England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CHANCERY DIVISION
(Mr Geoffrey Vos Q.C. sitting as a Deputy High Court Judge)

		Royal Courts of Justice Strand, London, WC2A 2LL
		Wednesday, 4th December 2002

Lord Justice Ward :

1. This is an appeal by Mr Geoffrey Pattinson and his company Queensgate Industries Ltd. against the order made by Mr Geoffrey Vos Q.C. sitting as a deputy judge of the High Court on 19^th December 2001. He entered judgment for the claimant, Mr Spencer Flack now deceased, against the defendants and each of them in the sum of £76,747.50 by way of damages for deceit.
2. The case centres on a rare historic racing car, a single seater front engined Lotus 16, Chassis No. 367. It was purchased by the famous racing driver, Mr Innes Ireland for the 1959 Formula 2 motor racing season. It seems that between May and August 1959 he drove the car then fitted with a 1.5 litre engine in about six Formula 2 races. He was driving a works Lotus 16 in the 1959 Formula 1 Grand Prix races. If the car had been fitted with a 2.5 litre engine which it was capable of taking it would have been suitable for racing in the Formula 1 class but this larger engine was never fitted by Innes Ireland nor was the car ever raced by him with a 2.5 litre engine. At the end of the 1959 season Innes Ireland sold the car to a Mr Finney who exported it to America. It was then sold on to other American enthusiasts. It is unlikely that the car ever raced with a 2.5 litre engine in 1959 or 1960.
3. Late in 1996 or early in 1997 the car was bought by a British vintage racing car enthusiast and dealer, the appellant, Mr Pattinson, or by his company Queensgate Industries Ltd., no distinction having been made between them at the trial. The car was in a poor state of repair and so it was delivered to a Mr Stephen Griswold, an engineer who carries on a vintage car restoration business in Northamptonshire.
4. Mr Pattinson wished to race the car at the Coys International Historic Festival in July 1998. These races are quite tightly regulated. To race in an International Historic car competition sanctioned by the Federation Internationale de l'Automobile (the "FIA") the cars have to be issued with an approved Historic Vehicle Identity Form ("HVIF"). When application was made by Mr Pattinson to the Royal Automobile Club Motor Sports Association ("MSA") for an HVIF, the application was rejected because the car was not a 2.5 litre Grand Prix car, but a Formula 2 car. This car had never raced in international competition with a 2.5 litre engine in period. That difficulty for Mr Pattinson was overcome by his agreeing with Mr Griswold that Mr Griswold as an American might be able to obtain an American HVIF, the rules not being as strictly applied there as perhaps they are here. That application was successful and the American national body issued a certificate clearly stamped:-

"Originality of components and/or specifications including chronological data not verified by ACCUS [the American regulating authority]."

Using that certificate Mr Pattinson raced the Lotus at the Coys Festival.

5. He was racing against the claimant Mr Spencer Flack, another well known vintage racing car enthusiast, driving a Maserati. Tragically Mr Flack was killed in an accident on the race track earlier this year. He was known to be a competitive spirit who liked to win. The Maserati was not fast enough for his purposes, but the Lotus had the potential. Thus, when late in 1998 or early in 1999 Mr Flack saw the Lotus again in Mr Griswold's workshop where his own car was also receiving attention, he began to express some interest in it. Mr Griswold showed Mr Flack a series of motor magazines about the car and gave him the clear impression that Innes Ireland had driven the car in Formula 1 races in 1959 which was what Mr Griswold says he believed at the time. He also showed him the American HVIF papers. Mr Flack did not look carefully at them. It is common ground that the articles and the HVIF only showed that the car raced in Formula 2 races in 1959 and 1960 and that Innes Ireland (but not the car) had also competed in Formula 1 races in those years. Mr Flack was interested in purchasing the car. Mr Griswold gave him his business card which showed Mr Griswold as an employee or associate of Coys of Kensington Automobiles Ltd., valuers and auctioneers specialising in "fine historic automobiles".
6. He met with Mr Pattinson in February 1999 and the judge found that the following events took place:-

"(1) Mr Pattinson was enthusiastic about the car. He told Mr Flack that it was "Innes Ireland's 2.5 Grand Prix car.

(2) Mr Pattinson asked Mr Flack if he had seen the car's FIA papers, and Mr Flack said he had.

(3) The sale was agreed at £180,000."

7. This claim was brought because Mr Flack alleged that he was induced to purchase by material misrepresentations known to be false. The representations were said to be, as the judge recited them:-

"(1) That the car was an historic Formula 1 car and

(2) That the car had the requisite historic vehicle identity papers (an FIA HVIF)."

8. As to the first, the judge found that neither Mr Griswold, whom he held was acting on Mr Pattinson's behalf, nor Mr Pattinson himself had used the words "historic Formula 1 car" to describe the car to Mr Flack. He did, however, find that:-

47. The words actually used by Mr Pattinson, were, as I have already said, that the car was "Innes Ireland's 2.5 litre Grand Prix car". In my judgment, however, those words carried and were intended to carry exactly the same meaning as if Mr Pattinson had said that the car was an historic Formula 1 car. Mr Pattinson had carefully arranged matters so that he would be able to give the impression to potential purchasers that the car could race in HGPCA "Grand Prix" in Formula 1 format (i.e. with a 2.5 litre engine) without problems. He had obtained the [American] ACCAS HVIF, when he knew he could not obtain one approved by the [RAC's] MSA. He had actually raced the car at the Coys Festival in the Formula 1 category for all to see. He was not about to tell a potential purchaser that the car was not a Formula 1 car. On the other hand, in my judgment, he was careful not to say expressly that it was a Formula 1 car.

48. Mr Griswold had, of course, expressly or impliedly, given Mr Flack the impression by reference to the magazine articles that the car had raced in period in Formula 1. In view of my findings as to what Mr Pattinson himself said, the fact that Mr Griswold made a similar representation is only of background importance."

9. As to the representation that the car had the requisite HVIF, he found that:-

"Mr Pattinson did not himself make any representation about the HVIF form. He simply asked Mr Flack if he had seen them, which he said he had. Mr Griswold also did not, in my view, represent that the HVIF was "requisite" if that is intended to mean that they were something other than U.S. forms. Mr Flack had the opportunity to look at them. Mr Flack did not notice the clear disclaimers stamped on the HVIF forms, nor did he notice that they were ACCAS rather than MSA approved, but that was his own fault. His lack of an eye for detail allowed him to ignore such minor matters, though he was given a fair opportunity to examine the forms. The second representation pleaded by Mr Flack was, therefore, not made."

10. The judge held that the representation that the car was Innes Ireland's 2.5 litre car was false in a number of respects. He held that it was not Innes Ireland's 2.5 litre car, but his 1.5 litre Grand Prix car. It was a Grand Prix car which had been raced in international competition only with a 1.5 litre engine. Moreover,

"It was very likely … that it would not be allowed to compete in historic Grand Prix events. It could not, therefore, properly be described as an historic Grand Prix car, whilst fitted with a 2.5 litre engine."

11. Since Mr Pattinson knew very well that the car was primarily a Formula 2 car, the judge held that he knew the representation to be false. He found that Mr Flack had relied on the misrepresentation. It is this finding which is the subject of challenge in this appeal. Mr Flack was awarded as damages the difference between the price paid, £180,000, and the amount subsequently realised net of expenses when the car was sold at auction, £103,252.50.
12. The crucial issue in the appeal is whether that misrepresentation was relied upon by Mr Flack as an inducement to enter into this contract.
13. The evidence of a Mr John Harper is central to the appellants' case. He is another motor engineer specialising in the restoration and sale of these classic cars of the type which has featured in this case. He revealed under cross-examination that he had for some years been a member of the Historic Grand Prix Cars Association which governs the racing of these historic cars here and in Europe. He knew both Mr Flack and Mr Pattinson. He knew of the Lotus car. Sometime late in 1998 or in January 1999 Mr Flack visited his premises in Gloucestershire to look at a Cooper Monaco period racing car which he had for sale. In his witness statement he said of that meeting:-

"He [Mr Flack] talked to me about buying a car for use in Formula 1 racing. In particular, he discussed a Lotus 16 which he was interested in buying from Geoffrey Pattinson. The Lotus 16 came up in conversation as one belonging to Mr Pattinson and Mr Griswold. I told him he ought to be very careful before buying that car as it had always been a Formula 2 car, and not a Formula 1 car (i.e. it was a 1.5 litre car). I told him that the car had been around for quite a while, that everybody in the business knew about it and nobody had bought it simply because it was a Formula 2 car and he ought to know that."

14. Cross-examined by Mr Matthew Collings, counsel for Mr Flack, he was asked why he warned Mr Flack about the car being a Formula 2 rather than a Formula 1 car and he replied:-

"He seemed to want to go quicker than he was going … in the [Maserati] 250F, and I said to him that he should be careful – this is speaking as a dealer, I didn't profess to give this as an opinion as a committee member, but just my own personal opinion – that the car was a Formula 2 car and had never been other than that."

15. It was pointed out to him that Mr Flack had visited because he was interested in buying the Cooper Monaco from him and he was asked:-

"Q: Would it be fair to say sometimes – and I hope you do not take this too personally – that in buying and selling motor cars sometimes you extol, one extols the virtue of one's own motor car at the expense of another dealer's motor car?

A: Oh, yes. I'm sure that's common practice, yes.

Q: But in any event you did, you say, tell him about this car being a Formula 2 not a Formula 1 car?

A: Yes."

16. There was no other challenge to his evidence about the conversation he had with Mr Flack. The judge asked him how Mr Flack had reacted to the information he imparted asking:-

"Q: … do you remember how he reacted to that statement, what he said to you?

A: The usual wry amusement, but he treats most things with that. You can't tell much from Mr Flack."

17. Mr Flack would for some time have had an awareness of the evidence that Mr Harper was likely to be giving. In a request for further information of the particulars of claim, this was asked of him:-

"24. Please confirm that it is admitted that:-

(i) the claimant specifically discussed the car with a Mr John Harper some months before buying it; and

(ii) the claimant agreed during that conversation that he knew that the car had a Formula 2 and not a Formula 1 racing history."

The answer given was this:-

"The claimant did have a conversation with Mr Harper, who was endeavouring to sell the claimant a car. The car was mentioned during the conversation, Mr Harper describing it in generally unfavourable terms. The claimant put this down to rival salesmanship, and determined to make his own mind up about the purchase. The claimant cannot accurately recall the terms of the conversation with Mr Harper, but specifically he does not recall agreeing that it was a Formula 2 car. In any event that was not his belief at the time of purchase of the car, by reason of the representations made."

18. In his witness statement Mr Flack spoke of receiving the invitation from Mr Griswold to buy the car for £180,000, which he thought was a fair price. He went on to say:-

"7. I subsequently attended a meeting with Mr Pattinson at his office in Kensington. I was excited at the prospect of owning and being able to race the Lotus as now I could be nearer the front; a Lotus 16 often wins and I could not be as quick with my Maserati 250F.

8. The meeting was only attended by me and Mr Pattinson. He described his car as a lovely car, in original condition, which had been preserved in the United States. He said it was Innes Ireland's 2.5 litre Grand Prix car. He asked whether I had been shown the FIA papers, and the old press material. The sale was agreed. …

9. I bought the car because it was a historic Formula 1 car in which I would be competitive. Everything I was told, and shown, led me to believe it was a Formula 1 car … I can say quite categorically that I would not have been interested in the Lotus as a Formula 2 car."

19. He was extensively cross-examined by Mr Sean Brannigan, counsel for Mr Pattinson. I must set out a number of the relevant passages, to which I have added the emphasis in order later to deal with three different aspects of this evidence, namely, first, Mr Flack's recollection of the conversation with Mr Harper, secondly, what he says he would have done had he been told the truth, and, thirdly, what he says he actually did:-

"Q: …You heard Mr Harper being cross-examined yesterday, I believe? A: Yes.

Q: And you heard that he was not challenged at all that that is what he said to you. You agree, do you not, that that is what Mr Harper said to you? A: I agree he said he said it to me. I do not recall him saying it at all. I never replied to it, as you heard him say. And had he said it I certainly would have investigated it both with him and with the people. I would not spend £180,000 on a car when somebody has told me it is not the car I think it is …

Q: Was the car we are now talking about mentioned by Mr Harper at all during this conversation with you? A: I do not recall talking to him about it at that time, at that particular meeting that he is referring to. I had already been to his place twice. At that time I do not recall discussing the notice with him at all. I went there about a separate car altogether.

Q: You say at that time, but let us be quite clear: at any point prior to you buying the Lotus did you discuss it with Mr Harper? A: No.

Q: And let us be quite clear by what we mean by "discussion". At any point prior to you purchasing the Lotus did Mr Harper say anything to you at all about this? A: Not that I recall. I do not think he even knew I knew about it….

Q: Can you look over the page at the answer which you gave to that, para. 24. It says: [the reply to the request for information was then read to the witness]. That is a completely different version of events to which you have just mentioned in your sworn evidence today. A: You are asking me to recall a conversation four years ago. I do not recall, then or now, Mr Harper – all I do know is my reaction would have been at the time – had he told me the car I was thinking of buying was not what I thought it was, I would have done something about it.

Q: As any sensible person would. A: Correct. …

Q: Have you any explanation for why your solicitors put forward in this draft … a completely different version of events? A: I can only assume that if my solicitors had said to me, "He says he said it", and I am not calling the man a liar – if he had said it I would probably have discounted it for the reason put down there. …

Q: I have to suggest to you, Mr Flack, that the reason why your solicitors have put forward that version of events in May of last year was because you told them that that is what had happened. A: Well, you say what you like. I could only have suggested to him, but if that is what Mr Harper is adamant he said I am not calling Mr Harper a liar. If he did say it I do not recall it, but if I had not replied to it or ignored it that would have been the reason that I did ignore it. …

Q: But … you cannot think of any good reason why he [Mr Harper] would make up lies about you. A: I can think of a good reason why he would discredit a car which I am trying to buy from him for sure. He has a reputation in the trade. ...

Q: In any event, you accept that had you been told by Mr Harper … that his car had such a Formula 2 history, it is something that you should have checked out? A: I would have checked.

Q: How would you have gone about checking that? A: I would have asked Mr Pattinson about it, or Mr Griswold …

Q: And you accept that you did not ask Mr Pattinson about that at all, do you not. A: We never discussed Formula 2 because we were always discussing Formula 1. …

Q: Can you identify where in paras. 7 and 8 you say that you asked Mr Pattinson about whether or not the car had a Formula 1 or Formula 2 history? A: There was a forty minute conversation with Mr Pattinson … I did not need to ask him; he told me. …

Q: One way or another, the witness statement which you swore at paras 7 and 8 does not say at all, does it, that Mr Pattinson told you that the car had a Formula 1 racing history? A: He knows he told me that. He asked me – because I have just explained what happened here. We discussed which cars I had. He asked me which cars I already had and why I wanted to buy the Lotus, in his office, and we explained there and then that it needed to be a faster car to compete and win the Formula 1 races because the one I had at present would not win the races.

Q: Is that what you rely upon as what you say was him telling you that the car had a Formula 1 racing history? A: That it was a Formula 1 car, yes. …

Q: Do you think you could have [compared information in different documents setting out some racing history of the car]? A: I was not suspicious. At the end of the day I believed what I was being told. …

Q: … You had absolutely no interest in looking at the various pieces of information that were provided to you. A: I was dealing, I thought, with a proprietary company, and the gentleman said to me, and I had no reason to disbelieve what he was telling me.

Q: The gentleman, which gentleman. A: At that time it was Mr Griswold …

Q: But where in your witness statement does it say ["this car has a Formula 1 racing history"]? A: It does not, but you can ask Mr Griswold. He knew I was only interested in everybody knew I was only interested in a Formula 1 car. …

Q: Had Mr Harper told you this car had a Formula 2 racing history, and it is a matter for His Lordship whether or not that happened, what would you have done differently? A: I would have asked Mr Griswold and Mr Pattinson about it.

Q: And presumably you would have investigated matters? A: Correct.

Q: You would have checked the car's history. A: I would have asked them to. I would not personally have done it. I would have asked them. I do not have access to all these records. These people have all these books in their offices.

Q: You might have asked a third party for advice in relation to that. A: Only if I was in any doubt at all, but there was never, ever any doubt whatsoever. Nobody ever mentioned Formula 2 in the whole of the discussions on this car. It had been entered and raced in a Formula 1; it had a Formula 1 engine in it. Nobody ever mentioned Formula 2 to me at all….

Q: The reality of this case is that Mr Harper is telling the truth, and that he told you it had a Formula 2 racing history but you did not really care because you thought you would be able to get it on and race it anyway? A: No, totally incorrect, I would not have paid that money if there was any doubt about it. …

Q: You accept, do you not, that had you spent a few moments just simply checking the race history of this car you would have been fully aware that it had never raced in Formula 1? A: You would not check it in a few moments. This was not produced in five minutes, as you can see from all the paperwork. If the paperwork that I was presented with was the truth, and what I was told was the truth, I would not need to check it. If I was dealing with perhaps a private individual I might have done, but I was not. I was dealing with what I considered at the time to be a premier company with premises in Kensington."

Re-examined by Mr Collings:

"Q: Your evidence towards the end of my learned friend's cross-examination was that nobody had mentioned Formula 2. A: Never ever.

Q: Had they done so what would have been your reaction? A: I think it was understood that I was not interested in a Formula 2 car. I already had a very, very fast Formula 2 car and did not want another Formula 2 car. I wanted a Formula 1 car. I would not even have gone any way down the road to buy another Formula 2 car."

20. The judge made these findings about the witnesses whom he had seen:-

"30. Mr Flack was an honest witness. He is, however, a man who paid very little attention to detail in his dealings with Mr Griswold and Mr Pattinson in relation to the car. He very much wanted to buy the car because he thought it would enable him to win historic Formula 1 races, for which purpose his existing car (a Maserati 250F) was rather slow. But there his detailed thought faltered. This meant that he was, in some ways, an ideal candidate for any vendor wishing to lead him to believe that what he was selling was rather better than it actually was. He was a man who was in a frame of mind to be easily persuaded that the car was exactly what he wanted. …

33. Finally in this connection, I found … Mr John Harper to be [an] independent witness, whose evidence I was able to accept without question."

21. The judge answered the vital question he posed, namely "did Mr Flack rely on the misrepresentations?" in the following way:-

"58. I accept Mr Harper's evidence that Mr Flack was told by him, while he was looking at a car Mr Harper had for sale, that the car was a Formula 2 car and not a Formula 1 car and that Mr Flack ought to be very careful before buying it. Mr Flack prevaricated somewhat when asked about this incident, saying that he could not recall it. I accept that the information made little impression on Mr Flack because of his enthusiasm for his intended acquisition, and because he thought Mr Harper was trying to put him off the car so that Mr Flack would make a purchase from Mr Harper.

59. Nevertheless, Mr Flack was on notice that the car might be a Formula 2 car. He could (but in fact did not) have established the same fact from the HVIF papers he was shown, which recorded that the car had only raced in Formula 2 races.

60. Nevertheless, I do not think that these matters affect the question of whether Mr Flack actually, as a matter of fact, relied upon the misrepresentation Mr Pattinson made. I find that Mr Flack did rely on the representation and believed that Innes Ireland had raced the car in Formula 1, and that the car was as Pattinson described it. It was common ground that, in 1959, cars could race in both Formulas 1 and 2 with or without engine changes (subject of course to the capacity limits) and I believe that Mr Flack may well have thought that the car would have done both. Suffice it to say that I am satisfied that Mr Pattinson's misrepresentation finally persuaded Mr Flack that the car would be able to race in HGPCA Historic Grand Prix Formula 1 events, which is what he wanted the car for.

61. I accept, as Mr Brannigan pressed upon me, that, to an extent Mr Flack deceived himself. He could have ascertained from the information that had been made available to him that the car was a Formula 2 car, and that it had American papers, which might not obtain an MSA approved HVIF but the fact is that he did not do so. He did not put two and two together. He did not do so, in my judgment, in most part because of the misrepresentation that had been made to him. That is enough to found reliance."

Permission was granted to appeal against those findings of reliance.

22. Mr Brannigan sought permission to adduce further evidence. Mr Pattinson's solicitor says that:-

"During the course of my investigations into what Mr Flack did or did not know about the car before he bought it, I made enquiries of a number of people in the field of historic motor cars including Mr Harper. It became clear to me during those investigations that whilst there were a number of people who would normally have been happy to help, they were frightened of doing so because of Mr Flack's reputation. He was a rich man, very influential in historic motor racing circles and seemed to have a reputation of bullying people to get what he wanted."

23. The fresh evidence was obtained about ten days ago from Mr Julian Sutton, the chairman of the Historic Grand Prix Cars Association. He would say:-

"I can confirm that any information that Mr John Harper, a member of this committee gave to Mr Spencer Flack regarding the car in question would reflect the association's opinion of its suitability to race, and Mr Spencer [Flack] as a HGPCA member for nearly six years would have been aware of that. Mr Flack confirmed to the committee on 13^th March, 2000 at which Mr Harper and I were present that Mr Harper had indeed informed him about the exact origins of this car before his purchase i.e. that it originally had a 1.5 litre engine not a 2.5 litre engine, and that it had only raced in Formula 2 events in its period."

24. We refused to admit that evidence. We were far from satisfied that an adequate reason had been given as to why the information from Mr Sutton could not have been obtained with reasonable diligence for use at the trial. The involvement of the Historic Grand Prix Cars Association was common knowledge and Mr Harper had made known to the solicitors that he did not wish to give evidence in his capacity as a member of the committee, as he made clear in the evidence he actually gave to the judge. That did not prevent official enquiries being made of the association through the chairman. Mr Sutton does not say in the letter placed before us that he would have been unwilling to respond to any enquiries made of him. We accept that his evidence is credible.
25. We were, moreover, not satisfied that the further information would have made a material difference to the outcome. It is true that it may have damaged Mr Flack's credibility. On the other hand Mr Harper was found to be an honest witness and the judge accepted his evidence as to what he had said to Mr Flack. We were, therefore, not satisfied that it would have had an important impact on the result of the case.

The Argument.

26. There is an appealing logic to Mr Brannigan's powerful submissions. I hope I correctly summarise them in this way:-

1. Dealing with Mr Flack's recollection of the conversation with Mr Harper, his evidence was (a) quite contrary to his pleaded case. The pleaded case admitted that a conversation about the car had taken place, but his oral evidence denied any conversation at all. (b) His oral evidence was therefore at odds with Mr Harper's evidence. Faced with that conflict the judge's findings were inconsistent. He could not both find that Mr Flack was "an honest witness" and accept Mr Harper's evidence "without question". As appears from his judgment he accepted Mr Harper's evidence that Mr Flack was told that the car was a Formula 2 car, not a Formula 1 car.

2. Dealing with Mr Flack's reaction to what Mr Harper told him, Mr Flack's evidence was directly at odds with his pleaded case. If the judge was right in accepting that Mr Flack was an honest witness, then he should have accepted that he "would have done something about it … as any sensible person would". In fact, however, he agreed that he did nothing. If he did nothing, the reason must be (i) he was not told (which is not the judge's findings) or (ii) he was not truthful in saying he would have done something (which again the judge did not find) or (iii) there was some other reason for doing nothing.

3. The judge must have found for the third possibility in finding that the information made little impression on Mr Flack because he thought Mr Harper was trying to put him off the car. That must be wrong because (a) the pleaded case had been disavowed and (b) there was no evidence to support that finding.

4. If Mr Flack raised no questions about the car, the only other inference must be, as Mr Pattinson has always contended, that he, Mr Flack, always knew it was a Formula 2 car which he was content to buy in the hope and expectation that he could nonetheless race it. Thus he could not establish that he relied upon the representation.

27. Mr Collings submits in essence that the judge gave two reasons for concluding that the information made little impression on Mr Flack, first his enthusiasm for the intended purchase and secondly, because he thought Mr Harper was trying to secure the sale of his own motor car. He submits there was ample evidence for those findings. He goes on to submit that there was ample evidence looking at the case as a whole for the judge's conclusion in the other paragraphs that Mr Flack did rely on the misrepresentations. We should not lightly interfere with findings of fact.

Conclusions.

28. First let me spell out the approach this court has to adopt on this appeal. The appeal is essentially against the findings of fact made by the judge. If there was no evidence to support the finding, then the judge erred in law. If, however, there was some evidence to support the finding then the ground of appeal is that the finding was against the weight of the evidence. This court conducts a review of the judge's finding, that is to say it considers the evidence before him in order to judge for the purposes of CPR 52.11(3) whether the decision of the lower court was wrong. This court will not, however, find that the decision was wrong unless it was, as Mr Collings submitted, "palpably" wrong. A range of synonymous adverbs may be used but the approach is best adapted from the speech of Lord Fraser of Tullybelton in G v G (Minors: Custody Appeal) [1985] 1 W.L.R. 642, 659, admittedly dealing with the different task of challenging the exercise of a discretion, namely to ask whether the finding of fact is one which is outside the generous ambit within which reasonable disagreement about the conclusion to be drawn from the evidence is possible.
29. The judge's finding that Mr Flack "prevaricated somewhat" about the conversation with Mr Harper is accurate but perhaps charitable. There was a fairly radical departure from the pleaded case. It is, therefore, not surprising that Mr Brannigan persuaded the judge that Mr Harper's evidence was to be accepted. Indeed it was not challenged. For reasons of convenience Mr Harper was interposed and gave evidence before Mr Flack did. There may have been more challenge if Mr Collings had known his client would give evidence at odds with his pleaded case. Be that as it may, the question is whether the judge was entitled to find that the information made little impression on Mr Flack.
30. The first reason for that finding was Mr Flack's enthusiasm for his intended acquisition. There was ample evidence to support that finding. He was known to be competitive. He was known to like to win. He wanted to win in Formula 1, not Formula 2. Asked by Mr Pattinson why he wanted to buy the Lotus he explained "there and then" that:-

"it needed to be a faster car to compete and win the Formula 1 races, because the one I had at present would not win the races."

31. There was also some evidence, though much more exiguous, that he thought Mr Harper was trying to put him off the car so that Mr Flack would make a purchase from Mr Harper. Mr Collings had done some of the spadework in his cross-examination extracting the admission that a dealer would extol the virtue of his own motor car at the expense of his competitor's. When cross-examined about paragraph 24 of the Further Information Mr Flack did say that:-

"I would probably have discounted [what Mr Harper said] for the reasons put down there (i.e. in paragraph 24)."

He also said:-

"If I had not replied to it or ignored it that [the explanation put forward by his solicitors in paragraph 24] would have been the reason that I did ignore it."

Mr Harper himself observed that Mr Flack's reaction to his comments was:-

"The usual wry amusement, but he treats most things with that. You can't tell much from Mr Flack."

That may be why the judge concluded that the information made little impression upon him. Finally, there is his answer:-

"I can think of a good reason why he would discredit a car which I am trying to buy from him, for sure. He has a reputation in the trade."

The innuendo is not different from the pleaded case that Mr Harper was describing the car "in generally unfavourable terms", which Mr Flack put down "to rival salesmanship".

32. I, therefore, reject Mr Brannigan's submission that there was no evidence to support the findings he made in paragraph 58. I shall return to the question whether the finding was against the weight of the evidence.
33. There was no direct evidence in support of the appellant's case that Mr Flack knew the truth and was content to buy the Lotus in the hope and expectation he could nonetheless race it. When it was put to him that he did not really care because he thought he would be able to get it on the track and race it anyway, the answer was:-

"No, totally incorrect. I would not have paid that money if there was any doubt about it."

Since that judge found Mr Flack to be truthful, he must have accepted that evidence.

34. There was moreover ample evidence to justify the judge's conclusion that, as a matter of fact, Mr Flack actually relied upon the misrepresentation Mr Pattinson made. The chronology of events is not unimportant. Mr Flack learnt of the availability for sale of the Lotus when he visited Mr Griswold. He had raced – and lost – against the Lotus at the Coy Meeting. Mr Griswold, as the judge found, had given Mr Flack the impression that the car had raced in Formula 1 but the judge treated that as "only of background importance". Then came the meeting with Mr Harper and perhaps more visits to Mr Griswold. Mr Griswold gave Mr Flack Coys' business card, Mr Pattinson having some, though I am not clear what, connection with Coys of Kensington. He made one visit to Mr Pattinson in Kensington. The meeting lasted forty minutes. The deal was done. The only misrepresentation found by the judge was that made by Mr Pattinson at the end of this period of months. The issue, therefore, is whether what Mr Pattinson said at that meeting affected the mind of Mr Flack and was a cause of his entering into the purchase. In judging what he had in mind, the judge had this evidence at least:-

"I would not have spent £180,000 on a car when somebody has told me it is not the car I think it is".

"I was not suspicious. At the end of the day I believed what I was being told."

"I was dealing, I thought, with a proprietary company, and the gentleman said to me, and I had no reason to disbelieve what he was telling me."

"I was dealing with what I considered at the time to be a premier company with premises in Kensington."

"I think it was understood that I was not interested in a Formula 2 car. I already had a very, very fast Formula 2 car and I did not want another Formula 2 car. I wanted a Formula 1 car. I would not even have gone any way down the road to buy another Formula 2 car."

35. The law is clear and not in dispute. As Lord Blackburn said in Smith v Chadwick (1884) 9 App. Cas. 187, 196:-

"I think that if it is proved that the defendants with a view to induce the plaintiff to enter into a contract made a statement to the plaintiff of such a nature as would be likely to induce a person to enter into a contract, and it is proved that the plaintiff did enter into the contract, it is a fair inference of fact that he was induced to do so by the statement."

36. The representation here was obviously material. Mr Flack wanted a Formula 1 car. As the judge held, Mr Pattinson "was not about to tell a potential purchaser that the car was not a Formula 1 car". He told him it was Innes Ireland's 2.5 Grand Prix car, carrying with it the implication that it was an historic Formula 1 car. As such it would meet Mr Flack's requirements. There is, thus, a presumption that the representation induced the contract.
37. It is, of course, rebuttable. The appellant's case is that Mr Flack knew the truth but took the chance. Mr Flack was adamant in rejecting that suggestion as:-

"totally incorrect. I would not have paid that money if there was any doubt about it."

38. So it seems to me, upon a review of the whole of the evidence the judge had ample material upon which to found his judgment that Mr Flack "actually, as a matter of fact relied upon the misrepresentation Mr Pattinson made". He did not err in law. The findings of fact were well within the generous ambit within which there is room for disagreement. Although I began the case inclined to think there was much force in Mr Brannigan's critical analysis of the judgment, the more I look at the evidence as a whole, the more I become satisfied not simply that I could not say the judge was wrong but on the contrary I conclude that the judge was right. Mr Flack was deceived and is entitled to his damages. I would dismiss the appeal accordingly.

Lord Justice Chadwick :

39. I agree that this appeal should be dismissed. But I think it appropriate to add some short observations of my own in order to explain why I have been persuaded that the powerful submissions made by counsel on behalf of the appellant ought not to prevail.
40. The judge found as a fact that the claimant, Mr Flack, had been told by Mr Harper that the Lotus 16 racing car which Mr Flack was subsequently to purchase from the appellant, Mr Pattinson was "a Formula 2 car and not a Formula 1 car". Nevertheless, he went on to hold that Mr Flack purchased the car in reliance on Mr Pattinson's representation that the car was "Innes Ireland's 2.5 litre Grand Prix Car"; and that those words used by Mr Pattinson "carried and were intended to carry exactly the same meaning as if Mr Pattinson had said that the car was an historic Formula 1 car". There is no doubt – and it is not in dispute – that, if the judge was entitled to hold, as a matter of fact, that Mr Flack purchased the car in reliance on Mr Pattinson's representation, he was entitled to hold, as a matter of law, that Mr Flack should succeed in his claim in these proceedings; notwithstanding that he, Mr Flack, had the means of discovering – or, indeed, ought to have appreciated - that the representation was false. If authority be needed for that proposition it can be found in the decision of this Court in Redgrave v Hurd (1881) 20 ChD 1. In the recent appeal in Standard Chartered Bank v Pakistan National Shipping Corporation [2002] UKHL 43 (unreported, 6 November 2002) Lord Hoffmann, at paragraphs 14 to 16 of his speech, explained that that proposition was founded on the wider principle that:

"It would not seem just that a fraudulent defendant's liability should be reduced on the grounds that, for whatever reason, the victim should not have made the payment which the defendant successfully induced him to make."

41. The only question on this appeal is whether – having regard to what (as he found) Mr Flack had been told by Mr Harper - the judge was entitled to hold, as a matter of fact, that Mr Flack purchased the car in reliance on Mr Pattinson's representation. The judge explained Mr Flack's apparent disregard of Mr Harper's warning in a sentence:

"I accept that [Mr Harper's] information made little impression on Mr Flack because of his enthusiasm for his intended acquisition, and because he thought Mr Harper was trying to put him off the car so that Mr Flack would make a purchase from Mr Harper."

42. As Lord Justice Ward has pointed out, that sentence is a reflection of the answer which Mr Flack had given – or which had been given by solicitors on his behalf – to a request for further information of the particulars of claim. But Mr Flack did not support that answer by the evidence which he gave in the course of the trial.
43. The effect of Mr Flack's evidence at the trial – as appears from the passages which Lord Justice Ward has set out in his judgment – was (i) that he had no recollection of Mr Harper saying anything to him about the Lotus 16 car; but (ii) that he was sure that, if Mr Harper had warned him that the car had a Formula 2 (and not a Formula 1) history, he (Mr Flack) would have taken some steps to check the position with Mr Pattinson. It was not in dispute that Mr Flack had not raised with Mr Pattinson the possibility that the car might have a Formula 2 history. The question which, it is said, the judge needed to address (in the light of his finding that Mr Flack was warned by Mr Harper that the car had a Formula 2 history) was why had Mr Flack not done what he said he would have done if that warning had been given. And, it is said, if the judge had addressed that question, he ought to have reached the conclusion that Mr Flack did not raise the matter with Mr Pattinson because he was determined to have the car notwithstanding any doubts about its history; he was confident that, notwithstanding the car's history, he would be able to race it in FIA sanctioned events with the existing HVIF certificate, as Mr Pattinson had done at the Coy's International Historic Festival.
44. The judge did not confront, directly, the question why Mr Flack had not done what he said he would have done in the light of Mr Harper's warning. But the judge had found Mr Flack to be an honest witness, albeit "a man who paid very little attention to detail in his dealings with Mr Griswold and Mr Pattinson in relation to the Car". The judge must have taken the view, as it seems to me, that (by the trial) Mr Flack had forgotten that Mr Harper had warned him that there were doubts about the car's history; and that (by the trial) Mr Flack had persuaded himself that that warning had not been given on the basis of a reconstruction as to what he would have done if the warning had been given. Once the judge had decided that Mr Flack was mistaken in his belief that the warning had not been given; he was bound to hold, as it seems to me, that Mr Flack's evidence as to what he would have done was merely speculative. No reliance could be placed upon it.
45. Mr Pattinson's representation was made some time after Mr Harper's warning. Mr Flack had not done, then, what he said, now, that he would have done. The only relevant question was whether, as a matter of fact, Mr Flack had placed reliance on Mr Pattinson's representation. The judge, having heard Mr Flack give evidence, was entitled to conclude that he had. As the judge put it "I am satisfied that Mr Pattinson's misrepresentation finally persuaded Mr Flack that the Car would be able to race in HGPCA historic Grand Prix Formula 1 events, which is what he wanted the Car for". On the basis of that finding of fact, Mr Flack was entitled to succeed. It was irrelevant that Mr Flack might have bought the car even if the representation had not been made.

Sir Denis Henry :

46. I agree that the appeal should be dismissed for the reasons given by my Lords.