England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CHANCERY DIVISION
BIRMINGHAM DISTRICT REGISTRY
(His Honour Judge Hamilton)

		Royal Courts of Justice Strand London WC2A 2LL Friday, 23rd November 2001

Friday, 23rd November 2001

1. LORD JUSTICE PETER GIBSON: The claimant, Mr Shingari, applies for permission to appeal from the order made on 5 July 2001 by His Honour Judge Hamilton, sitting as a High Court Judge in the Birmingham District Registry of the Chancery Division. By that order the judge dismissed with costs Mr Shingari's claim against the defendants, Hearne & Company, a firm of solicitors.
2. The dispute between the parties turns on the terms on which Mr Shingari paid £105,000 to the defendant on 2nd July 1993. The defendants' Roger Hearne was the solicitor to Manjula Sharma. Mr Sharma and Mr Shingari entered into a joint venture to build a nursing home on a site at 150 Goldhill Road, Hodge Hill, Birmingham ("the Property"). The Property was owned by Mr Sharma's wife. Each was to contribute £200,000. Mr Shingari's case was that he would contribute £105,000 by buying a half-share in the Property and £95,000 in cash. Mr Sharma instructed his solicitor, Mr Hearne, to prepare a contract. On 2 July 1993 Mr Shingari and Mrs Sharma signed the contract in the presence of Mr Hearne. Mr Shingari paid Mr Hearne £105,000. The agreement was expressed to incorporate the Standard Conditions of Sale (1st edition) with certain exceptions which are immaterial. Condition 2.2.3 provided that any deposit was to be held by the seller's solicitor as stakeholder on terms that on completion it was to be paid to the seller with accrued interest. The contract showed the £105,000 as being a deposit, with a further sum to be paid on completion.
3. In the ensuing months £95,000 was paid by Mr Shingari to Mr Sharma's daughter at Mr Sharma's request. It was not, I think, in dispute that the £200,000 which Mr Shingari paid reached Mr Sharma and was used by him for his own purposes and not on the Property. The transfer was never completed.
4. Mr Shingari brought two actions. One was against Mr and Mrs Sharma and their daughter. Mr Shingari claimed against Mr Sharma the return of £200,000. In substance that claim succeeded. His claims against Mrs Sharma and Miss Sharma, each of whom was alleged to be a trustee of the monies they had received for Mr Shingari, were dismissed.
5. The second action is the one with which I am concerned today. Mr Shingari claimed that he paid £105,000 to Hearne & Company on terms that they were to hold that sum to the order of Mr Shingari, save that it was to be released to Mrs Sharma on completion by her of the transfer to Mr Shingari. It was further pleaded that Hearne & Company held the monies for Mr Shingari as trustees and that there was a breach of trust when the monies were paid to Mrs Sharma or Mr Sharma.
6. Judge Hamilton appears to have thought that Mr Shingari, by the two actions, had advanced mutually inconsistent propositions. I do not see that, save to the extent that Mr Shingari could not recover twice over both from the Sharmas and also from Hearne & Company. It is of course possible for two persons to be trustees successively of the same money when that money reaches their hands.
7. In the defendants' original defence it was denied that the payment was made on the terms alleged. The defence was amended in May 1998 to set out what the defendants say occurred at the meeting on 2nd July 1993. Paragraph 2G sets out the defendants' version of the terms on which the money was paid, that is to say that Mr Shingari told Mr Hearne that the £105,000 was to be paid over to Mr and Mrs Sharma immediately, or as they required, so that the monies could be used for construction work at the Property. That is repeated in similar terms in an affidavit which was sworn on 23rd February 1998 by Mr Hearne, who said that Mr Shingari had told him that the monies were being paid over to be utilised in the building works and that that accorded with his, Mr Hearne's, instructions from his clients, the Sharmas. In the defence it was also pleaded that it was within the defendants' power as stakeholders to make the payment without obtaining Mr Shingari's instructions, as the defendants were confident that circumstances existed which justified the decision to make payment. The circumstances which are set out are, first, what is contained in paragraph 2G; second, instructions from Mr and Mrs Sharma that Mr Shingari had agreed to the money being used for another purchase by Mr Sharma; and, third, a discussion about the Property not yet being transferred at a meeting on 29th June 1994 when a partnership agreement was signed by Mr Shingari and Mr Sharma.
8. An attendance note was made by Mr Hearne of the meeting on 2nd July 1993, but it contained nothing to substantiate the defendants' case, or, indeed, to substantiate Mr Shingari's case, as to the terms on which the money was paid over. In a witness statement, made on 23rd October 2000 more than two and a half years after his earlier Affidavit, Mr Hearne gave another account of what occurred on 2nd July 1993; there he made no mention that monies were paid to be utilised in the building work. Mr Hearne said that Mr Shingari had told him that the monies were to be paid over to Mr and Mrs Sharma immediately, or as and when they required the money, for whatever reason. In paragraph 8 of the witness statement it was said by Mr Hearne that over the months he had paid the whole of the £105,000 to Mr Sharma. That, he said, was in accordance with the understanding and agreement that Mr Sharma had with Mr Shingari. He says that he had no hesitation in using the monies because he knew that Mr Shingari had not placed any restrictions on that sum. By that stage, he said, Mr Shingari had agreed with Mr Sharma that the half-share in the Property would not be transferred over, and he, that is to say Mr Shingari, was also aware that building works had not been carried out to the Property. Mr Hearne said,

"Had there been any restrictions I would not have released the £48,000 for Chance House Farm."

9. That is another property which apparently Mr Sharma acquired.
10. When the case came before the judge Mr Shingari appeared in person. The judge heard evidence from both Mr Shingari and Mr Hearne. Mr Sharma did not give evidence. The judge in paragraph 8 of his judgment recounted Mr Hearne's evidence to have been this:

"He says there was a discussion in which it was made clear that the sum of £105,000 was to be made freely available to Mr Sharma or his wife or both of them for such purposes as they should require on calling it down because they were to be involved in the expense of developing the site for use as a nursing home."

11. The judge expressed his crucial finding of fact in this way:

"I find, as a fact, that at the meeting on 2nd July 1993 Mr Hearne discussed with Mr Shingari the status of this £105,000. It was agreed that it was not to be treated as a deposit held by Mr Hearne as a stakeholder for completion of the transfer of the land and that it was to be Mr Sharma family's money because the Sharma family, however it was defined, whether it was Mr Sharma alone or Mr Sharma with his wife, or Mr Sharma with anybody else, were going to invest in the venture with Mr Shingari."

12. The judge said that Mr Shingari's case therefore failed on this point. He further said that was because the evidence showed that even if Mr Hearne had received the money as a stakeholder, Mr Shingari had accepted the decision of the Sharma family not to proceed to transfer the half-share. That was the finding made in the first action by the judge in that case, who had held that the agreement to transfer land was an agreement discharged by Mr Shingari when he quite clearly, between himself and Mr Sharma, varied the nature of their agreement. The judge said that if Mr Sharma used the money for other purposes, then that did not show that Mr Hearne or his firm was liable to compensate Mr Shingari for any loss that might have been sustained because that was not a loss incurred by any default on the part of Hearne & Company but by the misappropriation of funds by Mr Sharma. Accordingly the judge dismissed Mr Shingari's claim.
13. Mr Shingari appears in person before me today. He has addressed me with courtesy and clarity. He has added orally to the submissions which he made in a skeleton argument, running to 48 paragraphs, in which he takes a number of detailed factual points on the evidence. They included that the judge should not have accepted Mr Hearne's attendance notes as evidence because errors in them suggested that they were not made contemporaneously; that Mr Hearne's version of events was not supported by the documents; and that Hearne & Company failed to provide information, relying on client confidentiality. He also suggested that Mr Hearne had by his witness statement accepted that he knew that the monies were paid over for purposes other than for the building works at the Property. I think that was in part a misunderstanding of what is contained in the witness statement of Mr Hearne, though it is arguable that Mr Hearne was accepting that he knew that the £48,000 was released for a property other than the Property.
14. I had thought that Mr Shingari would be taking the point that there was a discrepancy between the way that the matter had been pleaded and expounded by Mr Hearne in his 1998 affidavit, on the one hand (that is to say that on Mr Hearne's own evidence the monies were handed over on 2nd July 1993 subject to a restriction that they were to be released to Mr or Mrs Sharma only for building purposes) and, on the other hand, Mr Hearne's witness statement on 23rd October 2000 and his oral evidence, that there was no restriction on the purpose for which the monies could be released. But it is apparent from what I have been told by Mr Shingari today that he was concentrating on other matters, such as the absence in the attendance notice of 2nd July 1993 of anything to support Mr Hearne's present recollection of the terms on which the money was handed over.
15. It is therefore very unlikely that what I have called the discrepancy featured strongly, if at all, before the judge. Certainly it is not a matter referred to by the judge. But then, no judge is required to deal with all points raised in the course of a trial. He has a duty, of course, to deal with the principal points which are advanced so that the loser knows precisely why he has lost. The fact of the matter, as it appears to me, is this, that the judge was faced with an acute conflict of fact between Mr Hearne on the one hand and Mr Shingari on the other. Mr Shingari has told me that Mr Sharma was a fraudster and was assisted by his solicitor and that there is no truth in what Mr Hearne was saying. But that is the very matter which the trial judge has to decide on the evidence before him and on how the witnesses appear to him.
16. In this court I do not have the advantage, which the trial judge had, of seeing both key witnesses give their evidence. This court, it has been said over and over again, cannot interfere with findings of fact made by a judge who has reached a conclusion reliant on the impression made by witnesses unless it can be demonstrated that the trial judge has misused his advantage of having seen and heard the witnesses or otherwise the trial judge can be shown to have been plainly wrong.
17. I do not doubt the sincerity of Mr Shingari and how upset he is that he has been, as he puts it, defrauded in the way that he has. One of his complaints was that this is not the only occasion on which events such as he experienced have occurred; and he had a couple of witnesses who gave evidence that there were other occasions where similarly unsatisfactory treatment was meted out by Mr Sharma aided by Mr Hearne. But that too was a matter for the trial judge to consider and appraise.
18. I am afraid that I see no real prospect of success in an appeal in this case. The hurdle that has to be overcome in order to interfere with findings of fact is too great, and I have not been provided with material that shows, even arguably, that the trial judge erred in his assessment. Nor has any other compelling reason been shown as to why this appeal should go ahead. Mr Shingari has said to me that it is wrong for courts to believe a solicitor and to disbelieve someone who is not a lawyer. Every trial judge faced with a conflict involving a solicitor and someone who is not a lawyer is required to do his duty conscientiously to decide which of the two witnesses is telling the truth. There is, I am afraid, nothing that has been put before me to show that in this case the trial judge can arguably be demonstrated to have erred in the exercise of his duty.
19. For these reasons, I regret that I must dismiss this application.
Order: Application dismissed. (Order does not form part of approved judgment)