IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM MILTON KEYNES COUNTY COURT
(HIS HONOUR JUDGE SEROTA QC)
B e f o r e :
LADY JUSTICE ARDEN
LORD JUSTICE LAWRENCE COLLINS
|BASSANO & ANR||CLAIMANT/APPELLANT|
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MR N YEO (instructed by Messrs David Downton) appeared on behalf of the Respondent.
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"Having seen Mr Battista in the witness box, what he has said about VAT and effectively appreciating that he was probably going to go over the threshold but did not do very much about it until he really had to, seemed to me to have the ring of truth".
"36. Broadly speaking I prefer the Claimant's submissions. Even if the Claimant may have been mistaken as to some details, he accepted the errors in his chronology quite readily. I believe, having seen him in the witness box, that he was an honest witness and his case depends more on honesty than anything else. The Defendant's case involves my making a finding that the claimant deliberately misled the defendants and also previous clients. It is far too late, it seems to me, for me to order disclosure of further VAT records. In relation to the case on VAT it is significant that the claimant arranged for registration before his dispute with the Defendants arose. I accept that he may well have been over-optimistic or extremely careless as to the effect of payments on the VAT threshold, but I am not satisfied that he intended to mislead the Defendants and nor am I satisfied that he lead them to suppose that the amounts they paid in respect of tradesmen and labourers would be paid directly, whether to avoid the VAT threshold or generally.
"37. The Defendants are highly intelligent, but in my view were commercially naïve to believe that the kind of contract they entered into, such as was let to the Claimant, was more appropriate than a contract which may have seemed to cost more but where there would have been a proper contract, independent supervision, and clearly defined specification, time scale, and price.
"38. I am not satisfied that any of the three witnesses from whom I have heard is wholly clear about what was said at what meeting or where these conversations took place, but I am clear, however, as to the substance.
"39. I prefer the Claimant's case as to the contractual terms that were agreed. The Defendant's case makes no sense commercially. Why should all trades be paid the same? Why should work-men be paid far more than the going rate? The profit for the claimant would be negligible; he would only receive it at the end. He would have to cover all his overheads from his daily earnings. In those circumstances why on earth would he abandon his right to claim weekly payments if he was expecting to be forking out these relatively significant sums, which included his profit, to the workmen between January and April. I have to say I have never come across an arrangement such as the Defendants are putting forward. I accept that such terms may be agreed, but the far more usual term is in day-work contracts for a charge to be made, so much per day per man, so much per day per machine.
"40. I have regard to what Mr Russell says and what the Bradleys say. Neither of them have been cross-examined, and I do not think in the absence of cross-examination it would be right to place any great emphasis on evidence of either of them, but the Bradleys significantly undermine what Mr Russell says, and on balance I will accept their evidence because it corroborates what the Claimant said and what my understanding is of usual practice. I accept that rather than the evidence of Mr Russell, which would mean that the Claimant had not only been guilty of lying to the Defendants but also to other clients, and I can see no reason why he should have done so. Why on earth should he have deliberately lied to the Defendants about his charges?
"41. There is no suggestion that the amounts that he was charging were unreasonable and the Defendants were willing to pay them. I can only conclude that the Defendants were mistaken and had got hold of the wrong end of the stick. In the real world builders do not pay their client's workmen and pay for materials as the Defendants suggested that the Claimant did between January and April. The Defendant's case, in my opinion, defies common-sense.
"42. So far as VAT is concerned, I have already noted that the Claimant did take advice and seek to register with retrospective effect during the job and asked that the Defendants should pay VAT. This is so even if the retrospective registration was effected later. The registration was, as I have said, effected in September but backdated in effect."
"All of the issues before the court are pure questions of fact and will turn on the relative credibility and reliability of the evidence called on each side."
There were only written closing submissions at trial and in the closing submissions on their behalf it was repeated that the resolution of the issues would turn on the relative credibility and reliability of the evidence.
"I cannot stress too strongly that there is no duty on a judge in giving his reasons, to deal with every argument presented by counsel in support of his case. It is sufficient if he shows the parties and, if needs be, the Court of Appeal the basis on which he has acted ..."
"It follows that, if the appellate process is to work satisfactorily, the judgment must enable the appellate court to understand why the judge reached his decision. This does not mean that every factor which weighed with the judge in his appraisal of the evidence has to be identified and explained. But the issues the resolution of which were vital to the judge's conclusion should be identified and the manner in which he resolved them explained. It is not possible to provide a template for this process. It need not involve a lengthy judgment. It does require the judge to identify and record those matters which were critical to his decision. If the critical issue was one of fact, it may be enough to say that one witness was preferred to another because the one manifestly had a clearer recollection of the material facts or the other gave answers which are demonstrated that his recollection could not be relied upon." 
"When giving reasons a judge will often need to refer to a piece of evidence or to a submission which he has accepted or rejected. Provided that the reference is clear, it may be unnecessary to detail, or even summarise, the evidence or submission in question. The essential requirement is that the terms of the judgment should enable the parties in any appellate tribunal readily to analyse the reasoning that was essential to the judge's conclusion."
Order: Application refused. Appeal dismissed.