England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT, CHANCERY DIVISION
Mr Justice David Richards
HC05C01580

		Royal Courts of Justice Strand, London, WC2A 2LL
		12 February 2009

The Chancellor:

Introduction
1. In 1996 the issued share capital of Stanelco plc ("Stanelco") consisted of 666,224,850 fully paid shares of 1p each. They were quoted on the Unlisted Securities Market. 80% of the issued share capital was held by Abacus (Nominees) Ltd as and for the trustees of the trust constituted under the laws of Jersey by each of two of the four directors of Stanelco, namely Mr Ian Davis and Mr Howard White. In the case of each trust the holding of Stanelco shares amounted to 40% of the issued share capital and the eponymous director was beneficially interested thereunder. In December 1996, in connection with the impending abolition of the Unlisted Securities Market, the opportunity arose to obtain a full listing of the Stanelco Shares on the London Stock Exchange. The Board of Directors of Stanelco, consisting of Mr Davis, Mr White and Mr Christopher Mills, Mr Barrie Hozier and Mrs Shepherd, were anxious to obtain such a listing and instructed brokers and solicitors accordingly.
2. Rule 3.19 of the then relevant listing rules required that at least 25% of the shares to be listed should be "in public hands". That phrase was not defined but rule 3.20 made it clear that shares would not be regarded as being in public hands if they were held directly or indirectly by a director or a connected person, as defined by s.346 Companies Act 1985. In accordance with that definition the trustees of the Jersey Trusts were connected with Mr Davis and Mr White respectively. Accordingly even if shares held in nominee names could be regarded as 'in public hands' any nominee or trustee for either Mr Davis or Mr White would be a person connected with each of them. It followed, and was so understood by those concerned, that the holdings of the two Jersey Trusts would have to be reduced by 5%.
3. In the report of the directors of Stanelco signed by Mr Barrie Hozier as the Secretary and dated 18^th December 1996 included with the financial statements for the year ended 31^st October 1996 the two Jersey Trusts were recorded as each holding 40% of the issued share capital but that to comply with the Stock Exchange regulations Mr White would "sell at least 5% of his holding". In the listing particulars dated 23^rd December 1996 it was recorded that Mr Davis had a 40% interest in the share capital of Stanelco and that Mr Davis and Mr White "jointly own companies which have a further 34.9% interest in the issued share capital of Stanelco". The latter statement was not reflected in the share register of Stanelco.
4. On 9^th April 1997 Abacus, as the trustee of Mr White's Jersey Trust, exercised its discretionary power arising under clause 2(1)(b) of the Trust in favour of Mr White in respect of its entire holding of 40% of the issued share capital of Stanelco. In the directors' reports attached to the accounts of Stanelco for the years ended 31^st October 1997 and 1998 signed by Mr Barrie Hozier on 30^th April 1998 and 30^th April 1999 it was recorded that Mr White was interested in 17.45% of the share capital of Stanelco being half of the holding of 34.9% of three companies owned by him jointly with Mr Davis. Neither the exercise of the power of appointment nor the transfers of 34.9% to the three jointly owned companies were recorded in the share register of Stanelco. Nor, more importantly, was there any disclosure of any beneficial interest in 3% or more of the share capital of Stanelco in respect of the 5.1% apparently disposed of by Mr White.
5. In February 2000, in connection with the sale of the shares in the three jointly owned companies by Mr Davis and Mr White to the son of Mr Davis, Mr Barrie Hozier informed the solicitors acting for Stanelco that the missing 5.1% was held as to 33,309,940 or 4.99% by the claimant Mr William Hurndell and as to the balance of 101,878 by Mr Denis Sharland. In the accounts of Stanelco for the year ended 31^st October 1999 approved on 24^th April 2000 the holding of Mr Hurndell was disclosed as a beneficial holding of more than 3% in the issued share capital of Stanelco which had been notified to the Company.
6. On 15^th December 2000 Mr Barrie Hozier wrote to Abacus at the request of Mr White regarding the holding of the latter in Stanelco. He recorded the need to dispose of shares to comply with the listing requirements and stated that Mr White had agreed that 5% of his holding should be transferred to Mr Hurndell with a small number going to Mr Sharland. He gave details of the disposals to the three jointly owned companies and their onward transfer to a Liechtenstein foundation set up for the son of Mr White. He concluded by asking Abacus to sign the requisite transfers to enable these transactions to be registered in Stanelco's share register. On 9^th January 2001 Abacus complied with the request of Mr Barrie Hozier and the requisite transfers were duly recorded in the share register of Stanelco in February 2001. At the request of Mr Barrie Hozier the certificates were sent to him by the Registrar. He sent the certificate issued to Mr Sharland to him but retained that issued to Mr Hurndell.
7. The accounts of Stanelco for the years ended 31^st October 2000 and 2001 were duly approved on 30^th April 2001 and 14^th February 2002. They continued to show Mr Hurndell as having been notified to the Company as having a beneficial interest in the share capital though in the latter accounts the percentage interest was reduced from 4.99% to 4.85%. On the same day, namely 14^th February 2002, Mr Barrie Hozier completed share transfer forms which Mr Hurndell had previously signed so as to sell all but 1.5m of his shares in Stanelco to Finale Finance Ltd (£11,309,940) and Khaki Investments Ltd (20,500,000). These companies had been incorporated in the British Virgin Islands and owned by a trust in which Mr David Hozier, the son of Mr Barrie Hozier was beneficially interested. The transfer forms indicated a sale consideration of 3.5 p per share. No part of any such consideration was received by Mr Hurndell. The transfers were registered in the share register of Stanelco on 15^th February 2002. On 22^nd February 2002 a balance certificate for 1.5m shares was issued and sent to Mr Hurndell at his address in France. In the accounts of Stanelco for the year ended 31^st October 2002 approved on 24^th February 2003 Mr Hurndell was not shown as the holder of a beneficial interest in 3% or more in the issued share capital of Stanelco; nor were Finale Finance Ltd or Khaki Investments Ltd for their respective holdings were less than 3%.
8. Mr Barrie Hozier's employment by Stanelco ceased on 18^th March 2002. He took with him certain documents which had been kept in the offices of Stanelco in Barnet. Later, in July 2002, solicitors acting for Mr Davis and companies under his control claimed that Mr Barrie Hozier had taken documents to which he was not entitled, including personal files governing the relationship between Mr Davis and Mr White and 38 files belonging to Stanelco. The allegation was hotly denied by solicitors acting for Mr Barrie Hozier and not, so far as the court is concerned, ever resolved. Mr Barrie Hozier resigned as secretary of Stanelco in July 2002 and as a director on 22^nd April 2005.
9. In April 2002 Mr Davis told Mr Hurndell of the sale of the shares in his name to Finale Finance Ltd or Khaki Investments Ltd. Those shares were sold into the market on 11^th May 2004 for £3,202,828.93 and Finale Finance Ltd or Khaki Investments Ltd were dissolved in March and May 2005 respectively. As far as Mr Hurndell was concerned he sold half of his holding of 1.5m shares in September 2004 but did nothing to question the disposal of the rest of his original holding until April 2005. On 18^th April Mr White signed a memorandum ("the White Memorandum") concerning his knowledge in relation to Finale Finance Ltd and Khaki Investments Ltd and sent it to the Chief Executive of Stanelco. Mr Barrie Hozier responded to it on 28^th April. Solicitors instructed by Mr Hurndell commenced an investigation on his behalf into the sales of his holding to Finale Finance Ltd and Khaki Investments Ltd in the same month. On 17^th May 2005 those solicitors wrote to Mr Barrie Hozier claiming that Mr Hurndell had not authorised those sales nor received any consideration for the shares and demanding their return. On 24^th May 2005 Mr Barrie Hozier replied denying that he had completed the stock transfer forms or that either transferee was a vehicle under his control. He expressed regret that he was unable to help any further in the matter.
10. The claim form and associated particulars of claim were issued on 20^th June 2005. Mr Hurndell claimed that he had been the registered holder and beneficial owner of 4.85% of the issued share capital in Stanelco, that Mr Barrie Hozier had, without his authority, completed the stock transfers to Finale Finance Ltd and Khaki Investments Ltd and that he, Mr Hurndell, had not received any of the consideration referred to in the transfers. He sought their return and damages for their conversion by Mr Barrie Hozier. On 25^th July 2005 solicitors for Mr Barrie Hozier wrote to those for Mr Hurndell enclosing a document said to 'have come to light' in the course of the preparation of the defence of Mr Barrie Hozier. That document is headed "St Tropez 13^th August 2001" and reads as follows:

"I, William Hurndell, confirm that Howard White has authorised me to transfer approximately thirty-two million shares in Stanelco PLC to David Hozier at the appropriate time in the near future."

This document to which I shall refer as the St Tropez Note and the alleged meeting in St Tropez between Mr Hurndell and Mr David Hozier and his wife Mrs Karen Hozier on 16^th August 2001 at which it is alleged that Mr Hurndell signed it played a major part in the judgment of David Richards J by whom the, by then amended, claim was tried in July 2007.

11. In his judgment handed down on 19^th March 2008 David Richards J described the events with which he was concerned in considerable detail. He explained why he was unable to place reliance on the oral evidence of the four principal witnesses before him, namely, Mr White, Mr Davis, Mr Hurndell and Mr Barrie Hozier. He concluded, for reasons I shall set out in some detail later, that Mr Hurndell's holding of 4.99% of the shares in Stanelco was only ever as nominee for Mr White and that the transfers from Mr Hurndell, completed by Mr Barrie Hozier in favour of Finale Finance Ltd and Khaki Investments Ltd, were made with the authority of Mr White. In the result he dismissed the action and, subsequently, in a detailed judgment given on 11^th April 2008, refused to grant Mr Hurndell permission to appeal.
12. Mr Hurndell's appellant's notice issued on 1^st May 2008 sought permission to appeal and for permission to adduce additional evidence on the hearing of the appeal. The principal ground was what was described as "the wholly inordinate, inexcusable and unexplained delay in the preparation and delivery of the judgment" alleged to have led to "numerous material errors in the conclusions which have been reached". The relief sought was the reversal of the order dismissing the action and judgment for Mr Hurndell for £10m+. Two further applications for permission to adduce further evidence on the hearing of the application and appeal were issued on 23^rd May and 18^th June 2008. All three applications were considered on paper by Carnwath LJ. On 18^th June 2008 he refused them. His reasons for doing so include the following:

"...the judge's conclusions on all the relevant issues against the background of deeply unsatisfactory and conflicting evidence on both sides, were clearly explained. I have also taken account of his cogent reasons for refusing pta. I am not persuaded that the proposed new evidence would have been likely materially to affect the Judge's conclusions, rather than simply adding to the confusion."

The renewed application of Mr Hurndell came before Wall and Rimer LJ on 28^th July 2008. They indicated to leading counsel for Mr Hurndell that having read the papers they had reached the joint view that:

"...there is a compelling reason why you should have permission to appeal and that relates particularly to the length of the delay in the delivery of the judgment and the fact that you are able to say...because of that delay [the judge] has made a number of errors which were fatal to his conclusion..."

They left to the full court hearing the appeal the question whether to admit any of the additional evidence Mr Hurndell sought permission to adduce.

13. Before setting out the facts and the judge's conclusions in any more detail, I should say something about the conduct of the claim both before and at the trial.
The Conduct of the Claim
14. As I have mentioned in paragraph 10 above the claim of Mr Hurndell was as the beneficial owner of the 4.99% of the share capital of Stanelco registered in his name in February 2001. In his defence served on 18^th August 2005 Mr Barrie Hozier claimed that it had been decided by Mr Davis and Mr White to reduce their holdings to 75% of the issued share capital and by Mr Davis that 5% of the share capital should be transferred to Mr Hurndell to be held by him as nominee, that Mr Davis instructed Mr Barrie Hozier to arrange for that to be done and he had done so from the holding in the White Trust. He went on to allege that Mr Davis had previously promised Mr Barrie Hozier that prior to his, Mr Barrie Hozier's retirement, he, Mr Davis, would give him 5% of the share capital of Stanelco and that Mr White, hearing of this promise in mid-2001, confirmed to Mr Barrie Hozier that the shares held by Mr Hurndell, less 1.5m, would be transferred to Mr Barrie Hozier, his son or his son's wife. He alleged that at a meeting in St Tropez in August 2001 between Mr Hurndell and Mr David Hozier Mr Hurndell had confirmed to Mr David Hozier that he, Mr Hurndell, held his shares as nominee for Mr White and would transfer them to Mr David Hozier on receipt of instructions. He alleged that Mr Hurndell had signed the St Tropez Note at that meeting. In addition he contended that Mr White had assisted in setting up Finale Finance Ltd and Khaki Investments Ltd and that the blank transfers already signed by Mr Hurndell were completed by him in reliance on the assurances given to him by Mr White.
15. On 24^th October 2005 Mr Hurndell served a reply to the defence of Mr Barrie Hozier in which he contended that if the allegations made by Mr Barrie Hozier were true then Mr Davis and Mr White had conspired together to infringe the listing requirements, issued false documents and thereby committed a number of specified offences. He denied signing the St Tropez Note or making to anyone any of the statements contained therein. He accepted that his signature to the transfers in favour of Finale Finance Ltd and Khaki Investments Ltd were genuine but denied giving authority to anyone to complete them with the names of the transferees. In due course Mr David Hozier were joined as additional Defendant. In his defence served on 25^th August 2006 Mr David Hozier confirmed his father's account of the matter and alleged that Mr Hurndell had confirmed to him at a meeting in St Tropez on 16^th August 2001 that he held his Stanelco shares as nominee for Mr White and had been told by Mr White that they were to be transferred to Mr Barrie Hozier, his son or daughter in law. He averred that on that occasion Mr Hurndell had signed the St Tropez Note in his presence.
16. Witness statements were exchanged on 4^th April 2007. There was none from Mrs Karen Hozier. The witness statement of Mr David Hozier described at some length and in some detail the meeting between him, his wife and Mr Hurndell in St Tropez on 16^th August 2001. It is apparent from the terms of his statement that it was prepared in conjunction with his wife. He stated that the meeting had been arranged at the suggestion of his father in order to get Mr Hurndell to sign something to the effect that Mr White had told him to transfer the shares in his name to Mr David Hozier. He stated that he prepared the note on a piece of paper he found in the Hozier family apartment in Nice. He described the meeting at lunch at Le Cafe in St Tropez in considerable detail. He stated that he went through the St Tropez Note with Mr Hurndell who then signed it.
17. Following the exchange of these witness statements Mr Hurndell amended his reply in May 2007. He alleged that the arrangements between Mr Davis and Mr White were effective to confer an immediate interest in the 4.99% holding of Stanelco shares as a reward for work previously undertaken by him on their behalf. In addition he claimed that he had provided consideration in the form of his acceptance of the shares which "resulted in satisfaction of the requirements of rule 3.19 of the then applicable listing rules". In the light of those considerations he averred that it was the entire and intended purpose of the transfer of the 4.99% holding "to transfer the entire beneficial ownership in those shares to" Mr Hurndell.
18. On 20^th June 2007 Mr Hurndell, through his solicitors, disclosed to those for Messrs Barrie and David Hozier the receipt which he had obtained from Le Cafe given to Mr David Hozier or his wife at 2240 for payment for dinner for three, including two complimentary glasses of champagne and a bottle of Rose. He had disclosed his diary suggesting that there was to be a meeting with David Hozier at the Cafe de Paris. The trial commenced before David Richards J on Thursday 5^th July 2007. At 0936 on the second day, 6^th July 2007, the solicitors for the Hoziers faxed to those for Mr Hurndell a witness statement of Mrs Karen Hozier signed the previous day. The solicitors for Mr Hurndell had left for court by then. The solicitors for the Hoziers did not take any additional copies of Mrs Hozier's statement to court and did not inform the solicitors for Mr Hurndell of its existence. Accordingly, when Mr Hurndell commenced his oral evidence later in the day he was unaware of what Mrs Karen Hozier intended to say.
19. In her witness statement Mrs Karen Hozier recounted how her husband had mentioned that they were going to have lunch with Mr Hurndell in St Tropez on 16^th August but that "It turned out that we did not have lunch with William Hurndell but dinner instead". She described meeting him at Le Cafe and eating outside. She and her husband indicated that only she drank wine because Mr Hurndell was teetotal and her husband was driving. Thus the time of the meeting was changed from lunch to dinner.
20. The judge required all witnesses to give their evidence in chief orally. Mr Hurndell gave oral evidence from mid-morning on Friday 6^th July to mid-morning on Tuesday 10^th July in the course of which he was faced for the first time with the allegation that the meeting in St Tropez had taken place at dinner not lunchtime. In due course Mrs Karen Hozier gave her oral evidence on Tuesday 17^th July. She did so in accordance with her witness statement and maintained her account of events under cross-examination. The oral evidence was concluded in the morning of Thursday 19^th July. At 1030 the following day, Friday 20^th July, the judge heard the closing submissions of counsel for the parties. Counsel for Mr Hurndell observed in this court that the absence of any adjournment between the end of the oral evidence and the closing submissions of counsel for the parties meant that the judge did not have the benefit of so full a written closing submission of counsel for the respective parties as he might have done. No doubt that is true; but having read the closing submissions which he did have it cannot be said that he did not have ample assistance on the central issues. In addition he had transcripts of all the oral evidence. The hearing concluded and David Richards J reserved his judgment on Friday 20^th July 2007.
The Judgment of David Richards J
21. In view of the principal ground of appeal to which I have referred in paragraph 12 above it is necessary to consider the judgment in some detail. Having described the broad nature of the dispute in paragraphs [1] to [4] he indicated that the resolution of the issues of fact was difficult for two reasons [5] and [6]:

"5...First, there are documents which on their face strongly support each side's case. Secondly, the evidence of Mr Hurndell and Mr Hozier was highly unsatisfactory. I am satisfied that on a number of important questions they gave false evidence.

6. Determining where, on the balance of probabilities, the truth lies requires the court to examine the quality of the evidence on all the important issues. Ultimately the central issue is what was agreed in December 1996 or perhaps early 1997 but that can be decided only by examining the other issues. A provisional conclusion on one issue must be examined in the light of the evidence and conclusions on other issues."

In paragraphs [7] to [11] he gave his impression of Mr Hurndell, Mr Barrie Hozier, Mr Davis and Mr White and their respective oral evidence. He concluded in [12]:

"The result is that I must approach the evidence of all four principal witnesses with great caution. It was said on behalf of Mr Hurndell that the defendants were motivated to give false evidence by a desire to retain over £3 million which did not belong to them. But the same point might equally be made against Mr Hurndell that he is seeking to obtain over £3 million from the defendants to which he is not entitled."

22. In paragraphs [13] to [15] the judge described the relations between the parties. He then gave a narrative of the relevant events in paragraphs [16] to [90] but in much greater detail than I have in the introduction section of this judgment. I need to pick up some of them. In paragraphs [19] and [20] David Richards J rejected the contention of Mr Hurndell that the transfer of the Stanelco shares to him was by way of reward for past services. In paragraph [22] he recorded evidence as to the value of the shares in Stanelco. He said:

"At this time [1996] and throughout most of the 1990's Stanelco shares were a penny stock, trading literally at less than 1p. There were later some sharp movements in the share price, often coinciding with significant events in this case. There was a steep rise in late 1999 to over 6p but the price had halved by the end of 2000. The shares then traded in a range of 2 to 4p until a steep rise to nearly 6p in the second half of 2003. It stayed at approximately that level until a very steep and short-lived rise to 25p or more in the first half of 2005. Since 2006 the shares have traded again at less than 1p."

23. In paragraphs [23] to [33] the judge dealt with the events in 1996/97 in relation to the shares in Stanelco becoming listed on the Stock Exchange. He concluded in paragraph [34] that:

"It is clear that the position as stated in the public documents was that the shares had been disposed of completely without the retention by Mr White of any interest in them. This was also the understanding of the professional advisors: it is not suggested that they knew of any proposal for Mr White to be or remain the true owner of the shares and, if they had known, they would not have permitted the issue of these documents."

In paragraphs [35] to [64] he described the subsequent events down to the alleged meeting in St Tropez on 16^th August 2001, which he described in paragraph [65] as a critical event. In that and paragraph [66] he summarised the rival versions of events.

24. In paragraph [68] he recounted the evidence in relation to the transfers of the shares in Mr Hurndell's name into the names of Khaki and Finale. In paragraph [66] he described the circumstances in which Mr Hurndell signed those documents as "another crucial issue". In that connection at paragraph [81] he set out paragraph 4.2 of the White Memorandum to which I have referred in paragraph 9 above and Mr Hozier's response to it. He turned in paragraph [84] to the letter before action send by Mr Hurndell's solicitors. He had previously noted in paragraph [66] that:

"Mr Hurndell denies meeting David and Karen Hozier and denies that he signed this document. He accepts that it is his signature but says that in the 1980s and 1990s he signed some blank pieces of paper which were left at the Barnet office for use as formal business letters, the text being added as and when necessary. His case is that the document is in effect a forgery. Mr Hozier and David Hozier used one of the signed blank papers and wrote the text above the signature. It is alleged that this was done between 17 May 2005, the date of Mr Hurndell's letter before action, and 25 July 2005 when a copy of the note was sent by the defendants' solicitors to Mr Hurndell's solicitors. This is obviously a crucial issue, to which I shall return later. I should mention that although Mr Hurndell is dyslexic, as shown by his own and medical evidence, it was not suggested that he might have signed the note without understanding its contents. His case is that he never signed it at all."

25. Having completed his narrative in paragraph [90] the judge noted in paragraph [91] and [92] that:

"91. The central issue of fact is whether Mr White intended in December 1996, or possibly in the early months of 1997, to make a gift of the shares to Mr Hurndell or whether alternatively, Mr Hurndell was to hold the shares as a nominee. No steps were taken to transfer the shares to Mr Hurndell until February 2001, but it is not contended on behalf of Mr Hurndell that the transfer then did any more than give effect to Mr White's earlier intention to make a gift.

92. There are documents which on their face strongly support each party's case. The public statements, made principally in Stanelco's directors reports, support Mr Hurndell's case. The director's report for the year ended 31 October 1996, issued at the time of Stanelco's full listing in December 1996, stated that to enable Stanelco to comply with Stock Exchange requirements Mr White would before 31 December 1996 sell at least 5 per cent of his holding. While not consistent with either side's case, it is at least consistent with an outright disposal by Mr White."

26. The judge then considered the listing document and directors' reports for the years 31^st October 1997 and 1998 and noted that whilst they correctly recorded the reduction of Mr White's holding they did not disclose Mr Hurndell's holding in excess of 3%, but that the latter position changed in the directors' reports on the accounts for the years ended 31^st October 1999, 2000 and 2001. He then dealt with a number of other documents which wholly or partially supported the case for Mr Hurndell. But in paragraph [102] the Judge noted that:

"Equally, there are documents which on their face strongly support the defendants' case. These are the handwritten note [the St Tropez Note], which bears the genuine signature of Mr Hurndell and is said by the defendants to have been signed by him in St Tropez in August 2001, and the stock transfer forms signed by Mr Hurndell which were used to transfer all except 1.5 million of the shares in his name to Khaki and Finale."

27. In two important paragraphs [103] and [104] David Richards J described how he was approaching his task. He said:

"103. In resolving the central factual issue, the oral evidence is therefore critical, both on the documents themselves and on events between 1996 and 2005. A final conclusion can be reached only after a consideration of all this evidence. Conclusions on one issue if regard is had only to the evidence directly in point to that issue may need revision in the light of evidence on other issues. As I have already explained, simple recourse to the credibility of any particular witness is not generally an option in this case, having regard to the flawed quality of the evidence of all four principal witnesses.

104. Apart from the listing document and the directors' report approved on 18 December 1996, there are no relevant contemporaneous documents concerning the critical events of December 1996 and early 1997. There is only the evidence of the principal witnesses. Before considering and reaching conclusions on that evidence, I will consider the other principal issues which arise. These are: first, the note allegedly signed by Mr Hurndell in August 2001; secondly, the stock transfer forms used to transfer shares from Mr Hurndell to Khaki and Finale; thirdly, the delay by Mr Hurndell in making a claim; fourthly, the events of 2000/2001."

28. The judge then considered in paragraphs [105] to [116] in detail the evidence relating to the alleged meeting in St Tropez on 16^th August 2001 and the allegation that Mr Hurndell signed the St Tropez Note in the course of it. His conclusions expressed in paragraphs [117] to [120] were as follows:

"117. Much was made of the inconsistency as to whether the alleged meeting was for lunch or dinner. Other inconsistencies were noted: for example, whether any wine was drunk with the meal, and David Hozier saying in his witness statement that he and Karen did not want to wait in St Tropez for the rest of the afternoon and the evening before a night club opened. It was submitted also that it was significant that David Hozier had Karen's input when drafting his statement and she therefore shared in his errors. However, both David and Karen Hozier gave evidence that at some point (they differed to a limited extent on timing) Karen Hozier had said that she thought the meeting had been over dinner, but David Hozier had disagreed with her.

118. I do not regard any of these inconsistencies as significant in determining whether David and Karen Hozier were telling the truth in their evidence. I do not find it surprising that a mistake over whether they met for lunch or dinner would be made in recollecting a day four years before proceedings were commenced, especially as it would still have been light when they met for dinner. Nor do I find the other inconsistencies telling. The substance of the oral and written evidence was largely the same.

119. I am in no doubt that Mr Hurndell had dinner with David and Karen Hozier on the evening of 16 August. Even without their evidence, the combination of the bill, the credit card receipt and Mr Hurndell's diary entries establish it. Mr Hurndell's own evidence was not satisfactory. His evidence that he probably spent the evening with Mrs Mckenzie was not only late, but was plainly based on some sort of inference rather than any recollection.

120. My assessment is that Mr Hurndell was desperate to avoid admitting that he met David and Karen Hozier on 16 August, because it greatly strengthens their case that he signed the note on that day. It would be one thing if his case had all along been that he met them, but he did not sign the note. But his steadfast denial of the meeting is itself telling against his case that he did not sign the note.

29. In paragraphs [120] to [127] the judge considered at some length and in considerable detail the evidence in relation to the events of the meeting and the origin of the St Tropez Note. In paragraphs [121] and [122] he recorded the detailed evidence given by David and Karen Hozier to which I have referred in paragraphs 16, 18 and 19 above. He also referred in paragraph [123] to the results of a forensic examination of the paper on which the St Tropez Note was written. That was to the effect that it was of the Conqueror range of paper made by Wiggins Teape in a number of mills in the UK before 1994. It was of the same type as paper used by one of the companies controlled by Mr Davis and Mr White called Winemanor Ltd. In paragraph [124] he dealt with the evidence of David Hozier to the effect that the Hozier family apartment in Nice had been bought with all its contents including stationery. He commented that [125]:

"If accepted, this evidence provides a plausible explanation as to why the note was written on pre-1994 Conqueror paper."

He went on to consider the rival explanation of Mr Hurndell to the effect that he had signed sheets of paper in blank and left them at the Barnet office of Winemanor and later of Stanelco for use in connection with various activities he had undertaken in France on behalf of Mr Davis and Mr White. The judge commented [125]:

"As Mr Hurndell tried to explain the use made of the signed blank pieces of paper, his evidence became increasingly fanciful: see transcript day 2 pp 158-167."

In paragraph [127] the judge considered the sequence of events during which the St Tropez Note was produced in July 2005. He concluded that [127]:

"Concoction of the note is no more than a possible inference from this sequence."

30. The judge's conclusions are expressed in these terms in paragraphs [128] and [129]:

"128. In my judgment the evidence establishes that Mr Hurndell did have dinner with David and Karen Hozier on 16 August 2001 and did sign the handwritten note. Mr Hurndell was entirely unconvincing in his evidence that he did not have dinner with them. This is itself significant, as showing a need to distance himself from the note. His case that he did not sign it was dependent on establishing that he had signed blanks at the Barnet office and that Mr Hozier had one available in 2005. Again his evidence was unconvincing and, in any event, it is highly unlikely that if there had ever been signed blanks, any were still available in 2005. It is not clear to me how Mr Hozier would have had access to a surviving signed blank in May-July 2005, long after he ceased to work for Mr Davis at Barnet. It would have been a remarkable coincidence or a piece of extraordinary prescience if he had taken one when he removed the Stanelco files from the Barnet office in March 2003.

129. As against the evidence of Mr Hurndell, there is the evidence of David and Karen Hozier. The principal challenge to David Hozier's evidence related to the change in his case from meeting for lunch to meeting for dinner, and also to other inconsistencies in his account of the day. I have addressed these points and concluded that they do not justify a rejection of his evidence. Karen Hozier gave evidence which carried conviction, although her strong personal dislike of Mr Hurndell revealed by some answers at the end of her evidence means that I have approached her evidence with some caution. Nevertheless, the evidence of David and Karen Hozier was convincing, while Mr Hurndell's evidence was the opposite."

31. David Richards J then turned to the question of the stock transfer forms by which all but 1.5m of the shares in Stanelco registered in the name of Mr Hurndell were transferred to Finale Finance Ltd and Khaki Investments Ltd on 14^th February 2002. The judge noted the change in the account given by Mr Barrie Hozier. In his original defence he averred that the stock transfer forms had been signed in blank by Mr Hurndell in December 1996, but in his amended defence he alleged that Mr Hurndell had signed them in October 2001 at the request of Mr Davis to whom Mr Barrie Hozier had given them. The judge then considered the oral evidence on this matter of Mr Hurndell and Mr Davis. He concluded [137] that:

"Mr Hozier's account that the stock transfer forms were signed by Mr Hurndell in October 2001 is the only plausible explanation before the court."

32. David Richards J then turned to the delay between the time Mr Hurndell had been informed of the sale on of the shares transferred to Finale Finance Ltd and Khaki Investments Ltd on 14^th February 2002, namely April 2002 and the first intimation of this claim in April 2005. He referred to the detail of the evidence of Mr Hurndell and Mr Davis in paragraphs [139] to [141]. In paragraph [142] he stated that:

"142. I found the attempts of Mr Hurndell and Mr Davis to explain the delay unconvincing.......I do not believe that the real explanation for the commencement of proceedings as late as June 2005 has been given in evidence. The delay is not of itself decisive against Mr Hurndell but it is a significant factor against his case."

33. The judge then turned to what he described as "the important events of 2000/2001". He concluded that

"I do not consider that it is possible to come to conclusions on the events of 2000/2001 except in the light of findings on the other issues."

In that context the judge returned to the events of 1996/1997. He reviewed the oral evidence of Mr Hurndell, Mr White, Mr Davis and Mr Barrie Hozier and the contemporary documents in detail in paragraphs [146] to [151]. His conclusions set out in paragraphs [152] to [154] were:

"152. In reaching a conclusion on the issue of whether Mr Hurndell was to be a donee or a nominee of the shares, my conclusions on the August 2001 note and the stock transfer forms signed by Mr Hurndell are of central importance. I have reviewed my findings on those issues in the light of all the evidence in the case and in particular the highly unsatisfactory nature of Mr Hozier's evidence. I am nonetheless satisfied that the August 2001 note is not a later concoction but was read and signed by Mr Hurndell in the circumstances described by David and Karen Hozier, and that the stock transfer forms were signed by Mr Hurndell as described by Mr Hozier. Mr Hurndell may well have forgotten signing the stock transfer forms but I find that he was deliberately untruthful in his evidence concerning the meeting with David and Karen Hozier and signing the note. He appreciated, I believe, as was obvious, that the note in particular was entirely inconsistent with his case.

153. Other factors support the conclusion that Mr Hurndell was to be a nominee: the proposals in 2000, known to Mr Davis, that the shares should go to Mr Hozier or his son; the fact that Mr Hurndell had previously been used as a nominee or conduit in the cash routing exercise in 1992; the agreement of Mr White that Mr Hurndell should retain 1.5 million shares as his own in 2002; and, most significantly, the lengthy delay without adequate explanation in bringing or intimating any claim.

154. In the light of all these considerations, I accept the evidence of Mr Hozier and Mr White that at the time of the listing in 1996 it was agreed, and Mr White was later informed, that the shares would be transferred to Mr Hurndell as a nominee and that it was never intended that he should own them beneficially, apart from the 1.5 million shares given to him in 2002. I find also that the discussions in 2000-2001 of which Mr Hozier and Mr White gave evidence, involving at various times themselves, Mr Davis and Mr Hurndell, took place substantially as they described."

34. The judge then considered some of the consequences of his conclusion. They included the facts that Mr Davis must have known that nomineeship on behalf of Mr White would not comply with the listing requirements, that the professional advisors of Stanelco had been deceived and that Mr Davis, Mr White and Mr Barrie Hozier had committed a number of offences under the Companies Act 1985, the Financial Services Act 1986 and the Financial Services and Markets Act 2000. He concluded in paragraph [158] that:

"The explanation is, in my judgment that a decision was taken by Mr Davis and Mr Hozier to get round the Stock Exchange requirements by parking the shares with Mr Hurndell as nominee for Mr White. ("Parking" is the word which Mr White said was used by Mr Davis, evidence which I accept)."

35. Finally David Richards J considered an argument pursued on behalf of Mr Hurndell that that illegality precluded Mr White from asserting his own title to the shares thereby leaving Mr Hurndell as their beneficial owner. This contention was rejected by the judge on the footing that Mr Hurndell had never been the beneficial owner so that no one had to rely on his or anyone else's illegality. That point is not pursued on this appeal.
The Fresh Evidence
36. At this point it is convenient to consider the applications made by Mr Hurndell for the admission of fresh evidence in various categories on the hearing of his appeal with which we dealt in the course of the argument before us. We decided to admit some but to reject others. We indicated that we would give our reasons in the course of our judgments on the substance of the appeal. I now give mine.
37. The various categories are:

(a) Further documents exhibited to a witness statement of Mr Davis made on 30^th April 2008 relating to the original listing of the Stanelco shares and subsequent accounting years.

(b) The witness statement of Lisa Panter as to events occurring in St Tropez on 15^th to 17^th August 2001.

(c) The witness statement of Mrs Sally Bullimore-Pyne made on 29^th April 2008 as to the contents of the apartment in Nice when she and her husband sold it to Mr Barrie Hozier in 1999 or 2000.

(d) The witness statement of Mr Lionel Blye made on 22^nd May 2008 as to events occurring in St Tropez concerning Mr Hurndell at the time a Mr Ian McKenzie was admitted to hospital in 2001.

(e) The witness statement of Madame Marino dated 21^st May 2008 and its translation into English by Mr Kennard as indicated in his witness statement dated 11^th June 2008 to the effect that Mr Ian McKenzie had been admitted to the Clinique Chirurgicale du Golfe de St Tropez at 2200 on 15^th August 2001 and remained there until 1100 on 27^th August 2001.

(f) The witness statement of Mr Timothy Quinlan made on 9^th June 2008 as to conversations he had had with Mr Barrie Hozier over the years and what he had or had not said about Mr Davis and his intentions regarding Mr Barrie Hozier in relation to shares in Stanelco.

38. I refused to admit items (a) and (f) on the grounds that that evidence could have been adduced at the trial before David Richards J and would not have had an important influence on the outcome of the case. In addition the statement of Mr Quinlan does little more than provide material for the cross-examination of Mr Barrie Hozier. If we order a new trial it may be adduced then if not it can have no bearing on our decision on this appeal.
39. In relation to items (b) to (e) each of them could have an important bearing on the events of 16^th August 2001 or the paper on which the St Tropez Note was written. Thus Mrs Bullimore-Pyne states in paragraph 5 of her witness statement that:

"I do not believe that there was any [A4 Conqueror brand laid paper] in the flat at any time whilst we owned it. As we did not have a computer there and none of us were in the habit of writing letters from France, there would have been no reason for us to have had paper of this type or indeed any writing paper there."

Lisa Panter states that she was with Mr Hurndell throughout the evening of 16^th August 2001 from about 8pm onwards helping him to cope with Mrs McKenzie who was distraught about her husband who had been admitted to hospital the previous evening and with whom Mr Hurndell and Mrs McKenzie had been in the hospital most of that day since 11am. Similarly Mr Blye relates how he visited Mr McKenzie in hospital on 16^th August 2001 and that Mr Hurndell was there looking after Mrs McKenzie. The statement of Madame Marino pinpoints exactly when Mr McKenzie was admitted to hospital and how long he remained there.

40. Counsel for Mr Barrie Hozier submitted that the evidence should be excluded as it could have been given at the trial and was not sufficiently compelling. Further in response to the submission that the necessity for this evidence could not reasonably have been foreseen he pointed out that Mr Hurndell should have been prepared to meet the case that Karen Hozier made that the meeting was over dinner as his own diary recorded that the appointment with David Hozier was for 8pm. I do not accept these submissions. First, as the evidence of David Hozier and his wife showed, the meeting on 16^th August, if it occurred, was intended to obtain an admission from Mr Hurndell which he might not have been prepared to make had he been invited to do so in a more conventional manner. Second, I am concerned at the failure of the solicitors for Mr Barrie Hozier to ensure that Mr Hurndell was informed of the change of case concerning the timing of the meeting before he started to give his evidence. Third, even if Mr Hurndell had been informed of the change in the Hoziers' case, he could not have obtained any of this evidence in time for the hearing. I leave to later a consideration of what, if any, difference the admission of this evidence makes to the judge's conclusions, based as they were on the relative credibility of David and Karen Hozier and Mr Hurndell. But if it does undermine his conclusions to such an extent that they cannot stand then the appropriate order will be for a new trial, not the award of judgment in favour of Mr Hurndell.
The Delay
41. As I have set out in paragraph 12 above, counsel for Mr Hurndell ground their appeal against the judge's factual conclusions on the delay in giving his judgment.zoHoHo Indeed it is clear from the quotations set out in the same paragraph that it was their concern with the delay which led Wall and Rimer LJJ to give permission to appeal. I accept that the delay of 8 months is more than it should have been. Whether that justifies the use by counsel of the adjectives which I have quoted in paragraph 12 it is unnecessary to decide. In any case in which the delay in giving judgment is measured in months not weeks the judge would be wise to follow the advice of Lawton LJ in Rolled Steel Products v British Steel Corporation [1986] Ch. 246, 310 and explain in his judgment the reasons for the delay.
42. That there were reasons for some of the delay counsel for Mr Hurndell accepted when applying to the judge for permission to appeal, but those reasons could not account for all of it. This was fairly acknowledged by David Richards J in his judgment refusing permission to appeal. He said:

"As I have said in the course of submissions on this application, I regard that [20th July 2007 to 14th March 2008] as an unacceptable delay for which I have unreservedly apologised to the parties. There are no reasons connected with this case why that delay should have occurred."

The judge went on to observe:

"This was a difficult case for the reasons I have explained in my judgment, that I found the evidence of all four principal witnesses in varying degrees but on highly significant matters to be unsatisfactory. It was precisely because I was unable to place unreserved weight on the evidence of any of the witnesses that it was necessary for me to check carefully and recheck the transcripts of their evidence and in fact I did so. I think I should add this, and it is a point that [Counsel for Messrs Hozier] has made in his written submissions, as appears I think from the judgment, I retained a vivid memory of the various witnesses who gave evidence."

43. In Cobham v Frett [2001] 1 WLR 1775, 1783 Lord Scott of Foscote, giving the advice of the Privy Council, said:

"In their Lordships opinion, if excessive delay, and they agree that 12 months would normally justify that description, is to be relied on in attacking a judgment, a fair case must be shown for believing that the judgment contains errors that are probably, or even possibly, attributable to the delay. The appellate court must be satisfied that the judgment is not safe and that to allow it to stand would be unfair to the complainant."

In paragraph 13 of the extensive written argument of counsel for Mr Hurndell seven examples are given of instances where, it is suggested, "the judge's recollection was marred by the delay of 8 months".

44. The first two relate to the judge's assessment of the evidence in relation to the events of August 2001. It is suggested that the judge's criticism of Mr Hurndell's evidence as to where he was on the evening of 16th August as 'late' (see paragraph 28 above) and his treatment of the late change of case as to whether the meeting was at lunch or dinner time as "being not significant" each indicated a failure of recollection due to the delay. In my view each of those criticisms is unsustainable. The explanation of Mr Hurndell that he was at the hospital with Mrs McKenzie visiting her sick husband was late in the sense that when given in the witness box it was new. But until he was cross-examined on the subject the case he had had to meet was a meeting at lunch time. The change of case may or may not have been of more significance than the judge attributed to it. But neither of those points indicates that the delay in giving judgment led to a failure in the judge's recollection. He was right in his comment on the evidence of Mr Hurndell and the significance or otherwise of the change of case was, essentially, a matter for him.
45. The third relates to the judge's conclusion as expressed in paragraph 158 of his judgment, quoted in paragraph 34 above, that Mr Davis had used the terms 'parking' and 'parked' in relation to the Stanelco shares held by Mr Hurndell when "this fact had not even been put to Mr Davis". The suggestion appears to be that there was no evidence to justify the judge's conclusion; but there was (Day 3 page 46). In his evidence on 19th July 2007 Mr White, when under cross-examination by counsel for Mr Hurndell, volunteered the fact that the term 'parked' was used by Mr Davis when informing Mr White what had happened as descriptive of the basis on which the shares had been transferred to Mr Hurndell. The oral evidence of Mr Davis had been concluded on 11th July 2007. It is true that it was not put to Mr Davis that he had used the terms 'parked' or 'parking', but it was put to him that he had told Mr White that Mr Hurndell held the shares derived from the White Jersey Trust "as nominee". He denied it, but that the basic allegation was put is undeniable. I do not regard this point as in any way indicative of a failure on the part of the judge clearly to recollect the evidence before him.
46. The fourth relates to an allegation made by Mr Barrie Hozier that Mr Hurndell had made a statement to the Israeli police in relation to another transaction to the effect that he held the Stanelco shares as nominee. The judge accepted this allegation in preference to the contrary evidence of Mr Davis. Counsel for Mr Hurndell submit that the judge overlooked the fact that Mr Barrie Hozier had withdrawn the allegation when under cross-examination. Counsel for the Messrs Hozier took us through the transcript of the evidence of Mr Barrie Hozier to demonstrate that whilst the allegation may have been modified it certainly was not withdrawn. It was put to him that the admission had been that Mr Hurndell had admitted to being a nominee for Mr White. What was qualified was the identity of the person for whom he was nominee, not the nomineeship as such. Again I see nothing in this point to suggest that the judge failed to recollect the evidence before him; to the contrary the judge's recollection of this evidence, as qualified in cross-examination, was very exact.
47. The fifth alleged example relates to the facts that, following the transfer of all but 1.5m of the Stanelco shares to Finale Finance Ltd and Khaki Investments Ltd on 15th February 2002 a balance certificate for the remaining 1.5m shares was sent to Mr Hurndell's residence in France (see paragraph 7 above). In paragraph 62 of his judgment the judge described the evidence relating to an alleged telephone conversation between Mr Barrie Hozier and Mr White the year before, as follows:

"Mr Hozier's evidence is that in about mid-2001 he had another discussion about the shares with Mr White. Mr White told him that he would ring Mr Hurndell and tell him that the shares were at some stage to be transferred to Mr Hozier or a member of his family and that he would give 1.5 million shares to Mr Hurndell. Mr Hozier says that he was present when Mr White made this call from Stanelco's offices at Fareham. Mr White's evidence was that this conversation with Mr Hozier and his telephone call to Mr Hurndell occurred in 2000, rather than 2001. If it took place, it is more likely to have been in 2001, given the course of events in 2000 and 2001. I do not regard this particular difference of itself as significant."

48. The conversation was not mentioned in the White Memorandum in relation to either 2000 or 2001. In paragraph 6.5 of the White Memorandum Mr White merely recorded that:

"It appears from exhibit 8 that 1,500,000 shares in the Company were retained by [William Hurndell] under the announcement made by the Company."

It is suggested that this is an example of the judge forgetting material parts of the evidence given before him. I do not agree. I see no reason why the conversation should have been mentioned at all or why the judge should have done any more than he did.

49. The sixth example relied on is put in these terms:

"[The judge's] failure to take account of the fact that the making of a gift of shares to Mr Hurndell and Mr Sharland at a time that they had very little value permitted Listing Rule 3.19 to be satisfied, thus rendering a financially beneficial transaction for Mr White and Mr Davis to go ahead in compliance with the law."

I have quoted in paragraph 22 above the paragraph in which the judge dealt with the value of the shares at different material times. The judge could not but have been well aware of the value of a full listing on the main market. In the immediately preceding paragraph he referred to the evidence of Mr Davis that it was "an amazing opportunity" and not one to be missed. In paragraph 147 the judge commented in relation to the contention that there was a gift of 33m Stanelco shares to Mr Hurndell in 1996 that:

"Secondly, it is surprising that if the shares were a gift to him, they were not provided equally by the two trusts. Although the market price was less than 1p in December 1996, and 33 million shares could only be sold at a discount, they were not valueless and the evidence suggests that they could have been sold for significantly more than a nominal sum."

In my view this example completely fails to indicate any failure of recollection on the judge's part.

50. The seventh and last example relied on is to the effect that the judge did not comment on the fact that Mr Barrie Hozier did not rely on the St Tropez Note when commenting on and refuting the White Memorandum. The implication is that the lack of comment by Mr Barrie Hozier was evidence in support of the case for Mr Hurndell that the St Tropez Note was a late concoction. Whatever else it may be this is not an instance of the delay leading the judge to overlook important evidence. In paragraph 127 he referred in terms to the facts that Mr Barrie Hozier did not refer to the St Tropez Note either when responding on 24th May 2005 to the letter before action or when dealing with the statement made by Mr Hurndell to the French police. The comment which it is said that the judge should have made would have merely been more of the same.
51. I have been through each of the 7 examples on which counsel for Mr Hurndell relied for the proposition that the delay and its effects lead to the conclusion that the judge's judgment is unsafe and should be set aside. I reject that submission. Given the problems with which the judge was faced and the complications of the case there is no foundation for the submission.
The merits of this appeal
52. It follows from my conclusions so far that this appeal is on issues of fact only. I accept the submission of counsel for Mr Hurndell that such an appeal lies and this court must scrutinise the evidence and circumstances on which the appellant relies. No doubt it is also the case that insofar as the trial judge's conclusions are based on his findings of primary fact from the oral evidence given before him the appellate court is reluctant to interfere because it has not had the same advantages. But if the judge's findings are not of that description the appellate court may and frequently does substitute its own conclusions for that of the judge. See generally Eckersley v Binnie (1988) 18 Comm.L.R 1, 77/8; Assicurazioni Generali SpA v Arab Insurance Group Ltd [2003] 1 WLR 577, 580 et seq. and Datec Electronic Holdings Ltd v UPS Ltd [2007] 1 WLR 1325, 1346 para 46. No doubt it is the case, as pointed out by the High Court of Australia in Fox v Percy [2003] HCA 22 paras 28 and 31, that judges are aware of the limitation on their ability to tell truth from falsehood from 'the demeanour' of witnesses, but that acknowledgement of fallibility does not eliminate the established principles relating to witness credibility. Counsel for Messrs Hozier forcefully reminded us that when a party has been acquitted of fraud or forgery by the judge below that decision should not be displaced save on the clearest grounds, see Assicurazioni Generali SpA v Arab Insurance Group Ltd [2003] 1 WLR 577, 580 para 12 and Trka v Hulbert [2007] EWCA Civ 1224 paras 2, 3 and 33.
53. The essential issues in this case are:

(1) whether Mr White intended to give to Mr Hurndell the 33m shares in Stanelco registered in his name in February 2001; and if so

(2) whether Mr Barrie Hozier was authorised by Mr Hurndell to complete the blank but signed transfers of 31.5m of those shares to Finale Finance Ltd and Khaki Investments Ltd in February 2002.

The first issue depends on the intention of Mr White at the time, that is December 1996 to February 2001, the second on what authority from Mr Hurndell it is to be implied that Mr Barrie Hozier had. Neither depends directly on whether Mr Hurndell met Mr David Hozier and Mrs Karen Hozier in St Tropez on 16th August 2001 and if so whether he then signed the St Tropez Note. But, as the judge recognised in [65], that part of the case is of critical importance because of its effect on the credibility of the witnesses in relation to other issues.

54. It is pointless to consider what my conclusion would be on that issue alone if the further evidence had not been admitted, for it has been. There has been no cross-examination, so that, as I observed in paragraph 40 above, the question is whether it would, with the other evidence, justify an order for a new trial. The first stage must be to consider its impact on the judge's conclusions that Mr Hurndell and Mr David Hozier together with Mrs Karen Hozier met for dinner in St Tropez on 16th August 2001 and Mr Hurndell in the presence of both of them signed the St Tropez Note. For that purpose I assume, which might not be the fact, that following cross-examination at a new trial the evidence of the new witnesses is accepted.
55. The evidence of Madame Marino, and its translation by Mr Kennard, clearly establishes that Mr McKenzie was admitted to hospital at 2200 on 15th August 2001 and remained there until 1100 on 27th August. Mr Blye and Lisa Panter establish that Mr Hurndell was at the hospital with Mrs McKenzie for substantial periods of time on 16th August. In addition the evidence of Mrs Bullimore-Pyne would establish that the paper on which the St Tropez Note was written could not have been obtained in the circumstances to which Mr David Hozier testified. In addition there is, in my view, substance in the criticism made of the judgment of David Richards J to the effect that he gave insufficient weight to the last minute change of case as to when the alleged meeting took place and its likely effect on the oral evidence of Mr Hurndell who had not been told of it. Subject to cross-examination the fresh evidence undermines the conclusions of the judge as to the respective credibility of Mr Hurndell on the one hand and Mr David Hozier and Mrs Karen Hozier on the other. Given the new evidence the judge at a retrial might well conclude that there had been no meeting in St Tropez on 16th August 2001 and that the St Tropez Note was the late concoction Mr Hurndell had always maintained.
56. But it does not follow from that conclusion that the judge was wrong on whether or not Mr White intended to give the shares to Mr Hurndell. As the judge recognised in paragraph 91 that depended on the intention of Mr White. His credibility did not depend on whether or not there had been a meeting in St Tropez on 16th August 2001. Nor did it depend on whether or not Mr Hurndell had signed the St Tropez Note, though if he had that would be some support for Mr White's contentions. Accordingly it is essential to identify the findings of the judge in relation to the acts and intentions of Mr White and to consider it separately from the findings relating to the other participants.
57. The judge described Mr White and his evidence in paragraph [11]. He commented on the difficulty Mr White experienced in reconciling his account of the events of December 1996 and early 1997 with the White Memorandum prepared on his instructions on May 2005. The judge noted [20] that Mr White was in the US in the period December 1996/February 1997 and did not attend any of the listing meetings. It was common ground that Mr Davis spoke to him about them. The judge recorded [31] Mr White's evidence that Mr Davis told him of the need to reduce their combined shareholdings by a total of 5% and that Mr White assumed that the reduction would be proportionate. The judge added in his recitation of Mr White's evidence:

"Shortly after the listing, in January or February 1997, Mr Davis told him that all the shares had come from Mr White's trust but would be held by Mr Hurndell as nominee. Mr Davis told him that this was effective as a means of dealing with the point."

58. The judge accepted [36] that Mr White was not sent and did not see either the Directors' Report or the part of the Listing Document which stated that Mr White and Mr Davis jointly owned companies holding 34.9% of the shares in Stanelco. The judge also accepted [39] that Mr White remained in the US in 1997 and 1998 and did not concern himself with Stanelco and did not read the Directors' Reports attached to the accounts for those years. Similarly the judge records without comment [42] the evidence of Mr White that he did not receive the fax from Mr Barrie Hozier dated 4th February 2000 which set out the holdings of the shares originally comprised in his Jersey Trust. In paragraph [49] the judge said:

"Mr Hozier and Mr White both gave evidence that in 2000 they discussed the possibility of Mr Hozier receiving these shares [sc.the 33m Stanelco shares intended to be registered in the name of Mr Hurndell]. Mr White was quite happy for Mr Hozier to have the shares. Mr White's evidence was that he understood Mr Davis' earlier promise of shares for Mr Hozier to be serious."

59. In paragraph [56] the judge set out the terms of the letter written by Mr Barrie Hozier to Abacus dated 15th December 2000. The material part states:

"Howard White has asked me to write to you, regarding his Stanelco shares.

In December 1996, as part of the arrangements for Stanelco to move from the USM to a full listing, there was a requirement for Ian Davis and Howard White to dispose of 5% of their shares to a third party in order to keep below the 75% limit imposed by the Stock Exchange.

Howard agreed that 5% of his holding would be transferred to William Hurndell with a small number going to Denis Sharland. In addition, he arranged for the balance of his shares to be transferred to three companies jointly owned by Ian and himself.

The following transactions took place-

Majorgraph Ltd 75,687,000

Warrington Wireworks Ltd 131,277,413

Homebeam Ltd 26,113,709

William Hurndell 33,309,940

Denis Sharland 101,878

Total 266,489,940"

The judge accepted [58] the evidence of Mr White that he had not asked Mr Barrie Hozier to write this letter and had not seen it. Nevertheless he was content that Mr Barrie Hozier had authority to write it on his behalf as part of his general function of dealing with the trust.

60. In paragraph [62] the judge concluded that in mid-2001 Mr White had spoken to Mr Hurndell, at the suggestion of Mr Barrie Hozier, to tell him that:

"...the [33m Stanelco] shares were at some stage to be transferred to Mr Hozier or a member of his family and that he [Mr White] would give 1.5 million shares to Mr Hurndell."

When asked to put this in writing Mr White refused.

61. In early 2005 the Chief Executive of Stanelco, Mr Balchin, formally asked Mr White to assist with regard to alleged links between a director of Stanelco and Finale Finance Ltd and Khaki Investments Ltd. This request gave rise to the White Memorandum dated 18th April 2005. The Memorandum was drafted by Stanelco's solicitors and was approved by Mr White. It claims to set out the full extent of Mr White's knowledge in relation to Khaki and Finale. Paragraph 1 set out the position following the reverse takeover of Stanelco in 1991. In essence Mr White's shareholding was put into the White Jersey Trust. Paragraph 2 dealt with the shareholdings following the official listing in December 1996. In particular in paragraph 2.4 Mr White explained why he did not object to the reduction in his trust's shareholding of 5% rather than the pro rata 2.5%. Paragraph 3 is headed "Transfer of Shares from Abacus to [William Hurndell]". In both paragraph 3.1 and 3.4 Mr White referred to those shares as being "held for my account".
62. In paragraph 4 Mr White dealt with the promises made to Mr Barrie Hozier. In paragraph 4.2 he wrote:

"Sometime later (around 2000/2001), BH's expectations had still not been met. Again feeling at the time that it was not in the interests of either the Company or shareholders to have an ongoing dispute between the executive management, I therefore agreed to give to BH the 5.00% interest in the Shares allegedly promised by ID and to meet this from the Relevant Shares held by WH (held at that time for my account). The reasons for this are similar to those set out under sub-paragraphs 2.4 (a) and (b) above. It also helped to incentivise BH and to enable him to identify more closely with the interests of shareholders generally. As a result, the Relevant Shares were from that time under the beneficial ownership of BH or connected persons of BH. However, legal ownership of the Relevant Shares remained with Abacus pending registration of the transfer in 2001, as previously set out under paragraph 3.2".

The judge commented [81] that that paragraph is substantially consistent with the evidence of both Mr White and of Mr Barrie Hozier.

63. In paragraph [95] the judge recorded the admission of Mr White that he did read the directors reports of Stanelco for the years 2000 and 2001 but not those for 1996 to 1999 both inclusive. The judge summarised the evidence of Mr White in [151] in the following terms:

"Mr White's evidence is that he was told in December 1996 by Mr Davis about the need to reduce the combined holdings to 75 per cent and he assumed that there would be sales of equal numbers of shares from each trust. In early 1997 he says that he was told by Mr Davis that all the shares had come from his, Mr White's, trust but that Mr Hurndell held them as nominee. Mr Davis, he said, told him and he accepted that this worked to deal with the Stock Exchange requirement. A point which is fairly made against this last piece of evidence is that it is at least surprising that Mr White should think that it works if Mr Hurndell holds the shares as his nominee but it does not work if they are held by his Jersey trust. However, I am prepared to accept that Mr White was not giving much thought or attention to matters of this sort and that he would not be concerned to query this with Mr Davis, if that is what Mr Davis told him. Of more significance when assessing Mr White's evidence is what he said in his memorandum dated 18 April 2005. As I have already indicated, his account of the events of 1996 is more easily squared with an outright disposal to Mr Hurndell than with a transfer to him as nominee."

64. In paragraphs [152] and [153], quoted in paragraph 33 above, the judge concluded that the alleged meeting in St Tropez on 16th August 2001 did take place and that Mr Hurndell had at that meeting signed the St Tropez Note. The final conclusion set out in paragraph [154] is also quoted in paragraph 33 above but bears repeating in this context. It was:

"In the light of all these considerations, I accept the evidence of Mr Hozier and Mr White that at the time of the listing in 1996 it was agreed, and Mr White was later informed, that the shares would be transferred to Mr Hurndell as a nominee and that it was never intended that he should own them beneficially, apart from the 1.5 million shares given to him in 2002. I find also that the discussions in 2000-2001 of which Mr Hozier and Mr White gave evidence, involving at various times themselves, Mr Davis and Mr Hurndell, took place substantially as they described."

65. I read that paragraph as constituting so far as now relevant a finding that Mr White did not intend in 1996 to give the shares to Mr Hurndell beneficially. Indeed in the absence of valuable consideration that would be the normal presumption, see for example Snell's Equity 31st Ed. para 23-02. Equally it is a finding that Mr White's intention did not change later when the shares were registered in the name of Mr Hurndell. Unless this court is entitled to interfere with those findings of primary fact this appeal must be dismissed.
66. Counsel for Mr Hurndell submits that this court can and should interfere with these findings. In a long and detailed written and oral argument it is contended that the judge's conclusion is contrary to incontrovertible evidence, the inherent probabilities and the oral evidence. In addition counsel criticises the judge's reasoning and relies on the new evidence.
67. I do not think I do an injustice to the elaborate arguments of counsel for Mr Hurndell if I paraphrase his own summary of his submissions that, chronologically, the evidence was all one way, that is to say in favour of a gift, down to August 2001. But when the judge reached his conclusion on the alleged meeting in St Tropez on 16th August 2001 and Mr Hurndell's signature to the St Tropez Note he veered round in favour of nomineeship as recorded in the St Tropez Note. If, as he submits, the new evidence justifies an order for a new trial in relation to the issues of the St Tropez Meeting and Note then it justifies a new trial on the central issue of the intention of Mr White at the relevant time.
68. This is disputed by counsel for the Messrs Hozier. He submits that Mr Hurndell can only have been a nominee for Mr White (or his Jersey Trust) unless there was affirmative evidence of a donative intention on the part of Mr White. He submits that there is none. Mr White was not present at any of the listing meetings. He knew of the need to reduce the trust holdings by 5% overall but did not know until after the event that the reduction came from his trust alone. He did not read any of the published accounts before those for the year ended 31st October 2000 approved on 30th April 2001. By then the shares had been registered in the name of Mr Hurndell. In relation to the St Tropez Meeting and Note, Mr White was not involved. His statements in the White Memorandum are entirely consistent in demonstrating that Mr Hurndell was only ever a nominee.
69. I accept the submissions of counsel for the Messrs Hozier. The issues in relation to the alleged meeting in St Tropez on 16th August 2001 and the St Tropez Note undoubtedly affect all questions of the credibility of Mr Hurndell, Mr David Hozier, Mrs Karen Hozier and indirectly of Mr Barrie Hozier. They do not reflect on the credibility of Mr White. The judge's criticism of the evidence of Mr White related to his attempts to reconcile his account of the events of December 1996 to early 1997 with what he later stated in the White Memorandum. At no stage did Mr White allege that he had intended a gift, quite the contrary. At no relevant time, that is down to the registration of the shares in the name of Mr Hurndell in February 2001 had Mr White seen any public document indicating that the holding in the name of Mr Hurndell was held by him beneficially. At no later time was there any disposition by Mr White to Mr Hurndell of his beneficial interest in the 33m odd shares. The fact that Mr White did nothing to correct the inaccurate statements in the directors' reports annexed to the accounts of Stanelco for the years ended 31st October 2000 and later years is, no doubt, a matter for adverse comment but cannot supply the donative intention which Mr Hurndell needs.
70. The highest that the case for Mr Hurndell can be put is that Mr White left it all to Mr Davis and Mr Barrie Hozier. Thus in his conclusion to the White Memorandum Mr White stated:

"I accepted that on the recommendation of [Mr Davis] and [Mr Barrie Hozier] that the Relevant Shares should be transferred out of the [White Jersey Trust] to [Mr Hurndell] in order that the Company could comply with the applicable LSE Listing Rule. Although Abacus transferred the Relevant Shares to [Mr Hurndell] on behalf of the [White Jersey Trust], I was not personally involved in this transfer in any respect and was not aware of my having acquired a beneficial interest in those shares in April 1997. Everything at that time had been left to [Mr Davis] and [Mr Barrie Hozier] to arrange given the general authority I had vested in them."

Further the judge accepted the evidence of Mr White that Mr Barrie Hozier had general authority from him as part of his general function of dealing with the trust (see paragraph 59 above).

71. But there is no finding of the judge that such authority extended to giving away the property of either the White Jersey Trust or of Mr White personally. Nor does it appear to me to be an inference which this Court could legitimately draw from what findings the judge did make. It seems to me that once it is appreciated that it was for Mr Hurndell to prove a gift rather than for Mr White, who was not even a party, or the Messrs Hozier who claim through Mr White, to prove an absence of intention to make a gift then it must follow that this appeal fails, wherever the truth may lie in relation to the meeting in St Tropez alleged to have occurred on 16th August 2001 or the St Tropez Note.
72. For all these reasons and notwithstanding the admission of the new evidence I would dismiss this appeal.

Lord Justice Pill :

73. I gratefully adopt the Chancellor's recital of the facts and background. The case turns on issues of fact. Mr Hurndell claims to have been the beneficial owner of valuable shares. He had a long association with Mr White. His claim depends on establishing a gift of the shares by Mr White. He seeks to challenge the trial judge's findings of fact, submitting that fresh evidence should be admitted and that the court should either reverse the judge's findings or, failing that, remit the case for retrial. For the appellant, Mr Hodge Malek QC fully acknowledges the difficulties involved in obtaining the result he seeks.
74. I find it necessary to highlight some aspects of the factual background. In 1996, Mr Barrie Hozier was a director of Stanelco plc ("Stanelco") and company secretary. In 2004 his son, Mr David Hozier, received a very large sum of money as beneficial owner on the sale of the Stanelco shares, the ownership of which is in dispute. Mr Barrie Hozier signed directors' reports for the years ended October 1997 and October 1998. Share transfers which had taken place, and are considered by the Chancellor in paragraph 4 of his judgment, were not recorded. However, in February 2000 Mr Hozier informed Stanelco's solicitors that of almost all the missing 5.1% of the shares, 33,309,940, 4.99% were held by Mr Hurndell. In accounts for the year ended October 1999, approved in April 2000, the holding of Mr Hurndell was disclosed as a beneficial holding of more than 3%.
75. As recorded by the Chancellor at paragraph 6, Mr Hozier wrote to Abacus, which had formerly held as trustee shares of Mr Ian Davis and Mr Howard White in Jersey trusts, stating that Mr White had agreed that 5% of his holding should be transferred to Mr Hurndell. Mr Hurndell was, Mr Hozier later wrote, a friend of both Mr White and Mr Davis and had long worked for their businesses. In January 2001, Abacus complied with Mr Hozier's request and the transfer was recorded in Stanelco's share register in February 2001. A share certificate was issued in favour of Mr Hurndell and held by Mr Barrie Hozier. Approved accounts for the years ended October 2000 and October 2001 showed Mr Hurndell as having a beneficial interest in the share capital, to the extent of just under 5%.
76. On the same day that the 2001 accounts were approved, on 14 February 2002, Mr Barrie Hozier completed share transfer forms previously signed by Mr Hurndell so as to purport to sell all but 1.5 million of his shares to Finale Finance Ltd ("Finale") and Khaki Investments Ltd ("Khaki") owned by a trust in which Mr David Hozier was beneficially interested. The transfer forms indicated a consideration of 3.5 pence per share no part of which was received by Mr Hurndell or anyone else. It was falsely claimed that the transfer to Khaki Investments Ltd and Finale Finance Ltd was for consideration of over £1 million when in fact no payment was made.
77. The transfers were registered in the share register of Stanelco on 15 February 2002 and in the accounts for the year ended October 2002, approved on 24 February 2003. Mr Hurndell was no longer shown as the holder of a beneficial interest in 3% or more of the shares.
78. Thus shares which Mr Barrie Hozier, as director and secretary of Stanelco, had been recording in company accounts approved in February 2002, and earlier years, as being in the beneficial ownership of Mr Hurndell were, on the day the accounts for 2001 were approved, purportedly transferred by Mr Barrie Hozier to companies in which his son, Mr David Hozier, had a beneficial interest. On their sale in May 2004 for over £3m, a very substantial sum accrued to Mr David Hozier. The companies were dissolved in 2005.
79. In March 2002, Mr Barrie Hozier's employment by Stanelco ceased. He took with him files and documents which had been kept in the company's offices in Barnet. There was an issue between him and Mr Davis, never resolved, as to what was taken. Mr Barrie Hozier resigned as secretary of Stanelco in July, 2002 that is within months of the transfer of the shares to Finale and Khaki, and as a director in April 2005.
80. Mr Barrie Hozier, supported by Mr White, now claims that Mr Hurndell had held the shares until 2002 only as nominee for Mr White and that, on 16 August 2001, Mr Hurndell, subsequently recorded by Mr Barrie Hozier as beneficial owner, signed a handwritten document, prepared by Mr David Hozier, authorising their transfer, on the instructions of Mr White, to Mr David Hozier. The document, dated 13 August 2001, was allegedly signed by Mr Hurndell at Le Café in St Tropez over dinner on the evening of 16 August. It is claimed by Mr Hozier that Mr Hurndell had been given oral instructions by Mr White to transfer the shares. Mr Hurndell denies signing the document. He denies having had dinner with Mr David Hozier and his wife on that evening.
81. There is no doubt that there was a good reason for a transfer by Mr White and/or Mr Davis in 1996. The directors of Stanelco were anxious to obtain a full listing on the London Stock Exchange and that required at least 25% of its shares to be in public hands. In what has been described as the White Memorandum, a letter from Mr White dated 18 April 2005, Mr White said that the transfer of 5% of Stanelco shares he "felt ought to be done". To achieve that, it would be necessary for a part of the holdings of Mr Davis and Mr White in the Jersey trusts to be transferred.
82. At that time, the shares were worth "very little", as Mr White stated in his Memorandum. They would not be regarded as in public hands if they were held by nominees either for Mr Davis or Mr White. Thus, if it is true that Mr Hurndell did hold as nominee, there was a breach of the Companies Act by those responsible for running Stanelco in obtaining a full listing. Moreover, there were further breaches in misrepresentations in the accounts that Mr Hurndell was beneficial owner of almost 5% of the company's shares. The judge accepted that Mr White's "account of the events of 1996 is more easily squared with an outright disposal to Mr Hurndell than with a transfer to him as nominee".
83. That factual background appears to me to be distinctly adverse to the defendants' case. The judge held that Mr Hurndell had never been beneficial owner.
84. Permission to appeal was given because of the long delay which occurred between the hearing of the case and the judgment. The members of the court granting leave cannot, however, have been unaware of the difficult fact finding exercise required of the judge and the body of evidence which ran contrary to his finding. On behalf of the appellant, it is submitted that the judge's recollection was marred by the delay. The Chancellor has considered each of the examples relied on to support that submission and I agree with his conclusion that, even if the material findings of fact are unsound, the lack of soundness cannot be attributed to the delay which occurred.
85. I do not find it necessary to analyse the issues sought to be relied on as demonstrating the relevance of delay, which the Chancellor has considered in detail. I do, however, respectfully comment on the Chancellor's findings on the fifth example, that is, the lack of significance he finds in the difference between the evidence of Mr White and Mr Barrie Hozier as to when Mr White's alleged instructions to Mr Hurndell to transfer 33 million shares to Mr Hozier or a member of his family were given. That is linked, in the Chancellor's analysis at paragraph 48, with the absence of a reference to those instructions in the White Memorandum of April 2005 and the cursory reference in that Memorandum to the other 1.5 million shares allegedly transferred by Mr White to Mr Hurndell. Mr White wrote that it "appears" the shares were retained by Mr Hurndell, a surprising way to refer to a gift he himself claimed to have made in 2002.
86. The Chancellor's final conclusion is based on the failure of Mr Hurndell to prove a gift by Mr White. As the documentary evidence strongly suggests that the 33 million shares were beneficially owned by Mr Hurndell, that issue is bound up with a consideration of the alleged instructions by Mr White to Mr Hurndell to transfer the shares to Mr Hozier, instructions which he needed to give if it was correct that Mr Hurndell held only as nominee. Analysis of evidence about those alleged instructions, and its credibility, appears to me to be of considerable importance, along with the connected though subsidiary issue of the relevance of Mr White's alleged gift of 1.5 million shares, allegedly as a reward for Mr Hurndell's services as in acting as nominee holder of the large parcel. These crucial instructions of Mr White were claimed by Mr Barrie Hozier to have been given in about mid-2001. Mr White said they were given in 2000, that is long before the events of August 2001.
87. The issue bears heavily upon the case. The asset which the shares constituted, claimed by the defendants still to have been in the beneficial ownership of Mr White, was then worth about £1m. It would, on the face of it, be extremely surprising if Mr White were to give authority simply by a telephone call, and without written instructions, to Mr Hurndell to transfer a beneficial interest of his to Mr David Hozier, who was not even the beneficiary by way of pension provision for Mr Barrie Hozier with reference to whom the original intention to give was claimed by Mr White to have arisen in the mid-1990s. On Mr White's case, this oral instruction was given in the year 2000.
88. On the face of it, it would also be extremely surprising if Mr Hurndell were to follow such oral instructions in the following year, or at all, without asking for and receiving written or even oral confirmation, and to do so over dinner in a restaurant without having been given notice by the proposed beneficiary of the intention of the meeting. That he should do so on the handwritten document produced in evidence compounds the unlikelihood.
89. While it would be open to a trial judge to determine the entire case on the issue of burden of proof considered by the Chancellor, the circumstantial and documentary evidence available make it unlikely that a trial judge would do so. The practical issue before the court is, in my view, whether there should be a retrial and I do not find it necessary to set out the evidence as to Mr White's intentions in detail. The advantage to Mr White, along with Mr Davis, in transferring shares, then of very little value, to a third party is obvious. They sought a public listing. There were obviously close relations throughout between Mr White and Mr Barrie Hozier, fellow director and company secretary, who was a chartered accountant and who was responsible for documents repeatedly stating that Mr Hurndell was beneficial owner.
90. Mr White was absent in the United States for a time but when he claimed to want to make a gift of the shares to Mr Hozier or nominee he agreed he was aware of public documents, the accounts, stating that the holding in the name of Mr Hurndell was held by him beneficially. There were inconsistencies, as the judge recognised, between Mr White's evidence and what he had stated in the White Memorandum. However, Mr White accepted in that Memorandum that everything had been left to Mr Davis and Mr Barrie Hozier to arrange "given the general authority I had vested in them". Mr Barrie Hozier's conduct has been described.
91. The evidence of Mr Mills, Chairman of Stanelco, accepted by the judge as a truthful witness, was that he believed throughout that Mr White had disposed of his shares in December 1996 to Mr Hurndell. Mr Mills gave evidence that Mr Davis had been nothing but "honourable and honest" in his dealing with him. He described Stanelco in 1996 as a "nothing little company".
92. If Mr White's intentions are central to the case, analysis of his conduct throughout, including his dealings with Mr Barrie Hozier, is important. Given the complex personal relationships and the length of time over which the relevant dealings occurred, it is not in my view possible to consider the acts and intentions of Mr White in isolation. It does not appear to me to that the judge did that and he was correct not to do so. The judge found the 13 August note, with the instruction recorded in it, to be of vital importance and, having found it to be genuine, he worked back to conclude that there had been no intention by Mr White to give.
93. Notwithstanding a factual background distinctly adverse to the defendants' case, contemporary materials, objectively established facts and the apparent logic of events may, of course, be defeated by a trial judge's findings about a witness's credibility but a claimant so defeated is entitled to a fair hearing and to a sufficient analysis of the evidence relied on by the judge. The judge relied on evidence of Mr David Hozier and Mrs Karen Hozier about events in St Tropez on 16 August 2001. The judge found that over dinner in a restaurant, Mr Hurndell signed a handwritten document dated 13 August 2005 confirming that Mr White had "authorised me to transfer approximately 32 million shares in Stanelco plc to David Hozier at the appropriate time in the near future".
94. The judge stated that "my conclusions on the August 2001 note and the Stock Transfer Forms signed by Mr Hurndell are of central importance" (judgment paragraph 152). The judge did refer to "other factors" before accepting the evidence of Mr Barrie Hozier and Mr White "in the light of all these considerations". I cannot regard the signature of the Stock Transfer Forms in blank as decisive. On the defendants' case, the signature is unsurprising; on Mr Hurndell's case the obtaining of his signature on an incomplete document was one part of a systematic scheme by the defendants.
95. The judge considered the evidence about the note in 24 paragraphs of his judgment concluding that "the evidence of David and Karen Hozier was convincing, while Mr Hurndell's evidence was the opposite". Karen Hozier gave evidence, the judge stated at paragraph 129, "which carried conviction".
96. Mr Hurndell accepted that the signature on the document, which Mr David Hozier had handwritten, was his but denied that he had signed the piece of paper when the writing was on it. He claimed he had signed papers in blank in the course of his employment with Mr White and Mr Davis in the 1980s and up to 1996. There was evidence that Mr Hurndell and Mr White had on occasions signed blank papers and that, when he left the employment in 2002, Mr Barrie Hozier took company papers with him. Having regard to the false public documents he had prepared, Mr Barrie Hozier must have been aware of his extreme vulnerability when he left the employment in 2002, taking Stanelco files with him.
97. It emerged that the paper on which the signature appeared had been manufactured and distributed prior to 1994 and was from the same manufacturer as other paper which Mr Davis produced from his business records as the type used. This was consistent with Mr Hurndell's evidence of a pre-signed paper. The defendants' counter-explanation was that Mr Barrie Hozier had used old paper that had been left in the Hoziers' flat in the South of France by the previous owner. Thus the judge had to choose between two explanations neither of which was on its face a very likely one.
98. A difficulty for the defendants was that Mrs Karen Hozier's evidence, which the judge found to carry conviction, was not disclosed to Mr Hurndell's solicitors until after Mr Hurndell had begun to give evidence at the trial. (Mr and Mrs David Hozier did not marry until 2003 but had lived together since 1997). With over £3 million at stake, Mrs Hozier cannot be regarded as an independent witness.
99. Mr David Hozier's statement had included a detailed description of the events of 16 August. It involved him, and his wife, having lunch with Mr Hurndell. The lunch engagement was set up without mentioning the shares so that Mr Hurndell would believe it was a purely social meeting. Mr Barrie Hozier admitted he had decided to play "a form of trick" on Mr Hurndell. Mr David Hozier gave a detailed description of the events of a post-prandial outdoor afternoon, including time spent with Mr Hurndell. There were considerable inconsistencies between Mr David Hozier's oral evidence, which put the meeting over dinner and was on the lines of that given by his wife, and his written statement. Given the circumstances, and the inconsistencies, I find that the judge's conclusion that he did not regard any of the inconsistencies as significant was, with respect, a surprising conclusion.
100. Mrs Hozier's explanation for her very late statement was:

"David knows I am very shy and nervous about speaking in public and I don't really know anything about the case."

She had first thought the meeting was over lunch but "when I did some more thinking, it was in fact dinner."

101. Mrs Hozier later said that she didn't really want to be involved and didn't know an awful lot about the case. Asked if she knew how important it was because several million pounds was involved, Mrs Hozier said:

"I don't really, I didn't get involved in David's or Barrie's business so no, I don't, I'm afraid."

When asked by the judge the simple question whether she had met Mr Hurndell subsequently, Mrs Hozier took the opportunity gratuitously to make a most offensive comment about him, notwithstanding her claimed shyness.

102. I accept that there are points to be made in the Hoziers' favour in relation to the dinner date, notably an entry in the diary which Mr Hurndell disclosed but I regret that I find the judge's consideration of the meeting he found to be of "central importance" unsatisfactory. It required closer analysis, having regard to the background against which it arose, the belated disclosure of the note and the very late disclosure of the evidence of Mrs Hozier. When expressing his general conclusion, the judge referred to the "highly unsatisfactory nature of Mr [Barrie] Hozier's evidence". However, it is the fresh evidence which the court has decided the appellant may adduce, which concludes, in my view, given the central importance attached by the judge to the August 2001 note, the issue whether there should be a fresh trial in the appellant's favour.
103. The court has unanimously been prepared to admit evidence of Lisa Panter, Mrs Sally Bullimore-Pyne, Mr Lionel Blye and Madame Marino as identified by the Chancellor in his judgment at paragraphs 36 and following. I need not repeat its substance. The court has done so on the basis that it would probably have an important influence on the result of the case. I respectfully agree with the Chancellor's analysis of the evidence. Further it casts doubt on the judge's finding that Mr Hurndell's evidence in relation to Mrs Mckenzie was "plainly based on some sort of inference rather than any recollection". The court has unanimously decided not to admit further documents exhibited to a witness statement of Mr Davis and the witness statement of Mr Timothy Quinlan. However, if there is a retrial and the evidence is called, as the Chancellor contemplates at paragraph 38, I would leave open the question whether that evidence could have an influence on the outcome of the case.
104. On the facts of this case, I have found helpful the guidance of Lord Justice Robert Goff, (as he then was), in The Ocean Frost [1985] 1 Lloyds LR, at page 57:

"Speaking from my own experience, I have found it essential in cases of fraud, when considering the credibility of witnesses, always to test their veracity by reference to the objective facts proved independently of their testimony, in particular by reference to the documents in the case, and also to pay particular regard to their motives and to the overall probabilities. It is frequently very difficult to tell whether a witness is telling the truth or not; and where there is a conflict of evidence such as there was in the present case, reference to the objective facts and documents, to the witnesses' motives, and to the overall probabilities, can be of very great assistance to a Judge in ascertaining the truth. I have been driven to the conclusion that the Judge did not pay sufficient regard to these matters in making his findings of act in the present case."

105. I have referred to and commented upon the overall circumstances with reluctance but in my view it was essential in the particular circumstances of this case. I have made only very limited comment on the judge's adverse findings upon the reliability of all four of the main players, (that is apart from Mr and Mrs David Hozier), Mr White, Mr Davis, Mr Hurndell and Mr Barrie Hozier, because I acknowledge the limited role of this court with respect to findings of fact and because further consideration, and a comprehensive review of the evidence, is not necessary for my conclusion that there should be a retrial. If there is a retrial, issues of credibility will of course be for consideration afresh by the trial judge.
106. Thus I would order a retrial on the basis that the appellant is entitled to fuller and better consideration of the evidence, including as to the events of 16 August 2001 which the judge regarded as of central importance and about which there is further evidence. His finding in the defendants' favour on that factual issue made a very important contribution to his conclusion that the shares had been transferred to Mr Hurndell as a nominee. His reasoning is such that there is a strong prospect that he would not have reached that conclusion had he reached a different conclusion on the events of 16 August 2001.
107. I have in the course of this judgment considered the underlying question whether Mr White did give the shares to Mr Hurndell in 1996. It is not, in my view, open to this court to dismiss the appeal on the basis that, whatever other error there may have been, no intention to give has been established. That issue was considered by the judge, rightly in my view, in a context which included the events of 16 August. He did not analyse intention in isolation. It is not now possible, for reasons I have given earlier in this judgment, to consider intentions in 1996 in isolation from an overall view of events. The authenticity of the note is bound up with Mr White's credibility. Moreover, the judge accepted that Mr White's "account of the events of 1996 is more easily squared with an outright disposal to Mr Hurndell than with a transfer to him as nominee". It would not be impossible to reach a finding adverse to the defendants about 16 August 2001 but still to find that there was no intention to give. However, in my view, it is not open to this court to ignore the merits or otherwise of the findings about 16 August 2001, in the context of this prolonged sequence of events, and to make such a finding in isolation.
108. I would allow the appeal and direct a re-trial.

Lord Justice Lloyd:
 


109. The Chancellor has set out the history of the proceedings and the underlying facts, and Pill LJ has referred to some other aspects of the evidence and the facts. I do not need to go over these, nor to set out the issues on the appeal, and I will reiterate no more of the matters (including quotations) that they have already dealt with than is necessary for ease of explanation.
110. I agree with the Chancellor that no error on the part of the judge has been demonstrated on the appeal which is attributable to the delay before he gave judgment, and I share his reasons for this conclusion, as set out at paragraphs [41] to [51]. For those reasons, I consider that the Appellant has wholly failed to make out the principal ground of the appeal.
111. I also agree with the Chancellor's reasons as set out in paragraph [38] as to why some of the additional evidence sought to be introduced on the appeal was excluded, and with his reasons in paragraphs [39] and [40] for admitting the rest of that new evidence, which has a bearing on the events of 16 August 2001 and the authenticity of the note alleged to have been signed by Mr Hurndell on that day.
112. Furthermore, I agree with his assessment of the effect of the new evidence which was admitted, as set out at paragraphs [53] to [55]. It casts into doubt the correctness of the judge's conclusions as to what happened on 16 August 2001.
113. I part company with the Chancellor, respectfully, on the issue whether, despite that conclusion on the judge's part being put in question by the new evidence, the appeal should nevertheless be dismissed because Mr Hurndell has failed to prove that Mr White intended to give him the shares. I set out my reasons in what follows.
114. Mr Hurndell's claim is that he became the beneficial owner of 33,309,940 shares in Stanelco plc in, or at any rate as a result of events taking place in, December 1996. At that time those shares were held by Abacus (Nominees) Ltd as trustee of a settlement created by Mr White, and they formed part of a holding of 40% of the issued shares in Stanelco held by Abacus in that capacity. In April 1997 Abacus appointed all the shares which they held as trustee of Mr White's trust in favour of Mr White absolutely and beneficially. Possibly by an oversight, the shares remained registered in the name of Abacus until February 2001. Despite the involvement of Abacus and Mr White's trust, the case was argued below, and before us, on the footing (which I do not find surprising) that it was Mr White's intention that mattered throughout as regards any disposition of the shares in favour of Mr Hurndell.
115. Mr Hurndell contended in his pleadings that the shares were to be transferred to him in recognition of services rendered in the past to Mr White and to Mr Davis, and also argued that there was consideration for the transfer in his acceptance of them, thereby enabling the listing requirements for Stanelco to be satisfied to the great advantage of Mr White and Mr Davis. The first of these contentions was rejected by the judge on the facts, at his paragraphs 19 and 20. The second could only have been put forward on the basis that there had been an agreement between himself and Mr White and Mr Davis at the time. The judge rejected Mr Hurndell's evidence as to the events in 1996/7: see his paragraph 148. Thus, the case could not succeed on the basis of there having been an agreement, legally binding or not. Accordingly, the case for him having become the beneficial owner of the shares depended on showing that Mr White intended to give him the shares beneficially.
116. There would have been one good reason for such a transfer, namely that if Mr Hurndell held as nominee for Mr White, rather than for his own benefit, the listing requirements were not satisfied, which might lead to delisting of the shares, and to other sanctions, including criminal liability. Mr White and Mr Davis between them were beneficially interested in 80% of the shares. If the shares were to be listed, the number of the shares in which they were interested had to be reduced to no more than 75%, and the balance of 5% had to go to more than one person, because any person who held 5% or more was not to be regarded as a member of the public. I suspect that it was for that reason, and not because of a "slight error in the calculation" (see the judge's paragraph 28), that Mr Hurndell was to receive 4.99%, with the balance, 101,878 shares, going to Mr Sharland. A holding of 4.99% itself gave rise to the requirement of disclosure in the directors' report. As the judge said at paragraph 70, that is why, when 31,809,940 of Mr Hurndell's shares were transferred in 2002 to Khaki and Finale, they were apportioned in such a way that each company held less than 3% of the shares. (Whether that was sufficient to avoid the obligation of disclosure, given that Mr David Hozier was a beneficiary of the trust that owned both companies, is a separate question which does not matter for present purposes.)
117. The obligation to disclose the 4.99% holding of shares was not complied with in the directors' reports for the years to 31 October 1997 or 1998. Subject to that, the position disclosed in those reports was consistent with Mr Hurndell's case and inconsistent with that advanced by Mr Hozier and supported by Mr White. The shares in which Mr White was interested were shown as reduced to 34.99%, which would not have been correct if Mr Hurndell held his shares as nominee for Mr White. The directors' reports for the years to 31 October 1999, 2000 and 2001 did show Mr Hurndell as beneficial owner of 4.99% of the shares. Mr White said in evidence that he did not see, or at any rate did not read, the directors' reports for the years to 31 October 1996, 1997, 1998 or 1999, though he did see those for the years to 31 October 2000 and 2001; the judge accepted this evidence: paragraph 95. The statement in the 1996 report was to the effect that Mr White would sell 5% of the shares before 31 December 1996, which was consistent with an intention to make an outright transfer, though not with a gift, as the judge noted at paragraph 92. Throughout this period Mr White lived and worked in the United States of America, and was primarily concerned with business interests other than his holding in Stanelco, which may explain his having paid less attention to the detail than he might have done if he had still been based in England, as previously.
118. Mr White sought to distance himself from the public statements of the position, despite his being responsible for them as a director, by saying that he relied on Mr Davis and Mr Hozier. Mr Hozier also tried to avoid the consequences of the inconsistency between the public statements made at the time and the case now advanced. The judge rejected his evidence in this respect, considering that he knew very well what was going on. The judge held that he knew perfectly well that if Mr Hurndell did hold the shares as nominee for Mr White, the listing conditions were not met: see paragraph 156. He also held that Mr Davis knew this: paragraph 157.
119. As for Mr White, he knew that the aggregate shareholding of 80% in which he and Mr Davis were interested had to be reduced to 75% in order that the listing requirements were satisfied: paragraph 146. He said that Mr Davis told him, before the listing, that this would be done by way of sales of equal numbers from each trust, but that he also told him, early in 1997, that all the shares had come from the White Trust, and had gone to Mr Hurndell, but that the latter held them as Mr White's nominee, and that this was in order. The judge recognised that this evidence was "at least surprising" (paragraph 151) but he did not reject it.
120. Mr White had said that he was content to leave matters to Mr Davis, and to go along with Mr Davis' view as to the value of obtaining a listing: paragraph 21. Consistently with this, in paragraph 2.4(c) of his memorandum dated 18 April 2005, he had said that he:

"was content to rely on their recommendations [i.e. those of Mr Davis and Mr Hozier] as to what needed to be done regarding the particular matter of the transfer of the 5% shareholding interest from the HW Trust and had no reason to dispute the existence of the particular Listing Rule requirement that I understood would have to be met for the Company's shares to be admitted to the Official List".

In paragraph 2.5 of that memorandum he said:

"As well as having responsibility for the management of the Company's affairs, ID [Mr Davis] and BH [Mr Hozier] were also entrusted to liaise with Abacus regarding the HW Trust Shares."

In turn, at paragraph 8.1 he said:

"I accepted that on the recommendation of ID and BH that the Relevant Shares should be transferred out of the HW Trust to [Mr Hurndell] in order that the Company could comply with the applicable LSE Listing Rule. Although Abacus transferred the Relevant Shares to [Mr Hurndell] on behalf of the HW Trust, I was not personally involved in this transfer in any respect and was not aware of my having acquired a beneficial interest in those shares in April 1997. Everything at that time had been left to ID and BH to arrange given the general authority I had vested in them."

121. The judge said at paragraph 58 that he accepted evidence from Mr White that, though he had not asked Mr Hozier to write a letter which the latter had written on 15 December 2000 to Abacus, nor had he seen it, he did accept that Mr Hozier had authority to write the letter on his behalf as part of his general function of dealing with the trust. The Chancellor has set the letter out at paragraph [59] above. While it does not say, in terms, that Mr Hurndell was the beneficial owner of the shares transferred to him, and while "transferred" can be said to be an ambiguous word, it seems to me that the letter would naturally be read as meaning that Mr Hurndell, like Mr Sharland, was the beneficial owner of the relevant shares. In that respect it would be consistent with the specific statement as regards Mr Hurndell's shares already contained in the directors' report for the year to 31 October 1999, which was in due course repeated in the following year's report, signed on 30 April 2001.
122. Mr Hozier used the word "transferred" in relation to Mr Hurndell's shares in his communications with Lovells during 2000 which the judge described at paragraphs 43 to 45 and 50 to 54, prompted by a proposal and initial discussions described in paragraph 41, to which Mr White was a party. It seems to me clear that Lovells would have understood that the transfer to Mr Hurndell was to him as beneficial owner, not as nominee for Mr White. It was not suggested that Mr White saw the details of these communications.
123. On 18 April 2005 Mr White signed the memorandum to which the Chancellor has referred at paragraph [61], which was said to set out "the full extent of [Mr White's] knowledge" in relation to the shares which were transferred to Khaki and Finale. This document was very carefully drafted. I have quoted three passages from it at paragraph [120] above. On a very close reading of the document, it is ambivalent as to the status of the transfer to Mr Hurndell. It was necessary for the draftsman to steer a difficult course between Scylla and Charybdis, seeking to avoid on the one hand making any statement which would show too clearly that the listing regulations had been broken, because Mr White retained a beneficial interest in the shares all along, and on the other hand any statement clearly inconsistent with Mr White being able to decide in 2000 or 2001 that the shares should go to Mr Hozier, as he said in paragraph 4.2 of the memorandum. I agree with the judge's comment in his paragraph 100 that it is difficult to read paragraph 2 of the memorandum as consistent with an intention in 1996/7 that Mr Hurndell should hold the shares as a nominee.
124. Those are some of the principal elements of Mr White's evidence which the judge needed to consider in the course of deciding whether Mr Hurndell had made out his case that the shares had been given to him outright, rather than transferred to be held as nominee. Other aspects of Mr White's evidence relevant for the purpose included what he said about various events said to have occurred at different times in the period 2000 to 2001. The judge correctly identified at paragraph 91 the central issue of fact which he had to decide. He felt unable to proceed on the basis of the credibility of any one witness, as he explained at paragraph 103:

"103. In resolving the central factual issue, the oral evidence is therefore critical, both on the documents themselves and on events between 1996 and 2005. A final conclusion can be reached only after a consideration of all this evidence. Conclusions on one issue if regard is had only to the evidence directly in point to that issue may need revision in the light of evidence on other issues. As I have already explained, simple recourse to the credibility of any particular witness is not generally an option in this case, having regard to the flawed quality of the evidence of all four principal witnesses."

125. His reference to having previously explained his difficulty with the principal witnesses is to paragraph 12, where he said he had to approach the evidence of all four men "with great caution".
126. At that point in his judgment, having identified the central factual issue at paragraph 91, he had referred to the documents which supported Mr Hurndell's case, and he then went on to deal in turn with the events of August 2001, then the stock transfer forms, then the delay on the part of Mr Hurndell in putting forward his claim, and then the events of 2000/1. As to the last of these, he said this at paragraph 143:

"143. Fourthly, the important events of 2000/2001 are to a significant extent a matter of the oral evidence of Mr Hozier, Mr Davis, Mr White and Mr Hurndell. The documents demonstrate a number of contradictory matters. First, Mr Hozier was active in effecting the transfer which it had been intended to make in December 1996. These included the transfer to Mr Hurndell, which is a point supporting Mr Hurndell's case. Secondly, and likewise supporting Mr Hurndell's case, Lovells were never told that Mr Hurndell was a nominee for Mr White. Thirdly, Mr Hozier was open with Stanelco's auditors and Lovells in discussing a proposal that he or David Hozier should receive the shares. This tends to support the defendants. It is highly unlikely that Mr Hozier would have discussed the proposal with Lovells or with Stanelco's auditors of it was to be kept secret from Mr Davis, particularly in view of Mr Davis' close links with Lovells. It is likely that Mr Davis knew of this proposal and that Mr Hozier's account of events in 2000 is to be preferred to that of Mr Davis. The retention by Mr Hozier of the certificate issued in February 2001 for the shares in Mr Hurndell's name, and the despatch to him a year later of the certificate for 1.5 million shares, is a point in favour of the defendant's case. I do not consider that it is possible to come to conclusions on the events of 2000/2001 except in the light of findings on the other issues."

127. At paragraph 146 the judge returned, in the light of what he had said about the various relevant factors, to consider the events of 1996 and early 1997. This is where the judge weighed up the various factors and came to his decision in favour of the Defendants. The critical passage for present purposes is paragraph 152:

"152. In reaching a conclusion on the issue of whether Mr Hurndell was to be a donee or a nominee of the shares, my conclusions on the August 2001 note and the stock transfer forms signed by Mr Hurndell are of central importance. I have reviewed my findings on those issues in the light of all the evidence in the case and in particular the highly unsatisfactory nature of Mr Hozier's evidence. I am nonetheless satisfied that the August 2001 note is not a later concoction but was read and signed by Mr Hurndell in the circumstances described by David and Karen Hozier, and that the stock transfer forms were signed by Mr Hurndell as described by Mr Hozier. Mr Hurndell may well have forgotten signing the stock transfer forms but I find that he was deliberately untruthful in his evidence concerning the meeting with David and Karen Hozier and signing the note. He appreciated, I believe, as was obvious, that the note in particular was entirely inconsistent with his case."

128. It might have been possible for the judge to decide the case in favour of the Defendants on the basis of his view of the evidence of Mr White alone, and to have taken the view that, on the one hand, Mr White did not himself intend to give the shares to Mr Hurndell and, on the other hand, the authority which he gave, informally, to Mr Hozier and Mr Davis did not extend to making such a gift. However, it seems to me clear that the judge did not proceed on this basis, and that he did not consider that he was able to do so. He needed to decide the issue as to what happened on 16 August 2001, as well as the other principal factual disputes, in order to come to a conclusion on the "central issue of fact", as he said at the beginning of paragraph 152.
129. Mr White was a much less active participant than some of the others involved, but it seems to me understandable that the judge should not have been willing to reach a decision on the reliability of his evidence to which he referred in paragraph 151, that decision being expressed in paragraph 154, without having assessed the issue of his credibility together with that of all the other protagonists as well.
130. The August 16 2001 document was not the only thing on which the Respondents relied to show that Mr Hurndell had held the shares as nominee. They also relied on the stock transfer forms which he had signed in blank. Clearly these are relevant but, like Pill LJ, I do not regard them as sufficient by themselves to prove the case, regardless of the conclusions which may be reached on other aspects of the evidence.
131. It may be that one matter which would merit further examination is the scope of the informal authority given by Mr White to Mr Davis and Mr Hozier in 1996 in connection with the listing. The Chancellor considers that it is not shown to have extended to giving away any of Mr White's shares, though I think it is clear that it would have extended to selling such shares. There was precious little time between 18 December, when the statement in the directors' report as to Mr White's intention to sell was made, and 31 December, by which the intention was to have been fulfilled. It may not have been easy to have organised a sale in that time. The shares are said to have been of little value at the time, and there cannot have been much of a market for them. Clearly, a full listing might well enhance their potential value, but the need for the disposal was a prerequisite to getting to that point. That being so, if a sale had not been possible in the time, it may be arguable that it was within the scope of the authority, in order to make the listing possible, and to comply with the listing requirements, to give the shares away. There might be a question whether Mr Davis would have been acting properly in taking all the 5% out of Mr White's trust, and none from his own, if value was not to be given for the transfer, but that would not in itself necessarily invalidate a transfer by way of gift. However, these speculations are for the future.
132. For the reasons given above, I have come to the conclusion, first, that the admission of the new evidence on the appeal puts the judge's conclusion as to the events of 16 August 2001 seriously into question, and secondly that the consequence of this is that his decision cannot stand. I share the concern expressed by the Chancellor at paragraph [40] as to the fact that Mr Hurndell's solicitors and counsel were not informed of Mrs Karen Hozier's witness statement before Mr Hurndell started to give his evidence, and his view, expressed at paragraph [55], that the judge may not have given enough weight to the last minute change of case on the part of the Hoziers as to when the meeting took place on 16 August 2001. But I would not myself have regarded those matters as sufficient to justify allowing the appeal by themselves. Accordingly, but for the new evidence having been admitted on the appeal, I would not have allowed the appeal. It having been admitted, however, I agree with Pill LJ that the appeal should be allowed and the case remitted for retrial in the Chancery Division.