Green v L.I.B.S Ltd & Anor [2018] EWHC 1979 (QB) (31 July 2018)

Neutral Citation Number: [2018] EWHC 1979 (QB) Claim No: 3MA30652 Appeal No: M17Q050 IN THE HIGH COURT OF JUSTICE ON APPEAL FROM THE MANCHESTER CIVIL JUSTICE CENTRE ORDER OF HHJ PLATTS Manchester Civil Justice Centre M60 31/07/2018 B e f o r e : MRS JUSTICE MOULDER ____________________ Between: (1) Mr Lloyd Green (2) Mrs Samantha Green Claimants - and - (1) L. I. B. S Limited (2) Gisburne Park Estates Limited Defendants - and - Panama Sports Horses (UK) Limited Third Party - and - Joss Saville Racing Limited Fourth Party ____________________ Mr Chaisty QC (instructed by Woodcocks Howarth & Nuttall) for the Claimants Defendants were not represented Stefan Brochwicz-Lewinski (instructed by Mason & Co) for the Third Party Mr Portman for the Fourth Party Hearing dates : 24 and 25 July 2018 ____________________ HTML VERSION OF JUDGMENT APPROVED ____________________ Crown Copyright © Mrs Justice Moulder : This is an appeal against the orders of His Honour Judge Platts on 16 January 2017 and 27 February 2017 which following the trial of the preliminary issue as between the claimants and the third and fourth parties determined the ownership of certain horses and equipment and made certain orders as to costs. Permission was granted by order of Sir Alistair Macduff dated 18 December 2017. Background The factual background is taken from the judgment of His Honour Judge Platts. In summary, the claimants, Mr Lloyd Green and Mrs Samantha Green are a married couple and joint directors of a limited company Marlie (Civils) Limited ("MCL"). They are described [5] as friends of Nick Saville and Carol Richardson who ran Panama Sport Horses (UK) Ltd ("PSHUK"). PSHUK ran stables at Gisburne Park in Clitheroe, Lancashire where the horses in question were stabled. Carol Richardson is a director of PSHUK. Nick Saville is her husband and had previously been a director of PSHUK and a secretary of its sister company, Panama Sports Horses Limited ("PSH"). The second defendant, Gisburne Park Estates Ltd, leased the premises at Gisburne Park to PSHUK. The first defendant were bailiffs, acting on the instruction of the second defendant, who on 30 September 2013 purported to forfeit the lease and execute a warrant of distress at the premises in order to recover alleged arrears of rent. In doing so the horses and the equipment, the subject of the action, were seized. PSHUK is in liquidation. Its liquidator is Mr Harold. Joss Saville Racing Limited ("JSRL") is a company formed with Mr Portman, Mr Kenny and Joss Saville as directors. Joss Saville is Nick Saville's son but ceased to be a director of JSRL in around 2008. Proceedings were originally issued against the first and second defendants on 16 October 2013 alleging that the claimants were the lawful owners of the horses and certain equipment. The proceedings were originally listed for trial in May 2015 but on that day Mr Harold and JSRL attended to challenge the claimants' title. They were joined as the third and fourth party, respectively, to the litigation and the trial was postponed to allow those competing claims to be raised. The matter came before His Honour Judge Platts in December 2016 to deal with the competing claims as to title as a preliminary issue. By a reserved judgment on 9 January 2017 His Honour Judge Platts determined that all the horses (other than JB and Curry) were owned by the claimants and all the equipment claimed was owned by the claimants. An order to that effect was made on 16 January 2017. In particular the following horses were found to be owned by the claimants: Sissy, Reece, Terry, Pimms, Simon, Emu and Buster. On 27 February 2017 the third and fourth party were ordered to pay the claimants' costs of the preliminary issues in the proportions of 85% and 15% respectively on the standard basis and the costs of the PTR were ordered to be costs in the case. Grounds of appeal The third party appeals on the basis that the trial judge erred in finding for the claimants on the issue of the horses in light of the relevant evidence. In particular, the appellant asserts that the judge failed to draw proper inferences from and/or attach proper weight to certain facts and matters which the appellant says served to fundamentally undermine the claimants' case. The third party also appeals against the costs orders, both the costs of the preliminary issue where the appellant says the claimants ought not to have received their costs in full and in relation to the costs of the PTR which the appellant says should have been the third party's costs in any event. Relevant law CPR 52.21 provides (so far as material): (1) Every appeal will be limited to a review of the decision of the lower court unless— (a) a practice direction makes different provision for a particular category of appeal; or (b) the court considers that in the circumstances of an individual appeal it would be in the interests of justice to hold a re-hearing. … (3) The appeal court will allow an appeal where the decision of the lower court was— (a) wrong; or (b) unjust because of a serious procedural or other irregularity in the proceedings in the lower court. (4) The appeal court may draw any inference of fact which it considers justified on the evidence. Both parties accepted that the approach of the court on an appeal is as set out in the cases of Assicurazioni Generali Spa v Arab Insurance Group [2002] EWCA Civ 1642 and Chen v NG (British Virgin Islands) [2017] UKPC 27 . I refer in particular to the following extracts from Arab Insurance : [15]. In appeals against conclusions of primary fact the approach of an appellate court will depend upon the weight to be attached to the findings of the judge and that weight will depend upon the extent to which, as the trial judge, the judge has an advantage over the appellate court; the greater that advantage the more reluctant the appellate court should be to interfere. As I see it, that was the approach of the Court of Appeal on a "rehearing" under the RSC and should be its approach on a "review" under the CPR . [16]. Some conclusions of fact are, however, not conclusions of primary fact of the kind to which I have just referred. They involve an assessment of a number of different factors which have to be weighed against each other. This is sometimes called an evaluation of the facts and is often a matter of degree upon which different judges can legitimately differ. Such cases may be closely analogous to the exercise of a discretion and, in my opinion, appellate courts should approach them in a similar way. [17]. In Todd v Adam, where the question was whether a contract of service existed, Mance LJ drew a distinction between challenges to conclusions of primary fact or inferences from those facts and an evaluation of those facts, as follows, at paragraph 129: "With regard to an appeal to this court (which would never have involved a complete rehearing in that sense), the language of 'review' may be said to fit most easily into the context of an appeal against the exercise of a discretion, or an appeal where the court of appeal is essentially concerned with the correctness of an exercise of evaluation or judgment — such as a decision by a lower court whether, weighing all relevant factors, a contract of service existed. However, the references in r 52 11 (3) and (4) to the power of an appellant court to allow an appeal where the decision below was 'wrong' and to 'draw any inference of fact which it considers justified on the evidence' indicate that there are other contexts in which the court of appeal must, as previously, make up its own mind as to the correctness or otherwise of a decision, even on matters of fact, by a lower court. Where the correctness of a finding of primary fact or of inference is in issue, it cannot be a matter of simple discretion how an appellant court approaches the matter. Once the appellant has shown a real prospect (justifying permission to appeal) that a finding or inference is wrong, the role of an appellate court is to determine whether or not this is so, giving full weight of course to the advantages enjoyed by any judge of first instance who has heard oral evidence . In the present case, therefore, I consider that (a) it is for us if necessary to make up our own mind about the correctness or otherwise of any findings of primary fact or inferences from primary fact that the judge made or drew and the claimants challenge, while (b) reminding ourselves that, so far as the appeal raises issues of judgment on unchallenged primary findings and inferences, this court ought not to interfere unless it is satisfied that the judge's conclusion lay outside the bounds within which reasonable disagreement is possible. In relation to (a) we must, as stated, bear in mind the important and well-recognised reluctance of this court to interfere with a trial judge on any finding of primary fact based on the credibility or reliability of oral evidence. In the present case, however, while there was oral evidence, its content was largely uncontentious." [20] In paragraph 20 Robert Walker LJ also quoted this passage from the speech of Lord Hoffmann in Biogen Inc v Medeva Plc [1997] RPC 1 at p 45: "The question of whether an invention was obvious had been called "a kind of jury question" (see Jenkins LJ in Allmanna Svenska Elektriska A/B v The Burntisland Shipbuilding Co Ltd (1952) 69 RPC 63 , 70) and should be treated with appropriate respect by an appellate court. It is true that in Benmax v Austin Motor Co Ltd [1955] AC 370 (1955) 72 RPC 39, 42, this House decided that, while the judge's findings of primary fact, particularly if founded upon an assessment of the credibility of witnesses, were virtually unassailable, an appellate court would be more ready to differ from the judge's evaluation of those facts by reference to some legal standard such as negligence or obviousness. In drawing this distinction, however, Viscount Simonds went on to observe, at page 374, that it was "subject only to the weight which should, as a matter of course, be given to the opinion of the learned judge". The need for appellate caution in reversing the judge's evaluation of the facts is based upon much more solid grounds than professional courtesy. It is because specific findings of fact, even by the most meticulous judge, are inherently an incomplete statement of the impression which was made upon him by the primary evidence. His expressed findings are always surrounded by a penumbra of imprecision as to emphasis, relative weight, minor qualification and nuance (as Renan said, la vérité est dans une nuance), of which time and language do not permit exact expression, but which may play an important part in the judge's overall evaluation. It would in my view be wrong to treat Benmax as authorising or requiring an appellate court to undertake a de novo evaluation of the facts in all cases in which no question of the credibility of witnesses is involved. Where the application of a legal standard such as negligence or obviousness involves no question of principle but is simply a matter of degree, an appellate court should be very cautious in differing from the judge's evaluation." … [22] Thus the extent to which the findings of fact depend upon oral evidence or what Lord Hoffmann called the "penumbra of imprecision as to emphasis, relative weight, minor qualification and nuance" will vary from case to case. In the instant case, the judge had the considerable advantage of seeing the witnesses and of assessing their credibility, although, as ever, he did so against the documentary material that was available. In these circumstances we should, I think, take particular care before holding that his conclusions of fact were wrong, especially since (as appears below) some of his conclusions depended to a significant extent upon the view which he formed of the witnesses. On the other hand this is not a case in which the judge was concerned to weigh a number of factors such that the judgment which he was called upon to make was a matter of degree. [emphasis added] Appellant's submissions Counsel for the appellant submitted that in this case the judge has reached a conclusion which no reasonable judge could have reached. The appellant referred to the passage from Lord Thankerton's speech in Thomas v Thomas [1947] AC 484 , 487-488, cited in the judgment in Chen at [49]: "(1) Where a question of fact has been tried by a judge without a jury, and there is no question of misdirection of himself by the judge, an appellate court which is disposed to come to a different conclusion on the printed evidence, should not do so unless it is satisfied that any advantage enjoyed by the trial judge by reason of having seen and heard the witnesses, could not be sufficient to explain or justify the trial judge's conclusion; (2) The appellate court may take the view that, without having seen or heard the witnesses, it is not in a position to come to any satisfactory conclusion on the printed evidence; (3) The appellate court, either because the reasons given by the trial judge are not satisfactory, or because it unmistakably so appears from the evidence, may be satisfied that he has not taken proper advantage of his having seen and heard the witnesses, and the matter will then become at large for the appellate court." For the appellant it was submitted that in this case the trial judge has not taken proper advantage of having seen and heard the witnesses and that this is a case where what was originally set out by the claimants was demonstrably false. Respondents' submissions For the respondent it was submitted that the judge had the considerable advantage of hearing the evidence of the witnesses and assessing their credibility and accuracy. Counsel for the respondents further submitted that the judge undertook the task with care and reached conclusions that were consistent with the results of the balancing exercise he performed; the appeal amounts to no more than an attempt to rerun the arguments which failed to prevail at first instance. Discussion I propose to consider the findings of the judge in respect of each of the horses which are now the subject of the appeal in the order in which they were dealt with in the oral submissions of counsel for the appellant, acknowledging that the appellant's appeal should not be considered solely in relation to individual horses but that the appellant seeks to demonstrate that certain findings of the judge in relation to particular horses should, in the appellant's view, have resulted in a different overall finding of credibility in relation to the claimants and thus a different outcome overall. Reece In relation to Reece, counsel for the appellant referred the court to documentation showing that in 2011 and in 2013 the horse appeared on a list of horses owned by PSHUK. By contrast in her witness statement of September 2016, Mrs Green stated, relying on the evidence of Nick Saville, that Reece was owned by Nick Saville, rather than PSHUK. Nick Saville's evidence in his witness statement in September 2016 was that the horse was retired in May 2011 and returned to Nick Saville by a company called "Own a Racehorse" which gifted its 75% share to him. Counsel for the appellant submitted that Nick Saville's evidence should have been rejected in the light of the documentary evidence showing that the horses were owned by PHSUK. Further it was submitted that if Nick Saville's evidence of ownership had been rejected, and the judge had accepted that the horse was owned by PHSUK, there should have been an invoice generated by PHSUK in the same way as an invoice was generated on the original transfer of 75% of the horse to Own a Racehorse in 2008. The judge in considering this horse noted the change in the claimants' case from their original position that Reece was bought from PSHUK to the second witness statement when Mrs Green having read the witness statement of Nick Saville, said that the purchase may have been from Nick Saville personally. The judge stated that he did not regard this as a significant change of evidence. He said at [33]: "I accept that, rightly or wrongly, she and her husband regarded PSHUK and Nick Saville as one and the same. Therefore although she originally understood that the purchase was from PSHUK she was prepared to accept that it may have been from Nick Saville personally. It did not matter to her." The judge acknowledged the competing evidence as to whether the horse was owned personally by Nick Saville or by PSHUK. The judge took the view that it did not matter whether title was transferred by Nick Saville or PSHUK. Even if the horse was owned by PSHUK, the judge found that Nick Saville had authority to sell it to the claimants. The judge held at [37] that the real issue was whether Nick Saville or PSHUK had good title to pass. I see no reason to conclude that the finding of the judge that it did not matter whether title was transferred by Nick Saville or PSHUK was wrong. The appellant has not sought to challenge the finding that Nick Saville had authority to sell on behalf of PSHUK. Accordingly it seems to me that the change of evidence by the claimants as to whether they had bought from PSHUK or Nick Saville is not as the appellant submits, a "very significant change of position" or a "transparent attempt" to defeat PSHUK's claim to ownership. It made no difference to the outcome of the issue which the judge had to decide. (I deal below with the more far reaching submission of conspiracy) Further in so far as the appellant seeks to argue that had the judge found that the horse been owned by PSHUK (which they contended is the correct position) there would have been an invoice evidencing the sale, in my view this is speculation in the light of the evidence that relations between Nick Saville and Carol Richardson on the one hand and the claimants on the other were informal and the evidence (which was accepted by the judge) that it was "not uncommon for horses to be bought and sold for cash with no documentation to be provided." Counsel for the appellant also submitted that it was "manifestly incredible" that Mr Green had £5000 in a drawer at home which was used to purchase Reece and that it was "beyond coincidence" that he had an amount equal to the purchase price of the horse. Counsel submitted that Mr Green's evidence should not have been accepted by the judge both in the light of Mr Green's oral evidence that he would not let the monies build up until they reached £5000 but would spend the money coupled with the fact that there were no documents to support the purchase. Counsel for the appellant repeatedly emphasised that the claimants did not pay livery fees and relied on this as evidence that the claimants had not purchased horses. This particular point was dealt with in the judgment at [29]. The judge accepted Mr Green's evidence that the livery for the horses was not charged pursuant to an arrangement whereby PSHUK would get any profit from any sale of the horses if and when they were sold. The judge found that Mr Green's evidence was consistent with "the general informal nature of the relationship between the parties." I cannot see that the judge's conclusion on the livery arrangements is wrong as being contrary to the evidence and I acknowledge the fact that he had the benefit of hearing Mr Green's evidence on this point. As far as other supporting documents were concerned in relation to Reece, the judge accepted that there was no documentary evidence of the purchase, the "only evidence" being the word of the claimants and Nick Saville. However he referred to documentary evidence which suggested that the claimants treated themselves as being the owners of Reece, namely the fact that the horse passport showed Mr Green as the owner, that MCL paid for the training of the horse and Mr Green was named as the owner on race entry forms. The judge was entitled to take this documentary evidence into account as well as the oral evidence of the claimants. The judge observed that "it might be regarded as unusual" that a party might have £5000 spare cash but again he referred to the fact that the dealings between the parties were informal and there was no reason why the party should have invented such a transaction if it did not happen. Counsel for the appellant submitted that the judge's reasoning was circular and the reason why the parties should have invented the explanation was to allow the claimants to recoup assets from loans which they had advanced. It is not clear to me that this was an argument which the judge was addressing at this point. The judge noted at [37] that the real issue was whether Nick Saville or PSHUK had good title to pass to the claimants and in that regard the competing claim of JSRL had to be considered. It seems to me therefore that the appellant is seeking to criticise the reasoning of the judge in relation to the £5000 cash by reference to an argument which was not being addressed in the relevant paragraph. It seems to me that the judge was addressing the question of whether the claimants would have invented the purchase for cash in September 2012 and his conclusion that there would seem to be no good reason why the parties should have invented such a transaction as having occurred is not wrong on the evidence. It seems to me that it cannot be said that having £5000 cash at home is "manifestly incredible". Whilst the evidence was that £5000 was withdrawn from the claimant's bank account in order to purchase Sissy around the same time, the evidence in cross examination was not to the effect that Mr Green had precisely £5000 in cash but in my view (having read the relevant passages) his evidence was that he had sufficient (less than £6000) such that he was able to pay for this horse without withdrawing a sum from the bank. Finally in relation to Reece, the appellant submitted that the judge was wrong to state at [45] that there was no good evidence to support the assertion that PSHUK has retained title. In my view this statement has no bearing on the outcome of the claim since the judge found (for the reasons discussed above) that: "even if PSHUK ever had title it was transferred to the claimants in September 2012." Terry and Pimms Turning then to the horses, Terry and Pimms, the issue raised on the appeal is the credit which appeared on an invoice dated 2 September 2013. Handwritten notes show that a credit was given in an amount of £1272 referring to the "Bach gelding" which it is said is a reference to Pimms. Counsel for the appellant submitted that the judge accepted the claimants' evidence that they bought the two horses at an auction through PSHUK but the appellant submitted that the handwritten note is incontrovertible evidence that, in relation to at least one of the horses, the money advanced was in fact a loan which was repaid by the credit noted on the invoice. Counsel submitted that the judge ignored or overlooked the "irresistible inference" and at [51] wrongly rejected as "pure speculation" and "unsupported by evidence" the submission on behalf of PSHUK that this was evidence of a loan. At [52] the judge noted that there was no evidence that PSHUK wanted these horses or ever treated these horses as its own. Further he asked (rhetorically) why if it was a loan the credit was not for the total price of two horses rather than one. The judge noted that Mrs Green was unable to explain the credit when asked in cross-examination. However he noted that neither Mr Green nor Mr Saville were cross-examined about the issue and therefore they were not given the opportunity to give an explanation. The judge concluded that he was not prepared to draw the inference from these documents that the horses were not purchased by the claimants. Whilst the handwritten note on the invoice may suggest a credit for the purchase price of one of the two horses, I agree with the judge that the credit does not establish that either or both horses was owned by PSHUK and acquired by a loan from the claimants. As the judge noted there may well be an explanation and he was entitled to take into account in my view that neither Mr Green nor Mr Saville were cross-examined on the point. In this regard counsel for the appellant submitted that this document was put into the bundle after the evidence been prepared and that it should have been dealt with by supplementary evidence in chief of Mr Green and/or Nick Saville. He further submitted that it was put to Mrs Green who gave the evidence about the purchase at auction. Whilst the appellant cannot be criticised for putting the point to Mrs Green, given her evidence that she could not explain the credit, it is remarkable that the point was not then put to Mr Green in cross-examination. The judge was in my view entitled to make reference to the fact that Mr Green had not been given an opportunity to provide an explanation. Whilst the judge may have been mistaken when he suggested that the effect of the credit may have been that PSHUK may have been paid twice, his conclusion that he was not prepared to infer from the handwritten notes on the invoice that the horses were not purchased by the claimants is in my view a conclusion that was open to him taking into account not only the bank transfer and the credit but also the absence of any evidence that PSHUK ever wanted the horses or treated the horses as its own. I do not therefore accept the submission that the credit can only mean that a loan was advanced by the claimants to purchase the horses at auction and that this credit amounted to repayment of that loan, such that at least one of the two horses were owned by PSHUK. I note that counsel for the appellant submitted that whilst, as the judge noted, the credit did not extend to both horses, that was because PSHUK went into liquidation shortly thereafter. Whilst this is a possible theory, it does not show that the judge's alternative view on the credit for only one horse was wrong or contrary to the evidence. Counsel for the appellant sought to broaden the argument and assert that the claimants took the opportunity to recover their "loan" by their "neat" argument that the claimants had bought the horses. The submission that the claimants were lying and conspiring with Nick Saville and Carol Richardson to defeat the liquidator's claim was one which was made before the trial judge and which he dealt with at various sections of the judgment. At [7] the judge stated: "it is clear from the evidence that this issue is a small part of a much wider dispute which has undoubtedly engendered considerable antagonism and mistrust which has been evident in the litigation before me…Mr Harold, through leading counsel (and presumably with his instructions), has accused the claimants of lying and effectively conspiring with Nick Saville and Mrs Richardson to defeat his claim as liquidator. (It is notable, however, that when Mr Harold came to give evidence he expressly refused to accuse the claimants of being liars). …" The Judge at [57]-[59] dealt with the alleged "conspiracy" in relation to the three showjumpers and the loan of £12,000: [57] The case of PSHUKL only became clear when it was put to Mrs and Mr Green and Mr Saville (it not having been previously pleaded) that they had together concocted a story about these horses. It was suggested that this was done in order to defeat the liquidator's claim to the horses. More importantly, it was suggested that because the claimants' case originally had been that the horses had been bought from PSHUKL in August 2013, when it became apparent that a petition for winding up of PSHUKL had been presented in June 2013 it was necessary for them to change their story so as to allege that the horses had been bought from Nick Saville directly rather than the company itself so as to avoid the operation of section 127 of the Insolvency Act 1986. PSHUKL relied upon the fact that the claimants had given accommodation to Nick Saville and Carol Richardson when they had been evicted from their home in September 2013 and therefore had "access to" them for two weeks before the claims to the horses were formulated. There was therefore, it was said, the opportunity to concoct a story. It was also suggested that in lending £12,000 to PSHUKL the claimants were a party to a scheme to mislead the traffic commissioner as to the financial standing of PSHUKL. [58] These allegations were strenuously and in my judgement credibly denied by all the witnesses . I am satisfied that Carol Richardson and Nick Saville probably knew of the winding up petition when they stayed with the claimants (it had been served in late August 2013). In my judgment, if a false story was concocted at that stage it is surprising that that false story did not feature in the claimants' initial evidence but only appeared much later and shortly before trial. I reject the allegation that either during that period or even subsequently the claimants and Nick Saville have conspired to invent false evidence. As for the allegation that there was a scheme to mislead the traffic commissioner I do not consider that the claimants are tainted by that. There is no suggestion that what was done was illegal. Their role was to provide liquidity at the request of someone they were relatively close to. What was done with that money was no concern of theirs. I accept that the letter from Carol Richardson to the traffic commissioner in which she described the £12,000 as "a business transaction involving horses…" was nothing to do with and was not known to the claimants at the time it was written. [59] Of course it is of concern that the claimant's evidence has changed so dramatically. However, until May 2015 they had no inkling that their ownership of any of the horses was to be challenged and no reason therefore to recollect the detail of their acquisition of the horses. In my judgment they cannot be criticised for not providing fuller particulars in their evidence in support of their initial claim. It was only some 18 months later that they were asked to recall the detail of what I find to have been informal transactions between friends. In the circumstances I find it credible that their evidence has developed in the way that it has and that details of the loan for purpose of obtaining a vehicle operator's licence had been forgotten. I accept that there may well have been genuine mistakes in recollection especially when dealings between the parties have been on such an informal basis without any records. I understand the suspicions of the liquidator but having heard all the evidence and in particular having seen both Mr Green and Mrs Green give evidence I am quite satisfied that they have been not guilty of the conspiracy which is alleged and on balance I accept their explanation for the change in evidence. [emphasis added] I set out these passages in full because it seems to me to show that the judge's rejection of the allegations of conspiracy, and in effect fraud, were largely dependent on his assessment of the credibility of Mr and Mrs Green and that is an advantage which the trial judge had over this court and in my view this assessment by a very experienced County Court judge has not been shown to be wrong. Counsel submitted that the judge set a lot of store on the credibility of Mrs Green but that the judge failed to refer to the evidence that in an email on 25 November 2014, Mrs Green stated that an invoice could be changed into Mr Green's name. Counsel submitted that her explanation that she was not changing documents which were already before the court in the court bundle was not in fact correct and that this was pointed out to the judge in closing submissions. Counsel submitted that the judge failed to deal with this point that suggested Mrs Green was prepared to change evidence. As was referred to in Arab Bank (and cited above): "The need for appellate caution in reversing the judge's evaluation of the facts is based upon much more solid grounds than professional courtesy It is because specific findings of fact, even by the most meticulous judge, are inherently an incomplete statement of the impression which was made upon him by the primary evidence. His expressed findings are always surrounded by a penumbra of imprecision as to emphasis, relative weight, minor qualification and nuance." Recognising the "penumbra of imprecision", to the extent therefore that the judgment can be said to be an incomplete statement of his findings on credibility, I do not accept that any error is thereby established in his conclusion as to the credibility of Mrs Green. The credit entry was unexplained but in my view for the reasons discussed above the appellant has not established that the judge's conclusion on Terrry and Pimms was wrong. JB, Simon and Emu In relation to JB, Simon and Emu, counsel for the appellant focused his submissions on the failure of the claimants to disclose the fact that the £12,000 was made by way of loan and the fact that it was only immediately before trial when the liquidator disclosed documents showing that a loan had been made, that the claimants' evidence changed. It was submitted for the appellant that this was a "step change" in the evidence from the position originally advanced by the claimants that they bought the horses to a more complicated position where they had made a loan. The appellant submitted that although the judge said that their memories had been prompted over time, the judge fell into error and attached no importance to this change. The appellant submitted that either the claimants advanced a false account and the evidence should be rejected accordingly or they had forgotten and when they said they had managed to piece things together they were making things up. On either basis the claimants' case should have failed. Counsel for the appellant submitted that in this case the trial judge has not taken proper advantage of having seen and heard the witnesses and that this is a case where what was originally set out by the claimants was demonstrably false. In essence, the appellant sought in this appeal to challenge the judge's findings that Mr and Mrs Green were credible witnesses. I reject these submissions. The trial judge carefully set out his reasons for his conclusions in relation to the credibility of the claimants. In a fairly short trial over three days, Mrs Green spent nearly one day in the witness box responding to what the judge described as "lengthy and sometimes hostile" cross-examination. The judge stated that he was able over that time "to form a good and firm view of her reliability and credibility." He observes that: "despite the many matters that were put to her, her answers were spontaneous, and in my judgment no way embellished or rehearsed." He found her "to be generally honest and truthful". In arriving at his conclusion on the credibility of the claimants' evidence the judge weighed the fact that the claimants were in breach of the undertaking which they gave to the court in October 2015. The judge expressed surprise that it occurred when they were represented by solicitors and held that the breach demonstrated "a degree of irresponsibility and naïveté" on the claimants' part. However, the judge was satisfied that the breach was not deliberate or intentional. This is a conclusion which was open to him and he had the benefit of their oral evidence. In response to the appellant's submission that the judge attached no importance to the changing evidence, I note that at [13] the judge dealt expressly with the fact that the claimant's evidence had changed as the litigation had progressed. The judge noted that the change in evidence was "most material" in the evidence concerning the three showjumpers but it was a feature of the totality of the evidence. He notes that he had "considered carefully whether these inconsistencies in their evidence are as a result of dishonesty" and he concluded: [14] having considered these matters carefully, together with the totality of the evidence and my assessment of them as witnesses, I reject the allegation that the claimants have lied on oath or that they have fabricated or sought to fabricate evidence for the purpose of dishonestly advancing their claim." [Emphasis added] He returned to the issue at [59] when dealing with the three showjumpers, JB, Simon and Emu. He stated that it was "of concern" that the claimants' evidence had changed "so dramatically". He took the view however that until May 2015 the claimants had "no inkling" that their ownership of any of the horses was to be challenged and no reason therefore to recollect the detail of their acquisition of the horses. He stated that he accepted that "there may well have been genuine mistakes in recollection" especially when dealings between the parties had been "on such an informal basis without any records." The appellant seeks to challenge this finding, in particular in relation to the three showjumpers, arguing that when seeking an injunction in October 2013, the claimants made no reference to the loan of £12,000, Mrs Green stating in her witness statement of 16 October 2013 that the horses had been purchased on 12 th August 2013 for £12,000. Counsel for the appellant submitted that this cannot be because they had forgotten the detail of what occurred only two months after the date in question. Further in her subsequent witness statement Mrs Green stated that she gave PSHUK £12,000 to purchase horses, again with no mention of the £12,000 being by way of loan. Counsel submitted that there was no explanation for what he described as a misrepresentation and that the judge should have taken this into account. Counsel submitted that it was "perverse" for the judge to find that this was an honest act. It seems to me that the judge's conclusion that "having heard all the evidence and in particular having seen both Mr Green and Mrs Green give evidence" he was satisfied that they were not guilty of the conspiracy which is alleged and that he accepted the explanation for the change in evidence is a conclusion which was open to him. It seems to me entirely open to the judge to take the view that at the early stages the claimants were not being asked to provide details of their acquisition of the horses. The question for the court on the injunction was the issue of ownership and the claimants' case is that the horses were owned by them. The consideration for the purchase is arguably not relevant. Even if the claimants should have given details of the loan from the outset (assuming that they recalled it) the appellant has not established that the only inference which the court can draw is that the claimants were deliberately seeking to mislead the court in this regard. It is in the nature of an ex parte injunction that it is obtained when urgency is required and papers have to be prepared in some haste. Contrary to the submission of counsel for the appellant, there is no evidence that the claimants were deliberately dishonest in failing to give details of the loan and in my view the failure to give details of the loan does not lead to a necessary inference that the claimants' case on ownership was untrue. It was also submitted for the appellant that the emails showing that the payments were in fact loans were documents which the claimants should themselves have disclosed and that the absence of disclosure by the claimant should have weighed in the balance. I do not accept the submission that the judge should have taken into account against the claimants the failure to disclose the fact of the loan. The issue which the judge had to decide was where ownership of the horses lay. As noted above, the judge gave reasons why he accepted that the evidence had developed in the way that it had and that details of the loan had been forgotten. That was a conclusion which he reached having heard the witnesses, an advantage which this court does not have, and this court having upheld that conclusion, for the reasons discussed above he was not therefore required to take into account against the claimants the fact that the loan had not been disclosed by the claimants. Further in reaching a conclusion on the change of the evidence in relation to the three showjumpers the judge considered the case advanced by the appellant that the claimants had together with Mr Saville, concocted a story in order to defeat the liquidator's claim to the horses. The judge took into account at [58] that: "these allegations were strenuously and in my judgment credibly denied by all the witnesses." This is a matter which the judge is peculiarly able to decide having had the advantage of having seen and heard the live witnesses. Counsel for the appellant criticised the judge for his reasoning expressed as supporting the live witness evidence, that if a false story was concocted it was surprising that the full story did not feature in the claimant's initial evidence. Counsel submitted that a false story was advanced, namely that the horses were purchased for the sum of £12,000. It seems to me that this is to confuse the point that the judge was making. The case which had been put by the appellant to the claimants (as noted at [57]) was that the claimants had changed their story to allege that the horses had been bought from Nick Saville rather than the company so as to avoid the operation of the Insolvency Act. In my view it is that allegation to which the judge is responding when at [58] he takes the view that if such a false story was concocted, it was surprising that the false story did not feature in the claimant's initial evidence. The judge therefore held that he rejected the allegation that the claimants and Nick Saville "have conspired to invent false evidence." It seems to me that the case advanced by the appellant in relation to the loan of £12,000 (again as noted at [57]) was that the claimants were a party to a scheme to mislead the Traffic Commissioner as to the financial standing of PSH UK. This allegation was also considered by the judge at [58] and he concluded that the claimants were not tainted by what was done with the money. As to the judge's acceptance of the evidence that the claimants were prepared to pay £12,000 for three horses which Mr Saville had purchased for considerably less, counsel for the appellant submitted that the judge was wrong to accept the explanation of the claimants and the "improbability" that the claimant would take horses which were worth much less than £12,000. Counsel submitted that the other horses purchased by the claimants had not been purchased for a "massive markup". Although Mr Saville may have earned less profit on the sale of other horses to the claimants, the judge had the benefit of Mrs Green's evidence in relation to these particular horses. In my view it cannot be said that the judge's conclusions were wrong given the evidence (which in my view is incontrovertible) that a horse is worth what a buyer is prepared to pay for it and the evidence of Mrs Green which the judge, who had the benefit of assessing her oral evidence, described as "compelling", as to why she was prepared to pay £12,000. Accordingly it seems to me that in relation to JB/Simon/Emu it cannot be said that the decision of the judge was clearly wrong. It seems to me that this court must give full weight to the advantages enjoyed by the trial judge who has heard the oral evidence. Although he assessed their credibility against the documentary material that was available, this court has to take particular care before holding that his conclusions of fact were wrong, especially where his conclusions depended to a significant extent upon the view which he formed of the witnesses' credibility. In my view this is not a case where it "unmistakably" appears from the evidence that the judge has not taken proper advantage of having seen and heard the witnesses. Sissy In relation to Sissy, counsel for the appellant submitted that because the claimants' case overall should not be upheld, the particular findings in relation to the ownership of Sissy should also be rejected. Counsel again referred to the absence of any livery charges and the absence of any contract for sale and he suggested that there was an "error of fact" when the judge stated that the claimants had paid for "its upkeep and maintenance". Counsel submitted that the findings in relation to Sissy cannot be divorced from the overall credibility of the claimants. The judge's reasoning was as follows: "[27] PSHUKL also object (in relation to this transaction and others) that there is no documentary evidence to support it. In particular it is argued that the first claimant having insisted on written confirmation of a loan of £12,000 in May 2013 (to which I will come later) it is inconceivable that had this £5,000 been used to pay for a horse that he would have not have asked for a receipt. I reject that argument. As Mr Green explained, in return for the £5,000 he got the horse (as to which at the time there was no dispute) which the family enjoyed and used . A loan is very different transaction and I fully understand his desire to have written confirmation of it. I accept the evidence of Mrs and Mr Green that it is not uncommon for horses to be bought and sold for cash with no documentation to be provided. In the case of Sissy, as I have said, there is supportive evidence in the withdrawal of the monies from the bank account, the fact that the passport is in the name of the second claimant, and the fact that the first and second claimants and their family have used the horse, paid for its upkeep and maintenance. All these factors point strongly to the fact that they became and were the true owners of Sissy." I do not accept the alleged error of fact. It is clear from the judgment at [23] that the claimants paid for veterinary fees and that MCL paid for training fees. It seems to me that both of these matters can be regarded as payment for the "upkeep and maintenance" of the horse. Whilst there was no contract of sale, the payment of £5000 is evidenced by a copy of the MCL bank statement showing a withdrawal in that amount. Mr Green was named as the owner in the horse passport in succession to Carol Richardson. As set out above, the judge accepted the evidence of the claimants that it was not uncommon for horses to be bought and sold with no documentation provided. In relation to this horse the judge had both documentary evidence and the evidence of Mrs Green. Whilst it was unclear whether Sissy was owned by a third party, Jacqui Martin or PSHUK the judge held that that did not matter in the circumstances and I see no basis to disagree with that conclusion. Conclusion on the ownership of the horses The success of this appeal depends on the appellant overturning the judge's findings on the credibility of the claimants and Mrs Green in particular. Further it requires the court to accept the appellant's argument, which failed before the trial judge, that the claimants did not own the horses in this case but concocted a story about ownership to repay loans advanced by the claimants to Nick Saville and Carol Richardson and/or PSHUK, not only the loan of £12,000 advanced at a time when the company was experiencing cash flow difficulties but other unspecified loans which the appellant suggests the claimants have made. In my view for the reasons discussed above, I find that the conclusions which the trial judge reached on the evidence in respect of ownership of the horses were conclusions which were open to him and this is not a case where it can be said that it "unmistakably" appears from the evidence that he has not taken proper advantage of having seen and heard the witnesses. Accepting therefore the judge's findings of credibility, the appellant's allegations of conspiracy also fall to be dismissed. The judge gave a clear and fully reasoned judgment which dealt with all the relevant issues and his conclusions have not been established in my view to be wrong or perverse. Accordingly the appeal in relation to the substantive issue of ownership of the horses is dismissed. Costs The appellant also appeals against the cost orders which were made. The appellant submits that whilst the claimants succeeded on the issue of ownership of most of the horses, the costs order ought to have reflected the fact that the claimants were not wholly successful and that the claimants' case in relation to the purchase of JB, Simon and Emu was at odds with the case advanced at trial. I am mindful that the appeal court should only interfere where the judge's exercise of his discretion on the issue of costs has exceeded the generous ambit within which reasonable disagreement is possible ( Tanfern and Cameron – MacDonald (Practice Note) [2000] 1 WLR 1311 CA. In my view the claimants were the successful party. Although the judge found that Curry was owned by MCL, this is a company which is owned and run by the claimants and therefore as between the claimants and the third-party it seems to me that the claimants can be regarded as the successful party. The claimants did not succeed in relation to JB but this was not because the claimants' case on ownership was found to be incorrect but rather by virtue of the operation of section 127 of the Insolvency Act 1986. Overall therefore it seems to me that the starting point was that the claimants were the successful party and were entitled to their costs. The appellant submits that the claimants' case in relation to JB, Simon and Emu changed and was only advanced at trial. However, I note at [57] that the judge stated that the case of the third party only became clear, it not having been previously pleaded, that the claimants had concocted a story about the horses in order to defeat the liquidator's claim to the horses and the judge was entitled to take this conduct into account in the claimants' favour. Whilst it may very well be the case that the liquidator was justified in pursuing the matter to trial, this does not in my view amount to a positive factor such as to displace the general rule. The judge's conclusion that the claimants should receive their costs and that costs should be paid by the third and fourth party, respectively in the proportions of 85% and 15% respectively was well within the ambit of his discretion. It seems to me that the judge has not erred in his approach to the costs of the preliminary matter. As to the costs of the PTR and the issue of disclosure this was a case management decision and whilst the court may have made a different order in relation to the issue of disclosure, the order of costs in the case did not fall outside the ambit of the judge's discretion. I therefore dismiss the appeal in relation to the two costs orders. BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII