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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> KG & Ors v Bryn Alyn Community (Holdings) Ltd. & Anor [2003] EWCA Civ 783 (10 June 2003) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2003/783.html Cite as: [2003] QB 1441, [2003] CPLR 415, [2003] EWCA Civ 783

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IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(CHESTER DISTRICT REGISTRY)
Mr Justice Connell
Royal Courts of Justice

		Royal Courts of Justice Strand, London, WC2A 2LL
		10 June 2003

Lord Justice Waller:

1. This is a postscript to the judgment we handed down on 24^th March 2003 dealing with what was termed the Part 36 appeal. We handed down that judgment but no order reflecting the judgment was finally made, because it became clear that there was a serious issue relating to our jurisdiction to deal with one aspect. To explain the position it is necessary to set out the history of the litigation, the making of Part 36 offers, and how it came about that we were dealing with the Part 36 appeal separately from the main appeal. This is again a judgment of the court.
2. Because anonymity has been granted to the individuals who brought the claims we will endeavour a description without use of names. Fourteen claimants brought proceedings against the first Defendants. The second defendants as insurers joined in the proceedings and ran the defence. Eight of the claimants made Part 36 offers which the second defendants did not accept. [We only have the offers of seven in the bundle, but it seems clear there was an eighth.] On 26^th June 2001 Connell J gave judgment in favour of all but one of the fourteen claimants. His awards of damages "beat" the offers of four of the claimants, and arguably beat an offer made by another depending whether an award for future earnings should be added to the award for general damages.
3. By his order when handing down his main judgment, Connell J ordered that issues in relation to Part 36 should be stood over to a date to be fixed.
4. On 29^th October 2001, Connell J made his ruling on the Part 36 issues in relation to the above mentioned five claimants, exercising the powers under Part 36.21(2) in favour of four claimants, but refusing to do so under Part 36.21(3); he further held in relation to the fifth claimant that since his award of general damages had not beaten the Part 36 offer, no Part 36.21 orders should be made in his case at all.
5. The second defendants and the claimants had prior to the Part 36 hearing put in notices of appeal and respondents' notices challenging Connell J's main judgment in the Court of Appeal.
6. The second defendants by a separate notice appealed the judge's Part 36 21(2) ruling in relation to the four claimants; those four claimants put in a respondents' notice challenging the refusal of the judge to exercise his discretion under Part 36.21(3) and the fifth claimant challenged the judge's ruling against him. The Part 36 appeal was fixed to be heard after we had handed down our judgment in the main appeal.
7. On 12^th February 2003 we handed down our judgment in the main appeal, increasing the general damages in all cases where Part 36 offers had been made. In the case of the fifth claimant, and also in the case of the remaining three claimants who had made Part 36 offers, but who were not parties to the Part 36 appeal, our awards of general damages "beat" their Part 36 offers.
8. On that day we dealt with various matters including costs of the appeal, and heard considerable argument on the Part 36 appeal. Final aspects of the Part 36 appeal were to be addressed by written submissions.
9. It is said that during the oral hearing mention was made of the fact that the three claimants who had now beaten the Part 36 offer should obtain similar orders to those who were parties to the Part 36 appeal. That may well be so, certainly in the written submissions that followed this was specifically mentioned (see paragraph 3 of Mr Hogan's submissions dated 16^th February 2003). But no application was lodged or made that Part 36 orders ought to be made in their favour and no application was made to join those three to the Part 36 appeal. Indeed it is fair to say that despite the mention in the written submissions we did not actually appreciate the point which arose in relation to the three claimants. Meanwhile on 14^th March 2003 the order made on the main appeal was sealed.
10. So far as the fifth claimant was concerned argument on the Part 36 appeal appeared to proceed on the basis that the issue he had raised was no longer live by virtue of the increase of his award of general damages. He of course was a party to the Part 36 appeal, and it was clear that he was maintaining that a Part 36 order should have been made in his favour, and in the result the judgment on the Part 36 appeal proceeded on the basis that it was common ground that he should have a similar order to the other parties to the Part 36 appeal.
11. The only issues addressed in the judgment on the Part 36 issue, were what appeared from correspondence to be the only live points i.e. whether the judge's order awarding Part 36 interest should run to the date of his judgment or to the date of the judgment of the court of appeal, and whether the judge should have awarded interest on costs under Part 36.21(3). These issues were addressed by reference to the five claimants who were parties to the Part 36 appeal. It should be said that the issues would have been relevant also to the claimants who were not parties to the Part 36 appeal, if it had been appreciated that they were now pursuing an application that a Part 36 order should be made in their favour.
12. When we handed down our judgment on the Part 36 appeal on 24^th March 2003, Mr Hogan asked us to clarify that our judgment applied to the three claimants not parties to the Part 36 appeal. Mr Fewtrell for the second defendants objected. He submitted that the court had no jurisdiction to make Part 36 orders in favour of these three. Indeed he went further and suggested that no Part 36 order should be made in relation to the fifth claimant, who was a party to the appeal, because no Part 36 order had been made by the judge in his case. His submission was that the time to make an application on the part of these three claimants and on the part of the fifth claimant for orders under Part 36.21 by reference to the damages which we by our main judgment were now saying the judge should have awarded, was at the time when the main judgment was handed down. The submission was that since the order in relation to the main judgment had now been sealed, the court had no jurisdiction to make any such orders.
13. We heard some limited argument on this point, but felt it right to allow further written submissions before ruling. We gave leave to Mr Hogan to amend the notice of appeal in the Part 36 proceedings to add the three claimants. That leave was of course without prejudice to Mr Fewtrell's arguments. The notice has been amended, and further written submissions received.
14. Mr Hogan's submissions suggest that the second defendants' posture lacks merit. He suggests that the Part 36 aspect was hived off in the court below, and was thus the subject of an independent appeal to the court of appeal. He submits that the three claimants are in the same position as the fifth claimant who did not obtain a Part 36 order in the court below and was seeking such an order in the court of appeal. Mr Hogan criticises the second defendants for resiling (as he would say) from the position taken up by them previously in relation to the fifth claimant. He submits that once the three claimants are added to the Notice of Appeal in the Part 36 appeal, the court has jurisdiction to deal with their contention that they should now have the benefit of Part 36 orders similar to those made in the case of other claimants who made such offers and beat those offers.
15. Mr Fewtrell's submissions are first that it was open to the three claimants to seek Part 36 orders at the time the main judgment was handed down, and not having done so, the court has no jurisdiction to deal with that application now since the order on the main appeal has been sealed. He puts the matter this way in paragraph 3.3:

"The additional Claimants acknowledge that no applications under Part 36 were made at first instance because they could not have succeeded as they had not beaten their Part 36 offers. The contention that these Claimants can now somehow circumvent the procedural bar confronting them by appealing (out of time) against the failure of Connell J to make an order under CPR 36.21 for which they accept they did not and could not have applied at the time as they seek to do in paragraph 5 of the Amended Respondents' Notice is, it is respectfully submitted, misconceived. This can best be illustrated by assuming that there had been no appeals by the original Claimants on the Part 36 issues. On the Claimants' analysis, at the conclusion of the main appeal the additional Claimants would have had to ask the Court of Appeal for permission to appeal (out of time) against the failure of Connell J to make an order under CPR 36.21. It is submitted that procedurally this cannot be right."

16. He suggests that the second defendants have not resiled from a position taken up in relation to the fifth claimant. He suggests it was up to the fifth claimant whether he wanted to pursue the only point taken on appeal, and since he did not do so that it is now too late simply to rely on the fact that the general damages have been increased so as to make the point academic.
17. In our view the second defendants have resiled from a position which they originally took up in relation to the fifth claimant. In Mr Fewtrell's skeleton dated 20^th February 2003, paragraph 3.2 it is said:

"It should be noted that the Claimants' solicitors letter dated 25^th January 2002 makes it clear that the only issues at large in the appeal would then be confined to the date of judgment point, the PS issue (which disappeared when his general damages were increased in the substantive appeal) and the costs of the Part 36 appeal. The second Defendant confirmed its understanding of the position in paragraphs 1 and 2 of its supplementary skeleton argument [4/6] and in the opening of the Part 36 appeal, without apparent demur on the part of the Claimants until almost the very end of the hearing."

The judgement handed down on 24^th March 2003 correctly assumed that it was common ground that the fifth claimant should have a Part 36 order in the same terms as the other claimants party to the Part 36 appeal. However the fact that the second defendants have resiled does not finally dispose of the jurisdiction question.

18. The position in this case is very unusual in that the court was dealing with a main appeal and then an appeal ancillary to the main appeal. So far as 13 of the claimants were concerned they succeeded on the main appeal and thus all they needed so far as the main order made by Connell J was concerned was to vary the sum he awarded as general damages. He did not in his main order make Part 36 orders; he adjourned that aspect. So far as the costs of the trial were concerned, they did not need to ask for the costs order made by the judge in his main order to be altered at all. Certainly so far as claimants who were parties to the Part 36 appeal was concerned, it was neither expected nor has it even now been suggested that they should have applied for a Part 36.21 order by reference to the sums awarded as damages by the Court of Appeal in substitution for those awarded by the judge. It is however argued that the claimants who had not previously obtained Part 36 orders in their favour, could and should have sought Part 36 orders at the time of the handing down of the main judgment. We would accept that they could have done, but if they had, the form of that order could not have been worked out until after completion of the hearing of the Part 36 appeal. The question as to the judgment on which an award of interest on the damages should run, and the question whether interest should be awarded on costs would only have been decided as between all parties interested. The inevitable result of an application by the three claimants would have been an order holding over consideration as to the proper form of that order to be decided during the Part 36 appeal. Indeed if the application had been made at the time of handing down the main judgment, it would have been entirely appropriate to join those claimants to the Part 36 appeal, so that the points that arose on that appeal could be resolved as between those claimants and the second defendants as well as between others who were already party to that appeal.
19. The position that the three claimants wished to take up was expressly raised by Mr Hogan in his skeleton before any sealing of the order on the main judgment. He made clear that since the three claimants had now beaten the Part 36 offers they would wish the orders as would be made for others to be made in their favour too. The second defendants did not suggest that it was inappropriate to consider their position during the final resolution of the Part 36 appeal, and whatever else the sealed order on the main appeal did, it did not purport to decide the issue whether Part 36 orders should now be made in favour of any of the claimants.
20. We do not think that the sealed order in this case was final in the sense of precluding the court considering whether Part 36 orders should be made in favour of either the fifth or the three claimants. The court undoubtedly was still seized of the proper approach to Part 36 in relation to claimants who were parties to the Part 36 appeal; there was in effect by the submissions put in by Mr Hogan a request for the applications of the three claimants to be considered at the same time. The court had not ruled that the position of the three claimants could not be considered at the same time, and it is clear that if an application had been made the ruling would have been to consider the position of the three claimants at the Part 36 appeal.
21. Despite the sealing of an order the court was on any view still seized of certain ancillary matters relating to the costs awarded under that order, and certain ancillary maters relating to the award of interest on damages under that sealed order otherwise it would have had no jurisdiction to deal with the Part 36 appeal at all. We do not see why it is necessary to construe the sealing of the order so as to deny jurisdiction to the court to deal with similar ancillary orders relating to claimants whose applications the court would undoubtedly have considered on the Part 36 appeal, and which it was apparent the claimants were contemplating and the second defendants should have appreciated they were contemplating, were to be dealt with in that context prior to the sealing of the order reflecting the main judgment.
22. In any event the finality of a sealed order in the court of appeal is subject to certain exceptions. In Taylor v Lawrence [2002]3WLR 640 at 655-6 it is put this way in the judgment of Lord Woolf:

"50. If, as we believe it is necessary to do, we go back to first principles, we start with the fact which is uncontroversial, that the Court of Appeal was established with a broad jurisdiction to hear appeals. Equally it was not established to exercise an originating as opposed to an appellate jurisdiction. It is therefore appropriate to state that in that sense it has no inherent jurisdiction It is, however, wrong to say that it has no implicit or implied jurisdiction arising out of the fact that it is an appellate court. As an appellate court it has the implicit powers to do that which is necessary to achieve the dual objectives of an appellate court to which we have referred already (see paragraph 26 above).

54. Earlier judgements referring to limits on the jurisdiction of this court must be read subject to this qualification. It is very easy to confuse questions as to what is the jurisdiction of a court and how that jurisdiction should be exercised. The residual jurisdiction which we are satisfied is vested in a court of appeal to avoid real injustice in exceptional circumstances is linked to a discretion which enables the court to confine the use of that jurisdiction to the cases in which it is appropriate for it to be exercised. There is a tension between a court having a residual jurisdiction of the type to which we are here referring and the need to have finality in litigation. The ability to reopen proceedings after the ordinary appeal process has been concluded can also create injustice. There therefore needs to be a procedure which will ensure that proceedings will only be reopened when there is a real requirement for this to happen."

23. The stress is of course on the exceptional nature of the jurisdiction to reopen the point. The very way in which Lord Woolf puts the matter indicates that where a party is seeking to get some ancillary matter decided rather than seeking to reverse a point already decided the court should be much less reluctant to hold itself powerless. It is very akin to a court having the power to make clear what its order is as to which on any view it has an inherent power (see 40BPD-004 4.5).
24. In our view therefore the three claimants should be entitled to be made parties to the Part 36 appeal. That is what would have happened if a proper application had been made on their behalf prior to the sealing of the main judgment, and if the court had appreciated that in reality an application was being made on their behalf. Furthermore in our view the court retains jurisdiction to place both the three claimants and the fifth claimant in the same position as those other parties to the Part 36 appeal, and similar orders with similar effects should be made so far as they are concerned.
25. So far as the costs of this exercise are concerned, the second defendants should pay them because they are the unsuccessful party. However in our view, some blame is to be attached to those representing the three claimants. Some formal application put in on the part of the three claimants once the main judgment was handed down would have prevented there being any argument of the kind that has been put forward in this case. It would not be right therefore to order costs on an indemnity basis.
Order: Agreed order now made in these proceedings. (Order does not form part of the approved judgment)