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 ORDER OF MR RECORDER MAW
(Lincoln County Court)

		Royal Courts of Justice Strand London WC2 Thursday, 3rd October 2002

1. LORD JUSTICE BUXTON: These proceedings arise out of a trial conducted by Mr Recorder Maw in the Lincoln County Court on three days in October 2001. He gave judgment for the claimant, Mr Philip Harrison, in respect of contractual claims he had against Parisbond, the defendant company. So far as the proceedings in this court are concerned, complaint was made of Mr Recorder Maw's judgment on six grounds. The sixth ground is that he had refused to deduct tax and national insurance from the amount of damages for loss of earnings awarded to Mr Harrison. The recorder gave permission for ground 6 to be pursued. On reflection, it was not opposed by the claimant's advisers. We are told by Mr Pimm, who appears today for the claimant, that not only were the defendants informed of that lack of opposition but at least some progress has been made towards agreeing sums that should be deducted from damages under that head. It is therefore apparent, and it has been fairly conceded by Mr Carlisle for the defendant, that if ground 6 had been all that was in issue between the parties it would not have been necessary to trouble this court with it.
2. However much more extensive complaint was made about other aspects of the judge's decision in grounds 1 to 5 of the grounds of appeal. The judge did not give permission in respect of those grounds. It did not occur to either side that the proper, or at least an available, course would be for those grounds to be renewed by a separate application to this court. What in fact happened was that in the notice and grounds of appeal put forward by the defendant company all six grounds were contested and put forward, as it were, pari passu, without discrimination between the ground upon which permission had been granted and the grounds on which permission had not been granted. This was a process that, as far as I can determine, was open to the defendants under the procedures presently adopted by this court. I will go so far as to say consideration is being given as to whether those procedures should be revised. The procedure was however conspicuously unusual in the present case because, as will have been seen from the account I have already given, grounds 1 to 5 have no life of their own and can only be put forward apparently as matters of appeal because they were parasitic on ground 6, a ground which is not in issue. In the proceedings as they stood therefore it was necessary for permission to be sought from this court before grounds 1 to 5 could be pursued.
3. We have heard Mr Carlisle this morning on a renewal of his grounds in court. The court is not persuaded that any of those grounds should attract its further attention for the reasons I will now shortly state. I will be forgiven if I do not go into all the detailed facts of this case. Although important to the parties concerned the case, as far as I can see, raises no point of any interest outside that forum and the facts are well known to the parties themselves.
4. Mr Harrison, the claimant, was originally, and apparently still is, the proprietor of a vehicle repair business called Harrison Accident Repair Specialists. The defendant company is a motor trader dealership operating in the same area as Mr Harrison. Its leading force at the time of the matters of which complaint is made was Mr Andrew Derry. He has now left the company, but he gave substantial evidence on its behalf in front of the recorder. Mr Harrison's claim effectively turned - and this is all to which I need refer - on agreements entered into, as he contended, at about the end of March 1999 for him to sell his business to the defendant company, Parisbond. Mr Harrison claimed that the agreement was in two parts: first, that he would receive £10,000 immediately and also a further £15,000 for the good will of the business, that money not to be paid until certain contingencies arose; secondly, as he said, an agreement for him to be employed by Parisbond in running the business, albeit then owned by them, by way of a fixed term contract for a period of two years, expiring on 31 March 2001, at a salary of £36,000 per annum; and that he would also be a member of their pension scheme.
5. The defendants, being dissatisfied with the way in which the business was running, decided to dispose of it back to Mr Harrison in about January 2002. They offered to pay him £5,000 which was meant, they said, to be in settlement of any claim he might have for redundancy pay. It was inherent in that contention not only that there had never been any agreement to a two-year fixed term contract but also additionally, as contended before the recorder, that the agreement in January 2000 had been, as it were, in full and final settlement of any claims that Mr Harrison might have against the company.
6. The essence of the case therefore was what agreement had been made on the sale in March or April 1999. On that, and on the surrounding circumstances, the judge heard an enormous amount of evidence and extensive submissions. He heard strongly competing versions of what had occurred and what had been agreed from Mr Harrison, on the one hand, and Mr Derry, on the other. It is fair to say that the judge formed a favourable view of Mr Harrison in the sense that he concluded that Mr Harrison was not a sophisticated businessman, but basically someone whose testimoney he was able to accept. In the case of Mr Derry he was impressed by Mr Derry's commercial acumen and experience, but he did not think his evidence, which the judge heard at length, was in every respect reliable. In one respect, as I shall have to say in a minute, he found it to have been actively misleading.
7. The singular aspect of the case was that there were in existence written, but unsigned, agreements which effectively set out the agreement in the terms that Mr Harrison alleged. These agreements had come into existence after a meeting or meetings between Mr Harrison and Mr Derry at which there was present Mr Crutch who was the solicitor and legal adviser to the defendant company. They had been furnished not only to Mr Derry but also, by him, to Mr Harrison. Mr Derry had made manuscript amendments to them. Mr Harrison's case was that these documents represented what had been agreed. Of course they were not themselves the contract because he had not signed them. But his case was that they evidenced that which had been agreed between him and Mr Derry. Mr Derry said that that was not the case, that the agreements had been simply pro forma, standard agreements used commonly in the defendant's business for directors or senior executives, as Mr Harrison was about to become. They had been drawn up by Mr Crutch as a matter of form. Mr Crutch, in Mr Derry's view, was not a person to be held in great regard. The truth of the agreement was as Mr Derry testified to in his oral evidence. The judge went into this matter in enormous detail.
8. In the grounds of appeal and skeleton argument complaint is made, or suggestion is made, that the judge did not have - and demonstrated in his judgment not to have - a full grasp of the facts. I do not think that criticism is at all valid. If there is any criticism to be made of this judgment it is that it is too elaborate, and effectively tells the reader everything said and done in every detail throughout the three days of this trial. The difficulty the judge had in accepting Mr Derry's account, quite apart from the view that he had formed of Mr Derry in the witness box, was that he did not understand why Mr Crutch had been involved at all, why he had drawn up the agreements and why Mr Derry had dealt with them as he had, if they were simply irrelevant to and misleading about what had been discussed between Mr Derry and Mr Harrison and agreed between them. He found that Mr Harrison's account that these documents did record the agreement was plausible and understandable against the background I have just indicated.
9. I, for my part, can see no way in which that finding can be contested. Not only is it one that the judge reached after considering all the evidence, I am also bound to say - I remind myself it is not for this court to enter into the merits of the matter - that in the light of all the evidence it is a finding that is redolent with common sense. Criticism that is made of it cannot be sustained. True it is that complaint is made that Mr Harrison did not explain why he had not signed the drafts, and that that failure to sign was possibly a significant matter. Mr Harrison's account to the judge, which the judge recorded, was that once he had reached agreement and seen the documents he got on with running the business and did not think further about the signature. The judge was influenced in that, on the one hand, by Mr Harrison's lack of sophistication and, on the other hand, by his belief that an experienced businessman like Mr Derry would not enter into this elaborate process unless it was one of meaning.
10. That is as to the substance of the agreement. The second dispute was as to the payment of the £15,000 for "good will". Mr Derry's claim was that Mr Harrison was wrong in saying that sum would be paid should he leave the company. It was only to be paid if the business was to be sold to a third party. It was claimed on behalf of the defendant and before us that Mr Harrison's construction that he would get the money if he left straightaway was commercially unreasonable and had been agreed by him in cross-examination to be unreasonable. Mr Harrison's reply, in my view, does not go that far. But, in any event, the judge was right. In a short passage in his judgment he pointed out that if Mr Harrison did leave he left behind him the fruits of whatever work he had done to improve the business on behalf of Parisbond. It is therefore entirely plausible that he should receive at that point the £15,000 for the good will he had transferred to Parisbond. In any event, the judge made a quite clear finding on this point:

"There is nothing at all in any of the evidence apart from Mr Derry's suggestion made late in the day that the £15,000.00 would only be paid if the business of the body shop was sold to a third party and if Mr Harrison was still employed by the company. Mr Derry might have thought that and might have wanted it. If that is right there would have been nothing at all to stop him putting that into the agreements and tying the matter up so that Mr Harrison could not disagree."

11. The judge said:

"I expressly reject Mr Derry's evidence that there was an agreement between himself and Mr Harrison and that Mr Harrison would only get the £15,000 under the circumstances that Mr Derry has put forward. I do not believe that to be true and I think and I find as a fact on the balance of probabilities and the evidence I have that Mr Derry has made up that suggestion to suit his case and that at a late stage."

12. Overall therefore there are no grounds for attacking this judgment.
13. I should mention one further point in that it was said to be inconsistent with the general thrust of the judge's judgment that he reached a conclusion on another matter - that is to say, as to the sale or ownership of a motor vehicle - that was different from that contained in the written agreements. Here, again, the judge explained circumstantially on pages 38 and 39 of the judgment why he reached that conclusion in the light of further transactions between the parties. There was nothing inconsistent in that finding.
14. On the main complaints therefore I would not grant permission. There is no prospect of this judgment being successfully challenged in this court, being based, as it is, on findings of fact and practical inference in the light of evidence heard by the judge.
15. 13 Two complaints were made about the judge's assessment of quantum (quite apart from the ground 6 point): which, on investigation, turned on the computation or decision of the amount to be deducted from Mr Harrison's damages by reason of further employment he gained. Mr Harrison, when questioned about this, originally gave a fairly substantial figure. There were thenproduced accounts in relation to Mr Harrison's business - not audited, but drawn up by a firm of accountants - which showed a lower sum. The judge accepted that sum as the correct sum and did not accept the figure originally given by Mr Harrison. He was plainly entitled to do that. Mr Carlisle complained that that conclusion was not reasoned. In my judgement, reasoning was not required when what the judge was doing was acting upon a set of proper, albeit unaudited, company accounts. It would not be necessary, particularly when one reaches page 38 of the judgment, to say more than that.
16. I therefore would not grant permission on any of these grounds.
17. LORD JUSTICE KEENE: I agree.
Order: Application dismissed with the respondent to have half of today's costs