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 HIGH COURT
CHANCERY DIVISION
(HIS HONOUR JUDGE MADDOCKS)

		Royal Courts of Justice Strand London, WC2
		1st November 2005

1. LORD JUSTICE GAGE: This is an application by a claimant for permission to appeal an order of HHJ Maddocks dismissing his claim against three defendants. He also seeks permission to appeal an order of the judge dismissing an application to adduce further evidence made between the handing down of the judgment and before drawing up the order.

2. I shall refer to the parties throughout this judgment by their surnames, I mean no disrespect from that, save for the defendants whom collectively I shall refer to as "the respondents".

3. The claim is most comprehensively set out in the judge's judgment at paragraph 1, which I quote:

   "1. This action arises out of the sale of the shares in a company called Dawn Processing Limited ("Dawn") on 10th January 2000. The issued shares were all held by or under the control of the Claimant, Mr. Barrie Parker, who was a director and Chairman. The sale was for a nominal sum of £1, but upon terms that Mr. Parker received a 20% shareholding in the acquiring company and upon terms, said to be advantageous to Mr. Parker, as to the company's occupation of its premises Dawn Mill, also owned by Mr. Parker. The three Defendants were the persons mainly concerned in the purchase, who in different roles and for different periods, had been involved in the business of Dawn. The claim, shortly, is that between August 1999 and December 1999 they fraudulently conspired together to run down the business of the Dawn and then to misrepresent it to Mr. Parker as a company which was in severe financial difficulties and on the verge of insolvency. They further falsely represented they were proposing to introduce further funding without which Dawn could not continue in business. As a consequence it is alleged that Mr. Parker was induced to accept their offer to purchase the shares on terms which did not reflect the true value of the shares. The value which Mr. Parker asserts as the value of Dawn at the time of the sale is in the region of £1m."

4. The judge went on to describe the nature of the business in the following terms, paragraph 7 of the judgment:

   "7. The Company's business consisted predominantly of garment processing in the form of pressing, inspection, sewing, repair and packaging for the retail and mail order sector of the clothing industry. The majority of the work was carried out for a small number of large 'blue chip' customers, being in 1997 the Burton Group, BHS, Next, Debenhams, Ben Sherman, Littlewoods, J.D. Williams, and latterly Arcadia, Debenhams, Next and Ben Sherman. In 1997 the workforce had reached 275 employees and in the year 1999 was about 190. The business operated primarily from Dawn Mill. Borough Mill was used exclusively for Ben Sherman until 1999, and at Leeds there was an on site operation at the Burton Group Distribution Centre."

5. The defendants were described by the judge in the following terms: so far as Mr Snyder is concerned, at paragraph 20 of the judgment the judge said:

   "20. Mr Lawrence Snyder the first Defendant came to live in the house next door to Mr. Parker, No.7 Old Hall Road, Broughton Park, in 1983. They became friends as well as neighbours, taking Sunday walks together in the Park and occasionally visiting each others houses, but until 1999 they did not share any other activities or have any business dealings. Mr. Snyder's business career reached a higher level. At a young age he had become production manager of a clothing company and in 1972 was recruited by, and became Production Director then Managing Director, of, a larger and expanding company called Charnos Garments, later Claremont Garments. Following a management buyout he took a !0% stake in the company, which was then taken over by a larger group, Stienberg plc later named Alexon Group plc, of which he became Managing Director in 1985, Joint Chief Executive in 1988 and Chairman in 1991. In terms of scale Alexon had profits of over £20m and over 5000 employees. Mr. Snyder retired from Alexon in 1993. He had achieved sufficient means to lead an independent life and for the time being did not wish to continue a full time business career."

6. So far as Miss Siddons is concerned, the judge said of her as follows:

   "4. The second Defendant, Andrea Siddons, entered the field of management accountancy on leaving school. She joined Parker & Franks in July 1989 as Assistant Accountant. Shortly afterwards she transferred to Mr. Parker's hotel business and in 1991 to Dawn. At that time it still occupied only one floor, but Parker & Franks then moved to Borough Mill leaving Dawn to occupy all five floors as the business expanded. Following the demise of Parker & Franks, Mr. Parker moved his own office to Dawn Mill. In 1994 Miss Siddons was appointed company secretary of Dawn in place of Mr. Parker's mother, who had become ill. Following a disagreement with Mr. Parker in 1994 she left but was persuaded to return. In June 1998, by reason of difficulties with Mr. Nivern and Mr. Finn, she again threatened to leave. The situation was resolved by her being appointed as financial director, to improve her status in relation to Mr. Nivern and Mr.Finn. In July 1998 Mr. Parker asked her to become a director of Instantscore in place of Avril Bowyer. She did not however have an active involvement in that business and resigned in June 1999 shortly before it went into liquidation. Miss Siddons did not have any formal accountancy qualifications but over the years she became competent to maintain the books of the company, to prepare monthly management accounts, including a monthly bank reconciliation, and to prepare year end accounts for the auditors from which they prepared the final accounts. The evidence is that her accounts were reliable but she did not have the skills or knowledge to prepare a cash flow forecast."

7. The third defendant, David Price, was described, together with two other witnesses, Wiegand and Elliott, by the judge in the following terms:

   "21. During his time with Claremont Mr. Snyder had worked with three persons for whom he had a high regard. Mr. Peter Wiegand had worked for Marks & Spencer for 10 years as merchandise manager before joining Claremont in 1977 as Sales Director, becoming Joint Managing Director with Mr. Snyder in 1979 and working with him down to 1991 when, following a de-merger, he continued with Claremont until it was sold to Courtaulds in 1998. Mr. Alan Elliott also worked for Claremont for some 17 years and continued as an employee of Courtaulds after the acquisition. Mr. David Price the 3rd Defendant joined Claremont, through Charnos, in 1970 and worked with the company for some 27 years. He worked mainly on the technical side of garment manufacturing but also acquired management and accounting skills. He became technical manager and joint deputy Managing Director of Claremont and then Group Technical Director on the main Board before leaving in 1997. In the course of business, when sourcing garments for Marks & Spencer, he met a Tunisian gentleman, Mr.Omar Dejani, with whom he set up a sourcing company, Tunisian Textile Industries, 'TTI'. Mr. Price also set up a small consultancy company with his wife, 'P & P Associates'."

8. The judge summarised the events that had taken place since the formation of Dawn. It is necessary for the purpose of this judgment to give but a brief summary of the background: in 1987 Dawn was formed. From its formation up to 1999 there were two joint managing directors, Nivern and Finn. A further member of the management team, Pearson, joined in July 1995 as Operations and Logistics Manager.

9. In October 1998 there was a burglary at Dawn Mill. The judge found that Parker was suspicious that either Nivern or Finn was involved. In January 1999 Parker summarily dismissed Finn because he found that Finn had been stealing stock. Nivern, who had been on sick leave for some weeks, ceased his employment with Dawn in August 1999. In May 1999 Parker sought to introduce Snyder as Chairman of Dawn leaving him, Parker, to get on with his other businesses. Terms were discussed and Snyder took up the position of chairman. He was appointed a director on 24th May 1999 and Parker resigned as Director and Chairman on 25th May 1999.

10. The judge carefully recorded in his judgment the events occurring after that date up to the time when Snyder, together with Price, offered to take over Dawn's business. The offer was made in a letter dated Friday, 3rd December 1999 and its material terms read as follows. I quote from the judgment at page 42 of the papers and paragraph 38:

    "The material terms of the letter are as follows:

    "Dear Barrie

    As you know, the existing Dawn Processing Business is not in a fit condition to continue without further funding. As a result of this you have decided to call in the receiver.

    David & I have worked out a plan to turn Dawn into a successful profitable business subject to certain conditions.

    Firstly we are prepared to acquire the company for £1 and give you back 20% of the company for 20p. This assumes that we would make substantial contributions both personally & financially to the ongoing business. This could take the form of both equity and loans but will not dilute your interest for the acquisition .

    Secondly we would need to find other premises, but until then would be prepared to remain at Shaw & continuing to pay the rent at £2k per week…."

    There followed terms as to the alternative premises, continuing:

    "In the event that a site is not found & the business has to be terminated then in consideration of the management team's efforts, free/cheap time and substantial investment, BP shall be personally responsible for 50% of the total redundancy of the business (a figure anticipated at approx. £200k)…."

    The terms provided for Mr. Parker to take over the retail shop, the stock of which, had already been invoiced to Sunbridge at a written down value of £15,000 plus VAT (book value £81,000), the invoice being back-dated on Mr. Parker's instructions to 8th November 1999."

11. Agreement was reached in principle on 8th December 1999 and Snyder and Siddons instructed solicitors Cobbetts to prepare documents for the acquisition of shares in Dawn. Parker had his own solicitors acting for him. The agreement was completed on 10th January 2000, the terms of which are set out in paragraph 40 of the judgment. I read the first paragraph:

    "40. The Agreement was completed on 10th January 2000 substantially as originally proposed, save that the redundancy clause was not included. It was carried out in the following form. Prior to the Agreement the shares in Dawn were held as to 50% by Mr. Parker and 50% by Dawn Processing Holdings Ltd. ("Holdings"), the shares in which were held or controlled by Mr. Parker. Following the Agreement the whole of the shares in Dawn were transferred to Holdings; the shares in Holdings were transferred to a new company Cobco 290, the shares in which were held as to 20% by Mr. Parker and 80% by another new Company, Cobco 296."

12. The judge then set out the shareholdings of the various other members and continued:

    "There was also an Agreement for a new Lease to be granted to Dawn, for a term expiring in March 2001, at the rent of £2,000 per week, the existing term to be surrendered and protection under the Landlord and Tenant Act 1994 to be excluded by order of the Court."

13. It is out of this agreement that the claim arises. It was in two parts: the conspiracy was alleged to have been formed in August 1999. The first part was an alleged course of conduct by the conspirators to "trade down" the business of Dawn in order to secure its purchase and below its real value. The second part was an alleged conspiracy falsely to represent to Parker that the parties to the conspiracy were proposing to introduce further funding without which Dawn would be unable to continue in business.

14. Before turning to the judge's findings in a little more detail, I must refer to the judge's findings in respect of the parties and to the witnesses who gave evidence at trial. He heard the oral evidence of some 16 witnesses of fact over a period of 18 days. His assessment of the main witnesses is expressed in paragraph 49 of the judgment. He dealt with each one individually:

    "(1) Mr. Parker was an erratic and unreliable witness. His suspicious nature led him to describe as fact that which he imagined to have occurred. His evidence would be adjusted to meet the case he wished to pursue, as happened in relation to the two cheques.

    (2) Mr. Snyder I viewed as honest but somewhat defensive. There were some inconsistencies in his evidence, as when he told me that he had decided not to continue with Dawn as early as the end of June 1999, but nevertheless attended Cobbetts in August to instruct them in relation to the share option. It was strange that he and Miss Snyder could not recall the meeting notwithstanding that Mr. Snyder had asked for the bill at the end of November and despite the production of the file notes of Cobbetts, which might have been expected to remind them. There was however nothing remarkable about the meeting itself or inconsistent with the main body of the evidence as to the share option being required for the other directors.

    (3) Miss Siddons on her own admission had made false entries in the cash books, albeit, on her evidence, at the instigation of Mr. Parker. Her explanation of the second cheque was unsatisfactory. It was remarkable that despite references in her original witness statement to Mr. Parker's cash dealings to demonstrate his dishonesty, she made no reference to the more blatant instances of these two cheques. My conclusion is that I cannot rely upon her as being a wholly truthful witness."

15. I pause there to interpolate that the question of the two cheques is one of the main grounds sought to appeal this judgment. I shall return to it. Continuing the quotation from paragraph 49:

    "(4) Mr. Pearson, on whom the Claimant placed much reliance, did not appear to me to be a dishonest man, but he was a witness with an obvious grievance: In his eyes he had been wrongly used by Mr. Snyder, excluded from the management buyout and finally eased out of his job with Dawn, on grounds which he regarded as contrived and which led to a claim for unfair dismissal. All this had I think led to his later recollection of events and conversations being coloured and selective so that he had built up a reconstruction of events which, as will appear, could not be sustained.

    (5) Mr. Price the third Defendant appeared to me to be honest and reliable. His part in the events in question came at a late stage and I can say that I had no reason to doubt his word that he had not been involved earlier save to the limited extent I have noted.

    (6) Mr. Price in his submissions invited me to regard Mr. Elliott as 'balanced; sober; disinterested and unshaken in cross examination.' I readily adopt that wording. Mr. Elliott was a man of obvious integrity and of assistance to the court in relation to the events with which he was concerned.

    I had no reason to doubt the honesty of other witnesses. Allowance must be made for their ability to record such matters as conversations completely and with accuracy. I shall note their evidence where it is material."

16. The judge then went on to deal with the first part of the conspiracy. He referred to the fact that this part of the claim was based on the evidence of Pearson as set out in his, Pearson's, witness statement of the 25th March 2004. The judgment at paragraph 50, page 46 of the documents, recites the relevant passages of Pearson's witness statement. It reads as follows:

    "He does not give the date [this is, I interpolate, of a meeting] but it occurred at the beginning of September 1999. In paragraph 8 he continues:

    "8. Prior to that meeting Lawrence Snyder approached me for a private conversation on the basis that I would not repeat the conversation to Barry Parker. I was in my office at the time that I was approached by Lawrence Snyder, and we were the only persons present in the office. Lawrence Snyder instructed (as opposed to asking) me "not to put a great deal of effort into running the company, as we'll set up another company doing exactly the same thing.

    9. Lawrence Snyder specifically required me to restrict the business of Dawn developing, although Lawrence Snyder was anxious to ensure that the customer base of Dawn was maintained…Lawrence Snyder advised that he intended to set up a similar company together with myself, Alan Elliott, Andrea Siddons and Barrie Owen.

    10. ….Lawrence Snyder's idea was to purchase Pre-Retail Services and thereafter take the business, (and customer base) of Dawn, once Dawn was in a weak position….

    11. Lawrence Snyder had actually devised an exit plan for the required directors, Barrie Owen and myself, would be the first persons to leave…

    12. I presume that at this time Lawrence Snyder may also have been [having] conversations with a bank(s) concerning the funding of the purchase of Pre-Retail Services.

    13. Indeed, reference (as part of the plans) was made to the fact that Andrea Siddons had already approached the Yorkshire Bank plc. (see below). Lawrence Snyder openly admitted that the primary objective was to weaken Dawn to such an extent that customers of Dawn could easily be taken from Dawn…."8

17. He then refers to the PRS visit:

    "I recall Lawrence Snyder specifically repeating whilst driving to the mill, that Barry Parker must not be advised as to the proposed plans" and to the meeting afterwards over lunch at the Bella Vista at which: An alternative plan was required, which Lawrence Snyder advised that he would develop…. It was agreed that there would be a further meeting in order to discuss matters in more detail."

18. In the next paragraph of the judgment the judge set out in detail why he rejected that evidence and why that part of the claim failed. In summary, he found Mr Pearson's evidence unlikely and contrary to the weight of evidence about how the company actually performed.

19. The second part of this conspiracy was based mainly, but not exclusively, on the letter of 3rd December 1999 to which I have referred. The judge said that, apart from the letter, the allegations were unrecorded and unspecific. So far as Mr Snyder was concerned, in addition he referred to a meeting in November 1999 when the judge recorded that the allegation was that Snyder had represented Dawn, was in severe financial difficulties and its financial position weak. It was said that that representation was false. Secondly, so far as Siddons is concerned, the allegation was that she was generally pessimistic about the business but there were no contemporaneous notes of conversations with her. Again it was said that her representations were false.

20. So far as the 3rd December letter is concerned, it contained the phrase that the company was: "not in a fit condition to continue without further funding." Again, it was alleged that that was a false representation. In dealing with this, the judge then set out what he understood and found as a fact Dawn's situation was at the time of these alleged misrepresentations.

21. He referred to three difficult areas so far as the company was concerned. First, it had lost its original joint managing directors. Secondly, it had suffered a number of misfortunes: burglaries, cross-claims by customers due to inadequate stock controls and the insolvency of an associated company. Thirdly, the trading figures showed losses in seven out of the last nine months. The judge then found, first, the statement of the letter was justified, secondly, the views set out in the letter were the genuine views of those behind the letter, particularly Snyder, and, thirdly, Parker did not rely on them. He found that Parker turned to Blaskey, the company accountant, if and when he needed financial advice and in any event he, Parker, made his own decisions and did not trust others. Accordingly, the judge dismissed this part of the claim.

22. The next part of the claim was an alleged fiduciary duty owed by the respondents. The judge found as a matter of law that they owed no duty to Parker. He held that they were acting on their own behalf and not on Parker's behalf and that Parker had his own solicitors to act for him.

23. The grounds of appeal upon which permission to appeal are sought are divided into two parts, parts A and B. I deal first with part A. This arises from the application by Parker to adduce further evidence after judgment had been handed down and before the order drawn up. There is no dispute that the judge had jurisdiction to entertain the application. The relevant dates are as follows: the judge heard oral submissions at the end of the case, which ended on 21st October 2004. Additional written material was submitted to him, he then reserved his judgment and handed down a draft judgment on 10th December 2004. Following him handing down the judgment, the witness statement of Roger Finn showed that Parker got in touch with him, as a result of which an application was made for further evidence to be heard in the form of evidence from Roger Finn. The application was dated 7th January 2005. It came before the court on 10th January 2005. The judge was unable to deal with the matter on that occasion. It was finally determined by a judgment given by the judge on 4th February 2005.

24. The application sought permission to call evidence from Finn who, it will be recalled, was one of the former joint managing directors. It related to an issue which arose in the course of the trial in respect of two cheques drawn for cash, signed by Parker in respect of one and by both Parker and Siddons in respect of the other. The details are as follows: the first cheque, chronologically, is dated 18th December 1998, was drawn in the sum of £2,000 and signed by Parker only. The second was for cash in the sum of £997, dated 13th October 1999 and signed by both Parker and Siddons. The evidence and the judge's findings in respect of the cheques are contained in paragraphs 44 to 48 of the judgment. At paragraphs 44 to 46 he describes the evidence about the cheques and the history of how they came to light:

    "44. Before addressing the claim it is material to look at the two cash withdrawals in December 1998 and October 1999. As to the first, the cheque for £20,000 was signed by Mr. Parker and not countersigned. Mr. Parker's own evidence in his first supplemental statement was that the Bank would only pay cash to one of the signatories of the cheque unless it was validated by a director. That was confirmed by Mr. Chapman. It was the practice for cheques to be written out by Miss Siddons, as was this cheque. The cash book entry was falsely made by her against the account of 'Littlewoods' and under 'Purchases'. She told me that she did this on instructions from Mr. Parker as payment could be set against a debt shown in the books as owing to Littlewoods from 1995, but which had never been invoiced.

    45. The October 1999 cheque for £9,997 was rather different. The cheque No.004415 was from the June cheque book. The counterfoil was blank save for the initials of Mr. Parker 'BP', indicating that he had signed it, but the cheque was not used in June. The cheque was made out to 'Cash' in the handwriting of Miss Siddons and signed also by her. A second signature was required from a date in June and certainly by October. The cheque was dated 8th October and shown in the Bank Statement as having been paid on 13th October, a day when Mr. Parker told me he was ill at home. Although the cheque was again entered falsely by Miss Siddons against the Littlewoods account, it had originally been entered by Mr.Chapman on her instructions against 'Inland Revenue' under 'PAYE', but these entries had been 'tippexed' out by her and replaced by 'Littlewoods' and an entry under Purchases.

    46. The cheques were only revealed in the course of the hearing and were not part of the claim in the action. As a result the investigation was somewhat unsatisfactory. It had been Mr. Parker's belief that he had been asked to sign a cheque in June to pay Mr. Snyder for his first three months. I am satisfied by the evidence of Mr. Snyder that he never did receive payment and indeed refused to be paid for this period or for any of his time prior to September."

25. The evidence showed, and Miss Siddons accepted, that she drew the cheques and in respect of them made false entries in the books showing they were to pay debts due to Littlewoods. She said she did so at the instigation of Parker who received the cheque in both instances. I have already set out the findings that the judge arrived at in paragraph 47. He continued at paragraph 48:

    "48. Miss Siddons acknowledged that she had collected the cash from the second cheque and that she had made the false entries in Cash Book. Her evidence was that it was another instance of Mr. Parker requiring her to extract cash for him by this means and that she paid the cash to him. Her evidence was less than satisfactory. She could not explain why an earlier cheque had been used, nor could she recall any details as to time and place in relation to the payment of the cash by her to Mr. Parker. It is strange that a cash withdrawal should not have been a round figure, £10,000, suggesting that the cheque had originally been drawn for some other purpose. Taking the whole of the evidence, I was not satisfied that Miss Siddons had retained and thus stolen the money. Nevertheless her conduct in making the false entries and her failure to refer to these cash payments at the outset must undermine my confidence as to her evidence."

26. That undermining of her confidence is reflected in the following paragraph in which he set out his findings as to the voracity and accuracy of each of the individual witnesses.

27. The evidence which Parker sought to adduce post-trial was evidence about the cheque for £20,000. In a witness statement made on 6th January 2005, Mr Finn said:

    "In December 1998, whilst Barry Parker was on holiday, Andrea Siddons walked into my office and gave me £2,500 in cash. I am aware that she also gave David Nivern £2,500 in cash. Andrea Siddons told me that it was part of the overpayment monies from Burtons. I asked her whether Barry Parker knew of this and she simply told me that she was dealing with it. I did not think at the time that Barry Parker knew the reason, that if Barry Parker were to give a gift or bonus he would never let you hear the end of it. Barry Parker would make a song and dance out of giving something for nothing."

28. Mr Finn, in his statement, went on to explain how towards the end of December 2004 Parker had got in touch with him by telephone. Apparently, Parker was on holiday in Thailand at that time. After telling him about various matters, Finn continued in his statement at paragraph 3, page 74, as follows:

    "Towards the end of December 2004, Barry Parker telephoned me from a mobile whilst he was on Christmas break in Thailand and explained that the case that he had brought against Andrea Siddons, Lawrence Snyder and David Price had been unsuccessful. Barry Parker had previously mentioned this case to me in passing but I had not paid much attention. Since my departure from Dawn Processing Limited, I have had certain contact with Barry Parker, partly in relation to a case I brought against him. As such, we have retained a grudging respect for each other."

29. It was submitted to the judge, as it has been to this court, that this fresh evidence materially affected the judge's finding in relation to the two cheques to which I have referred. This in turn might cause the judge to change his findings the issues of conspiracy and misrepresentation. The judge was referred to various authorities and dealt with each of the factors that are set out in Ladd v Marshall [1954] 1 WLR 1489.

30. He held, firstly, Parker had not acted with reasonable diligence in obtaining the evidence for use at trial. The basis for this holding was, in the judge's view, that the evidence about the cheque had first been given on the 4th October 1999, Finn and Parker had been in contact during the course of the trial, and no attempt had been made by Parker to seek evidence from Finn on this issue until after judgment. Accordingly, as I have said, the judge found he had not acted with reasonable diligence.

31. Secondly, he found that it would have had no impact on the evidence of the other two respondents, Snyder and Price. He had already made unfavourable comments about Miss Siddons' evidence. It might have caused him to make even more unfavourable comments that would not have affected the substantive claims.

32. Thirdly, he found that on the face of it Finn was participating in a dishonest removal of money from the company. In any event, Parker's own evidence was that Finn was a thoroughly dishonest man. In all the circumstances, this was a factor to be taken into account when assessing whether the evidence was such as "presumably to be believed".

33. The application to appeal this decision of the judge is sought on a number of grounds. In addition there is a freestanding application for this court to hear the evidence within the appeal. In support of this proposed ground of appeal, counsel, in a written skeleton argument, relies on a number of factors which he submits shows that the judge's decision was wrong. They are grouped together under a number of headings. First, the October 1999 cheque and December 1998 cheque. The factors relied on under this heading are set out under 30 separate different matters dealing with the background to the evidence in relation to the cheques, starting with Siddons' attack on Parker's integrity in her witness statements. They outline the difficulties which Parker's legal team encountered in obtaining disclosure of the cheques and the late introduction of them into evidence. They further refer to much of the evidence given by the witnesses in respect of these cheques.

34. Secondly, under the heading "significance of the October 1999 cheque and the December cheque", a number of factors are referred to, principally relating to the effect which Finn's evidence might have had on the judge in his assessment of Siddons' honesty. It is further submitted that this evidence, damaging to Siddons, ought to have caused the judge to draw adverse inferences against Snyder. Next, it is submitted that the adverse inferences as to Siddons' evidence would have had an inevitable beneficial effect on the judge's assessment of Parker's credibility. Finally, it is submitted that if Parker's evidence was accepted and he had been told of Siddons' dishonesty in respect of the cheques he would never have agreed to the sale of his shares without first holding a full scale enquiry. It is submitted that if the judge accepted Finn's evidence it would demonstrate a breach of fiduciary duty by Siddons.

35. Thirdly, in the light of recent authorities, it is submitted that the judge applied the wrong test. In respect of the reasonable diligence test, he wrongly equated that with reasonable speed. It is submitted that Parker could not have known of Finn's involvement until Finn volunteered the information in the telephone call referred to in Finn's witness statement. Further, it is submitted that the judge failed to give proper weight to the overriding objective of doing justice to the parties. In his assessment of the balance of fairness, it is said that the judge gave too much weight to fairness to the respondents and insufficient weight to fairness to Parker. Next, the judge took a too strict and onerous view of the second factor of the threefold test in Ladd v Marshal, namely the inference the evidence would have had on the case. Finally, he failed to apply these tests flexibly as is referred to in Charlesworth v Road Relay [2001] 1 WLR 230.

36. For my part, I am not persuaded that the judge's decision was arguably wrong. It is clearly a decision taken in the exercise of his discretion. As Neuberger J pointed out in Charlesorth v Road Relay (No 2) It will generally only be in rare cases that the judge will exercise his discretion to admit new evidence after judgment has been handed down. Notwithstanding counsel's argument that the evidence demonstrated a breach of fiduciary duty by Siddons, in my judgment this was essentially evidence going to the issue of credibility. It did not impinge directly on the substantial issues relating to the claim. Whilst I recognise that credibility in this case was a very important factor, the judge was in the best possible position to assess whether the evidence, even if accepted, would have caused him to reassess his findings. He had already expressed reservations about Miss Siddons' reliability.

37. As far as Parker was concerned, there were many other matters which could and no doubt did cause the judge to conclude that he was unreliable as a witness. We have been referred in the skeleton argument of counsel for the respondents to passages in the evidence of Parker which show him in a bad light when giving evidence. Indeed, in his submissions today Mr Booth accepted as much.

38. In any event, this evidence in my judgment in no way impinges on either Snyder or Price. Whilst I would not have been as critical, as the judge was, of Parker's failure to obtain his evidence earlier, it does appear from Finn's statement that it was Parker who asked Finn whether he knew about these cheques. There would appear to have been no reason why he did not do so earlier than late December 1999. Further, the judge referred to the obvious difficulties in relation to Finn's unreliability as a witness.

39. For these reasons, in my judgment, this ground of appeal, which seeks to overturn the judge's decision refusing the application to call new evidence, has no prospect of success.

40. There remains, so far as this part of the appeal is concerned, the application that this court should hear new evidence. I recognise the argument that the court might view the application more objectively than the judge who had already made his findings. However, in my view, having reached the conclusion that the judge's decision refusing to hear this evidence cannot properly be challenged, it is in my opinion in the highest degree unlikely that this court would entertain such an application. Whereas here I have reached the conclusion that the judge did not err in the exercise of his discretion, I do not think it arguable that this court would entertain this evidence.

41. I turn to the second ground, ground B. The applicant seeks to persuade this court that the judge was wrong in his findings of fact. The proposed grounds of appeal put the matter in three ways: first, the judge failed to draw the appropriate inferences from facts before him, secondly, he failed to make findings of fact that were required and, thirdly, he failed to take material evidence into account when considering the accuracy of credibility of witnesses in particular instances.

42. The principles of law are not in dispute, although counsel on each side in their skeleton arguments highlight different passages of the relevant authorities. It is not in dispute that generally it is only rarely that this court will interfere with the judge's findings of primary fact. The court may be more ready to interfere with inferences drawn from specific facts.

43. As my Lord Sir Peter Gibson said in Fuller v Strum [2002] 1 WLR 1097, which is in divider 5 of the authorities bundle, at paragraph 31:

    "31 In considering this appeal I am acutely conscious that the judge had the advantage, which an appellate court does not have, of having seen and heard the witnesses and observed their demeanour. So long as a trial judge cannot clearly be seen to have misused that advantage, the appellate court must accept the findings of primary fact, evidence of which the trial judge received from witnesses in a position to give that evidence: see, for example, Watt (or Thomas) v Thomas [1947] AC 484. But where direct evidence is lacking and the trial judge makes inferences from primary facts, it is easier for an appellate court to interfere with those inferences if in its view they are not justified, though even then the appellate court will give weight to the trial judge's opinon: see, for example, Benmax v Austin Motor Co Ltd [1955], AC 370."

44. Counsel for the respondents, in his skeleton argument, relies on a passage from Lord Hoffman's speech in Biogen Inc v Medeva Plc [1997] RPC 1 at page 45, the report to be found in divider 9 of the authorities bundle. In the middle of the page:

    "It is true that in Benmax v Austin Motor Co Ltd [1955] AC 370 this House decided that, while the judge's findings of primary fact, particularly if founded upon an assessment of the credibility of witnesses, were virtually unassailable, an appellate court would be more ready to differ from the judge's evaluation of those facts by reference to some legal standard such as negligence or obviousness. In drawing this distinction, however, Viscount Simonds went on to observe, at page 374, that it was 'subject only to the weight which should, as a matter of course, be given to the opinion of the learned judge'. The need for appellate caution in reversing the judge's evaluation of the facts is based upon much more solid grounds than professional courtesy. It is because specific findings of facts, even by the most meticulous judge, are inherently an incomplete statement of the impression which was made upon him by the primary evidence. His express findings are always surrounded by a penumbra of imprecision as to emphasis, relative weight, minor qualification and nuance (as Renan said, la verite est dans une nuance), of which time and language do not permit exact expression, but which may play an important part in the judge's overall evaluation."

45. Mr Booth QC seeks to persuade this court that a very large number of findings by the judge were wrong. His submissions on this ground of appeal are divided into 12 main headings, each on different findings. Under each of the headings, a very large number of separate factors are set out and relied upon. Mr Booth's closing submissions to the judge were equally lengthy. In the circumstances, it seems to me hardly surprising that many of the points made by Mr Booth do not feature in the judgment. It was in my judgment neither necessary nor appropriate for the judge to deal with it in his findings in as much detail as the submissions Mr Booth suggests he ought to have done.

46. For my part, I accept the submissions made by Mr Freedman QC in his skeleton argument that the length of the submissions of counsel for Parker and the detail of them tend to obscure the essential issues in the case. There were comparatively few documents of real importance in respect of the alleged conspiracy, misrepresentations in breach of fiduciary duty. The essential issue for the judge was which of the witnesses were telling the truth and which were accurate. I have already set out the judge's findings in respect of the important witnesses. It is clear that he came to the firm and clear conclusion that he could not rely on Parker's evidence. Equally, he concluded that Snyder and Price and Elliott were truthful and accurate.

47. Despite the wealth of detailed submissions placed before this court, I see nothing which persuades me that it is arguable that the judge's assessments of the witnesses were wrong. I take but a few examples of the submissions that are made to this court where it is said the judge was in error. First, the issue as to the cheques. Mr Booth argues that the judge never dealt with the submission that it would have been very odd if Parker had received cash for either of these two cheques. He would have pursued disclosure of each with the determination that he did during the trial. He also submits that it is surprising that Siddons, who had criticised Parker in her witness statements for taking money from the company, had not made the allegation in relation to these cheques in those witness statements. These allegations only surfaced in the course of her evidence when she was being cross-examined about the 1999 cheque.

48. The respondents point out that Miss Siddons made this allegation as another example of Parker taking money from the company. She said Parker must have collected the cash from the bank because only the person who signed the cheque was able to collect cash. This was supported by the evidence of Chapman, her assistant, and accorded with banking practice. Mr Booth criticised the judge for taking into account banking practice as supporting Miss Siddons' evidence. Mr Freedman points out in his skeleton argument that this point was one which was made by Parker himself in a supplemental witness statement; only at a later stage did he change his evidence to assert that Miss Siddons had stolen the money.

49. Despite Mr Booth's attempts to elevate this issue to one central to the case against the respondents, in my judgment it remains an issue of credibility. Had it been more, it would in my judgment have been necessary for it to have been specifically pleaded. It is, in my opinion, no answer to say that it was set out in the skeleton argument.

50. The judge observed all the witnesses. He did not deal with all the submissions made on this issue but it was an issue for him to decide in his assessment of the witnesses. In my view, it is not arguable that he was wrong in such findings as he made and for my part I am satisfied that he made all the necessary findings to decide the importance of this issue in the context of the whole case.

51. I turn next to the issues concerning the Cobbetts file. The judge is criticised under this heading for not dealing with the evidence emanating from the late disclosure of Cobbetts files. Cobbetts were the respondents' solicitors acting in the acquisition of Dawn. Both Snyder and Siddons said that they had no recollection of a meeting with Cobbetts on 26th August 1999. It was clear from the documents produced from Cobbetts files that they did have such a meeting. The judge found it surprising that neither had a recollection of this meeting.

52. The applicant invites this court to hold that the judge should have found that Snyder and Siddons were lying and that they were doing so because they were covering up their intention, at that early stage, to pursue the acquisition of Dawn for their own benefit. It is said that their double amnesia of this event and the contents of the documents leads to this inevitable inference.

53. Again, as the respondent's counsel pointed out, the documents disclosed from the files do not support the allegation that the respondents were at that stage seeking to acquire Dawn for their own benefit. Nor do subsequent documents and nor are they supported by the subsequent unchallenged events.

54. Snyder decided to leave at the stage shortly after the August meeting and thereafter became a reluctant consultant. The state of the company in December was quite different from September. Furthermore, there were other documents disclosed from Cobbetts files which supported aspects of the respondent's case. For instance, there were documents dated December 1999 which supported the respondent's evidence that they were going to inject money into the company, albeit by means of foregoing salary.

55. The judge, whilst finding that it was strange that Snyder and Siddons could not remember anything of the meeting, found that there was nothing memorable in the meeting or inconsistent with the main body of the evidence as to the share option being required for the directors. I see no reason for saying that this finding was arguably wrong.

56. Next, PRS and Pearson. The judge rejected the suggestion that Snyder's visit in September 1999 to Pre-Retail Services was for Snyder's own purposes, and not to find alternative premises from which Dawn could trade. It was in the car on the way to PRS that Pearson said Snyder repeated his outline of the plan to take over Dawn. It is submitted that the judge was wrong to reject Pearson's evidence and to find that Elliott's evidence supporting Snyder was truthful and accurate. Criticism was made of the judge's finding in relation to Pearson on the basis that having found Pearson an honest witness he could not properly have rejected his evidence about Snyder's intentions. It is said it was impossible for an honest witness to be mistaken about what he was told by Snyder.

57. In response, the respondents submit that this was simply an example of the judge preferring Snyder's evidence to that of Pearson. The submission is that there were powerful reasons for accepting Snyder's evidence on this point. It made no sense for Snyder to trade down Dawn. Further, it is submitted that Pearson's evidence was discredited in relation to a meeting in November 1999. It is suggested that Pearson's evidence on this issue was wholly unreliable.

58. The problem faced by the applicant on this, as on many of the issues, is that the judge heard the evidence about these incidents and rejected one side's version of events whilst accepting the other's. This was not only what the judge was entitled to do; it was his job to do so. It is true that he did not deal with every detail of the evidence, nor every one of the submissions. But the underlying theme is one of acceptance of Snyder's evidence and rejecting the evidence of Parker and his supporting witnesses. For my part I see no valid reason for concluding that the judge's findings were wrong on this particular issue.

59. The final issue that I shall deal with relates to the letter of the 3rd December 1999. This letter is recorded in the judgment and I have recited its contents. The letter is said to form the basis of the allegation of misrepresentations. The particular misrepresentation is the first reference in the letter to the weak state of Dawn. The criticism in the proposed grounds of appeal in the skeleton argument is that the judge was wrong to find that the statements in the letter were justified. It is submitted that the letter is to be contrasted with the contents of Cobbetts' file which demonstrate that no injection of funds was needed. The respondents submit that the letter was prepared as a basis for discussion if it was expected that thereafter lawyers would be instructed to protect the interests of both parties. Subsequently, that is exactly what happened.

60. Again, in my judgment no error is displayed in the judge's findings in respect of this letter. He prefaced his findings by setting out the position of the company at that time. He referred to the three factors which in his opinion led to the down turn in trading. He also referred to the prospect that the company would need to relocate. In my judgment, all these matters were factors which the judge was entitled to take into account when reaching his conclusion on this issue. Further, he went on to find that Parker had not proved that he relied on the representations in the letter. Again in my judgment this was a conclusion he was entitled to reach. In doing so, he referred to the fact that Parker turned to Blaskey, the company's accountant, for advice. He records the fact that Blaskey advised that the company was not insolvent. In my view, the criticisms of this part of the judgment are not made out.

61. I have carefully read the skeleton arguments of both parties. I do not propose to go into any further detail and thereby lengthen what is already an overlengthy judgment. For my part, I am quite satisfied that the appeal in this case has no prospect of success on any of the grounds in the notice of appeal. I would refuse the application.

62. SIR PETER GIBSON: I agree.