Inntrepreneur Estates Limited v Hollard & Hollard

An appellate court should respect a trial judge’s findings based on oral evidence, particularly where credibility is central. It may interfere where the judge’s reasoning is materially flawed, fails to weigh relevant evidence, or is not justified by the advantage of having seen and heard the witnesses. Documents should be used to test oral evidence, but apparent discrepancies do not automatically have to be resolved in favour of the documents. The appeal was dismissed because the contemporaneous documents did not compel the conclusion that the trial judge’s findings were wrong.

The appellant landlord appealed from a judgment by HHJ Richard Walker QC, who upheld the respondents’ counterclaim for innocent misrepresentation concerning the stated trading level of a tied public house. The judge found that the landlord’s agent had represented in March 1991 that the public house was trading at about the same level as in December 1990, that the representation induced the respondents to take the lease, and that they were not shown a later barrelage summary.

The appeal challenged those factual findings by reference to contemporaneous documents, rent-panel records and inherent probabilities. The central issue was whether the documents made it unmistakable that the trial judge had erred in accepting the respondents’ evidence.

1. Majority disposition. Lord Justice Tuckey and Lord Justice Roch dismissed the appeal. Lord Justice Mance dissented and would have set aside the judgment and entered judgment for the appellant on the claim and counterclaim.
2. The majority held that the trial judge’s findings were substantially based on his assessment of witnesses whom he had seen and heard. The documents raised persuasive arguments, but they did not compel the conclusion that the respondents’ evidence had to be rejected.
3. Oral testimony should be tested against contemporaneous documents and the overall probabilities. However, discrepancies do not invariably have to be resolved in favour of documents, especially where the documentation may be incomplete and the appellate court has only the transcript of the oral evidence.
4. The majority considered that the trial judge had not ignored the documents. He had considered their importance, assessed the witnesses, and reached findings that were supportable on the evidence. This was not an exceptional case warranting appellate interference with findings of fact.
5. Lord Justice Mance considered that the trial judge had failed to weigh central documents, the rent-panel sequence, the concessions and the overall probabilities. Applying the appellate approach discussed in Watts v Thomas [1947] AC 484 and Armagas v Mundogas (The Ocean Frost) [1985] 1 Ll.R. 1, he would have concluded that the respondents knew of the decline in barrelage.
6. The formal order was that the appeal be dismissed, with costs to the respondents, including detailed assessment under the community legal aid scheme and payment on account of £40,000.

• Court of Appeal (Civil Division) [2000] EWCA Civ 246: by a majority of Lord Justice Tuckey and Lord Justice Roch, the appeal was dismissed. Lord Justice Mance dissented.
• High Court: HHJ Richard Walker QC gave judgment on 11 November 1999 for the respondents on their counterclaim for misrepresentation.