England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM MIDDLESBROUGH COUNTY COURT
(HIS HONOUR JUDGE BOWERS)

		B2/2013/0215 7 Rolls Building Fetter Lane London EC41 1NL
		5 March 2014

1. SIR STANLEY BURNTON: This is in many ways a very sad case. The claim is, as originally quantified, for a sum of less than £9,000. It was tried for some days before District Judge Hall, who found in favour of the defendant. There was then an appeal to the County Court judge, who dismissed the appeal, and we are now here with a second appeal in a very modest case, in which the costs must by now be many times the amount of the claim, but we can only deal with the case on the basis of the findings of fact and conclusions of law drawn by the courts below. The findings of primary fact in this case are those of the district judge.
2. The case arose out of the purchase by Mr Palmer, to whom I shall refer to as the claimant, although he is now the appellant, of a horse called Toby, which, following its purchase in October 2007, became at some stage lame, if it was not already, and eventually had to be put down. The dealings relating to the acquisition of the horse by Mr Palmer were between him and the defendant, Miss Muir. He claimed, ultimately, that she had sold him the horse in October 2007, he acquired it on 11 October, and he contended that she was in breach of her contract of sale. Her case was that she was not the seller of the horse, it had been owned by Mr Clack, who originally had been a defendant in the proceedings, and that she had negotiated the purchase of the horse as agent on behalf of the claimant, and therefore she had no personal liability on the sale.
3. The nature of the agreement between the claimant and the defendant fell to be ascertained as a result of the communications between them and their conduct in relation to each other. The capacity in which the horse was acquired by the respondent defendant, Miss Muir, to whom I shall refer as the defendant, from Mr Clack was in a real sense irrelevant. The question was whether, when the claimant acquired the horse, he was buying it from her.
4. In a sense it was also irrelevant whether, when the agreement was made under which he acquired the horse, the owner was still Mr Clack, who was indubitably the original owner, or whether ownership had already passed, if it ever passed, to the defendant, because if she was acting as his agent, that is to say the agent of the claimant, then of course she would never have acquired title. On the other hand, if she were acting as seller, it was only necessary for her to perform the contract that she had the ability and right to transfer title at the time for the performance of the contract, which on this hypothesis there was, as between the claimant and the defendant when that contract fell to be performed.
5. Sadly, the district judge, having set out the background to the case and each side's case, set out in relatively few paragraphs of his judgment his relevant findings of fact. Those findings of fact focused not on the communications between the claimant and the defendant but on the position of Mr Clack: whether Mr Clack was still the owner of the horse on 11 October 2007 when the claimant acquired it. In paragraph 15, which is the first of the paragraphs dealing with the findings of fact, the district judge set out the background, but dealt with Mr Clack's impression, and not at all with the communications as between the claimant and the defendant. He then in paragraph 16 said the defendant was acting in the transaction as agent for the claimant. That is a conclusion in respect of which no primary findings of facts were set out.
6. The case of the defendant, as I have said, was that she was simply acting as agent, she had been asked to find a horse for the claimant, did find a horse, that is to say Toby, and duly in the exercise of the agency agreement arranged for it to be sold to the claimant. Equally, on his behalf she arranged for an inspection by a vet, since he insisted on such an inspection and a vet certificate as a precondition of his acquiring the horse.
7. The case for the defendant was that Mr Palmer, the claimant, was well aware that she was acting as his agent, and indeed it is difficult to see how, if the communications between them were to the effect that she was acting as his agent, he could think otherwise. The difficulty is that following paragraph 16, the district judge said this in paragraph 17:

"The claimant assumed incorrectly that he was buying from the defendant but never asked the direct question as to actual ownership, nor indeed was the correct situation volunteered by the defendant."

The correct situation, of course, depended on what had passed between the claimant and the defendant, not on what had passed between the defendant and Mr Clack. I find it impossible to read that first sentence as consistent with Mr Palmer, the claimant, knowing that in fact the defendant was not the seller but was simply acting as his agent.

The next sentence of paragraph 17 is:

"He asked the defendant to source a horse for him, which she did."

That is entirely consistent with both parties' cases. The fact that one goes to someone who deals in horses from time to time and says, "Please look out for a horse for me", and it is common ground that this did happen in this case, does not tell one whether, when the horse is found and transferred for payment, that transfer was effected by the transferor as agent for the buyer or as principal, that is to say seller, having bought the horse from the original owner, Mr Clack.

The next sentence is:

"On paying over the £4,000 in cash, he did not ask for a receipt, bill of sale or other document that might have identified the actual contracting parties."

That may be so and is very unfortunate, but that does not tell one in what capacities the parties were making an agreement about the horse.

8. Paragraph 18 deals with the question whether the horse was in fact defective, and paragraph 19 addresses the vet who produced the report which led to the claimant acquiring the horse. Looking at that analysis, it seems to me that in no way did the district judge address the issues which had to be addressed.
9. Before us on behalf of the defendant, powerful submissions have been made to the effect that there was very considerable material before the district judge which would justify a finding that from the beginning Mr Palmer, the claimant, knew that the defendant was acting as his agent. There is the initial correspondence which took place before the defect in the horse became known. There is very powerfully the invoice at page 113 of the bundle, which is an invoice from the defendant to the claimant, referring to the transaction in October 2007, stating £4,000 paid, £2,750 to owner, £250 commission, £1,000 in credit. That is entirely consistent with the defendant's case, and no doubt required some explanation on the part of the claimant, and he was in due course cross-examined on it. Equally, there are passages in the expert report relied on by the claimant to demonstrate that the horse was defective at the date of sale, which are consistent with the defendant having been his agent.
10. But we do not have any sensible findings which would enable this court to conclude that there are primary findings of fact which are consistent only with one party's case or the other. There are passages in the judgment which point to one case, and others pointing another way. We have been urged on behalf of the defendant to read the first sentence of paragraph 17, which I have cited, to the effect that the claimant had no basis for his assumption that the defendant was the principal selling the horse to him, but I regret that I cannot read that sentence other than literally.
11. Furthermore, we did not find it necessary to call on Mr Anderson to reply to Mr Limb's submissions on behalf of the defendant, and he may have had equally or more powerful points to make on behalf of the claimant.
12. In those circumstances, it seems to me that this court does not have the material in the findings of fact made by the district judge which would enable the court to find one way or the other what the agreement was between these parties. That is highly regrettable. It is a failure on the part of the court to do justice as between the parties at this stage, but regrettably I see no alternative to this conclusion. That being so, it follows in my judgment that the appeal must be allowed.
13. The question then arises what is to happen. It is common ground between the parties that there is also no sensible finding of fact as to the condition of Toby as at the date of sale.
14. In those circumstances, I see no alternative but for the case to be remitted to the County Court for retrial before a different judge. That is highly regrettable. It is particularly highly regrettable given that the issues in this case are relatively clear and that the amounts involved are relatively small, but I see no alternative to it.

In my judgment, therefore, the appeal must be allowed with the result that I have indicated.

15. LORD JUSTICE KITCHIN: I agree.
16. LORD JUSTICE ETHERTON: I also agree with what Sir Stanley has said. I would only add one short point, that in paragraph 15 of the district judge's judgment, which together with paragraphs 16 and 17 are relied upon by Mr Patrick Limb QC for the respondent, that in paragraph 15 the district judge says that the crucial fact is that Mr Clack himself, the owner of the horse, considered that his purchaser was not the defendant but someone on whose behalf she was acting, but the fact of the matter is that whether or not there was a contract between these parties or not, and what were its terms, depends upon an objective assessment of the facts and has nothing to do with what the parties or other people may subjectively have thought. The district judge has highlighted that particular element, but it is the one element that is entirely irrelevant.
17. For that reason and the others given by Sir Stanley, I agree that the appeal must be allowed, and the consequence is that the proceedings must now be remitted to a different district judge to determine the proceedings.