CLAIMANT’S APPEAL ALLOWED BECAUSE THE JUDGE FOUND FOR THE DEFENDANT ON A BASIS THAT WAS NOT PLEADED

I am grateful to barrister Tom Morris for giving me details of the judgment of Mr Justice Fancourt in Jacobs v Chalcot Crescent (Management) Company Ltd [2024] EWHC 259 (Ch).  It is an important case about statements of case. The claimant’s appeal was allowed because the defendant had succeeded at trial on the basis of something that had not been pleaded.

“… where an issue has clearly not been pleaded and was not relied on at the start of the trial, I consider that the onus lies as much on counsel for the party seeking to rely on it as on their opponent to raise the matter with the judge and seek permission to amend. For the reasons given by Dyson LJ in Al-Medenni v Mars, a party is entitled to rely on the pleaded case as defining the ambit of the issues to be decided at trial.”

THE CASE

The claimant brought an action for a declaration that the defendant had unreasonably withheld its consent to make alterations to a flat. The claimant pleaded that consent had been withheld due to concerns about fire safety.  The defendant’s defence pleaded various grounds for withholding consent but did not plead that there was a general concern about the structure of the building.

THE TRIAL

A case about the general structure of the building “emerged” during the trial. This was the basis upon which the trial judge found for the defendant.

THE CLAIMANT’S SUCCESSFUL APPEAL

The claimant appealed on several grounds, one of which was that the trial judge found for the defendant on the basis of a claim that was not pleaded.  The claimant’s argument on this issue was upheld on appeal.

THE JUDGMENT ON THIS ISSUE ON APPEAL

Mr Justice Fancourt considered the defendant’s pleaded case and the way in which the issue of structural integrity was raised and considered at trial.  He held that the defendant had not pleaded the issue and that the claimant was able to take this case on appeal. The appeal was allowed on this basis.

1. 1. Mr Tom Morris, who represented Mr Jacobs before me and at the trial, submitted that the basis on which the Judge held for the defendant was not a basis that was open to him on the statements of case, as the matter was never an issue to be determined at the trial.

1. 1. Mr Morris relied on the decision of the Court of Appeal in Al-Medenni v Mars UK Limited [2005] EWCA Civ 1041. At trial in that case, the issue had been whether the claimant was injured at work because of her own carelessness or the carelessness of another identified employee, whom she was helping at the time. The judge raised the possibility that the person at fault had been another, unidentified employee. This was referred to as the “third man theory”.

1. 1. Counsel for the claimant warned the judge that the only case that the claimant had to meet was the pleaded case that the claimant caused the danger and not the identified employee. The third man theory was not taken up with any of the witnesses, but it was adopted by counsel for the employer as an alternative finding in her closing submissions.

1. 1. Dyson LJ said:

“[21] In my view the judge was not entitled to find for the claimant on the basis of the third man theory. It is fundamental to our adversarial system of justice that the parties should clearly identify the issues that arise in the litigation, so that each has the opportunity of responding to the points made by the other. The function of the judges to adjudicate on those issues alone. The parties may have their own reasons for limiting the issues or presenting them in a certain way. The judge can invite, and even encourage, the parties to recast or modify the issues. But if they refuse to do so, the judge must respect that decision. One consequence of this may be that the judges compelled to reject a claim on the basis on which it is advanced, although he or she is of the opinion that it would have succeeded if it had been advanced on a different basis. Such an outcome may be unattractive, but any other approach leads to uncertainty and potentially real unfairness.

[22] The starting point must always be the pleadings ….

[23] In the present case the claimant’s pleaded case was that Mr Braich and no one else placed the reel on the machine. If the claimant wished to advance the third man theory as an alternative to her primary case, then she had to seek permission to amend her pleadings. It may be that she had sound tactical reasons for not taking this course…. There was no hint of the third man theory in the witness statements, the way in which the case was opened or in the evidence of the claimants witnesses. I accept that there was a rather faint- hearted espousal of the theory by Miss Harmer in her closing submissions, but in my judgement it was by then far too late for the claimant to take the point.

[24] As the judge himself recognised, the third man theory was not explored with any of the witnesses. If the defendants had been alerted to the fact that this theory was in play, then they would at least have wished to consider exploring it with some of the witnesses who were called to give evidence….

[25] Having concluded, as he did, that neither the claimant herself nor Mr Braich was responsible for placing the reel in the position from which it fell, the judge should have concluded that the claim was not proved and he should have dismissed it. In my judgment that should have been the inevitable consequence of his findings. By making findings for which the claimant was not contending, it seems to me that the judge crossed the line which separates adversarial and inquisitorial systems. What he did may have been legitimate in an inquisitorial system. It was, in my judgment, impermissible in our end system.”

1. 1. Tuckey LJ and Brooke LJ agreed with Dyson LJ.

1. 1. In that case, the judge had taken the initiative in raising the third man theory and had been warned off by Counsel for the employer, on the basis that the issue had not been raised as an issue for trial. The essential facts of this case are therefore not entirely on all fours because, at trial, Mr Morris did not warn the Judge about reaching a conclusion based on the risk of structural damage. It can also be said that that issue was at least touched on in the evidence of Mr Levy, whereas the third man theory was not explored at all with the witnesses. Otherwise, the essential facts of this case are very similar to what happened in Al-Medenni v Mars.

1. 1. Mr Morris took me in some detail through the correspondence before and after the claim was issued, and the evidence filed by the defendant on the Part 8 claim, to show that the defendant had never advanced as a separate reason for withholding consent a ground that, regardless of whether the fire safety requirements of the Building Regulations were satisfied, a fire could cause more serious damage to the landlord’s retained structure. Although Mr Levy certainly raised that concern in his letter dated 4 June 2020 (see [11(ix)] above), and later advised his client to take an expert opinion on that question (which the defendant did not take), what principally matters is, first, whether in fact the defendant refused consent for that additional reason; and second, whether it was pleaded as a reason for refusing consent, thereby making the separate reason an issue for trial.

1. 1. It is, with respect to Mr Williams, who appeared on behalf of the defendant and who did his best to argue the contrary, clear that the separate reason for refusing consent was not pleaded, if it was indeed a separate reason on which the defendant had relied. Whether it was a separate reason is a more tricky issue, since the 16 July 2020 letter is ambiguous as to what Mr Levy meant by “unsatisfactory in the context of fire safety and prejudices the fire safety of the block as a whole”.

1. 1. The conclusion that the issue was not pleaded is reinforced by a consideration of the witness statements and expert evidence that were filed in preparation for trial, none of which addresses a separate concern that a fire could be more intense and more damaging to the landlord’s roof or other retained structure as a result of the open plan layout at second floor level. That specific reason for refusal of consent, if it existed, is different from the issues of fire safety under the Building Regulations, which is concerned with the safety of the occupants of the building. It is also different from a general proposition that a landlord dealing with an application for consent to alterations has a legitimate interest in avoiding prejudice to its own property interests.

1. 1. Mr Williams had prepared written outline opening submissions for the defendant at trial. These identified the issues in the claim and said that the principal issue concerned the fire safety of the new layout of the Flat and Mr Jacobs’ case that the final certificate of Mr Ettles was conclusive on that question. Although Mr Williams referred in his outline to Mr Levy’s letter dated 4 June 2020, he only referred to the paragraph that addressed the Building Regulations issues, not the paragraph that explained the risk of “chimneying” of a fire in the Flat. Instead, Mr Williams asserted that compliance with Building Regulations was a matter of opinion and referred to what Mr Levy and a Dr Davis had said about compliance. Then his opening turned to the other reasons in a paragraph that starts “Consent was also refused on a number of other bases…”, but which does not include any reference to the potential impact of a fire on the landlord’s retained structure.

1. 1. The disputed reason was therefore not part of the defendant’s case at the start of the trial. It is obvious that if the defendant was intending to rely on a separate justification for refusal that neatly sidestepped the entrenched dispute about the application of the fire regulations, it would have been referred to, both in the written evidence and in the opening submissions. The first time that the issue arose was in cross-examination by Mr Morris of Mr Levy.

1. 1. Mr Williams, in cross-examining Mr Jacobs first, did not put to him the separate reason for refusing consent, distinct from compliance with the Building Regulations: he put only the general proposition that a freeholder has an interest in the integrity and safety of the whole building (transcript day 2, p.18D-G). When he did so, Mr Jacobs disagreed, asserting that Mr Levy had continually said that the works were not compliant with Building Regulations and was not looking at whether the works did anything to damage the interest of the freeholder in the property. Mr Williams raised the general point again later (transcript day 2, p.33B) (“he has to consider the interests of the defendant and the building as a whole”) and again Mr Jacobs disagreed, on the basis that the issue was about life safety of the occupants.

1. 1. In cross-examining Mr Levy, Mr Morris asked him about the conversation that Mr Levy had had with Mr Percival (who was an Approved Inspector and whose expertise was therefore with Building Regulations) and then about the principle under Approved Document B “Fire Safety” that if alterations did not fully comply with Building Regulations they should at least make the fire safety situation no worse. Mr Levy said:

“Yes, I was satisfied and I was aware that what the interpretation of the regulations is it should not be made worse as a consequence of the alternations. And I was satisfied for various reasons that the layout (inaudible) was worse. The reasons are: (a) the partition around the staircase had been removed and that would encourage the chimneying of smoke and flames … Secondly, the kitchen was larger. A larger kitchen has a great number of appliances in it, and appliances are quite frequently the cause of fire. These are all the reason that I said that I didn’t believe that it was compliant.” (transcript day 2, p.40C-G)

1. 1. Later, at p.44A-F, Mr Morris asked Mr Levy about Mr Percival’s interpretation of the Building Regulations and whether Mr Levy thought Mr Percival was wrong, and Mr Levy said that he was, because he had not considered (or referred to) the issue of the fire spreading into the stairwell area and the chimneying effect that would affect the welfare of the building as a whole.

1. 1. At p.46A-C, in answer to a question about why Mr Levy thought himself better placed than Mr Ettles or Mr Percival to opine about fire safety concerns, Mr Levy said that his concern was the welfare of the building as a whole, not just the Flat, and the risk of the fire spreading into the roof. He said that that was something which sits outside the Approved Inspectors’ duties to make sure that the Building Regulations are complied with.

1. 1. This was the full extent of the evidence given about risk of fire damage to the roof structure. It was given in answer to questions about compliance with Building Regulations and the principle that non-compliance does not matter if it does not make fire safety worse: so Mr Morris cannot be said to have invited the answers that he received. Mr Levy simply took the opportunity to voice a concern that he had had.

1. 1. That evidence did not, however, give the full picture, because of two further points that emerged from the documentary evidence. First, Mr Levy had advised his clients to take the advice of an expert in this regard, Dr Davis, but they had not done so. Second, when the question turned to whether giving permission would have adverse insurance consequences, Mr Levy took the position, in a letter to Professor and Ms Schehtman dated 19 June 2020, that despite his concern that the design could cause a more severe fire and damage the structure of the building “I recommend that this report [setting out the concern] is sent to your building insurers inviting them to comment. If they consider the proposed layout agreeable on account of Building Regulation approval having been obtained from an Approved Inspector, then I will be prepared to accept the proposals”. So Mr Levy was willing to defer to others on whether his concerns should be maintained.

1. 1. Closing submissions were made only orally, some days after the conclusion of the evidence. Without advance notice to Mr Morris, Mr Williams submitted to the Judge that it became clear as the trial went on that there were two aspects to “fire safety” – the Buildings Regulations compliance aspect and the integrity of the building from the landlord’s point of view (day 4, p.32E-F). He said that the second aspect emerged from Mr Levy’s evidence and from the letter of 4 June 2020 and was an important consideration that should be taken into account (p.34F-G). The Judge remarked that there was a contrast between the life safety of those in the Flat, giving them more time to get out, and the structural integrity of the building, burning down after they had got out (p.35E). It is true that those are different considerations.

1. 1. When Mr Morris followed with his closing submissions he did not take the point that Mr Williams was seeking to rely on a second aspect of “fire safety” that had not been pleaded or fully addressed in evidence by both parties. In dealing with the refusal of consent on the distinct ground that the design drawings had not been altered to make clear the position in relation to the construction of the floor at second floor level, the Judge observed that it would have been reasonable to grant permission subject to a condition of correcting the plans, but then continued “The real issue is the fire safety with respect to the structure of the building”. Mr Morris did not engage directly, and made a submission about the reliability of Ms Schehtman’s evidence about the attempts to obtain an opinion from Dr Davis (which related to a point that the Judge should not accept that the defendant had obtained proper evidence to support that argument). Then Mr Morris addressed the question of the acceptability of the works being referred to the insurers of the building.

1. 1. The discussion with the Judge later turned to the email that Dr Davis had sent, which was in agreement with Mr Levy’s view that the alterations made the overall fire safety position worse (p.86), though it said that a “building control body” might find it acceptable. The Judge asked Mr Morris whether he was talking about worse from a fire safety regulation point of view or from a risk to structural integrity point of view, and Mr Morris answered that it was the former because the test itself came from the terms of Regulation 4(3). The Judge then asked whether the Building Regulations drew a clear line between the safety of the occupants and the safety of the building (p.86H), to which the answer was that the Regulations “just do not ask about the structure of the building” other than how long it would take the building to burn, which was relevant to escape time. Mr Morris then submitted that it could not be reasonable for a landlord to rely on a point when it has ignored the advice of its surveyor to get an expert opinion on the point.

1. 1. The structural integrity issue was therefore advanced by the defendant, taken up by the Judge and not in terms dealt with by Mr Morris because he was focusing on the issue relating to the Building Regulations. It is important to note that the layout of the Flat, and the lack of compartmentation of the staircase, was relevant to those issues and not just to the structural damage issue.

1. 1. Mr Williams, in responding on Ground 1 of the appeal, did not argue that Mr Morris had failed to point out to the Judge in closing submissions that the structural damage issue was not a pleaded issue and so it could not be advanced on appeal. Instead, he argued that the issue was amply covered in the preparation of the case and at trial. He was inclined to agree that if an objection had been taken by Mr Morris at trial it would have required an amendment to the pleaded case of the defendant, but said that it would have been proper to grant that amendment, having regard to the way that the issue had been covered in evidence by Mr Levy, and, given the nature of the issue (risk of fire damage to the roof), it did not need expert opinion evidence to address it.

1. 1. Despite Mr Williams not taking the point, I must consider whether the failure by Mr Morris to object at trial to the new issue precludes Mr Jacobs from relying on the point as a ground of appeal.

1. 1. In this regard, the first point to make is that the fact that Counsel for the employer in Al-Medenni v Mars told the judge during the hearing that the third man theory was not a pleaded issue does not feature at all in the reasoning of Dyson LJ. The focus is instead on the absence of a pleaded issue and the fact that it had not therefore been explored in evidence, or been addressed in argument until it was too late.

1. 1. However, the Court will not usually allow a procedural impropriety that should have been raised at the time and could then have been put right to found the basis of a successful appeal, when it is then too late to put the matter right. Parties are expected to take their procedural or other objections to the course of a trial at the time, rather than keep quiet and use them as ammunition for an appeal. That is particularly so if the irregularity is of the kind that the affected party could sensibly choose to let pass, or acquiesce in, on the basis that it did not really affect the fairness of the trial or impinge on the main issues.

1. 1. It is pertinent to note that the issue, though identified by the Judge, was not raised in such a way as to make it clear that it was a self-contained issue that was being relied on by the defendant as justifying refusal of consent. The refusal letter of 16 July 2020 had not raised it in terms as a ground of refusal, and Mr Levy’s concern about the fire risk to the structure was not presented in evidence by him as being separate from issues of compliance with (or acceptability of the layout of the Flat under) the Building Regulations. Given that Mr Levy had intended to have the issue resolved by Dr Davis, or by insurers, it is not obvious that, despite being raised by Mr Levy and acknowledged by the Judge, it was being regarded as a freestanding ground for a reasonable refusal of consent. I therefore do not consider that Mr Morris was at fault in not identifying that that was where the point was heading and objecting at the time.

1. 1. Further, where an issue has clearly not been pleaded and was not relied on at the start of the trial, I consider that the onus lies as much on counsel for the party seeking to rely on it as on their opponent to raise the matter with the judge and seek permission to amend. For the reasons given by Dyson LJ in Al-Medenni v Mars, a party is entitled to rely on the pleaded case as defining the ambit of the issues to be decided at trial.

1. 1. Even if objection had been made by Mr Morris at trial, it is tolerably clear that matters could not have been put right at the stage of closing submissions, a week after the evidence had concluded.

1. 1. If it had been pleaded that, regardless of compliance with the Building Regulations, Mr Levy’s concern about harm to the structure justified refusal of consent, I have no doubt that Mr Morris would have taken up in cross-examination the basis for Mr Levy’s views and his qualification to express an opinion, in light of the facts that Mr Levy had recommended his clients to take an expert’s opinion and then to follow the insurer’s views. It is clear from the transcript that Mr Morris did not engage with Mr Levy’s allusion to the risk of structural damage when he mentioned it in a different context, as he was fully entitled not to do given the pleaded issues. Pleading of the issue would also have given rise to a line of questioning about whether in fact the defendant, through Mr Levy, was relying on that reason as a freestanding reason, and not merely as a point tending to reinforce the fire safety issues based on the Building Regulations. That gave rise to a potential issue about whether reliance on it was merely a makeweight, or was infected by reliance on a bad reason, or both: see No.1 West India Quay (Residential) Ltd v East Tower Apartments Ltd [2018] EWCA Civ 250, per Lewison LJ at [32]-[42].

1. 1. As a very late application to amend (if made), the Judge could only properly have given permission to amend, if it necessitated an adjournment of the trial to re-open the evidence, where, exceptionally, there was a very good reason for the late pleading of the issue: see the principles established in Swain Mason v Mills and Reeve [2011] EWCA Civ 14; [2011] 1 WLR 2735 and Quah v Goldman Sachs International [2015] EWHC 759 (Comm) at [38]. There appear to have been no exceptional circumstances in play or good reasons why, if the structural damage risk issue was a freestanding issue, it had not been identified in the statements of case at the outset, or at the latest at the start of the trial. Mr Williams’ argument that the defendant was only responding to how Mr Jacobs had framed the issue about withholding consent was unpersuasive, not least because the defendant was counterclaiming a declaration that consent had been reasonably withheld. If there were other reasons that had been relied on for refusing consent on 16 July 2020, it was necessary for the defendant to plead them if it wanted to rely on them at trial.

1. 1. Further, the question of whether the layout of the Flat gave rise to a significant risk of greater damage being done to the structure of the building in the event of a fire was a matter for expert opinion evidence. The question was not whether, if there was a fire, it would spread upwards to the roof but whether the open plan layout of the Flat, without compartmentation of the staircase, meant that the severity of any fire would be greater and cause worse damage to the main structure of the building. The answer to that question would inevitably be an opinion and not an objective fact or matter of experience of a general building surveyor, and the answer might well depend on what other mitigation measures, such as a misting system, could or should be deployed.

1. 1. By recommending to the defendant that they obtain an expert opinion from Dr Davis on this matter, which he would accept whether it concurred with his view or not, Mr Levy was recognising that he was not an expert on fire engineering, even though, as an experienced general building surveyor, he felt that he had an informed view. More to the point, Mr Jacobs would have been entitled to adduce and rely on his own expert opinion evidence addressing the issue and not be saddled with the inexpert views of Mr Levy alone. The issues addressed by the experts who prepared reports for the trial did not include the risk of damage to the structure.

1. 1. Accordingly, in my judgment, on account of the lateness of the application and the prejudice to the trial process, the Judge would have been bound to reject an application to amend the Particulars of Claim had it been made at the stage of closing submissions. To grant it would have been wholly contrary to the overriding objective, as it would have necessitated an adjournment of the trial for some weeks at least, and then the hearing of further evidence at a much later date, when the trial had otherwise nearly concluded. To grant the amendment without allowing Mr Jacobs to adduce further evidence on the new point would have been a serious injustice.

1. 1. The Judge said, in refusing permission to appeal, that the structural integrity issue was a central issue and confronting it was unavoidable. It was not a central issue: it emerged from nowhere at the trial only when Mr Levy chose to say something about it when asked about a different issue. It may have been central to Mr Levy’s thinking, but that is irrelevant. To say that confronting the issue was unavoidable would only be true if the trial were inquisitorial in nature. Since it is adversarial and the structural integrity question (even if intended to be covered by the terms of the 16 July 2020 letter) was not a pleaded issue for trial, it was not with respect right to confront it and make it the basis of the decision. In my judgment, this case is indistinguishable in principle from the Al-Medenni v Mars case: the fact that, though unpleaded, Mr Levy briefly volunteered his opinion on the structural integrity issue, did not make it appropriate to engage with the issue.

1. 1. For these reasons, the appeal succeeds on Ground 1. It was not open to the Judge to decide the case in favour of the defendant on the basis of an unpleaded issue. Apart from his conclusion on that issue, the Judge rejected all the grounds on which the defendant relied as reasons for withholding consent. It follows that the declaration made in the Order must be set aside and replaced by the declaration that Mr Jacobs sought, namely that consent was unreasonably withheld by the defendant.

1. My decision on Ground 1 is sufficient to dispose of the appeal. However, since the other grounds were argued in full, I will more briefly indicate my conclusion on each.