(In this YAWS version a few editorial alterations have been made to the description of the CPR and Practice Directions, eg references to Part 3.8 have been changed to Rule 3.8, to ensure consistency with the remainder of the site.)
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CENTRAL LONDON COUNTY COURT
HIS HONOUR JUDGE COWELL
Royal Courts of Justice
Strand, London, WC2 A 2LL
10 March 2005
LORD JUSTICE BROOKE
Vice-President of the Court of Appeal (Civil Division)
LORD JUSTICE DYSON
and
LORD JUSTICE GAGE
Nicos Varnavas Hajigeorgiou
Appellant/ Defendant
- and -
Vassos Michael Vasiliou
Respondent/Claimant
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LORD JUSTICE DYSON : this is the judgment of the court. | |||||||||||||||
| 1. | This is an appeal from the decision of His Honour Judge Cowell who in the course of a case management conference at the Central London County Court gave certain directions in relation to expert evidence which the defendant seeks to challenge. The judge gave permission to appeal because he considered that his decision raises an issue of practice and procedure affecting legal professional privilege which is of some importance. | ||||||||||||||
| 2. | The claimant started these proceedings on 1 Aug 2002. The details of the claim are immaterial for present purposes. Suffice it to say that the claimant seeks damages for breach of the defendant's covenant of quiet enjoyment in a lease of premises at Green Lanes, Palmers Green, London N13 which were intended to be used as a restaurant. On 7 April 2004, His Honour Judge Levy QC gave judgment in favour of the claimant on issues of liability and ordered an assessment of damages. | ||||||||||||||
| 3. | A case management conference was fixed for 21 July. In anticipation of the hearing, Mr Christou (the defendant's solicitor) produced a witness statement in which he set out the defendant's proposed directions. At para 22, he identified a number of issues which, he contended, only an expert could address. These included the value of the restaurant and what profit the restaurant would have made if trading had not been restricted as a result of the defendant's breach of covenant. He continued: | ||||||||||||||
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| 4. | Mr Christou exhibited a detailed curriculum vitae of Mr Watson. | ||||||||||||||
| 5. | The case management conference took place before Judge Levy on 21 July. It was common ground that each party should have permission to rely on an expert in the field of restaurant valuation and profitability, and we were told that there was little, if any, discussion about this before the judge. At the end of the hearing, counsel who appeared on each side prepared a draft order which they were satisfied accurately reflected what the judge had decided and/or the agreed directions which had been approved by the judge. The terms of the draft agreed by counsel were incorporated in the court order and included the following directions: | ||||||||||||||
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| 6. | Difficulties were encountered in implementing these directions. They led Mr Fleming (litigation manager for the claimant's solicitors) to prepare a witness statement dated 28 September in which he described the problems. It is only necessary to refer to what he said about the defendant's expert witness. He said that Mr Watson must have been appointed by the defendant as his expert, because some time after 30 July Mr Watson had attended the claimant's premises by appointment and had carried out an inspection. He went on to say that on 20 September, the defendant's solicitors wrote to the claimant's solicitors asking for access to be afforded to the claimant's premises the following day for inspection by "a further expert, Mr Richard Negus, of Fleurets". Correspondence ensued in which the claimant's solicitors asked why another expert had been appointed, but no explanation was forthcoming. Mr Fleming also said that on 27 September he had telephoned Mr Watson and told him that the defendant's solicitors wished to instruct another expert: Mr Watson expressed surprise, saying that he knew of no reason which prevented him from acting, and that indeed he had already prepared his evidence. | ||||||||||||||
| 7. | This led Mr Fleming to submit at para 44 of his statement that (a) the defendant should not have permission to adduce the evidence of any further expert without an explanation, and (b) since Mr Watson's evidence was not privileged and may assist the court, disclosure of it should be ordered. | ||||||||||||||
| 8. | Mr Christou responded in a witness statement of 11 October. He said that Mr Watson had been appointed and had inspected the premises. He had prepared what was described as a "draft interim report". Subsequently, it had been decided that the defendant did not wish to rely on Mr Watson as his expert witness, and Mr Negus was instructed to prepare an expert's report. Mr Negus was willing and able to prepare a report within the timescale prescribed by the order of 21 July. Mr Christou said that he was not at liberty to disclose why the decision had been taken to instruct Mr Negus. He said that, since the order had not limited permission to a named expert, the defendant was entitled to change experts without seeking the permission of the court. But if that was wrong, then he asked the court for permission to rely on the report of Mr Negus, and for an order that he be granted reasonable access to the premises so that he could make any necessary amendments to his report in accordance with his duty to the court. | ||||||||||||||
| 9. | That was how matters stood when the case came before Judge Cowell on 18 October. | ||||||||||||||
| The judgment | |||||||||||||||
| 10. | First, the judge held that the defendant did need permission to rely on the report of Mr Negus. He decided that the order of 21 July gave the defendant permission to rely on the evidence of Mr Watson and no other expert in restaurant valuation and profitability, so that the defendant required the court's permission to rely on another expert in that field. At para 33 of the judgment, he said: | ||||||||||||||
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| 11. | Secondly, having held
that permission was required, he decided that he would give the defendant
permission to rely on the evidence of Mr Negus, but only on condition that
the report of Mr Watson was disclosed to the claimant. In deciding to
impose this condition, the judge relied heavily on the unreported decision
of this court in | ||||||||||||||
| 12. | On behalf of the defendant, Mr Clarke submits that the judge reached the wrong conclusion on both issues. First, the judge should have held that, properly construed, the order of 21 July gave permission to both parties to instruct an expert in restaurant valuation and profitablilty: it did not give the defendant permission only to instruct Mr Watson. Secondly, even if that is wrong, the judge should not have made it a condition of granting permission for Mr Negus to be called as a substitute expert that the defendant disclose Mr Watson's report. | ||||||||||||||
| CPR 35.4 | |||||||||||||||
| 13. | CPR 35.4 is headed "Court's power to restrict expert evidence and provides: | ||||||||||||||
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| The first issue | |||||||||||||||
| 14. | Mr Clarke's submission is quite simple. He draws attention to the fact that CPR 35.4(3) provides that permission to call an expert or put in evidence an expert's report shall be in relation to "the expert named or the field identified". In the present case, there can be no doubt that the order did not identify a named expert; it identified the field of expertise of the expert for whom permission was given. If the order had named Mr Watson, Mr Clarke concedes that the defendant would have had to apply to the court for permission to rely on Mr Negus. It cannot be argued that the order was not correctly drawn, nor was it so argued before the judge. The order followed the wording of the draft agreed between counsel and submitted to the associate after the conclusion of the case management conference. | ||||||||||||||
| 15. | Mr Vasiliou (who was ably assisted in his submissions by Mr Fleming) contends that Judge Cowell was right to say that what was plainly intended by Judge Levy was to give the defendant permission to rely on the evidence of Mr Watson. He refers to | ||||||||||||||
| 16. | The judge seems to have construed the order as giving the defendant permission to rely on the evidence of Mr Watson, but in our judgment the order plainly and unequivocally identifies the experts only by their field of expertise. Moreover, we cannot accept the submission that there was an accidental slip or error here. The terms of the order were agreed by counsel. Despite the details given by Mr Christou about Mr Watson and his rates of charging, it is not surprising that the parties agreed, and the judge approved, an order giving the defendant permission to rely on an expert in Mr Watson's field of expertise, rather than on Mr Watson by name. An order giving the defendant permission to rely on an expert in Mr Watson's field would have served his purposes just as well. The significance of giving the details of Mr Watson's expertise could have been no more than evidence of the fact that there are experts in this field. The relevance of Mr Christou's evidence of charging rates was not only to indicate that Mr Watson's rates were reasonable and not disproportionate, but also to show that, if the claimant were to instruct an expert, his or her fees were also likely to be reasonable and proportionate. | ||||||||||||||
| 17. | Even if it had been made explicitly clear that the defendant was asking for permission to rely on the evidence of Mr Watson, it would not have been perverse to make an order simply giving permission to rely on one expert in the field of restaurant valuation and profitability (ie the expertise of Mr Watson). The mere fact that such an order was made in that situation would not, of itself, suggest that the order was an accidental slip on the grounds that it did not give effect to the intention of the judge who made the order. | ||||||||||||||
| 18. | We do not find it at all surprising that the order did not identify the name of the expert who could be relied on by the defendant in circumstances where he could not do the same in relation to the claimant. It would have been possible to make an order giving the defendant permission to call and rely on the report of Mr Watson, and giving the claimant permission to call and rely on the report of an unnamed expert in the field of restaurant valuation and profitability. But that would have been an unusual order to make. Judge Levy may well have taken the view that, if he could not restrict the claimant to a named expert, then it would not be right to restrict the defendant to a named expert. In these circumstances, we find it impossible to hold that the failure to name Mr Watson in the order of 21 July was an accidental slip. | ||||||||||||||
| 19. | It follows that in disagreement with the judge, we consider that the terms of the order of 21 July did not of themselves require the defendant to obtain the permission of the court to rely on the evidence of Mr Negus. Moreover, as we have pointed out, the judge was told that the defendant would have been able to serve the report of Mr Negus within the time specified by the order of 21 July. | ||||||||||||||
| Were there other reasons for needing permission to rely on Mr Negus? | |||||||||||||||
| 20. | Two other possible reasons for holding that the defendant needed permission to rely on Mr Negus were canvassed before us. First, Mr Fleming submitted that, once the defendant had instructed Mr Watson, he had implemented para 3 of the order of 21 July. The order had been carried into effect and, if the defendant wanted to instruct a second expert, he needed the permission of the court. The order did not envisage the instruction of a succession of experts. In our judgment, the court did not have power to give permission for the "instruction" of experts. CPR 35.4 contains the rules which govern the court's power to restrict expert evidence. They do not refer to the "instruction" of experts. They provide that no party may "call" or "put in evidence an expert's report" without the court's permission. It seems to us, therefore, that the words in the order "permission, if so advised, to instruct one expert" should be construed as meaning "permission, if so advised, to call and put in evidence a report from one expert". If that is right, it must follow that the fact that Mr Watson had been instructed did not of itself require the defendant to seek the permission of the court to instruct Mr Negus. | ||||||||||||||
| 21. | Secondly, the question of permission arose in the context of a request for an inspection of the claimant's restaurant. The claimant did not in fact object to the appointment of Mr Negus on the grounds that Mr Negus wanted to inspect the restaurant, and that it was unreasonable to require the claimant to submit to a second inspection. Mr Fleming confirmed that this was not the basis of the objection. Moreover, as Mr Clarke pointed out, if the right to inspect had been denied to Mr Negus, this would not have prevented him from writing his report. If the court had indicated that it would give permission for Mr Negus to inspect the restaurant only on condition that the defendant disclosed Mr Watson's report, it is clear that the defendant would have instructed Mr Negus to write his report without the benefit of an inspection rather than disclose Mr Watson's report. In any event, we consider that to impose such a requirement as a condition of giving Mr Negus permission to inspect the premises would have been unreasonable and disproportionate. The circumstances here are a far cry from a personal injury case where a second expert wishes to conduct a second medical examination on the claimant, and issues such as those discussed in | ||||||||||||||
| The second issue | |||||||||||||||
| 22. | We shall approach this on the footing that the order of 21 July gave permission to the defendant to rely on the evidence of a named expert, Mr Watson, and that the defendant needed the permission of the court to rely on the evidence of Mr Negus in place of Mr Watson. As we have seen, the judge decided that he would give permission to the defendant to call Mr Negus and rely on his report on condition that the report of Mr Watson was disclosed to the claimant. | ||||||||||||||
| 23. | Mr Clarke submits that this decision was wrong in principle. He argues as follows. The report of Mr Watson was privileged and the privilege had not been waived by the defendant. Legal professional privilege is a fundamental right which can only be curtailed by Parliament. The effect of the judge's order was to give the defendant the choice of either surrendering his right to privilege in Mr Watson's report (a report which, it may reasonably be inferred, was unfavourable to the defendant's case) or being prevented altogether from calling expert evidence at the assessment of damages in a case in which the defendant was facing a substantial claim for loss of profits. The practical effect of such an order was to compel the defendant to disclose Mr Watson's report and deprive him of his right to privilege in it. Mr Clarke submits that the case of | ||||||||||||||
| 24. | In | ||||||||||||||
| 25. | The defendant applied to the court for permission to change experts. No point seems to have been taken that the defendant did not need the permission of the court to change experts, because the court had not given permission by reference to named experts. The argument proceeded on the basis that the question was "whether it can ever be appropriate to allow a party to substitute one expert for another without, at some stage at least, being required to disclose the first expert's report." (para 2 of the judgment of Simon Brown LJ). To that question, Simon Brown LJ gave this resounding answer: | ||||||||||||||
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| Ward LJ said: | |||||||||||||||
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| Lord Phillips MR said: | |||||||||||||||
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| 26. | It is surprising that this important decision has not been reported. Mr Clarke says that it was wrongly decided. He submits that the court did not appreciate that the effect of its decision was to abrogate or at any rate emasculate privilege. Alternatively, he seeks to distinguish it from the present case on two grounds. First, in that case, the defendant was prepared to disclose the first report if it was granted permission to call the second expert. Secondly, the defendant put forward an explanation as to why it wished to instruct a second expert and the condition was imposed so that the claimant could see that the explanation was true. | ||||||||||||||
| 27. | In our judgment, these factual differences are immaterial to the point of principle that was decided in | ||||||||||||||
| 28. | Clear support for this
proposition is to be found in | ||||||||||||||
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| And Peter Gibson LJ said: | |||||||||||||||
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| 29. | The principle established in | ||||||||||||||
| 30. | A question that was not considered in | ||||||||||||||
| 31. | In the present case, the first expert had produced a "draft interim report". It is reasonable to infer from the defendant's wish to change experts and refusal to provide an explanation that the draft interim report contains the substance of the first expert's opinion on some or all of the remaining issues in the case. In these circumstances, we consider that the judge was entirely justified in deciding that, if the defendant needed the permission of the court to rely on the evidence of Mr Negus, it should be a condition that he disclose to the claimant Mr Watson's draft interim report. | ||||||||||||||
| Conclusion | |||||||||||||||
| 32. | For the reasons given earlier, the defendant did not need the permission of the court to rely on the evidence of Mr Negus. But if he did need that permission, the judge was right to impose the condition that he imposed. But in view of our conclusion on the first issue, in our opinion this appeal should be allowed. | ||||||||||||||
| ORDER: | |||||||||||||||
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| (Order does not form part of approved Judgment) |