Jawad v Rahim

An appellate court is slow to interfere with first-instance findings of fact based substantially on witness credibility. That restraint does not relieve the trial judge of the duty to test credibility against important evidence and difficulties identified at trial. The judge must give reasons sufficient to show why one account was preferred, particularly where significant inconsistencies or corroborative material require resolution. Failure to address central evidential difficulties may justify setting aside the judgment and ordering a retrial, despite the trial judge having seen and heard the witnesses.

The claimant sought repayment of $225,000 said to have been lent to the defendant in 1987. The defendant maintained that the money was paid for shares in a company connected with a property development. The Deputy Judge accepted the claimant’s account, ordered repayment of £266,143.29 including interest, and rejected the defendant’s limitation argument.

The defendant sought permission to appeal, permission to adduce fresh evidence, and a retrial. The central issue was whether the Deputy Judge had adequately explained his preference for the claimant’s evidence despite substantial evidential difficulties, including the role of the recipient lawyer, inconsistencies in the claimant’s evidence, and late production of a material letter.

1. Appeal allowed. Permission to appeal was granted, the Deputy Judge’s judgment was set aside, and a retrial before a different judge was ordered. The application to adduce fresh evidence was left undecided, and costs were reserved to the retrial judge.

2. Sir Christopher Slade, giving the judgment with which Lord Justice Aldous agreed, reaffirmed the ordinary appellate restraint identified in Watt or Thomas v Thomas (1947) AC 484. An appellate court should ordinarily avoid overturning factual findings based primarily on credibility unless the trial judge’s advantage from seeing and hearing witnesses cannot explain the conclusion, or the reasons are unsatisfactory.

3. That restraint is qualified by a duty on the trial judge to test witness credibility against important evidence and relevant difficulties. The judge must give reasons showing that this exercise has been performed. The duty is not satisfied merely by preferring one witness to another where the case contains substantial analytical or evidential problems.

4. The court applied the reasoning on adequate reasons in Flannery & Another v The Halifax Estate Agencies Limited [2000] 1 WLR 377. The extent of the duty varies with the subject matter, but the judge must explain why the decision was reached. Here, the Deputy Judge failed to address the capacity in which Mr Bregy received the money, the claimant’s evidence concerning a joint account, and the late emergence of the 1996 letter. These matters were central to the credibility assessment and the competing accounts of the transaction.

5. The failure to engage with those difficulties left the appellate court unable to understand why the claimant’s version had been accepted. Although the Court did not find that the Deputy Judge’s factual conclusion was necessarily wrong, justice required the defendant to have the opportunity of a fresh trial.

• Court of Appeal (Civil Division): Permission to appeal granted. Appeal allowed. The Queen’s Bench Division judgment was set aside and the case was ordered to be retried before a different judge.
• Queen’s Bench Division: Mr Leighton Williams QC, sitting as a Deputy Judge, ordered repayment of £266,143.29 including interest in respect of the alleged loan.