In two recent cases in which judgment was given a day apart (The Gulf Agencies v Ahmed and Clydesdale Bank v John Workman) the Court of Appeal overturned the decisions of the first instance judges and severely criticised them for the manner in which they reached their decisions. In both cases, the first instance judges reached a conclusion regarding the honesty or believability of the witnesses before them (all of whom were solicitors) without properly addressing the evidence and/or without adhering to requirements to make an express finding and provide clear reasons for doing so in their judgments. The Court of Appeal stressed the importance of this, especially in cases against solicitors.
The Gulf Agencies v Ahmed
In the first decision, The Gulf Agencies v Ahmed, the Court of Appeal considered an appeal against a County Court decision that a landlord had failed to establish his intention to occupy certain premises for the purposes of a business to be carried on by him there, and against the resulting order that a new tenancy should be granted. The two elements making up “intention” were subjective (did the landlord have a fixed and settled desire to do that which he intended to do?) and objective (did the landlord have a reasonable prospect of being able to bring about its desired result?).
The first instance judge found against the landlord on both the subjective and the objective elements of intention, and his decision on these points formed two of the three grounds of appeal (along with apparent bias). In relation to the subjective point, the issue was that while the judgment implied that the judge did not believe the landlord, the Court of Appeal found that “there is no express finding to that effect and no clear reasons for that conclusion.”
Unsurprisingly, the Court of Appeal found this “an unacceptable way of deciding the case, from the point of view of both parties”. The court highlighted both the “very serious concern for the landlord that he appears to have been disbelieved without any clear finding or any clear statement of the grounds for that finding” and the uncertainty for the tenant as to whether it could apply for its costs to be assessed on the indemnity basis, as a clear finding of dishonesty would have given it strong grounds to do. On the objective point, the Court of Appeal also found the judge’s final position “less than clear” and found that his findings on the issue, to the extent he made any, were set aside. The judgment was set aside (although no apparent bias was found) and was remitted to the County Court for a re-trial before a different judge.
Clydesdale Bank v John Workman
In the second decision, Clydesdale Bank v John Workman, the Court of Appeal considered whether the High Court judge was right, on the basis of the facts that he found, to conclude that two solicitors were guilty of dishonest assistance in a breach of trust. The Court of Appeal found that the judge had failed to confront what was a potential good defence “head on” and unless he was able to conclude that he did not believe the defence (which he did not say in the judgment), he was not entitled to find the defendants guilty of dishonesty. The failure to expressly address the solicitors’ evidence, coupled with the failure of the judge to say that he disbelieved the solicitors, resulted in the Court of Appeal concluding that “a finding of dishonesty is, in my view, insufficiently secure, especially when no motive for such dishonesty has ever been suggested”. The appeal succeeded and a re-trial was not ordered.
In both cases, the Court of Appeal considered whether the judge had properly addressed and decided the issues which were central to the matter. This may sound simple, but in the words of the tenant’s counsel in the Gulf Agencies case, the judge “did not grapple with the issue; he dodged it”. The Court of Appeal has made it plain that this is not an acceptable way in which to decide a case, particularly when the central issues relate to the believability or honesty of a witness.
So what can a practitioner do to avoid their client facing this situation?
Presenting your client’s best case before a judge at trial, along with ensuring the judge is aware of the points to be decided, must always be the aim. In relation to allegations of dishonesty, clear evidence must be presented in order to allow the judge to make firm findings of fact. However, once this has been satisfactorily presented, the matter is out of your hands.
In the Gulf Agencies case, despite both sides agreeing on the central issue to be decided (whether the landlord was truthful in his evidence) and communicating this to the judge by way of their submissions, the issue was still not properly addressed. Practically speaking, there is very little more a representative can do for their client if the resulting judgment does not address the evidence or decide the point in the proper manner or at all. All a representative can do is pre-warn their client that judges are fallible and that the first-instance judgment may not be the end of the matter.
Following the judgment, it may be difficult for a client to understand why a judgment which, for example, appears squarely in their favour is vulnerable to an appeal. In the Gulf Agencies case, the Court of Appeal noted that there could be no doubt that the issue for the judge to decide was whether the landlord was truthful in his evidence. The Court of Appeal stated “both counsel agree, a fair reading of the judgment suggests that the judge implicitly did not believe the landlord …” (emphasis added). However, such implicit suggestions were not enough. In these circumstances, the solicitor will have to explain to their client that, while it may be clear from the comments made in the judgment, and ultimately the decision itself, what the judge’s view is, if the judge has not adhered to the requirements to make an express finding and provide clear reasons for doing so, the judgment can be vulnerable to being overturned.
If it is possible to anticipate before judgment is handed down that an application seeking permission to appeal should be made, counsel should be instructed to prepare to do so and have a skeleton argument dealing with costs and the appeal ready for the handing down. This should also be considered from the opposing side’s point of view, in order to prepare to potentially oppose any such application. However, it may often take a careful review of the judgment, once handed down and together with counsel, in order to determine whether the judgment is appealable.
This article was first published on the Practical Law Dispute Resolution blog on 8 March 2016 and was written by Rebecca Foden, a Solicitor in the Litigation team.