England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(Mr N. Wilkinson QC sitting as a Deputy Judge
of the Queen's Bench Division)

		Royal Courts of Justice Strand London WC2 Friday, 7th December 2001

1. LORD JUSTICE DYSON: On 28th March 1993 the claimants, then trading as Hanningfield Leisure, purchased a Chevron 2-32 microlight aircraft, registration G-MZDP from AMF Aviation Enterprises Limited. AMF is now in liquidation. Mr. Fleming, the second defendant, was the moving force behind AMF. The claimants' case in a nutshell is that Hanningfield Leisure ceased trading, as it did, because of shortcomings in the aircraft in question and that they suffered loss and damage thereby. The particular shortcoming that is material to this appeal is that the aircraft was overweight so that the permit to fly granted by the Civil Aviation Authority was withdrawn on 26th July 1995.
2. After October 1988 the maximum empty weight permitted for the aircraft with a fuel capacity of 30 litres was 185 kilogrammes. There was evidence before the judge as to the weight of the aircraft recorded from time to time by the second defendant. A weight of 179.17 kilogrammes was recorded in July 1990. A weight of 181 kilogrammes was recorded on 26th March 1993, two days before the sale in connection with an application for a renewal of the permit to fly. There were later weight records which included a record by the Essex Trading Standards of 203 kilogrammes on 30th May 1995, and the same weight recorded by them on 27th June 1995. At the trial the excess in weight over the maximum permitted of 185 kilogrammes at the time when the permit to fly was withdrawn was put at 12 kilogrammes on the defendants' case and 13.4 kilogrammes on behalf of the claimants. The key issue at the trial was what the reason was for that apparent increase in weight from the date of sale until the date of withdrawal of the permit to fly. The claimants' case was that, although some weight increase after manufacture could be explained, for the most part it could not be explained, and the only inference that could properly be drawn was that the aircraft was constructed overweight and sold overweight, and that the weights recorded on the test flight sheet of 2nd July 1990, and on the application to renew the permit to fly on 26th March 1995, were false. If the recordings were false, it seems not to have been in dispute that the second defendant would have known that. This was the basis upon which the claimants sued him in his personal capacity on the ground that he was guilty of a fraudulent misrepresentation which induced the claimants to purchase the aircraft. The only explanation advanced by Mr. Fleming as to the weight increase, as he contended that it was, was that the aircraft had absorbed moisture during the two year period between March 1993 and May 1995. The aircraft was in part constructed from absorbent materials, glass reinforced plastic, GRP, and plastic foam. It was suggested on behalf of Mr. Fleming that this material had absorbed moisture sufficient to account for the increase in weight.
3. The judge heard a good deal of evidence on the subject of the weight of the aircraft and as to the possibility that there had been an increase since the manufacture by reason of the absorption of moisture. He ultimately said that he was not satisfied that the claimants had excluded the real possibility that there had been an increase in weight which was attributable to moisture absorption. Accordingly he found in favour of the second defendant on liability.
4. It is necessary, in view of the points taken by Mr. Hedley, to summarize the evidence as it was recorded and appraised by the judge in his judgment. He noted that Mr Fleming asserted at an interview in January 1996 with Mr. Maerz of the Essex County Council that the explanation for the weight increase was moisture absorption. This explanation was not accepted by Mr. Maerz who authorised the moisture testing of the fuselage of the aircraft which took place later. There was evidence that a Mr. Hayward had x-rayed the fuselage and that a Mr Francis had placed probes in the outer casing of the fuselage and that both of these tests, conducted I think in 1995, seemed to indicate that no moisture was present in the fuselage at the time of testing. There was evidence from a Mr. Marshall, the claimants' expert, who was, as the judge said, firmly of the view that overweight manufacture was clearly demonstrable. The judge at page 11 of his judgment dealt with the evidence of Mr. Francis and Mr. Hayward. He said that neither of them impressed him as being more than technicians who had a limited understanding of their equipment and its scientific operation. He identified a number of shortcomings in their evidence. He contrasted the evidence of the claimants' witnesses with that of Professor Richardson, an expert in composite materials and a chemist who was called on behalf of Mr. Fleming. His evidence, as the judge put it, was not capable of serious challenge as to the fact that the aircraft had the capacity to absorb as much as 18 kilogrammes of moisture. He believed that the absorption process could be lengthy and measured in months or years. When asked to comment on the statement of Mr. Mearz that there had been in his view no moisture absorption, Professor Richardson said that such a statement could not be substantiated scientifically because absorption and drying out processes can be very slow. By comparison, the judge said that Mr Marshall was not in a position to match Professor Richardson's expertise. The judge said that he greatly preferred the defendants' evidence, and that it was possible for the critical weight gain to be explained by moisture absorption. He said that Professor Richardson's views were provided in a careful and balanced manner and were consistent with the general proposition recognised by Mr Bevan (he was of the CAA) that GRP is a substance which, to the knowledge of the Civil Aviation Authority, is associated with weight gain over years. The judge also said that tests carried out by Dr. Stinton supported the conclusion that the GRP had a considerable capacity to absorb water, so that it was now being used less in aircraft and boat construction. The judge also said that the MZDP aircraft was exposed during its time at Hanningfield to a high risk of moisture absorption since it was not housed in a hanger and not sufficiently protected from the elements. At page 15 the judge said that the claimants had not proved to him that the explanation of moisture absorption to account for the weight gain was unreasonable. He said that the defendants, through Professor Richardson, had shown that that contention was tenable. He then drew some support for his conclusion from other parts of the evidence, including the ongoing involvement of the CAA in the certification process, the fact that the judge could not believe that Mr. Fleming would have put the Chevron and his own reputation at risk by lying about its weight. He did not think that recklessness was a realistic prospect. He had carefully considered the criticisms made of Mr Fleming as a witness, but was not able to assess him as having been fraudulent. He referred in this connection to the testimonials given of Mr Fleming by Mr Bevan and Dr Stinton, both of whom knew him well, who the judge regarded as impressive witnesses. Finally, and, as the judge put it, significantly, he relied on the evidence of Mr. Cook, the production manager at the time of the construction of the MZDP aircraft. Mr. Cook told the judge, and he accepted, that the aircraft was not constructed overweight. I quote from the judgment:

"He could not be sure that he was present at the final assembly of MZDP when it would have been weighed, but as production manager of a small company he was most likely there. I so find. He was almost always present at final assembly of the Chevrons which all came out more or less the same weight. Weight, he acknowledged, was always the key issue. I regarded Mr Cook as an impressive witness who would not seek to mislead the court for any reason, be it loyalty or friendship or any antipathy that may have existed towards the claimants."

5. In a comprehensive skeleton argument Mr. Hedley has made many points of detail but, as he has made clear this morning, the essential ground upon which he would seek permission to appeal is that the judge failed to give any or any sufficient reasons for his conclusion; alternatively, that he failed to take account of certain essential features of the way in which the claimants put their case. He relies on the decision of this court in Flannery v Halifax Estate Agencies Limited [2000] 1 WLR 377 and in particular the passage at 382A-C. In that passage the court indicated that where a 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.
6. Mr. Hedley placed before the judge at the close of the case a detailed written submission in which he advanced a number of closely analysed propositions in support of the claimants' case that the absorption of moisture theory could and should be excluded. Three particular features of the evidence were relied upon by Mr. Hedley. The first, and perhaps the most important, (but they are cumulative in their effect,) was that the weight of the GRP and foam, the potentially absorbent material used in the construction of the aircraft, was estimated by Mr. Fleming, in an interview with Mr. Maerz on 17th January 1996, as 135 kilogrammes. That was also the figure of GRP and foam weight given to Professor Richardson as the manufacture weight. It coincided with the weight found by Mr. Mearz at the strip weigh conducted on 14th February 1996. Mr. Hedley made the point therefore that, since there was a coincidence in weight between the figure estimated by Mr. Fleming and that found by Mr. Mearz on 14th February 1996, this indicated that there had been no increase in weight since manufacture and therefore no moisture uptake. The judge dealt with that point at page 16 of his judgment by saying this:

"I have had regard to the cogent submissions advanced by Mr Hedley in paragraph 27 of his closing submission, which he expanded in argument in his final speech. I have placed an analysis of the estimates given at various times by Mr Fleming, as against the 135 kilogramme assessment made at the strip weigh given in paragraph 31 of Mr Mertz's statement at page 254 of bundle 2, alongside the evidence of Mr Cook. The two pieces of evidence are of course inconsistent. I prefer Mr Cook. He speaks directly of his knowledge and experience of the aircraft weight at manufacture. The claimants' submissions at paragraph 27 are based upon the analysis of estimates."

7. It seems to me that there can be no possible complaint, either that the judge failed to take into account this point or that he failed to give reasons for rejecting the case insofar as it was based upon it.
8. Mr. Hedley has two other points. First, there was evidence that, when the aircraft was taken to AMF premises on 10th October 1995, it had a recorded empty weight of 301.5 kilogrammes. Between 10th October and 30th November 1995 Mr. Fleming endeavoured to dry out parts of the aircraft. It was re-weighed on 30th November 1995 at 200 kilogrammes. The aircraft continued to be dried by Mr. Fleming until 13th February 1996. At the strip weigh on 14th February the empty weight was 201.26 kilogrammes. It follows that on those figures the drying out carried out by the second defendant had not reduced the weight at all.
9. Secondly, the wings, which have not been the subject of that drying out process, were nevertheless stored properly during that five month period between October 1995 and February 1996, and were weighed on 10th October 1995 at 72.1 kilogrammes and on 14th February 1996 at 71.9 kilogrammes; in other words, effectively there was no weight loss during that five month period. Mr. Hedley submits that the judge simply failed to deal with either of these two points. It seems to me that in that respect he is right and he has a legitimate complaint: the judge ought to have dealt with those points specifically.
10. The question, however, remains whether the failure to deal specifically with those two points, and possibly the somewhat limited way in which he dealt with the first point, are sufficient to give the claimants a reasonable prospect of succeeding on an appeal along the lines submitted by Mr. Hedley. It seems to me that the decision of Flannery has to be viewed in the context of that case. It was an extreme case. It seems to me that the judge gave sufficient reasons for finding as he did. In particular, he accepted the evidence of Mr. Fleming, whom he regarded as credible and honest, and most importantly of all, Mr. Cook. He also accepted the evidence of Professor Richardson that it was possible for the amount of weight gain that occurred to be attributable to moisture absorption. It would have been preferable if the judge had dealt specifically with the points made by Mr. Hedley. But in my judgment he did give adequate reasons for his conclusions overall. I am not persuaded, despite the cogent and clear submissions made by Mr. Hedley, that he has demonstrated that the claimants would have a real prospect of succeeding on an appeal. For all these reasons I would dismiss the application.
Order: Application refused; detailed assessment of the claimants' costs.