CA-2024-002563 - [2025] EWCA Civ 932

The Judge’s Case Management Decision (Ground 4)

Although it may appear counter-intuitive, it is appropriate to start with the judge’s case management decision that, in the circumstances which he describes in his judgment, he was only going to deal with the insolvency point. He explained that the original application to strike out was based on the proposition that the cause of action accrued on Vantage’s insolvency, without any qualification or elaboration. He decided that that issue was capable of being dealt with in the estimated timeslot of two hours. He decided that the issues which would arise if the insolvency point was wrong, such as what precisely “if you…have to pay more” meant, and whether that required actual or merely foreseeable extra cost to trigger the cause of action, could not be dealt with in the time and might require further evidence.

In my view, the judge was entitled to make that case management decision. Although Mr Grant KC argued that the application for reverse summary judgment/strike out was in general terms, it was plainly narrowed by Ms Alabi’s first statement. There was no mention of any alternative case based on the “if…you have to pay more” part of Option 1 until her statement in response to Mr London’s statement, just a week before the hearing. In their submissions to the judge, Mr Casey KC and Mr Mesfin at [39] and [40] made plain that the issue for the judge was whether Vantage’s insolvency was the point when the cause of action accrued and that, for the purposes of the strike out application, the court did not need to go any further. In particular, if the court rejected the insolvency point, they said that it did not need to determine when in fact the cause of action actually accrued. In my view, as a matter of case management, the judge was entitled to conclude that, in all the circumstances, that was the best course.

I should say that I am not sure whether I would have made the same case management decision. Had I been the judge, I may have wanted to deal with all the arguments relating to limitation together, and in advance of the trial. I may not have wanted to decide only one aspect of that argument, and thereby at least run the risk of hobbling the remainder of the debate. I would not have regarded the pre-hearing events and the changes in the parties’ positions as anyone’s fault so, if necessary, I may have adjourned the hearing part-heard and allowed further evidence to be submitted on the alternative case. But of course what another judge might have done is irrelevant, if what the case-managing judge did was open to him or her. Here, dealing just with the insolvency point was plainly a case management decision that the judge was entitled to make.

In those circumstances, ground 4 of the appeal must fail (a result expressly foreshadowed when I granted permission to appeal). It follows that the scope of this appeal is considerably narrower than the NHBC would wish. That is best explained by reference to the three options as to the accrual of the cause of action which Mr Grant helpfully identified in his oral submissions.

The three options were:

Mr Grant was very clear about these three options. He said that if the answer was option i), then he won. He accepted that if the answer was option iii), he lost. He urged the court to decide option ii) because, he said, it was an issue that was before the court and did not require any further fact-finding.

But as a result of the judge’s case management decision, option ii) was not decided below. Because I have concluded that ground 4 must fail, such that that case management decision cannot be revisited, it seems to me that the inevitable consequence is that option ii) cannot be properly determined on this appeal. Moreover, I am not persuaded that option ii) can properly be considered without at least the possibility of some further evidence concerning when it was possible/likely/probable/foreseeable that Peabody would “have to pay more”. That was a point which the judge made. It was also inherent in Mr Grant’s submission that, under option ii), what mattered was “the factual reality that, in consequence of the insolvency, Peabody would have to pay more to complete the homes”.

Consistent with what I have said at paragraph 39 above, I would add that, if option i) fails, then the issue as to whether the answer is option ii) or iii) should be determined at an early stage, perhaps by way of a preliminary issue, and certainly in advance of the trial. It would be unsatisfactory for the matter to go to trial in circumstances where the entire claim might fail on limitation grounds.

Having addressed the procedural position, I therefore turn to the critical issue for the purposes of this appeal, namely the insolvency point.