England and Wales Court of Appeal (Civil Division) Decisions
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Flannery & Anor v Halifax Estate Agencies Ltd [1999] EWCA Civ 811 (18 February 1999)
URL: http://www.bailii.org/ew/cases/EWCA/Civ/1999/811.html
Cite as:
[1999] EWCA Civ 811,
(1999) 11 Admin LR 465,
[2000] CP Rep 18,
[2000] WLR 377,
[2000] 1 WLR 377,
[2000] 1 All ER 373,
[1999] BLR 107,
(1999) 15 Const LJ 313
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[2000] 1 WLR 377]
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IN
THE SUPREME COURT OF JUDICATURE
Case
No: CCRTF 98/0203/2
IN
THE COURT OF APPEAL (CIVIL DIVISION)
ON
APPEAL FROM MANCHESTER COUNTY COURT
(His
Honour Judge James QC
)
Royal
Courts of Justice
Strand
London
WC2
Thursday
18th February 1999
B
e f o r e:
LORD
JUSTICE HENRY
LORD
JUSTICE LAWS
MR
JUSTICE HIDDEN
-
- - - - -
FRANK
FLANNERY
ANN
FLANNERY
Appellant
-
v -
HALIFAX
ESTATE AGENCIES LIMITED
Respondent
-
- - - - -
(Transcript
of the Handed Down Judgment of
Smith
Bernal Reporting Limited, 180 Fleet Street,
London
EC4A 2HD
Tel:
0171 421 4040
Official
Shorthand Writers to the Court)
-
- - - - -
Mr
Paul Darling
(Instructed by Messrs Pannone & Partners, Manchester M3 2BU) appeared on
behalf of the Appellant
Mr
Graeme McPherson
(Instructed by Messrs Wragge & Co, Birmingham B3 2AS) appeared on behalf of
the Respondent
-
- - - - -
J
U D G M E N T
(As
approved by the Court
)
-
- - - - -
@Crown
Copyright
Thursday
18 February 1999
JUDGMENT
LORD
JUSTICE HENRY: This is the judgment of the Court. This is an appeal by the
plaintiffs from the judgment of His Honour Judge Charles James QC sitting in
the Manchester County Court on 23rd January 1998. The outline facts are not
contentious, and are taken from the summary contained in the skeleton argument
of the appellants.
The
plaintiffs, Mr and Mrs Flannery purchased a first-floor flat at 70 Simons Way,
Wythenshawe, Manchester. They did so with the benefit of a mortgage from the
Derbyshire Building Society. The defendants (“the valuers”) were
asked by the building society to carry out a valuation. The valuers, by their
employee Mr Haining, valued the property at £33,000 and in their report
stated in relation to movement of the land on which the property stood:
“Heave landslip or settlement” that:
"No
undue hazards were apparent at the time of inspection."
The
Flannerys claimed to have relied on that report in going ahead with their
purchase.
The
Flannerys then spent substantial funds renovating the property, but decided
they did not like living there. They accordingly put the property on the
market for £48,000, and received an offer at that sum from a prospective
purchaser, Miss Hitchon. She applied to the Halifax Building Society for a
mortgage. By coincidence, the Halifax asked the valuers to carry out a
valuation, and this task was performed by another of the surveyors in their
employ, Mr Earley. He expressed a view in direct conflict to that expressed a
year or so earlier by his colleague Mr Haining. He reported that the property
was affected by structural movement. The purchaser withdrew, and the Flannerys
then sued the valuers for professional negligence in relation to Mr
Haining’s original valuation.
The
valuers’ defence, both as set out in the pleadings and in the trial as
conducted, centred on denial that the property at any time suffered from any or
any significant structural movement - neither at the date of the report nor at
any time thereafter. Even though the ultimate issue for decision by the court
was whether the valuer in inspecting and reporting on the property had fallen
below the standard ordinarily to be expected of a competent valuer,
nevertheless one, or the central issue in the action was one of fact, namely
whether the property was or was not suffering from foundation subsidence at the
time of Mr Haining’s inspection. It was common ground that there was
some cracking in the superstructure of the building, but it was contended on
behalf of the valuer that that cracking was caused by thermal movement, rather
than foundation disturbance. At trial there was, in relation at any rate to
six of the seven cracks or other indicia of movement however caused, no dispute
as to what was there to be seen. The dispute centred entirely on what had
caused those cracks. The plaintiffs’ called an expert valuer and an
expert engineer (Mr Johnson and Mr Rhodes) who supported Mr Earley’s
thesis, and Mr Earley himself did not give evidence. The defendants called Mr
Haining and as their expert valuer and expert engineer Mr Atkinson and Mr
Cohen. The hearing covered eight court days and the judge gave a reserved
judgment some six weeks after the conclusion of the case (that time including
the Christmas and New Year break).
The
first 25 pages of a 29 page judgment show every sign of being prepared with
care. The central documentation, such as it is, is set out, as is the history
summarised above. Included in the judgment is a factual account of the
investigations carried out after the second valuation, even where the report
was not in evidence, and no witness had been called.
Pages
25 to 27 are a bare summary of the expert evidence given on behalf of each
party, being introduced with the observation that the plaintiffs’
evidence was “entirely different” from that called by the
defendants. Ten lines or thereabouts is spent on the plaintiffs’ case -
with a bare assertion of the conclusion “the property had suffered from
significant structural movement” without any supporting argument or
detail beyond saying:
"They
drew my attention to a number of features concerning the property which they
said confirmed their opinion ..."
Then
just over a page is spent on the defendants’ case, with the conclusions
from Mr Atkinson’s report of 4th March 1997 being expressly quoted.
Again, assertion and not supporting evidence or argument is there set out.
Next
there is a bare reference to technical guidance for surveyors, and a
publication called “Subsidence in Low Rise Buildings” (published by
the Institute of Structural Engineers) to which the judge had been referred.
Then he accurately set out the crucial issue, and what he had to decide.
And
then, with all set up, he concluded:
"I
have had the advantage not only of hearing the various witnesses give evidence
but also of seeing the way in which they reacted to the questions that they
were asked.
Having
done so,
I
prefer the Expert Evidence that was given for the Defendants to that which was
given for the Plaintiffs.
I
find, on the balance of probabilities, that the property was described
reasonably accurately by Haining in his Report and that the opinion expressed
by Mr Atkinson is correct.
Accordingly,
I
find that it was not right to say in July 1995 that: “The property is
affected by Structural Movement”.
On
the evidence which I have heard,
I
find that there was no reason connected with the structural stability of the
property which rendered it unmortgageable at the time when Haining inspected it
in April 1994 and there is no such reason now that could justifiably do so.
Since
the claims brought by:
(a) the
Plaintiffs jointly for damages in respect of the condition of the property.
(b) the
Second Plaintiff separately for damages in respect of personal injuries and loss
both
depend upon establishing that Haining was negligent in the manner in which he
described the property in his Mortgage Valuation Report dated 20th April 1994
it follows the claims fail and accordingly I dismiss them.
If
necessary, I will hear further submissions from Counsel concerning the issue of
costs."
That
passage is the only passage in the judgment which purports to set out reasons
for the decision. The appellants complain that in truth no reasons are given -
we do not know why the judge preferred the defendants’ expert evidence to
that of the plaintiff. By way of illustration, it seems from the terms of the
judgment that the judge got particular assistance from having seen the experts
give evidence and “... the way in which they reacted to the questions
that were asked.” But that information leaves us none the wiser. We do
not know why the oral evidence and the experts’ reactions were so
valuable, and so cannot judge whether that gave the judge good reason or no
reason for preferring the defendants’ experts. We know (as we have been
shown from the skeleton arguments used for closing speeches) that the
defendants through their counsel attacked Mr Johnson for the plaintiffs on the
grounds of the superficiality of his evidence, and of a tendency to over-state
his case, leading to a necessary retreat from an untenable position. Given the
judge’s conclusions, it is very possible, indeed perhaps likely, that the
judge accepted the attack mounted on Mr Johnson. But this Court cannot
properly infer that - to do so would be to guess, and that the Court cannot do.
Both
counsel rightly accept that this is a case in which the judge’s
conclusion, that the property in question did not suffer from structural
movement in April 1994, was one which was open to him on the evidence. And
there is nothing in the text of the judgment to demonstrate or even suggest
that he may have misapprehended any part of the evidence, or founded upon some
illegitimate consideration, or anything of that kind. But the judgment is
entirely opaque - it gives the judge’s conclusions, but not his reasons
for reaching that conclusion.
Accordingly
the only complaint that is made here, that the judge failed to give reasons for
his decision to prefer the evidence of the defendants’ experts over that
of the plaintiffs’, is entirely free-standing. The case thus raises in
stark form the question, when the failure of a judge at first instance to give
reasons for a conclusion essential to his decision may of itself constitute a
good ground of appeal.
That
today’s professional judge owes a general duty to give reasons is clear,
(see
R
-v- Knightsbridge Crown Court ex parte International Sporting Club
[1982] QB 304) although there are some exceptions. It does not always or even
usually apply in the magistrates court, nor in some areas where the
court’s decision is more often than not a summary exercise of discretion
- in particular orders for costs. For the general duty, see for example
R
v Harrow Crown Court ex p. Dave
[1994] 1 AER 315, which was not cited to us but contains a useful review of
earlier authority.
It
is not a useful task to attempt to make absolute rules as to the requirement
for the judge to give reasons. This is because issues are so infinitely
various. For instance, when the court, in a case without documents depending
on eye-witness accounts is faced with two irreconcilable accounts, there may be
little to say other than that the witnesses for one side were more credible
(see DeSmith, Judicial Review of Administrative Action, 5th Edition, 9-049).
But with expert evidence, it should usually be possible to be more explicit in
giving reasons: see Bingham LJ in
Eckersley
-v- Binnie
18 Construction Law Reports 1 at page 77:
"In
resolving conflicts of expert evidence, the judge remains the judge; he is not
obliged to accept evidence simply because it comes from an illustrious source;
he can take account of demonstrated partisanship and lack of objectivity. But,
save where an expert is guilty of a deliberate attempt to mislead (as happens
only very rarely), a coherent reasoned opinion expressed by a suitably
qualified expert should be the subject of a coherent reasoned rebuttal, unless
it can be discounted for other good reasons. The advantages enjoyed by the
trial judge are great indeed, but they do not absolve the Court of Appeal from
weighing, considering and comparing the evidence in the light of his findings,
a task made longer but easier by possession of a verbatim transcript usually
(as here) denied to the trial judge."
We
make the following general comments on the duty to give reasons:
(1) The
duty is a function of due process, and therefore of justice. Its rationale has
two principal aspects. The first is that fairness surely requires that the
parties - especially the losing party - should be left in no doubt why they
have won or lost. This is especially so since without reasons the losing party
will not know (as was said in
Ex
p. Dave
)
whether the court has misdirected itself, and thus whether he may have an
available appeal on the substance of the case. The second is that a requirement
to give reasons concentrates the mind; if it is fulfilled, the resulting
decision is much more likely to be soundly based on the evidence than if it is
not.
(2) The
first of these aspects implies that want of reasons may be a good self-standing
ground of appeal. Where because no reasons are given it is impossible to tell
whether the judge has gone wrong on the law or the facts, the losing party
would be altogether deprived of his chance of an appeal unless the court
entertains an appeal based on the lack of reasons itself.
(3) The
extent of the duty, or rather the reach of what is required to fulfil it,
depends on the subject-matter. Where there is a straightforward factual dispute
whose resolution depends simply on which witness is telling the truth about
events which he claims to recall, it is likely to be enough for the judge
(having, no doubt, summarised the evidence) to indicate simply that he believes
X rather than Y; indeed there may be nothing else to say. But where the dispute
involves something in the nature of an intellectual exchange, with reasons and
analysis advanced on either side, the judge must enter into the issues
canvassed before him and explain why he prefers one case over the other. This
is likely to apply particularly in litigation where as here there is disputed
expert evidence; but it is not necessarily limited to such cases.
(4) This
is not to suggest that there is one rule for cases concerning the
witnesses’ truthfulness or recall of events, and another for cases where
the issue depends on reasoning or analysis (with experts or otherwise). The
rule is the same: the judge must explain
why
he has reached his decision. The question is always, what is required of the
judge to do so; and that will differ from case to case. Transparency should be
the watchword.
Mr
Graeme McPherson, for the respondent defendants, reminded us of all the
advantages enjoyed by a trial judge who has seen and heard the evidence. But,
as he reminds us, Robert Goff LJ in
Armagas
Limited -v- Mundogas SA
[1985] 1 Lloyds Reports at 56 quotes the “classic statement” of the
trial judge’s advantage from Lord Thankerton’s speech in
Watt
-v- Thomas
[1947] AC 484, where dealing with when the Court of Appeal may intervene he said:
"III The
appellate court, either because the reasons given by the trial judge are not
satisfactory or because it unmistakably so appears from the evidence may be
satisfied that he has not taken proper advantage of having seen and heard the
witnesses, and the matter will then become at large for the appellate court."
That
passage assumes the duty to give reasons, and for the appellate court to
intervene when those reasons are unsatisfactory. To give no reasons cannot be
satisfactory when reasons are required.
Mr
McPherson submits that because of the “stark choice” between
experts the judge in reality could do no more than prefer the conclusions of
one to the conclusions of the other. This was because:
1) neither
expert had a motive for favouring their client;
2) neither
explanation for the cracks was inherently more likely;
3) there
were “very few” incontrovertible facts and “virtually
no” contemporaneous documents to resolve the conflict of opinion as to
the cause of the cracks;
so
all had to be resolved by the judge’s conclusions based on the way the
experts gave their evidence, and their demeanour in the witness box. It was
clear that he preferred the defendants’ experts therefore he accepted
their reasoning and conclusions, and the judgment, and so could give his
reasons shortly.
As
we have already indicated, in a dispute over, say, who hit the first blow, that
approach and such “reasons” expressed in an [unreasoned] preference
may well be sufficient. But that is not the case.
There
seem to us to be four things wrong with the respondents’ analysis.
First, we do not know whether the assumed thought process was the judge’s
actual thought process. Second, on what the judge said we do not know why he
preferred the defendants’ experts, nor whether that was for good reason
or bad. We do not know because reasons were not given. Third, if the judge
had the difficulty in choosing between the two accounts assumed by Mr
McPherson, he must have been at least close to the situation where the cause of
the damage could not be resolved - see
Rhesa
Shipping -v- Edmonds
[1985] 1 WLR 948 at 955F to 956G. But if this was his difficulty he should
have said so. Fourth, why did the defendants’ experts performance in the
witness box tip the scales? The judgment does not tell us.
Referring
back to the passage quoted from Bingham LJ, it seems to us that the
judge’s preference for the defendants’ expert (which was decisive)
should have enabled him to give his reasons in the form of the “coherent
reasoned rebuttal” therein referred to.
Accordingly,
in our judgment this judge was under a duty to give reasons and did not do so.
Without such reasons, his judgment is not transparent, and we cannot know
whether the judge had adequate or inadequate reasons for the conclusion he
reached.
It
should not be assumed that the court that (for whatever reason) failed to give
reasons had no reasons. Here, for example, it seems likely that the judge
believed he had said enough. In that we differ from him. But one alternative
remedy to quashing the decision is to invite or require the court to give
reasons (see where this is done in the administrative law context - DeSmith 5th
Edition 9-054 and 9-055). We considered that here. But by the time we were
seised of the case, more than a year had passed since the hearing. It would
not have been realistic for the judge to reconstitute his reasons. But, in
accordance with the new Practice Direction on Leave to Appeal, leave should be
sought from the trial judge immediately after judgment is delivered. On the
application for leave, if a “no reasons” point is being taken, the
potential respondents should consider inviting the judge to give his reasons,
and his explanation as to why they were not set out in the judgment, in an
affidavit for use at the leave application and at the hearing if leave be
granted.
Accordingly,
we do not regard this as an appropriate case to remit to the trial judge. Nor
have we the evidence before us necessary to form our own view - for instance,
we do not have the transcripts of the experts’ evidence. Accordingly, we
have no alternative but to allow the appeal, set aside the judgment, and order
a new trial.
Order:
Appeal allowed with costs