England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE CH l99l G 8O26

IN THE COURT OF APPEAL (CIVIL DIVISION ) CH l994 G 2283

(MR JUSTICE HARMAN )

Royal Courts of Justice

Strand

London W2A 2LL

Friday l3th February l998

B e f o r e

LORD JUSTICE PETER GIBSON

LORD JUSTICE BROOKE

LORD JUSTICE MUMMERY

REX GOOSE Appellant

v.

(l) WILSON SANDFORD & CO

(2) GERARD MAINON Respondents

(Handed down transcript of

Smith Bernal Reporting Limited, l80 Fleet Street

London EC4A 2HD Tel: 0l7l 42l 4040

Official Shorthand Writers to the Court)

MR ALAN BOYLE QC and MR PHILIP MARSHALL (instructed by Messrs Sharpe Pritchard, London WC1V 6HG) appeared on behalf of the Appellant (Plaintiff).

MR RONALD WALKER QC and MISS CATHERINE BROWN (instructed by Messrs Hextall Erskine, London E1 8ER) appeared on behalf of the Respondents (Defendants).

J U D G M E N T

(As approved by the court)

©Crown Copyright

LORD JUSTICE PETER GIBSON: This is the judgment of the court to which all members of the court have contributed.

l. The Plaintiff, Rex Goose, appeals from the order of Harman J. on lst April l996. By that order the judge dismissed a consolidated action brought by Mr. Goose against Wilson Sandford & Co., a firm of chartered accountants practising in Brighton. Mr. Goose sued the firm (l) for damages for breach of contract, negligence and deceit, and (2) for equitable compensation for breach of fiduciary duty and for dishonestly assisting a fiduciary, Peter Bray, in a dishonest breach of fiduciary duty.

A. HISTORY OF THE DISPUTE

March-May l984

2. Mr. Goose is a Lincolnshire farmer who on his father's death in l983 inherited Hagbeach Farm, a farm of some 480 acres at Whaplode Drove, Spalding, Lincolnshire. His family has farmed in that area for more than l00 years. He was interested in acquiring a farm in France as farmland there was very much cheaper than in England. His intention was to raise the purchase moneys on the security of Hagbeach Farm. In March l984 he was given the name of Mr. Bray as being someone also interested in acquiring a French farm. Shortly afterwards Mr. Goose met Mr. Bray. Unknown to Mr. Goose Mr. Bray was a fraudster who had twice been convicted and sentenced to terms of imprisonment and had already been made bankrupt. Mr. Bray gave Mr. Goose to understand that he was interested in buying a farm for himself or for the Brent Foundation, which was said by Mr. Bray to be a Liechtenstein trust of which the beneficiaries were Mr. Bray's family. The trust was said to have farms in Zimbabwe and some semi-precious stones ("the gemstones") held in Zurich and worth U.S.$500,000. Mr. Goose was at the time considering the purchase of a particular farm in the Tours region. On 29th March l984 Mr. Bray wrote to him on paper headed Intas Technical & Managerial Services Ltd. with a Swiss address, offering to undertake arrangements to enable Mr. Goose to purchase the farm. Mr. Bray suggested funding the transaction through a Swiss intermediary and creating a capital reserve. That transaction did not proceed, but Mr. Bray and Mr. Goose visited France together to look at some farms and had other meetings. Mr. Goose was impressed by Mr. Bray, so much so that he made him an unsecured loan of £l0,000 on 20th May l984. He was willing to enter into a syndicate scheme suggested by Mr. Bray for each of them to buy farms in France with money raised in Switzerland at the low interest rates prevailing there on the security of their own assets, Mr. Bray using the gemstones and Mr. Goose Hagbeach Farm. The borrower in Switzerland was to be an English company, Intag Estates Ltd. ("Intag"), which on 2nd May was incorporated for Mr. Bray and of which Mr. Bray was to be the chairman and Mr. Goose was to be a director. Both were to be shareholders. Another possible participant in the scheme was Mr. Tony Riby.

3. The true position on the gemstones, though never revealed to Mr. Goose, appears to have been that they originally belonged to the Holford Trust Ltd., a subsidiary of an American company. In l982 Mr. Bray asked the Holford Trust to assist him in providing security to Trinkaus & Burkhardt (Switzerland) Ltd. ("Trinkaus & Burkhardt"), from whom Mr. Bray hoped to obtain a facility. Trinkaus & Burkhardt are the Swiss subsidiary of a German bank owned by the Midland Bank. The Holford Trust agreed, taking promissory notes from the Brent Foundation, signed by Mr. Bray. It is not clear whether that constituted a sale of the gemstones either to the Brent Foundation or Mr. Bray. The promissory notes were never honoured. The gemstones were sent to Trinkaus & Burkhardt where they were kept at Zurich airport in the duty-free zone. Mr. Bray acknowledged to the Holford Trust that the gemstones were held to its order. Although Trinkaus & Burkhardt do not appear to have given Mr. Bray the facility, by July l984 they were claiming that he owed them debts of some Sfr. 60,000 and nearly U.S.$8,000. Further, on 26th August l982 they had by telex confirmed to Barclays Bank that they intended to remit up to U.S.$83,000 of the proceeds of the gemstones to that bank to cover debts then owed to it by Mr. Bray's wife and they were not prepared to release the gemstones without that bank relinquishing any rights resulting from that confirmation.

June l984

4. Mr. Bray suggested to Mr. Goose, and Mr. Goose agreed, that Wilson Sandford, of whom Mr. Bray had heard, be instructed to act as Intag's accountants. Mr. Bray met one of the four partners, Robin Wilson, on 20th June l984. Mr. Bray represented to Mr. Wilson that all the Bray family assets had been put into the Holford Trust, the interest in which had been replaced by a Swiss trust. Mr. Bray said that he was the sole beneficiary of that trust and that it owned the gemstones; they had been transferred to Zurich where they were under the "guidance" of Trinkaus & Burkhardt, and should not be brought to the UK as VAT would be payable. Mr. Bray gave Mr. Wilson a list headed "Stones delivered to Bray", detailing the gemstones and giving them a value of U.S.$525,l88.25. This was a list which appears to have come from the Holford Trust. Mr. Wilson's note of the meeting with Mr. Bray makes no reference to Intag and in a telex sent to Trinkaus & Burkhardt on 28th June Mr. Wilson said that Wilson Sandford had been instructed to inform them that Wilson Sandford had instructions to act in connection with all the financial affairs of the Bray family. Mr. Wilson asked to be provided with a schedule of all investments held by Mr. Bray, his family and the family trust and with a list of all the gemstones together with a valuation. Mr. Karl Schaefer of Trinkaus & Burkhardt spoke to Mr. Wilson on the telephone and in a telex on l0th July informed Mr. Wilson of the amounts to be paid to have the gemstones released (viz. Sfr.60,720.05 and U.S.$7,858.7l) and of the requirement of a release from Barclays Bank. Mr. Schaefer continued: "The price indications of the stones held as collateral are mentioned on the accompanying certificates for which we refuse any responsibility with respect to the prices mentioned as well as the authenticity of the certificates". He listed the gemstones with their values, which totalled U.S.$498,7ll.

5. Mr. Wilson in his oral evidence said that he was told on 20th June by Mr. Bray about a farming project in France involving Intag. He was told that there was a consortium comprising Mr. Bray, Mr. Goose and Mr. Riby, each of whom was to buy farm properties in France, the purchase money to be borrowed under an umbrella organisation, Intag. He said that he accepted instructions on behalf of Wilson Sandford to act for Intag in connection with the project. Wilson Sandford were to be Intag's auditors and their office was to be its registered office.

July l984

6. On llth July Mr. Wilson wrote himself a memorandum under a heading of Mr. Bray and Intag. In it he recorded that meetings had taken place that day with Linda Goetz of Depinna Scorers & John Venn, a firm of Notaries Public and Solicitors, and with John Dewhurst of J.F. Chown, a firm of tax consultants. It is apparent from that memorandum that it was contemplated that three farms in France would be purchased, one for Mr. Bray, one for Mr. Goose and one for Mr. Riby. Among the points noted were:

"(5) It is agreed that 3 French companies will be formed each to own the Farms in one particular area. The formations will be dealt with by Linda Goetz but Wilson Sandford need to provide advice regarding the shareholdings in the Intag (Sologne) Sarl which will be buying the Farm known as La Devinniere with the shares being held by Rex Goose."

7. Another paragraph recorded that Intag would hold signed share transfers in respect of the three French companies so that "in the event of necessity" the shares could be transferred to Intag, and that Wilson Sandford would keep the transfers. It was also noted that concern had been expressed that the local accountants dealing with Mr. Riby and Mr. Goose might not report the circumstances of Intag "correctly" and that it was necessary to make certain that "if possible all affairs are dealt with by one firm of accountants but this cannot be guaranteed until a meeting has taken place with Goose & Riby."

8. Mr. Dewhurst on l6th July reported to Mr. Wilson, giving tax advice on the project and recommending a particular corporate financing structure. This showed Intag as owned by Mr. Bray and owning a French company and Mr. Riby and Mr. Goose together owning another company which in turn owned two French companies; each French company was to own a farm. At that stage the scheme recommended by Mr. Dewhurst was a joint venture or partnership with profits and losses on the farms being shared. Also in July Mr. Milne of HarvestMinster Ltd., instructed by Mr. Bray to act as the adviser to Intag on financial administration, wrote two reports, one on farm acquisition and development, and the other on the sinking fund which he was advising should be set up. Intag was said to have been formed to provide the basis of a syndicate operation to purchase and operate farms in the UK and France and to be providing a loan of Swiss francs to cover all or part of the projected outlay on Devinniere.

9. On l8th July Mr. Wilson wrote to Mr. Bray sending a copy of the telex of l0th July from Mr. Schaefer, noting the omission from Mr. Schaefer's list of the gemstones of six items which had been shown on the list headed "Stones delivered to Bray" and saying he thought it important that various other decisions were taken, in particular whether once the liabilities had been agreed, they were to be settled by selling the gemstones or by other funds being passed to Trinkaus & Burkhardt.

l0. On 24th July Mr. Wilson, after discussing the proposed scheme with Mr. Bray, wrote to Mr. Dewhurst informing him of changes to the scheme. The French companies were to be eliminated and the farms were to be purchased by Intag, as Mr. Bray's company, by a UK company for Mr. Goose and by Mr. Riby for himself respectively. He referred to the gemstones which, Mr. Wilson said, the Brent Foundation held. He said that it was hoped that some of the gemstones would be sold in the near future. On 3lst July Mr. Dewhurst produced a revised report suggesting that Mr. Bray, Mr. Riby and Mr. Goose were each to invest in a farm in France, the investments to be financed by £l.5m borrowed in Switzerland, with additional capital contributions from each of them out of their own assets. Mr. Bray was to provide up to £200,000 from the gemstones, Mr. Riby £l50,000 and Mr.  Goose £l25,000 from a charge on Hagbeach Farm. Intag, shown as owned by Mr. Bray, was to acquire a French farm for him, using part of the Swiss loan. Mr. Riby, using another part of the Swiss loan, was to acquire another French farm. Mr. Dewhurst continued to recommend that a French company be used to own the French farm to be purchased for Mr. Goose with a further part of the Swiss loan and to farm it, and that that company in turn should be owned by a UK company owned by Mr. Goose.

August l984

ll. On lst August l984 Mr. Wilson wrote on behalf of Intag to Mr. Moore, the chartered accountant who acted for Mr. Goose in respect of his English farming business, seeking information on Mr. Goose's affairs in order to make a presentation to a clearing bank in the UK It was envisaged that such a bank would be required to give a guarantee to the Swiss lender and would require security from the participants in the project. On 3rd August he wrote to Mr. Goose, referring to a telephone conversation between them that week and enclosing a synopsis of the report prepared by Mr. Dewhurst and he also referred to Mr. Milne's report in connection with the sinking fund. He said to Mr. Goose that he was sure that there would be various points which Mr. Goose would like to discuss with him. By l0th August Mr. Wilson caused the proposed scheme to be changed so as to cut out the French company, the farm for Mr. Goose instead to be owned directly by an English company. On l3th August Mr. Wilson wrote to Mr. Goose, enclosing forms to enable an English company to be incorporated for him, but saying that the use of a French company might not be necessary. On l5th August Mr. Goose supplied Mr. Wilson with the information sought from his accountants. But he did not complete the company forms, and he expressed concern regarding his proposed liability with Intag. He said that he would like to see the extent to which his liability extended if Mr. Riby failed or Mr. Bray's farm failed.

l2. Mr. Wilson had been having conversations with Mr. Riby and he, like Mr. Goose, expressed reluctance to charge his UK assets to support a borrowing in Switzerland. Only Mr. Bray, as a memorandum of Mr. Wilson of 7th August records, was insisting that all the borrowing be in the name of Intag and that it was "a joint venture, not with each deal being split individually."

l3. On 20th August Mr. Wilson wrote to Mr. Bray. He said that Barclays Bank would be prepared to provide a back-to-back guarantee to obtain a Swiss borrowing only if UK assets were pledged in support as it would not like a charge on the French assets. He said that Mr. Riby and Mr. Goose were not prepared to pledge their UK assets in support of Intag's borrowing. He suggested that it would be simpler to divide the structure into three separate vehicles with Mr. Bray and Mr. Goose purchasing through UK companies and Mr. Riby purchasing in his own name. He said that although he knew that Mr. Bray had told Mr. Goose and Mr. Riby that Intag would put up the security and that effectively they would be free from any guarantee affecting their UK security, he (Mr. Wilson) did not feel that it was realistic nor did he believe that Intag, even with Mr. Bray's "Swiss Trust Fund", had sufficient capital behind it. But he commented:

"We have at least been able to lay down a definite structure for approaching the whole deal with the right conditions for each of the 3 of you."

September l984

l4. On 7th September l984 there was a meeting between Mr. Bray and Mr. Wilson in London. There are three pages of manuscript notes in Mr. Wilson's handwriting which the judge said were written by Mr. Wilson for his own purposes and were not notes of interviews or conversation. However it is apparent from the oral evidence of Mr. Wilson both in chief and in cross-examination that they were notes of that meeting and record what he was told by Mr. Bray. One note read "Tfr [transfer] House [at March and belonging to Mrs. Bray] into Intag (UK) Ltd. - Put in at high price eg £60,000. Barclays loan £53,000." The reference to that company appears to be an inaccurate reference to Intag. Mr. Wilson in his oral evidence thought that this was an arbitrary figure at the top end of its market value and having a new Barclays loan to Intag would have the effect of discharging Trinkaus & Burkhardt in respect of any obligation under their telex of 26th August l982. A further note read: "Stones not in Foundation yet i.e. no Security/Asset in Brent Foundation at all. Just need to pay off bank's costs". Mr. Wilson in his oral evidence said that this meant that Mr. Bray was telling him that, contrary to the information which Mr. Bray gave him when they first met, the gemstones had not yet been put into the Brent Foundation, and therefore there were no assets in that Foundation and no security could be given. There was also a note: " Holford Trust Over the counter shares - Assets divided 4 ways - may be some shares instead of gems". Mr. Wilson explained that Mr. Bray told him that he was trying to take control of the Holford Trust and he was trying to exchange shares for the gemstones in some way.

l5. Mr. Bray on or shortly after l3th September l984 sent a notice of a meeting of Intag and its Board on l9th September l984 to a number of people including Mr. Goose, Mr. Riby, Mr. Milne and Mr. Wilson. That notice contained the agenda which included the issue of shares, the appointment of directors and auditors and the funding of farm purchases. With the last item was a reference to a policy document. It was prepared by Mr. Bray and sent out with the notice. It stated that it formed the basis of the agreement between Mr. Bray and Mr. Riby, which had had to be implemented prior to the first Board meeting. It further stated that it was agreed that the funding of farm purchases would be from a borrowing in Swiss francs supported by a bank guarantee. Paragraph 4 of the paper was in this form:

“Individual borrowers will satisfy the company auditors, financial advisors and bankers as to the security for their borrowings and their security will be made available to the company and through it to the support bankers."

l6. Paragraph 6 stated that if the stated conditions were complied with, the responsibility of borrowers would be for their portion of the fund on an individual basis and not as joint and several guarantors.

l7. Before the meeting, Mr. Wilson on l7th September wrote to Mr. Bray warning him that following a number of conversations with Mr. Schaefer, there was no doubt that pressure was growing on him for Mr. Bray's debts to Trinkaus & Burkhardt to be paid. Mr. Wilson said that they were threatening legal action and that in order to prevent this, it was obviously going to be essential for Mr. Bray and Mr. Wilson to fix a date to meet Mr. Schaefer and decide on the amount to be paid. Mr. Wilson enclosed a copy of an article from The Times two days earlier which discussed the sapphire market and contained a description of the gemstones market as "disastrous". Mr. Wilson said that he was not sure whether Mr. Bray's gemstones came into the category of gemstones to which the article referred, but he commented that "this would be another good reason to try to take part of your value from the Brent Foundation as securities rather than merely as stones."

l8. The meeting on l9th September was attended by (amongst others) Mr. Bray, Mr. Goose, Mr. Riby (with his own accountant and solicitor) and Mr. Milne. Mr. Wilson wrote the minutes as those of the first meeting of the Board. They recorded the appointment of Mr. Bray and Mr. Goose as directors and of Wilson Sandford as auditors, and the allotment of some shares to Mr. and Mrs. Bray jointly and some to Mr. Bray and his farm manager jointly. They also recorded agreement that Mr. Goose would be allocated shares but not until the Board gave its approval following Mr. Goose's acquisition of farms via financing from Intag. Para. 8 of the minutes stated that the policy paper was adopted in principle and would form the basis of agreement between Mr. Bray and Mr. Goose, Mr. Riby, after taking advice, not wishing to be a director. The minutes are comparatively brief and formal.

l9. The judge heard oral evidence of the meeting from four of those who attended. Mr.  Riby, whose evidence the judge found broadly credible, said in his witness statement that Mr. Bray tried to hustle the meeting through the business quickly, but that he (Mr. Riby) and his advisers had insisted on asking many questions and that Mr. Bray soon became very quiet in something of a sulk, leaving Mr. Wilson and Mr. Milne to try and answer the questions posed. Mr. Riby said that Mr. Wilson and Mr. Milne did most of the talking. Mr. Riby was particularly keen to satisfy himself as to the fairness of the division of collateral which Mr. Goose, Mr. Bray and he were each to contribute. He remembered that in response to his and his advisers' queries on that matter, the response of Mr. Wilson or Mr. Milne was that Mr. Bray was to put in the gemstones which alone were worth more than what Mr. Goose or Mr. Riby was to put in, so why fuss to identify what other assets Mr. Bray might have available. To Mr. Riby's prompting that the gemstones should be brought to this country, the response was that by bringing them to England £90,000 duty (by which was meant VAT) would be incurred. Mr. Riby said that he did not recollect a direct statement as to the value of the gemstones other than by implication from that £90,000 figure and the assurance that the gemstones alone were worth more that Mr. Goose's and Mr. Riby's contributions.

20. Mr. Riby in his witness statement said that he could not recall the individual contributions of, nor in exact terms the representations made by, Mr. Milne and Mr. Wilson, but said that both were putting forward the proposals and trying to satisfy Mr. Riby's reservations. He said that he recalled that the role of the gemstones as a protection against currency fluctuations was stressed. In cross-examination by Mr. Walker Q.C. on behalf of Wilson Sandford, Mr. Riby was asked whether he could distinguish between Mr. Milne and HarvestMinster on the one hand and Mr. Wilson of Wilson Sandford on the other. Mr. Riby's reply was:

"This was a quite clear situation, I think: HarvestMinster were the people selling the sinking fund."

2l. Mr. Riby said in cross-examination that he was quite confident that there were discussions about the gemstones at this meeting and he deduced that it was Mr. Wilson who had mentioned the figure of £90,000 as the VAT payable if the gemstones were brought to the UK With VAT at l5% the inference was, he said, that the gemstones were worth £600,000. Mr. Riby said that it was suggested that it would be silly to bring gemstones from a secure situation just to satisfy him. He repeated the gist of that evidence in answer to further questions from the judge, though he added that a remark about the role of the gemstones as a protection against currency fluctuations sounded more like coming from Mr. Bray.

22. Mr. Milne also gave evidence about the meeting. He said that the gemstones must have been mentioned, but he had no recall of the figure of £90,000 VAT being mentioned. He said that Wilson Sandford had been attempting to get information of the value of the gemstones and he could not obtain finance for the project without it.

23. Mr. Goose gave evidence in chief that U.S.$500,000 of gemstones were mentioned by Mr. Wilson as held in Zurich as a buffer against currency fluctuations. Mr. Goose said that Mr. Bray and Mr. Wilson agreed that Mr. Bray was putting in more than what Mr. Riby and Mr. Goose were putting in. In cross-examination Mr. Goose repeated that evidence and said that Mr. Wilson referred to the gemstones as Mr. Bray's stones. He had not asked Mr. Wilson about the gemstones.

24. Mr. Wilson in cross-examination accepted that the role that Wilson Sandford were intended to perform pursuant to paragraph 4 of the policy document was to make sure that the security being provided by the individual participants was adequate security, but denied making any representations about the gemstones.

25. The judge found that Mr. Wilson had a very poor recollection of the meeting, but the judge said:

"My assessment of Mr. Wilson is that he is not a man to put himself forward and I am not satisfied that Mr. Wilson made any statement, whether about Value Added Tax or otherwise, from which the value of the gemstones, which are not mentioned in the Minutes of the meeting taken by Mr. Wilson, was stated or implied to that meeting. It may be that Mr. Milne .... made some reference to V.A.T. or possibly Bray did so. I hold that it is not proved that Mr. Wilson did so .... In my judgment I cannot be satisfied that Mr. Wilson made any representation to Mr. Goose on l9th September l984 about the value or even ownership of the gemstones."

26. The Board meeting was the first occasion on which Mr. Goose met Mr. Wilson. After the meeting there was, according to Mr. Goose, a conversation between the two of them. Mr. Goose's evidence was that he had made a beeline for Mr. Wilson and said:

"I want to make sure there is nothing untowards me as regards to this whole project."

27. The judge found that this curious use of language rang true. Mr. Goose explained that "nothing untowards me" meant that he wanted "everything straight" that there was no "jiggery-pokery" and that "it was right". Mr. Goose's evidence was that Mr. Wilson's response was that he did not want anything to be wrong. Mr. Wilson could not recall any conversation with Mr. Goose on this occasion. The judge accepted Mr. Goose's evidence as substantially correct and that it was directed by Mr. Goose to satisfying himself that he was not getting involved in some illegal or improper transaction.

28. Mr. Goose on 20th September called on his own solicitors, Roythornes, in Spalding. He saw Mr. Tongue whose attendance note records:

"You produced numerous documents concerned with your proposal to borrow half a million pounds in Swiss francs through Intag Limited, which was an English Company set up to organise the borrowing for you and two other people in the syndicate you were joining. The money was coming from a private source in Switzerland, which was lending to Allied Irish Bank Limited, who were then lending to Intag Limited, who in turn would lend to the members of the syndicate. The members of the syndicate were alleged to be liable only for their own loans, and it was agreed that it was essential that this was ll0% certain."

29. Mr. Goose told Mr. Tongue that he had seen his own accountant who knew an international tax expert in Lymington and that he (Mr. Goose) was going to send the papers to him to look at the position from the tax and finance side. Mr. Goose said that he would come back to Roythornes if there were any legal aspects to sort out. He also told Mr. Tongue that he was going to buy l80 acres adjoining Hagbeach Farm, and was hoping to finance it by a bridging loan from the Bank and later by the loans from Intag.

October l984

30. On lst October l984 Mr. Riby's solicitors wrote to Mr. Wilson, saying that he had come away from the meeting on l9th September with the impression that if Mr. Riby put £50,000 into Intag, he would be free to withdraw it without strings, unless and until it was pledged as collateral for a loan being taken out by Mr. Riby himself, Intag being merely a vehicle through which he, Mr. Bray and Mr. Goose could pursue their separate projects. Concern was expressed that there had been a change in the situation, Mr. Riby being asked to commit that sum to Intag on a more binding basis, the money to be used to secure Intag's liabilities, and this implied a risk that it would not be available to Mr. Riby. Mr. Riby was not prepared to put his money at risk to enable another's project to go forward. He therefore ceased to be involved in the scheme.

3l. On lst October Mr. Wilson wrote two letters. One was to Mr. Bray. Mr. Wilson told him that Mr. Schaefer of Trinkaus & Burkhardt had phoned him on at least four or five occasions that week. Mr. Wilson said:

"Disturbingly Mr. Schaefer states that in his opinion the stones held in Zurich are of very low value and will not cover the Swiss debts which you have. This is obviously in direct contradiction to the value shown in the Telex [of l0th July l984] which I hold and I have no way of knowing the value myself.

However, I am convinced that we will need to realise some of the stones both to pay the Swiss debts when they are finally agreed and also to inject capital into Intag .... [I]t is also essential that we obtain a valuation of the gems, totally independently, so that the true market value can be established; I think it fair to say that the market in gems at the present time is weak and we will need to decide the amount which we need to raise at the present time."

32. The second letter was written to Mr. Goose. This was headed Intag and recorded Mr. Wilson's understanding of Mr. Goose's wish to borrow on lst December l994 £300,000 to acquire land adjoining his farm and to borrow on 30th June l985 another £500,000 to purchase a farm in France. Mr. Wilson said that in order to raise that finance through "our source" it was essential that he received documentation to support a loan application.

33. On l7th October Mr. Bray and Mr. Goose held a Board meeting of Intag. The minutes signed by Mr. Bray record that it was requested that Mr. Goose was to complete the purchase of additional land in Lincolnshire, and that this would be effected through Intag, and that a "compromis" or contract for the purchase of La Devinniere had been signed by Mr. Bray and that the purchase would be completed through Intag. Mr. Bray asked Mr. Goose to lend a further £50,000, £25,000 for the compromis and £25,000 for working capital for Intag, this despite the fact that promises by Mr. Bray to pay the earlier loan of £l0,000 had come to nothing. Mr. Goose duly obliged on l8th October.

November l984

34. On lst November Mr. Wilson produced a document on Wilson Sandford's headed paper and headed "P.J. Bray Statement of Affairs as at 3lst October l984". This, Mr. Wilson accepted, was to be used to support applications to banks for loans. It listed what purported to be assets of Mr. Bray totalling £l,350,000 including a house at March which in fact belonged to Mrs. Bray and "Beneficial interest in Brent Foundation .... (Value per Telex attached) 498,7ll US Dollars". The Telex attached was part of the Trinkaus & Burkhardt telex of l0th July l984 listing the gemstones with their given values but without the disclaimer by those bankers of responsibility for the values. The Statement of Affairs states at the bottom of the page "Based on information supplied by P.J.Bray, Esq." Nevertheless, Mr. Wilson was lending it authenticity by the use of the Wilson Sandford headed paper, and the judge rightly commented that it was a disgraceful document for any Chartered Accountant to use.

December l984

35. During this month Mr. Wilson was quite heavily involved in matters concerned with the ownership and value of the gemstones. First, he received a letter from Mr. Schaefer of Trinkaus & Burkhardt dated llth December in which he asserted its and its lawyers’ rights to the sums claimed against Mr. Bray and the Brent Foundation, and threatened precipitate action if these debts were not settled by 30th January l985. In this letter Mr. Schaefer said that Mr. Bray had always been aware that the value of the gemstones stated on the certificates represented a multiple of their market value and that the price of 75% of that value at which he wanted to sell the gemstones was not achievable. Mr. Schaefer ended this letter by saying that if the debts were not paid, the collateral, by which he meant the gems, would be sold at the best obtainable price. His company estimated that this would be approximately Sfr.5,000-l0,000. Legal action would also be taken against Mr. Bray for cheque fraud. Mr. Wilson told the judge that when he spoke to Mr. Schaefer he found him to be a very emotive individual, and he felt he was trying to put pressure on his client to clear up the situation.

36. On l3th December Mr. Wilson received a phone call out of the blue from Mr. Boyce-Mears, a director of the Holford Trust. In a contemporary note Mr. Wilson recorded that the assets, meaning the gemstones, had been transferred from the Holford Trust into the Brent Foundation to raise a loan for expansion in Zimbabwe, but that when they arrived in Switzerland, Trinkaus & Burkhardt had not accepted them as security for the loan. The Holford Trust was therefore willing to take the stones, whose combined valuation on the telex was U.S.$498,000. The value of semi-precious stones was said to have fallen over the last few years. The note ended by stating that Mr. Boyce-Mears was desperate to take the stones back into the Trust. They belonged to the Holford Trust, or to clients of the Trust. Peter Bray had no interest in the Holford Trust, or in the stones. The words “no” and “or” were underlined. Mr. Wilson told the judge that he found this an odd phone call. Mr. Boyce-Mears contradicted himself several times, and Mr. Wilson could not really see how he fitted into the picture.

37. When Mr. Wilson spoke to Mr. Bray on l8th December, the only reference to the Holford Trust in his note related to his agreement to carry out a search on the Trust, since Mr. Bray was interested in buying complete control of it in the coming year. Mr. Wilson spoke to Mr. Schaefer the same day to discuss the possibility of a settlement between £20,000 and £25,000.

38. Mr. Wilson told the judge that Mr. Bray had told him that while it was correct that the Holford Trust had been instrumental in bringing the stones from America to Switzerland, the Trust now had no interest whatsoever in the stones and that what Mr. Boyce-Mears had told him was untrue. He described him as untrustworthy and dishonest. Since this telephone call was not followed up in any way, and Mr. Wilson had no way of checking what he was told, because his client was in dispute with Mr. Schaefer, Mr. Wilson said he was disposed to believe Mr. Bray and to wait until the stones were sold to ascertain what they were really worth. He thought that Mr. Bray accepted that the market in stones had fallen, but he hoped it would recover, and Mr. Boyce-Mears, too, had believed they still had a substantial value. Mr. Wilson stressed that as an accountant he was not in a position to warrant the title or value of any security a client might be offering, since he would rely on the security department of any lending institution he approached to carry out this task. The judge’s own impression of Mr. Boyce-Mears, who gave evidence at the trial, was that he was a confusing witness who could easily give an impression of unreliability.

39. Mr. Wilson said that he did not tell Mr. Goose about his conversation with Mr. Boyce-Mears because after his conversation with Mr. Bray he did not believe Mr. Boyce-Mears. He added that he did not think he was authorised to reveal information to Mr. Goose about Mr. Bray’s private affairs.

40. During the course of this month steps were being taken to take forward the acquisition in Mr. Goose’s sole name of two parcels of land adjoining the Hagbeach Farm land with money purportedly to be lent by Intag. These parcels of land, together with Hagbeach Farm, were then to be used as security for the borrowing required to buy Mr. Goose a farm in France. Mr. Wilson was also in touch with the Co-operative Bank’s branch manager in Brighton as a prospective source of finance to Intag. When Mr. Wilson came to prepare his firm’s bill for professional services up to 3lst December l984 it was addressed to Mr. Bray alone.

January l985

4l. During the first part of this month Mr. Wilson achieved a prospective settlement figure with Trinkaus & Burkhardt of £23,500. He reported to Mr. Bray the results of his company search on the Holford Trust, and was told by him that the agreed completion date for the La Devinniere Farm had been put back to l5th February. Intag staff were in fact running the farm, by agreement with the vendors, from the beginning of the year. Discussions continued with the Allied Irish Bank as a potential short-term lender (with long term funds said to be available in due course from the Co-operative Bank (“the Co-op”)). Mr. Francis was engaged at the same time in seeking a building society which would take over from Barclays Bank their lending on Mrs. Bray’s house at March, since this would free the gemstones from any possible incumbrance asserted by Barclays. Mr. Bray also instructed Mr. Wilson in connection with a new venture, the possible acquisition of a hotel, wine importing and restaurant group in London, but Mr. Wilson told the judge that this idea did not last for long. Towards the end of the month, the name of a new possible source of finance to Intag, Mr. Phipps of International and Commercial Bank, was noted by Mr. Wilson. Mr. Bray was now scouting the possibility of transferring the value of the gemstones into Swiss bonds, with an option to convert back into gemstones in seven years’ time. Mr. Goose told the judge that he went to see Mr. Phipps at this time together with Mr. Bray and Mr. Francis. He gained the impression that Mr. Phipps was very keen on the proposal.

42. On 30th January Mr. Bray wrote to Mr. Wilson setting out details of the Intag funding proposals he now wished to put forward to Mr. Phipps’s bank and Mr. Francis. A total of Sfr.3 million (say, £l million) was to be sought. In the first phase, £450,000 was sought: to bring the two additional parcels of farmland into Mr. Goose’s sole name (£l20,000) and to complete the purchase of La Devinniere (£300,000). Mr. Goose’s land, with the two extra parcels, was to be offered as security. In the second phase, what Mr. Bray called “the trust” would support the borrowing of Sfr.3 million. The sterling borrowing would then be cleared off and the remainder of the La Devinniere estate would be acquired. Mr. Bray asserted that the total net assets available would be Mr. Goose’s UK farmland, which he valued at £665,000, the French farmland at La Devinniere (£530,000) and what he called the trust fund which he put at £300,000 (the sterling equivalent of U.S.$500,000 which he mentioned as the value of the gemstones). His letter included a reference to “other underlying assets supporting the trust” (mews house lease in Belgravia, Zimbabwe/Zambia farms and other property and holdings) to which he ascribed a value of £375,000, but Mr. Wilson made a manuscript note “not as security” against these items. Mr. Bray envisaged net earnings of £60,000 from the UK farms, £70,000 from La Devinniere, and £60,000 from Gracay (the farm which Mr Goose wished to acquire), totalling £l90,000, of which £90,000 would be needed to pay interest on the Swiss borrowing and £l00,000 would be available for capital repayments. Under these proposals, therefore, money would be available on the security of Mr. Goose’s farmlands for the first tranche of Intag borrowing without Mr. Bray having to put up any security at all.

February l985

43. On lst February Mr. Wilson set out all these details in a letter to Mr. Francis, who had already received professional valuations of Mr. Goose’s land and the La Devinniere estate. In Stage l, £l43,500 was to be used on buying the two extra parcels of land for Mr. Goose, and the balance on completing the acte de vente on La Devinniere. In stage 2, £650,000 in Swiss francs would be used, as to Sfr.500,000 on delayed purchase payments on La Devinniere and as to Sfr.l,l50,000 on the l8-year lease of Gracay Farm to be acquired for Mr. Goose. Mr. Wilson said that in addition to Mr. Goose’s farmland, rare gemstones were to be deposited in support of the Swiss franc borrowing, and he enclosed what he called a summary valuation in the sum of U.S.$498,7ll, together with individual valuations and pictures of the stones. He enclosed with his letter an article in The Times the previous day which was said to emphasise the portability of precious stones and their ability to retain value. (This article was in fact headed “All that glisters is not a good investment”, and although it includes the sub-title mentioned by Mr. Wilson, it has a further heading, borne out by the text, of “Stones you should leave unturned”.)

44. It appears that Mr. Phipps’s Bank was not interested in this proposition, but Mr. Francis then turned to the company which turned out to be the eventual lender, which we will call Mansons. Mansons were being invited to provide the Stage l borrowing, described as a £400,000 facility for one to two years, with £200,000 being drawn down on completion of the loan and the remainder being available as a line of credit. Mr. Goose’s lands, valued at £665,000, were being offered as security. There was no mention of the gemstones. Mansons were shown Mr. Wilson’s letter which set out the complete plan, but were told that they were only concerned with the Stage l borrowing. Since the facility was amply secured by the value of Mr. Goose’s land, Mansons offered a loan of £400,000 for l8 months, with a commitment fee of £8,000, a redemption fee of £4,000 and interest charged at 4% above Mansons’ base rate, to be secured by Mr. Goose’s farmlands and farmhouse and the personal guarantee of the directors of Intag.

45. On 27th February Mr. Wilson reported this offer to the Co-op in advance of going to see them (with Mr.Bray) on 8th March, in a letter in which he made it clear that Intag would prefer to borrow from the Co-op. He said the Swiss franc long term funding was on offer to Intag at the present time, but that its directors had been advised not to take it up until such time as the financial markets had settled down and interest rates had generally been stabilised. The Allied Irish deposit and current account of Intag were to be closed, and the proceeds remitted to Intag’s current account at the Co-op.

March l985

46. On 6th March Mr. Goose saw his solicitor Mr. Tongue, who made a note that Mr. Bray’s trust had diamonds worth U.S.$½ million at Geneva Airport, which would be security for a loan from Intag to Mr. Bray. He also noted Mr. Goose’s proposed borrowing of £l49,000 from Intag, and the fact that he was also charging his land to support Mr. Bray’s loan of £½ million (to buy land in France) until the end of the year, while Mr. Bray was supporting Mr. Goose’s acquisition of a farm in France for £¼ million on a tenanted basis in perhaps two months’ time. Mr. Goose agreed that he would bring Mr. Bray to meet Mr. Tongue and his partner, Mr. Harrod, on 22nd March to go through the Intag proposals with them.

47. Following the meeting on 6th March Mr. Tongue telephoned Intag’s new solicitor, Mr. Alldis, who was the senior conveyancing partner in the Brighton firm of Donne Mileham & Haddock. Mr. Alldis had seen Mr. Bray for the first time the previous Friday and he was understandably not yet clear about the financial arrangements, although he told Mr. Tongue what he understood the position to be. This included proposed Phase l borrowing of £450,000 on the security of Mr. Goose’s land.

48. On llth March Mr. Wilson sent Mr. Alldis details of the structure of the proposed farm deal. He said that Mr. Bray was to be in touch with Mansons that day to finalise the details of their offer, but that the security for their loan was now to exclude Mr. Goose’s farmhouse but to include the gemsstones. Mr. Wilson said that these were currently lodged in Zurich, but that they would be transferred to London, and that Mr. Francis could provide copies of all the valuations forwarded to Mr. Wilson’s firm by Trinkaus & Burkhardt. At the end of this letter Mr. Wilson said that Intag would be borrowing the full amount of the loan from Mansons and would then be making a loan to Mr. Goose’s company, which his own accountants should form, although he would be happy to do this on Mr. Goose’s account if he wished him to do so.

49. On l5th March Mr. Wilson and Mr. Bray saw the local Brighton Area Manager of the Midland Bank in their search for an alternative source of short-term finance, and Mr. Wilson wrote a letter to him on the same day, enclosing a new offer from Mansons. What was now being sought was bridging finance from the Midland Bank for £350,000 against an irrevocable letter of offer from Mansons of a loan of £400,000, to be issued within the next ten days. Thereafter Intag would seek to operate normal current account and possibly deposit account facilities with the Midland. The security for the proposed Mansons loan was again said to be Mr. Goose’s farmland (excluding the farmhouse) to which were now added “the gems to be provided by Peter Bray (valuation attached)”. On the following day Mr. Wilson sent Mansons a copy of Mr. Goose’s draft accounts for l983 (which showed a net profit of over £50,000) and his l98l and l982 accounts. His letter included an expression of his firm’s opinion that although Intag had not traded yet, it would be capable of a commitment of £5,000 per month for l2 months, and a statement that the firm unreservedly recommended their clients’ business integrity and acumen: “We also feel that they have the relevant experience required to undertake an international farming venture of this nature, and we trust therefore that you will be able to extend the facilities to them which they are seeking”.

50. On the same day, l5th March, Mr. Alldis received a telephone call from the lawyer acting for the French vendors warning him that if the purchase of La Devinniere was not completed by 22nd March, Intag’s deposit of Ffr.250,000 would be forfeited and the transaction would be at an end. Mr. Bray assured Mr. Wilson, however, that he had already taken steps to ease this situation. Mr. Wilson also learned at about the same time that the Co-op was not able to provide the finance they had been seeking. Mr. Goose was paying a two-day visit to the French farms at this time

5l. On 20th March Mr. Alldis told Mr. Tongue that the diamonds were not now part of the trust’s security, and on 22nd March Mr. Tongue and Mr. Harrod held the long meeting with Mr. Bray and Mr. Goose at which they went over the whole of the proposed two-stage scheme. At the end of the month Intag was still seeking bridging finance from the Midland, while Mansons were continuing with their investigations.

52. Mr. Milne told the judge that he thought it was in about March that his efforts to find an alternative mortgagee of the Brays’ home ended, because there were arrears with the existing mortgage with Barclays Bank. He said he would have simply told Mr. Wilson that he could not obtain the further mortgage.

April l985

53. At the beginning of this month Intag’s search for short-term bridging finance was switched to Mr. Goose’s local branch of National Westminster Bank (“Nat West”) at Spalding. The first document evidencing this new approach is a letter from Mr. Wilson to Mr. Goose dated 9th April l985 reporting the action that had been taken. What was being sought was a loan of £450,000 (divided as to £l35,000 for the Goose land and as to £3l5,000 for the monies needed for completion of the La Devinniere in two tranches now fixed for l0th and l6th April). On this occasion, too, the gemstones were to be provided as security, ranking ahead of Mr. Goose’s own land. Interest was to be rolled up for six months, and it was envisaged that the Swiss finance, from which the loan would be paid, would be forthcoming well before the end of that period. Mr. Goose had clearly been advised not to use a new company, and the terms set out in this letter reflect the concerns of Mr. Goose’s solicitors to ensure that Mr. Bray furnished the leading security for this borrowing.

54. The judge heard evidence from both Mr. Goose and Mr. Wilson about the events leading up to the writing of that letter. Mr. Goose told him that he had initially rung his bank manager on 27th or 28th March and went to see him the following week. He had told him the outlines of what was being proposed and asked him to contact Mr. Robin Wilson on the telephone. He said that his family had been away on a skiing holiday with the Bray family between 29th March and l0th April, and that Mr. Bray had returned to England a few days later, when Mr. Goose took him to meet Mr. John Wilson at the bank for a short meeting after office hours.

55. Mr. Wilson, on the other hand, told the judge that he had only a brief talk with the bank manager and that he was simply confirming in writing what had already been discussed and agreed between the bank and Mr. Goose, and that Mr. Bray had asked him to write a letter to clarify what had been agreed. He said that it had been arranged between Mr. Bray and Mr. Goose that the gemstones would rank as prior security. Mr. Bray had already had detailed contact with Nat West, whose manager knew all about the project when Mr. Wilson spoke to him. Mr. Wilson added that if the deal had gone through, Mr. Goose’s solicitors would have checked to see that the bank had agreed a value on the gemstones and taken title on the gems, and that they would then have advised Mr. Goose what his exposure would be after the value of the gemstoneshad been taken into account. He said that the fact that the gemstones would rank as prior security was of great importance to Mr. Goose.

56. This proposal had to be forwarded to the Nat West Area Office. On 24th April Mr. Harrod received a guarded warning from a third party source to be very careful about the gemstones being offered as security, and he passed this message on to Mr. Goose, telling him it would be worth while flying to Zurich to check the information about the gemstones that he had been given. On 29th April l985 Mansons made a reduced offer of a loan of £3l4,000 for l8 months with the same commitment fees and interest rate (subject now to a minimum rate of l4%) secured by Mr. Goose’s farmlands (apart from the farmhouse) and joint and several guarantees by Mr. Bray and Mr. Goose. This facility was to be used for the purchase of La Devinniere, and Mr. Goose’s solicitors were required to confirm that he and his family were fully aware of the risks involved in this speculative venture.

May l985

57. This month witnessed no positive progress on the financing arrangements, but growing pressure on Mr. Bray by various creditors. Mr. Wilson received letters from Penningtons, a firm of London solicitors, dated 30th April and l5th May l985, threatening bankruptcy proceedings on a long outstanding judgment debt of just under £20,000 (including interest) in favour of the Royal Bank of Scotland. Next, Mr. Goose began to insist that Intag should repay his loan of £50,000 before he created a charge over his farm, and that some of the gemstones should be sold as soon as possible. On lst May Mr. Wilson told Mr. Bray in a letter that he, too, was beginning to think that the sale of the gemstones was absolutely vital. Mr. Wilson reminded Mr. Bray of his debts to Mr. Schaefer (who kept telephoning), Penningtons, probably Barclays Bank on his house, Mr. Goose, and the tax consultant who had originally advised Intag and was owed just over £2,000. Mr. Wilson observed that if they proceeded to completion that week on the strength of Mr. Goose’s security then all would be well, but if not, some of the gemstones should be sold as soon as possible.

58. On 5th May Mr. Bray wrote to Mr. Goose trying to encourage him to sign a personal guarantee, backed by a charge on his farmlands, to back the Mansons loan. He made no mention of offering the gemstones as prior security. On l0th May Mr. Bray signed the Mansons facility agreement for £3l4,000 on behalf of Intag. He told Mansons that Intag was making arrangements regarding the 2% non-refundable commitment fee. The following day he made a new application for banking facilities, this time to Caisse Centrale des Banques Populaires (“Banque Populaire”). On l5th May the long suffering French vendors threatened to call off the sale of La Devinniere, and on the same day Mr. Wilson told Penningtons, on behalf of Intag, that they anticipated receiving a £3l4,000 loan within two weeks, and sought the postponement of bankruptcy proceedings until the end of the month by which time he said he was confident that the amount demanded would have been paid.

59. The stage was thus set for an important meeting on l8th May between Mr. Wilson, Mr. Bray and Mr. Goose. Mr. Wilson was driving to Harrogate with his wife and his l0-month old daughter and arranged to stop at the Brays’ house at March on the way up. He still had quite a long way to go, and he had the child’s welfare on his mind while he was at the Brays’ house. He spoke to the Brays about tax matters when he arrived, and he then talked to Mr. Bray and Mr. Goose about the Intag plans. He made notes of what was discussed at the meeting on a single page of A4 paper.

60. In this note he wrote down various sums which showed the two stages of the proposed transaction. In the first stage Intag would take the “Manson or Nat West loan” of £3l4,000. £l75,000 would be paid to Mr. Goose and the balance to Intag, who would then repay Mr. Goose’s £50,000 loan. £90,000 would be left as Intag’s working capital. In the second stage, called “Capital account”, the acquisition costs of the two French farms were put at £680,000, against which was written “less l/3 250,000 ex Trust sales”, making £430,000, described as a rolling balance from Banque Populaire, secured on the two French farms. More figures followed showing a requirement of £750,000 or more for the Swiss franc loan.

6l. It was common ground between Mr. Goose and Mr. Wilson at the trial that the words “ex Trust sales” referred to a sale of some or all of the gemstones. Mr. Goose said that he was sure that Mr. Wilson had said there was £250,000 coming from the trust fund, from the sale of the gems, and that he then wrote this down. He also understood that it would be Banque Populaire who would be providing the long term Swiss funding. He maintained that Mr. Wilson did most of the talking. Mr. Wilson, who had a very poor memory of the discussion, told the judge that it must have been Mr. Bray who made the statement about the money from the trust fund, and that he merely wrote it down. He said that he was making notes as Mr. Bray went through the procedure as he envisaged it. Most of the facts he was recording were new to him. He explained that he was no expert on gemstones and knew little or nothing about how they could be realised, and added that he would never have put forward something as an intended action himself which he had no power to achieve. He accepted that he would have recommended that a minimum of one third should be put down as unborrowed capital as he wanted to see a capital injection into Intag.

62. The judge accepted Mr. Wilson’s evidence and held that he did not make any statements to Mr. Goose or in Mr. Goose’s presence that afternoon to the effect that the stones were available for sale or that they could produce £250,000.

63. On 23rd May Mr. Wilson reported to Mr. Alldis on the effect of this meeting. He told him that Banque Populaire was prepared to finance the purchase of the French farms and to use them as security for their loans. The Mansons offer of £3l4,000 would be accepted (unless Nat West produced a much better offer within the next few days) and this would be first used to pay the procurement fee and the £l75,000 for Mr. Goose (£l44,000 for his land purchases and £30,000 as repayment of an overdraft). The balance would be paid to Intag, and Intag’s original £50,000 loan might be refunded (to Mr. Goose) at that point, but a decision about this would be made in the future. After mentioning the sums which totalled £680,000 as the acquisition costs of the two French farms, and repeating that Banque Populaire would provide the balance, Mr. Wilson said that it was anticipated that up to £250,000 would be available from Mr. Bray personally from his trust funds or his Zimbabwe monies. He anticipated that this plan might change before completion took place: at present it was hoped that completion might take place prior to 3lst May.

64. On 24th May Mr. Bray and Mr. Goose met Mr. Goose’s solicitor Mr. Harrod at his office. Mr. Harrod had prepared draft Heads of Terms for this meeting. The judge described this document as clear and competently drawn and said that it set out a rationally prepared set of proposals. The judge appears to have referred in his judgment to what was an earlier, undated draft of this agreement. We were shown a later draft, dated 23rd May, which includes details left blank in the earlier draft. This document contained what Mr. Bray must have seen as unwelcome provisions requiring him to procure a first charge of the gemstones in favour of Mr. Goose by way of collateral security to him for the performance by Intag of its obligations to Mansons in respect of the £3l4,000 loan, of which £l80,000 was to be advanced to Mr. Goose (at the same rate of interest as was payable by Intag to Mansons), and the balance was to be applied solely towards the purchase by Intag of La Devinniere.

65. Mr. Goose told the judge that Mr. Bray used this meeting to score points off Mr. Harrod and made it clear that he was not prepared to sign any document containing terms like these. Mr. Bray told Mr. Harrod that he was practising law before Mr. Harrod was in short trousers and also that he had been the first man to sell a nuclear power plant to a country behind the Iron Curtain. Mr. Bray took the document away but there was no evidence that he ever showed it to Mr. Wilson or to Mr. Alldis before he rejected its terms.

66. On 25th May Mr. Wilson told Mr. Bray that Mr. Schaefer had set a new deadline of 6th June. If his company had not received settlement by that date it would take legal proceedings against him. The gemstones would be sold over his head and if these were insufficient to settle the amount of their debts further proceedings would be taken against him personally. Mr. Wilson also mentioned he was in touch with a gem dealer who could arrange sales in the United States if required.

June l985

67. During the first l0 days of June Mr. Wilson tried, unsuccessfully, to tie a number of loose threads together. Mr. Harrod told him that he was still awaiting a redraft of the Heads of Terms from Mr. Bray, and Mr. Schaefer continued to press for payment. On 7th June Mr. Goose met Mr. Bray who confirmed to him that the Heads of Terms would not be signed, and three days later Mr. Bray sent Mr. Harrod a vague letter which enclosed what purported to be a brief summary of the way in which Mr. Goose and he saw the joint operations between them. Mr. Bray had given Mr. Goose a copy of this document the same day. Because of the alleged need on the part of Mr. Bray’s family to secure long term finance from Swiss fund services, Mr. Bray said it had been agreed that Mr. Goose would bear the currency fluctuations on all his interest payments but that “we” should carry the long term fluctuations on the capital sums. As the judge said, the enclosed document was entirely unspecific and unclear. Mr. Harrod sent a copy of this letter (and enclosure) to Mr. Alldis on l3th June, together with a copy of the draft Heads of Terms dated 23rd May, and said that his firm was concerned to see the precise arrangements set out on paper rather than mere generalities.

68. Mr. Alldis wrote to Mr. Bray on 20th June to the effect that the draft Heads of Terms involved a number of important matters of principle, on which he would need to have a meeting with him. He added, however, that he understood from Mr. Wilson that Mr. Bray did not consider a detailed agreement to be necessary, and that he proposed that there should be a simple letter addressed by him to Mr. Goose simply indemnifying him against any enforcement action which Mansons might take under the terms of its first mortgage with him.

69. On the same day Mr. Bray wrote to Mr. Goose to the effect that Banque Populaire had now agreed the funding of £300,000 “to follow up the purchase of La Devinniere”. He was going to France the following Monday and would complete the documentation during the week. He said that “we” must proceed to the Swiss franc lending as rapidly as possible, “even if on our own”, and that it was a matter for Mr. Goose to decide whether he would complete the documentation required for the Mansons loan of £300,000. If he chose to do so, Intag would “lend” to him at the standard UK bank rate plus 3% and absorb the “special costs” which accrued under this loan. Mr. Bray wished to receive Mr. Goose’s agreement to proceed before he left for France.

70. Mr. Goose discussed this letter with Mr. Tongue the following day. In his Attendance Note Mr. Tongue recorded that whereas Mr. Goose felt that Mr. Bray’s letter solved everything, he had told him that he would be foolish to put his deeds into Mr. Manson’s hands merely on his trust of Mr. Bray. His firm retained its view that nothing Mr. Bray had done was inconsistent with him being a con-man, and the longer that the situation continued the more likely it was that he was a con-man. Mr. Tongue strongly advised Mr. Goose not to get tangled up with Mansons if he could avoid it. Mr. Goose accepted that this Attendance Note was generally accurate.

7l. In the event Mr. Goose decided to go ahead in the teeth of his solicitors’ advice. He explained to the judge that he did not believe that Mr. Bray was a con-man because he was very impressed with the business Mr. Bray was going to purchase at Peterborough. This was a reference to a quite different venture which was mentioned at the start of Mr. Bray’s letter to Mr. Goose dated 20th June in the following terms:

"Events have as you are aware been overtaking us and following discussion with Robin Wilson as a trustee of the family, we have purchased a majority share holding in William Allison Ltd, a small London confirming house having a subsidiary export/import company in Peterborough.”

72. This was a reference to negotiations Mr. Bray had been having with the directors of W Allison Limited (“Allisons”) for the acquisition of a 52% interest in that company. The proposed terms, which were signed by two directors of Allisons, involved Wilson Sandford becoming the company auditors and Mr. Kane, the secretary of Intag, becoming company secretary. At an Allisons board meeting on l4th June, these two changes were implemented, and a share transfer relating to the transfer of 32,000 shares from a former director to Intag was approved subject to stamping. It appears from writs issued just over two months later that Allisons subsequently advanced over £3l,000 to Mr. Bray and/or Intag and that Intag drew a cheque in favour of Allisons for over £23,000 on lst July l985 which was duly presented for payment but dishonoured on Intag’s instructions.

73. The judge accepted Mr. Wilson’s evidence that he knew nothing about this turn of events until lst July, when he was given a copy of at least one of the relevant documents, and that he had at no time been a trustee of any settlement for Mr. Bray or his family. His first knowledge of the Allisons venture came when Mr. Bray instructed him to go to London to review and advise on the adequacy of Allisons’ book-keeping systems which he did on lst July.

74. Mr. Goose, on the other hand, had been told by Mr. Bray about this new deal on l8th June, and he saw him on 20th June in Peterborough in the offices of a subsidiary of Allisons called Ascom. He was impressed by the Ascom staff who treated Mr. Bray as their new boss, and he told the judge that this meeting gave him the belief that Mr. Bray had plenty of money. Mr. Bray had told him that it was his family trust which had bought Allisons, and he did not ask Mr. Bray the source of the funds which had been used. The judge commented on this aspect of his conduct that there are none so blind as those who will not see.

July l985

75. On 3rd July Mr. Tongue spoke to Mr. Goose on the telephone, and made an attendance note of the conversation. After clarifying the nature of the indemnity Mr. Goose was now seeking from Mr. Bray (which related to the money Intag would be retaining for itself from the Mansons loan) the note continues:

“You still did not know whether you would actually go to Manson, but the essence was that you wanted some money quickly. It seemed that you had been offered the renting of two further farms next to Devinniere, each of 500,000 acres, and you were going ahead with that.

Putting to you that you had not told us the full story, and you agreed that you had information that you had not passed onto us. Pointing out that on that basis we could not really advise you, and you accepted this. You had weighed the advice we had given you very carefully, but because of what you also knew, you had decided to proceed despite that advice. You appreciated our efforts on your behalf, and that legally our advice was entirely correct.

You had that day learned from a independent source that Bray had plenty of money. Pointing out to you that in that case the question arose as to why he didn’t use that money instead of chasing round to Manson or such outfits. You said the money was all tied up, but we pointed out that if there was security a Bank would provide the bridging."

76. Mr. Goose told the judge that Mr. Bray had told him about some deal involving Nigerian pipelines, which was probably a scam yielding Mr. Bray a commission, although he did not know how fraudulent it was. He maintained, however, that these apparent international dealings did not impress him one way or the other. The judge, however, did not accept this evidence: he said that Mr. Goose’s knowledge of these dealings added to his regard to Mr. Bray.

77. Mr. Goose said that it was Mr. Wilson who had told him that Mr. Bray had plenty of money (although he did not mention his name to Mr. Tongue) and that this information had influenced him in deciding to proceed. He maintained that after receiving Mr. Bray’s letter of 20th June (which had referred to the purchasers of Allisons as “we”), and after having several meetings with Mr. Bray at which he was told Intag was not the purchaser, he had telephoned Mr. Wilson one evening to ask him whether Intag was involved in the Allisons purchase. Mr. Wilson told him it was not. The precise date of this conversation was unclear, and the judge said that Mr. Goose’s account of these matters was also far from clear. He had given conflicting reasons for asking this question during the course of his evidence.

78. The judge said that Mr. Wilson’s evidence about this conversation was also far from clear. He held, however, that on some occasion at the end of June of the start of July Mr. Goose did ask Mr. Wilson whether Intag was the purchaser of the shares in Allisons and was told that it was unclear whether Intag was involved. The judge said that that would have been wrong since the contract claimed by Mr. Bray was being performed by payments by Intag, but he added that Mr. Wilson’s error may well have been as much due to confusion of thought as to a mis-statement of fact. The judge did not, however, accept that this representation had any material effect upon Mr. Goose’s mind or that Mr. Goose would have acted differently if Mr. Wilson had said that Intag was the purchaser.

79. The judge went on to reject Mr. Goose’s evidence that Mr. Wilson had told him during the same telephone conversation that Mr. Bray had plenty of money. Mr. Goose maintained that when he asked Mr. Wilson if Mr. Bray could afford to buy Allisons, Mr. Wilson replied that he could, and that in fact he was looking to buy a wine-bar and a hotel business in the south of England as well, and that he had plenty of money. After recording Mr. Wilson’s state of knowledge of Mr. Bray’s unpaid debts, the judge said he was satisfied after long observation of Mr. Wilson in the witness box, and his style of speaking, that it was highly unlikely that he would volunteer a phrase like this. He could see no possible motive for or benefit to Mr. Wilson from his making such a statement. The judge might have added that the only reference in Mr. Wilson’s files of the acquisition of a wine-bar business turned out to have been six months earlier. Mr. Wilson told the judge that by July this idea had been long buried.

80. On 25th July Mr. Goose duly charged his land in support of his guarantee of the Mansons loan to Intag, despite receiving a further careful letter from Mr. Tongue dated l6th July advising him in strong terms not to proceed. At the same time he and Mr. Bray guaranteed Intag’s debt to Mansons, and each agreed to indemnify the other against loss. A formal Deed of Indemnity was executed. One consequence of the availability of the Mansons money was that Intag was able to discharge its outstanding loan indebtedness of £50,000 to Mr. Goose. On 25th July Mansons paid £l47,3l4.96 to Mr. Goose’s solicitors and £l30,000 to Banque Populaire.

August l985

8l. On l3th-l4th August Mr. Goose visited Mr. Bray at La Devinniere, and Mr. Bray succeeded in persuading him to lend him £50,000 for a short time to enable his family trust to complete the Allisons acquisition. Mr. Goose was unaware of the fact that on l6th August Allisons issued a writ against Mr. Bray and Intag claiming the return of just over £3l,000 and injunctive relief until he received a copy of the writ and of an injunction in those proceedings which were sent to him on 20th August. In due course Mr. Goose was repaid £40,000 of the money he had lent.

82. In the meantime Mr. Wilson was engaged in correspondence with Mr. Boyce-Mears of the Holford Trust about the gemstones. In his reply dated 27th August Mr. Wilson said that he noted the contents of a letter he had recently received from Mr. Boyce-Mears but that it was incorrect in one respect. The letter had suggested that as a result of negotiations conducted by Mr. Wilson, the amount due to Trinkaus & Burkhardt had been agreed and that Mr. Bray was in a position to settle the debt. Mr. Wilson said that the actual amount due to the bank had not been agreed, although he had received a suggestion from it as to the amount it would be prepared to accept in settlement. The judge did not mention this exchange of letters in his judgment, and it was argued before us that as Mr. Wilson did not challenge the central premise in Mr. Boyce-Mears’s letter (to the effect that the gemstones belonged to the Holford Trust) this meant that he had received no instructions from Mr. Bray which challenged this version of the facts. Mr. Wilson told the judge that he intended not to comment on this matter until he had spoken to Mr. Bray.

September - December l985

83. The autumn of l985 saw the collapse of Mr. Bray’s schemes. During September Allisons issued a writ against Intag for just over £23,000, on which it obtained a default judgment on lst October, which led to the presentation of a winding up petition on l6th October. At the beginning of October Mr. Goose learned that Intag had defaulted on the interest payments due to Mansons. On l0th October Intag was unable to make a contractual payment which was due on the purchase of La Devinniere, because Banque Populaire had been served with notice of the English injunctions. As a result it lost its rights to the farm, and the money it had already paid was forfeited to the owners. In early November Mr. Goose paid a monthly instalment of £4,7l0 due on the Intag loan to Mansons. On 20th November Mr. Goose agreed to guarantee the mortgage outstanding to Barclays Bank on the Brays’ home at March for a short period (until the house could be sold) in return for a written charge on the gemstones. The following day Mr. Bray’s solicitors told Mr. Goose that this proposed sale could not be effected because a pending action in bankruptcy by the Royal Bank of Scotland had been registered against Mr. Bray. Mr. Goose told the judge he nearly had a heart attack when he received this news.

84. On 6th December Mr. Kane asked Mr. Goose if he would be good enough to pay him the outstanding secretarial fees of £l,050 Intag owed him. Mr. Wilson had suggested he should get in touch with Mr. Bray, but in view of Mr. Bray’s “highly questionable activities, particularly with regard to the ownership of the gems”, he did not want anything more to do with him. In the middle of that month Mr. Goose paid a further £2,500 to Intag to be used to finance a payment to Mansons.

l986-l990

85. By the end of January Mr. Goose had paid a total of £37,500 to free Intag from all Allisons’ claims against it, so that the injunctions were discharged and the winding up petition withdrawn. On llth February a Receiving Order in bankruptcy was made against Mr. Bray, and Mr. Goose duly submitted a claim in Mr. Bray’s bankruptcy. He then raised £400,000 with the help of a French bank loan to complete the purchase of part of the land at La Devinniere which Intag had contracted to buy. In March Mr. Goose learned for the first time that Mr. Bray had been an undischarged bankrupt during the whole period of his dealings with him. With the Official Receiver’s authority Mr. Goose went to Zurich and had the gemstones valued with a view to discharging the Trinkaus & Burkhardt debt, but when the valuation produced a figure of about US.$l5,000 Mr. Goose decided not to throw good money after bad.

86. Mr. Goose told the judge that Mr. Bray had given him certain documents relating to Intag’s affairs on l6th January, and that a representative of the Official Receiver gave him three dustbin liners full of Intag documents on l8th March, which he had retained at his home until l0th June when he handed them over to the police. He had taken a quick scan through these documents, but he was sure he did not see an important letter from Mr. Wilson to Mr. Bray dated llth October l984 until after Mr. Bray’s criminal trial was over in November l989. On 4th June l986 a winding up order was made against Intag, and at the end of July Mr. Goose cross-examined Mr. Bray at the public examination in his bankruptcy and put to him information gleaned from the documents he had seen. He told the judge that on 5th August l986 he asked a police officer in the case to let him see an important letter in October l984 of which the Official Receiver’s representative had told him, but the police would not let him see it. Mr. Walker submitted that this evidence was incredible, but the judge made no findings about it.

87. At the end of July l986 a defence and counterclaim was served on Mr. Goose’s behalf in an action brought against him by his former solicitors for their unpaid fees. He alleged that they had been negligent in the way they had handled his affairs. He did not at that time seek to join Mr. Wilson as a defendant to the counterclaim (as he did nearly five years later). This omission was later explained on the basis that he and his lawyers did not at that time have access to all the information which was later disclosed on discovery.

88. In October l987 Mr. Goose was made bankrupt, and the land at La Devinniere was repossessed by a French bank. In January l989 Mrs. Goose purchased Hagbeach Farm from her husband’s trustee in bankruptcy. Later that year Mr. Bray was sentenced to 4 years imprisonment when he pleaded guilty to charges of dishonesty in connection with these matters, and in October l990 Mr. Goose was discharged from bankruptcy.

B. THE PRESENT PROCEEDINGS

89. In May l99l Mr. Goose first made allegations against Mr. Wilson in the proceedings brought by his former solicitors, and on l5th July l99l he issued a writ against Mr. Wilson’s firm claiming damages for breach of contract and negligence. Inspection of the Defendants’ documents took place at the end of l993, and in April l994 Harman J. was concerned with an interlocutory application to extend to scope of the proceedings very considerably.

90. The Plaintiff was now seeking to make six different types of amendment. The nature of these amendments, and the judge's decision on each of them in his judgment of 2lst April l994, can be quite briefly summarised.

9l. Whereas in the original Statement of Claim it had been alleged that Mr. Wilson had made a single misrepresentation to Mr. Goose in breach of contract and negligently, viz. that on 3rd July l985 Mr. Wilson orally stated to Mr. Goose that Mr. Bray "had plenty of money", four other misrepresentations by Mr. Wilson to Mr. Goose were now sought to be alleged. The first three of these related to the first Board meeting of Intag on l9th September l994 (see para. 23 above), Mr. Wilson’s letter of 9th April l985 (see para. 53 above), and the meeting on l8th May l985 between Mr. Wilson, Mr. Bray and Mr. Goose (see paras. 59-62 above), when it is alleged that one each occasion Mr. Wilson made representations as to the ownership of the gemstones and their availability as security and their value. The fourth related to the telephone conversation on 3rd July l985 (see paras. 77-79 above) when it is alleged that Mr. Wilson falsely represented to Mr. Goose that Intag had no involvement in the purchase of Allisons. The judge allowed these amendments so far as they related to claims in contract and in negligence against Wilson Sandford on the ground that they were matters arising out of substantially the same facts, although they were different incidents.

92. Next, it was sought to be alleged that Mr. Wilson in making the "plenty of money" misrepresentation, as well as the four other misrepresentations, did so fraudulently, and that Wilson Sandford were accordingly liable in deceit. The judge refused these amendments on the ground that the cause of action arguably was statute-barred. He said that it was for Mr. Goose to decide whether to bring further proceedings raising that claim.

93. Thirdly, it was sought to be alleged that Wilson Sandford, through Mr. Wilson, acted as agents for Mr. Goose in negotiating the raising of finance and in advising Mr. Goose. The judge allowed the amendments on the basis that the facts which pointed to the legal relationship of agency had been set out in the original pleading.

94. Fourthly, it was sought to be alleged that Wilson Sandford, through Mr. Wilson, owed fiduciary duties to Mr. Goose and were in breach of those duties. The judge allowed these amendments as being substantially the same as what had originally been pleaded.

95. Then it was sought to be alleged that Mr. Wilson knowingly assisted Mr. Bray, a fiduciary, in that he was a party to a joint venture entered into with Mr. Goose in March and April l984 whereby they would obtain finance for the purchase by each of them of a farm in France, in the commission of a fraudulent and dishonest breach of Mr. Bray's fiduciary duties owed to Mr. Goose, and that thereby Wilson Sandford were liable as constructive trustees. The judge refused these amendments because the facts involved in this claim were identical to those in the deceit claim.

96. Finally, it was sought to be alleged that Mr. Goose, acting in reliance on the representations made by Mr. Wilson on l9th September l984 or as a result of Wilson Sandford's breaches of contract or negligence or breaches of fiduciary duty or duty as agents, (a) made the £50,000 loan on l8th October l984, and (b) between October l984 and July l985 paid various expenses totalling £766 relating to the joint venture. The judge allowed these amendments and, although he does not refer to them in his judgment, it appears that he did so on the ground that they were substantially the same facts as a cause of action already pleaded.

97. Wilson Sandford applied to the judge for leave to appeal from so much of his order as allowed amendments. The judge sensibly adjourned that application pending the outcome of the action. Mr. Goose promptly on 22nd April l994 commenced a further action against Wilson Sandford raising the claims in deceit and constructive trust and that action was consolidated with the action commenced on l5 July l99l. A consolidated Statement of Claim formed the basis of Mr.  Goose's pleadings at the trial. This was heard by the judge between 9th June and l3th July l994. The judge reserved judgment.

98. Judgment was eventually delivered on lst April l996. The judge dismissed the action. He held that Mr. Wilson and Wilson Sandford were never retained by or on behalf on Mr. Goose; that Mr. Wilson never made the alleged representations on l9th September l984, in the letter of 9th April l985, on l8th May l985 or on 3rd July l985 (except that in relation to one of the representations that day, he held that it was made and that it was false, but that Mr Goose suffered no resulting loss); that Mr. Wilson owed Mr. Goose no duty of care; and that as Mr. Bray held no trust property, Mr. Wilson could not be liable as constructive trustee to Mr. Goose for assisting Mr. Bray in a breach of his fiduciary duties.

C. THE APPEAL

99. Mr. Goose now appeals. The first ground on which he does so is that the judge was guilty of inordinate and inexcusable delay in delivering his judgment. He also challenges each of the judge's holdings to which we have referred. If we are unable to enter judgment for Mr. Goose, he asks that there should be a retrial.

l00. Wilson Sandford by their Respondents' Notice also appeal against the allowance by the judge of the

amendments to the Statement of Claim on the grounds that the causes of action added by amendment were statute-barred and could not be allowed under R.S.C. Order 20 Rule 5(5). They further say that any cause of action was barred by limitation or laches and they add that even if Mr.  Goose established any breach of contract, negligence, deceit, breach of trust or fiduciary duty by Wilson Sandford, none of his losses was caused by the same.

l0l. We shall first consider the effect of the judge's delay, and then go on to consider the Respondent’s

points on limitation and laches before discussing the alleged retainer and the alleged representations (i) on l9th September l984, (ii) in the letter of 9th April l985, (iii) on l8th May l985, and (iv) on 3rd July l985. After dealing with these issues, we will go on to consider the effect of our conclusions on them on the other issues (namely deceit, negligence, constructive trust and agency) relied on by the Plaintiff in his pleadings.

The effect of the judge’s delay

l02. The trial started on Tuesday 9th June l994, and the hearing ended just over five weeks later on

Wednesday l3th July. Opening submissions lasted two days, the evidence took l7 days, and closing submissions lasted eight days. The parties and the judge were furnished with daily transcripts of the evidence and a huge amount of written material was placed before the judge. At the end of the hearing the judge reserved judgment. We understand he told the parties that he doubted if he could give judgment that sitting.

l03. He did not give judgment during the l994 Michaelmas sittings, either. On 20th January l995 the

Plaintiff’s solicitors wrote to him asking if he could provide any indication as to when judgment might be expected. They pointed out that their client had been awaiting the judgment ever since the final day of the trial, as had Mr. Wilson, and that he was now extremely anxious to learn the outcome. The judge’s clerk replied that the judge was in the middle of drafting his judgment in these actions which was at the forefront of his attention and that the judgment would be delivered as soon as possible. The time taken was greatly regretted but the solicitors were reminded that the issues raised, both of fact and law, were complicated. Notwithstanding the judge’s assurance, judgment was not delivered during the Hilary sittings.

l04. At the beginning of June l995 leading counsel wrote to the judge’s clerk in agreed terms in order to

draw the judge’s attention to a recent decision of the House of Lords. Towards the end of June the parties’ solicitors heard that the judge was about to be admitted to hospital for a few days, and they discussed the possibility of insuring the risk that he would be unable to deliver judgment. On 5th July l995 the Plaintiff’s solicitors wrote again to the judge’s clerk on behalf of both parties. They said that they had been advised before Easter that the judgment was substantially ready, and they inquired whether they might reassure the lay clients that it would be delivered before the long vacation started. They received no reply to this letter. The judge had had to undergo surgery, and it may be that it would have been difficult to give a clear answer, but the letter should have received some form of written reply.

l05. It appears that during the Michaelmas term the Clerk of the Lists gave the parties an informal indication

that they could expect judgment by mid-November. This expectation was not fulfilled, and on l8th January l996 the Plaintiff’s solicitors were constrained to write on behalf of both parties to the Vice-Chancellor. He told them that he had spoken to the judge who had given him an assurance that judgment would be given not later than mid-February. On 20th March the Plaintiff’s solicitors had to write to the Vice-Chancellor again. They were told in reply that judgment would be ready for delivery before the end of that term, and judgment was indeed handed down on lst April l996, over 20 months after the end of the hearing. The judge wrote a personal letter to counsel for both parties asking them to give their lay clients his apologies for the extreme delay in delivering judgment. He had been seriously ill the previous summer, which added to the delay, but that was not an excuse. He was simply very sorry that so important a decision for their clients had been so long in preparation.

l06. There have unhappily been two other occasions in recent years when this court has censured judges for

delay in delivering reserved judgments.

l07. In Rolled Steel Ltd. v British Steel Corporation [l986] Ch. 246 a judge had delayed giving judgment

for nearly eight months at the end of a l9-day trial. This delay occasioned the following stricture from Lawton LJ:

“[Counsel] submitted that this long and, in my experience, unprecedented delay resulted in the judge making material findings which were not justified by the evidence. I am not satisfied that this was so. But the fact that responsible and experienced counsel, acting for a public corporation, felt it incumbent upon him to make this submission shows that long delays in delivering judgment can cause disquiet and suspicion amongst litigants who lose - and those who win may feel they have been deprived of justice far too long. Delays of this length should not occur unless there are compelling reasons why they should; and, if there are such reasons, it would be prudent of a judge to refer to them briefly. In this case, for all we know, there may have been such reasons. We have kept in mind that the parties had a most patient hearing and that the judge must have kept a very full note to deliver the judgment he did.”

l08. In Bishopsgate Investment Management Ltd. v Maxwell [l993] BCC l20 this court criticised a judge

for a five-month delay in giving judgment after a five-day hearing. Hoffmann LJ said that the members of the court thought that the time taken to deliver judgment was excessive. He added:

“We do not of course know why it took so long, but the hearing was arranged at fairly short notice to come on before the end of the summer term. The parties are entitled to feel that there was little point in exerting themselves if they were not going to have a decision for five months.”

l09. The delays with which the court was concerned in those two cases were substantially shorter than the

delay in the present case, even when due allowance is made for the judge’s serious illness during l995. As the judge himself was the first to recognise, a delay of this magnitude was completely inexcusable The Plaintiff, who was not a young man, was claiming that Mr. Wilson’s fraudulent conduct had been causative of his financial ruin. Mr. Wilson for his part was a professional man charged with serious professional misconduct amounting to fraud. Both parties were entitled to expect to receive judgment before Christmas l994 at the very latest. The fact that they were obliged to wait another year and a quarter, even allowing for the judge’s illness, is wholly unacceptable.

ll0. The Plaintiff’s first ground of appeal was that the court should infer that the judge had forgotten large

parts of the essential facts and evidence in the case, and that he had no clear recollection or impression of the demeanour of the witnesses of fact or their credibility by the time he came to deliver his judgment. Our attention was drawn to certain mistakes he made, to which reference is made in this judgment. We were also told that the judge mislaid a detailed chronology on which he had made manuscript notes of counsel’s opening submissions on the facts and also the written closing submissions prepared by counsel for Mr. Goose. Replacement documents were requested and supplied in November l995, but the judge’s own notes could not be replaced.

lll. In these circumstances we were invited to find that the judge’s misdirections had occasioned such a

substantial wrong or miscarriage of justice that we should order a new trial (see Order 59 Rule ll). Both parties had incurred very heavy costs in the original trial, and the Plaintiff was and is in receipt of legal aid. There are no provisions enabling a court to make an order out of central funds to compensate the parties in a situation like this. These considerations illustrate some of the very serious problems that are likely to arise if a judge delays giving judgment in this extraordinary way.

ll2. A judge’s tardiness in completing his judicial task after a trial is over denies justice to the winning

party during the period of the delay. It also undermines the loser’s confidence in the correctness of the decision when it is eventually delivered. Litigation causes quite enough stress, as it is, for people to have to endure while a trial is going on. Compelling them to await judgment for an indefinitely extended period after the trial is over will only serve to prolong their anxiety, and may well increase it. Conduct like this weakens public confidence in the whole judicial process. Left unchecked it would be ultimately subversive of the rule of law. Delays on this scale cannot and will not be tolerated. A situation like this must never occur again.

ll3. Because of the delay in giving judgment, it has been incumbent on us to look with especial care at any

finding of fact which is now challenged. In ordinary circumstances where there is a conflict of evidence a judge who has seen and heard the witnesses has an advantage, denied to an appellate court, which is likely to prove decisive on an appeal unless it can be shown that he failed to use, or misused, this advantage. We do not lose sight of the fact that the judge had transcripts of the evidence, as well as very extensive written submissions from counsel. But the very fact of the huge delay in itself weakened the judge’s advantage, and this consideration had to be taken into account when we reviewed the material which was before the judge. In a case as complex as this, it is not uncommon for a judge to form an initial impression of the likely result at the end of the evidence, but when he has come to study the evidence (both oral and written) and the submissions he has received with greater care, he will then go back to consider the effect the witnesses made on him when they gave evidence about the matters that are now troubling him. At a distance of 20 months, Harman J. denied himself the opportunity of making this further check in any meaningful way.

Limitation and Laches

ll4. Section 2 of the Limitation Act l980 (the l980 Act) provides that:

“An action founded on tort shall not be brought after the expiration of six years from the date on which the cause of action accrued."

ll5. Section 5 provides a six year limitation period for an action founded on simple contract, while Section

32 provides for the postponement of the limitation period in case of fraud, concealment or mistake. Omitting immaterial parts, it provides that:

"(l)...... where in the case of any action for which a period of limitation is prescribed by this Act, either-

the action is based upon the fraud of the defendant; or any fact relevant to the plaintiff's right of action has been deliberately concealed from him by the defendant; or

[mistake]

the period of limitation shall not begin to run until the plaintiff has discovered the fraud, concealment or mistake (as the case may be) or could with reasonable diligence have discovered it.

References in this subsection to the defendant include references to the defendant's agent and to any person through whom the defendant claims and his agent.

For the purposes of subsection (l) above, deliberate commission of a breach of duty in circumstances of which it is unlikely to be discovered for some time amounts to deliberate concealment of the facts involved in that breach of duty."

ll6. The relevance of those provisions in the l980 Act to these proceedings arises in the following way.

Action l99l G 8026 - The First Action

ll7. In the first action, commenced by writ issued on l5th July l99l, Mr Goose claimed damages for breach

of contract and negligence occurring between May l984 and June l986 and for a negligent misstatement by Mr Wilson on or about 3rd July l985 as to the creditworthiness and financial standing of Mr Bray. The defence served on 20th December l99l (paragraph l7(3)) pleaded that the claims for breach of contract and negligence were statute-barred by virtue of the l980 Act, as any cause of action, which Mr Goose might have had in relation to the matters pleaded as " omissions" or monies paid by him as a result of them, arose more than six years before the issue of that writ.

ll8. The first action was listed to be tried on l2th April l994. As we have already described, Mr Goose then

applied for leave to amend by adding new causes of action and for leave to serve an amended statement of claim. In his reserved judgment of 2lst April l994 Harman J. refused leave to add new causes of action alleging deceit and constructive trust relating to the allegations of deceit, because of questions arising on the possible effect of the l980 Act on those claims. Other amendments already referred to were allowed under Order 20 Rule 5(5).

Action l994 G 2283 - The Second Action

ll9. On 22nd April l995 the second writ was issued for deceit in respect of representations alleged to have

been made by Mr Wilson on the dates mentioned above. The writ was amended on 26th April under Order 20 Rule 3 to include a claim for equitable compensation for breach of fiduciary duty and for knowing assistance on the part of Mr Wilson of Mr Bray in dealing with property in breach of his duty as a trustee.

l20. A consolidated statement of claim was served on the 25th April l994. In the defence served on 5th May

l994 it was pleaded (paragraph 58) that the causes of action were statute-barred by reason of sections 2 and 5 of the l980 Act and that Mr Goose had discovered or could with reasonable diligence have discovered the alleged fraud more than six years prior to the issue of the writ on 22nd April l994. As for the claims for breach of contract, it was alleged that they had accrued either on l9th September l984 or prior to l5th July l985 and were statute-barred. Laches was pleaded in relation to the claim for equitable compensation.

l2l. In the reply served on l2th May l994 it was specifically denied (paragraph 4) that the cause of action

based on fraud was statute-barred. It was alleged that Mr Goose did not discover and could not with reasonable diligence have discovered the fraud of Mr Wilson more than six years before the issue of the second writ. Reliance was placed on an affidavit sworn on l8th April l994 in the first action.

l22. It was also denied that the causes of action for breach of contract, negligence and /or breach of tortious

duty were statute-barred. It was alleged that material facts had been deliberately concealed by Mr Wilson and had only been discovered and/or were only discoverable with reasonable diligence on the part of Mr Goose within six years of the date of the issue of the second writ in l994. Particulars were given of the facts and matters alleged to have been deliberately concealed.

l23. In his judgment on lst April l996 Harman J., having rejected all Mr. Goose's claims, dismissed the

action and said (page 48E of the transcript)

"The pleadings raised as defences to the various claims by Mr. Goose assertions that the causes of action, or some of them, were barred by the statutes of limitation or, in the case of equitable claims, by the doctrine of Laches where Equity would follow the law. In the light of my conclusions upon the facts of this case no claim succeeds against Mr. Wilson and the questions of limitation do not therefore arise. I shall not attempt to make obiter dicta pronouncements upon points of some difficulty."

l24. In those circumstances the judge made no specific findings on the disputed factual questions whether

Mr. Wilson had deliberately concealed certain facts and whether Mr. Goose had only discovered certain facts within the limitation period or could, by reasonable diligence, have discovered them earlier.

Limitation issues in the Appeal

l25. No grounds of appeal on the limitation point were raised in the Notice of Appeal, but in the

Respondent's Notice served on 3rd July l996 it was indicated that Mr Wilson would contend that the judgment should be affirmed or varied on an additional grounds, i.e. that the judge had erred in the exercise of his discretion in granting leave to amend the statement of claim in the first action, by reason of the fact that the causes of action added by the amendments were statute-barred and not permissible under Order 20 Rule 5(5); and that (paragraph 4)

"Any cause of action that the plaintiff may have had, whether arising out of the meeting on l9th September l984, the letter dated 9th April l985, the meeting on l8th May l985, any conversation on 3rd July l985, or otherwise, was barred by limitation, alternatively laches."

l26. On the hearing of the appeal it was argued by Mr. Boyle Q.C., on behalf of Mr. Goose, that there was

no basis for attacking the exercise of the judge's discretion in relation to the grant of leave to amend the statement of claim in the first action. Most of the claims in it were not, in any case, affected by limitation defence. On the plea of limitation to the claims in deceit advanced in the second action, it was recognised that there was a potential for the claim to be statute-barred, but it was contended that under Section 32 of the l980 Act time did not begin to run until Mr. Goose had discovered the fraud or could with reasonable diligence have discovered it. It was submitted that Mr. Goose did not discover, and could not, by reasonable diligence, have discovered Mr. Wilson's fraud until he saw the documents disclosed by Mr. Wilson in the course of the first action. In relation to the other causes of action Mr. Goose submitted that relevant facts were deliberately concealed by Mr. Wilson and were only discoverable by exercising reasonable diligence within six years of the issue of the second writ. The particular difficulty facing this court on the appeal was identified in paragraph 7l of Mr. Boyle's skeleton argument. It reads:-

"Unfortunately, the learned judge made no findings in relation to concealment of material facts or in relation to the inability of Mr. Goose to uncover them exercising reasonable diligence. Accordingly, if the limitation defences arise as a material issue in the appeal then the Court should order a trial of the factual issues which arise either by the trial learned judge or by another learned judge."

l27. Mr Walker advanced the argument that the judge was wrong to allow the amendments to the first

action, all of which pleaded new causes of action, which causes of action were, or were at least arguably, statute-barred. He was wrong to take the view that the new causes of action arose "out of the same facts or substantially the same facts" within the meaning of RSC Order 20 Rule 5(5). We agree that the new causes of action added by the amendments referred to in paragraphs 9l, 93, 94 and 96 above do not arise "out of the same facts or substantially the same facts as a cause of action in respect of which relief has already been claimed in the action" by Mr. Goose. The judge therefore misdirected himself in the exercise of his discretion with the result that the cross appeal will be allowed on that ground alone and that the order of the 2lst April l994 will be set aside to the extent that leave to make those amendments was granted. This does not, however, remove the matters pleaded in the amendments from the litigation since, by virtue of the commencement of the second action, these matters remain pleaded in a consolidated statement of claim and, for reasons explained in paragraph l30, the issue whether the claims are statute barred cannot be resolved by this court on the appeal.

l28. Mr. Walker also developed his contentions that all of the claims in the second action were prima facie

statute-barred and made detailed submissions in response to the points raised under section 32 in relation to Mr. Goose's knowledge of the facts on which his cause of action was founded.

l29. The difficulties in resolving the limitation points in this court became all the more obvious when, at the

invitation of the court, Mr. Boyle made a detailed reply submission on the limitation questions. Mr. Boyle submitted that in relation to the representations alleged in September l984, and in April, May and July l985 Mr. Goose did not know, before discovery in the first action, that Mr. Wilson knew of the charge of the gemstones to Trinkaus & Burkhardt, of the low value of the gemstones, and of the ownership of the gemstones by the Holford Trust, not by Mr. Bray or the Brent Foundation. He did not discover Mr. Wilson's lack of honest belief in the representations allegedly made by him until after the first action had started. He submitted that Mr. Goose could not, with reasonable diligence, have discovered earlier these facts relevant to Mr. Wilson's lack of honest belief. On the question of deliberate concealment Mr. Boyle's case was that Mr. Wilson had concealed facts relevant to the cause of action, namely the Trinkaus & Burkhardt lien on the gemstones, information available to him about their value, the claim that the gemstones were owned by the Holford Trust, and the fact that bankruptcy proceedings had been commenced against Mr. Bray. In support of these contentions Mr. Boyle referred in detail to the evidence in the transcripts and in other documents.

l30. It was apparent to the court from these arguments that, in the absence of relevant findings of fact by the

judge about what Mr. Goose had discovered and could have discovered by reasonable diligence and as to what facts Mr. Wilson had deliberately concealed, it was impossible to decide the limitation points on this appeal. This court cannot make the findings of primary fact essential for the resolution of the issue whether the start of the limitation period was postponed by virtue of section 32 and whether the claims were statute-barred. The position is the same both in relation to the matters pleaded in the second action and to the amendments which we have held (see para. l27) should not have been allowed to be made in the first action. It is impossible for the court to decide whether the relevant period of limitation has expired in relation to any of these matters until findings of fact have been made relevant to the postponement of the limitation period under Section 32 (l) (a) and Section 32 (l) (b) of the Limitation Act l980.

Retainer

l3l. Paragraphs 7 and 8 of the Consolidated Statement of Claim read as follows:

“7. In order to obtain assistance and advice upon the Joint Venture, Mr. Bray, acting on his own behalf and on behalf of the Plaintiff in or about May l984, instructed and retained Wilson Sandford .... The said retainer was effected at a meeting between Mr. Bray and Mr. Wilson in either London or Brighton.

8. The said instructions were conveyed to and the said retainer was arranged with Mr. Wilson, acting on Wilson Sandford's behalf ...."

l32. It is therefore pleaded that the retainer was effected by Mr. Bray acting as agent for Mr. Goose.

l33. Mr. Boyle submitted that the retainer was effected at the initial meeting between Mr. Bray and

Mr. Wilson on 20th June l984, when Mr. Bray gave Mr  Wilson instructions to act for the participants in the project and Mr. Wilson accepted, and that Mr. Goose ratified the giving of instructions in a telephone call between Mr. Goose and Mr. Wilson prior to 3rd August l984.

l34. The judge rejected the first submission and in our judgment he was plainly right to do so. Mr. Boyle

did not suggest that Mr. Goose had authorised Mr. Bray prior to 20th June to retain Mr. Wilson on Mr. Goose's behalf. In his evidence in chief Mr. Goose said that Mr. Bray asked him if his, Mr. Goose's, accountant would be interested in being the accountant for Intag, and he replied that his accountant would not be interested. At about this time Mr. Bray mentioned Wilson Sandford to Mr. Goose and asked if Mr. Goose had any objection to Mr. Bray going to visit that firm. Mr. Goose said that it was OK by him, thinking that if they were instructed they would be acting purely as bookholders, preparing the accounts and so forth. There is no evidence that at the meeting on 20th June Mr. Bray was purporting to give instructions on behalf of anyone other than Intag and himself and his family. Mr. Wilson consistently denied that he was ever instructed on behalf of Mr. Goose, and Mr. Bray never gave evidence. True it is that in Mr. Wilson's evidence he said that Mr. Bray described Intag as "a vehicle for a consortium Bray belonged to" and an "umbrella organisation". But Intag was a legal entity capable of giving instructions to Mr. Wilson and undoubtedly it did give instructions through Mr. Bray who controlled it. It does not follow that the individuals who were intended by Mr. Bray to make up that consortium ever gave instructions to Mr. Wilson through Mr. Bray as their agent. Nor is there any evidence that Mr. Bray acted as such.

l35. Mr. Goose and Mr. Riby each had their own accountants. Mr. Goose's evidence was that on his

accountants’ advice he consulted a specialist in international financial affairs, Mr. Ray Needle, sending him papers such as the Chown report. There is no contemporaneous or other document which suggests that Mr. Goose ever retained Mr  Wilson or Wilson Sandford. It is noteworthy that Mr. Wilson, consistently with his evidence that he was never instructed by Mr. Goose, never sought to bill or charge Mr. Goose, even when he could not recover his fees from Intag. Other documents are strongly suggestive of there being no retainer of Mr. Wilson or Wilson Sandford by Mr. Goose, for example the letter of llth March l985 from Mr. Wilson to Intag's solicitor, Mr. Alldis, referring to Mr. Goose's company which, Mr. Wilson said, Mr. Goose's own accountants should form, although he (Mr. Wilson) offered to do so on Mr. Goose's behalf.

l36. In the light of our conclusion that there was no retainer effected by Mr. Bray on Mr. Goose's behalf on

20th June l984, it is unnecessary to consider the further submission that there was an oral ratification (which was never pleaded) of that retainer by Mr. Goose speaking to Mr. Wilson on the telephone before 3rd August. However, because Mr. Boyle submitted that the judge made two errors when dealing with the telephone conversations between Mr. Wilson and Mr. Goose, we think it right to say that we accept that the judge did indeed make those two errors. The first was when the judge said that Mr. Goose could never give any date for his speaking with Mr. Wilson and continued:

"Indeed in cross-examination Mr. Goose limited himself to speaking to Mr. Wilson during l984 on two occasions, once on the telephone when at Mr. Bray's house, and again on a much later occasion at a meeting on l9th September l984."

l37. That is not correct. The evidence to which the judge was referring was Mr. Goose's evidence on l46th

June l994 (Transcript Day 4 p. 2lC) that he had asked Mr. Wilson on those two occasions to look after his interests in Intag and the French operation, but they were not the only occasions on which, according to Mr. Goose, he spoke to Mr. Wilson on the telephone. The second is the judge's comment on a letter from Mr. Wilson to Mr. Goose of 3rd August l984: "The letter carries in my view a plain implication that Mr. Wilson and Mr. Goose had had no communication before 3rd August l984. In my judgment that is the true position." That comment is plainly wrong. The letter itself starts "Following our telephone conversation this week".

l38. We do not, however, regard either error as of importance on the question whether Mr. Wilson was

retained by Mr. Goose in view of the lack of any evidence to support Mr. Goose's pleaded case. We would add that quite apart from the pleadings, looking afresh at all the material that touches on the question whether there was a retainer of Mr. Wilson or his firm by Mr. Goose at any time, we cannot see that Mr. Goose ever effected such retainer.

l39. With the failure of the retainer claim falls a complaint that Mr. Wilson failed to advise Mr. Goose and

to pass on information which he had in relation to the gemstones.

Alleged representations on l9th September l984

l40. We have set out the evidence relating to the meeting on l9th September l994 at paras. l8-27 above.

Mr. Goose claims that three representations were made by Mr. Wilson at this meeting: that the gemstones were available as security; that they were worth more than the joint contributions of Mr. Riby and Mr. Goose and/or were worth U.S.$500,000; and that they were owned by Mr. Bray.

l4l. The judge found that none of those representations was made. (a) He was not satisfied that Mr. Wilson

made any statement from which the value of the gemstones was stated or implied to the meeting; and (b) he could not be satisfied that Mr. Wilson made any representations to Mr. Goose on l9th September l984 about the value or even the ownership of the gemstones.

l42. As to (a) the judge based himself on three matters. The first was his assessment of Mr. Wilson as "not a

man to put himself forward". We have an anxiety about the judge determining this issue on an assessment of a witness in a judgment delivered so long after that witness gave evidence, the more so when such a subjective assessment is not explained by the judge and appears to be inconsistent with some of the evidence. For example, Mr. Wilson was prepared to put forward to potential lenders the statement of affairs dated lst November l984 and written on Wilson Sandford paper relating to Mr. Bray (see para. 34 above), when it contained matters which were obviously untrue, or the truth of which was questionable or unknown to him. An inference which might be drawn by the objective observer is that Mr. Wilson was prepared to put himself forward to repeat assertions made to him by Mr. Bray.

l43. The judge’s second reason was that the minutes taken by Mr. Wilson of the meeting were silent on the

point. But the minutes were formal and comparatively brief and it would have been out of character with the rest of the minutes if there had been such mention.

l44. The judge’s third reason was that Mr. Milne or Mr. Bray may have made some reference to VAT, from

which an inference as to the value of the gemstones might have been made. But if there was mention of VAT at the meeting (and Mr. Riby, whose evidence the judge found broadly credible, was insistent that there was), the evidence before the judge would strongly suggest that Mr. Wilson was the person to have mentioned it. Mr. Bray had gone into a silent sulk, and as between Mr. Milne and Mr. Wilson the probability, from the evidence of both Mr. Riby and Mr. Milne, must be that it was a matter for Mr. Wilson rather than Mr. Milne.

l45. Further, as the judge himself observed, there is no doubt that Mr. Bray had told Mr. Wilson that a VAT

liability would arise if the gemstones were imported into the UK and the point would have been in Mr. Wilson's mind. Because of the concerns of Mr. Riby and his advisers, there must have been questions asked by them about Mr. Bray's contribution and hence the value of the gemstones, and there must have been some answers given. The likelihood is that Mr. Wilson gave those answers, if only repeating what Mr. Bray had told him. Mr. Riby and Mr. Goose both gave evidence that there were assurances about the value of the gemstones, Mr. Goose saying that it was Mr. Wilson making the assertion. As against that there is only Mr. Wilson's denial, and he, as the judge said, had a very poor recollection of the meeting.

l46. As to (b) the judge appeared to base himself on two facts: (i) Mr. Goose had not asked Mr. Wilson

anything about the gemstones at the meeting; and (ii) Mr. Goose accepted that he had no reason to believe and was not told that Mr. Wilson had any greater knowledge about the gemstones than he himself had. Neither point goes to whether the representations were made by Mr. Wilson at a meeting when Mr. Riby and his advisers were undoubtedly asking questions.

l47. Having reviewed all the evidence relating to the meeting afresh, we are left with serious doubts whether

the judge's assessment that the representations were not made can stand. Certainly that conclusion appears to be against the weight of the evidence. Whilst this in ordinary circumstances may not be determinative of an appeal on the issue if the appellate court is satisfied that the conclusion is explicable by the advantage which the trial judge has had of seeing and hearing the witnesses, in this case by reason of the long delay we are unable to be so satisfied. In our judgment, the judge's conclusion, reached after so great an interval after the trial, on these important claims by Mr. Goose is not safe, and this issue should be retried.

Alleged representations on 9th April l985

l48. The next issue arises out of Mr. Wilson’s involvement in Mr. Goose’s dealings with his own bank

manager, Mr. John Wilson, at the beginning of April l985. We have set out the relevant evidence in paras. 53-55 above. Mr. Goose claims that Mr. Wilson represented to him in that letter that (l) the gemstones were available to provide the security referred to in the letter; (2) that Mr. Bray owned the gems; and (3) that they were of substantial value such that Mr. Goose’s farm would only be at risk if they realised less than £450,000.

l49. In his judgment the judge recorded Mr. Boyle’s contention that Mr. Robin Wilson’s letter dated 9th

April showed that he had negotiated with the bank on Mr. Goose’s behalf and had agreed terms with the bank, and that this could only be consistent with his having authority to act, at any rate on this occasion, as Mr. Goose’s agent and with his having accepted obligations towards him.

l50. The judge recalled that Mr. Robin Wilson totally denied that he had conducted any negotiations with

the bank manager although he accepted that the language of his letter reads as if he had had extensive discussions with him leading up to the agreement of terms. The judge acknowledged that he was faced with a complete conflict of oral evidence. He noted the absence of any evidence from the bank itself, and was sharply critical of certain features of the suggested agreement which he described at various times as “muddled”, “odd” and “inexplicable”. He said that the letter revealed what he believed was an ingrained and characteristic state of complete lack of clarity of thought in all Mr. R Wilson’s dealings.

l5l. After long hesitation the judge preferred the evidence of Mr. Wilson as against Mr. Goose. He was

convinced that Mr. Wilson habitually wrote letters in terms designed to make his part in matters seem more important than in fact they were. He was also convinced that Mr. Goose had, perfectly understandably, brooded on his very considerable sufferings and could not believe that he brought the disasters that he underwent on his own head. He referred to Mr. Goose’s mistaken conviction that his own solicitor Mr. Harrod had let him down by telling him that he had inquired into Mr. Bray’s background and that he was “clean”, and he said that he mentioned these facts as showing that Mr. Goose had convinced himself that he was let down in connection with this venture by professional men. He was sure that Mr. Goose was wrong when he asserted that Mr. R Wilson made the arrangements on his behalf with his bank manager.

l52. We are not surprised that the judge hesitated long before he accepted Mr. Wilson’s evidence. Although

in the ordinary way we would be very slow to disturb a finding of fact by a judge who had seen the witnesses, there are three very surprising aspects of this finding. First, as the judge said, the letter of 9th April bears all the hallmarks of a letter reporting action that Mr. Wilson himself had taken. Secondly, as Mr. Boyle observed, the explanation that Mr. Wilson habitually wrote letters in terms designed to make his part in matters seem more important sits uncomfortably with the judge’s earlier finding that Mr. Wilson was not a man to put himself forward, although we accept that these contradictory findings are perhaps capable of reconciliation, since one of them refers to Mr. Wilson’s performance at meetings and the other to his performance on paper. More importantly, the judge appears to have completely overlooked the evidence that Mr. Bray had left for a holiday in France before Mr. Goose ever saw his bank manager and was still away when Mr. Wilson wrote that letter. Mr. Wilson had told the judge that he had written the letter at Mr. Bray’s request, and that Mr. Bray had already had detailed contact with Nat West whose manager knew all about the project when Mr. Wilson spoke to him. The judge does not explain how he reconciled that evidence with his eventual finding, given that Mr. Bray was abroad all the time and that it was Mr. Wilson and Mr. Bray, not Mr. Goose, who had had all the earlier dealings with other bank managers over the structure of the different proposals.

l53. For these reasons we find this finding of fact by the judge, made 20 months after the end of the trial, to

be unsafe. If the judge was wrong in making that finding, then the way would be open for a finding that on this occasion at least Mr. Wilson owed Mr. Goose the duty of care that would arise out of his duty to protect his interests in his dealings with his bank. While it is true that nothing in the end came of the proposal to Nat West, by 9th April l985 Mr. Wilson knew enough about the gemstones, from Mr. Boyce-Mears and Mr. Schaefer, for it to be improper to give Mr. Goose the representations contained in that letter in such unqualified terms. Because of the view we take as to the safety of this finding, this is in our judgment another very important issue which Mr. Goose is entitled to have retried.

Alleged representations on l8th May l995

l54. The next point relates to Mr. Wilson’s role at the meeting in Mr. Bray’s home on l8th May l985. We

have summarised the relevant evidence at paras. 59-62 above. Mr. Goose claims that the essence of the representation made by Mr. Wilson on this date was that the gemstones could be sold and when sold they would realise £250,000, and that there would still be sufficient stones left to provide further valuable security on the basis of which long-term borrowing could be made. It was therefore necessarily represented that the gemstones were available for use as security, and that they were worth at least £250,000 and that they were owned by Mr. Bray.

l55. This was another occasion on which the judge made a mistake. The issue turned on the identity of the

person responsible for the statement which is recorded in Mr. Wilson’s note as “less l/3 = 250,000 (ex trust sales)”. Mr. Goose asserted that it was Mr. Wilson’s statement, while the judge recorded Mr. Wilson as saying that it must have been Mr. Bray who made the statement and that he merely recorded it. In fact Mr. Wilson told the judge that the figure of one third was indeed his recommendation, which he made for the reasons we have recorded earlier in this judgment (para. 63), and that he believed he wrote down ‘230’ and that Mr. Bray said “make it ‘250’”.

l56. This small mistake on the judge’s part, while contributing to our anxiety about the safety of his overall

findings, does not affect our view of the safety of his finding on this particular issue. On an occasion when Mr. Bray was present, presenting new proposals following his discussions with Banque Populaire, it would have been natural for Mr. Bray to make the running, and we see no reason to doubt the soundness of the judge’s findings that on this occasion Mr. Wilson did not make any relevant representations about the availability or value of the gemstones. On the other hand he did nothing to correct what Mr.  Bray was now saying, a matter which might have to be borne in mind if on a retrial he was found to have made earlier positive representations on this issue.

Alleged representations on about 3rd July l995

l57. The last two representations on which Mr. Goose relies relate to the telephone conversation between

Mr. Wilson and Mr. Goose six weeks later. Mr Goose claimed in this context that Mr. Wilson had represented to him that Intag was not involved in the purchase of Allisons, and that he also made a representation to him as to Mr.  Bray’s financial standing (“plenty of money”). We summarised the evidence about this conversation at paras. 77-79 above.

l58. We say at once that we can see no reason to doubt the soundness of the judge’s finding that it was not

Mr. Wilson who told Mr. Goose that Mr. Bray had plenty of money. The judge’s reasons for this finding are firmly based. As we have said, he might have added that Mr. Goose wrongly attributed to this conversation a contemporary reference by Mr. Wilson to one of Mr. Bray’s projects which was long since dead.

l59. We are less happy, however, about the judge’s other finding, namely that the fact that Mr. Wilson made

a misrepresentation about Intag’s purchase of Allisons had no material effect upon Mr. Goose’s mind. It is hard to see why Mr. Goose would have gone to the trouble of ringing up Mr. Wilson if he had not wanted to confirm the accuracy of what Mr. Bray had told him. This was a time when Mr. Goose was preparing to proceed, against his solicitor’s strong advice, to charge his lands against a loan being made by Mansons to Intag, a material part of which would be retained by Intag. He wanted to know whether Intag was committing itself to the purchase of Allisons before he went ahead. If it was, this might pro tanto affect its ability to service the Mansons loan. While there was plenty of evidence that Mr. Goose was still willing to believe everything Mr. Bray was telling him, notwithstanding his solicitors’ warnings, this was a occasion when on Mr. Wilson’s own admission he was making a second check on the truth of what Mr. Bray was saying, and Mr. Wilson let him down.

l60. Mr. Walker pointed out to us that Mr. Goose accepted that shortly after this conversation he saw a letter

signed by Intag’s company secretary which showed that Intag was to be the nominated buyer of the shares. Mr. Goose told the judge that when he asked Mr. Bray about this Mr. Bray had assured him that this was only a transitional arrangement while another company was being incorporated in England and that he accepted this explanation. If this was the evidence which the judge had in mind when he held that Mr. Wilson’s misrepresentation had no material effect on Mr. Goose’s mind, he overlooked the fact that Mr. Goose said that he did not see that letter until 30th July, by which time he had already committed himself to guaranteeing the Mansons loan and charged his lands as security for the loan. Since the judge gave no reasons for his finding on this point, it is unwise to speculate about the other reasons he might have had. Suffice it to say we are uneasy about the safety of the judge’s finding as to the effect of this misrepresentation, too.

New Trial

l6l. Mr Goose seeks an order either that Mr Wilson pays him damages in the amounts claimed or in such an

amount that may be assessed on an inquiry, or equitable compensation; alternatively, that the action be retried.

l62. In our judgment, the appeal must be allowed and the action must be re-tried. The Court is driven to

take this exceptional course on the ground that a substantial miscarriage of justice would be occasioned to Mr Goose by allowing the judge's decision to stand and it is not possible to rectify that miscarriage of justice without a re-trial. We are satisfied, for the reasons we have already given, that the flaws in the judgment are such that Mr. Goose has lost a chance of success which was fairly open to him on a substantial part of his case: see RSC Order 59 Rule ll (2) and the notes at 59/ll/2 and 59/ll/8. The errors in the judge's treatment of the evidence and his failure to make findings of fact on other aspects of the case which might have enabled this court, for example, to conclude that some or all of the claims were statute-barred, make a new trial unavoidable. This course will unfortunately inflict upon the parties additional expense and stress, which the court was anxious to avoid, if it possibly could.

l63. We consider, in short, that justice requires that there must be a retrial in relation to the representations

alleged to have been made on l9th September l984, 9th April l985, and 3rd July l985. If another judge reaches a different conclusion to Harman J. on any of these issues, the effect of that finding will permeate his view on the rest of the evidence to such an extent that it would be pointless for us to say anything now about the issues of deceit, negligence and constructive trust that arise on the pleadings. So far as the case based on agency is concerned, we are of the view that Mr. Goose’s case based on an alleged retainer is hopeless, and that the only occasion when Mr. Wilson might have acted as Mr.  Goose’s agent was when he was putting a proposal to Mr. Goose’s bank manager at the beginning of April l985.

l64. We will say nothing about any of these matters, so as to avoid tying the hands of the judge who

conducts the retrial. That judge would be assisted if this court were able to identify the issues of fact and law which will arise for decision at the new trial. We hope that when counsel have considered the effect of this judgment, they will be able to reach agreement as to the terms of the order for a retrial we should make. If they cannot reach agreement, we would be happy to reconvene the court at some future date to consider the directions we should make for this purpose.