England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
APPLICATION FOR PERMISSION TO APPEAL

		Royal Courts of Justice Strand London WC2 Wednesday, 10th October 2001

1. LORD JUSTICE SEDLEY: This application is made with his customary skill by Mr Sher for permission to appeal on behalf of a counterclaiming defendant, a limited company, against the judgment and costs order given by His Honour Judge Hywel Moseley QC, sitting as a judge of the Technology and Construction Court in Cardiff.
2. The claimant Mr Young is a surveyor, valuer and estate agent. The defendant company is a property development company run by its eponymous owner Mr Smart. Mr Young's action having gone, the judge tried Mr Smart's counterclaim for damages for the loss of opportunity to develop a site more profitably than had turned out to be the case by reason of negligent valuation advice given by Mr Young.
3. I can take the judge's conclusion from the paragraph in which he set it out in summary form before giving his reasons in more detail:

"Mr Smart was not a reliable witness and the documentary evidence did not support his case. Mr Young in contrast was convincing. I was not persuaded that Mr Young gave any advice on 18th November 1994, nor that he confirmed that advice at any intermediate date between then and August 1995. Necessarily therefore Smart could not have relied on any such advice. Mr Young did not give any development advice at any time. On 2nd August 1995 he was persuaded by Mr Smart that the houses be marketed at higher price than that which Mr Young considered appropriate and he was persuaded to confirm those prices in a letter dated 4th August 1995 which he knew Smart intended to produce to the Bank of Wales, the financial institution which was going to finance the development. Mr Smart admitted that he did not rely on that letter, regarding it as a letter intended to provide financial comfort to the Bank. Two essential features of a negligent misstatement case, advice or information and reliance on it are therefore not proved and the claim consequently fails."

4. Following the delivery of this judgment Judge Moseley heard argument on costs and ordered Mr Smart to pay Mr Young's costs on an indemnity basis.
5. When the notice of appeal and the skeleton argument in support were lodged on Mr Smart's behalf I adjourned the desk application so that Mr Young could show cause in writing, if he wished, why permission to appeal should not be granted. This he has done and Mr Sher, in addressing me, has addressed some of the principal grounds of resistance advanced in writing by Mr Young's counsel.
6. The essence of the proposed appeal on liability is that the judge, in giving the reasons for the decision which I have read out in summary, has misread the evidence and has impermissibly re-configured it or some of it into a case that was not made at trial. Whether this is so has been canvassed in helpful detail in the two written submissions. It would be pointless to go through the text of those written submissions, even more so the materials to which they refer, but all of them I have read with care.
7. I am satisfied that, notwithstanding the attractive way in which Mr Sher has put the case, it falls well short of the high standard of cogency which is necessary if an attack on a trial judge's findings of fact is to have a realistic prospect of success in this court. In essence, my reasons are these. First, Mr Smart's case originally was that the negligent advice on which he relied had been contained in the letter of 4th August 1995 which has been mentioned. The advice given in that letter was admittedly negligent in the sense that it was grossly over sanguine about the market value of the development. It was, as the judge found, aimed not at Mr Smart but Mr Smart's bankers and it was in any event, in the judge's view, too late to have been a source of reliance since Mr Smart had conditionally exchanged contracts almost eight months earlier and had applied for planning permission shortly after that. Nevertheless, as Mr Sher reminds me, Mr Smart gave evidence that he could still have called off the development in August had he been properly advised. That may be so, but it would not answer the judge's finding, for which there was good evidence, that there was no reliance for the reason that the letter was not aimed at Mr Smart but at the bank.
8. Secondly, Smart the company then asserted for the first time that similar advice had been given orally by Mr Young in November 1994. On file was a letter - which we have considered in detail this morning - written early the following week which made it clear that before expressing a view Mr Young wanted to see the plans. Smart, therefore, by now at a late stage of the litigation, asserted that confirmatory advice had been given orally by Mr Young after receipt of the plans and before thegrant of planning permission at roughly the turn of the year. It was this, Mr Smart said, which was echoed in the letter of August 1995. But apart from that letter there was no evidence except the bare assertion of Mr Smart that Mr Young had given any such advice at the turn of the year. The judge did not accept that it had been given. It is on the judge's reasons for coming to that conclusion that Mr Sher now concentrates his fire.
9. I have read the material with care before sitting today and I have looked, in such time as was available, with Mr Sher at the key points in it today. I do not accept that the judge's conclusions, read as a whole, are vulnerable on appeal. The nub of the argument is put in paragraph 5.4.3 of Mr Sher's skeleton argument. It deserves to be read out:

"The learned judge however chose to infer from the letter dated 21st November 1994 that preliminary advice on prices could not have been given in the telephone conversation on 18th November 1994. In respect of each of those passages his reasons are either based upon an erroneous view of the evidence or he reaches his conclusions upon a basis in respect of which no evidence was given and upon which no submissions were made by either party during the course of the trial. This reasoning was brand new in the judgment. It was entirely an idea of the judge himself. If MGY [that is Young] thought he could not have given the prices alleged to have been given by him on 18th November 1994, he would have said so and the matter would have been explored in evidence. He did not say so, neither in evidence or at any other time, nor was the point ever raised in the opening or closing speeches by anybody at trial."

10. The argument goes on to focus upon the judge's reasoning concerning what he took to be a 24 per cent valuation discrepancy upon which it is Mr Sher's assertion that the rest of the judgment or its significant findings are premised. The letter of 21st November 1994 may well be the source of figures which yielded the 24 per cent figure that the judge took. It may well be as Mr Sher says that that 24 per cent is erroneous because it makes assumptions which had not been explored in argument, and which if they had been explored in argument would have been shown to be false.
11. I proceed on the assumption that that is a viable argument. Nevertheless, the final line of the letter remains eloquent of the fact that no firm valuation had by then been given. Mr Sher agrees with this. He goes on to say that it was in early January that the actionable oral advice was given. That is something which the judge did not believe, and there is no direct foundation for impugning the judge's finding to this effect. There was therefore, on the facts as found, a simple hiatus in the giving of advice between the provisional advice of November and the letter of August, the character of which I have already described.
12. The written submissions in response, for which I gave permission, in my view adequately answer the argument on the effect and significance of the 24 per cent calculation. I will not read out those submissions in detail; they are to be found essentially in paragraph 16.4 of the submissions in response. But they do satisfy me that the judge has not gone anything like the distance which Mr Sher asserts that he has gone, namely inventing an unargued case or entirely misapprehending the evidence beyond the data fed into the 24 per cent figure. It seems to me, reading his judgment, that the judge has made up his own mind on the material before him as to who was giving him a more reliable and accurate account of events. That was precisely his job. If, as Mr Sher contends, the judge had derived the 24 per cent figure from misunderstood data, that might shake the edifice, I do not doubt, but it would not bring it down. The criticism made in response that the argument advanced by Mr Sher in his skeleton argument is a form of cherry-picking seems to me to have some force in it. To change the metaphor, Mr Smart cannot have the plums without the duff. The duff is that the judge found his evidence of the earlier conversations entirely unconvincing. Unless some objective evidence or some admission by Mr Young makes it inexorable that the judge should have found the other way, then it seems to me there cannot be a realistic prospect, taken in the round, of upsetting the conclusion on liability.
13. Mr Sher accepts that if his proposed appeal is to have a realistic prospect of success he must be able to show - and he is clearly right about this - that the 24 per cent calculation was not merely a severable error but is a false premise that vitiates the totality of the findings made by the judge, and necessarily made by him because he could not reach his conclusion without them.
14. I am unpersuaded that there is any real prospect of showing that the error, as I will assume it was, had the latter character, that is to say a sufficient effect to poison the judgment.
15. As to the award of indemnity costs, while Mr Sher does not abandon the argument that this award was wrongly made, he accepts that it is not a viable ground of appeal in the absence of permission to appeal on the substantive issue. That seems to me to be an honourable and realistic approach. The amount of money, while not inconsiderable, is not so great that by itself it would justify the grant of permission to appeal if on the substantive issue of liability there was to be none. In those circumstances I need say no more about the available arguments such as they are, on the level of costs awarded.
16. In consequence my decision is that permission to appeal is refused.
Order: Application refused with intended respondent's costs of preparation of written submissions in reply.