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 BURY COUNTY COURT
(His Honour Judge Macmillan)

		Royal Courts of Justice Strand London, WC2 Friday, 22 November 2002

1. LORD JUSTICE CLARKE: This is an application for permission to appeal the order of 15 July 2002 of His Honour Judge Macmillan, sitting at Bury County Court, dismissing the applicants' appeal against the order of Deputy District Judge Flanagan, sitting in the Small Claims Court on 31 May 2001. Deputy District Judge Flanagan ("the district judge") dismissed the applicants' claim, which sought to recover £2,400 for materials supplied and used in the repair of a property at 83 Prout Street, Manchester, and monies paid to the respondent's agent as advance rent for a property at 43 Swan Meadow Road in Wigan. He further ordered the applicants to pay the respondent £2,822.71 pursuant to a counterclaim by the respondent for unpaid rent. The applicants also apply for a stay of execution of the order of the district judge and permission to rely on further evidence.
2. The facts may be comparatively shortly stated. The applicants rented 43 Swan Meadow Road from the respondent. The property was rented in accordance with a six-month assured shorthold tenancy agreement, commencing on 30 July 1996, and further leases of 12 months were subsequently granted. The applicants claim to have vacated the property on 19 June 2000, although the respondent claimed that they vacated it at a later date. On renting the property, the applicants claim to have made a payment of £960 to the respondent's agent, MB Property Services, consisting of £320 by way of initial deposit, a further £320 as a month's rent in advance, and a further £320 as the first month's rent on the property. The applicants claimed that this amount was due to them on their vacating the property, although in the course of the hearing before the district judge they conceded that the claims now stood reduced to £320, which was the deposit paid.
3. In 1999 the applicants' son, Philip Maile, rented 83 Prout Street from the respondent on a 12-month assured shorthold tenancy, with Alan Craig. That property was in need of some repair and refurbishment, and it was said that an oral agreement was reached between Philip Maile and the respondent which provided that Philip Maile would have the work done and send the bill to the respondent, who would then reimburse him. The applicants asserted that the work was subsequently carried out by Philip Maile, and that he had not received payment. They claimed the sum of £2,400. By a deed of assignment dated 19 August 2000, Philip Maile had assigned all the benefits and advantages of that claim to the applicants.
4. The applicants issued proceedings on 9 September 2000, claiming £2,400 in respect of the materials supplied and used in the repair of 83 Prout Street and the return of the £960 paid as advance rent for 43 Swan Meadow Road. A defence was filed on 29 December 2000. It included a counterclaim against the applicants for £3,252.13, comprising unpaid rent between January and July 2000, a small amount of unpaid rent for the previous year and damage to the property. A sum of £695 was claimed in relation to the damage to the property based on figures provided by Mr Donaldson, who viewed the property shortly after it had been vacated by the applicants and carried out repairs to the value of £695, according to his letter of 25 January 2002. The allegations in the counterclaim were denied in a defence to counterclaim dated 10 October 2000.

The decision of the district judge

5. The case was heard by the district judge on 31 May 2001. He heard oral evidence from both sides and said that he was satisfied that both parties had come to court with the intention of giving honest, clear and concise evidence to the best of their recollection. However, he noted that there were significant areas in which the version of events given was contradictory and that he had to reach a decision as to what was likely to have occurred, based on the evidence before him. In short, as Mr Maile quite correctly indicated this morning, it was all down to credibility, or at any rate much of it was down to the credibility of the witnesses on both sides.
6. The district judge first considered the works done to the Prout Street property. A bill of £2,040 was presented to the respondent by Philip Maile in 1999, to which the applicants added £360 for extras, making £2,400 in all. No bill was ever produced for the £360. Philip Maile gave evidence that that figure was communicated orally to the respondent.
7. There was no doubt that the work was carried out. On the evidence, particularly a photostat cheque and the respondent's bank statements, the judge accepted the respondent's case that £210 was paid to Alan Craig. The respondent further claimed to have paid £1,500 to Philip Maile in cash, a fact disputed by the applicants, who claim that there was inadequate evidence in support of the payment. The judge noted that the burden of proof rested with the applicants. Considering the surrounding evidence, in particular a withdrawal of £600 made, he said, in proximity to the time when the cash was alleged to be paid, but noting that there was no evidence from the respondent's bank statements to show a withdrawal of £1,500 and no evidence to point particularly to the payment of that sum, and taking into account the oral evidence, the judge preferred the respondent's account and found that the £1,500 had been paid. The judge therefore found that £1,500 plus £210, namely £1,710, of the £2,040 had been paid. The respondent admitted that £1,790 of the bill had been due, this amount being made up of items on the bill that were not disputed. He claimed that the applicants were unable to establish that any money was due over and above that amount, of which £1,710 had been paid, and that the remaining £80 owing should be set off to account for the condition in which the property was left.
8. The district judge then considered the £320 alleged to be due under the second limb of the claim. It was common ground that a deposit had been paid, although the respondent claimed that the amount was £100, not £320. The district judge observed that there was no evidence before him to establish that any payment was made, aside from the oral evidence of the applicants, and noting that once again it was incumbent on the applicants to prove that payment was made, he held that the value of the deposit was £100.
9. Turning to the counterclaim for unpaid rent, the district judge noted that the applicants were adamant that the rent was properly paid. The respondent relied heavily on a letter dated 29 March 2000 to the applicants, setting out the reasons why the tenancy was being brought to an end and showing rental arrears. The district judge was satisfied that there was rent owing and that the amount of arrears claimed, namely £2,760.13, was correct. Further, he found that the respondent was entitled to retain the deposit of £100 as against the £2,760.13.
10. The district judge considered the letter written by Mr Donaldson, in which it was said that Mr Donaldson had viewed the property soon after the applicants had left. The district judge noted that Mr Donaldson did not give evidence at the hearing and he did not hold the applicants liable for the sum of £695 said by Mr Donaldson to have been the relevant amount necessary to put the property into a state of repair in the absence of evidence as to how the figure was arrived at. Accordingly no award was made in favour of the respondent in respect of that amount. The district judge did conclude, however, that there was some evidence to suggest that the state of the property when vacated was not the same as at the beginning of the tenancy.
11. In conclusion, the district judge dismissed the applicants' claim and ordered the applicants to pay £2,822.71 to the respondent on the counterclaim, inclusive of interest, plus various costs and expenses.

The applicants appealed. The appeal was heard by His Honour Judge Macmillan ("the circuit judge") in the Bury County Court on 15 July 2002. The circuit judge observed that an appeal can only succeed if the decision was wrong or unjust because of a serious procedural irregularity, in the light of CPR rule 52.11. The second limb was not relied upon by the applicants, so he was concerned with whether the decision was wrong. The circuit judge noted that the case came down to who the district judge believed with regard to the two key matters in issue. He expressed his conclusions thus in paragraphs 8 and 9:

"8. Now in this case the [district judge] heard all the evidence put before him and in his experience, applying the correct test of the balance of probabilities that he set out at the start of his judgment, he preferred the evidence of Mr Hopwood to that of the claimants, the appellants here.

9. I, on all the matters put before me cannot agree with Mr Maile's description that it beggars belief that he could do so and I am not satisfied by any means that his judgment, preferring one piece of evidence against another, exceeded the generous ambit within which reasonable disagreement is possible. Accordingly this appeal is dismissed."

12. The applicants have produced a number of grounds of appeal, as follows:

"1) Wrongly and contrary to law concluded that the proof of the counter claim lay with the [applicants] rather than the [respondent];

2) Wrongly and contrary to law erred in concluding that the [appellants] had the onus to proof assertions in the claim made by the [respondent];

3) No reasonable decision maker could have concluded from the evidence that two remote withdrawals from the [respondent's] bank account one made over 4 months before an alleged payment was conclusive proof of such payment;

4) Failed to address the issue of the [district judge's] failure to allow proper cross examination of witnesses;

5) Failed to address the issue of the [district judge] preferring hearsay evidence over that of sworn evidence; and

6) Failed to consider the question of allowing new evidence to be put before the Court that demonstrated that the [respondent] had misled the court."

13. The grounds of appeal are supplemented by a skeleton argument, to which I would like to pay tribute. It runs to some 11 pages between pages 9-20 of the bundle, and is to my mind a model of its kind. It contains detailed submissions regarding the burden of proof, submissions disputing the district judge's findings of fact, allegations that the district judge allowed evidence to be presented without hearing objections as to its admissibility (namely that the respondent unlawfully obtained certain documents by opening letters at 43 Swan Meadow Road, contrary to section 84(3) of the Postal Services Act 2000) and criticism of the judge for failing to consider a letter of 7 January 2000.
14. This would be a second appeal if permission were granted. CPR rule 52.13 provides:

"(1) Permission is required from the Court of Appeal for any appeal to that court from a decision of a county court or the High Court which was itself made on appeal.

(2) The Court of Appeal will not give permission unless it considers that -

(a) the appeal would raise an important point of principle or practice, or

(b) there is some other compelling reason for the Court of Appeal to hear it."

In short, it is not open to this court to give permission simply to afford a litigant a further opportunity to challenge the decision of a judge of first instance where an appeal has already taken place.

15. In the instant case, an appeal would plainly not raise an important point of principle or practice. The question therefore can only be whether there is some other compelling reason for the Court of Appeal to hear it. Disappointing though I know this will be to the applicants, I have reached the conclusion that there is no such compelling reason here.
16. I would just like to say a word briefly about the various grounds of appeal. Grounds 1 and 2 assert that the district judge misapplied the burden of proof. While I sympathise with the difficulties to which Mr Maile has referred this morning orally, and which are set out in Mr and Mrs Maile's skeleton argument, the problem here is an example of problems which often face judges of first instance, especially in the Small Claims Court. There are very few documents; thus the judge of first instance has very little, as it were, to go on with which to test the oral evidence or the credibility of the principal protagonists. This is just such a case.
17. I am unable to accept the submission that the district judge did not correctly apply the burden of proof. A review of his judgment shows that he correctly appreciated that the burden of proving the claim was on the applicants and that the burden of proving the counterclaim was on the respondent. In the case of the counterclaim, this can be seen by his approach to the counterclaim in respect of the sum of £695 claimed by the respondent as monies necessary to put the property in a proper state of repair. It is plain from paragraph 14 and the last sentence of paragraph 16 of his judgment that he rejected that item of the counterclaim because the respondent had failed to discharge the burden of proof. So, for example, he said in the last sentence of paragraph 16:

"I am not satisfied as to the figure of £695 and I make no award in that respect."

He had earlier noted that Mr Donaldson did not give oral evidence before the court.

18. Ground 3 asserts that no reasonable decision-maker would have concluded that two withdrawals from the respondent's bank account made over four months before the alleged payment of £1,500 was conclusive proof of such payment. The district judge held, as I have indicated, that £210 was paid to Alan Craig. Although this very morning Mr Maile has put forward a suggestion as to what might in fact have happened, the applicants have not so far sought to challenge the district judge's conclusion that £210 was indeed paid to Alan Craig, and it appears that that finding played some part in the district judge's conclusions in relation to the claim as a whole.
19. As to the issue whether the £1,500 was paid or not, the district judge said this in paragraph 7:

"The question must then be decided, is there evidence that £1,500 has been paid? The claimants maintain that it has not. Philip Maile maintains that it has not. The defendant maintains that it has. One must look here at the surrounding evidence. The defendant presented to me in the witness box (as indeed did the claimants) to give evidence clear from recollection. There is no evidence from the defendant's bank statements to show a withdrawal of £1,500, and there is no evidence to point specifically to the payment of that sum, but looking at the overall evidence, looking at a withdrawal of £600 made in proximity to the time when this cash was alleged to have been paid, and taking into account that which has been told to me, I prefer the evidence of the defendant in that regard and I find that I am satisfied that £1,500 has been so paid."

I understand the point that is made in relation to the £600 but the fact is that the district judge saw and heard the witnesses. He tried to take account of all the circumstances which were relevant. He recognised that there was no evidence from the bank statements showing a withdrawal of £1,500. He had to do the best he could in deciding between two differing accounts. Unfortunately for the applicants, he preferred the evidence of the respondent. It is very difficult, if not impossible, for this court, or any appeal court, to take a different view. Here, the applicants have already, as it were, had one bite of the cherry by appealing to the circuit judge. This issue is simply a question of fact and, given the difficulty which would face the applicants on any appeal to this court, it certainly does not give rise to a compelling reason for granting permission to appeal within CPR 52.13.

20. As to grounds 4 and 5, this was a trial in the Small Claims Court. I can see no basis for concluding that the district judge improperly failed to allow sufficient cross-examination or that he did not weigh the evidence carefully, as for example between direct evidence and hearsay evidence. Indeed, one of the reasons he rejected the respondent's case based upon Mr Donaldson's letter was that Mr Donaldson did not himself give evidence.
21. As to ground 6, the applicants wish to rely on a letter dated 7 January 2000. They say that it demonstrates that the respondent had not paid the £1,500 to Philip Maile. The applicants say that the letter only came into their hands after trial, but that it was put before the circuit judge and not taken into account, despite an order being sought for its introduction. They say that the circuit judge failed to rule on the application or the admissibility of the letter.
22. It is certainly true that as far as I can see the circuit judge did not expressly say anything about the letter. In her witness statement in support of the application, Linda Maile claims to have been handed the letter by her son on the day of the trial but after judgment. I am bound to say that that does not seem to me to be very satisfactory, given that Philip Maile, her son, gave evidence in the proceedings and plainly knew what they involved. Indeed, it must be remembered that it was his claim for £2,400 to which the issue related, his claim having been assigned to the applicants, as I indicated earlier. In any event, so far as I can see, admission of the letter would be likely to make no significant difference. The applicants rely on the comment in the letter by the respondent: "I realise that you [Philip Maile] have money invested in the property and would reimburse you if I had to sell". It does not seem to me that that is sufficiently clear to explain what money Philip Maile may have had invested in the property and does not preclude the respondent from having already paid £1,500 to Philip Maile.
23. In these circumstances, given the strict rules in relation to the admission of further evidence on an appeal, there is to my mind no realistic prospect of the Court of Appeal admitting the letter on an appeal, if only because it would be likely to make so little, if any, difference.
24. Finally, the applicants say that the respondent unlawfully opened a number of letters and put their content before the court. No objection was taken at the time, although it is fair to the applicants to say that it appears that the letters were produced late in the day. More importantly, however, it is not said that the letters were not genuine. They were, as I see it, admissible, however unsatisfactory the explanation of how they were obtained. This is, however, a civil court and not a criminal court.
25. In short, as I have already indicated, this is a second appeal and the applicants cannot satisfy the tests to which I have referred, which are set out in CPR 52.13. I have tried to give as careful consideration to all these points as I can, but I regret that it would simply not be appropriate to grant permission to appeal, sympathetic though I am to the disappointment that that must cause the applicants.
ORDER: Applications refused