England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CENTRAL LONDON CIVIL JUSTICE CENTRE
(MR RECORDER MORRIS-COOLE)

		Royal Courts of Justice Strand London, WC2A 2LL
		21 May 2015

1. LORD JUSTICE FLOYD: This is a renewed application for permission to appeal from the judgment of Mr Recorder Morris-Coole given in the Central London County Court. The Recorder's judgment was released on 16 April 2014, but modified and signed by him on 7 October 2014. Permission to appeal was refused on the paper by Lewison LJ on 22 April this year.
2. The Claimant, Alpha Estates (Essex) Limited, sought specific performance of a contract for the sale of land consisting of the freehold property at 11 Atcost Road, Barking, Essex. This consisted of a site which included a dairy which was owned and run by the Defendants.
3. The price stated in the contract was £1 million. The only answer to the claim for specific performance was that the contract was an illegal one because the real sale price was £2.2 million and the price in the contract had been understated in order to evade stamp duty.
4. The only evidence of the illegality was the Defendants' case that there was a prior and settled agreement to sell at the higher price. The judge had to decide as a question of primary fact whether that agreement in fact took place.
5. The Defendants' case was that the higher price was agreed at a meeting between Mr Bakshi of the Claimant and the First Defendant on 21 April. The judge rejected that account, preferring the evidence of Mr Bakshi that nothing was agreed at that meeting and forming the impression that Mr Bakshi was "biding his time": see paragraph 13.
6. Like many such findings of primary fact, the judge had available to him a number of sources of evidence and consequent inferences which he had to evaluate. Two important factors seem to have influenced the judge and driven him in the direction in which he ultimately found.
7. The first was that professional advice had been given that demand for properties of a similar size and specification was limited and that therefore purchasers wishing to purchase a unit of this size would be in a good position to negotiate on price.
8. The second factor was that the Defendants were, as he found in his judgment, in straitened financial circumstances. This would also have an effect on the parties' relative bargaining positions, placing the Defendants in a weak position.
9. The judge plainly found those two factors of great importance in explaining why Mr Singh's initial offer to sell at £2.2 million had ultimately resulted in a sale at the very much lower figure.
10. There were of course a whole variety of other factors which were pressed upon the judge. Why was it, for example, that the Defendants only pulled out at a late stage? One explanation that was given was that the Defendants were surprised when they saw that the price of £1 million would leave them with no balance when the charges to the lenders were paid off.
11. It was pressed on the judge that the Defendants were well aware of the extent of their borrowings and that this factor cannot have caused them to pull out at the last minute.
12. Another factor which was pressed on the judge was that there was no adjustment of the price when during the negotiations the Defendants were asked for a guarantee in respect of the rent charged under the lease and so on.
13. When I read the skeleton arguments, it seemed to me that it was a case in which the Appellants were seeking to undermine a finding of primary fact. I drew their attention to what Lewison LJ has said recently in Fage UK Ltd & Anor v Chobani UK Ltd & Anor [2014] EWCA Civ 5 at 114 to 117:

"114. Appellate courts have been repeatedly warned, by recent cases at the highest level, not to interfere with findings of fact by trial judges, unless compelled to do so. This applies not only to findings of primary fact, but also to the evaluation of those facts and to inferences to be drawn from them. The best known of these cases are: Biogen Inc v Medeva plc [1977] RPC1; Piglowska v Piglowski [1999] 1 WLR 1360; Datec Electronics Holdings Ltd v United Parcels Service Ltd [2007] UKHL 23 [2007] 1 WLR 1325; Re B (A Child) (Care Proceedings: Threshold Criteria) [2013] UKSC 33 [2013] 1 WLR 1911 and most recently and comprehensively McGraddie v McGraddie [2013] UKSC 58 [2013] 1 WLR 2477. These are all decisions either of the House of Lords or of the Supreme Court. The reasons for this approach are many. They include

i) The expertise of a trial judge is in determining what facts are relevant to the legal issues to be decided, and what those facts are if they are disputed.

ii) The trial is not a dress rehearsal. It is the first and last night of the show.

iii) Duplication of the trial judge's role on appeal is a disproportionate use of the limited resources of an appellate court, and will seldom lead to a different outcome in an individual case.

iv) In making his decisions the trial judge will have regard to the whole of the sea of evidence presented to him, whereas an appellate court will only be island hopping.

v) The atmosphere of the courtroom cannot, in any event, be recreated by reference to documents (including transcripts of evidence).

vi) Thus even if it were possible to duplicate the role of the trial judge, it cannot in practice be done.

115. It is also important to have in mind the role of a judgment given after trial. The primary function of a first instance judge is to find facts and identify the crucial legal points and to advance reasons for deciding them in a particular way. He should give his reasons in sufficient detail to show the parties and, if need be, the Court of Appeal the principles on which he has acted and the reasons that have led him to his decision. They need not be elaborate. There is no duty on a judge, in giving his reasons, to deal with every argument presented by counsel in support of his case. His function is to reach conclusions and give reasons to support his view, not to spell out every matter as if summing up to a jury. Nor need he deal at any length with matters that are not disputed. It is sufficient if what he says shows the basis on which he has acted. These are not controversial observations: see Customs and Excise Commissioners v A [2002] EWCA Civ 1039 [2003] Fam 55; Bekoe v Broomes [2005] UKPC 39; Argos Ltd v Office of Fair Trading [2006] EWCA Civ 1318; [2006] UKCLR 1135."

14. Before me this morning and conscious of the strictures to which Lewison LJ has drawn attention, Mr Paton on behalf of the Defendant Applicants has sought to persuade me that the judge in reaching his conclusion of fact has taken into account irrelevant material and also failed to give adequate reasons for his judgment.
15. Whilst Mr Paton has done everything which could be done on behalf of his clients, it seems to me that Mr Paton is approaching the question of leave to appeal at far too detailed a level.
16. Once it is accepted, as it must be, that there was basis for the judge's conclusion, one does not successfully start to undermine it by analysing each of the various strands in the arguments of the trial which the judge was not impressed by.
17. It seems to me that the judge's conclusion that there was no illegal agreement present here is one which is simply not vulnerable to attack on appeal. An appeal would, therefore, not have any realistic prospect of success and I refuse permission.