Godfrey & Anor v Jerrett

An appellate court should be slow to interfere with findings of fact based on evidence and documents, particularly where the trial judge heard and assessed the witnesses. A solicitor’s inadequate records or accounting practices do not, without more, require the court to reject the solicitor’s evidence. In determining responsibility for money paid into a solicitor’s client account, the relevant questions include the underlying nature of the transaction, the retainer, and who gave the instructions. Where money is received by a solicitor as agent for a principal, the agent’s accounting obligation is ordinarily owed to that principal.

The claimants sought recovery of £60,000 paid into a solicitor’s client account. The pleaded case included constructive trust and negligence, but the negligence claims were abandoned. Mr Aylen QC, sitting as a Deputy Judge of the Queen’s Bench Division, found that the transaction was not a loan to Princess Khalil and that Mr Jerrett had acted for Mr Durani, who had instructed him concerning the account. Permission to appeal was refused on the basis that the proposed grounds concerned findings of fact. The renewed application concerned whether the judge had asked the wrong question and whether the evidence supported his conclusions.

1. Disposition. Lord Justice Buxton refused the renewed application for permission to appeal. The Court would not pursue any further appeal in the action.
2. The trial judge’s conclusion that the transaction was not a loan to Princess Khalil was reached after hearing Mr Godfrey’s evidence and examining the documents in detail. It was therefore a finding of fact which the Court of Appeal was not in a position to revisit.
3. The trial judge had also accepted Mr Jerrett’s evidence that Mr Durani was his client and that Mr Durani was responsible for the conduct of the account. The judge had approached that evidence cautiously because of the passage of time and had considered the criticisms concerning inadequate attendance notes, ambiguous records and alleged failures to comply with solicitors’ accounting practice. Those matters did not compel him to disbelieve Mr Jerrett or to reach a different conclusion.
4. The submission that the judge had asked the wrong question was misplaced. His conclusion about the identity of the client was supported by his findings concerning the underlying nature of the transaction and the instructions governing the account.
5. Obiter. Lord Justice Buxton expressed substantial difficulty with the legal basis of the claim even on assumptions favourable to the claimants. If the money had been paid to the solicitor as agent for Princess Khalil and as a loan to her, the solicitor would have been accountable to her. The claim to recover the money would then lie against the intended principal rather than her agent. The discussion referred to the duty described in article 113 of Bowstead, but was unnecessary to the refusal of permission.

• Court of Appeal (Civil Division) — On 22 October 2001, Lord Justice Buxton refused the renewed application for permission to appeal: [2001] EWCA Civ 1607.
• Queen’s Bench Division — Mr Aylen QC, sitting as a Deputy Judge, decided the claim on 21 June 2001 and refused permission to appeal because he considered that only questions of fact were involved.