party who is dissatisfied with the outcome of a trial may appeal to this court (usually with permission) the appellate process is, in general, limited to a review of the first instance decision. It is thus the starting point that parties are expected to put before the trial judge all questions both of fact and of law upon which they wish to have an adjudication.

[24] There are a number of reasons for this. First, parties to litigation are entitled to know where they stand and to tailor their expenditure and efforts in dealing with (and only with) what is known to be in dispute…. Second, it is a disproportionate allocation of court resources for the Court of Appeal (which usually sits in panels of three judges) to consider for the first time a point which could have been considered, and correctly answered, by a single judge at first instance. Moreover if the Court of Appeal deals with a point for the first time, it is neither a review nor a rehearing; which are the two processes contemplated by the CPR. Third, if resolution of a new point entails the re-opening of the trial it not only entails inevitable further delay, which is itself a reproach to the administration of justice, but is also wasteful of both the parties’ and the court’s resources and unfair to a party who conducted a trial on what has turned out to be a false basis. Fourth, there is a general public interest in the finality of litigation. It is for similar reasons that the Court of Appeal applies stringent criteria for the reception of fresh evidence on appeal.

[25] If the point is a pure point of law, and especially where the point of law goes to the jurisdiction of the court, an appeal court may permit it to be taken for the first time on appeal. But where the point, if successful, would require further findings of fact to be made it is a very rare case indeed in which an appeal court would permit the point to be taken. In addition before an appeal court permits a new point to be taken, it will require a cogent explanation of the omission to take the point below.”

1. 1. There was no explanation in this case of why the point was not expressly pleaded.

1. 1. Mr Furness suggested that the point was taken in paragraph 29 of Mr Johnson’s closing submissions at trial to which I have already referred. The written submissions, read in context do not, to my mind, take the point. But even if they had, it will generally be too late to raise a new point after the close of evidence if (a) evidence relevant to the point could have been but was not called or (b) there was no cross-examination on the point because it was not thought to be in issue or (c) both.

1. 1. If the argument had really been run at trial and the judge had failed to deal with it, counsel would surely have raised the point on receipt of the judge’s draft judgment which must have been circulated in the usual way. There is nothing to suggest that he did.

1. 1. It is also quite clear from Mr Johnson’s own skeleton argument that if the point were allowed to be taken (and if it were to succeed), further findings of fact would need to be made. As the skeleton argument put it: because there was no counterclaim, and Brent did not seek directions as to the possibility of any outcome other than their own beneficial ownership “the quantum of any interest of charity” in the property would have to be remitted. The failure to advance a counterclaim is not something for which Brent was responsible. If it were to have been contended that the court should conduct some form of enquiry into quantum, it would have been expected (a) that a counterclaim would have been raised to that effect and/or (b) that a split trial would have been directed. Neither happened.

1. 1. In addition, Ms Holland QC, for Brent, pointed out that in substance the ambit of disclosure ordered for the trial was limited to the acquisition of the property rather than its subsequent conversion. Had the point now sought to be raised been properly raised at trial, further investigation into and evidence about how and from whom the funds were procured, and how they were treated in Brent’s accounts would have been necessary. The skeleton argument in support of this new point asserted in blanket terms that the monies contributed to the Phase 2 works “were already held on charitable trusts before the contribution”. That is by no means self-evident from the judge’s findings, especially since the bulk of the cost was met by a grant from the DofE and by Brent itself. It would have been necessary to investigate which of the other donors (who included a clearing bank and a multi-national oil company) were indeed charities; and on what terms (if any) donations were made. HPCC’s involvement in the subsequent fund raising would also have been a matter for further evidence. If and to the extent that contributions were made by charities, it might also have been necessary to examine the nature of the charitable trusts in question and what expenditure was permitted by way of outright grant under the terms of those trusts. It might also have been relevant to consider on what precisely the monies were spent. If, for example, they were spent on loose furniture for the conference or seminar rooms, carpets, equipment for the contemplated music recording studio or kitchen equipment with a limited life, the effect of such expenditure might be very different from expenditure on the fabric of the building itself.

1. 1. It is not usually profitable for the appeal court to speculate as to what other questions might have been asked of those who did give evidence, or what other evidence might have been adduced from other witnesses, or by way of other documents, if it had been made clear, at least before the evidence was called, that the point now sought to be relied on was a plank in the defence on which the judge had to rule: compare Mullarkey v Broad at [48]. But in any event I do not consider that this court (or for that matter Mr Johnson) is in any position to gainsay what Ms Holland has told us.

1. Having heard argument from both sides, we announced our decision not to allow the new point to be taken. In consequence, we dismissed Mr Johnson’s appeal.