Wheeldon Brothers Waste Ltd v Millennium Insurance Company Ltd

Introduction

This is an application by Millennium Insurance Company Limited (“Millennium”) for permission to appeal against the judgment of Mr Jonathan Acton Davis QC (sitting as a Deputy High Court Judge) in a fire case heard earlier this year in the Technology and Construction Court (“TCC”). Following a fire at their waste processing plant in Ramsbottom (“the premises”), Wheeldon Brothers Waste Limited (“Wheeldon”) sought a declaration that they were entitled to be indemnified by Millennium under their contract of insurance. Millennium’s case was that they were entitled to refuse to indemnify Wheeldon because of their alleged breaches of a number of the policy’s conditions precedent.

The judge heard factual and expert evidence in a trial that lasted 5 days. In the course of a judgment produced just over a month after the end of the trial, and which ran to 148 paragraphs, the judge rejected each of the various reasons for refusing the indemnity put forward by Millennium. His judgment in favour of Wheeldon is at [2018] EWHC 834 (TCC).

By an Appellant’s Notice dated 10 May 2018, Millennium sought permission to appeal that judgment. There are eight separate grounds of appeal. The application is supported by a skeleton argument that is 25 pages in length. The majority of the grounds concern the judge’s findings of fact and his assessment of the expert evidence. Having considered the application on paper, it seemed to me that it raised a wider issue of principle as to the proper scope for appeals on such matters from the TCC. I therefore adjourned the application to be heard orally. Millennium put in a further skeleton argument on the law and Wheeldon produced one composite skeleton argument dealing with the law and the eight grounds of appeal.

For the reasons set out below, I do not consider that different rules apply to applications for permission to appeal from the TCC, as compared with any other part of the High Court. On the other hand, because TCC cases often involve complex and interlinked findings of fact and assessments of expert evidence, it is inevitable that wide-ranging applications for permission to appeal against such findings and assessments will rarely be successful.

The Applicable Principles

The Relevant Test

The relevant test for permission to appeal is set out at CPR r.52.6(1):

“(1)

Except where rule 52.7 applies, permission to appeal may be given only where—

(a)

the court considers that the appeal would have a real prospect of success; or

(b)

there is some other compelling reason for the appeal to be heard.”

Prior to the CPR, different and more restrictive rules applied to findings of fact by Official Referees. Indeed, for most of the last century, appeals from any decision of fact by an Official Referee were prohibited altogether, although this prohibition was eventually qualified to exclude questions of fact relevant to fraud or breaches of professional duty. None of those rules and restrictions now apply. I agree with Mr Eklund QC that the only applicable test on an application for permission to appeal from the TCC is that set out in r.52.6(1). But I also agree with Mr Quiney QC that, from a practical perspective, that is not quite the whole story.

Appeals on Findings of Fact

The general approach of an appellate court to appeals on questions of fact was memorably summarised by Lewison LJ in Fage UK Limited & Another v Chobani Limited & Another [2014] EWCA Civ 5. In paragraph 114, he said:

“Appellate courts have been repeatedly warned, by recent cases at the highest level, not to interfere with findings of fact by trial judges, unless compelled to do so. This applies not only to findings of primary fact, but also to the evaluation of those facts and to inferences to be drawn from them. The best known of these cases are: Biogen Inc v Medeva plc [1977] RPC1; Piglowska v Piglowski [1999] 1 WLR 1360; Datec Electronics Holdings Ltd v United Parcels Service Ltd [2007] UKHL 23 [2007] 1 WLR 1325; Re B (A Child) (Care Proceedings: Threshold Criteria) [2013] UKSC 33 [2013] 1 WLR 1911 and most recently and comprehensively McGraddie v McGraddie [2013] UKSC 58 [2013] 1 WLR 2477. These are all decisions either of the House of Lords or of the Supreme Court. The reasons for this approach are many. They include

i)

The expertise of a trial judge is in determining what facts are relevant to the legal issues to be decided, and what those facts are if they are disputed.

ii)

The trial is not a dress rehearsal. It is the first and last night of the show.

iii)

Duplication of the trial judge's role on appeal is a disproportionate use of the limited resources of an appellate court, and will seldom lead to a different outcome in an individual case.

iv)

In making his decisions the trial judge will have regard to the whole of the sea of evidence presented to him, whereas an appellate court will only be island hopping.

v)

The atmosphere of the courtroom cannot, in any event, be recreated by reference to documents (including transcripts of evidence).

vi)

Thus even if it were possible to duplicate the role of the trial judge, it cannot in practice be done.”

Shortly thereafter, in Henderson v Foxworth Investments Limited [2014] UKSC 41, Lord Reed said at paragraph 67:

“It follows that, in the absence of some other identifiable error, such as (without attempting an exhaustive account) a material error of law, or the making of a critical finding of fact which has no basis in the evidence, or a demonstrable misunderstanding of relevant evidence, or a demonstrable failure to consider relevant evidence, an appellate court will interfere with the findings of fact made by a trial judge only if it is satisfied that his decision cannot reasonably be explained or justified.”

Although I was referred to a number of other cases dealing with the proper approach of an appellate court to appeals based on matters of fact, the only other authority to which reference should be made is Grizzly Business Ltd v Stena Drilling Ltd [2017] EWCA Civ 94. At paragraphs 39 and 40, Longmore LJ said:

“39.

The parties were broadly agreed upon the relevant law in the light of the recent Supreme Court decisions of Henderson v Foxworth Investments Ltd [2014] UKSC 41; [2014] 1 WLR 2600 and McGraddie v McGraddie [2013] UKSC 58; [2013] 1 WLR 2477 the latter of which cited with approval Hamilton v Allied Domecq Plc [2006] SC 221, para 85. In the latter case it was said:-

"If findings of fact are unsupported by the evidence and are critical to the decision of the case, it may be incumbent on the appellate court to reverse the decision made at first instance."…

We have also had regard to the last three reasons why appellate courts are warned not to interfere with findings of fact unless compelled to do so as enumerated by Lewison LJ in Fage UK Ltd v Chobani UK Ltd [2014] EWCA Civ 5…

40.

There will be (and have been) rare cases where an appellate court is compelled to set aside findings of fact made by an experienced trial judge but we are far from convinced that that is the case here. None of the challenged findings can be said to be unsupported by the evidence and the decision is certainly not one that no reasonable judge could have reached. The case was not an easy one for the judge but he grappled with all the potential difficulties of the evidence and came to a conclusion which, we feel able to say (although our own opinion is immaterial) was probably correct.”

In short, to be overturned on appeal, a finding of fact must be one that no reasonable judge could have reached. In practice, that will usually occur only where there was no evidence at all to support the finding that was made, or the judge plainly misunderstood the evidence in order to arrive at the disputed finding.

Appeals on Matters of Expert Evidence

A first instance judge’s assessment of, or evaluations based upon, expert evidence adduced at trial must be approached by an appellate court with similar caution. Whilst it has been said that a reconsideration of an expert’s opinion may be slightly easier than a finding of fact, because the underlying report will be in writing (see Thomson v Christie Manson & Woods Limited & Ors [2005] EWCA Civ 555), the same case also provides a salutary warning that, since the evaluation of expert evidence is likely to be bound up with a wider evaluation of matters of fact, an appellate court will still be very slow to intervene. At paragraph 141 of his judgement in Thomson, May LJ said:

“…But, even accepting that individual points such as these are amenable to judicial appellate evaluation whatever the expert opinion, no appellate court should cherry pick a few such points so as to disagree with a composite first instance decision which, in the nature of a jig-saw, depended on the interlocking of a very large number of individual pieces, each the subject of oral expert evidence which the appellate court has not heard.”

Appeals from the TCC

In Virgin Management v de Morgan Group (1994) 68 BLR 26 at paragraphs 34 – 35, Sir Thomas Bingham MR said:

“Whether a ground will be regarded as having a reasonable prospect of success will of course depend on what the point is. A prospective appellant will have difficulty in showing that the test is satisfied if he is seeking to challenge:

(1)

an official referee’s findings of primary fact based on his evaluation of oral evidence, not because of any peculiar immunity enjoyed by official referees but because of the weight invariably given to the trial judge’s factual conclusions unless and until they are shown to be wrong;

(2)

the fine detail of an official referee’s factual investigation: while the official referee’s findings of this nature are no longer final, the Court of Appeal will not readily enter upon an enquiry of this kind;

(3)

findings of fact falling within an official referee’s area of specialised expertise, particularly if the official referee has had the advantage of inspecting the site or the subject matter of the dispute in question.

We do not suggest that these are no-go areas, only that the burden on a prospective appellant in these areas will be hard to discharge.”

Some of these points were picked up in two later Court of Appeal decisions. Thus, in Skanska Construction UK Limited v Egger (Barony) Limited [2002] EWCA Civ 1914, Lawrence Collins J (with whom the other judges agreed) said:

“7.

The appeal by Egger and the cross-appeal by Skanska are brought with the permission of a single Lord Justice. Under the CPR appeals lie, with permission of the judge or the Court of Appeal, from decisions of the Technology and Construction Court, as they did in the period after 1988 from decisions of the Official Referees. But the decisions of the Technology and Construction Court have special characteristics which affect the readiness of the Court of Appeal to reconsider them on appeal. First, the findings of fact often fall within an area of specialist expertise, where the evidence is of a technical nature and given by experienced experts, and which is evidence of a kind which judges of the Technology and Construction Court are particularly well placed to assess. Second, the conclusions of fact will frequently involve an assessment or evaluation of a number of different factors which have to be weighed against each other, which is often a matter of degree. Third, the decisions may deal with factual minutiae not easily susceptible of reconsideration on appeal. Fourth, the judgments will frequently be written on the basis of assumed knowledge of the detail by the parties and their advisers, and will not address a wider audience, with the consequence that the underlying reasoning may not always be readily apparent or fully articulated.

8.

Consequently the recent pronouncements of this Court on appeals against findings of fact apply with particular force to the decisions of the Technology and Construction Court. In particular this Court will be reluctant to interfere with a trial judge, not only on findings of primary fact based on the credibility or reliability of witnesses, but also where conclusions of fact involve an assessment of a number of different factors which have to be weighed against each other and involve an evaluation of the facts.”

And in Yorkshire Water Services Limited v Taylor Woodrow Construction Northern Limited [2005] EWCA Civ 894, May LJ said:

“27.

I do not consider that the advent of Part 52 of the CPR has altered this court’s approach to applications for permission to appeal from factual decisions of TCC judges. The fact that permission to appeal is now needed in many cases, where formerly it was not, does not predicate a more relaxed approach than formerly in TCC cases. As Lord Bingham said, a reasonable prospect of success will depend on what the point is. But he had expressed agreement with the policy behind the pre-1988 rule stated by Waller LJ in Moody v Ellis. The policy has been somewhat relaxed, and findings of fact such as Lord Bingham described on page 35 in Virgin Management are not no-go areas. The burden on a prospective appellant in these areas is nevertheless hard to discharge. In my view, the more complicated and technical the facts, the harder generally speaking is the burden. The reason again is obvious. The more complicated and technical the facts, the longer and more expensive would be this court’s enquiry, whether by review or re-hearing, and the more disproportionate would be the whole exercise for the parties and the court alike. Importantly, this court would have the disadvantage of not having heard any of the witnesses, including the experts, give oral evidence. I venture to think that, at the extreme, some questions of fact may be so complicated and technical that they should only be investigated in detail judicially once, provided that the resulting decision is not palpably incompetent. That would not only apply to decisions of TCC judges. The facts in the present case are quite close to any extreme. So far from being palpably incompetent, Forbes J’s factual decisions are, so far as I have been able to judge, of the highest quality. In so far as I have reached this conclusion upon no more than 5 days reading and one day of oral argument, care must be taken, as Lord Bingham said, to prevent applications for leave blossoming into dress rehearsals for a full appeal.”

Mr Eklund argued that Skanska and Yorkshire Water were no longer good law and I should not follow them. He offered no basis for that conclusion. At one point during the hearing, he seemed to advance an alternative submission that both cases could be distinguished from the present case because they arose after longer trials and concerned longer judgments. Mr Quiney submitted that Skanska and Yorkshire Water remained good law and said that they dealt pragmatically with the effect of the general rules (as to the restrictions on appeals against findings of fact and/or evaluations of expert evidence) in the particular context of a detailed TCC judgment. He also said that there were questions of proportionality which separately justified the approach in Skanska and Yorkshire Water.

I accept Mr Quiney’s submissions. There is no basis on which I could find that the decisions in Skanska and Yorkshire Water – both of which address the test in CPR r.52.6(1) - were no longer good law. On the contrary, not only are they binding on me, but I consider that they represent sensible guidance as to the right approach to applications for permission to appeal from a TCC judge. The fact that, doubtless in part due to the improvement in case and trial management techniques over the last 15 years, the present case was resolved by the judge after a shorter trial than occurred in Skanska or Yorkshire Water, is manifestly not a proper ground of distinction.

Summary

In those circumstances, I consider that the applicable principles can be summarised as follows:

I should add that whilst, for obvious reasons, my focus has been on the TCC, I see no reason why these principles should not apply equally to appeals from any other specialist court. I note that Teva UK Ltd v Boehringer Ingelheim Pharma GmbH & Co KG [2016] EWCA Civ 1296 broadly adopts the same principles for appeals in patent cases.

With those principles in mind, I turn to consider the application for permission to appeal in the present case.

Millennium’s Application for Permission to Appeal

Preliminary Observations

The first point to make is that, at trial, the principal issue was the cause of the fire. The judge rejected Millennium’s case on causation. He agreed with Wheeldon that the cause of the fire was the failure of the bearing on a conveyor (which had been a problem since it was first installed and had twice been replaced). This caused a build-up of combustible waste material in the bearing housing (which would otherwise have passed through the process). This ignited and the fire then spread to the roof.

The question of causation still matters because, although Millennium do not now seek directly to challenge the judge’s conclusion as to the cause of the fire, there are times when their other criticisms of the judge can be traced back to that fundamental question. Millennium’s failure on that central issue, and the absence of challenge to the judge’s conclusion as to causation, necessarily colours any consideration of the remainder of this application.

In addition to the cause of the fire, the factual matters in issue at trial concerned the features of the machinery, the recycling and fuel-recovery operation, and the general state of the premises (with particular regard to storage, cleaning, maintenance and record-keeping). I note that almost all the factual evidence at trial emanated from Wheeldon and that, although Millennium might have relied upon some relevant factual evidence concerning an inspection of the premises prior to the fire by their consultants, Secon, they chose not to adduce it.

Having dealt with causation, in the remainder of his judgment, the judge worked through the other issues which had been agreed by the parties. Starting at issue 3, these were concerned with the scope and extent of the particular conditions precedent relied on by Millennium, and whether or not the evidence about the working environment at the premises immediately before the fire meant that those conditions had been breached.

The judge’s conclusions as to how particular conditions should be interpreted were matters of law, but they cannot be divorced from the detailed factual background. That is because, as he correctly pointed out at [60(i)], it is a basic principle of insurance law that “every underwriter is presumed to be acquainted with the practice of the trade he insures and that whether it is established [the practice] or not”. This was a busy waste-to-energy operation where recycling was undertaken and fuel was produced following the removal of non-combustible material from the waste input. Accordingly, the judge’s interpretation of the conditions was not just a matter of law but also the result of his consideration of the factual context provided by the particular premises which had been insured.

Having identified what the conditions were and what they meant, the judge then went on to consider whether or not there had been a breach of those conditions. Those findings were matters of fact, based on his evaluation of the interlocking factual and expert evidence.

I deal with the eight grounds of appeal below. Since the eight grounds are in a rather random order (and do not always follow the logical sequence of the judgment), I have endeavoured to address them in the order in which they arise in that judgment.

Ground 1: Risk Requirement 4 (Storage of Combustible Materials)

Given the judge’s conclusions as to causation, Risk Requirement 4 became the most important of the conditions precedent to liability. It required Wheeldon not to store combustible materials within six metres of fixed plant or machinery.

The argument as to the interpretation of this clause was dealt with by the judge at [78] – [79] as follows:

“78.

Issue 3 (c) is that of interpretation of Risk Requirement 4. Mr Eklund QC says that the “positive obligation… to store materials more than 6 metres from fixed plant and machinery” means “that such materials had to be placed (or kept) 6 metres from fixed plant and machinery…”. Mr Quiney says that definition of storage is so wide as to be meaningless. He emphasises that “storage, store or storage area denotes something deliberate. It’s a decision to keep something somewhere, to designate an area that’s intentionally – that things are intentionally placed in”. He contrasts storage “with simply part of the process where materials are incidentally placed from time to time and removed from time to time; for example at the beginning of the process, the waste material is placed on the floor near the first shredder and then is put within the shredder. That is not a storage area, that is just part of the process.

79.

I accept that argument. Risk Requirement 4 applies to “storage” which import a degree of permanence and a deliberate decision to designate an area to place and keep material. In my judgment, Mr Eklund’s definition does not do justice to the language used in the Risk Requirements.”

On behalf of Millennium, Mr Eklund says that the judge was wrong to reach this conclusion and says that the judge should have agreed with his interpretation of Risk Requirement 4.

I do not consider that Millennium has a realistic prospect of success on ground 1. The judge’s interpretation was informed by the oral evidence he heard from witnesses and experts about the premises, the machinery and the process that was in operation: see paragraph 24 above. Since that was detailed evidence that this court would be unable properly to consider afresh for itself, it is not appropriate to grant permission to appeal the judge’s conclusion as to the proper interpretation of Risk Requirement 4.

Moreover, as a straightforward matter of construction, it seems to me that the judge was plainly right. Mr Eklund’s interpretation would mean that any piece of waste placed less than 6m from the plant and machinery, no matter how small and no matter how it got there or how long it remained, would negate the insurance altogether. That is not a common sense reading of the policy. It substitutes the word “stored” for the word “kept” or “placed”, a process that can also be seen in paragraph 17 of Mr Eklund’s first skeleton argument. Mr Quiney’s interpretation, with which the judge agreed, gives meaning and effect to the word “stored” as denoting a deliberate act of storage for at least a period of time.

In addition, this interpretation is also consistent with the use of the expression “storage area” later in Risk Requirement 4, and with the approach of the experts. They produced a table in their Joint Statement which took each area of the building and asked whether material was within 6m of the plant; whether that material was combustible; and whether or not it was in a storage area. That approach seems to me to be correct and in accordance with the proper interpretation of Risk Requirement 4.

Accordingly, both because I consider that this was a question of law which could not be divorced from the factual matrix, and because I consider that the judge’s construction was plainly right in any event, I refuse permission to appeal on ground 1.

Ground 7: Combustible Waste in Area B

This is the first of the judge’s findings as to the presence of stored combustible material in specific areas of the building and which Millennium now seek to challenge by their application for permission to appeal. On analysis, the issue is even more refined than that, because it concerns the judge’s finding that trommel fines (that is to say, the residue of glass, stone and soils produced by the trommel, which was designed to remove small and dense elements from the process) were not combustible.

The judge’s detailed findings are at [89] – [93] inclusive, where he said:

“89.

Turning then to the areas shown on [B/40] which I read with the table at [B/11].

(i)

Area A. Mr Eklund does not argue in his Written Closing Submissions for breach of the condition precedent in area A. In any event the experts agree that there was no combustible material at the time of the fire and the area was not a storage area.

(ii)

Area B. It is common ground that there were trommel fines in the location. Both experts agree that trommel fines contain combustible materials, but as I have already set out, I accept Dr Jowett's conclusion that a layperson would conclude that the material was not combustible. Mr Eklund makes much of the witness marks at page 6 of his written closings but as I explain at paragraphs 56-58 of this Judgment I am not satisfied that the witness marks have the decisive feature which Mr Braund would have me accept.

90.

Mr James Wheeldon says at paragraphs 4.15-4.20 [C/18-19] that the bulk of trommel fines are materials such as glass, stone or soils. That is consistent with the function of the trommel, which is to remove small dense non-combustible elements from the processor.

91.

Moreover, samples of trommel fines do not burn when tested (see Mr James Wheeldon at paragraph 5.16 [C/22] and Dr Jowett at 4.53(c) [B/77].

92.

Mr Braund did not carry out any tests similar to that carried out by Dr Jowett. It is unnecessary for me to criticise him for that failure and I do not do so. But the fact remains is that having discarded the overstated significance of witness marks, the only evidence before me is that of Mr James Wheeldon and Dr Jowett to the effect that trommel fines are not combustible in the ordinary or layman's meaning of that word. In any event, the pile of trommel fines removed after the fire were not burned. (see James Wheeldon at paragraph 9.11 [C/28]).

93.

Mr Quiney also placed some reliance upon the CCTV evidence which, he said, does not show the pile of trommel fines burning during the Fire. I was not greatly assisted by the CCTV evidence. On the material available to me I conclude that trommel fines were not combustible.”

It seems to me plain that the finding that the trommel fines were not combustible was based fairly and squarely on the judge’s evaluation of the factual and expert evidence. It does not get anywhere close to the sort of finding referred to in Fage, Henderson or Grizzly Business with which an appellate court might interfere.

I consider that this conclusion is supported by the fact that, although Mr Eklund devoted 20 paragraphs of his skeleton argument to this ground, he did not (and could not) suggest that the contested conclusion was not open to the judge or that the judge had reached it based on a misunderstanding of the evidence; Mr Eklund was simply endeavouring to show that the judge could (and he submits should) have reached an alternative conclusion. Of course, these were the sorts of detailed arguments of fact, weight and the like which Mr Eklund was quite entitled to pursue at first instance, but having done so and lost, he is not entitled to re-argue them all over again in the Court of Appeal.

I will take just one example of these detailed points in order to demonstrate the futility of the application for permission to appeal on ground 7. Mr Eklund submits that the judge should not have taken account of certain tests undertaken by Dr Jowett, Wheeldon’s forensic expert, because his own expert, Mr Braund, was not invited to take part in that testing. That is a bad point for so many reasons. Dr Jowett’s testing incontrovertibly showed that the trommel fines did not burn, so the judge had at least to take account of the results when answering the question as to their combustibility. Mr Braund chose not to undertake his own testing, so could not contradict the results. And Mr Braund could offer only vague speculation on the issue in any event. This was all part of the judge’s overall evaluation, and he reached a conclusion on the non-combustibility of the trommel fines which was plainly open to him.

Thus it seems to me that, in accordance with the authorities outlined in Section 2 above, this is classically not a matter for the Court of Appeal. I therefore refuse permission to appeal on ground 7.

Ground 2: Combustible Materials in Area F

There was a dispute about whether there were combustible materials stored less than 6m from the plant in Area F, where the fire started. Area F was the only area which ticked each of the three boxes in the Joint Statement referred to in paragraph 32 above. The issue was whether the steel barrier in the area provided proper segregation in a way that was consistent with the insurance contract. The judge’s conclusions are set out at [97] – [100] as follows:

“97.

Area F is the area where SRF was stored. That material is combustible. Mr Eklund argues that "the facts as agreed by the experts suffice to establish non-compliance with RR4 and therefore breach of the condition precedent to liability".

98.

That broad assertion does not consider the segregation arrangements as they are described by the experts in their Joint Statement at paragraph 2.5.13 [B/23].

99.

Mr Braund is recorded at 2.5.13(g) as considering "that in area F the steel barrier provided a degree of segregation from the fixed plant and machinery but no direct comparison with the Secon examples, owing to this steel enclosure around the conveyors shown in the Secon photograph with the concrete bollards".

100.

That is a reference to Dr Jowett's view which is set out at paragraph 2.5.13(f) [B/23]. He says that the situation "is analogous to the Secon concrete bollard example in that there are conveyors passing above what appears to be combustible materials". I prefer the evidence of Dr Jowett. Mr Braund's comment in the Joint Statement is not part of the conclusions to his report at [B/201-203].”

Mr Eklund submits that the judge was wrong to find that the segregation in place was sufficient and was “analogous to the Secon concrete bollard example in that there are conveyors passing above what appears to be combustible materials”. He says that the reference in the Secon report to such bollards at another property was too vague and unclear to permit such a finding.

It seems to me that this argument must fail for two reasons. First, the experts were agreed that there was a large steel barrier which segregated the material from the conveyor. It was therefore a matter for the judge as to whether or not that barrier was sufficient alternative segregation for the purposes of Risk Requirement 4. Secondly, his conclusion that it was sufficient, because it was akin to the bollards at the other premises viewed and photographed by Secon, was not something that the judge decided off his own bat; it was the conclusion recorded by Dr Jowett in the Joint Statement, and the subject of his oral expert evidence. The judge was therefore quite entitled to rely on that conclusion in reaching his decision.

More widely, ground 2 is one of a number of the grounds raised by Millennium where the judge considered the expert evidence of both sides and relied, for the reasons that he gave, on the evidence of Dr Jowett. Again, that was something that the judge was entitled to do: again, Millennium have not come anywhere close to demonstrating that this could be a legitimate ground of appeal.

In accordance with the principles noted in Section 2 above, I therefore refuse permission to appeal on ground 2.

Ground 3: Combustible Material in Area G

The judge’s findings at [101] – [102] were as follows:

“101.

Area G is the area near the end of the conveyor and the trommel fines bay. It is the seat of the Fire. It is agreed that combustible materials were within 6 metres of fixed plant and machinery.

102.

However, the experts agree that it was not a storage area. Mr Eklund says correctly that the issue of whether the area is used as a storage area or not is not for the experts. However, he says that what was required was that "these combustible materials should be stored (in the sense of being placed or kept) 6 metres from fixed plant and machinery". As set out at paragraphs 78 and 79 I reject that definition of "stored" and "storage". It appears from the evidence that materials were overspill or the result of the misalignment causing the build up in the bearing housing. That is not somewhere where materials were stored. It was an unfortunate consequence of the M&K conveyor.”

Millennium now say that the judge was wrong to find that there was no breach of Risk Requirement 4 because Area G was not a location where materials were stored (as he defined that obligation). However, the answer to that complaint is the same as the answer on ground 1: the judge’s conclusion was a matter of law, based in part on the factual matrix, and he was quite entitled to reach that conclusion. Indeed, as I have said at paragraphs 31 and 32 above, I consider he was right to do so.

In addition, I consider that Millennium’s argument is an attempt to re-open the debate about the cause of the fire. The material built up in this area because of the misalignment of the bearing. To say that this build-up amounted to ‘storage’ so as to bring Risk Requirement 4 into play is untenable.

For these reasons, there is no realistic prospect of the Court of Appeal interfering with the judge’s findings as to the absence of storage in Area G. Therefore I refuse permission to appeal on ground 3.

Ground 5: WA6: Formal Records of Maintenance

Condition precedent WA6 involved two separate elements: an obligation to maintain all machinery in efficient working order in accordance with the manufacturer’s specifications and guidelines, and an obligation to keep formal records of all such maintenance. Ground 5 is concerned with the second element (record-keeping) and the judge’s finding that Wheeldon were not in breach of this obligation.

The relevant findings are at [123] – [126] as follows:

“123.

As to the requirement for the keeping of formal records, the system of daily and weekly checklists that Wheeldon had in place reasonably covered the M&K checklists for the 10 and 50 hour checks as explained by Mr James Wheeldon at paragraph 10.15-10.29 of his witness statement [C/31-33]. Further, a record of the maintenance was kept both in the form of the daily and weekly checklists and in a works diary as explained by Dr Jowett at paragraphs 4.180-4.185 of his report [B104-105].

124.

Mr Eklund says that what he describes as "brief manuscript notes in Mr Booker's diary" is insufficient to meet the requirement for formal records.

125.

I am unpersuaded that records maintained in the form of daily and weekly checklists supported by a works diary are insufficiently "formal". If Insurers have required records to be kept in some particular format, it was for them to prescribe that format in their draftmanship of the Policy.

126.

On the evidence before me, there is no breach of WA6. Issue 5B does not arise.”

The judge’s findings set out above were findings of fact, based on the factual and expert evidence that he heard. The argument boiled down to the narrow issue of whether the records that were kept were sufficiently extensive or formal so as to satisfy Wheeldon’s contractual obligations. The judge’s conclusion in their favour was plainly open to him on the evidence, and it is not suggested otherwise.

During the course of the hearing, Mr Eklund took me to some of the records and said that I could conclude for myself that there was at least a realistic prospect that he could persuade the full court that such maintenance records were inadequate. I do not agree. The insurance contract did not specify any particular form of record that had to be kept. The records that were kept have to be set in their factual context. In addition, the judge heard evidence on general practices at the premises specifically concerned with cleaning, maintenance and record-keeping. The judge reached his conclusion, that the records were adequate, against that background. There can be no realistic prospect of this court coming to a different conclusion.

For these reasons, I therefore refuse permission to appeal on ground 5.

Ground 6: Failure to Maintain

This is the related ground concerned with the alleged failure to maintain the machinery. The argument focused on the particular problem that Wheeldon had with the bearing on the conveyor which had been replaced on two previous occasions, each time following discussions between Wheeldon and the supplier. The history of that was dealt with by the judge at [11] – [18]. It was Millennium’s case that these events amounted to a breach by Wheeldon of the obligation to maintain the machinery.

The judge reached the opposite conclusion, as follows:

“121.

The fact that the bearing failed does not lead irresistibly to the conclusion that there was a failure to maintain the machinery in efficient working order in accordance with the manufacturer's classifications, guidelines and any applicable regulations. Mr Booker decided to repair the bearing by its replacement which was a simple procedure: see his witness statement at paragraphs 5.4.1-5.4.5 [C/12-13]. He followed the same process as he had seen the Supplier undertake. The repair was the replacement of the bearing rather than an attempt to repair the conveyor. When the Supplier had attended they had modified the conveyor by adding an angle iron and drilling the roller shaft (see Mr James Wheeldon at paragraphs 7.11-714 [C/25-26]. Those repairs did not fail on 3^rd June 2014. Mr Booker had no reason to think that there was anything wrong with the conveyor's operation beyond the need to replace a bearing.

122.

In Mr Braund's report dated 12^th October 2015 [F/23], he said "… it was reasonable for Wheeldon to replace the bearing for a second time and continue using the conveyor". evidence of what he did and the reasoning he applied is persuasive evidence that the machinery was maintained in accordance with WA6. His decision as to that is supported by Mr Braund. There is no evidence of any breach of WA6(a).”

Again, the complaint is simply that the judge was wrong to make the finding of fact that he did. It is not suggested that there was no basis for the finding made. In his oral submissions Mr Eklund criticised the judge for focusing on the history of the bearing, and suggested (for the first time) that there was no evidence of any maintenance work being undertaken that would have ensured that the bearing would not fail for a third time.

The answer to these criticisms is that, once again, the judge reached a conclusion that was open to him on the evidence. Indeed, in this instance, his finding was based (at least in part) on his acceptance of the evidence of Mr Braund, Millennium’s own expert. Mr Braund had not suggested that the bearing failure amounted to a breach of the maintenance obligation: on the contrary, he said that Wheeldon acted reasonably in making all their decisions in respect of the bearing. In the absence of any expert evidence to support it, Mr Eklund’s new point may not even be open to him. But even if it is, the judge was quite entitled to come to the view that the maintenance was sufficient. There is no realistic prospect of the Court of Appeal reaching a different conclusion.

In accordance with the principles noted in Section 2 above, I therefore refuse permission to appeal on ground 6.

Ground 4: WA7: Cleaning/Good Level of Housekeeping

At trial, it was Millennium’s case that Wheeldon were in breach of WA7, a condition precedent in respect of cleaning/housekeeping. The judge again reached a different conclusion. The complaint is that he should have agreed with Millennium.

The relevant parts of the judgment were:

“128.

The Claimant's evidence is that there was a good system of housekeeping in place (see the evidence of Mr James Wheeldon, paragraphs 10.1-10.9 [C/29-33]. It involved the operatives taking care to keep the Plant clear throughout the day and a period of at least an hour at the end of the day to clean, as explained at paragraph 10.7.2 and 10.7.3 of Mr James Wheeldon's evidence at [C/30]. The system was structured around daily and weekly checklists that covered all the machines (see paragraph 10.7.7 of Mr James Wheeldon's evidence at [C/30]). The system focussed on and considered the risks of fire giving particular care and attention to high risk areas, see Mr James Wheeldon at paragraph 10.7.5 [C/30]. The trommel and conveyor were inspected daily and were to be "run clean" and swept around (see paragraph 10.7.19 of Mr James Wheeldon's evidence at [C/31-32]. There were weekly checks that would include a "deep clean" (paragraph 10.7.20 at [C/32]). Wheeldon kept daily and weekly records logging the cleaning régime (see paragraph 10.7.7 of Mr James Wheeldon at [C/30]). The CCTV evidence (such as it is) shows regular and effective cleaning as summarised by Mr Martin Brooker in his Second Statement at paragraphs 5.1 to 5.6.4 [C/39-43].

129.

Mr Eklund says that there is no evidence of procedures to be undertaken at the end of the day to clean up combustible materials and that there is no evidence of procedures being in place to ensure the trommel fines were cleared away from the trommel bay at the end of the day. I have already found that trommel fines are not combustible within the meaning of the Policy.

130.

Mr Eklund also complains of the absence of a log book but, as summarised above, there were daily and weekly records logging the cleaning régime. Again, if Underwriters require a particular form of log to be taken, kept and produced, it was for them to define that requirement in the Policy.”

Again therefore, the issue raised by Millennium was largely one of form rather than substance. In answering it, the judge considered all of the relevant evidence and reached a conclusion in favour of Wheeldon, based on the factual evidence and the documentary records. He expressly dealt with and rejected the specific arguments put forward on behalf of Millennium by Mr Eklund.

As with the maintenance records (ground 5), Mr Eklund said that the records relating to cleaning were neither technical nor complex and that the Court of Appeal could reach their own views as to their adequacy. I disagree for the reasons explained at paragraph 52 above. In this instance, the judge heard from and accepted the evidence of Wheeldon’s witnesses, as he was entitled to do, which dealt with the regular and effective cleaning system that was in place and the records that were kept of it. Moreover, I also reject the submission, made to me orally, that the judge did not deal in sufficient detail with the allegations in relation to the housekeeping records (because, for example, he did not seek to marry up every record with every part of the obligation). The relevant parts of the judgment, noted above, make it clear beyond doubt how and why the judge concluded that there was no breach of the relevant housekeeping condition. That is the end of the matter.

In all those circumstances, there can be no basis for granting permission to appeal on ground 4.

Ground 8: Co-Insurance

On the papers, I found this a puzzling ground of appeal. That was because the ground itself referred to the co-insurance clause, and alleges that the judge was wrong to say that the co-insurance clause did not apply. But the only criticised paragraph of the judgment, namely [147], seemed to deal with a different topic.

That paragraph said:

“With the exception of requirement 4 in the email of 3^rd April 2014 [D/137] there was no or little evidence that the subjectivities had been completed. However, I accept Mr Quiney's pleading point summarised at paragraph 140 above. I refer to it in shorthand form as a pleading point but it is more significant than that. It was open to Millennium to have taken any point which they wished. They have raised a good number of issues. At no time, to my knowledge, have they raised any failure to comply with any of the other requirements/subjectivities in the email at [D/136]. There is thus no reason why Wheeldon should have called evidence that they had complied with any of the other subjectivities/conditions. There is evidence as is plain from my earlier findings that Wheeldon had complied with subjectivity/requirement 4.”

After further oral elaboration during the hearing, the following emerged:

The fact that the above explanation was necessary in the first place, and the gaps in the story that it still leaves, serve only to emphasise to me that, on this ground at least, there is a very real danger of ‘island-hopping’ by the Court of Appeal (as per Fage).

The judge concluded that the only “subjectivity” whose incompleteness was in play during the trial was Risk Requirement 4, that combustible waste be stored at least six metres from any fixed plant. I have already said at paragraphs 27-33 above, in respect of ground 1, that Millennium are not entitled to permission to appeal in respect of that issue. On that basis, because the judge found that no other incomplete subjectivities had been raised by Millennium in their pleaded defence, the obligation under Memorandum 15 (and the email of 3 April) had been discharged, such that the co-insurance clause did not apply.

However, at the hearing of the application for permission to appeal, Mr Eklund submitted to me that, since the email of 3 April said that confirmation of compliance had to be received by Millennium, he was entitled to say that the absence of any such confirmation that Requirement 4 had been completed or complied with meant that the co-insurance clause still applied. In response, Mr Quiney pointed out that at no time had any such breach or non-compliance ever been alleged against Wheeldon. It had never been pleaded that there had been a failure to provide confirmation. Mr Eklund did not suggest otherwise. Therefore, Mr Quiney said that this argument was simply not open to Millennium. That, of course, chimes with the judge’s conclusion.

I accept with Mr Quiney’s submissions. The alleged absence of any confirmation was not a point which Millennium had ever taken, let alone pleaded, and it is much too late to allow them to do so now. In all those circumstances, this last ground of appeal has no realistic prospect of success. It is either parasitic on other grounds which I have already rejected, or it raises a pleading point to which both the judge and I have found that Millennium has no answer. I therefore refuse permission to appeal on ground 8.

Conclusions

For the reasons set out above, I refuse Millennium’s application for permission to appeal.

I have considered a number of applications for permission to appeal in TCC cases over the last six months. Complaints about factual findings and expert evaluation, of the kinds unsuccessfully raised in the present case by Millennium, are surprisingly commonplace. It has therefore been convenient to use this judgment to re-state the relevant principles that are and will continue to be applied by the Court of Appeal to appeals on such matters from the TCC, and for that purpose only, I direct that this judgment can be referred to in other cases. I hope it provides at least some guidance to the parties in TCC litigation, and to the judges who sit doing that work around the country, and who are the first port of call for any application for permission to appeal.

Finally, it is appropriate to pay proper tribute to the deputy judge (a specialist TCC silk with considerable experience of both fire and process plant cases) for the clear and prompt way in which, in his judgment, he worked through the shopping list of issues raised by Millennium.