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 BRENTFORD COUNTY COURT
(His Honour Judge Knight QC)

		Royal Courts of Justice Strand London WC2 Friday, 9th March 2001

Friday, 9th March 2001

1. LORD JUSTICE CHADWICK: This is a renewed application for permission to appeal against orders made on 20th September and 10th October 2000 by His Honour Judge Knight QC, sitting at the Central London County Court, in proceedings brought by the applicant, Mr Vishwanath Chakravarti against Rapat Freight Limited.
2. The proceedings were commenced in the Brentford County Court on or about 23rd November 1998. The particulars of claim which bear that date seek payment of £27,500, being, as it is said, arrears of salary payable by the defendant company to the applicant for his services as managing director or chief executive over the period 2nd May 1996 to October 1997. A defence, dated 6th December 1998, contains the single assertion that the applicant had been paid in full for his services in India and that the defendant company owed him no monies.
3. In March 1999 the defendant, through its solicitors, asked for particulars of the claim, including particulars of any Board meeting at which it was alleged that the litigant had been appointed managing director of the defendant company. The applicant gave some further information in response to that request; but in response to a request for particulars of the Board meeting, the defendant company was, in effect, told to look at its own Board minutes. That prompted service of an amended defence and counterclaim in which the point was taken - it seems for the first time - that the applicant had never been employed by the defendant company at all. That pleading included a counterclaim seeking repayment of £6,500 which, as it was alleged, had been advanced to the applicant, or to his wife on terms that the monies would be repaid by the applicant.
4. On 16th July 1999 the applicant's claim was struck out by the Deputy District Judge. In an affidavit sworn by his solicitor on 20th August 1999 in support of an application for permission to appeal out of time against the order striking out his claim, the applicant's case was explained in these terms:

"2.The Plaintiff's claim is for arrears of salary payable for work done and services rendered by the Plaintiff to the Defendant between 2nd May 1996 and October 1997. The Plaintiff was engaged by the Defendant pursuant to an agreement dated 28 April 1996 ... to assist with the setting up of a joint venture freight company between the Defendant and an Indian company called Skypak Limited. Pursuant to the 28th April agreement the Plaintiff travelled to India and engaged in negotiations with Skypak and another potential partner called Express Delivery Systems...

3.Despite numerous requests throughout the term of the contract, by October 1997 the Plaintiff had received only £6,500 from the Defendant and he returned to the United Kingdom and ceased working for the Defendant. To date the Plaintiff has received no further payment."

5. The appeal against the order to strike out came before His Honour Judge Marcus Edwards on 10th November 1999. He ordered both parties to file amended statements of case. It is from those documents that the issues for trial have eventually emerged. The first issue was whether there was any contract - in particular any contract of employment - between the applicant and the defendant company. The applicant relied on the letter of 28th April 1996 to which reference was made in the affidavit which I have read. The letter, which is on the headed paper of Rapat Freight Ltd, is in these terms:

"Dear Mr Chakravarti,

Further to our various meetings in London and subsequent interview with the Board of Directors on 16th March 1996 in Bombay, we are pleased to offer you the post of Managing Director/Chief Executive with effect from 2nd May 1996.

a) Your yearly salary will be £24,000 payable monthly in arrears direct to your bank account.

b) You will be responsible for the running of all our overseas offices, as per the job descriptions attached.

c) You will be provided with a company car for office use.

d)You will be eligible to annual leave of thirty days.

e) You will be eligible to reimbursement of official entertainment expenses incurred from time-to-time subject to office rules.

f)You will be eligible to reimbursement of all travel expenses such as air and rail fares.

Your initial contract will be for a period of three years and is subject to review at any time at the discretion of the Board of Directors. Renewal or termination of the contract will be done at three months notice by either party.

All other terms are those as per the Job Description and Terms of Contract attached herewith.

Please sign and return one copy of this letter confirming your acceptance."

6. The letter is signed by Mr Hasmukh Patel as a director of the defendant company; and it is countersigned by the applicant to confirm acceptance of the employment.
7. On the face of the letter it contains what might be thought to be clear evidence of a contract between the applicant and the defendant company. But the letter must be read in the light of the Terms of Contract and Job Description to which it refers. The first two paragraphs of the Terms of Contract and Job Description are these:

"a)Your designation will be Managing Director/Chief Executive of the Joint Venture Company being set up between Rapat Freight Ltd. London and Skypak Couriers Ltd. Bombay, India. The name of this Company will be discussed at the next Board of Directors meeting.

b)You will be responsible for successful management of the company on a day to day basis. You will be accountable to Mr H Patel of Rapat Freight Ltd. London, with regards to any contractual matters and to Mr D Kulkarni of Skypak Couriers Ltd. Bombay, with regards to any operational matters."

8. The defendant company's answer is that terms of engagement were indeed agreed with the applicant; but that they were agreed by Mr Dilip Kulkarni of Skypack Couriers Ltd, the co-joint venturer referred to in the Terms of Contract and Job Description. The point is made in paragraphs 5, 6 and 7 of the re-amended defence:

"5.In or around April 1996, Mr Patel of the Defendant company and Mr Dilip Kulkarni of Skypak Couriers Limited agreed that the joint venture company would employ the Claimant. The Claimant was informed of this in India in or around April 1996 by Mr Patel of the Defendant company.

6.The terms under which the Claimant was to be employed by the joint venture company were..." [and there are set out the terms, which are substantially the same terms as those in the letter of 28th April 1996].

"7.On or around 28th April 1996, the Claimant asked Mr Patel of the Defendant company for a letter evidencing his proposed contract of employment. To the best of the Defendant's knowledge the letter was requested for the purposes of showing the same to the Claimant's mortgage company. The letter was typed up by a Miss Raksha Kotecha at the Claimant's request and the Claimant handed the said letter to Mr Patel of the Defendant company to sign."

9. If the applicant was successful on the first issue, then the counterclaim would fail. The applicant acknowledged that the £6,500 had been paid; but it had been paid, as he said, on account of salary; and he gave credit for that payment in computing his claim for £27,500 arrears of salary. But if the applicant failed on the first issue, then there was a second issue, namely, whether the £6,500 which had been paid to the applicant or his wife had been paid as a loan upon terms that the applicant would be responsible for repayment.
10. Those were the matters which came before His Honour Judge Knight for trial. I have not been provided with a transcript of his judgment, but there is in the bundle a manuscript note, taken, I am told, by counsel who appeared for the applicant on that occasion. It is not a note which has been approved by the judge; but the applicant has invited me to proceed on the basis that it is accurate.
11. The judge heard evidence from the applicant, from Miss Kotecha and from Mr Hasmukh Patel. Miss Kotecha's evidence, as it appears from the witness statement included in the bundle, is that whilst carrying out her secretarial duties in or about April 1996 she was approached by the applicant to type out a letter for him. The applicant explained to her that he needed the letter for his building society purposes. She asked Mr Patel whether she should type the letter; and he confirmed that she should. That is the letter which is in the bundle dated 28th April 1996. Mr Patel's evidence, as it appears from his witness statement, is to much the same effect: that the applicant had requested that, for a personal reason, he needed a letter evidencing that he had been employed by the joint venture company. On the 28th April the applicant wrote a letter, which Mr Patel signed, which could be read as an offer; and Mr Patel said that he never received a signed acceptance from the applicant.
12. The position, therefore, was that the judge had to decide whether the terms of employment, as set out in the letter of 28th April 1996, were terms of an employment of the applicant by the defendant company or whether they were really the proposed terms of his prospective employment by the joint venture company. The judge had to decide whether the letter of 28th April was written and signed in the circumstances that it was understood that that was not a letter evidencing a contract with the defendant, but was required by the applicant for some collateral purpose.
13. The judge accepted the evidence of Mr Patel and Miss Kotecha in preference to the evidence of the applicant. He said so at page 8 in the manuscript transcript of his judgment:

"I accept the evidence of Mr Patel and Miss Kotecha that the purpose of the coming into being of that letter [the letter of 28th April 1996] was not to set out the terms, but was for the personal use of Mr Chakravarti. I don't know what that was. I heard Mrs Kotecha in the witness box, and that being so, this contract does not reach first base. The letter was prepared for a wholly collateral purpose, and that being so, the claimant's claim fails."

14. It is fair to say that, if one reads the documents in this case -including documents addressed to Air India seeking preferential fares in respect of the applicant and other documents giving him authority to act - one would be led to the conclusion that there was a contract between the applicant and the defendant company. But all those documents were before the judge; and having heard the evidence of Mr Patel and Miss Kotecha, he came to the conclusion that no such contract had ever been made and no contract was ever intended. That is a finding of fact.
15. An appellate court has to respect the advantage which the trial judge has had of hearing and seeing the witnesses give their evidence. This is not a case in which it can be said that the judge came to a conclusion which was unsupported by any evidence. He came to a conclusion which was supported by oral evidence, although contradicted by written evidence. He preferred the oral evidence. It cannot be said that he was not entitled to do so. There is no real prospect that an appellate court could reach a different conclusion.
16. Having found against the applicant on the question of employment, it was then necessary for the judge to consider the basis upon which the admitted payments of £6,500 had been made. He came to the conclusion, again after hearing evidence, that they were loans which were repayable. Again, that is a finding of fact with which this court could not interfere.
17. The order which the judge made on 20th September 2000 was for the applicant to provide a statement of means by 27th September. He dismissed the claim, gave judgment on the counterclaim and ordered the filing of a statement of means. He adjourned the matter over until 10th October. Clearly, the purpose of that adjournment was to enable him to decide whether or not he should make an instalment payments order. When the matter came back to him on 10th October 2000 he decided not to make an instalment payments order. Although there is no note of his reasons for reaching that conclusion, it is reasonably plain from the order which he made - in particular, from paragraph 3 of that order - that he had not been impressed by the applicant's statement of means. I say that because paragraph 3 of the order of 10th October requires the claimant to make a further affidavit of means exhibiting bank statements, disclosing life insurance policies and copies of any application for a loan.
18. When this matter came before Arden LJ for consideration on paper, she directed that the applicant was to lodge a note of the judgment given on 10th October 2000 so that this Court could see what it was that had led the judge to decide not to make an instalment payments order. No such note has been lodged. Therefore, I am left in the position that the judge must have taken the view that whatever statement of means was filed was not sufficient to lead to the conclusion that the applicant could not pay the whole of the judgment sum forthwith.
19. In his proposed grounds of appeal, the applicant criticises the judge's approach. He says that the judge was wrong on the law and on the facts: he was wrong to rule that the contract of employment was not intended to be a contract between the applicant and the defendant company; he was wrong to rely on the evidence of the defendant and Miss Kotecha, who was still in the employment of the defendant; he did not consider all the documentary evidence; and it was wrong of him to reach the conclusion that the sum of £6,500 was paid by way of loan, rather than as salary. Further, it is said that the judge didn't take into account the representations made by the applicant that his employment in India for a nominal sum would be insufficient for him to manage two households, one in London and the other in India.
20. The Court is hampered by having only a note of the judge's reasons. But all the documents in the bundle appear to have been put to the judge by counsel then representing the applicant; and I have no reason to doubt that the applicant's counsel cross-examined Mr Patel on the apparent inconsistencies between the documents and the oral evidence that was being advanced. After hearing that evidence, the judge came to the conclusion which he did. The applicant's complaint really is that the judge should not have believed Mr Patel and should have believed the applicant. But that is not a complaint which the Court of Appeal can resolve on the material that is available to it.
21. As I have said, there is no real prospect that the court would interfere with the judge's findings of fact in this case. In those circumstances, the application to appeal against both orders is refused.
Order: Application refused. (Order does not form part of approved Judgment)